After World War I Britain’s railwayspresented their Government with a whopping $300,000,000 bill for rentand dam ages, which the Government paid under protest. This time theGovernment wanted nothing like that, and on Sept. 1 it simply tookcontrol of all railway transportation in the British Isles. Since thenstockholders have waited anxiously to find out how much profit theGovernment would allow them.
But for the past three weeks speculators in the City have been gamblingon “generous” terms. The value of railway stocks has risenby $400,000,000. Last week the stocks went even higher. Minister ofTransport Euan Wallace announced that the four main British railroadswhich have operated under a pool scheme since the war began, would beguaranteed a wartime profit of £40,000,000 ($160,000,000) a year. Sincethe guaranteed profit was based on the revenues for 1935, 1936 and1937, excluding the depression year of 1938, the terms seemed morethan generous. In addition, the companies will split profits above£40,000,000 up to £43,500,000, after which the Government will takehalf until £68,500,000 has been reached; after that, all. Since theagreement allows the companies to increase rates as prices and laborcosts rise, financial writers figured that the stockholders would getmore dividends than they have received in many peace years.
Editorially many newspapers figured the same thing in different terms.Snorted Lord Beaverbrook’s Daily Express: “It is all give by theGovernment, it is all take by the railways. And who gets nothing? Thepublic.”