History This Week

Part 4

This is the fourth instalment in a series of articles which gives a brief overview of the History of the British Guiana railway with particular reference to the Georgetown-Mahaica link. The third article dealt with the early problems encountered by the Demerara Railway Commit-tee throughout the completion of the British Guiana Railway. This instalment will deal with the continued disagreements between the Liverpool and London Directors and the effects it had on the eventual opening of the Georgetown – Mahaica link.

There are no records of any subsequent meetings held to decide the points of dispute between the Liverpool Directors and the London shareholders. However, it was discovered that an Ordinance was passed in the Colonial Legislature on the 26th August 1861 which showed that the latter had carried the day.  This Ordinance (No. 18 of 1861) empowered the company to create, and issue perpetual preference stock to an extent not exceeding £115,000,  in order to raise a sum of not less than £30,000 for the purposes mentioned in Ordinance No. 23 of 1859, and also to provide the means by exchange, adjustment or otherwise, of satisfying and extinguishing all existing claims in  respect of bonds and preference stock previously created, and finally to satisfy all existing debts and liabilities of the company. This preference stock was to bear interest perpetually at 7% per annum, and after the satisfaction of all existing bonds and preference stock, this interest was to have priority and to be payable out of the revenue of the company in each year before the payment of any dividend on the ordinary capital stock of the company. It was further provided that if the net revenue of any year was insufficient to the whole interest at the rate aforesaid, the unpaid portion would remain chargeable on the net revenues of future years.

As further evidence of the victory won by the London shareholders in their fight against the Liverpool Directors, an Ordinance was passed early in 1862 repealing the sections of Ordinance 15 of 1855 which required the management of the company to be located in the city of Liverpool. However, it was decided by a resolution passed that at a general meeting it would be decided at what place in the United Kingdom the management would be carried on. In September of the same year at an extraordinary general meeting in Liverpool, resolutions were passed as to the manner in which the provisions of Ordinance 18, 1861 were to be carried out, and transferred the management of the company to London. The Liverpool Directors were peeved at this decision but eventually conceded.

The welfare of the railway depended on the industrial activity in the areas through which its line passed. An attempt was made at this time to float a company for cotton growing on the East Coast of Demerara. On 10th July 1862, an advertisement appeared in the press by The Demerara Cotton Company, Ltd. established and registered under the Joint Stock Companies Act, with a capital of £50,000 in 10,000 of £5 each. No subsequent mention of this company can be discovered, and it may be assumed that it formed one of the numerous schemes formulated for the development of the colony which came to naught.

When the next half yearly general meeting of the Railway Company took place in London in May, 1863, the Chairman (Mr. J. A. Tinne) informed the meeting that the arrangements for the conversion of the bonds and old preference stock had been carried out with great success, and ample funds had been provided for the completion of the railway in accordance with the Colonial Ordinance so as to secure the cancellation of the Government mortgage. He added that there was now a far brighter outlook for the company than in his opinion, there had been ever before.

The line was formally opened to Clonbrook on the 1st August 1863, and the tariff fares showed the 1st class to Clonbrook was 88 cents as compared with 85 cents at the time, and second class 56 cents as compared with 51cents.  A third class was also provided, the fare being 36 cents while no third class accommodations were allowed.

In 1863, two further locomotives arrived in the colony, costing £1,593 each. They were named respectively “Victoria” and “Alexandra,” .Alexandra did duty for the Transport Department as a relief engine. The “Victoria” came to the end of her career in 1921. The affairs of the company were satisfactorily straightened out at the time, and this was evidenced by the fact that at the first half yearly meeting in April, 1864, the Chairman reported that revenue permitted not only of interest being paid on the 7% preference stock, but it was also possible to declare a dividend of 21% on the ordinary stock of the company. The shareholders were delighted with this great news and the fact that the Mahaica link was finally completed.

On the 3lst August 1864, His Excellency the Governor Sir Francis Hincks formally opened the completed railway line from Georgetown to Mahaica. A large party of especially invited guests left Georgetown at 11 a.m. by a special train that was elaborately decorated. On arrival at Mahaica about an hour and half later, the party gathered on the station. James Stuart, the Chairman of the Demerara Board, whom, after referring to the advantages that the completion of the railway afforded all classes of the community, requested His Excellency to declare the line open.  His Excellency expressed the gratification he felt in that this was the first opportunity he had to refer publicly to the Demerara Railway Company. He referred to similar undertakings in other colonies, and complimented the company in having secured the services of a Manager so esteemed as Mr. Martin, and expressed his regret that owing to some delay in executing the necessary legal documents, he could not present the mortgage on the railway held by the colony. He however, expressed his belief that there was not a man in the colony who did not heartily approve of that mortgage being cancelled now that the line was finished according to the terms of the arrangements entered into. His Excellency then declared the line of the railway from Georgetown to Mahaica Creek opened.

The railway, measuring twenty-one and a half miles, had taken eighteen years, to build, and the Chairman at a meeting of the shareholders in London early in 1865, stated the cost of construction, to have been

£313,890. The cost of the railway to the company, however, seemed to have been only £49,023, the balance of £64,867 representing the Government loan or £45,000 together with various other sums advanced by Government under the mortgage, and the cost of two locomotives and forty goods wagons imported at Government expense, repayment of all of which sums was waived under the provisions of Ordinance No. 23 of 1859.  The amount actually received from the shareholders was £250,100 and £135,100 ordinary stock and £115,000 or 7% perpetual preference stock. In subsequent years a further £29,900 was received, making the total of ordinary stock £166,000, which together with the £115,000 preference stock brought the total capital to £280,000. During the following two or three decades the railway appeared to have enjoyed more peaceful times. Operating with a varying measure of success it was able to pay interest to its 7% preference stock-holders with regularity, and dividends averaging 5% to the ordinary shareholders.

The railway emerged as a cargo carrier but ended up as a passenger service. Two and a quarter million passengers were carried on the Georgetown – Mahaica railway service up to 1962 and accounted for four-fifths of the revenue of roughly $800,000 and only the remaining one-fifth was earned from cargo. The sugar and rum cargo was lost to canal, and with the introduction of bulk loading, sugar was shifted to road transport. From the original commodities for which the railway was designed only three items remained with the railways. Only one-tenth of the plantain traffic was outward bound instead of inward. The other two products retained by the railway system were molasses and cattle, but in 1962, these two commodities accounted respectively for a mere 7% and 1% of the revenue from the Georgetown – Rosignol railway system. In the course of the years the rice traffic on this railway replaced the lost sugar traffic but only to the extent of about 10% of the railway’s annual revenue and with the intervening increase in the country’s population there was a corresponding increase in out-going shop-goods to this area, but even so, in 1962 the transport of 5,000 tons of shop-goods on the East Coast Railway earned $16,000 representing a mere 2% of the total revenue.

Later, there were extension lines to Blairmont but they never paid their way, and as a result there was extreme dissatisfaction on the part of the public at the service afforded. The Government appointed a Committee of the Combined Court in 1918 to enquire into the Train Service, and report as to the advisability of the colony acquiring the property. This Committee, of which Sir Joseph Nunan was Chairman, submitted a preliminary report dated 27th November, 1918 and a final report on 31st March, 1919. Further, because of the Committee’s Report, the Colonial Government decided to purchase the Railway. In 1921, the Demerara Railway Company was put up for sale 1st January 1922 the government took over its assets. No purchase price was fixed, but government agreed to pay the Company annually for as long as the rail was working. This was bad business as later events proved that the railway service had been turning out a loss for many years. It was now the government’s intention to scrap the railways and concentrate on building good roads throughout the country.

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