Previous to 1899 both these railways had achieved an unenviable notoriety for the in adequacy, slowness and unpunctuality of their services, for the dilapidated condition of their stations and rolling stock, and generally for the backward state of their accommodation. In the case of the Chatham Company the financial position was also precarious, and though the South-Eastern at one time was nominally much stronger in this respect, it too had lost much ground in the preceding five years, and for 1901 its ordinary dividend at the rate of only 2 per cent was the worst in its history. Com petition of the worst kind between the South Eastern and Chatham companies was a normal state of affairs, and as the result both railways spent vast sums of capital and revenue for which • there is at the present time little to show except duplicate lines and stations, and in adequate provision for traffic where extended accommodation was most required. Many times a fusion of interests had been urged upon the two companies, but without result. Negotia tions for amalgamation were entered upon sev eral times, but they always broke down at the crucial moment.
At last, in 1898, an agreement between the two companies was reached, not for a complete amalgamation, but for the pooling of gross revenue and working expenses and the division of net profits on a fixed percentage basis, with additional arrangements for the joint contribu tion of capital required. It was not the inten tion of the two companies to seek Parliamentary authority for this arrangement, as they were not bound to secure the sanction of any other body than their shareholders. But the gov ernment virtually intimated that the new ar rangement was so important and far-reaching in its bearing on the interests of the public, that the terms of agreement ought to be embodied in a bill. This bill received the royal assent on 1 Aug. 1899, and seven months thereafter the new arrangement came into operation.
The preamble of the bill recites that With a view to avoiding undue competition and unneces sary expense and delays and other inconveniences arising from diversity of interests and to turning to the best account the respective powers and resources of the two companies — . it is expedient and will be for the public advantage that, subject to the provisions and enactments in this Act contained, the undertakings of the two companies should be used, worked, managed, maintained, and improved from and after the passing of this Act, as one undertaking. . . . .
The Act constituted a Managing Committee to administer the two railways as one company, that new body being made up of the directors of the two companies.
The committee of 1872 sum up their view upon the effect of hostile or prohibitory legisla tion on this subject as follows: long and varied experience has fully demonstrated the fact that, while Parliament may hinder and thwart it, it cannot prevent it The theory of the British Constitution is that Parliament is omnipotent, and here there is formal admission that there are things that omnipotence cannot do.
France.— The French railway system was developed a little later than the English, but we must look as far hack as the reign of Louis XI, in the latter part of the 15th century, if we are fully to understand and appreciate that develop ment. That sagacious and masterful prince, who reigned from 1461 to 1483, broke effectually the power of the great feudatories, and by a consolidation of authority in the Crown laid the foundation of the absolute monarchy. His taking the postal service out of the hands of the feudal authorities and away from the cities and making it a matter of national administration, these 400 years ago and more, was one of the most notable acts of his reign, and was in a way the first step toward the modern railway system of France. "Modern history,' says President Hadley, in speaking of the nationalization of the French post office, "— the history of nations as such — may almost be said to have begun at this point." What Louis XI did for the power of the Crown and for the postal service of the country, Louis XIV and Colbert did in laying the foundation of the national system of high roads and canals. The Ecole des Pouts et ChaussFs was founded, and trained engineers graduated therefrom laid out, constructed and perfected that splendid system of canals and highways, radiating from Paris and reaching every corner of the kingdom, which long ago made France the first country in the world in its roads and waterways. There was from the
beginning complete organization, intelligent sur vey and construction and strict supervision; so that an almost perfect system of lines of com munication existed in France before railways were known. In no other country had such re sults been accomplished in road-making, and nowhere else was such completeness of organiza tion and •development possible. The genius of highways had in some sort come down to France as an inheritance from Rome, whose military roads were one of her most characteristic monuments. In this state of case, with a per fect system of roads and canals already built and in operation — which made railways seem less necessary in France than in other countries —it is not strange that the French built railways slowly and cautiously. So it was not merely accidental that France moved tardily in this mat ter. It is not in the French character to make radical changes, or to do things piecemeal; and it was easy for her highway engineers to see that other nations were blundering in their first railway construction. The racial qualities that distinguished the French, their spirit of order and economy, their notion of proportion and their conservative good sense in business, all had something to do with their making haste slowly in railway building. It is very much the French way to let other people make the initial experi ments in new things, and only to take a thing up when it is demonstrably sound and feasible. It is almost a racial instinct, and this is what happened in the development of French railways. The result is that they now possess the only railway system in the world which was intel ligently conceived from the outset as a unit, which was scientifically planned and laid down by competent engineers working together to a common end, and which was built as a whole. The conditions in France that made this pos sible had their genesis in the dominating sagacity and spirit of order of Louis XI. The highways and canals led up to the railway lines, and the governmental regulation and control of the old land waterways grew naturally into the present system of railway supervision. The system of roads and waterways existing in 1830 suited the French nation exactly. They were so arranged and classified that each bore its exact propor tion of importance, whether national, depart mental or local. They were regulated from Paris with ease and with military precision. Never was there so efficient a corps of en gineers for carrying out such a scheme as that which is trained at the Ecole des Ponts et Chaussees. The first step taken by the govern ment looking to a general railway system was the appropriation of a sum of money to pay the government engineers for laying out a gen eral system of railway lines covering the whole of France. When this survey was completed, and while the lines existed only on the maps and blue-prints of the engineers, the govern ment next took up the question of ownership and management. While other countries had been acting and experimenting and making costly mistakes, France had been reasoning and thinking the matter out. There was a long series of debates in Parliament between 1837 and 1840. The plan finally adopted was the concep tion of Thiers, and was settled upon in 1842. The plans then and thus deliberately conceived and matured — both of engineering and of legis lation — have since been carried out consistently. They were sufficiently elastic to be practicable. It was at the outset a policy of support and con trol without actual ownership, or, in other words, a policy of subsidies to encourage private companies, and in return for these subsidies a reservation of more or less important rights of state control. As the work proceeded and as new conditions arose, amendments and modifi cations were incorporated into the plan as origi nally conceived. In 1842 it was strictly a plan for subsidies; in 1852, extensions of chartered privileges were granted to the companies; in 1859, a scheme for the guarantee of interest on the bonds was inaugurated, and, in 1883, the government guarantee was extended to dividends.