. Legislative regulation of railway finance in England . elective body, and has consequently been influenced by popularconceptions in dealing with even such scientific questions as theregulation of railway finance. Moreover, by the time Parliament had fully realized theimportance of more strict regulation, its laissez faire rules hadalready been established, and an enormous amount of capital in-vested in the railway business. Parliament therefore felt thatit would be unjust in any way to withdraw the early concessionswhich led to the investments. The constant desire to make rail-way investment
. Legislative regulation of railway finance in England . elective body, and has consequently been influenced by popularconceptions in dealing with even such scientific questions as theregulation of railway finance. Moreover, by the time Parliament had fully realized theimportance of more strict regulation, its laissez faire rules hadalready been established, and an enormous amount of capital in-vested in the railway business. Parliament therefore felt thatit would be unjust in any way to withdraw the early concessionswhich led to the investments. The constant desire to make rail-way investments safe securities on the one hand and to interferewith railway management as little as possible on the other, seemsto have caused Parliament to adept its unique system of regulationof railway finance which seems to lie between lais^ez faire andahsolute CEAPTEB II. LEGISLATIVE SUPERVISION OP CAPITALIZATION. I - SHARE CAPITAL. The greater part of English railway capital is raised by 1 the issue of three classes of instruments, varying in security and interest. The net income is liable in the first instance to the claims of the debenture^holders, then to those of the holders of preference shares, end ultimately to those of the holders of ordi-2 nary shares. In general a. railway raises its capital in the first in-stance by issuing ordinary shares. When this class falls to adiscount, or for some other reason, the company has recourse toinviting subscriptions to preference or guaranteed shares. Theholders of the latter class of stocks are, to a certain extent, •not only proprietors but semi-creditors of the company, in thatthe net income of the company is first of all secured to them inpriority over the ordinary stock holders. When the ordinary andpreference stocks are both taken up, and, theoretically paid forin cashto the amount of t
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