How was this new legislation received by the railways? It was not long before the railway companies saw that the aim of the Canal Carriers' Act was to keep them from securing monopoly, by allowing the canals to collaborate and thus obtain harmonious action in the contest against their rival. But acute minds soon recognized also that this Act gave power to railway companies that had become owners of canals to obtain a control over other canals, without coming under the notice of Parliament; and under such a plan no opportunity would be afforded to Parliament of taking the course usually taken when sanctioning arrangements between railway companies, of investigating the terms of the proposed arrangement before confirming it, or of subjecting it to the approval of the Board of Trade. If a railway company could obtain a controlling interest in a canal it would then be entitled to rank as a canal or navigation company, and claim the privileges of traffic arrangements that were allowed by this Act1. Accordingly, railways set to work to secure this standing, and thus make the statute that was intended for the benefit of their rivals, contribute to their own advancement. Having become in effect canal companies, through acquiring control over navigations, the railway companies were then had been carriers for some time. The Bridgewater Trustees had been carriers on their canal, but, of course, it had been constructed and operated under the control of a private individual. The Trent and Mersey Canal Company had also been carrying for the public on their line. Other canal companies had been engaged in this carrying trade, but not under their own names. Even where the work was

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done by the canal company there were always other carriers who were doing the same work, upon payment of the tolls; and on the Bridgewater Canal a small part of the traffic was carried by the Trustees, while the larger part was taken by other carriers. Brit. Doc. 1844 (318), x1, 17, 'Fifth Report on Railways, Minutes of Evidence,' p. 169 et seq.; Brit. Doc. 1840 (437), XIII, 181, Fourth Report on Railways, Minutes of Evidence,' Q.960. But it was a very rare thing that the canal companies did the actual work of carrying, either before or after the passage of the Act of 1845. As late as the year 1883, several witnesses advocated the carrying business being taken up by the canal companies, as well as by the private carriers ; and it was said that at that time the system of carrying goods on the inland waterways was almost exclusively in the hands of the traffic senders, who put their own boats on the canals and paid the toll to the canal company (v. for example, Brit. Doc. 1883 (252), x1, 1, evidence of Mr Lloyd, p. 23; also Brit. Doc. 1867 [3844], XXXVIII, 1, evidence of Mr Wilson, Q. 10,021, p. 433).

1 Brit. Doc. 1857-8 (411), XIV, 1, 'Report of Select Committee on Railway and Canal Legislation,' p. 40. The Act authorized the owners of canals and navigations to carry as common carriers on their own canals and navigations; to enter into arrangements with each other in the way that railway companies were authorized to do, so as to avoid the delays incident to a diversity of interests; to enter into agreements for the division and apportionment of tolls and charges; and to let the tolls and duties to be levied on any canal or navigation, or any railways or tramways belonging to them, to any other canal or navigation companies for a period not exceeding 21 years.

ready to enter into negotiations with other canal companies which were powerful rivals, and to make such agreements with them as would prevent their competing with the railways, so that the latter would have the whole field to themselves1. In this way, the acumen of the railway managers or directors proved more than a match for the legislators, and the more powerful transportation rival was able to still further obtain the predominance. So great was the influence that might be acquired by railway companies which were in a position to make use of the powers conferred by the Act of 1845, that the Board of Trade suggested whether it might not be proper to place some restriction on the exercise by these companies of the power of entering into traffic arrangements with canal companies2.

The impetus given to the amalgamation of railways and canals before the beginning of the railway mania continued in the following years, and in 1846 there were over 200 Bills presented to Parliament

1 As an example of this strategy, we give some facts in the history of the Leeds and Liverpool Canal. Before the commencement of railway competition, the tolls on this canal for general merchandise varied from 1d. to 1d. per ton per mile. To meet railway competition, the canal tolls were reduced to d. to d. per ton per mile. As competitors for the traffic of the district traversed by this canal, there were three lines of railway, the London and North Western, the Midland, and the Lancashire and Yorkshire. These railways, having under authority of Parliament secured the property of certain navigations, and desiring to put down all competition for traffic in this district, engaged the Leeds and Liverpool Canal, in 1851, in consideration of an annuity of £41,860, to give up all competition and to practically close up their navigation by raising their tolls to a prohibitory figure, obtaining thereby for the united railways a complete monopoly of the traffic of that district. The arrangement was made to assume the appearance of a lease of the canal tolls, under the powers of the Act of 1845. The lease, however, was a fiction; the £41,860 yearly was paid, not as a rent, but in consideration of a rise in the canal tolls, which shut up the navigation and compelled the traffic to go by rail. While the canal was charging the aforementioned reduced rates, these three railways, together with the East Lancashire Railway, offered the Leeds and Liverpool Canal this annuity, the counter condition being an increase of all the canal tolls to 1d. per ton per mile, which was an advance of 100 % to 200 % on the existing tolls. The canal accepted the annuity offered, but refused to allow the East Lancashire Railway to appear as a party to the transaction, since the latter did not have any canal whereby to legalize the agreement. The arrangement was therefore completed under the pretence of a lease of the Leeds and Liverpool Canal tolls, by the London and North Western Railway, as proprietors of the Huddersfield Canal, the Lancashire and Yorkshire Railway, as proprietors of the Bolton and Bury Canal, and the Midland Railway, as proprietors of the Ashby-de-la-Zouch Canal. The proportions in which the £41,860 was divided among the four railway companies were not publicly known. Brit. Doc. 1852-3 (736), xxxviii, 447, 'Fifth Report of Select Committee on Railway and Canal Bills, Minutes of Evidence' of Thomas Grahame, p. 69. For other instances, see Brit. Doc. 1857-8 (117), xxx1, 335, Report of Board of Trade on the Railway and Canal Bills of that Session,' p. 40.

2 Brit. Doc. 1857-8 (117), xxxi, 335, p. 40.

containing provisions for uniting canals with railways1. The committee that was appointed to look into this subject recognized the growing tendency to union and extension, with its advantages of harmonious management and its accompanying evils of monopoly; and they recommended the appointment of a department of the Government to provide more effective supervision of railways and canals. Still the amalgamations went on, with some effects that were detrimental to the public; and the committee of 1853, that was appointed to report on the railway and canal bills of that year, urged that working agreements between different companies, for the regulation of traffic and division of profits, should be sanctioned under proper conditions and for limited periods, but that amalgamation of companies should not be sanctioned except in special cases, where its object was to secure public benefit through economy of management3. They also recommended that the good results of such merging of interests should be retained, and the evils arising from them should be done away, by compelling every railway company to afford to the public, in regard to both goods and passengers, the full advantage of convenient interchange from one system to another4. Since competitors were able, in a great

1 Brit. Doc. 1872 (364), xi, 1, 'Report of Select Committee on Railway Amalgamations,' under heading No. 8.

2 Brit. Doc. 1846 (275), XIII, 93, 'Second Report of Select Committee on Railways and Canals Amalgamations.'

The recommendations of this, the first committee on railways and canals amalgamations, are important, and we give them as follows:

(1) The imposition of a low scale of tolls and charges upon all parties to the amalgamation. In the case of canals, the scales of tolls were of much greater importance than in that of railways, for, in most instances, the public were the carriers upon the canals.

(2) Strict regulations should be made for keeping the canals in effectual repair and with a proper supply of water.

(3) The public must have the right of carrying passengers and goods on the canals.

(4) The privilege of making by-laws should be subjected to careful revision. By this means, many of the canal companies exercised much power and could prevent fair competition.

(5) Where a canal was converted into a railway, care should be taken that no district would be deprived of efficient means of communication.

3 Brit. Doc. 1852–3 (736), xxxvIII, 447, 'Fifth Report of Select Committee on Railway and Canal Bills,' pp. 20-21. If working agreements were entered into and found to be injurious, they could easily be dissolved at any time; whereas if amalgamations were allowed they would be permanent and could not be subsequently broken. Brit. Doc. 1865 (3), XLIX, 219, p. 23.

♦ Brit. Doc. 1852–3 (736), xxxvIII, 447, ‘Fifth Report of Select Committee on Railway and Canal Bills,' pp. 20–21. Running powers were generally discouraged on the score of danger, and were to be conceded only in cases where free transit

measure, to secure the benefits of combination by agreements with each other, without authority of Parliament, and there were many such private agreements1, it became necessary for Parliament to adopt some means of protecting the public by compelling proper arrangements for traffic between the companies. For this reason, the Legislature acted in accordance with the recommendation of the above-mentioned committee, and in the following year passed the "Railway and Canal Traffic Act, 1854." This Act enunciated two principles: that every company should afford, both for passengers and goods, proper facilities for forwarding traffic, and that no preferences should be given2. It was the first really important step in the direction of solving the difficulties that had arisen in connexion with the conduct of the traffic of railways whose interests were at variance with one another or with the interests of the public3. The Act also provided a summary remedy against from one system to another could not be adequately ensured by other means (ibid., pp. 20-21, No. 6). The Board of Trade in 1865 also opposed the granting of running powers, that is, conceding to one company power to pass over the lines of another company without the consent of the latter, on the ground of its being questionable from considerations of public safety (ibid., p. 24; also 'Fourth Report of Select Committee of 1853,' p. 6).

1 Brit. Doc. 1852–3 (736), xxxvIII, 447, 'Fifth Report of Select Committee on Railway and Canal Bills,' p. 6. Here it is stated that such combinations of interests under private agreements were a matter of constant occurrence. 2 Act 17 & 18 Vict., c. 31. Under this Act, "every railway company, canal company, and railway and canal company, shall afford all reasonable facilities for the receiving and forwarding and delivering of traffic upon and from the several railways and canals belonging to or worked by such companies respectively, and for the return of carriages, trucks, boats, and other vehicles, and no such company shall make or give any undue or unreasonable preference or advantage to or in favour of any particular person or company, or any particular description of traffic, to any undue or unreasonable prejudice or disadvantage in any respect whatsoever." The rest of the Act gives provisions for its enforcement. Brit. Doc. 1854 (87), vi, 19; also Brit. Doc. 1854-5 [1965], XLVIII, 1, 'Report of Railway Department of the Board of Trade for 1854,' pp. x, xi give the provisions of this Act.

The necessity for this Act may be further illustrated by the following instance: In 1853 there was a complaint sent to Parliament by the coal-owners in Lancashire, that the railway company did not provide locomotive power to meet their needs, and that their coal had been forwarded at the company's convenience, rather than their own. The company took higher class traffic, which paid higher rates, and left the coal, which paid lower rates. Then, too, the railway left the coal-owners' rolling stock and coal on sidings along the line, which required the maintenance of a larger amount of rolling stock. The complaint also alleged that there was much delay in sending back the empty waggons from London. Brit. Doc. 1852–3 (736), xxxvIII, 447, 'Fifth Report of Select Committee on Railway and Canal Bills, Minutes of Evidence,' p. 4.

The Railway Department of the Board of Trade, in 1865, observed that the necessity there might formerly have been for allowing running powers were, to some extent, obviated by the passage of the Railway and Canal Traffic Act, 1854, and

railway companies for any violation of its enactments, by an application to the Court of Common Pleas1; but despite this it remained for many years practically a dead letter.

As soon as the Traffic Act of 1854 had been passed, large numbers of Bills were laid before the House by railway companies, asking that authority be given to enter into various descriptions of agreements for working in connexion with other companies, or for forwarding or interchanging traffic with other companies. Out of a total number of 138 Bills introduced in 1854, seventy-five were for making working arrangements and this movement for working agreements increased in importance during subsequent years2. Most of those that were authorized were for ten years, but the power of renewal at the expiration of that period was generally granted, subject, of course, to the approval of the Lords. The reason why there were so many of these agreements consummated about this time was because the trunk lines had been laid out, and the many short lines that were being constructed had to be merged with them in order to acquire any stability of operation*. To have attempted to remain apart from one of the main lines would have been to invite ruinous competition from the other roads in the same district; and, on the other hand, it was for the public good that new lines, which were extensions of, or feeders to, existing lines, should form part of one or other of the great systems and thus facilitate intercommunication.

The amount of amalgamation that was effected between railways and canals we are unable to trace with minuteness through successive stages in the growth of the transportation system. Some had been accomplished before the railway mania of 1844-6; much more was that they were necessary only where a company required to pass for a short distance over the line of another company to reach a station at which to deposit and receive traffic, or when such short piece of line was a link necessary for the completion of a special railway system. Brit. Doc. 1865 (3), XLIX, 219, p. 24.

1 See also Brit. Doc. 1867 [3844], xxxviii, 1, 'Report of Royal Commission,' p. xxi.

2 Out of 71 Bills introduced in the Session of 1858, there were 46 seeking sanction for working and traffic agreements. Brit. Doc. 1857-8 (117), XXXI, 335, ‘General Report of the Board of Trade upon the Railway and Canal Bills of the Session of 1858,' p. 11.

3 Brit. Doc. 1854 (139), LXII, 441, 'Report of the Board of Trade on Railway Bills of 1854, p. 14; also 1854-5 [1965], XLVIII, 1, 'Report of the Railway Department of the Board of Trade for 1854,' p. viii.

For the full text of the English and Scotch Traffic Agreement, among seven great railway companies, for apportioning the receipts from the Scotch traffic, see Brit. Doc. 1856 [2114], LIV, 1, 'Report of the Railway Department of the Board of Trade for 1855,' Appendix No. 4. Some other traffic agreements are given in ibid., Appendix No. 5.