The chief complaints which have been discussed fall under two heads; first, the statements expressed in many forms that rates on the Continent are lower than rates here, that this difference injures our trade, and that English railway rates ought therefore, to be reduced; secondly, that rates are based on no principle, that a scientific system ought to be adopted, and that import, transit, and certain other special rates, as the greatest anomalies, ought to be prohibited. A few words remain to be said to summarise my arguments as to each of these statements.
The facts and figures mentioned at pages 144-8, and elsewhere have shown, it is hoped, that for instance, the exportation of iron or coal—the articles more often mentioned in the controversy—is not prejudiced by the railway rates charged in England as compared with those charged abroad. There has been, undoubtedly, some loss of trade in particular markets. For instance, coal was formerly sent from this country to Antwerp, Rotterdam, and Amsterdam. It is now replaced by Belgian and German coal. Is this very surprising? Is it reasonable to expect that colliery proprietors on the Continent would not supply coal, or the Governments, the proprietors of the railways, not convey it at anything above cost price rather than allow foreign coal to be imported, their collieries to stand idle, and their people to be unemployed? Coal of superior quality can be shipped at Newport and Cardiff at from 6½d. to 1s.per ton. What abatement could reasonably be expected from rates based on such a very low scale? What effect, if a reduction were made, could it have upon the alleged foreign competition, and upon the depression in trade?
The prices of coal are low because of over production, and undue competition between colliery owners. The extravagant prices obtained by colliery proprietors in 1873-4 led to the opening of many new collieries in the South Wales, Northern and Midland districts of England, as well as in Germany and elsewhere. The result was to create a capacity of output far beyond the demand—160,000,000 tons per annum now as compared with 127,000,000 tons in 1873. The desire which exists in every district for reductions in railway rates is not so much to meet foreign, as home competition; the strength of that desire is ascribable to the activity and intensity of the latter competition.
In regard to export trade, the inland producers of manufactured goods must be at a disadvantage as compared with their rivals on the sea coast. But no complaint that the railway companies had diverted traffic from England abroad by exorbitant rates was made out before the Railway Rates Committee. The Royal Commission on the Depression of Trade have heard much evidence to that effect, but they have not thought it necessary to call upon the railway companies for any reply. To very different causes—some of them far reaching and deep—is due the depression which interested persons would attribute on superficial grounds to the operation of rates.
Upon the policies pursued by foreign Governments in regard to the construction and working of railways, it is unnecessary to pass any opinion. No trustworthy judgmentis possible without fully considering all the circumstances—especially the difficulties to be encountered and the objects which the Governments had in view. It is enough to point out how radically different are the railway systems here and abroad—how much at variance are the policies pursued by our Government and by those of Continental States. Here the sole principle running through railway legislation has been to depend upon private enterprise, and to encourage competition between the companies.[112]Parliament has afforded no assistance to them, except indeed conferring the power to purchase, often on payment of exorbitant prices, the necessary land. Even when property of the State has been required by a railway company, the Government have, as a rule, been as exacting in their terms as any of the now maligned landowners, wholly different has been the policy of Governments abroad. Not only have railways been saved the payment of extravagant compensation or legal expenses in obtaining powers to construct therailways or acquire property, but inasmuch as the public in France did not, as in England, come forward to provide the necessary capital, the State supplied large portions of the capital of some railways, and contracted heavy obligations to promote the construction of others. In Germany, the State is responsible for the interest on the capital, the Government alone bearing any loss arising from charging low rates or otherwise. That also is the position of the Government in Belgium, which is responsible to the extent of 71 per cent. of the railway system in that country. The principles which have guided the Belgian Government in fixing railway rates appear from the extract from the report of the Debate to be found on page 115. At an interview which M. Vandenpeereboom, the Belgian Minister of Railways, Post and Telegraphs, was good enough to grant the writer, this was confirmed. Asked “what had been the object which the Government had in fixing the tariff; whether they had in view the obtaining of a fair interest on the outlay as a commercial undertaking, or whether the object was to develop the resources of the country, looking to a return on the outlay as a secondary consideration,” M. Vandenpeereboom replied “that the object had been to develop the resources of the country, and therefore a return on the capital was not of primary importance.” These fundamental differences cannot be disregarded; the fruits of systems so radically dissimilar cannot be expected to be the same.
If the State here, as in France, had provided without charging interest towards the capital expended upon the railways in this country, the same proportion as was so provided by the State in France (say upwards of £200,000,000), and guaranteed from 7 to 11 per cent. dividend on the remainderof the share capital; if it had, as in Holland, found three-fifths (£480,880,000) of the total sum expended on British railways, and accepted less than one per cent. interest upon the advance, the railway companies in this country could have afforded to carry at rates considerably lower than they now carry. It would not have been unreasonable in that case on the part of traders to have called on them to do so.
But the benefits, such as they are, of the Continental system cannot be fairly claimed without bearing the cost. Other countries, having in view advantages from railways, have paid for them with public money, and are prepared to pay still further for them at the expense of the taxpayer; it would be an unreasonable and scarcely honest policy to try to get indirectly the same rights and advantages without payment.
Our Government have been called upon to reduce the rates of the railway companies upon the complaint of traders that they have to compete with French, German, and Belgian traders, who are served by what, speaking generally, may be termed “subsidised lines.” To such an application the answer of the Government of this country, who have hitherto declined to aid the sugar manufacturers in their competition with those in France, supported though the latter are by State bounties, cannot be doubtful. Nor would purchase by the State remove all the differences which have been mentioned. Some of them cannot now be overcome. If the Government did purchase the railways, and by reducing the accommodation to something like that given on the Continent, were enabled to diminish the working expenses; if they placed the railways on the same footing as regards duties and taxes as theGovernment lines in Germany, the fact would remain that the railways in this country have cost from 45 to 120 per cent. more than those on the Continent, and that in wages alone there is a disparity which they would not be able materially to alter.
The volume of trade in England, it may be said, is greater in proportion to that of other countries; this should be considered, it may be argued, as an equivalent for the greater cost of construction and working of the railways. The fact that the average dividend is only 4·02 per cent.—that is, two-fifths of the dividend which in 1844 it was considered the railways should pay—is one of several answers to this contention.
A few remarks may be made with respect to the second class of complaints—those which relate to the mode of fixing rates.
The chief question is, What rates will at once yield a fair return on the capital of railways and best accommodate and develop the trade of the country? The early Acts provided that they should be fixed according to mileage. This, as we have seen, was altered by s. 90 of the Railway Clauses Act 1845. Are railway companies no longer to carry out the provision of that Act, and continue to charge rates “so as to accommodate them to the circumstances of the traffic?” That principle has guided them for forty years, and certainly ought not to be altered without good cause and full consideration. Instead of merely inveighing against the present mode of fixing rates as unscientific, those who are dissatisfied should explicitly state what mode they would substitute, and make clear by full explanation that it would be at once fair to the companies, and not injurious to thetrade of the country. To charge according to actual cost of conveyance, or on a strictly mileage basis, has been shown to be impracticable and impolitic. What other modes can be suggested?
If the mode of fixing rates adopted in France, Holland, Belgium and Germany—systems which differ from each other—are suited to those countries they would be inapplicable here. In practice they have to be modified. In Holland, for instance, the theory is mileage rates, but the greater portion of the traffic conveyed by railways is, in fact, carried on under special contracts wholly inconsistent with the principle upon which the railway rate system is nominally based, which, if imitated in this country, would afford continuous occupation for the Railway Commissioners.
The main complaint against the English companies is that they so charge differential rates as to encourage foreign competition. The effect of these rates is apt to be overestimated or misunderstood. The benefits which the manufacturers derive from the low export rates—based upon exactly the same principle—are entirely ignored. It may be a matter of doubt whether it has been prudent on the part of railway companies to consent to some of the import rates complained of. Indeed, this doubt may be entertained, even if there is no substantial grievance, and it may be desirable that Parliament or the Board of Trade should institute an inquiry into the subject, which affects not only the interests of railway companies, agriculturists, and manufacturers, but also those of consumers, steamboat proprietors, merchants, and sea-ports.
No system of rates can be suggested, much less adopted, which would satisfy the desires of all traders. When therecommendation of the Railway Rates Committee is carried out—when one uniform classification is adopted over all the railways, and the maximum rate clauses of the Companies are consolidated and revised on the basis of their existing powers—any difficulty in ascertaining whether the charges are within the companies’ powers will be removed. The reasonableness of the charges for terminal services will be determined by the Railway Commissioners.
Instead of the many scales of tolls now in force on all large systems of railways—due to their being built up of originally independent lines—one or at most two scales of tolls will govern the entire systems of companies. By this process a great improvement will be effected. Many of the anomalies in the rates will be removed. But it is to be hoped, in the interest of the trade of the country as a whole, that no legislation affecting railways, while preserving the existing provisions against undue preference, will interfere with the right of the companies to charge, within their maxima, differential rates such as the traffic will fairly bear; a power which has enabled them to meet the requirements of producers and consumers in varying circumstances.
These observations have not been written with a view to prove that there is no scope for criticism in the management of railways in this country, but are made with every desire to comprehend and appreciate all reasonable objections. They do not pretend to solve all difficulties of the railway problem; but they may, at least, show the serious dangers which would arise if some of the crude and popular proposals often put forward were adopted, and may aid in arriving at a safe and equitable settlement.
The figures and facts which have been stated prove that, as a rule, no fair, or even useful, comparison can be made between rates per ton per mile on railways in England, and those charged on railways in continental countries. A multitude of circumstances—original cost of construction, difference in gradients, nature of services performed, speed in transit, limited liability of foreign companies, opportunities for getting full loads, immunity from taxation—must all be taken into account before a just comparison can be established.
But even assuming due regard is not given to these striking differences the inference to the extent drawn by Sir B. Samuelson is not accurate; the rates on the Continent are not universally lower. Sir B. Samuelson’s report contains many errors of detail; and some of them are worth noting, because they are frequently repeated. Comparisons throughout have been made without due regard to the conditions attaching to the rates, or the different circumstances under which the traffic is carried. We give a few instances of the errors; errors, it may be observed, not merely in calculation but in the very bases of the comparison.
An effort has been made to reduce the English rates (which include collection and delivery) to station to station rates, with the object of comparing them with similar rates in other countries. But many of the deductions are inaccurate andmisleading. Instead of adding to the continental station to station rates the charges for cartage, which in Brussels is 4s. per ton, and in other Belgian towns about 2s. 5d. at each end, Sir B. Samuelson has apparently made arbitrary deductions of sums varying from 3d. and 4d. to 1s. and 2s. per ton for cartage from British rates. These are manifestly insufficient deductions. It is impossible that services could be performed for such sums, especially in London. We cite a few illustrations of this class of errors.
ForIron Wirepacked from Birmingham to London the rate is shown as 24s. 4d. per ton; the actual rate is 28s. 4d. per ton, including collection and delivery. Apparently 4s. per ton has been deducted for cartage at both ends; that ismerely 2s. per tonfor cartage in London, although the cost of delivery in such a city as Brussels would be 4s. per ton.
Similar remarks apply to the rates for unpacked iron wire from Birmingham to London and Manchester, which have been treated in the same way.
Cotton Goodsfrom Manchester to Oxford.—The rate shewn on page 32 is 42s. per ton, station to station; the correct rate, including collection and delivery, being 42s. 6d. per ton, so that 6d. per ton,or 3d. per ton only at each end, has been apparently allowed for collection and delivery.
Woollen, Worsted and Stuff Goodsfrom Bradford (Yorks) to Norwich.—The rate shown on page 32 is 41s. per ton, station to station, while the correct rate, including collection and delivery, is 41s. 8d. per ton; 8d. per ton being apparently allowed in this case for the two services of collection and delivery.
General Machineryfrom Leeds to Newcastle.—The export rate is 12s. 6d. per ton, including both collection and delivery, but 11s. 6d. is shewn on page 33 of report; that is, 1s. per ton only has been deducted for the two services of collection and delivery.[113]
These errors make many of the comparisons valueless.
A still graver error has been repeatedly committed. Notwithstanding the remark (page 19) that the cost of collection and delivery has been deducted, Sir B. Samuelson has in numerous cases assumed British rates, which include either collection or delivery, and in some cases both those services, to be station to station rates, and compared them as such with station to station rates on the foreign lines. Here are a few examples of this class of mistakes.
General Machinery.—Leeds to Hull, the export rate of 12s. 6d. per ton is shown on page 33 as station to station, whereas it includes both collection and delivery.
Though all the following rates forButterinclude collection and delivery, they are shewn on pages 38 and 39 as station to station, viz.:—
An unfortunate omission may be mentioned. In some cases there are alternative rates on the English railways,i.e., a higher rate when the company undertakes the risk of conveyance, and a lower rate when the risk is borne by the owner. In no single instance has Sir B. Samuelson taken in his comparisons the lower owner’s risk rate chargeable at the option of the consignor. Yet in Holland, for instance, the goods are carried practically at the risk of the owner. On some goods no compensation for damage or delay is payable, while on the others the compensation is limited, in some cases, to simply a return of a portion, or, at the utmost, the whole of the freight. We give a few examples of this class of errors.
The rate for iron wire packed from Birmingham to London is shown on page 29 as 24s. 4d. per ton station to station; there is no reference to the fact that there is an owner’s risk rate of 19s. 2d. per ton, collected and delivered.
In like manner the rates for agricultural implements shown in the first column of the following table are given on pages 33 & 34 of the report, although there are the special rates shown in the other columns, all notice of which has been omitted.
These are not the only misleading omissions; it is incumbent to mention others not less important.
In Holland bulky articles pay double the fast goods or ordinary goods rates, or as for a minimum truckload of 5,000 or 10,000 kilogrammes respectively. An actual instance of a consignment from Rotterdam to Munich will illustrate the system:—2 machines and 7 packages of appurtenances, theactual weight of which was 6,762 kilogrammes (6 tons 13 cwt.) were charged as for 10,000 kilogrammes (9 tons 16 cwt. 3 qrs.) under the conditions of special tariff No. 3. This special rate is ignored.
In almost every instance, Sir B. Samuelson has taken the lowest rates in Germany, Belgium and Holland, which are applicable only to full truckloads of 5 and 10 tons, and in some cases, viz., Belgium, to a minimum weight of 8 cwt. These he has used for the purpose of comparison with English rates for any quantities over 500 lbs.
The rate for hardware from Birmingham to Newcastle for export—206 miles—is 27s. 6d. per ton, including collection and delivery, but it is shewn as 25s. 6d. per ton, station to station, overlooking the special owner’s risk rate of 25s. per ton, which also includes collection and delivery. The German rate for the same distance (331 kilometres) is incorrectly given as 18s. 7d. per ton; the lowest station to station rate is 19s. per ton for full truckloads of not less than 5 tons, the rate for smaller quantities, including collection and delivery, being 45s. 2d. per ton.
In Belgium again, the station to station rate of 18s. 11d. per ton (which should be 19s. 4d.) is for a minimum of 8 cwt., the rate, including collection and delivery for the same minimum, being 24s. 3d. per ton.
The Dutch station to station rate of 14s. 10d. per ton (which should be 15s. 7d.) is for full truck loads of not less than 5 tons, the rate, including collection and delivery for any quantities, being 30s. 4d. per ton.
In the German tariff the rate is 2·15d. per ton per mile for goods of every description in lots of less than 5 tons, with a lower tariff divided into six classes for goods in full truckloads of 5 and 10 tons. The latter have been compared with the rates on English railways applicable to consignment of 500 lbs. and over, or of 2 tons. The higher foreign tariff for such traffic, in like circumstances, is not shown. To arrive at a proper comparison, the English rate should, in many instances, have been compared with the rates charged for “Eilgut” (or fast goods service) on the continental lines. Of course, the general public in Holland and Germany cannot avail themselvesof the rates for 5 and 10 ton lots. They must deal with carriers or forwarding agents, who perform many of the services included in the rates on English railways, and who fill up, or partially fill up, truckloads. The agents who pay the railway transit charges are free to make their own charges to the public without limitation. What would be instructive—what, however, is not supplied—would be a comparison between what is actually paid in England, and what the majority of the public pay in Germany; it is of little interest to knowwhat the carriers or forwarding agents payto the railway companies. The comparison, such as it is, does not show the rate of conveyance per ton, because the carriers have to pay as for five or ten tons, even if that quantity is not in a wagon. They must make charges to the public beyond the ordinary profits to cover deficiencies in the loads per wagon, as well as for all the services performed by them.[117]
In some instances, Sir B. Samuelson has not included in the foreign rates the charge for loading and unloading. Bar-iron is a case in point. In every other case he has omitted to include in those rates the charges for weighing, counting, labelling, booking, use of cranes, and advice of arrival of goods—all of which are authorised additional charges beyond the tariff rates. In this country, as is well known, such services are included in the collected and delivered railway rates.[118]
Such are some examples of the errors vitiating the comparison. We have by no means exhausted them; they might be greatly multiplied. It is not intended to suggest that Sir B. Samuelson has been more inaccurate than other critics. On the contrary, his report, notwithstanding its inaccuracies, shows that a considerable amount of labour has been expended in endeavouring to obtain the information. It is a favourable specimen of such criticisms, and for this reason it is deserving of notice. It is, of course, difficult for any person, even when practically acquainted with railway business, to appreciate the practical effect of the different conditions under which traffic is carried on Foreign and English railways. It is not surprisingthat Sir B. Samuelson has evidently not become fully acquainted with all the conditions of carriage, or that he has omitted to give them their proper value in the tables which he has prepared. Unfortunately, owing to the omissions, the conclusions which he draws are, in some cases, erroneous, and in others misleading.
It may be useful to enquire how far it is true that the heavy trades of coal and iron, or the general trade of the country, are being “slowly, but surely killed by high rates and tolls,” or otherwise. That trade in all countries is subject to fluctuation is undoubted, and the causes are many and various. The conveyance of minerals and goods upon the railways of the United Kingdom is one test. Let us take periods of three years:—
According to the test of railway receipts for conveyance of minerals and goods, the killing process seems very slow indeed, and it is not even sure, because in 1885 the railway receipts for minerals were in some instances reduced. The average receipts for minerals were about 2¼ per cent. less on the average of the past two years as compared with those of the previous three years. In the case of goods traffic this percentage was only 0·82 per cent. But, as against the above average receipts for1884 and 1885, let us place the average for the preceding nine years. For minerals, £14,398,012; for goods, £19,635,080, which shows an increased receipt on the average of the past two years—on minerals of £989,431; on goods of £995,986. Certainly these results are the reverse of decay in traffic or trade.
Another and better test is the tonnage of minerals and goods conveyed on the railways of the United Kingdom for the like period.
This test contradicts the theory of decaying trade in an unmistakable manner, but it may be urged that these averages are insufficient to show the great depression in 1885. The fact is, that in 1885 there was a larger tonnage of minerals conveyed than in any year, with the exception of 1883, and a larger tonnage of goods than in any year except 1882, 1883 and 1884.
But a third test, that of production, may be applied. In 1884, the quantity of coal raised in the United Kingdom
being a decrease of 628,200 tons, or a decrease of 3·33 per cent.
In 1883, the quantity of pig iron produced in Great Britainwas 8,529,000 tons.” 1884 7,812,000 ”” 1885 7,415,000 ”
The fact is, that 1883 was an exceptional year. The tonnage of minerals conveyed by railway in 1883 was 8,075,101 tons greater than in 1882, 13,451,612 tons greater than in 1881, and 23,815,308 tons greater than in 1880.
And in like manner the tonnage of general merchandise conveyed in 1883 was 2,192,034 tons in excess of 1882, 5,886,356 tons in excess of 1881, and 7,262,031 tons in excess of the tonnage of 1880.
The production of pig iron is not a real test, inasmuch as large stocks accumulate at certain periods, and the ratio of production is lessened in order to reduce the quantity in stock.
No doubt depression of trade may arise from lower prices. The years 1876 and 1877 were probably those during which the highest possible prices ruled for coal, iron, &c. What were the quantities conveyed by railway?
If lower prices now rule, it is clear there is a very much larger volume of trade now than in the years of high prices. That there has been depression in some branches of the trade of the country may be a fact, but it is only natural to overrate and overstate its reality and importance, and to cast blame upon the wrong parties.
There is no scale of rates universally chargeable in Holland; each railway company is authorised by the Concession under which the railway was constructed to charge certain specified rates. The rates actually charged are, as in England, generally lower than the maximum, and they are controlled by the State.
Although the same maximum rates do not govern all the railways in Holland, and the classifications also vary, the basis of a mileage scale is practically the same throughout, viz.:—a rate per kilometre and per ton according to distance, and a fixed charge for Station terminals according to class. The terminal charges on Fast and “Piece” (ordinary) goods include loading and unloading, but in the wagon load classes the terminals do not include those services.
The tariff for the conveyance of through Goods Traffic—i.e., traffic exchanged between all Dutch Railways—is divided into the following classes, viz.:—
1. Fast Goods, carried by ordinary Passenger Trains.
2. “Piece” (Ordinary) Goods, or consignments under 5 tons carried by Goods Trains.
3. Truck loads—Classes A, B and C.
Note.—One cent. per 1,000 kilogrammes per kilometre equals 0.327d. per ton per mile.
Consignments of Fast Goods and Piece Goods weighing less than 50 kilos. (1 cwt.) are charged as for 50 kilos.—the minimum charge per freight note being 60 cents. (1s.) by Fast Train; 30 cents. (6d.) by Goods Train.
To the “Ordinary Goods” class belong all goods in lots of less than 5 tons carried by Goods Train; to the “Truck Load,” class A—all goods in 5 ton lots, or paying as for 5 tons, which, according to the classification, do not belong to classes B or C. Classes B and C comprise Truck Loads of 5 and 10 tons respectively of such goods as are specified in the classification.
On theDutch States and Central Railwaysthe mileagerates for local traffic are the same as the foregoing scale for through traffic; but the terminals vary as under:—
On theHolland Railwaythe mileage rates and the terminals for local traffic are as follows:—
On theDutch Rhenish Railwaythe following are the mileage rates charged:—[119]
The tariff of theDutch Rhenish Railwayis divided into the following classes:—