. Legislative regulation of railway finance in England . iimostimpossible to make any such inspection if a directorate objected toit. The demand for an examination of a companys affairs, accordingto the provision, would be a penal proceeding which the directorswould always resist. It would be made,therefore, only when a rail-way came to grief, while what was needed was a government inspectionwhen the soundness of the company was not suspected and not merelyan inquiry when troubles had taken place. Moreover, in spite of the great respnnsibility placed uponthe Board of Trade, no principle was la
. Legislative regulation of railway finance in England . iimostimpossible to make any such inspection if a directorate objected toit. The demand for an examination of a companys affairs, accordingto the provision, would be a penal proceeding which the directorswould always resist. It would be made,therefore, only when a rail-way came to grief, while what was needed was a government inspectionwhen the soundness of the company was not suspected and not merelyan inquiry when troubles had taken place. Moreover, in spite of the great respnnsibility placed uponthe Board of Trade, no principle was laid down to guide that body,as to what reasons were sufficient to justify an inquiry. Neitherwas there any specific rule as to the kind of evidence on which itshould insist. Thus, it was apprehended that the act might be w wholly unworkable if the Board of Trade were judicial and exacting, 4 and looked too narrowly into prima facie cases. 1. Ibid. 2. Economist, August 29, 1868, o. 992. 3. Economist, March 21, 1868. 4. Economist, August 29, 1868, p. It was, however, conceded that the provision for the appointment of government inspectors would generally be of some use in that a hanging in terrorem over directors the posibility of a 1 searching inquiry would have much indirect influence. In spite of its defects, however, the sjfsten of governmentaudit and inspection was recognized to be a forward movement in theregulation of railway finance. The holders of the securities ofthe companies were at least afforded a chance to get governmentauditors and inspectors to act with their own, thus bringing press-ure to bear upon the directors. All good companies would gain bytaking advantage of the provisions of the act; and the fashionbeing once established might compel companies to follow the discredit arising from shutting out the light might be evenworse than the discredit of the unwelcome truth itself. Althoughthe system of government audit and inspection has been resor
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