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Uf- (Hi: 
UNiVtKSIIY Of ULINOI^S 

RESULTS 



OF 



RAILWAY EXTENSION. 



A PAPER READ BEFORE THE STATISTICAL SOCIETY 

OF LONDON, BY R. DUDLEY BAXTER, M. A., 

IN NO VE3IBER, 186Q. 



Pour HE^mdred and Foi*ty M!il- 

lions of* GroveMimeiit Subsidy 

to the Cotton. Railroads 

in India. 



i 



1 RAILWAY EXTENSION AND ITS RESULTS. 

JO 

p-t*-^ 

•I. — Introduction. 

If a Roman Emperor, in the most prosperous age of the empire, had 
commanded a history to be written of that wonderful system of roads 
which consolidated the Roman power, and carried her laws and customs 
to the boundaries of the accessible world, it would have afforded a just 
subject for national pride. The invention and perfecting of the art of 
road making, its sagacious adoption by the State, its engineering triumphs, 
its splendid roads tlirough Italy, through Gaul, through Spain, through 
Britain, through Germany, through Macedonia, through Asia Minor, 
through the chief islands of the Mediterranean, and through Northern 
Africa ; all these would have been recounted as proofs of Roman energy 
and magnificence, and as introducing a new instrument of civilization, 
and creating a new epoch in the history of mankind. 

A similar triumph may fairly be claimed by Great Britain. The Ro- 
mans were the great road-makers of the ancient world — the English are 
the great railroad makers of the modern world. The tramway was an 
English invention, the locomotive was the production of English genius, 
and the first railways were constructed and carried to success in England. 
We have covered with railroads the fairest districts of the United King- 
dom, and developed railways in our colonies of Canada and India. But 
we have done much more than this, we have introduced them into almost 
every civilized country. Belgian railways were planned by George 
Stephenson. The great French system received an important impulse 
from Locke. In Holland, in Italy, in Spain, in Portugal, in Norway, in 
. Denmark, in Russia, in Egypt, in Turkey, in Asia Minor, in Algeria, in 
c:; the West Indies, and in South America, JEuglishmen have led the way in 
vi-, railway enterprise and construction. To this day, wherever an under- 
taking of more than ordinary diflSculty presents itself, the aid is invoked 
/-, of English engineers, English contractors, English navvies, and English 
^ shareholders ; and a large portion of the rails with which the line is laid, 
and the engines and rolling stock with which it is worked, are brought 
from England. 

To Englishmen the annals of railways must always be of the highest 
interest, and I trust that the brief inquiry upon which I am about to en- 
ter will not be deemed a waste of labor. I propose to examine into the 
extension of railways at home and abroad, to show the rate at which it 
^ is proceeding, the expenditure which it has cost, and its vast commercial 



results. The practical questions Avill follow whether the coustruction of 
railways in the United Kingdom has reached its proper limit ? Are we 
over-railroaded, as some assert, so that railways ought to be discouraged ? 
Or are we under-railroaded, so that fresh railways ought to be invited ? 
Are other nations passing us in the race of railway development ? And, 
lastly, can any improvement be introduced into our railway legislation ? 

II. — Railways in the United Kingdom. 

So far as roads are concerned, the dark ages may be said to have lasted 
from the evacuation of Britain by the Romans in 448 to the beginning 
of the last century. During the whole of that period nothing could be 
more barbarous or impassable than English highways. The Scotch re- 
bellions first drew attention to the necessity of good roads. The first step 
was to establish turnpikes, with their attendant wagons and stage coaches, 
superseding the long strings of pack-horses which, up to that time, had 
been the principal means of transport. The second step was to render 
navigable the rivers which passed through the chief seats of industry. 
The third, which commenced later in the century, was to imitate the 
rivers by canals, and to construct through the north and centre of Eng- 
land a net-work of 2,600 miles of water communication at an outlay of 
£50,000,000 sterling. But roads and canals combined were insufficient 
for the trade of Lancashire and Yorkshire, and bitter complaints were 
made of expense and delay in the transmission of their goods. 

The desired improvement came from the mining districts. Since the 
year 1700 it had been the custom to use wooden rails for the passage of 
the trucks; About the year 1800 Mr. Outram, in Derbyshire, laid down 
iron rails upon stone sleepers, and the roads so constructed took from him 
the name of Outram's Ways or Tramways. About the year 1814 the in- 
genuity of mining engineers developed the stationary steam engine into-a 
rude locomotive, capable of drawing heavy loads at the rate of four or 
five miles an hour. It was proposed to construct a public railway on this 
principle between Stockton and Darlington. After much delay the line 
was opened by George Stephenson in 1825,_and the experiment was suc- 
cessful as a goods line — unsuccessful, from its slowness, as a passenger 
line. The next experiment was the Manchester and Liverpool railway, 
projected as a goods line to accommodate the increasing trade of those 
two places, which was crippled by the high rates of the canal and navi- 
gation. Before the railway was completed, another great improvement 
had taken place in the construction of locomotives by the discovery of 
the multitubular boiler, which immensely increased the volume of steam 
and the speed attainable. 

The opening of the Manchester and Liverpool railway on loth Septem- 
ber, 1830, was the formal commencement of the railway era. On that 
day the public saw for the first time immense trains of carriages, loaded 
with passengers, conveyed at a rate of more than fifteen miles an hour, a 
speeed which was largely exceeded in subsequent trials. The desidera- 
tum was at length obtained, viz : the conveyance of large masses of pas- 
sengers and goods with ease and rapidity ; and it was seen that the dis- 
covery must revolutionize the whole system of inland communication. 

The public feeling was strangely excited. Commercial men and men 
of enterprise were enthusiastic in favor of the new railways, and eager 



for their introduction all over the country. But the vested interests of 
roads and canals, and landed proprietors who feared that their estates 
would be injured, together with the great body of the public, were vio- 
lently prejudiced against them. Railways had to fight their way against 
the most strenuous opposition. I quote from the " Life of Robert Ste- 
phenson," the engineer of the London and Birmingham line : 

"In everj parish through which Robert Stc'iihenson passed he was eyed with suspi- 
cion by the'iiihabitan'ts, and not seldom menaced by violence. The aristocracy regarded 
the irruption as an interference with territorial rights. The humbler classes were not 
less exasperated, as they feared the railway movement would injure those industrial in- 
terests by which they lived. In London, journalists and pamphleteers distributed criti- 
cisms, which were nianifestly absurd, and prophecies which time has signally falsified." 
—Vol. i., p. 169. 

The city of Northampton Avas so vehement in its opposition that the 
line was diverted to a distance of five miles, through the Kilsby Tunnel, 
to the permanent injury both of the city and railway. The bill was 
thrown out in Parliament, and only passed in the following session by the 
most lavish expenditure in buying off opposition. 

Other lines were soon obtained in spite of the same vehement hostility. 
The Grand Junction railway from Liverpool to Birmingham was passed 
in 1833. The Eastern Counties railway was sanctioned in 1834. It was 
launched as a 15 per cent. line. It is said that a wealthy banker in the 
eastern counties made a will, leaving considerable property to trustees to 
be expended in parliamentary opposition to railways. The Great West- 
ern was thrown out in 1834, but passed in 1835. The London and South- 
ampton, now the London and Southwestern, was proposed in 1832, but 
Avas not sanctioned till 1834. 

In 1836 came the first railway mania. Up to this time the difficulty 
had been to pass an}'' bill at all ; now competing schemes began to be 
brought before Parliament. Brighton was fought for by no less than five 
companies, at the total expenditure of £200,000. The Southeastern ob- 
tained its act after a severe contest with the Mid Kent and Central Kent. 
Twenty-nine bills were passed by Parliament authorizing the construction 
of 994 miles of railway. In the autumn the mania raged with the great- 
est violence. " There is scarcely," said the Edinburgh Review, " a prac- 
ticable line between two considerable places, however remote, that has not 
been occupied by a company ; frequently two, three, or four rival lines 
have started simultaneously." The winter brought a crash, and the 
shares of the best companies became almost unsaleable. 

In 1845 most of the great lines had proved a success. The London 
and Birmingham was paying 10 per cent., the Grand Junction 11 per 
cent., the Stockton and Darlington 15 per cent., and railway shares were 
on an average at 100 per cent, premium. The railway mania broke out 
with redoubled violence ; railways appeared an El Dorado. The number 
of miles then open was 2,148. The number of miles sanctioned by Par- 
liament in the three following sessions was : 

1845 / 2,700 

1846 4,538 

1847 1,354 

Total 8,592 



6 

Had all these lines been constructed, we should have had in 1852 more 
than 10,700 miles of railway, a number which was not actually reached 
till 1861, or nine years later. But the collapse in 1846 was so severe 
that an act was passed for the purpose of facilitating the dissolution of 
companies, and a large number of lines were abandoned, amounting, it 
is said, to 2,800 miles. 

Railway extension was now menaced with a new danger. The effect 
of the panic was so great, and the losses on shares ^o severe, that the 
confidence of the public was destroyed. Besides this, as the new lines 
were opened, the dividends gradually decreased till the percentage of 
profit on capital had gone down from 5 J per cent, in 1845 to Ss in 1849 
and 3* in 1850, leaving scarcely anything for ordinary shareholders. 
As a consequence, shareholders' lines were at an end. But since 1846 a 
new custom had been gaining ground of the amalgamation of smaller 
into larger companies. I may instance the North Eastern Company, 
which consists of twenty-five originally independent railways. In this 
manner eleven powerful companies had been formed, which divided the 
greater part of England between them. The competition between these 
companies for the possession of the country was very great, and by amal- 
gamations, leases, guarantees, and i^reference stocks, they financed a large 
number of lines which otherwise could not be made. In this manner the 
construction of railways between 1850 and 1858 progressed at the rate of 
nearly 400 miles a year. 

But towards the end of 1858 the great companies had exhausted their 
funds and ardor, and proposed terms of peace. The technical phrase was 
"that the companies required rest." Again it seemed probable that rail- 
way extension would be checked. But a new state of things arose. 
Twenty years of railway construction had brought forward many great 
contractors, who made a business of financing and carrying through lines 
which they thought profitable. The system had grown up gradually 
under the wing of the companies, and it now came to the front, aided by 
a great improvement in the value of railway property, on which the per- 
centage of profits to capital expended had gradually risen from 82 per 
cent, in 1850 to 43 in 1860. The companies also found it their interest 
to make quiet extensions when required by the traflic of the country. 
Thus railway construction was continued in the accelerated ratio of more 
than 500 miles a year. The following table gives a summary of the rate 
of progress from 1845 to 1865 : — 

UNITED KINGDOM — MILES CONSTRUCTED. 



} 

1845 2,440 



Average Number. 
Year. Miles Opened. Opened per An. 

1834 about 200 

1840 '• 1,200 .. 

I 
1850 6,500 i 

1855 8,335 | 

1860 10,434 I 

1865 13,289 | 



133 
240 
812 
367 
425 
511 



During the same year the percentage of profits to capital expended were 
as follows : — 



Per cent. Per cent. 



1845 5.48 

1850 3.31 

1855 3.90 



1860 4 39 

1865 4.46 



The latter table, which is abridged from an annual statement in Here- 
path's Journal, scarcely gives an idea of the gradual manner in which 
the dividends sunk from their highest point in 1845 to their lowest in 
1850, and of their equally gradual recovery from 1850 to 1860 and 18G5. 
The main results of the two tables are, first, the close connection between 
the profit of one period and the average number of miles constructed in 
the next five years; and, second, the fact that the construction of railways 
in the United Kingdom has been steadily increasing since 1855, and is 
now more than 500 miles per annum. 

The number of miles authorized by Parliament during the last six 
years is stated in the Railway Times to be as follows : — 

Year. Miles. Year. Miles. 

1861 1,332 1864 1,329 

1862 809 1865 1,996 

1863 795 1866 1,062 



7,323 
Average 1,220 

Hence the miles authorized by Parliament for the last six years have 
been double the number constructed; and there must be about 3,500 
miles not begun or not completed — a number sufficient to occupy us for 
fully seven years, at our present rate of construction. 

Such is a brief summary of the history of 'railway extension in Great 
Britain and Ireland. It may be thrown into five periods : 

1. The period of experiment, from 1820 to 1830. 

2. The period of infancy, from 1830 to 1845. 

3. The period of mania, from 1845 to 1848. 

4. The period of competition by great companies, from 1848 to 1859. 

5. The period of contractors' lines and companies' extensions, from 
1859 to 1865. 

III. — Distribution of Railways in the United Kingdom. 

The returns of the Board of Trade to the end of 1865 give the follow- 
ing distribution of the 13,289 miles then open: — 

Total 
Double Lines. Single Lines. Miles Open. 

England and Wales 6,081 3,170 9,251 

Scotland 946 1,254 2,200 

Ireland 476 1,362 1,838 

7,503 5,786 13.289 

Hence there is a considerable preponderance of double lines over single 
lines in England, and of single lines over double in Scotland and Ireland. 

The following table shows which country has the greatest length of 
railways in proportion to its area : — 





Square Miles. 


Railway Mileage. 


per Mile of Railway 


9,251 


6.25 


2,200 


14. 


1,838 


17.7 



Area in 
Square Miles. 

England and Wales 57,812 

Scotland 30,715 

Ireland 32,512 

So that England and Wales have a mile of railway for every six and a 
half square miles of country, being the highest proportion in the world, 
while Scotland has less than Imlf that accommodation, and Ireland little 
more than one-third. 

The following table shows which country has the greatest length of 
railway in proportion to population : — 

Population per 
Population in 1860. Railway Mileage. Mile of Railway. 

England and Wales 20,228,497 9,251 2,186 

Scotland 3,096,308 2,200 1,409 

Ireland 5,850,309 1,838 3,182 

So that Scotland, a thinly inhabited country, has the greatest railway 
mileage in proportion to her population, and we shall afterwards find that 
she stands at the head of all European countries in this respect. 

The manner in which this railway mileage is distributed through Eng- 
land deserves some attention. A railway map will show that the general 
direction of English lines is towards the meti'opolis. London is a centre 
to which nearly all the main lines converge. Every large town is, in its 
degree, a centre of railway convergence. For example, look at the lines 
radiating from Leeds, from Hull, from Birmingham, or from Bristol. 
But all those lesser stars revolve, so to speak, round the metropolis as a 
central sun. 

A great deal may be learned of the character and political state of a 
country from the convergence of its railway lines. Centralizing France 
concentrates them all on Paris. Spain, another nation of the Latin race, 
directs her railways on Madrid. Italy shows her past deficiency of unity, 
and want of a capital, by her straggling and centerless railroads. Bel- 
gium is evidently a collection of co-equal cities without any prepondera- 
ting focus. Germany betrays her territorial divisions by the multitude 
of her railway centres. Austria, on the contrary, shows her unity by the 
convergence of her lines on Vienna. The United States of America 
prove their federal independence by the number of their centres of 
radiation. 

The national character of the English nation may be traced in the same 
way. Though our raihvays point towards London, they have also another 
point of convergence — towards Manchester and the great port of Liver- 
pool. The London and Northwestern, the Great Northern (by the 
Manchester, Shefiield and Lincolnshire line), the Great Western and the 
Midland run to Manchester and Liverpool from the south. The Man- 
chester, Shefiield and Lincolshire railway, the London and Northwest- 
ern Yorkshire and Carlisle lines, and the network of the Lancashire and 
Yorkshire Company converge on them from the east and north. The 
London and Northwestern Welsh railways and the Mid Wales and 
South Wales lines communicate with them from the west. Thus our rail- 
way system shows that Manchester and Liverpool are the manufacturing 
and commercial capitals of the country, as Loudon is its monetary and 



9 

political metropolis, and that the French centralization into a single great 
city does not exist in England. 

It remains to describe the great systems into which the English rail- 
ways have been amalgamated. There are in England twelve great com- 
panies, with more than £14,000,000 each of capital, which in the aggre- 
gate comprises nearly seven-eighths of our total mileage and capital. 
They divide the country into twelve railway kingdoms, genei'ally well 
defined, but sometimes intermingled in the-most intricate manner. They 
may be classified into the following seven districts : — 

Miles Open. Capital Expended. 

1. Northwestern District — London and Northwestern 

Railway 1,306 £53,210,000 

2. Midland District — Midland Railway 677 26,103,000 

3. Northeastern District — Great Northern Railway 422 18,200,000 

Northeastern Railway 1,121 41,158,000 

4. Mersey to Humber District — Lancashire and Yorkshire 

Railway 403 21,114,000 

Manchester, SheiEeld and Lincolnshire Railway 246 14,113,000 

5. Eastern District — Great Eastern Railway \ 709 23,574,000 

6. Southeastern District — Southeastern Railway 319 18,626,000 

London, Chatham and Dover Railway 175 14,768,000 

London and Brighton Railway 294 14,561,000 

7. Southwestern District — London and Southwestern 

Railway 500 16,364,000 

Great Western Railway 1,292 47,630,000 

Total 7,564 £309,421,000 

In Scotland there aY'e three great companies : — 

Miles Open. Capital Expended. 

1. Southeast Coast — North British Railway 732 £17,802,000 

2. Central District — Caledonian Railway 561 14,797,000 

3. Southivest Coast — Glasgow and Southwestern 249 5,603,000 

Total 1,542 £38,202,000 

which include three-fourths of the whole mileage and capital of Scotch 
railways. 

In Ireland there are only two large companies : — 

Miles Open. Capital Expended. 

1. Southwestern District — Great Southern and Western 420 £5,712,000 

2. ifirfZanc^ Z>is<Wrt— Midland Great Western 260 3,625,000 

Total 680 £9,337,000 

which embrace rather more than two-fifths of the capital and mileage. 

The above figures are taken from Serepath's Rcdhvay Journal, made 
up very nearly to the present time. 

The following table shows the average gross receijjts and net })rofits, 
for three years, for the United Kingdom, and also the dividends paid on 
ordinary stock in the above great companies, except the London, Chatham 
and Dover: — 

AVERAGE RECEIPTS AND DIVIDENDS PER CENT. 

1857. 1861. 1865. 

Gross receipts 7.87 8.27 8.57 

Net protits 4.19 4.30 4.46 



861. 


1865. 


4.45 


4.65 


4.90 


5.70 


5.00 


3.56 



10 

Dividends of Great Companies : 1857. 

12 English 4.00 

3 Scotch 4.55 

2 Irish 5.00 

A verage dividends 4.51 4.78 4.64 

IV. — Cost of Railways in the United Kingdom. 

The total capital authorized and expended, up to the end of 1865, is 
given in the Board of Trade Returns, as follows, including the companies 
estimated for, which have not made a return : — 

* CAPITAL AUTHOKIZED. 

Shares £434,457,000 

Loans 143.968,000 

Total £578,425,000 

CAPITAL EXPENDED. 

Debenture Capital : 

Stock £13,312,000 

Mortgages 98,059,000—111,871,000 

Preference capital 124,517,000 

Ordinary capital 220,033,000 

V £456,421,000 

Hence the following conclusions : — 
1. The capital expended is more than half as large as the national debt. 

2. The debenture and preference capital, which are practically first 
and second mortgages of railway property, amounted in 1865 to more 
than half the whole capital expended. 

So that railway property is virtually mortgaged to the debenture and 
preference capitalist for about half its value. 

The preference capital has for some years been steadily increasing, 
while the ordinary capital has remained almost stationary. During 1865 
the preference capital increased by £19,615,000, while the ordinary 
capital only increased by £4,650,000. As the old companies almost 
always increase their capital by preference stock, I anticipate that in 
seven or eight years the debenture and preference capital will have risen 
to two-thirds of the capital expended. 

3. The unissued or unpaid capital was, in 1864, £95,000,000. This 
increased largely in 1865, by the great number of miles authorized in 
that year, and in the return for that year is £122,000,000. 

The expenditure was, in 1864, divided between the three kingdoms in 
the following proportions, including non-returning companies : — 

Cost per 
Capital Expended. Mile of Railway. 

England and Wales £379,000,000 £41,033 

Scotland 50,206,000 22,820 

Ireland 26,394,000 14,360 

Thus Ireland has made her railways for one-third the cost, and Scot- 
land for little more than half the cost of the English railways — a result 
which might be partly expected from their larger poportions of single 
lines, the greater cheapness of land, and in Ireland the lower wages of 
labor. 



11 

But the English expenditure is the highest in the world, and has given 
rise to severe remarks on the wastefulness of the English system. Let 
us examine the causes of expense. 

1. The English expenditure includes, on a probable estimate, no less 
than £40,000,000 sterling absorbed by metropolitan railways and termini. 
This of itself is £4,500 per mile on the 8,890 miles constructed. _ 

It also includes very large sums for termini in Manchester, Liverpool, 
Leeds, Sheffield, Birmingham and other great towns, far beyond what is 
paid in continental cities. 

2. The English expenditure also includes considerable capital for docks, 
as at Grimsby, where £1,000,000 was laid out by the Manchester, Shef- 
field and Lincolnshire Company; and at Hartlepool, where £1,250,000 
was spent by a company now merged in the Northeastern. 

It also includes in many instances capital expended on steamers and 
capital for the purchase of canals. 

3. The counties whose trade and population is greatest, and which are 
most thickly studded with railways, as Lancashire, Yorkshire, and Gla- 
morgan, are exceedingly hilly, and necessitate heavy embankments, cut- 
tings and tunnels, which enormously increase the cost of construction. 
The Lancashire and Yorkshire Railway has cost £52,400 per mile for 
the whole of its 403 miles. Had those counties been as flat as Belgium 
the company might probably have saved something like £20,000 per mile, 
or £8,000,000 sterling. The Manchester, Sheffield and Lincolnshire 
Company, even after deducting £1,000,000 for the docks of Grimsby, 
have spent £53,000 per mile. A flat country might have saved them a 
similar sum per mile, or £5,000,000 sterling. 

4. England, as the inventor of railways, had to buy experience in 
their construction. Other nations have profited by it. There is no doubt 
that our present system of lines could now be made at very much less 
than their original cost. In addition we have paid for experiments, such 
as the broad guage and atmosphei'ic railway. 

5. The great preponderance of double lines over single (6,081 miles 
against 3,170) has largely increased the expense as compared with the 
single lines, which predominate in other countries. 

6. The price of land in a thickly populated country like England must 
necessai'ily be higher than in the more thinly inhabited continental coun- 
tries. But beyond this, English landowners, in the first vehement oppo- 
sition to railways, acquired the habit of being bought ofi* at high prices, 
and of exacting immense sums for imaginary damages. The first 
Eastern Counties line was said to have paid £12,000 per mile for land 
through an agricultural country, being about ten times its real value. 
This habit of exaction has been perpetuated to our own day. As an 
every day instance I may mention that, only a few months ago a gentle- 
man of great wealth was selling to a railway company, which he had 
supported in Parliament, thirty acres of grass land, of which the admitted 
agricultural value was £100 an acre, and three acres of limestone, of 
which the proved value to a quarryman was £300 an acre. There was 
no residential damage, and the railway skirted the outside of the estate. 
The price of the whole in an auction room would have been about 
£4,000. The proprietor's agent, supported by a troop of eminent valuers, 
demanded £25,000. 



VI 

7. Parliamentary expenses are an item of English expenditure not oc- 
curring in countries where the concession of railways is the province of a 
department of the government. But in those countries there is almost 
always a "promoter's fund" and secret service fund, which often attain 
very large dimensions. Which is the preferable alternative? Besides, 
those who object to parliamentary committees must be prepared to give 
us a practicable substitute, which will suit the habits and feelings of the 
British nation. Now, a free nation must have liberty to bring forward 
schemes for the public accommodation, and to have them decided by some 
public tribunal, after full investigation and hearing all parties. There 
must be witnesses, and, where millions of money are at stake, there must 
be the powder of be^ng represented by the ablest advocates. Commissions 
appointed by the Board of Trade, or any other department, would be 
just as expensive. The expense of parliamentary committees is the price 
we pay for free trade in railways, and for our present amount of railway 
development. 

I believe that these causes will fully account for the higher cost of 
English railways, and, except as regards the cost of land, I think that no 
valid or practical objection can be taken to them. There is certainly the 
consolation of knowing that in return for our money we have a more 
efficient system of railways than any other country. 

V. — Traffic and Benefit of Railw^ays in the United Kingdom. 

In order to appreciate the wonderful increase of traffic which has re- 
sulted from railways, it is necessary to know the traffic of the kingdom 
before their introduction. 

Previous to the opening of the great trunk lines in 1835, passengers 
were conveyed by mail and stage coaches, a system which had reached a 
high degree of perfection. Mr, Porter, in his " Progress of the Nation," 
has calculated, from the stage coach license returns, the total number of 
miles traveled by passengers during 1834 as 358,290,000, which repi-e- 
sented 30,000,000 persons traveling 12 miles each. The fares were very 
high, being by the mails 6d. a mile inside and 4d. outside, exclusive of 
coachmen and guards, and rather less on the stage coaches. Including 
coachmen and guards, the average fares paid may be taken at 5d. per 
mile. Hence the 30,000,000 passengers paid a total of £6,250,000. 

Goods were conveyed by water or by road. 

Water communication had been developed with great perseverance, 
and was nearly as follows: — 

Miles. 

Canals — England 2,600 

Scotland 225 

Ireland 275—3,100 

NaTigations 900 

Total 4,000 

Being one mile to every thirty square miles of country. 

Canal companies always regarded with great jealousy any attempt to 
ascertain the amount of their traffic, and the only calculation I can find 
is in Smiles' "Life of Brindley," (p. 464,) where it is estimated at 
20,000,000 tons annually. The rates charged by canal carriers were, for 
the great bulk of general goods, about 4d. per ton per mile. Thus, Lon- 



don to Birmingham was 40s. per ton, and Loudon to Manchester 70s. to 
80s., the direct distances being 113 and 200 miles. The rates for coal 
were considerably less, but so high as to restrict its carriage to short dis- 
tances, and to reuder its amount inconsiderable. 

The tonnage carried by road appears to have been about one-sixth of 
that conveyed by canal, and may be taken at 3,000,000 tons. The rates 
by road were about 13d. per ton per mile, the stage wagons from London 
to Birmingham charging no less than £6 per ton for the 113 miles, and 
those from London to Leeds the enormous amount of £13 per ton for 
190 miles. Assuming that each ton by road or water was carried 20 
miles — a less average than at present — the total rates paid would have 
been nearly £8,000,000. Hence the total traffic receipts about the year 
1834 may be calculated as follows : — 

Passengers 30,000,000 = £6,250,000 

Goods tons 23,000,000 = 8,000,000 

£14,250,000 

The effect of railways was very remarkable. It might reasonably be 
supposed that the new means of communication would have supplanted 
and destroyed the old. kSingular to relate, no diminution has taken 
place either in the road or canal traffic. As fast as coaches were run off 
the main roads they were put on the side roads, or re-appeared in the 
shape of omnibuses. At the present moment there is probably a larger 
mileage of road passenger traffic than in 1834. The railway traffic is new 
and additional traffic. But railways reduced the fares very materially. 
For instance, the journey from Doncaster to London by mail used to cost 
£5 inside and £3 outside, (exclusive of food,) for 156 miles, performed 
. in twenty hours. The railway fares are now 27s. 6d. first class, and 21s. 
second class for the same distance, performed in four hours. The average 
fares now paid by first, second, and third class passengers are IM. per 
mile, against an average of 5d. in the coaching days, being little more 
than one-fourth of the former amounts. 

On canals the effect of railway competition was also to lower the rates 
to one-fourth of the former charges. In consequence the canal tonnage 
actually hicreased, and is now considerably larger than it was before the 
competition of railways. Hence the railway goods traffic, like its passen- 
ger traffic, is entirely a new traffic. The saving in cost is also very great ; 
goods are carried by rail at an average of li^d. per ton, or 40 per cent, of 
the old canal rates. * 

Now observe the growth of this new railway traffic. The following 
table from the Parliamentery returns (except for 1865) shows the receipts 
from passenger and goods traffic on railways in the following years : — 



INCREASE OF TRAFFIC. 



Total Receipts. Average An- Average of whole 
' nual Increase. 22 years. 



'^'^ £4,535,000| £i^o,,o_o,,^ 

1848 9,933,000 { 

} 1,653,000 

1855 21,507,000^ 

} 1,252,000 

1860 27,'766,000^ 

1865 35,890,000/ 1,619,000 



£1,423,000 ' 



14 

Thus the average annual increase for the whole twenty-two years was 
£1,423,000 per annum ; and the increase was largest in the latest years. 
The traffic in 1864 and 1865 was thus made up : — 

1864. 1865. 

Passengers £15,684,000 £16,572,000 

Goods 18,331,000 19,318,000 



Total receipts £34,015,000 £35,890.000 

And the things carried were, exclusive of carriages and animals, — 

1864 1865. 

Passengers 229,272,000 251,863,000 

Goods, tons 110,400,000 114,593,000 

Being six times as many as before the introduction of railways. 
The increase was extraordinary. 

1864 over 1863. 1865 over 1864. 

Increase in passenger receipts £1,163,000 £888,000 

" goods " 1,696,000 986,000 



£2,859,000 • £1, 874,000 

So that the increase in 1864 was just double the average annual increase. 

The increase in things carried was : 

1864 over 1863. 1865 over 1864. 

■ Increase in number of passengers.... 24,637,000 22,590,000 

" tons of goods 9,800,000 4,233,000 

An increase in 1864 equal to five-sixths of the whole number of passen- 
gers in 1834, and to five-twelfths of the total goods tonnage in 1834 ; a 
wonderful proof of the capabilities and benefits of the railway system. 

Now let us examine the saving to the country. Had the railway traf- 
fic of 1865 been conveyed by canal and road at the pre-railway rates, it 
would have cost thi-ee times as much. Instead of £36,000,000 it would 
have cost £108,000,000. Hence there is a saving of £72,000,000 a year, 
or more than the whole taxation of the United Kingdom. 

But the real benefit is far beyond even this vast saving. If the traffic 
had been already in existence it would have been cheapened to this ex- 
tent. But it was not previously in existence; it was a new traffic, created 
by raihvays, and impossible without railways. To create such a traffic, 
or to furnish the machinery by which alone it could exist, is a far higher 
merit than to cheapen an existing traffic, and has had far greater influ- 
ence on the prosperity of the nation. 

Look at the effects on commerce. Before 1833 the exports and im- 
ports were almost stationary. Since that time they have increased as fol- 
lows : — 

INCREASE OF EXPORTS AND IMPORTS. 

One Year '^°^^^ Exports 

and Imports 
1833 £85,500,000 

1842 116,000,000 

1850 171,000,000 

1855 260,000,000 

1860 375,000,000 

1865 490,000,000 



Per cent. 
Increase. 


Per cent, per 
annum Increase 


36 


4 


47 


6 


:52 


10.4 


44 


9 


30 


« 



15 

I am far from attributing the whole of this increase to railways. Free 
trade, steamboats, the improvements in machinery, and other causes con- 
tributed powerfully to accelerate its progress. But I wish to call atten- 
tion to two facts. 

1. This increase could not have taken place without railways. It would 
have been physically impossible to convey the quantity of goods, still less 
to do so with the necessary rapidity. 

Mr Francis, in his " History of Railways," draws a striking picture 
of the obstacles to commerce in 1824, from the want of means of con- 
veyance : 

"Although the wealth and importance of Manchester and Liverpool had immensely 
increased, there was no increase in the carriage power between the two places. The 
canal companies enjoyed a virtual monopoly. Their agents were despotic in their treat- 
ment of the great houses which supported them. The charges, though high, were sub- 
mitted to, but the time lost was unbearable. Although the facilities of transit were 
manifestly deficient, although the barges got aground, although for ten days during 
summer the canals were stopped by draught, and in severe winters frozen up for weeks, 
yet the agents established a rotation by which they sent as much or as little as suited 
them, and shipped it how or when they pleased. They held levees attended by crowd?, 
who almost implored them to forward their goods. The effects were disastrous ; mills 
stood still for want of material ; machines were stopped for lack of food. Another fea- 
ture was the extreme slowness of communication. The average time of one company 
between Liverpool and Manchester was four days, and of another thirty-six hours ; and 
the goods, although conveyed across the Atlantic in twenty-one days, were often kept 
six weeks in the docks and warehouses of Liverpool before they could be conveyed to 
Manchester. ' I took so much for you yesterday, and I can only take so much to-day,' 
was the reply when an urgent demand was made. The exchange of Liverpool resounded 
with merchants' complaints ; the counting-houses of Manchester re-echoed the murmurs 
of manufacturers." — Vol. i., p. '77 and "78. 

This intolerable tyranny produced the Manchester and Liverpool rail- 
way, and gave the greatest impetus to railway development. 

2. The increase of imports and exports vms in strict proportion to the 
development of railways. The following table shows the miles of railway 
and navigation opened, and the total exports and imports. It must be 
remembered that there are about 4,000 miles of navigation, and that the 
exports and imports had been for some time stationary before 1833 : — 

PROPORTION OF EXPORTS AND IMPORTS TO RAILWAYS AND NAVIGATION. 

Miles of Total exports Exports 

railway and and and imp'ts 

Year. navigation. imports. per mile. 

1833 4,000 £85,500,000 £21,3t5 

1840 5,200 119,000,000 22,884 

1845 6,441 135,000,000 20,959 

1850 10,733 171,800,000 16,006 

1855 12,334 260,234,000 21,098 

1860 14,433 375,052,000 52,985 

1865 17,289 490,000,000 28,341 

Here the increase in exports and imports keeps pace with railway de- 
velopment from 1833 to 1845, falls below it during the enormous multi- 
plication of railways and the railway distress from 1845 to 1850, rises 
again to the former level in 1855, and outstrips it after that year, aided 
by the lowering of fares and the greater facilities for through booking 
and interchange of traffic. I cannot think that this correspondence within 
the two increases is accidental, especially as I shall show that it exists 
also in France. 



16 

But, it may be said, how do exports and imports depend on the devel- 
opment of the railway system ? I answer, because they depend on the 
goods traffic ; and the goods traffic increases visibly with the increase of 
railway mileage and the perfecting of raihvay facilities. Goods traffic 
means raw material and food brought from ports, or mines, or farms, to 
the producing population, and manufactured articles carried back from 
the producers to the inland or foreign consumers. The exports and im- 
ports bear a variable but appreciable proportion to the inland traffic. 
Every mineral railway clearly increases them ; every agricultural railway 
increases them less clearly but not less certainly. Hence I claim it as an 
axiom, that the commerce of a country increases in direct proportion to 
the improvement of its railway system, and that railway development is one 
of the most powerful and evident causes of the increase of commerce. 

Now, let us turn to the benefits which railways have conferred on the 
working classes. For many years before 1830 great distress had prevailed 
through the country. Mr. Molesworth, in his " History of the Reform 
Bill," says that it existed in every class of the community. " Agricul- 
tural laborers were found starved to death. In vain did landlords abate 
their rents and clergymen their tithes ; wages continued to fall till they 
did not suffice to support existence." Innumerable petitions were pre- 
sented from every county in England, stating that the distress " was 
weighing down the landholder and the manufacturer, the shipowner and 
the miner, the employer and the laborer." Trade and commerce were 
standing still while poj)ulation was rapidly increasing at nearly the same 
rate as during the most busy and prosperous period of the French war. 
The increase from 1801 to 1861 is given in the census : — 

ENGLAND AND WALES. 



Popula- Inc. per ct. 

Year. tion. for 10 years. 

1801 8,892,536 11 

1811 10,164,256 14 

1821 12,000,236 18 

1831 13,896,T97 16 



Popula- Inc. per ct. 

Year. tion. forlOvears. 

1841 15.914,148 14 ' 

1851 l'(,927,609 13 

1861 20,066,224 12 



The increase during the ten years from 1821 to 1831, which included 
so much disti'ess, was no less than 16 per cent., distributed pretty uni- 
formly between the agricultural and manufacturing counties, and in itself 
almost a sufficient cause for the distress. But what has happened since ? 
Increased facilities of transit led to increased trade ; increased trade 
gave greater employment and improved wages ; the diminution in the 
cost of transit and the repeal of fiscal duties cheapened provisions ; and 
the immense flood of commerce which set in since 1850 has raised the in- 
comes and the prosperity of the working classes to an unprecedented height. 
Railways were the first cause of this great change, and are entitled to 
share largely with free trade the glory of its subsequent increase and of 
the national benefit. But one portion of the result is entirely their own. 
Free trade benefited the manufacturing populations, but had little to do 
with the agriculturists. Yet the distress in the rural districts was as great 
or greater, than in the towns, and this under a system of the most rigid 
protection. How did the country population attain their present pros- 
perity ? kSimply by the emigration to the towns or colonies of the redun^ 
dant laborers. This emigration was scarcely possible till the construction 



17 

of railways. Up to that time the farm laborer was unable to migrate ; 
from that time he became a migratory animal. The increase of popula- 
tion in agricultural counties stopped, or was changed into a decrease, and 
the laborers ceased to be too numerous for the work. To this cause is 
principally owing the sufficiency of employment and wages throughout 
the agricultural portion of the kingdom. If I may venture on a com- 
parison, England was, in 1830, like a wide-spreading plain flooded with 
stagnant waters, which were the cause of malaria and distress. Railways 
were a grand system of di'ainage, carrying away to the running streams, 
or to the ocean, the redundant moisture, and restoring the country to fer- 
tility and prosperty. 

VI. — Railways in France. 

In turning from England to France we enter a country completely dif- 
ferent in its railway organization. In England everything is left to indi- 
vidual enterprise and independent companies. In France nothing can be 
done without the aid of the government. They tried the English sys- 
tem, and failed, just as they tried parliamentary government and failed. 
The independent railway companies broke down, and it was found abso- 
lutely necessary to change to a regime of government guarantees and gov- 
ernment surveillance, suited to the genius of the French people, and under 
which they regained confidence and prosperity. 

Before the introduction of railways France possessed an extensive sys- 
tem of water communication, which is now of the following extent : — 

Miles. 

Navigable rivers 4,820 

Canals 2,880 

Total 7,700 

by which goods were conveyed at very reasonable rates, varying from Id. 
to 2d. per ton per mile, or about half the English charges. But the de- 
lays were very great ; three or four months for a transit of 150 miles was 
quite usual. And the canals paid scarcely 1 per cent, dividend, while 
their English cotemporaries were paying 5 to 20 per cent. . 

Communication by road was also cheaper, but slower, than in England. 
The passengers paid from IM. to 3d. per mile, instead of the 3d. to 6d. 
paid in England. But they only traveled five to six miles an hour in- 
stead of the English eight to ten. Goods paid by road about od. per ton 
per mile for ordinary conveyance, and 6d. for quick despatch, being less 
than half the English charges. The distances in France were greater 
than in England, the commerce was less, and labor and food were 
cheaper ; thus fully accounting for the difference. 

Tramvv'ays were introduced into France in 1823, by the construction of 
a line of eleven miles from the coal mines of St. Etienne, and this was 
followed by two much longer lines of a similar character, which were 
opened by sections between 1830 and 1834. They are dignified in French 
books with the title of railways, but they were really nothing but horse 
tramways, and were sometimes even worked by oxen. 

The success of the Manchester and Liverpool railway provoked some 
real though sliort railways in France, especially those from Paris to St. 
Germain and to Versailles. But in 1837 only 85 miles had been opened, 
against nearly 500 in England. In 1837 and 1838 the French Chambers 

2 



18 

threw out a scheme of their government for the construction by the State 
of an extensive system of railways, but granted concessions to private 
companies for lines to Rouen, Havre, Dieppe, Orleans, and Dunkerque. 
These lines were abandoned for a time, in 1839, for want of funds. 

In this emergency Mr. Locke, the great English engineer, restored the 
fortunes of French railways. Assisted by the London and Southwestern 
company, and Mr. Brassey, and with subventions from the French Gov- 
ernment, and subscriptions from English shareholders, and a powerful 
corps of English navvies, he recommenced, carried through the line from 
Paris to Rouen, and from Rouen to Havre, and fairly gave the start to 
railway enterprise in France. k 

In 1842 a new law was passed, by which the State undertook the earth- 
works, masonry, and stations, and one-third of the price of laud ; the de- 
partments were bound to pay by instalments the remaining two-thirds of 
the land ; and the companies had only to lay down rails, maintain the 
pei'maneut way, and find and work the rolling stock. It was intended 
that three-fifths of the total cost should be home by the State and depart- 
ments, and two-fifths by the companies. Under this system of subventions, a 
number of concessions were made, the shares rose to 50 per cent, premium, 
and in 1848 a total of 1,092 miles had been opened. The revolution of 
1848 was a terrible shock to their credit, and shares vrent down to half 
their value. Many lines became bankrupt and Avere sequestrated, and for 
three years fresh concessions were entirely stopped. But the concessions 
already made were slowly completed, and by the end of 1851 France 
had opened 2,124 miles against 6,889 opened in the United Kingdom. 

In 1852 the Emperor took French railways in hand, and by a system 
of great wisdom, singularly adapted to the French people, he put an end 
to the previously feeble manao'ement, and launched into a bold course of 
railway development. The French public shrank from shares without a 
guarantee ; he gave a State guarantee of 4 or 5 per cent, interest. The 
French public preferred debentures to shares ; he authorized an enor- 
mous issue of debentures. The companies complained of the shortness 
of their concessions ; he prolonged them to a uniform period of ninety- 
nine years. At the same time he provided for the interest of the State by 
a rigid system of government regulation and audit. And, lastly, coming 
to the conclusion that small companies were weak and useless, he amal- 
gamated them into six great companies, each with a large and distinct 
territory ; and able, by their magnitude, to inspire confidence in the pub- 
lic, and aid the government in the construction of fresh railways. This 
vigorous policy was very soon successful. Capital flowed in I'apidly, con 
struction proceeded with rapidity, and between the end of 1851 and 1857 
the length of the railways opened was increased from 2,124 miles to 4,475, 
or more than doubled.' England at that time had opened 9,087 miles. 
France was now exceedingly prosperous. Her exports and imports 
had increased from £102,000,000 in 1850, to £213,000,000 in 1857, or 
more than 100 per cent in seven years. The six great companies were 
paying dividends which averaged 10 per cent. ; and the government guar- 
antee had never been needed. Railways united all the great towns and 
ports, and met the most pressing commercial wants. But the Emperor 
was not satisfied. France, v>'ith double the territory of England, had 
only half the railway accommodation, and wide districts between all the 
trunk lines were totally unprovided with railways. The government en- 



I 



19 

gineers of the ponts et chaussees were prepared with plans and estimates 
for 5,000 miles of lines, which had been inquired into, and officially de- 
clared to be dhdiUte publique, i. e., a public necessity. The country dis- 
tricts clamored for these lines. But how w^ere they to be made ? The 
public were not prepared to subscribe for them, the government could not 
undertake them, an<l the great companies were too well satisfied with their 
10 per cent, dividend to wish to endanger it by unremunerative branches. 
The plan of the Emperor was intricate but masterly. He said to the 
companies : " You must make these lines. The 4,520 miles of railway 
already made shall be a separate system for the present, under the name 
of Anclen Reseau, the old lines. You no longer require the guarantee 
of the State for these lines. But I will give you an extension of the 
ninety-nine years of your concessions, by allowing them to commence at 
later dates ; beginning with 1852 for the Northern Company, and at 
various dates for the rest, up to 1862, for the Southern Company. I also 
engage that £9,000,000 sterling of the net revenue of these old lines shall 
for ever be divisable among the shareholders, witliout being liable for any 
deficit of the extension lines, an amount which will give you a clear and 
undefeasible dividend of 6 to 8 per cent. ; with a strong probability — 
almost a certainty — of getting much more from surplus traffic." 

" Next the new lines, 5,128 miles in length, shall be a separate system, 
"under the name of Nouveau Reseau, or extension lines. Their estimated 
cost is £124,000,000, and you, the companies, may raise this sum b)'' de- 
bentures, on which the government will guarantee 4 per cent, interest, 
and .65 sinking fund for the paying them off in fifty years. Any extra 
cost you must pay yourselves." 

These, in their biiefest possible form, are the terms on which the Em- 
peror imposed an average of nearly 1,000 miles per company on the six 
great companies of France. They were accepted with considerable re- 
luctance. Their efiect has been to lower the value of the shares of the 
great companies, for the bargain is considered disadvantageous. The com- 
panies cannot borrow at less than 5.75, so losing 1.10 percent, per annum 
on every debenture ; and as the lines cost more than the £124,000,000, 
the overplus has been raised by the companies by debentures, for which 
they alone are resj)onsible. But on the other hand, they get an immense 
amount of fresh traffic over their old lines, which must ultimately more 
than repay this loss. English railways would be thankful if their ex- 
tensions cost them so little. 

In the following years other lines were a(Jded, with similar guarantees 
and with considerable subventions from the State, and in 1863 an addi- 
tional series of lines, 1,974 miles in length, were imposed on similar 
terms, but with some modifications of the conventions with two of the 
weakest companies. 

Besides the government lines, the Emperor encouraged to the utmost 
the efforts of the departments, and in July, 1865, a law was passed re- 
specting chehilns cle fer d'interet local, which authorized departments and 
communes to undertake the construction of local railways at their own 
expense, or to aid concessionaires with subventions to the extent of one- 
fourth, one-third, or in some cases one-half the expense, not exceeding 
£240,000. 

Not content with passing this law, the minister of public works, in the 
very next month wrote to the prefets of the 88 departments of France, 



20 

to acquaint them fully with its provisions, and to invite them to commu- 
nicate with their councils general, and deliberate upon the subject. The 
result was that sixteen councils requested their prefets to make surveys 
and inquiries to ascertain Avhat lines would be advisable. 32 departments 
authorized their prefets to prepare special plans, and even to make pro- 
visional agreements with the companies to carry out lines, subject to con- 
firmation by the councils. Two of these made immediate votes, viz., the 
department of Ain, £56,000, and Herault, £260,000, for lines which they 
approved, A third, the department of Calvados, voted subventions 
amounting to £1,000 per mile for one line, and £2,000 per mile for an- 
other line. Besides, these five departments put railroads into immediate 
execution by contracts with independent companies. Among these were : 

Subvention. 

Saone et Loire £14,000 

" (besides the lanci) 40,000 

Manche (with an English company, and including land) 40,000 

Rhone 240,000 

Tarn 171,000 

By these measures the Emperor has brought up the concessions to the 
following total : — 

Miles. 

Ancien Reseau, or old lines 5, 027 

Nbuveau " orextension lines 7,565 



12,592 
Being very nearly the length of our constructed lines in 1864. 

But of this mileage there has been constructed up to the present time only 8,134 



Leaving still unconstructed 4,458 

being one-third of the whole concessions. Of this, 1,800 miles are now 
being constructed, and 1,600 miles are expected to be opened by the end 
of 1867. 

Hence the lines constructed in France up to and including 1865, are 
8,134 miles, or about the same length as the lines constructed in the 
United Kingdom to the end of 1865 ; so that France is ten years behind 
England in actual length of railways constructed, and at least fifteen 
years behind England if her larger territory and population are taken 
into account ; and I must add that France would have been very much 
farther behind had it not been for the vigorous impulse and the wise 
measures of the Emperor Napoleon. 

The progress of completion from 1837 to the present time is shown in 
the following table : — 

MILES CONSTRUCTED. Average annual 

Year. Miles open. Increase 
1837 85 

1840 338 



■} 



1845 508 I 

1850 1,807. 

1855 3,315 



} 

1860 5,586 I 

1865 8,134/ 



84 
34 
259 
301 
454 
509 



21 

This shows the insignificant rate of progress up to 1845, and the larger 
but still slow progress up to 1855. From that time the effect of the Em- 
peror's policy becomes visible in the increased rate of progression. It 
is expected that between 1852 and 1872 more than 9,500 miles will have 
been opened, quadrupling the number constructed in the previous twenty 
years, and coutributmg in the highest degree to the prosperity and 
wealth of the French nation. 

Railway history in France may be briefly summed up in four periods: 

1. The period of independent companies, from 1831 to 1841. 

2. The period of joint partneship of the State and the companies, from 
1842 to 1851. 

3. The period of Imperial amalgamations and guarantees, from 1852 to 
1857. 

4. The period of guaranteed extension lines from 1858 to the present 
time. 

VII. — Cost and Results of French Railways. 

The French system of railway organization is worthy of attentive 
study. It is in many points novel to an Englishman; it is often charac- 
terized by remarkable talent ; and some of its regulations are very in- 
structive and worthy of imitation. 

In extent the French lines are far inferior to the English, whether 
judged by the area or population of the two countries. 

COMPARISON BY AREA. 

Area in Railway Mileage. Square Miles per 

Country. Square Miles. 1865. Mile of Railway. 

United Kingdom 120,927 13,289 9 

France 211,852 8,134 26 

COMPARISON BY POPULATION. 

Railway Mileage. Population per 

Country. Population, 1861. 1865. Mile of Railway. 

United Kingdom 29,321,000 13,289 2,206 

France 37,382,000 8,134 4,595 

Hence, measured by area, France has only one-third of the railway 
accommodation, and measured by population only one-half of the railway 
accommodation of the United Kingdom. 

The capital authorized and expended to the 31st December, 1865, was 
as follows : — 

CAPITAL AUTHORIZED. 

Ancien Reseau, or old lines £151,000,000 

Nouveau " or extension lines 209,000,000— £360,000,000 

Including 64,000,000 subventions. 

CAPITAL KXPENDED, 1866. 

Debentures £178,700,000 

Shares 54,800,000 

Subventions 27,500,000— £261,000,000 

So that the French companies borrow more than three times the amount 
of their share capital ; reversing the English rule, of borrowing only one- 
third of the share capital. But if we consider preference capital as a 



second mortgage, the English practice is to borrow an amount equal to 
the ordinary share capital. This, however, is still a long way fr/im the 
French regulations. 

The capital not paid up is nearly £100,000,000. Of this nearly one-half 
will be required in the next three years for lines approaching completion. 

The cost per mile of French railways is as follows : — 

Ancien Reseau $30,650 

Nouveau " 27,350 

As the nouveau reseau is almost entirely composed of single lines, this 
does not show very great cheapness of construction. We are making our 
country lines much cheaper, particularly in Ireland and Scotland. 

The eflect of railway competition with canals was the same as in Eng- 
land. The canal rates were reduced to one-third of their former amount, 
and the canal traffic has increased instead of diminishing. The average 
railway fares and rates are stated by M. Flachat, in his work on railways, 
to be 6 to 7 centimes for each passenger, and sou per kilometre, being Id. 
to l-iV<^- ps^* mile, as compared with l^d. per mile, the average on Eng- 
lish railways. 

The increase of traffic since 1850 is stated in the official returns as fol- 
lows : — 

INCEEASE OP TEAFFIC, 

Average 
Average Annual Increase for 

Year. Total Receipts. Annual Increase. Fifteen Years. 

1850 £3,824,400 . 

\ £1,307,000" 

1855 10,358,000=^ 

\ 1,217,000 

1860 16,443,000;^ 

\ 1,192,000 

1865 22,400,000 -* 



£1,238,400 



Thus the increase has been more equable than in England, but smaller 
in amount, showing an average of £1,238,400, against £1,423,000 in Eng- 
land. But I see it stated in the railway papers that the first nine months 
of 1866 show much more than the usual increase. 

M. Flachat gives a calculation of the saving to the nation by railway 
conveyance, which he makes a minimum of £40,000,000 a year. But it 
is based on the supposition that all the new trade would have been car- 
ried by road, which is obviously untenable. Probably £25,000,000 to 
£30,000,000 is a safer estimate. A writer in th% "Dictionaire du Com- 
merce" goes into elaborate calculations of the money-saving arising out 
of the greater rapidity of railways, and values it at £8,000,000, on the 
basis that the time of a French citizen is worth 5d. an hour. I give the 
passage entire : — 

" In France, the number of kilometres traveled by passengers in 1856 was 2,200,000,- 
OOQ. In traveling tliis distance they would have spent 290,000,000 hours, while they 
have only been 50,000,000 hours on ihe railway. The saving in time of traveling by 
railway has therefore been 240,000,000 hours, which, at the moderate price of 5d. per 
hour, represent an economy of 120,000,000 frs. Besides this, the time lost in stoppages 
at small inns (auberges) used to exceed that spent in traveling, and hence on this head 
alone we may calculate on a saving of more than 100,000,000 frs. But even if we should 
reduce this valuation to 80,000,000, or still lower to 60,000,000 trs., there cannot be any 
doubt that the saving to the traveler in the matter of time alone exceeds 200,000,000 
frs. (£8,000,000)."— Vol. i., p. 638. 



Passing from individuals to commerce, the effect of railways has heen 
very marked, and is warmly acknowledged by the principal French 
writers. The following table shows the progress of French trade: — 

INCREASE OP EXPOETS AND IMPORTS. 

Total Exports Increase per Cent. 

Year. and Imports. Increase per Cent. per Annum. 

1840 £82,520.000 — — 

1845 97,080,000 15.. 3. 

1850 102,204,000 5. 1. 

1855 173,076,000 50. 10. 

1860 232,192,000 34. 6.8 

1865 293,144,000 26.25 5.25 

The revolution of 1848 accounts for the small increase between 1845 
and 1850, but it is plain that the great increase in French commerce was 
between 1850 and 1860, contemporaneously with the great development 
of railways. When traveling in France I have always heard railways 
assigned as the cause of their present commercial prosperity. 

The proportion which the exports and imjjorts bore to the means of 
communication is shown in the following table : — 

PROPORTION OP EXPORTS AND IMPORTS TO RAILWAYS AND NAVIGATION. 

Navigations Exports and Imports 

(7,700 miles), per 
Year. and Railways. Exports and Imports. Mile Open. 

1840 8,264 £82,520,000 £9,985 

1845 8,547 97,080,000 11,358 

1850 9,507 102,204,000 10,750 

1855 11,015 173,076,000 15,712 

1860 13,286 232,192,000 17,476 

1865 15,830 293,144,000 18,518 

Here there is a steady rise in the amount per mile, checked only by 
the revolution of 1848. But the principle that there is a distinct corres- 
pondence between means of communication and the exports and imports 
is already shown. 

The effect of railways on the condition of the working classes has also 
been very beneficial. The extreme lowness of fares enables them to 
travel cheaply, and the opportunity is largely used. The number of 
third class passengers in France is 75 per cent, of the total passengers, 
against only 58 per cent, in England (M, Flachat, p. 60). The result of 
these facilities of motion has been an equalization of wages throughout the 
country, to the great benefit of the rural populations. M. Flachat says : — 

" Railways found in France great inequnlity in the wages of laborers; but they are 
constantly remedying it Wherever they were constructed in a district of low wages, 
employment was eagerly sought. The working classes rapidly learnt to deserve high, 
wages by the greater quantity of work done. Agriculture had been unable to draw out 
the capabilities of its workmen, and was for the moment paralyzed by want of hands; 
but industry developed fresh resources. The total amount of work done was consid- 
erably increased all over the country. The difficulties of agriculture were removed by 
obtaining in return for higher wages a larger amount of work than before, and also 
because machines began to be used in cultivation. Everywhere it was evident that 
increased energy accompanied increased remuneration. This is the point in which rail- 
ways have most powerfully increased the wealth of France. The moral result of this 
improvement in the means of existence of the working class has been to diminish the 
distance which separates the man who works only for himself from the man who labors 
tor a master. In the education of the workman's childien, in his clothing, in his do- 
mestic life, and even in bis amusements, there is now an improvement which i:aises him 
nearer to his master." — pp. 78 and 79. 



24 

I am sure we shall all rejoice at this evidence of the benefits conferred 
by railways upon the working classes of that great neighboring nation. 
I wish there Avas time to give you additional extracts, showing the im- 
mense services of railways to the industry of France, showing tliat France 
was kept back by the difficulty of communication, by the immense dis- 
tances to be traversed and the impossibility of conveying cheaply and 
rapidly the raw materials of manulactures. Railways have supplied this 
want, and have given a new impetus to production and new outlets for 
the produce. 

Turning to the shareholders, there are some curious facts which sur- 
prised me not a little. The popular notion is, that in France railway 
traffic bears a much higher proportion to capital expended than in Eng- 
land. The phrase " They manage these things better in France" is for- 
ever on the lips of the British shareholder when he talks of his own paltry 
4^- per cent, dividend, or of the 8 1 per cent, gross receipts. The world in 
general believe that a 10 or 12 per cent. French line, like the Orleans of 
France, really has a traffic of at least that amount. But this is an entire 
mistake. The gross traffic receipts of France are now 9.6 per cent, on 
the share and debenture capital, or 1 per cent, more than in England. 
And the net receipts, after deduction of 45 per cent, working expenses, 
are now 5.28 per cent, on the total share and debenture capital, being .82 
or about four-fifths per cent, higher than in England. Yet the French 
companies pay an average dividend of 10 per cent., while the English 
pay only the natural dividend of 4?. Here are the figures, for the 
benefit of the sceptical : — 

AVERAGE RECEIPTS AND DIVIDENDS PER CENT. 

Name of Company. 1859. 1861. 1865. 

Gross receipts 10.5 

Net profits 5.1 

Dividends of Great Companies : 

Nord 15. 

Orleans 18. 

Midi 4. 

Quest 1.5 

Est 3.13 

Mediterrannee 10.6 

Average 10.54 13. 10.53 

Compare these figures with those for the English lines given above. 
You will see the remarkable correspondence between the gross and net 
receipts and the very remarkable dissimilarity in the dividends. How is 
this accounted for? 

Look at the table of capital expended. Disregarding the £27,500,000 
subventions, as corresponding to the dixierae tax paid by the companies, 
there is £233,000,000 share and debenture capital, out of which a por- 
tion of the debentures are charged to capital under the conventions for 
the extension lines. Being for new railways they have not yet been trans- 
ferred to the revenue account. Hence the interest-bearing capital re- 
duced, and the interest itself increased. 

The large amount of debentures now comes into play, on which there 
is paid fi'om 5 to 5^ per cent., leaving an overplus to accumulate for the 
shares, so raising the interest on shares to nearly 7 per cent. 



11. 


9.6 


6.2 


5.28 


16.5 


17. 87 


20. 


11.2 


10. 


8. 


8.5 


7.5 


8. 


6.6 


15. 


12. 



25 

But this is not enough. In 1863 the State bound itself to contribute 
to certain lines annual subventions, which in 1865 came to £551,000, and 
the State also paid during the same year, in respect of their guarantees of 
the debentures in the nouveuu reseau, £1,320,000, making a total sul)ven- 
tion in 1865 of £1,871,000, an amount sufficient to pay more than 3 per 
cent, on the share capital of £54,800,000. The guarantee of £1,220,000 
on the nonveau reseau, however, is not an absolute subvention, as it will 
be repayable gradually by the companies when their income exceeds a 
fixed amount. It is therefore a loan by the State, repayable on the oc- 
currence of a contingency, and at an uncertain date. 

Thus the original interest of 5.28 per cent, on the share and debenture 
capital becomes 10 per cent, to the shareholder. It is a wonderfully 
clever ari'angement and would be exceedingly palatable to Great Eastern 
or even Great Northern shareholders. 

But consider the difference which this shows in the ideas of the two 
countries. In England it would never be borne for an instant that six 
great companies, say the London and Noi'thwestern, Great Western, 
Midland, and others, should receive 10 percent, dividend and yet obtain 
from the State annual subventions and guarantees amounting to £1,800,- 
000. No ministry dare propose such a job. The reform agitation would 
be nothing to the clamor with which it would be greeted ; and yet in 
France it is the most natural thing possible. Nobody says a word against 
it. Nay, the feeling of the French companies and the popular opinion 
is that these poor 10 per cent, shareholders have been badly used, and 
that their legitimate 12 or 15 per cent, from the trunk lines ought not to 
have been lessened. 

One characteristic of the French systems is the absence of competition, 
and this is opposed to all our ideas of freedom of communication. The 
Northern Company monopolizes the whole traffic between Calais and 
Paris. The Mediterranean Company monopolizes the whole traffic be- 
tween Paris and Marseilles, a traffic of extraordinary importance and 
value. An attempt made two years ago by another company to abtain 
an extension to Marseilles and to establish an alternative route was re- 
jected by a government commission after a very long inquiry. The con- 
sequence of this system is a great concentration of traffic in a small num- 
ber of trains, to the profit of the companies and to the inconvenience of 
the traveler. There are in England, between places like Liverpool and 
London, about three times as many trains as there are in France, between 
Marseilles and Paris. And besides this, goods are sent less rapidly in 
France and delivered with less punctuality. 

But there is a great deal to be said in defence of the French system. 
It avoids the duplicate lines necessary for competition, which France 
could not well aflbrd. It keeps the companies prosperous and able to aid 
the government in raihvay extension. It is not an irresponsible monop- 
oly, able to charge high prices to its customers, but a strictly regulated 
monopoly, with its tariff fixed by government at the lowest prices that 
will be remunerative. It is like the system of our own Metropolitan Gas 
and Water Companies, which enjoy a monopoly within defined districts, 
on terms settled by the law and revised from time to time in the interest 
of the public. The French government appoints commissioners of in- 
quiry to examine into any defect or to consider improvements, and they 
report to the minister of public works, who has the power of making reg- 



ulatlons which are binding on the companies. The last commission is a 
good instance. In February, 1864, the minister of public works issued 
to the companies a circular suggesting several points which required im- 
provement, and the commission was appointed to consider their answers. 
The points discussed were : — 

1. The adoption of a means of communication between the guard and 
engine-driver. This was made obligatory on the companies. 

2. A means of communication between passengers and the guard. 
This was accepted by the companies. 

3. The consumption by the locomotives of their own smoke. This 
was ordered to be carried out within two years. 

4. The addition of second and third class carriages to express trains. 
The recommendation of the commission was accepted by the companies. 

5. Separate carriages for unprotected females. 

6. The commission demanded that on the great lines the speed of goods 
trains should be increased from 60 miles to 120 miles, without any in- 
crease of tariff. This very important question was referred to a sub- 
committee for further examination and for hearing objections. 

From these details it is evident that the interests of the public are well 
looked after. 

I should add that there is a continuous audit of the accounts of the 
companies by government accountants, who attend from week to week 
at the companies' offices for that pur]Dose. 

I will at present mention only one other point in French railway law — 
that the government has the power of purchasing any line of railway 
after fifteen yeai'S from its first concession. The price is to be fixed by 
taking the amount of the net profits of the seven preceding years, deduct- 
ing the two lowest years and striking the average of the remaining five 
years. The government is then to pay to the company for the remain- 
der of the concession an annual rent-charge or annuity equal to the 
average so determined, but not less than the profits of the last of the 
seven years. This mode of purchase appears preferable to the English 
law, since it does not require the creation of any new rentes or consols, 
and I commend it to the notice of Mr. Gait. 

I have mentioned these prominent features of the French law in the 
hope that they may be useful in suggesting improvements in the English 
system. 

Why should we not vest in the President of the Board of Trade a 
power of making and enforcing regulations for the public safety and 
convenience? VVhy should we not introduce more frequent railway 
commissions to consider important questions and recommend to the Pres- 
ident of the Board of Trade or to Parliament? Why should we not 
have a modified system of audit, and a registration of shares and de- 
bentures ? 

VIII. — Railways in Belgium akd Holland. 

Belgium is one of the most striking instances of the benefit of railwavs. 
In 1830 she separated from Holland, a country which possessed a much 
larger commerce and superior means of communication with other na- 
tions by sea and by canals. Five years hiter the total exports and im- 
ports of Belgium were only £10,800,000, while those of Holland were 
double that amount. But in 1833 the Belgian government resolved to 



27 

adopt tlie railway system, and employed George Stephenson to plan rail- 
ways between all the large towns. The law authorizing their construc- 
tion at the expense of the State passed iii 1834, and no time %vas lost in 
carrying it out. Trade at once received a new impetus, and its progress 
since that time has been more rapid than in any other country in Europe. 
The following table shows the activity with which the lines Avere con- 
structed. We must remember that Belgium contains only one-tenth of 
the area of the United Kingdom, and that to make a fair comparison 
with our own progress we must multiply the table by ten. 

MILES CONSTKUCTED. 

Increase per annum 
Year. Miles Open. Miles. 

1839 185. 

I 25 



1845 335 

1853 720 



} 



I 45 

1860 1,037 \ 

\ 78 

1864 1,350 ' 

Hence, the progress for a State of the size of the United Kingdom 
would have been — 

Miles a Year. 

1839 to 1845 250 

1845 to 1853 480 

1853 to 1860 450 

1860 to 1864 750 

a rate of increase which is as great or greater than our own. 
The results on commerce are shown in the following table : — 

INCREASE OF EXPORTS AND IMPORTS. 

Increase Increase per Cent. 

Year. Exports and Imports per Cent. per Annum. 

1835 £10,760,000. 

\ 45.72 11.43 

1839 15,680,000^ 

\ 71.4 11.9 

1845 26,920,000 \ 

\ 77.41 9.67 

1853 47,760,000 :{ 

\ 51. 7.3 

1860 72,120,000^ 

\ 35.88 9. 

1864 97,280,000-' 

I need scarcely point out the extraordinary character of this increase, 
which is enormous in the first ten years, and far beyond either England 
or France, and is not inferior to us in the later period. In the tliirty 
years from 1835 to 1864 Belgium increased her exports and imports 
nearly tenfold, while England increased hers only fivefold. If we had 
increased our commerce in the same ratio, the English exports and im- 
ports would now be a thousand million pounds sterling. 

The proportion between exports and imports and means of communi- 
cation is shown in the following table, which differs from those of En- 
gland and France in the rapid increase per mile : — 



28 

PROPORTION OF EXPORTS AND IMPORTS TO EAILTCATS AND NAVIGATIONS. 

Canals (910 Miles) Exports and Imports 
Year. and Railways Ojien. Exports and Imports, per .Mile Open 

1839 1,055 £15.680,000 £14,862 

1845 1,205 26.920,000 22,340 

1853 1,590 47.760,000 30,037 

1860 1.907 72,120,000 37.818 

1864 2,220 97,280,000 42,919 

This enormous increase of Belgian commerce must be ascribed to her 
wise system of railway development, and it is not difficult to see how it 
arises. Before railways, Belgium was shut out from the continent of 
Europe by the expensive rates of land carriage and her want of water 
communication. She had no colonies and but little shipping. Railways 
gave her direct and rapid access to Germany, Austria, and France, and 
made Ostend and Antwerp great continental ports. One of her chief 
manufactures is that of wool, of which she imports 21,000 tons, valued at 
£2,250,000, from Saxony, Prussia, Silesia, Poland, Bohemia, Hungary, 
Moravia, and the southern Provinces of Russia ; and returns a large por- 
tion in a manufactured state. She is rapidly becoming the principal 
workshop of the continent, and every development of railways in Europe 
must increase her means of access and add to her trade. 

Now look at Holland, which in 1835 was so much her superior. Hol- 
land was possessed of immense advantages in the perfection of her canals, 
which are the finest and most numerous in the world ; in the large ton- 
nage of her shipping ; in her access by the Rhine to the heart of Ger- 
many ; and in the command ^of tlie German trade, which was brought to 
her ships at Amsterdam and Rotterdam. The Dutch relied on these ad- 
vantages and neglected railways. The consequence was, that by 1850 
they found themselves rapidly losing the German trade, which was being 
diverted to Ostend and Antwerp. The Dutch Rhenish railway was con- 
structed to remedy this loss, and was partly ojiened in 1853, but not fully 
till 1856. It succeeded in regaining part of the former connection. But 
now observe the result. In 1839 the Dutch exports and imports were 
£28,500,000, nearly double those of Belgium. In 1862 they were £59,- 
000,000, when those of Belgium were £78,000,000. Thus while Holland 
had doubled her commerce Belgium had increased fivefold, and had 
completely passed her in the race. 

Before leaving Belgium I ought to mention the cheapness of fares on 
her railways, which have always been much below those on English lines ; 
a further reduction has lately been made, and I see by a French paper 
that the results has been to increase the passenger receipts on the State 
lines for the month of April from 76,956 frs. in 1865 to 198,345 frs. in 
1866, of which 168,725 frs. was from third and fourth class passengers; 
a fact which is in favor of the plan of Mr. Gait. But it must be remem- 
bered that Belgium is the most densely populated country in the world, 
having 432 inhabitants to the square mile, while the United Kingdom has 
only 253, and England and Wales 347. A system which will pay admi- 
rably between large cities at short, distances from each other, and on lines 
which cost little to construct, might break down completely on lines of 
expensive construction in more thinly inhabited districts. Mr. Gait takes 
his instances from railways in dense populations, and applies the rules 
thus obtained to railways which are under totally diflferent conditions, and 
I fear that this vitiates in a great degree the soundness of his conclusions. 



29 



IX. — Railways iis iHi: United States. 

In any paper on foreign railways it is impossible to omit the United 
States, a country where they have attained such gigantic proportions. 
The increase ol United Slates lines is as follows : 

MILES CONSTRUCTED. Total Idc. per an- 

Year. mileage. num. Miles. 

1830 41 I 215 

1840 2,191 \ 

\ 465 

1845 4,522 ' 

} 590 

1850 7,475:^ 

} 1,984 

1855 17,398:^ 

V 2,274 

1860 28,771 :| 

1864 33,860/ ^'^^^^ 

The mileage here shown is something enormous : four time that of 
France, two and a half that of England, and nearly as large as the total 
mileage of the United Kingdom and Europe, which is about 42,000 miles. 

In so young a country inland traffic gives these lines the greater part 
of their employment, and there are no masses of expensive manufactured 
goods as in England or Belgium to swell the total value of foreign trade. 
Foreign commerce is still in its infancy, but an infancy of herculean pro- 
portions, as the following table shows : — 

INCREASE OP EXPORTS AND IMPORTS. 

Total exports Increase Inc. per ct. 
Year. and imports. per cent. per annum. 

1830 £31,000,0001 4^_g(, 3_4Q 

1844 45,759,000i 

[ 50.00 8.33 

1850 68,758,000] 

>■ 62.60 12.52 

1855 111,797,000] 

1860 158,810,000 1 ^^^.OO 8.40 

The advance in the annual increase is very striking, being from 82 per 
cent, per annum in the infancy of railways, to 8 and 12 per cent, when 
their extension was proceeding rapidly. Before the introduction of rail- 
ways America possessed a very extensive system of canals, which amounts 
to nearly 6,000 miles. At the present time both canals and railways are 
crowded with traffic. The following table shows the relation between the 
growth of trade and the increase of means of communication : — 

PROPORTION OF EXPORTS AND IMPORTS TO RAILWAYS AND CANALS. 

Canals (6,000 Total ex- Exports 

miles) and ports and im- 

railways and im- ports per 

Year. open. ports. mile. 

1830 6,040 £31,000,000 5,130 

1844 10,310 45,759,000 4,437 

1850 13,475 68,758,000 5,102 

1855 23,398 111,797,000 4,778 

1860 34,770 158,810,000 4,567 



80 

Thus, in the United States, as well as in England, France, and Bel- 
gium, the exports and imports bear a distinct relation to the miles of com- 
munication open, but lower in amount than in the European countries, as 
was only likely from the thinner po})ulation. 

Vast as is the mileage of the American railways it is by no means near 
its highest point. The lines in construction, but not yet completed, are 
stated to be more that 15,000 miles in length, a larger number than the 
whole mileage of the United Kingdom, completed and uncompleted. 

The manner in which these lines are made is very remarkable. The 
United States are very thinly populated, not containing on an average 
more than 32 persons pei' square mile in tlie Northern States, and 11 in 
the Southern. Even the most populous Northern States have only 90 
persons per square mile, while England and Yv'^ales have 347 per square 
mile. A less expensive railway, of smaller guage, was, therefore, neces- 
sary, and the lines are almost invariably " single tracks." Their first 
cost have averaged from £7,000 up to £io,000 per mile, or about one- 
third of the expenditure in England. Of course they are very inferior 
in weight of rails and in sleepers, ballasting, stations, and efficiency. Even 
this expense was difficult to provide for where the inhabitants are so widely 
scattered. But in America the greatest encouragement is given to rail- 
roads, and every facility is afforded for their extension, as they are con- 
sidered the most important sources of wealth and prosperity. Shares are 
taken largely by the inhabitants of the district traversed, land is often 
voted by the State, and the cities and towns find part of the capital by 
giving security on their municipal bonds. 

I must not omit to mention the great Pacific railways, one of which is 
now being constructed from the State of Missouri for a distance of 2,400 
miles across Kansas, Nebraska, Utah, and Nevada to San Francisco, in 
California. It receives from the general government subsidies of £3,300, 
£6,600, or £9,900 per mile, according to the difficulty of the ground, be- 
sides enormous grants of land on each side of the line. When this rail- 
way is completed the journey from Hong Kong to England will be made 
in thirty-three days instead of the present time of six weeks, and it is an- 
ticipated that a large portion of our Chinese traffic will pass by this route. 

No one can study the United States without being struck by the great 
railway future which lies before them, when their immense territories are 
more thickly peopled, and their mineral resources and manufactures have 
been developed. The distances to be traversed are so vast, and the traffic 
to be carried will be so enormous that the railways of the United States 
will far exceed in extent, and in the trade which will pass over them, 
anything that has hitherto been known in the history of the world. 

X. — Railways and Free Trade. 

In the preceding sections I have endeavored to describe the progress of 
railway extension in England, France, Belgium, and the United States, 
the four countries where it has received the greatest development, and I 
have pointed out the very great increase of commerce and national pros- 
perity which have been its result. But in the case of England, I am 
bound to meet a very probable objection. 1 shall be asked, why do you 
attribute this increase of commerce mainly to railways ? Was it not 
caused by free trade ? 



81 

The general opinion undoubte Jly le, tiiat free trade is the principal 
cause of the immense increase since 1842 of English commerce. We see 
this opinion expressed every day in newspapers and reviews, in speeches 
and parliamentary papers. I hold in my hand a very able memorandum, 
lately issued by the Board of Trade, respecting the progress of British 
commerce before and since the adoption of free trade, in which the same 
view is taken, and in which the statistics of the exports and imports since 
1842 are given as mainly the result of free trade. It is true that there 
is a reservation, acknov.ledging " that the increase of productive power 
and other causes have materially operated in effecting this vast develop- 
ment." But in the newspaper quotations and reviews this reservation was 
left out of sight, and the striking results recorded in the memorandum 
were entirely ascribed to free trade. 

While acknowledging to the full the g)-oat benefits and the enlightened 
principles of free trade, I have no hesitation in saying that this popular 
view is a popular exaggerati<.n, which it is the duty of staticians to cor- 
rect, and 1 think that my reasons will be considered satisfactory by this 
Society. In the first place, the development of English commerce began 
in 1834, before free trade, but simultaneously with railways ; and be- 
tween 1833 and 1842 the exports and imports increased from a stationarv 
position- at £85,500,000 to £112,000,000, or 31 per cent. In the next 
place, from 1842 till 1860 England was the only country which adopted 
free ti-ade. If England had also been the only country that made such 
enormous progress we might safely conclude that free trade was the chief 
cause of so great a fact. But this is not the case. England is only one 
of several countries which made an equal advance during the same pe- 
riod, and none of those countries, except England, had adopted free trade. 
The total increase of exports and imports from 1842 to 1860 in the three 
first countries described in this paper, and from 1844 to 1860 in the 
United States, was as follows : — 

Increase 
Country. 1842. 1860. percent. 

England £112,000,000 £3T5, 000,000 234 

France 86,280,000 232,200,000 169 

Belgium 19,400,000 72,120,000 272 

1844. 
United States 45,757,000 158,810,000 305 

Thus, the English rate of increase is only third in order, and is ex- 
ceeded both by Belgium and the United States. If the latter country is 
objected to on account of its rapid growth in population by immigration, 
still Belgium remains, exceeding the English rate of increase by 36 per 
cent. Look at the argument by induction. Here are ibur countries 
under the same condition of civilization, and having access to the same 
mechanical powers and inventions, which far outstrip contemporary na- 
tions. It is a probable conclusion that the same great cause was the 
foundation of their success. What was that common cause ? It could 
not be free trade, for only one of the countries had adopted a free trade 
poli(.-y. But there was a common cause which each and all of those four 
countries liad pre-eminently developed — the power of steam — steam ma- 
chinery, steam navigation, and steam railways. I say, then, that steam 
was the main cause of this prodigious progress of England as well as of 
the other three countries. 



32 

But I will go a step farther. Steam machinery had existed for very 
many years before 1830, and before the great expansion of commerce. 
Steam navigation had also existed for many years before 1830, and before 
the great expansion of commerce, and steam navigation was unable to 
cope with the obstacle which before 1830 was so insuperable, viz : the 
slowness and expense, and limited capacity of land carriage. 

I come, then, to this further conclusion, that the railways which re- 
moved this gigantic obstacle, and gave to land carriage such extraordi- 
nary rapidity and cheapness, and such unlimited capacity, must have 
been the main agent, the active and immediate cause of this sudden com- 
mercial development. 

This conclusion appears to become a certainty when I find, from the 
investigation through which we have traveled, that in every one of these 
four great examples, the rapid development of commerce has synchron- 
ised with an equal rapid development of railways — nay, that the de- 
velopment of commerce has been singularly in proportion to the increased 
mileage of railways — so that each expansion of the railway system has 
been immediately followed, as if by its shadow, by a great expansion of 
exports and imports. 

But I will not leave the case even -here. Consider what are the bur- 
dens which press upon trade and manufactures. If our merchairts could 
be presented with that wondrous carpet of the Genii of the " Arabian 
Nights," which transported whatever was placed upon it in one instant 
through the air to its farthest destination, overleaping mountains and 
seas and custom-houses, without expense or delay, we should have the 
most perfect and unburdened intercourse. But see what barriers and 
burdens there are in actual fact, when we trace the journey of the raw 
material, such as cotton or wool, to the British manufacturer, and its ex- 
port as a manufactured article. 

BURDENS DPON IMPORTS AND EXPORTS. 

Raw Material — 

1. Inland carriage to the sea. 

2. Voyage to England. 

3. Import duty. 

4. Inland carriage of the manufacturer. 
Manufactured Article — 

5. Inland carriage to the sea. 

6. Voyage to foreign country. 

7. Import duty. 

8. Inland carriage to the customer. 

Here are eight distinct burdens or charges increa.«ing the price of our 
manufactures to the foreign consumers. Out of these — 

Four are inland carriage, 

Two are navigation, and only 

Two are custom house duties. 

Now, except in the case of prohibitory duties, it was undoubtedly the 
case that, before the introduction of railways, inland carriage was the 
most expensive of these burdens. In countries unprovided with canals, 
a very few miles of road tran.sport was an absolute pn^hibition. It is so 
in many parts of India, Spain, and Turkey at the present day. In coun- 
tries provided with canals, rates were high, and trausjDort slow, and al- 
ways coming to a dead lock. Hence the relief afforded by railways. 



33 

both in cheapness and saving of time, was far beyond any relief by free 
trade in taking off moderate duties. 

In a vast number of eases railways did more than cheapen trade, they 
rendered it possible. Railways are the nearest approach that human in- 
genuity has yet devised to that magic carpet of the " Arabian Nights," 
for which I ventured to express a wish. 

For all these reasons I maintain that we ought to give railways their 
due credit and praise, as the chief of those mighty agents which, within 
the last thirty years, have changed the face of civilization. 

XI. — Railways and National Debts. 

In one important point the nations of Latin race have stolen a clear 
march upon the nations of Teutonic origin, of England, Germany, and 
the United States, by their appreciation and adoption for railways of the 
principle of a sinking fund. The idea owes its origin to the semi-Latin, 
semi-Teutonic intellect of Belgium. When the Belgian government, in 
1834, pi'ojected a system of State railways, to be constructed with money 
borrowed by the State, they provided for the extinction of the loans in 
fifty years by an annual sinking fund. The amount borrowed was nearly 
£8,000,000 sterling, and the whole will be paid off in 1884, after which 
date the whole profits of the State lines, 352 miles in length, will become 
part of the revenue of the nation. But so good an investment are these 
lines that their present net income is £525,000 a year, and is increasing 
at a rate which promises in 1884 a net revenue of £960,000, a sum which 
will be sufficient to pay the interest on the whole national debt, now 
£26,000,000. Besides this, the conceded lines, 1,000 miles tn length, 
will become amortized and become State property in 90 years from the 
beginning of their concessions, and the profits on a capital of more than 
£13,000,000 will then be available toward the State revenue. 

This system was copied by France, and imitated from her by the other 
Latin nations, Spain, Portugal, and Italy, as well as by the non-Latin 
States of Austria and Holland. All these countries, at the end of vari- 
ous terms of 99, 90, and 85 years will practically pay off a large portion 
of their national debt. Improvident Spain will pay off about £40,000,000 
out of her debt of £164,000,000. Heavily burdened Austria will 
practically abrogate something like £65,000,000 out of her debt of 
£250,000,000. Italy will wipe out a large portion of her debt of 
£176,000,000. 

But the most remarkable example is France ; and I will endeavor to 
explain as briefly as possible the working of the French system. In 
France the railways are conceded for 99 years, but it is one of the con- 
ditions of the grant that all the capital, whether in shares or debentures, 
shall be paid off within that term by an annual amortissement, or sinking 
fund. The small amount of this annual payment is very extraordinary. 
The French rate of interest is 5 per cent., and the annual sinking fund 
necessary to pay off 100 francs in 99 years is as nearly as possible .04. 
Put into the English form, for the sake of clearness, this means that the 
annual sinking fund necessary at 5 per cent; to redeem £100 in 99 years 
is only Is. per annum. As debentures are issued in France for less than 
99 years when part of the concession is run out, the amount of the sink- 
ing fund varies, but it is usually said to amount on the average to one- 

3 



34 

eighth per cent. As the whole expended capital of French railways 
represented by shares and debentures, is £233,000,000, it follows that 
the total annual sinking fund paid by the French companies for the re- 
demption of that sum i?* le?s thon £300,000. The result is marvellous, 
that tor £300,000 the French nation will acquire, in less than 99 years, 
an unencumbered property of £233,000,000 sterling. But this is not 
all. The railways represented by that £233,000,000 sterling produced 
in 1865 a net revenue of ubout £12,500,000. Before 1872 further rail- 
ways will have been completed, which will be amortized at the same rate 
as their parent lines, and will produce before many years a net income .of 
£4,000,000, making a total net income of the French railways £16,500,000. 
But the total charge of the French national debt in 1865 was only 
£16,000,000. /S'o that France has now a system in operation which, in 
less than 90 years from the preseiit time, will relieve the country from the 
ivhole burden of her national debt of nearly £500,000,000. 

Is it allowable in me to ask, why are we doing nothing of the sort ? 
When so many other nations are paying ofi' by means of their railways 
a portion, or the whole of their national debts, why are AA"e, with all our 
wealth and resources, to do nothing ? A scheme of amortization suited 
to the habits of the English people, is perfectly possible, and the peculiar 
position of railway companies at the present moment renders it easy to 
carry out. I will say nothing about debentures, because a plan is now 
before the government dealing with them. But, I say, respecting Share 
Capital, that it would be perfectly practicable for the State to become 
the possessor of a large proportion of this stock in a comparatively short 
time, and at no great expense. An annual sinking fund of 5s, per cent, 
will pay off £100 in seventy-two years, reckoning only 4 per cent, in- 
terest. Hence, in seventy-two years, an annual sinking fund of £500,- 
000 a year will pay ofi' £200,000,000. The government duty on railways 
amounts to £450,000 a year, and will soon reach £500,000. My propo- 
sal would be to make this a sinking fund towards purchasing £200,000,- 
000 of preference and other stock, and let it be invested annually by the 
Board of Trade, or by commissioners appointed for the purpose, like 
those appointed for the national debt. Instead of canceling each share 
as it is purchased, let it be held in trust for the nation, and the divi- 
dends applied every year in augmentation of the sinking fund. In this 
manner, at the end of about seventy-two years, £200,000,000 of prefer- 
ence and ordinary share capital would become the property of the na- 
tion, and its dividends become applicable to the interest of the national 
debt. As railway dividends average 4 to 44 per cent., the devidends on 
the redeemed capital would pay the interest on more than £250,000,000 
consols, and be equivalent to the redemption of that amount of our na- 
tional debt. 

I believe that this is a practical scheme. In a slightly difierent 
form it is now being carried out in France, Belgium and other continen- 
tal States. I trust that before long we shall cease to be almost the only 
nation in Europe which does net act on the principle "that raihvays are 
the true sinking fund for the payment of the national debt." 

The advantages of such a sinking fund invested in consols are three- 
fold: 

1. It would be invested annually in railway capital at a higher inte- 
rest, and thus accumulate more rapidly. 



35 

2. It Tvould have a different primary object, viz : tlie purchase of a 
State interest in railways, and would, therefore, be more likely to enlist 
popular feeling in favor of its maintenance. 

3. It would be distinct and separate from the national debt, and not 
under the same control, and would, therefore, be less liable to be diverted 
to the financial necessities of the hour. 

Perhaps it will be said that a railway sinking fund is unsuited to the 
character and habits of the English people. But surely it is our charac- 
ter to be prudent and to pay off encumbrances, and to adopt the best 
means of accomplishing that object. Surely it is not right in a great and 
wealthy and enlightened nation like England to incur the reproach of 
being spendthrift of her resources and reckless of her debts. 

XII. — Further Railway Extension. 

England is undoubtedly the country in the world best provided with 
railways. The statistical comparison stood thus at the end of 1865 : — 

RAILWAYS COMPARED WITH AREA AND POPULATION. 

Railway Miles Square Miles Population per 

Country. Open. per Kailway Mile. Railway Mile. 

England and Wale.« 9,251 6^ 2,186 

1. Belgium 1,350 8 3,625 

2. United Kingdom 13,289 9 2,206 

3. Switzerland 778 19 3,257 

4. Prussia and Germany (except 

Austria) 8,589 20 3,525 

5. Northern United States (except 

Kansas, Nebraska and Oregon) 24,883 25 801 

6. France 8,134 26 4,607 

7. Holland 372 29 9,066 

8. Italy 2,389 41 9,084 

9. Austria , 3,735 63 9,375 

10. Spain 2,721 67 5,991 

11. Portugal 419 87 8,555 

12. Southern United States 10,300 92 1,025 

13. Canada 2,539 136 987 

14. India 3,186 287 42,572 

Total of the 14 countries 82,495 ' 

But England has a much greater proportion of double lines, and a 
larger number of trains on each line; Avhile, on the other hand, Belgium 
and other continental nations have lower fares and give greater accom- 
modation to third and fourth class passengers. Both parties have some- 
thing to learn — they to admit the principle of competition and increase 
the number of railways ; we to provide cheap conveyance for the masses, 
without the clumsy device of excursion trains. 

But now comes the question — do England and Belgium need further 
railways, or are they already sufficiently provided? It may partly be 
answered by the fact that in England there are about 3,500 miles au- 
thorized by Parliament which have not yet been made, and that in Bel- 
gium there are 450 miles (equal to 4,500 in England) conceded but not 
constructed. And we may also point to the circumstance that in Eng- 
land and Wales there were, in 1865, 6,081 miles of double line against 
3,170 miles of single, showing that there is a want of cheap lines through 



36 

rural districts. A glance at the railway map will confirm this inference. 
The lines run in the direction of the metropolis or some great town, and 
there are few cross-country lines. The distance between the lines sup- 
ports this conclusion. Deducting the manufacturing districts, which are 
crowded with a railway network, the remainder of the country gives an 
average of about fifteen miles between each mile of railway. The aver- 
age ought not to be more than eight or ten miles. 

The advantage of a railway to agriculture may be estimated by the 
following facts. A new line would, on an average, give fresh accommo- 
dation to three and a-half miles on each side, being a total of seven 
square miles, or 4,560 acres for each mile of railway. It would be a 
very moderate estimate to suppose that cartage would be saved on one 
ton of produce, manure, or other articles for each acre, and that the 
saving per ton would be five miles at 8d. per mile. Hence the total an- 
nual saving would be £768 per mile of railway, which is 5 per cent, in- 
terest on £15,000. Thus it is almost impossible to construct a railway 
through a new district of fair agricultural capabilities without saving 
to the landowner and farmer alone the whole cost of the line. 
Besides this, there is the benefit to the laborers of cheap coals and better 
access to the market. There is also the benefit to the small towns of 
being put into railway communication with larger towns and wholesale 
producers. And there is the possibility of opening up sources of mine- 
ral wealth. 

Somebody ought to make these agricultural lines, even though they 
may not pay a dividend to the shareholder. But who is that somebody 
to be ? The great companies will not take the main burden lest they 
should lower their own dividends. The general public will not subscribe, 
for they know the uncertainty of the investment turning out profitable. 
And notwithstanding the able letters signed " H " in the Times some 
months ago, I cannot advocate the necessarily wasteful system of con- 
tractors' lines, or believe in the principle, " Never mind who is the loser 
so that the public is benefited." Railway extension is not promoted in 
the long run by wasteful financing and ruinous projects. On the con- 
trary, such lines injure railway extension by making railways a bye-word 
and depreciating railway property, and they render it impossible to" find 
supporters for sound and beneficial schemes. 

The proper parties to pay for country lines are the proprietors and in- 
habitants of the districts through which they pass. They are benefited 
even if the line does not pay a dividend. They have every motive for 
economical construction and management, and can make a line pay where 
no one else can. But they will not subscribe any large portion of the 
capital as individuals. Very few will make a poor investment of any 
magnitude for the public good, though all might be ready to take their 
part in a general rate. Almost every country but our own has recognized 
the fact, and legislated on this basis, by empowering the inhabitants of a 
district which would be benefited to tax themselves for the construction 
of a railway. I have shown that in France either the department or the 
commune may vote a subvention out of their public funds, and that in 
the United States the municipalities vote subsidies of municipal bonds. 
In Spain the provinces and the municipalities have the power to take 
shares or debentures, or, if they prefer it, to vote subventions or a guar- 
antee of interest. In Italy the municipalities do the same thing. Why 



37 

should not England follow their example, and authorize the inhabitants 
of parishes and boroughs to rate themselves for a railway which will im- 
prove their property, or empower them to raise loans on the security of 
the rates, to be paid off in a certain number of years by a sinking fund, 
as is done for sanitary improvements? I see no other way of raising the 
nucleus of funds for carrying out many rural lines which would be most 
beneficial to the country. 

I can give a remarkable instance of the benefits caused by an unre- 
munerative railway. In 1834 the inhabitants of Whitby projected a line 
from Whitby along the valley of the Esk to Pickering, half way to York. 
The line was engineered by George Stephenson, and was originally worked 
by horse-power and carriages on the model of the four-horse coaches. 
But though considered at that time one of the wonders of the world, the 
line was utterly unprofitable, and the Whitby people looked upou it as a 
bad speculation, much as the shareholders of the London, Chatham, and 
Dover look on their present property. The railway was ultimately sold 
to the Northeastern Company ; but though the shareholders got no ad- 
vantage, somebody else did. Farmers and laborers came to market in 
AVhitby, and got coals and other necessaries at reduced rates, while they 
sold their produce better. Very soon rents began to rise, and I find the 
total rise since the construction of the railway has been from an average 
of 15s. per acre up to 22s., or nearly 50 per cent. But far greater con- 
sequences resulted. The cliffs at Whitby were known to contain nodules 
of ironstone, which were picked up and sent to ironworks on the Tyne. 
Soon after the opening of the railways George Stephenson and a number 
of Whitby gentlemen formed a company, called the Whitby Stone Com- 
pany, for working stone quarries and ironstone mines at Grosmont, about 
six miles up the railway. At first the ironstone was very badly received 
by the iron founders, and it was only after long and patient perseverance 
that the company got a sale for what they raised. It was not till 1844 
and 1846 that the merits of the Cleveland ironstone were fully acknow- 
ledged and large contracts entered into for its working throughout the 
district. Thus the unprofitable Whitby and Pickering railway opened 
up the Cleveland iron district and caused the establishment of a very 
large number of foundries and the employment of thousands of work- 
men, and has added very materially to the wealth of England. 

XIII. — Conclusion. 

From the facts which have been brought forward I draw the following 
conclusions : 

1. Railways have been a most powerful agent in the progress of com- 
merce, in improving the condition of the working classes, and in develop- 
ing the agricultural and mineral resources of the country. 

2. England has a more complete and efficient system of railways than 
any other country, but is not so far ahead that she can aflbrd to relax her 
railway progress, and to let her competitors pass her in the race. 

3. England ought to improve the internal organization of her i-ail ways, 
both as to finance and traffic, and to constitute some central authority 
with power to investigate and regulate. 

4. A sinking fund should be instituted to purchase for the State a portion 
of the railway capital, and so to lighten the charge of the national debt. 



38 

5. Power should be given to parishes and boroughs to rate themselves 
in aid of local railways in order to facilitate the construction of country 
lines. 

6. England, as a manufacturing and commercial country, is benefited 
by every extension of the railway system in loreign countries, since every 
new line opens up fresh markets and diminishes the cost of ti'ansporting 
her manufactures. 

I cannot conclude without saying a word on the future of railways. 
The progress of the last thirty-six years has been wonderful, since that 
period has witnessed the construction of about 85,000 miles of railway. 
The next thirty-six years are likely to witness a still greater development 
and the construction of far more than 85,000 miles. We may look for- 
ward to England possessing, at no distant date, more that 20,000 miles, 
France an equal number, and the other nations of the continent increasing 
their mileage until it will bear the proportion of 1 railway mile to every 
10 square miles of area, instead of the very much less satisfactory propor- 
tions stated in the comparative table. We ma)'^ expect the period when 
the immense continent of North America will boast of 100,000 miles of 
line, clustered in the thickly-populated Eastern States and spreading plen- 
tifully through the Western to the base of the Rocky Mountains and over 
to California and the Pacific. We may anticipate the time when Russia 
will bend her energies to consolidating her vast empire by an equally vast 
railway network. We may predict the day when a continuous railroad 
will run from Dover to the Bosphorus, from the Bosphorus down the Eu- 
phrates, across Persia and Beloochistan to India, and from India to China. 
We may look for the age when China, with her 350,000,000 of inhabit- 
ants, will turn her intelligence and industry to railroad communication. 

But who shall estimate the consequences that will follow, the prodigious 
increase of commerce, the activity of national intercourse, the spread of 
civilization, and that advance of hum.an intelligence foretold thousands of 
years ago by the prophet upon the lonely plains of Palestine, "when 
many shall run to and fro upon the earth, and knowledge shall be in- 
creased ? " 



Four hundred and forty million dollars of subsidy granted 
BY THE British Government to build Railways into the Cotton 
Districts of India. 



The eflPorts recently made by the English government to develop the 
resources of its vast empire in Hindostan, evince remarkable energy and 
sagacity. Probably no country in the world has made more material 
progress within the last few years than British India. Notwithstanding 
the discouragements arising from the mutiny of the Sepoys, and the 
disasters of famine and financial collapse, the present condition and future 
prospects of the people have been greatly improved. Railroads have 
been built, highways have been thrown up, canals widened and deepened, 
obstructions removed from rivers, bridges constructed over rivers and 
mountain chasms, and the jungle has been rendered passable for the first 
time. 



39 

These great changes in the conJitiou of the interior of British India 
were initiated, or, at least, actively commenced in accordance with a 
policy adopted at the commencement of our civil war. England, in 
place of attempting to break up our monopoly of the cotton trade by an 
open and formal assistance of the South, resolved to effect the same 
object by other and surer means. Her statesmen, with far reaching 
sagacity, resolved to improve the opportunity aflurded by the American 
crisis, so as to attach the tottering Indian Empire to the imperial govern- 
ment by a bridge of gold. 

In 1860-61, the Marquis Dalhousie, Governor General, inaugurated 
the extensive system of internal improvement, which was to enable the 
people of Hindostan to compete with America for the cotton trade of 
the world. The most favorable cotton regions of India were inaccessible 
for want of proper facilities for communi-cation. In order to get the 
staple to a market, it was necessary to carry it by man and horse power 
over vast tracts of jungle, across mountains and ravines, and ferry it 
over great rivers. 

To obviate these difficulties, the railroad movement inaugurated was 
of the most comprehensive character. The population of India subject 
to the English government is probably not less than two hundred millions. 
The country comprises an area of 1,364,000 square miles, stretching 1,800 
miles in length and 1,500 miles in breadth from east to west. This great 
country is broken up into an almost endless geographical diversity. There 
are vast and impassable jungles, huge forests, mighty rivers, mountain 
chains and extensive plains, the whole being combined with a wonderful 
luxuriance of vegetation, which at every step obstructs progress and 
almost prevents any passage by man or beast. 

It was over this country, presenting so many difficulties, that Lord 
Dalhousie contemplated his admirable network of railroads. The system 
was, of course, planned Avith reference to the geographical features of 
the country, so as to connect the extremes of the vast empire with grand 
trunk lines, from which branch lines, or feeders, might be constructed, 
according to the future reqviirements of local commerce. Four thousand 
six hundred miles of railroad were to be built, at an estimated expense 
of $440,000,000. The credit of the imperial government was granted 
to private companies, guaranteeing a certain amount of interest on all 
money invested in Indian railroads. The government wisely left all de- 
tails of construction and management to the energies of the companies 
themselves, which had every motive for economy, as all money earned 
above the guaranteed dividends was clear gain. The system worked so 
well, that last year several Indian railways exceeded the 5 per cent, 
guaranteed interest. During the half year ending December 31st, the 
East Indian and the Great Peninsular railroad companies were able to 
declare surplus dividends. Half the amount of surplus income was de- 
voted to the repayment of former advances for interest by the govern- 
ment, and the other half was divided among the stockholders. 

The net amount of guaranteed interest paid hy the government diminishes 
every year. In 1865 the amount was £1,450,000 ; in 1866 it was 
£800,000, and this year only £600,000 was required. These figures 
indicate the profitable character of these Indian railroad enterprises. 

The original system of Indian railroads contemplated the establishment 
of communications between Bombay, Madras, and Calcutta, the three 



40 

great centres of military and commercial power. The extremes of the 
empire were united, and roads were cut through the great agricultural 
and producing districts. The East Indian Railroad Company has now 
under its management 1,310 miles of railway, constructed at an expense 
of $100,000,000, and is the longest line of road in the world under one 
company. The Great Indian Peninsular road will be 1,233 miles long 
wheu completed, and next year it will be open for traffic along its entire 
length. In 1868, from Calcutta to Bombay, a distance of 1,458 miles, 
there will be an unbroken railroad communication. The branch lines 
connecting with the main stems are of great extent, and will cost as much 
money as the main roads. To show the progress of Indian railroads it 
may be stated that it is only fourteen years since the first line was opened 
in that country. At the present time there are 3,200 miles in operation, 
and next year a thousand additional miles will be completed. 

This development of railroads in British India is of the highest im- 
portance as affecting the cotton trade. Formerly we enjoyed a monopoly 
of the market; now, nearly one-half of the cotton manulactured in Eng- 
land is derived from India alone. A late Liverpool circular estimates 
the quantity of American cotton now on hand and to arrive before De- 
cember 31st, 1867, at 680,000 bales, while the supply of India cotton for 
the same period is estimated at 925,000 bales. Without expressing any 
opinion as to the correctness of these figures, the more important fact 
for us to remember is that the manufacturers of England have so altered 
and improved their machinery as to be able to use in much larger pro- 
portion than formerly the shorter India staple, while, at the same time, 
the quality of cotton from that country has been decidedly and steadily 
improved, and is being more carefully prepared for market. Judging 
then of the future from the past, it may be expected to equal the Amer- 
ican article at no distant period. 

The establishment of railroads in India removes the chief obstacles to 
the growth of an almost unlimited supply of cotton. The country is 
admirably adapted for it, and the teeming population has long been fa- 
miliar with the staple, and exhibit great aptitude in its culture. The 
best cotton regions have not yet been opened to the world ; the only fa- 
cilties for reaching a market being the slow and expensive process of cattle 
teams. The new railroads, however, will convey the products bt these 
regions to market cheaply and expeditiously. And it is a noticeable 
feature of Indian railroad companies that their revenues are derived from 
goods rather than from passengers. Of $35,000,000 income of Indian 
railroads during the three years ending June, 1866, two-thirds were re- 
ceived from merchandise traffic. 



J. L. Pearson, Peinter, Cor. 9th & D sts. 



\ 



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