At this time the Caledonian Railway Company owned no port or harbour in Scotland, except the small and rather shallow tidal harbour of South Alloa. Having got possession of the railway lines in Central Scotland, they thought it necessary to obtain control of some port on the east coast, in the interests of traffic to or from the Continent, and especially to facilitate the shipment to the Continent of coal from the Lanarkshire coal-fields, chiefly served by them. The port of Grangemouth being adapted to their requirements, they entered into negotiations with the proprietors of the Forth and Clyde Navigation, who were also proprietors of the harbour of Grangemouth, and acquired the whole undertaking in 1867, guaranteeing to the original company a dividend of 6-1/4 per cent. Since their acquisition of the canal, the Caledonian Railway Company have spent large sums annually in maintaining it in a state of efficiency, and its general condition to-day is better than when it was taken over. Much of the traffic handled is brought into or sent out from Grangemouth, and here the Caledonian Railway Company have more than doubled the accommodation, with the result that the imports and exports have enormously increased. All the same, there has been a steady decrease in the actual canal traffic, due to various causes, such as (_a_) the exhaustion of several of the coal-fields in the Monkland district; (_b_) the extension of railways; and (_c_) changes in the sources from which certain classes of traffic formerly carried on the canal are derived. In regard to the coal-fields, the closing of pits adjoining the canal has been followed by the opening of others at such a distance from the canal that it was cheaper to consign by rail.