m oaS^st BDSr UNIVERSITY LIBRARY UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN The person charging this material is responsible for its renewal or return to the library on or before the due date The minimum fee for a lost item is $1 25.00, $300 00 for bound journals. Theft, mutilation, and underlining of books are reasons for disciplinary action and may result in dismissal from the University. Please note: self-stick notes may result in torn pages and lift some inks. Renew via the Telephone Center at 217-333-8400 846-262-1510 (toll-free) or circlib@uiuc.edu Renew online by choosing the My Account option af http://www.library.uiuc.edu/catalog/ 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'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■ 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. \ uNivERsrrv of Illinois urbana