Development
The new canal was not a commercial success, mainly because there was little local traffic, and it relied on traffic passing through from other canals. The company correspondence shows large amounts of effort devoted to negotiations on rates, but it was not in a strong position, and coal was carried at around one third of the rate authorised by the enabling Act of Parliament. Pig iron and other heavy castings only raised 1.5d (0.6p) per ton per mile, whereas on the Monmouthshire Canal at the time, such cargoes were charged at 5d (2p) per ton per mile. Despite this, they had managed to repay most of their debts by 1826, and paid the first dividend to shareholders of one per cent. All loans had been repaid by 1836, and the dividend rose to 1.25 per cent in 1840.
With the opening of the London and Birmingham Railway in 1838, and the prospect of lower tolls, men who were committee members of the Grand Junction Canal began buying shares in order to obtain financial control of the Grand Union. A close working relationship developed with the Leicestershire and Northamptonshire Union to help stave off competition from the railways, but toll receipts spiralled downwards, from £7,551 in 1848 to £3,108 in 1858, £1,024 in 1875 and just £742 in 1885. Dividends followed this trend, reaching 0.05 per cent in 1885. Costly repairs were carried out on both of the tunnels, which interrupted traffic while the work was done, and the company managed to build an ice-boat and a dredger, but by 1884, they were almost penniless.
Read more about this topic: Grand Union Canal (old)
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