The building of the Stour Valley Line between Birmingham and Wolverhampton, with a branch to Dudley, was sanctioned by an Act of 1846, which further authorised the Birmingham Canal Company and the London and Birmingham Railway Company to contribute each one quarter of the necessary capital. The canal company raised their quarter, amounting to £190,087, by means of mortgages. In return for their guarantee of the canal company's dividend, the London and Birmingham Railway Company obtained certain rights and privileges in regard to the working of the canal. These were authorised by the London and Birmingham Railway and Birmingham Canal Arrangement Act, 1846, which empowered the two companies each to appoint five persons as a committee of management of the Birmingham Canal Company. Those members of the committee chosen by the London and Birmingham Railway Company were to have the same powers, etc., as the members elected by the canal company; but the canal company were restricted from expending, without the consent of the railway company, "any sum which shall exceed the sum of five hundred pounds in the formation of any new canal, or extension, or branch canal or otherwise, for the purpose of any single work to be hereafter undertaken by the same company"; nor, without consent of the railway company, could the canal company make any alterations in the tolls, rates, or dues charged. In the event of differences of opinion arising between the two sections of the committee of management, the final decision was to be given by the railway representatives in such year or years as the railway company was called upon to make good a deficiency in the dividends, and by the canal representatives when no such demand had been made upon the railway company. In other words the canal company retained the deciding vote so long as they could pay their way, and in any case they could spend up to £500 on any single work without asking the consent of the railway company. In course of time the Stour Valley Line, as well as the London and Birmingham Company, became part of the system of the London and North-Western Railway Company, which thus took over the responsibilities and obligations, in regard to the waterways, already assumed; while the mortgages issued by the Birmingham Canal Company, when they undertook to raise one-fourth of the capital for the Stour Valley Railway, were exchanged for £126,725 of ordinary stock in the London and North-Western Railway.