Legislative regulation of railway finance in England

Contents

Introduction x~3

Chapter 1. General Legislation on Railway Finance

Page

(1) Peculiarities of the railway problem in England. (2)

Origin of railway legislation. (3) General policy of Parliament concerning railway finance. (4) General nature of regulation. (5) The three periods of legislative activity. (6) Historical development of the English system of legislative regulation of railway finance-Early legislation influenced by the conception of railways as being similar to turnpikes and canals-Early irregularities in railway finance and the coniolidation of clauses in 1845-The effect of the railway mania of 1845 and its subsequent collapse- Circumstances leading- to the enactment of the Companies1 Clauses Act of 1863- Extensions and speculations- Parliamentary inquiry regarding the borrowing powers, etc. of railway companies? 1863- 4, and the Railway Companies Securities Act of I860- The railway panic of 1866 and its revelations- The Railway Companies Act of 1867-Royal Commission on Railways, 1867- Adoption of uniform system of account s-e lose of legislative activity. (7) The scope of the English system of regulation. (8) wljy England has undertaken to regulate railway finance and why she had adopted her unique policy... 1

Chapter II. Legislative Supervision of Railway Capitalization

1- Share ^Sapital.

(1) Introductory-Variety of railway securities-Sketch of early legislation. (2) general provisions governing share capital- Creation of shares and convertion of loans into share capital-Ordinary shares- No compulsory power to take land until all shares subscribed-Privileges of shareholders and the transfer of shares- Cancellation and surrender of shares- Additional share capital and new ordinary shares-Preference shares- The splitting of shares into preferred and deferred portions. (3) Restrictions governing the application

g, of capital-Principles followed by the English legislature- Financial difficulties of the forties led to further legislation-Experimental legislation during the fifties- Application of money raised by debenture stocks- Irregularities in practice. (4) Prohibition of paying dividends out of capital- Early regulations as shownn in the London and Croydon Act of 1837- need of relaxation during the forties-Provisions adopted in 1845- Standing order of 1847- Self-contradictory provisions contained in the Companies Act of 1862-Details rules prescribed in the Railway Companies Act of 1867-Undef ined working expenses and irregular chargings led to violation of regulations-Efforts to remove restrictions-Relaxation of restrictions in 1868 and subsequent unsatisfactory results. (5) Conclusion. *5j

Chapter 111.

Legislative Supervision of Railway Capitalization.

2-Loan capital.

(1) Introductory- What constitutes railway loan capital-Policy

of Parliament governing railway capitalization by loans. (2) Sketch of early legislation. (3) General provisions adopted in 1845. (4) Effects of the collapse of 1847. (5) Agitation for reforms (6) Tentative regulation of debenture stock issuing. (7) Protection to security-holders and limitation of rate of interest on loans emphasized. (8) Confusion over legality of debentures. (9)Provisions governing the creation of debenture stocks adopted in 1863-What led to the adoption of the provisions- Where the provisions seemed to have failed. (10) Parliamentary inquiry concerning debentures. (11) The Railway Companies Securities Act of 1866. and the circumstances led to its enactment. (12) Difficulties over debentures- Co nf u sing ideas as to the clsdms of debenture-holder s- Drawbacks of debenture s-Agit at ions for reforms- Three bills introduced in 1867. The railway Companies Act, 1867-Protection of rolling stock-The issue of pre-pref erence stocks-Priority of debentures- Abolition of restrictions on rates of interest. (13) Effects of regulation and conclusion. 63

Chapter IV. Central of the Borrowing Powers of Railway Companies

(1) Original notion of railway borrowings. (2)Early regulation ineffective and some of the results-Principles set forth in the standing orders and application of the same-Purpose of restricting borrowing powers and apparent defects of such restrictions. (3) General rules laid down in 1845- Analysis of the rules? and their defects-Irregularities in practice- Ef fort s to extend limit of borrowing powers. (4) Disregard and defects the regulations- Unavoidable, intentional and fraudulent violations-Difficulties resulting from such violations- Evasion of the limit of borrov.lng powers through the issue ©f Lloyd* s bonds and its effect. (5) Agitation for the abolition of the borrovdng powers. (6) Borrowing should he placed in the hands of creditors. (7) Parliamentary inquiries made in 1863 and 1864. (8) Further strengthening of the limit of borrowing powers. (9) Conclusion

V/

on of Railway Sec

Early provisions railway securitie ;s=As being set fo jses act-Difficult >f the early regul Schemes of registr limit tee on railway f registration and eper of the signet rinciples advocate tration. (4) Pari mpts in Parliament the select commit i of 1865 and 1864= on of securities, jt of 1866-Rules ac of railway returns , Analysis of the railway companies rowing power s-Defec Conclusion