East Indian Railway: 1847/08/06 Meeting

Note: This is a sub-section of the East Indian Railway

---

1847/08/06 AGM.

EAST INDIAN. A general meeting of the registered shareholders in the East Indian Railway Company was held at the London Tavern, Bishopsgate-street, yesterday, Sir George Larpent in the chair.

The Secretary (Mr. D. I. Noad) having read the advertisement convening the meeting.

The Chairman then said— Gentlemen, this report which I hold in my hand is the report which has been unanimously agreed to as the report of the directors, and which I will proceed to lay before you. The Honourable Gentleman then proceeded to read as follows:—

"In April last your directors submitted to the proprietors a report, containing an exposition of all that had taken place up to that time, and offered certain recommendations which were unanimously adopted by the meeting.

"These recommendations were as follows:—

"’1. That the proprietors should proceed at once to constitute the company, under the provisions of Act 7 and 8 Victoria, chap. 110; and,

“’ 2. That your directors should be entrusted with the further necessary negotiations with the East India Company, for carrying out the objects of the undertaking.'

"Your directors have now to report, that the company is registered under the said Act, all the necessary conditions having been complied with; and that, having brought their negotiations with the East India Company to a close, they are prepared to lay the result before the proprietors.

"The terms upon which the Honourable East India Company proposed to sanction the construction of two sections of the great truck live of railroad from Calcutta to Delhi, through Mirzapore, one in the lower and the other in the upper provinces, were —

"'That the land for the railway should be granted free of all cost for ninety-nine years.

"'That interest at the rate of four per cent, per annum for fifteen years on the capital employed on these sections (not exceeding 3,000,000/. sterling) should be advanced by the Honourable East India Company: such interest to commence as soon as the contract should be arranged, and the sum of 500,000/. paid into the East India Company's treasury; repayment of said interest being made when the profits of the line should exceed four per cent.'

"It will be in the recollection of the proprietors, that your directors did not consider these terms sufficiently favourable to induce them to propose your adoption thereof.

"Your directors considered the rate of guaranteed interest too low, the period too short, and the sum required to be paid down too large.

"Upon all these points, your directors are happy to state that the Honourable East India Company have met them with fairness and liberality, and have agreed to raise the rate of interest from four to five per cent.; to extend the term from fifteen to twenty-five years; and to require 100,000/. only to be paid upon the arrangement of the contract.

"The terms, therefore, which your directors have now to submit to your consideration may be shortly stated as follows, namely . —

"'The East Indian Railway Company is to undertake to construct in the first instance, and to keep up, and work when constructed, two sections of their proposed line of railway between Calcutta and the north-western provinces of India — one section in Upper and the other in Lower India — and to expend thereon the sum of 3,000,000/. sterling. The railway company is to carry the Government mails free of cost, and the troops and military stores at the lowest fares charged to passengers and goods.'

"In consideration whereof, the East India Company is to guarantee a minimum dividend of five per cent, per annum upon sums which, in the course of three years from the date of the railway company signing the first contract with the East India Company, shall be paid into the East India Company's treasury by the railway company, to an extent not exceeding 3,000,000/. sterling.

"This guarantee is to continue for a period of twenty-five years, and the payment of the interest is to commence so soon as the payment into the East India Company's treasury shall amount to 100,000/., and is to be made in London half-yearly.

"The East India Company is to provide and lease to the railway company, without charge or expense, for ninety-nine years, all the land required for the railway; the land remaining the property of the Government.

"When the profits of the railway exceed five per cent., the excess is to be divided between the East India Company and the railway company, until the amount which may have been advanced by the East India Company shall have been repaid : thus, supposing the line to pay ten per cent., the proprietary would receive seven-and-a-half per cent., and the Government two-and-a-half, until the advances should be repaid, when the whole of the profits would revert to the proprietors.

"Your directors beg to state their unanimous opinion, that these terms are such as they can most fully recommend the proprietors to adopt; they offer advantages superior to those enjoyed by any railway company at home or on the Continent, and remove the difficulties which, in times like the present, might otherwise prevent the railway company from raising the necessary capital for an undertaking in so distant a country as India.

"The guarantee establishes the railway payments up to 3,000,000/. sterling on the basis of a Government five per cent, stock, and offers a safe and eligible investment for money at a fair rate of interest, payable half-yearly in Lon- don, for twenty-five years.

"In addition to this certainty, the proprietors may reasonably indulge the hope of an early participation in the profits of the railway, which have been shown, by the data laid before them in April last, to promise a large additional compensation to the persons who may be disposed to embark their capital in the undertaking.

"Should the proprietors concur in these views, your directors hope that authority will be given to them to close with the proposals of the Honourable East India Company, and a resolution to that effect will be submitted to this meeting.

"Assuming that the proprietors will coincide in opinion with them, your directors are prepared to take immediate measures for carrying out the undertaking; and they hope to be able to make such arrangements as will ensure the commencement of the works during the cold season of the present year.

"To accomplish this, a command of funds to some amount will be required, and they rely, therefore, upon the proprietors immediately registering their shares; for upon the number of shares registered every arrangement must depend.

"The larger the amount of capital subscribed the lighter the burden of calls; it is the opinion of your directors that not more than 15/. to 20/. per share will be required during three years to raise the 3,000,000/ sterling; and the proprietors will recollect that for every payment made they will receive from the East India Company an interest of 5 per cent, payable half-yearly in London

"Your directors will receive payment in anticipation of calls, so as to allow parties to avail themselves of the East India Company's guarantee at once; but until the registration of the shares be completed, your directors cannot state positively what amount per share can be so paid; they are prepared however, to take the responsibility of receiving 15/. per share expecting that the whole amount required will not as above stated exceed 20/. out of the 50/. Share.

“In the first instance, your directors do not expect, if a fair amount of shares be registered, that any heavy call will be necessary to make the payment of 100,000/. required by the East India Company, and to form such arrangements as may be necessary to send out an efficient staff by the September mail to India. All future calls will be strictly regulated upon the principle of affording every facility to those who desire to convert their calls in to a fixed stock, and rendering the calls as light as possible to those parties to whom such an investment may not be at all times convenient.

“Having thus laid before you, in this report and that of April last, every information that your directors believe necessary in order to guide the proprietors in their decision, they have only further to advert to the proposed amalgamation with the Great Western Railway Company of Bengal, upon the following terms, and a resolution will be proposed for the formal approval and confirmation thereof:-

“’1. That the subscribed shares in the Great Western of Bengal Railway Company be exchanged for an equal number of shares in the Consolidated Company.

“’2. That the relative expenses of the two companies be equitably adjusted by mutual arrangement

“’3. That three of the directors of the Great Western of Bengal Company do join the Consolidated Board

“’4. And that the claims of the officers that may be displaced by the amalgamation be considered by the Consolidated Board

“Your Directors take this opportunity of stating, that they have other proposals of amalgamation which, under the existing circumstances, they cannot recommend to the proprietors; but as this undertaking is clearly understood to be the first to which the sanction and influences of the Honourable East India Company will be given, your directors hope that all parties desirous of carry our railroads in India will unite in giving that aid to this company, upon the success of which the future extension of the system of railway communication in India depends. If the great line connecting the metropolis of India with the North-Western provinces be accomplished, there can be little doubt of similar undertakings in other parts of India being ultimately adopted. If the present opportunity be lost it is problematical whether this improved mode of commnunication, offering such advantages to British India, additional security to the Government, and such benefits to the whole empire, will not be delayed for many years, to the serious loss of the present generation.

“In conclusion, your directors beg to express their grateful sense of the liberal manner in which they have been treated by the East India Company; no effort on their part shall be wanting to justify the confidence of the proprietors and to merit the support of the Indian authorities in both countries; and they believe that this undertaking, whilst it will prove a great blessing to the empire, will afford the means of a safe and profitable investment to individuals.

"George Larpent, Chairman.

"D. I. Noad, Secretary.

“8 Broad-street buildings, London, Aug. 6, 1847."

The Chairman then said - That, gentlemen, is the report which we have to lay before you. The observations which I have to make will be very brief, and I will not trespass on your patience at any length The first subject to which I will draw your attention will be that of the registration. (Hear hear ) The number of the first shares created was 80,000, of which 66,000 were issued in this country and of that number 37,000 have already registered. (Hear.) The period for their registration expires this day; but we have the power, which we wish to exercise, of allowing all shares brought in to be registered prior to the 1st of September. (Hear) That disposes of the first shares issued in this country but of those issued in India we have of course yet got no return (Hear.)

With regard to the second issue of shares, which took place when we determined to increase our capital they amount to 185,000, of which number 160,000 have been issued in this country. They are now in course of registration, and the period of their registration will close on the 1st of September. It is therefore necessary that all shares should be registered before that time, if the holders wish to take part in the future proceedings of the company. (Hear, hear)

The next subject I have to bring before you, gentlemen, is the improved terms which we have obtained from the East India Company - (Hear, hear, hear) — on those which we brought before you at our former meeting, but which we did not venture to recommend for your adoption. Throughout we have had two objects in view - the first, the registration of the shares, which I believe I have explained to your satisfaction; and the second, the negotiations with the East India Company, which have been a source of anxiety, and no little responsibility, but which I believe we have carried out so as to maintain your position and the good opinion of the East India Company. (Hear, hear.) We thought this part of our duty most important; and we have, through the kindness and attention of the East India Company, obtained such terms as we can confidently offer for your adoption; and by their assistance we have also obtained the sanction of the Board of Control to nil the points for which we contended. (Applause.) The four per cent, guarantee originally offered we thought, in the state of the money market, as it existed in April, and as it unfortunately still exists, too little, and we consequently required the alteration of the interest from four to five percent. — (Applause) — and the period of guarantee from 15 to 25 years. We also thought it unwise for the East India Company, in the present state of the money market, to require from us so large a deposit as 500,000/.; and we have by our representations obtained its reduction to 100,000/., which will put it within our reach to perform without making any very heavy or extraordinary call upon our shareholders. (Hear, hear.) I think that the readiness with which the East India Company have met us in these concessions shows their anxiety for the carrying out of these important works for the prosperity of India. The Board of Control has also readily consented to these modifications of the terms. It is true that they at first wished to make a stand at the fifteen years' guarantee, but we determined that we could not agree to less than twenty-five years - (Hear) - and it was directly after we had succeeded in getting them to yield that we issued the advertisements calling you together. (Hear.) No time has been lost, not a day has been spent, in which we have not endeavoured to obtain for you satisfactory terms from the Indian Government; and immediately we have obtained them we have called you together. With regard to the result, I hope they will prove satisfactory to that proprietary which it has always been our endeavour to obtain. We have looked to getting upon our register men of standing and capital, who would enter the company as an investment, and not as a speculation. We have always said that it was to obtain such individuals upon our register that our efforts were directed; and, perhaps, for that purpose it was necessary to obtain some modification of the terns offered by the Government. I think we have now so far succeeded in that object, as we offer them five per cent, for twenty-five years, payable half-yearly in London, as an investment, with all the advantages of a Government stock, combined with — what in addition may be no slight advantage - the strong likelihood, at no distant day, of a great addition to that amount from the profits of the railway when made. (Hear, hear. )

Taking the certainty that I have mentioned, with the prospect of in future receiving great advantage, which, I think, from the estimates which I had the honour of laying before you at the last meeting, ranges from eleven to eighteen per cent., there can be no doubt of the value of our undertaking. (Hear.) I do rot wish to lay any stress upon those estimates, but I only call your attention to all the circumstances that, the data being published, you may examine and decide of their value for yourselves. (Applause.) Whenever, however, I recollect that we have secured a guarantee of five per cent, for 25 years, in addition to contingent advantages, I cannot help thinking that we have established a company which, as an investment, must carry us successfully through. (Hear, hear, hear)

The third subject to which I must call your attention is the importance of early registration; for, until we know the exact number of the shares registered, and the means at our command, we cannot determine upon our future proceedings, or the amount of the call which will be required. Now, gentlemen, upwards of 37,000 of the old shares are registered, and we have up to the 1st of September, during which time all the new shares issued, independent of the old, may be registered; and if they should be registered to a large extent, the call will be necessarily small. (Hear.) You have only to find 100,000/. as a deposit to the East India Company, and as we have of your deposits 20,000/. in hand — (Hear, hear) — which is beneficially employed at interest for the benefit of the company, the directors having always looked to the economical use of your funds, and to the propriety, in the present state of the company, of reducing expenses — we shall not require any very large sum beyond the 100,000/. to enable us to send an efficient staff to India in the present year. (Hear, hear.) That, however, must depend upon the state of the registration; but I do not think that we can possibly require a call of more than 1/. or 2/. per share to give us the 100,000/., and perhaps, 10,000/. or 15,000/. more towards the object to which I have alluded. (Applause.) Gentlemen will please to recollect that the money which they may subscribe will not remain idle, but that they will receive at once five per cent, on their deposits; and I hope that such a number of shares will be registered as will at once enable us actively to proceed this year. I wish to insist particularly upon the importance of an early registration, as we must, within three months from this time produce the 100,000/. for the East India Company and we ought at least to have 10,000/. or 15,000/. more to pay the expenses of sending out an efficient staff to India.

I have a very few more observations to address to you; but the next point to which I wish to call your attention is that of an amalgamation with the Great Western of Bengal Company, the policy of which has already been generally approved by you. We shall be happy to receive their assistance, as the reasons which were valid at the last meeting are still all in full force, why they should be taken into alliance with this company. (Hear hear.)

With regard to other companies which have offered to amalgamate with us, we have not, after due consideration, seen sufficient reasons to induce us to recommend you to take them into amalgamation with you; but we would strongly recommend all parties connected with India to lay the foundation of railways in India by supporting this company. (Hear, hear.) This is the first company that will have the power of introducing railways into India under the sanction of the Government and the East India Company; and, therefore, a great deal of their future prosperity depends upon the manner in which this company is carried out; for, if we are successful, there can be no doubt that it will lead to their general introduction into that country. (Hear, hear.) Therefore I must recommend to gentlemen interested in railways in India, not to consider that we are rivals to one another, but that we should concentrate all our strength and capital, so as to go together in establishing the first railway in that country as the precursor of others. (Hear, hear.) I think this most important, for, I cannot see how if we act together, we can possibly fail of success.

I will now speak more immediately of this company. It is our present intention to send Mr. Stephenson out to India early in October and I must here state that all our steps have been throughout considerably influenced by his experience, and the admirable manner in which he has conducted the business entrusted to him - (Hear, hear) - to him we owe the first idea of this company - to his great, I may say, unparalleled, exertions we owe the development of those plans which have met with the approbation of the Government and the East India Company. (Applause.) It is impossible that I can speak too highly of that gentleman who possesses the fullest confidence of the directors, and who will go out to India alike in possession of the confidence of the Government; of the Directors, and I trust of the shareholders. (Loud applause.) Mr. Stephenson will be accompanied by a party to be selected by the directors with the assistance and concurrence of Mr. Rendel our consulting engineer thoroughly conversant with railway engineering. (Hear, hear.) He will also be accompanied by an individual who is not only conversant with the arrangements of a railway office but who is thoroughly conversant in railway management – independent of the engineer – who will be acquainted with the latest scientific improvements in railway engineering - in whom, assisted by the knowledge of these matters which Mr. Stephenson has gained in this country, we can have the fullest confidence. (Applause)

The work will, of course, be subject to the control of Mr. Simm, the Government engineer, in whom the directors have the fullest confidence; but as he will have to look over us; it will be necessary that we should have an engineer entirely independent of that gentleman. Though I hope and expect that the Government and ourselves will go hand in hand in carrying out the measure – and we look to them with full assurance of support – the responsibility of carrying out the measure will be ours. (Hear, hear.)

There is scarcely anything more I have to say, except to introduce to you the advisability of educating, if possible, the natives of India, to fill the engineering and other situations on the line. (Hear. hear.)….[more]

---

See Also

Loading...