A correspondent of Thursday's Tinzes calls attention to a matter
which is of the greatest importance to the investors in English Railways,—the tendency of some Companies to place to the -capital account, in relation to lines already open, an expenditure which is not of a kind to bring further traffic, but only, at most, to prevent some of the existing traffic from being diverted elsewhere. For example, the enlargement and rebuilding of stations on an old line should certainly, we think, be under- taken out of revenue, and not be effected out of capital, since it is not a certain and distinct source of more revenue, but only at most a precaution against the loss of some. Now every cautious man will take precautions against the loss of income, but he will pay for such precautions out of income, not out of fresh capital,—for where is the interest on such capital to come from ? it seems clear that a great many of our Railways are preparing for themselves an hour of great tribulation, by yielding to the desire to make the dividends as large as possible, and therefore to swell the capital account, on very slight pretexts. No careful investor should lose sight of this tendency, or invest in any line in which he does not see it kept under rigid control.
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