We continue our serialisation of the memories of Merthyr in the 1830’s by an un-named correspondent to the Merthyr Express, courtesy of Michael Donovan.
But there is another matter that contributed to that end both for them and other ironmasters too. With the dawn of the railways the public were diffident of investing, and the issue of bonds was a neccessity for the ready obtaining of rails. These were generally issued at discount, say as an example, a bond for £100 for ten tons of rails at £8 per ton. The cost of the rails would be, perhaps. £6, so that the iron master, if in a position to do so, would receive say £100 for £60 worth of his product. Bankers would advance upon the deposit of such bonds, and, in consequence, enough money would be obtained to carry on the same cycle of operations.
It must not be thought that the railway company, on the one hand, or the ironmaster on the other, were dealing in hundreds only. One deal may be for ten thousand tons of rails, and if not able to make and deliver the full amount within the specified time, he contracted with other and, perhaps, smaller makers for some portion. The ironmaster, taking the original contract, would thus become an iron merchant, and pay cash or some other mode of payment as may be arranged. Wages were paid in cash, and it may be that a part was arranged by acceptance.
In order to show the difficulty in obtaining money for the making of railroads, let me remind you readers that the £100 Taff Vale share was for sale at £30 at one time, and it was only some five or six persons who made the Aberdare branch from Navigation to Aberdare – the public declined to take shares, Mr C H James told me – but those who ventured have one of the best railway investments, for it was leased to the Taff Vale Railway Company at an increasing rate, 10 percent being obtained in three years, and so to continue in perpetuity.
To be continued at a later date.