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that, in most companies, this party has not a single representative in the direction. When a new project is brought forward, the shareholders are almost invariably told, and with truth, that the board is unanimous in recommending its adoption. In one or two companies, indeed, in which the corruption of the leading directors is notorious, and the dissatisfaction of the shareholders unurnally great, a member of the opposition party has occasionally succeeded in forcing his way to the board. All who are conversant with the affairs of those companies, well know what a grievous impediment the presence of even one such director presents to making things pleasant."

If the monopoly of the representation by a bare majority is to be got rid of, it must be by some subdivision of the constituent body. I think the principle on which it was proposed to provide for the representation of minorities by Lord John Russell's Reform Bill of 1854, affords the means of effecting this object. Whether that principle is a good one with reference to Parliamentary elections, it is not my purpose to inquire. The political evil it was intended to meet is, as already observed, to a great extent practically obviated by the subdivision of Parliamentary constituencies. The objections which were made to its working as a political measure have no application to public companies; and the nature of such bodies affords some peculiar facilities for bringing it into operation. I should suggest in accordance with this principle, that on the filling up of several vacancies in the direction of public companies, each shareholder should be entitled to vote for one candidate only; or, at all events, for some number of candidates less than the number of seats to be filled up.

The practical result of this mode of election may be readily calculated. If there were three seats to be filled up, and each shareholder could vote for one candidate only, the dominant party in the Company could not secure all the three seats, unless they could command more than three-fourths of the whole

number of votes. Otherwise, the minority would obtain one seat out of the three. If there were two seats, the dominant party must command upwards of two-thirds, and if four seats, upwards of four-fifths of the votes, to monopolize the representation. The minority would obtain one seat, if they could muster above one-third of the whole number of votes in the first case, and above one-fifth in the second. In the latter case, they would obtain a second seat out of the four, if they could muster above two-fifths of the whole number of votes. It seems obvious that, by means of a well-arranged system of election of this kind, the nearest approach to fàirness could be made which the case admits of, and the state of the directorship might reasonably represent the state of opinion amongst the shareholders.

The adoption of the mode of election I have suggested would require an amendment of the Companies Clauses Act of 1845. If that act were amended, the clause which gives the election to casual vacancies in the direction, to the directors themselves, ought surely to be repealed, and the right of election in such cases to be conferred on the shareholders. The tendency to reelect retiring directors is so strong, that it is only when vacancies occur by death or resignation that an independent candidate can have, under ordinary circumstances, any prospect of success. The election of such candidates has consequently been confined, as far as I am aware, except in some extreme cases, to Companies which have not come within the Companies Clauses Act.

I will conclude by referring to another cause which greatly fetters the action of shareholders, both in choosing directors and in other respects. This is the half-crown stamp imposed on proxies. It is by proxy alone that the vast majority of shareholders can vote. Proxies in support of the dominant party are generally paid for, in one shape or another, out of the funds of the Company. But to an independent candidate for the direction, or to a body of independent shareholders associated to resist some project which they think detrimental to their interests, the expense

of

circulating half-crown proxies amongst a proprietary numbered by thousands, is always a formidable and often an insuperable obstacle. That the vote of a shareholder concerning his own affairs should be the subject of taxation appears a singular anomaly, and greatly conduces to the mismanagement of public Companies. Even a reduction of the tax would be a great boon, and I am satisfied that, with the growing disposition of shareholders to think for themselves when they have an opportunity, a sixpenny proxy stamp would be far more productive to the exchequer than the present duty, which practically confines the exercise by shareholders of the right of voting to great and unusual emergencies. I remain, my dear sir, Always yours very truly,

R. MAC DONNELL HERBERT SPENCER, Esq.

After the number of the Edinburgh Review containing the article now republished, had been issued in the United States, sundry comments were made by the press of that country on its disclosures concerning our railway system. The American Railroad Journal made them the text for a series of four leading articles on the railway system of America. As these contain a large amount of information possessed by but a few in England; and as this information has an important bearing on the general doctrines that have been set forth; it has been decided to reprint them along with the additional matter above given. Respecting the criticism with which the first of the four articles sets out, it may be admitted that there is ground for it. But it did not come within the writer's object to touch upon those yet deeper legislative errors referred to; nor, probably, would his views have met with editorial approval had they been expressed.

RAILWAY MORALS AND RAILWAY POLICY.

From the American Railroad Journal, for November 25, 1854,

We copy, on another page of the Journal, an article upon the railway morals and railway policy of Great Britain. It is undoubtedly a truthful picture of the condition and management of railway property in that country. As far as there is a parallelism between the manner in which the railways of the two countries are conducted, the article may be studied with as much profit by our own people as those to whom it is directly addressed. We copy it for the additional object of seeing how far this parallelism holds good, and as a means of obtaining a more correct view of the policy and management which prevails in this country, and of the condition and prospects of our railroads.

We would remark, in the outset, that the article quoted appears to us to touch only upon a part, and perhaps upon the least important of the mistakes and misconduct from which railways have suffered. It is an able statement of the present condition of railway affairs; but it only partially explains the causes, while it hardly suggests a remedy, for the abuses which are shown to exist. From the article, it would seem that English railroads have suffered most from branches, or extensions of the trunk lines, which have been the occasion of enormous expenditures, without any useful object or end. Another great source of evil is Purliamentary legislation. Abuses of legislation, in fact, are the constant theme of complaint on the part of the British press, and undoubtedly with good reason, as erroneous ideas in legislation lie at the foundation of many of the abuses and losses that have been suffered. The article also fails, in our judgment, to point out the proper remedies, mainly for the reason, we think, that the causes of the abuses and mistakes are not correctly appreciated.

But whatever be the causes of the disasters which have befallen British railroads, involving a loss, variously estimated at from 350,000,000 to 500,000,000 dollars, equal to one-half or two-thirds of the whole expenditure upon such works in this country, the fact stares us fully in the face. Are our roads in a similar category? Is the vice from which the former have suffered inherent in the system, or peculiar to one country? We propose to draw, in connection with the above article, a parallel between the works of the two countries, for the purpose of showing how far we are suffering from the influence of similar causes, as well as to point out, if possible, the appropriate remedy.

We commence with a comparative review of the Legislation of the two countries. As already stated, the wrongs inflicted upon railways by a partial, unwise, and unjust system of legislation, is regarded in England as one of the great sources of the evils suffered. What this legislation is

, was well stated by Mr. Robert Stephenson (himself a member of Parliament), in a speech made when in this country to the citizens of Toronto, from which we extract as follows :

“In the various railway struggles, the committees of Parliament took into consideration not what was right nor what was wrong, but entered into considerations entirely subsidiary, and not at all connected with the profits of the lines, nor the necessity for making them. The consequence was that the committees sometimes decided upon different lines, upon reasons entirely apart from their real merits or the scientific questions involved in the details. There was one district through which it was proposed to run two lines, and there was no other difficulty between them than the simple rivalry, that, if one got a charter, the other might also. But here, where the Committee might have given both, they gave neither. In another instance, two lines were projected through a barren country, and the Committee gave the one which afforded the least accommodation to the public. In another, where a line was to be run merely to shorten the time by a few minutes, leading through a mountainous country, the Committee gave both; so that, where the Committee might have given both, they gave neither; and where they should have given neither, they gave both. Such a species of legislation was faulty, and he hoped it would not be imitated in this country. There was, indeed, a Committee sitting in England, the attention of which he had called to these facts. After lines were granted, the competition which began within the walls of Parliament continued when the lines came to be put in operation. He could say, upon the authority of the Board of Trade, and from his own knowledge, that, since

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