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of rates. Now, as a matter of legislative morality, such a saving clause would only justify the proposed revision, if it was intended to provide for that revision, and accepted as providing for it, and not for some other revision to take effect under different circumstances, and on different terms, from those which Mr. Mundella's Bill contemplates. Parliament, therefore, has to consider any evidence there may be, which tends to show what the real signification and intent of the clause is. It is not enough to interpret the words of the clause, as a court of law would do, on the view.' For it must be remembered that Parliament is interpreting the terms of its own bargain; and surely a party to a contract, who meant to be just and honest, would do to his friend-or even his enemy-what he intended to do when the contract was made, whether the legal construction of the words which were used would be more favourable to himself or not. Thus the circumstances under which the clause came into existence, and its history, become of great importance for the purpose of arriving at its true interpretation.

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The clause, the latter part of which is relied on as justifying the present Bill, is as follows:

Nothing herein contained shall be deemed or construed to exempt the railway by this Act authorised to be made from the provisions of any general Acts relating to railways which may hereafter pass, or during the present session of Parliament, or from any future revision or alteration under the authority of Parliament of the maximum rates of fare and charges authorised by this Act.

This clause first appears in its present form in 1845. It was ordered to be introduced into all railway Acts of that session. It afterwards became a standing order clause applicable to all railway Bills. As no different meaning has ever been assigned to it, nor special attention called to it, it may be safely assumed that the clause was intended to bear the same meaning in the Acts of 1885 as in those of 1845; but the earlier date is the more important one, because most of the Acts of the great railway companies date back to about that period.

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It is my first object to show, by reference to what took place in Parliament in 1844 and 1845, that the clause does not justify a revision of rates at all (unless a notice, that Parliament might one day consider whether a revision of rates was justifiable, can be said to justify a revision without any such consideration taking place); and that the revision of rates which was contemplated by the clause was a revision, the policy of which was to be considered under circumstances which have never arisen and were totally different from those which are now said to make revision necessary. Secondly, I shall endeavour to show that, whatever the effect of the clause may be, Parliament is not justified in exercising such a power now, or upon the terms which the Bill proposes.

In 1844 the policy which ought to be adopted when powers were

granted to make railways was much discussed. A committee, of which Mr. Gladstone, then President of the Board of Trade, was chairman, sat to consider the subject, and an Act, commonly called Mr. Gladstone's Act (7 & 8 Vict. cap. 85) was passed, based upon its recommendations. Revision of rates was one of the subjects which that Act dealt with, and the terms upon which such a revision might be put in force in the case of future railways were stated. But the principle that it was justifiable to exercise such a power was not accepted by Parliament. On the contrary, in deference to a strong feeling which was manifested in the House against the exercise of such a power upon any terms (75 Hansard, 1189), Mr. Gladstone undertook to insert the following preamble in the Act:

Whereas it is expedient that the policy of revision or purchase should in no manner be prejudged by the provisions of this Act, but should remain for the future consideration of the legislature upon grounds of general and national policy. . . . At the same time, so necessary was it thought to treat railway enterprise uberrimâ fide, and to avoid doing anything which would prospectively discourage the disposition, then so actively in operation, to extend the railway system by the formation of new lines (Rep. Com. Rys. 1844), that, as Mr. Gladstone expressed it in introducing his Bill,

the Government thought they were bound, in reserving this power, to tell those parties who were now going to invest large sums in national improvement, what were the terms, and the limits, within which, if Parliament thought fit to purchase or revise, it should so purchase or revise. (75 Hansard, 492.)

These terms were, that no revision should take place until twentyone years after the powers to make the railway had been obtained, nor unless 10 per cent. had been paid for three years in succession; above all, the dividends of the companies whose rates were revised were to be guaranteed at 10 per cent. during the time the revised. scale of rates was in operation. In 1844 therefore Parliament took the policy of revision of rates into consideration, but deliberately abstained from deciding it, leaving it for future discussion upon grounds of general and national policy; but the terms upon which, and the circumstances under which, revision might be permissible were carefully elaborated, for the express purpose of informing intending investors what they had to expect if Parliament should afterwards determine that it was justifiable to interfere with their profits.

It was at the very commencement of the following session that the present clause came into existence, and whatever else the reservation at the end of it may express, it certainly did not commit Parliament to the principle that revision was justifiable. As Lord Salisbury said in 1872, It contains no decision as to what moral right Parliament has to interfere with the receipts of shareholders' (Royal Com. Evid. VOL. XIX.-No. 111.

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q. 1486). The clause leaves the question of revision in identically the same position as it was in 1844: a question to be decided upon grounds of general and national policy. Indeed such a question could not have been even debated upon a resolution the avowed object of which was, as I shall show, to leave things as they were. All it pretended to say was that nothing in the special Act should deprive Parliament of the right to revise rates, if it had any. If anybody had thought that it would have been construed as justifying the revision of rates, it would no doubt have met with the same opposition as the similar proposal in Mr. Gladstone's Bill of the previous session of the same Parliament, and with a similar result. If, however, any doubt remained whether the clause justifies revision, what took place in 1847 leaves no room for the existence of such a doubt. In that year an attempt was made to put the very same construction upon the clause which is now suggested, and a Bill was introduced by which railway companies whose Acts contained the clause were to have their rates made subject to revision every ten years. The Bill caused great apprehension in the country, and such an outcry was raised against it on the ground that it was a breach of faith on the part of Parliament, and an attempt to evade the conditions on which Mr. Gladstone's Act had been allowed to pass, that it had to be withdrawn on the second reading without debate. In passing it is interesting to notice that the plea on which the power to revise was sought for was that of affording to the public the advantages derivable from an altered state of circumstances' (80 Hansard, 854). As rates have been reduced since then, much more than working expenses, that principle would certainly not justify the revision now sought for. No attempt has since been made to obtain the sanction of Parliament to the policy of revision.

Conclusion 1. Parliament has never accepted the principle that it is justified in revising rates. It has in 1844 and 1847 declined to accept that principle.

If, then, the clause does not justify revision, but only amounts to a notice that Parliament may consider the policy of revision at some future period, let us see what were the contingencies which, if they happened, Parliament thought might possibly make revision justifiable, and in reference to which the notice was given.

The first part of the clause, which relates to general legislation, had been inserted in the railway Acts in 1844 in accordance with a recommendation of Mr. Gladstone's committee. It was again moved as a resolution of the House in 1845, and the words relating to revision of rates were added to it by amendment. The amendment was based upon, and had reference to, a new procedure which had been adopted by a resolution of the House in that session. It had been determined that committees on railway Bills should fix the maximum charges for the carriage of goods as well as for tolls, to which there had always

been a limit (79 Hansard, 1241). The mover of the amendment, who assumed that the maximum rates would be the rates which would be actually charged for all distances, stated that committees had much difficulty in carrying out their duty in this respect, and that the result of the adoption of the new procedure was quite uncertain. It was in view of the novelty of the procedure, and as a temporary measure, until the result should be ascertained and legislation proposed, that the amendment was accepted by the House. The mover of the resolution stated that he was not presuming to legislate for railways;''all that he asked was that the clause should be applied to every future railway Bill until the subject should be taken up by Government with a view of devising some general measure respecting them' (80 Hansard, 854). And it was unquestionably because it was deemed uncertain what the effect of the new system of fixing maximum rates would be, that the latter part of the clause was introduced. It was thought that the rates might be fixed so high as to enable the companies to make huge profits. Under the circumstances it was natural enough that Parliament should say, 'We give you, the companies, notice that, if the bargain turns out more favourable to you than you say it will, we will, if necessary, discuss the policy of revising rates before the period which the Act of 1844 fixes.'

These rates have, however, now been in force for forty years. Time has shown that the profits which railway companies can make under them are very modest. The contingencies contemplated by the clause have in fact never happened, and it has remained a dead letter up to the present time, when it is proposed to apply it for a purpose differing toto cælo from that for which it was introduced. It is now intended to revise rates, not because the profits of the railway companies are too large, but because the traders say that their profits are too small, and that railway rates ought to be reduced. If anybody had thought in 1846 that Parliament reserved to itself a right of reducing rates if trade required the reduction, independently of what profit the railway companies were making, I wonder how much of the 124,000,000l. would have been forthcoming which was authorised to be raised to make railways with in that year, and how much of it would have gone to make railways in France, which it was then thought a great object to prevent.

Conclusion 2. The revision contemplated by the saving clause was a revision the policy of which was to be considered, if contingencies happened which have not happened, and under conditions wholly different from those which are now alleged to make revision necessary.

The terms upon which the revision contemplated by the clause was to take place have next to be considered. The Act of 1844, as we have seen, declared what the terms were upon which Parliament thought that persons who had put their money into works of national

improvement ought to be treated, if rates were revised. They were avowedly published for the information of intending investors. The Act which contains them is still in force. It applies to every railway Act that has ever been passed since 1844, and was incorporated in express terms in each Act up to 1854. The clause and the Act must inevitably therefore be read together, as part of the special Act in which they are both included; and Parliament, which is bound, both on the grounds of morality and expediency, to satisfy the reasonable expectations that it has created, cannot be justified in revising rates except upon the terms which it has thus held out year by year as applicable to revision, if revision should take place. There seems to be no escape from this position. Parliament in 1844 said, 'The terms upon which any future revision of rates shall be made are that there shall be a 10 per cent. guarantee while the revised rates are in operation.' These terms were made applicable to all future Acts. How can it be reasonably argued that, because a proviso has also been inserted in those Acts that nothing in them shall prevent Parliament from revising rates, it would be justified in throwing over those terms altogether and revising without reference to them? Is that fulfilling a just expectation on the part of investors, whom Parliament was sorely afraid of frightening before their money had been spent in works of national improvement. The Royal Commission of 1865 recognised that the terms of the Act of 1844 were still applicable in the event of the purchase of railways by the State (Rep. p. 75); why are they not to be applied if rates are to be revised?

Conclusion 3. If Parliament is justified in revising rates under the saving clause, the revision must be upon the terms prescribed by the Act of 1844, which applies to all the special Acts in which the saving clause is contained.

Let us, however, now assume that the clause in itself would justify Parliament in revising rates without any restrictions as to terms. Even in that case, if Parliament, by the course of action it has adopted, has led shareholders reasonably to believe that the clause was a tradition which could not or would not be acted upon, where can any justification be found for refusing to fulfil expectations founded on such a course of conduct? There can be no doubt that such a belief exists, and the reasonableness of it is not difficult to demonstrate. The fate of the Bill of 1847, coupled with the fact that no attempt has ever been made since to reopen the question, is strong evidence that Parliament had relinquished all intention of acting upon the clause. The fact that a large part of the railway system, certainly the most important part of it, has been exercising these powers for forty years is of itself sufficient to raise such a presumption. But when it is remembered that these powers have been complained of before numerous select committees and a royal

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