. Legislative regulation of railway finance in England . long as you rely on the bona fides of the issuer of the debentureyou are not;and cannot be^safe from his mala fides. The act seemed to have failed to check the confusion overdebentures at least during the three or four years after its did it prevent some of the companies from exceeding theirborrowing powers, as shown by the fact that a good number of rail-ways continued their former practice and that neither the share-holders nor the public were at all aware of the liabilities to whichthe companies were subject. M
. Legislative regulation of railway finance in England . long as you rely on the bona fides of the issuer of the debentureyou are not;and cannot be^safe from his mala fides. The act seemed to have failed to check the confusion overdebentures at least during the three or four years after its did it prevent some of the companies from exceeding theirborrowing powers, as shown by the fact that a good number of rail-ways continued their former practice and that neither the share-holders nor the public were at all aware of the liabilities to whichthe companies were subject. Moreover, during 1867, the year afterthe act was passed, many railway properties became greatly depreci-ated and a feeling sprang up throughout the country that furtherreform was needed. Thus Lord Redesdale felt it extremely neces-sary to adopt some provisions to the effect that railway securities,unless properly registered, should be regarded as invalid.:.. Ibid. :!. ,JIansard, waft.* 190; **, 1962.).^ga&&a^u, ¥%i. 190; g*. 1955. 190; p. In tills connection it may bo remarked that the apparentfailure of the Railway Companies Securities Act during several yearsafter its passage was perhaps due more largely to the specialmomentum of the established habit of the railway companies to over-borrow rather than the weakness of the act itself. When the stateof railway borrowing had reached such a chaotic condition and thecompanies had become so used to CTSgJi&*ng/tne limit oi theirborrowing powers, as they were during the early sixties, it wouldtake some time to make any signal improvement, no matter whatmeasures were adopted. Therefore, the contenporary dissatisfactionand the apparent lack of good results from the act during the yearsimmediately following its enactment do not necessarily prove that tthe act was ineffective. On the contrary, time seemed to have jroventhe act of great value in spite of its defects, in helping to restoreorder out of the financial chaos which exist
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