. Legislative regulation of railway finance in England . ses towhich they were applied, led the Railway Times to say that noother name than fraud can be given to transactions of this de-scription, and the eminent legal ability which has been exercisedin drawing up the instrument so as to keeo it out of the range ofcriminality must accept its share of These instruments might or might not be within the strict limit of * il-legality, «e stated a member of Parliament, but they certainly had a tendency to be made a most fruitful means of deception and concealment of the real position
. Legislative regulation of railway finance in England . ses towhich they were applied, led the Railway Times to say that noother name than fraud can be given to transactions of this de-scription, and the eminent legal ability which has been exercisedin drawing up the instrument so as to keeo it out of the range ofcriminality must accept its share of These instruments might or might not be within the strict limit of * il-legality, «e stated a member of Parliament, but they certainly had a tendency to be made a most fruitful means of deception and concealment of the real position of the companys affair. The effect of this expedient was the total evasion of the statutory limitations of borrowing powers. While the legal *yft. Evidence before select committee of 1864, p. 31. yjfic . Hansard, 182; s> 825. 4 Report of Royal Commission on Railways, 1867, p. XXIII. 4>:. Evidence before select gommittee of 1364, p. 127. i/ji . Railway Times, June 25,^1864. t^. Marquess of Clakricarde in the House of Lords. Hansard190; jft. / borrowings wore limited to only one-third of the share capital, theillegal borrowings by Lloyd bonds were subjected to no limitationwhatever. Thus the precaution of the legislature for the protect-ion of the holders of statutory securities was nullified. Thiscoupled with the numerous and varied excuses offered by the compan-ies for exceeding their borrowing oov/ers in other ways resulted inmuch coniusion of the whole situation. The investor had no meansof ascertaining whether or not the borrowing powers of a companyhad been exceeded, and consequently whether or not the securitiesoffered by that company were worthless. They had to trust the rail-way returns made by the companies to the Board of Trade, but theyhad no means whereby to varify the accuracy of thece returns!^If these returns were made with strictness, they might in them-selves form a good prevention against over-issue of securities, orat least to give some valuable
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