RAILWAYS. (Hansard, 7 April 1845)

Lord Brougham
moved for certain Returns, to which he believed there could be no possible objection, as they were on a subject on which it was very necessary that information should be laid before their Lordships, and on which, if produced, and if the information came up to what he was given to understand would be the case, he pledged himself to ground a Motion before their Lordships. First, the number of Railway Bills passed in the last ten Sessions, distinguishing those passed in each Session. Secondly, the number of Railway Bills now pending in Parliament. Thirdly, the number of Railway Bills upon which the Board of Trade had reported favourably. Fourthly, the amount paid by the subscribers on the shares of the Railway Bills that had passed. Fifthly and lastly, the sums per cent. divided by the 226 different railways already authorized by Act of Parliament on their respective shares. His reason for calling their Lordships' attention to this subject was, that he was one of those who regarded with the greatest alarm the present fever—he could call it little less than frenzy—into which the community had fallen, as well those with capital and credit, as those who were very slenderly furnished with either, but who were inspired with the love of speculation and of gambling in shares. The effect of this was likely to prove exceedingly alarming to the credit as well as the resources of this country; and when he looked back to what happened in the years 1825 and 1826, the only period in our history within his recollection which could at all be compared with the present, he recollected that the noble Earl then at the head of his Majesty's Government, the late Lord Liverpool, feeling impressed with the same alarm which he (Lord Brougham) now stated himself to feel at what was then going forward, deemed it his duty, in his place in Parliament, to warn the great body of his fellow subjects against the course to which they were, as he thought, recklessly rushing. The warning which that noble Lord then gave concluded with this notice, which he had no doubt whatever Her Majesty's present Government were equally prepared to give— That come what might, and happen what would, in the result of these speculations, the speculators were to look to their own resources only, and not to look to any assistance or any relief whatever from the Government which had thus given them a fair and timely warning. When the crash happened which was then apprehended—namely, in March, 1826, Lord Liverpool, referring to what he had said in the former year, reminded the speculators of the timely warning which he had given them; and Lord Lauderdale at that time stated that there was no wonder that a pecuniary crisis, that a mercantile convulsion, should have taken place, when, the consequence of these joint-stock companies, in the year preceding there had been no less than seventeen millions sterling withdrawn from the ordinary sources of circulation, and from the ordinary commercial employment of the country, and sunk in those speculations. He (Lord Brougham) had lately seen a calculation from one of the most eminent brokers in this country, whose name he would decline mentioning, though it would give very 227 great weight to his calculation, as it might be deemed invidious by parties concerned in the transactions. It was to the effect that if they were to pass the two hundred and forty odd Railway Bills now actually pending in Parliament, it was not seventeen millions merely, but in the course of two years, or at the most of three years, from the passing of the Bills, no less than 130 millions would be required for such speculations. He need not remind their Lordships that there was no Member of their Lordships' House, or of either House of Parliament, who regarded with more apprehension, or who opposed more strongly, any interference—except, perhaps, in the way of advice alone—but certainly any legal interference, as he had frequently shown their Lordships, with the employment of the capital or the labour of the community; but it was quite a different thing, it was a wholly different question, whether the Government and the Legislature were or not to give encouragement to such unbounded speculation, by granting a number of Acts of Parliament, conferring the most extraordinary powers on speculators, and without which powers none of those projects could by any possiblity be undertaken. By doing so they made themselves a party to this extravagant system of gambling; and when he mentioned to their Lordships the kind of occurrences that took place, and the treatment that to his own individual knowledge some parties had met with from these speculators, he thought their Lordships would feel no wonder that he should term them extraordinary. Before the railway business was so much multiplied in Parliament, he knew an instance of a railway that was to pass near an ancient mansion in the West of England. The engineers or managers of this railway came to the proprietor of that mansion to procure his consent to the sale of a portion of his lands, and when he asked them how much they meant to pay for fifteen acres of his ground over which the railway was to pass, they said they would not tell him until their Bill was passed into a law, but then they would give him what they might think just. The proprietor objected to be left at the mercy of the other party, beside having to permit the nuisance of having a railway within a quarter of a mile of his house. They answered that they did not care whether he consented or not; that the Railway Department of the Board of Trade had already reported in 228 favour of the line, and that it would be the worse for himself if he offered them any opposition. In another instance a threat was held out to a neighbouring proprietor, that if he offered any opposition to the railway passing near his lawn, or within half a quarter of a mile of his demesne, where his family had been established since the reign of Queen Elizabeth, they would probably have to go through his kitchen garden. In such a case the proprietor had no resource. He might be told that he could go before a jury; but jurors were now in nearly all instances mixed up with these railway speculations, and in almost every case they were known to give actually less than the companies had offered in the first place. Therefore for the gentlemen concerned to tell the proprietor who opposed them that he might go to a jury, and to employ a certain other coarse expression, were nearly synonymous. He knew, besides, several instances in which the most ruinous consequences were likely to accrue to private individuals in consequence of this mania of speculation. In one case, a respectable clergyman, having collected about 5,000l. as a provision for his family, forwarded it all to a friend in town with a peremptory instruction to buy railway shares with it, being, as he said, determined to quadruple the means of support for his family in a short time. In another case, a gentleman who had 2,000l. sent it to the same friend, with instructions to borrow, if possible, 3,000. more for him, and then to buy railway shares for him with the whole amount. Such instances were of frequent occurrence, and it was plain the consequence must be, that in a few months many of these parties would not have money to pay the instalments which would be demanded of them. They expected to hold the shares merely for a few months or weeks, and then to sell them at a premium; but when they found that similar intentions were general, as he feared they would find to their cost, they would learn their mistake when too late. He had deemed it his duty to take the earliest opportunity of stating what his apprehensions on this subject were, and of calling the attention of Her Majesty's Government to this view of the question. He did not attach the least blame to the Board of Trade for giving their approval to so many different schemes. They never had this view which he was now taking, submitted to them; as the question on which they 229 were expected to give their Report was, not whether such speculations ought to be encouraged or otherwise, but they were merely told, "There is to be a railway made through this particular district, and you are to state which of the plans for that purpose may be the most advisable." The other question belonged to the Parliament and the Government, and not to the Board of Trade. He did not, therefore, in the slightest degree complain of the Board of Trade having reported in favour of 240 plans of railways, or whatever number was now before Parliament; but what he wished to do was to call the attention of the Government to this view of the subject, that they might make up their minds whether it was expedient, or not expedient, in the general view of the matter, and on general principles, to hold out means to speculators, which means, unless afforded by Government and by the Legislature, do not exist, for indulging in the present system of gambling in shares, in what the French call "actions." Two years ago the French Government were seized with the same alarm which he now felt; and the result was that they stopped railways generally, having only allowed about a dozen or fifteen railways to be undertaken within the last year and a half, and these under strict limitation and control. He did not at all mean to lay down what course ought to be taken in existing circumstances. He only wished to give his opinion of the mischievous tendency of the mania that raged in favour of railway speculation, and which he thought was likely to lead to an alarming panic before the end of the year; the sooner the attention of Parliament, and, above all, the attention of the community was directed to it the better, so as to apply a check to the prevailing fury—the better for the commercial and monetary interests of the country. He, therefore, hoped their Lordships would not object to granting the Returns for which he moved.

The Earl of Dalhousie
said, that he was in no position to comply with the Motion of the noble and learned Lord, except so far as he might be able to do so in connexion with the Board to which his noble and learned Friend had alluded. Every information which was within the reach of that Board should be laid on the Table of their Lordships' House. With respect to the number of railway schemes that came before the Board of Trade, the number on which 230 they had reported, and probably the number of Bills that were before Parliament, there could be no difficulty; but as far as the prices of railway shares, and the amount of the dividends of existing lines were concerned, the Board of Trade could obtain the necessary information only from channels open to every one. There was no doubt, however, but that their Lordships could, if they required it, procure some of that information also. With respect to the wide and delicate question which the noble and learned Lord had brought before them, he would not presume to offer any observations to their Lordships. There could be no question whatever but that an immense amount of capital would be required for the formation of all the schemes that were now before Parliament; but he thought his noble and learned Friend's informant had rather exceeded the amount in his calculation. He believed the various lines announced to the public this year would extend to about 7,400 miles, which would require some 140,000,000l. or 150,000,000l. of capital for their construction; but it was impossible to suppose that Parliament would sanction any thing like that number of railway schemes, and, at all events, they might rest assured that the subject alluded to by the noble and learned Lord would undoubtedly receive the attention of Parliament. With reference to what the noble and learned Lord had said about the conduct of railway companies, and the necessity of imposing restrictions on them in the Bills before Parliament, he concurred with the noble and learned Lord in believing that many cases of very great hardship had occurred; and one instance of that nature had come under his own observation, which even surpassed those which his noble and learned Friend had mentioned. A gentleman had been solicited to become a member of a provisional Committee of a railway. He consented, and his name was entered in the advertisement list of the company. The shares were, he believed, at a premium, when it occurred to the gentleman to inquire into some of the details of the plan. He accordingly saw the section of the line, and he found that the railway would pass within forty yards of the windows of a large country house. That house was his own. On inquiring of the engineer how this could have come to pass, or whether it was possible the line could have been at all surveyed, he was told, after some hesitation, that they 231 had surveyed one end of the line, and the other end of the line, and that on these two data they had founded their prospectus and subsequent proceedings. He might mention, to account in some measure for the strangeness of the proceeding, that the railway in question was in Ireland. He knew the great objections that were felt to the way of procuring compensation in particular instances; but it was provided by the General Railway Bill, that where the owner of land requires either the decision of a jury or of arbitrators in his case, he alone shall have the right of deciding which shall be selected; and that being so, a very great objection was overcome, as it was always in the power of the party requiring the arbitration to decide whether it should be made by jurors or arbitrators.

§ Lord Ashburton
was not in the House to hear the early part of the speech of the noble and learned Lord, nor did he know the particular Papers for which he had moved; but he could not allow this discussion to pass without saying, that nothing more important could occupy the attention of Parliament than the present feverish state of the gambling events connected with railways. In this case, however, as in many others, it was easier to point out the difficulty than to suggest the remedy. Still it was desirable, whilst they were putting down the gambling-houses in St. James's-street and Jermyn-street, and in the purlieus of Westminster, that they should at least consider the gambling which was pervading every country town, and every family, from one end of the country to the other. They could not prevent the people from dealing in shares; but, at the same time, it did become important to consider the extent to which this gambling was carried on; and if they could not repress the gambling, they ought at least to consider its operation on the ordinary proceedings of the country, on our monetary transactions, and on the industry of the country. With regard to its influence on the ordinary business of trade, he might give one instance of its effect upon the iron manufactures of the country, and the derangement it caused to the iron trade. There had been 300 per cent. advance in the price of iron during the last eighteen months; and the consequence was, that all the ordinary commerce connected with that trade was disturbed. They found a competition arising in Belgium and other countries, owing to our manufactories being unable to carry 232 on their ordinary processes, since they found the raw materials in this country too dear for them. This raised a competition in other countries against us, and opened channels of trade from which they could not afterwards be driven out; so that when iron in this country came back to its ordinary price, we should find that we had lost the markets that had hitherto depended upon us. Again, as to its effect on the monetary system of this country. His noble Friend said, that if all the railways applied for were granted, they would take about 140,000,000l. from the ordinary monetary transactions of the country. By the mode of constructing the railways, it must take three or four years before the whole sum would be required; and though the demand would come by very small instalments, yet if the 140,000,000l. were required to be advanced in one year, the inconvenience to the country would be extremely serious. His noble Friend said that 140,000,000l. were proposed only, and that it was not likely so many railways would be assented to; but he was afraid that railways embracing that amount had already received the sanction of the Board of Trade; and he should like to see a return of the amount of capital of all the proposed lines that had gone before the Board. [Lord Brougham said, that was one of the Papers for which he had moved.] He wished to consider whether it were possible to make any further classification, so as to carry the operations over a greater length of time. He did not say that it was possible; but if it could be done, it would undoubtedly be a great benefit to the country. Returning to the very article of iron—what would be the results of the present state of things? There would be immense profits; very large fortunes would be made, and honestly made; and the consequence would be, that there would be furnaces set to work in every part of the country; so that the manufacture of iron would be carried to two or three times the ordinary demand of this country. By and by, when the trade ceased, the whole of the manufacturers would be thrown back—all the population engaged in this branch of manufacture would be thrown out of employment—and the cessation of this extraordinary demand would bring with it a sudden reduction of labour, of capital, and of industry, than which nothing could be more injurious to the quiet pursuits of commerce in this country. Unfortunately, this subject came 233 before them in a great hurry; they had hardly time to look about them and see how matters might be best conducted. Pressed as they would be in both Houses by the importunities of the speculators, he very much apprehended that every attention would not be paid to the subject, and that the inquiries would not be conducted with that great sobriety which the importance of the subject deserved. He could not, therefore, let that occasion pass by without expressing the apprehension he felt at the confusion which must, more or less, arise to the commercial industry of the country from the transactions now taking place.