The New Zealand Railways Magazine, Volume 4, Issue 6 (October 1, 1929)
Activities of the Early Railway Companies
Activities of the Early Railway Companies
The first permanent settlement in south eastern New South Wales, then known as the Port Phillip District, was made in 1834. Three years later Melbourne was founded on the shores of Hobson Bay. As a result of the rapidly increasing population, the demand for separation from New South Wales became gradually more insistent and, on 1st July, 1851, the District of Port Phillip was proclaimed a separate Colony under the name of Victoria.
As far back as 1845, proposals for the construction of railways in the Port Phillip District had been submitted to the New South Wales Government, but had not been entertained.
The first practical efforts for the construction of railways were made during the middle of 1852. Previously, neither the population nor the extent of the internal trade held out sufficient inducement for the prosecution of such enterprises, and it was not until the great increase of the population and its concentration in the interior, consequent upon the gold discoveries, that the necessity for railway construction became apparent.
Exaggerated accounts from Europe, of the success of railways under private ownership, having reached the Colony, the public manifested a general disposition for establishing railways by means of Joint Stock Companies. But sufficient consideration was not given the question as to whether the circumstances of a young country, with a limited population, were in favour of the introduction of a system applicable to older and more populous countries. Subsequent experience showed that the colonists had very little inclination to invest their capital in such undertakings, even when the Government guaranteed dividends.
In June, 1852, a deputation waited upon the Governor, Mr. La Trobe, regarding the construction of a railway from Melbourne to Mount Alexander. The deputation asked for financial aid, a guaranteed dividend on the amount of subscribed capital, and considerable land grants.
The Governor replied that on certain conditions, he would grant a sum of £1,000 towards preliminary expenses, but no loan money towards the formation of the railways. He was also willing that a land grant be made to the Company, but stipulated that all arrangements made and assented to, were made conditionally upon the approval of the Home Government.
During the following months it became evident that, immigration, which was rapidly proceeding, was materially hastening the settlement of the colony. Under this stimulus, railway projects were regarded from an enlarged point of view and the provisional Committee of the Company renewed their application for assistance to a much greater extent. Assistance was eventually conceded by the Government. Pending these negotiations, however, a company was projected for the construction of a railway between Melbourne and Geelong. Proposals to amalgamate this Company with the Mount Alexander Company were discussed before either had any legal existence. After considerable delay, the proposal was found to be impracticable, and the contemplated amalgamation fell through.
While these preliminaries were being considered, a third company was formed, the object being the construction of a railway from Melbourne to Sandridge (now Port Melbourne) on Hobson Bay, a distance of about two miles.
Bills for the incorporation of these Companies were submitted to the Legislature. The Melbourne and Hobson Bay Company's Act was assented to on 23rd January, 1853; the Melbourne-Mount Alexander and River Murray Act on 8th February, 1853, and the Melbourne-Geelong Act also on the same date.
The Act incorporating this Company authorised the raising of a capital of £100,000 and also conferred upon the Company the power to double the capital. The right of purchase was reserved to the Government after the expiration of ten years, upon condition of paying £250 for every £100 of the Company's stock. The Company also received a grant of land, 100 yards wide, along the entire length of the line and sites for the termini at Melbourne and Sandridge.
However, within twelve months, the inadequacy of the Company's capital became apparent and the directors issued shares to the amount of £200,000.