mallard
Established Member
- Joined
- 12 Apr 2009
- Messages
- 1,304
Sometimes the schemes prospered and the shareholders saw a return, but sometimes the schemes didn't do so well (often because they duplicated other more established lines) and the shareholders lost their shirts.
And sometimes the schemes were out-and-out scams. More than once did members of the board at a large railway company form a separate company to build a branch line, build it almost completely on bank loans (they were supposed to be funded from a majority of shareholder funding, but many of the "shareholders" were themselves fraudulent, not that the company really cared; parliament would authorise increased loans when the calls upon the shareholders failed) only to go bankrupt and be bought out at below-construction-cost by the nearby large company... Provided a very cheap way for large companies to expand their networks and spoil other attempts to build railways close to their territory.