. Legislative regulation of railway finance in England . ors ofthe companies adequate security. The purpose of requiring 50^of the share capital to be paid up before the exercising ofborrowing powers was adopted with the hope that such a requirementwould tend to place the shares in the hands of substantial in-vestors. It was also held that no sellers of land or of materialto a railway company could be prejudiced by the want of powers inthe company to srive any other security for payment of land or worksthan they were able to give under their act of incorporation. Thecompany Was not entitled to
. Legislative regulation of railway finance in England . ors ofthe companies adequate security. The purpose of requiring 50^of the share capital to be paid up before the exercising ofborrowing powers was adopted with the hope that such a requirementwould tend to place the shares in the hands of substantial in-vestors. It was also held that no sellers of land or of materialto a railway company could be prejudiced by the want of powers inthe company to srive any other security for payment of land or worksthan they were able to give under their act of incorporation. Thecompany Was not entitled to call any credit or to pledge and partof their property for any other purpose, nor should the directorsmake any contract or sanction any engagements to pay money untilthey had clearly ascertained that from one or other of the twosources authorized by Parliament they had the power of fulling them So far so good. But in practice these rules were notalways observed. Much consideration was usually given to the1. Letter to the London Times, August 23, peculiar circumstances of each case. The standing order just re-ferred to was often either dispensed with or modified so as to 1 meet the circumstances of the case. In fact another standing order provided for a select committee cn standing- orders, whose duty it was to determine whether the standing orders ought or 2 ought not to he dispensed v/ith. Moreover, it soon became clear that not only were the borrowings of railways to remain a permanent charge instead of a temporary obligation as was expected, but that the limit of the borrowing powers was altogether too narrow. The state of the money market and other circumstances frequently made it advisable for a railway company to raise a larger proportion of its capital by than what law permitted. Indeed it was only by over-borrowings that some companies continued tc pay a fairly3 good dividend. Under such circumstances one may readily imagine whathappened. When a railway c
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