. Legislative regulation of railway finance in England . sive powers of duplication were granted to the gjaff Vale. Althoughthe high level of the maximum rate of dividend fixed to balancethe favors granted might have been warrantable at the time by thespecific circumstances of that company, the method to limit themaximum was altogether misleading and ineffective. According tothat method any surplus above 15 per cent. etc. was to be given tothe public in the form of reduced rates. It was fairly well re-cognized then as it has been generally recognized since that a rail-way company under restric
. Legislative regulation of railway finance in England . sive powers of duplication were granted to the gjaff Vale. Althoughthe high level of the maximum rate of dividend fixed to balancethe favors granted might have been warrantable at the time by thespecific circumstances of that company, the method to limit themaximum was altogether misleading and ineffective. According tothat method any surplus above 15 per cent. etc. was to be given tothe public in the form of reduced rates. It was fairly well re-cognized then as it has been generally recognized since that a rail-way company under restriction as to the maximum rate of dividend would be constantly tempted to increase its expenditures, whenever p its profit promised to exceed that limit. There are always manyways in which a railway company can s~end money before it willgive it to the public. This must be especially so during that 1. Ibid. 2. To forbid a corporation to increase its profits is to encour-age waste and discourage enterprise. Hadley; RailroadTransportation, 1903, p. period when the system of accounts was far from being effective tocheck up the expense charges of the company. Then again, the proviso was based on a false premise . Themaximum was fixed at 15 per cent, only because the company had beendeclaring an average dividend at that rate during the previousseven years. Prom this it would follow that a company which mighthave gone on the principle of charging high or discriminatingrates and had thus been enabled to pay high dividends would have itiimaximum fixed at a high point, whereas a company that had beencontent with moderate rates would be punished for its moderation byhaving its maximum fixed at a low It is needless to saythat such a practice would mean gross injustice. To the public such a principle would also be unfair. One district would be given a right to receive all profits above say 5 per cent, of dividend of the railways serving it, while another district would not b
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