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 RAILWAYS AND 
 NATIONALISATION 
 
 BY 
 
 EDWIN A. PRATT, 
 
 Author of Railways and their 
 Rates, Canals and Traders, etc. 
 
 riVO SHILLINGS AND SIXPENCE NET. 
 
 LONDON: 
 
 THE RAILWAY GAZETTE, 
 
 QUEEN ANNE'S CHAMBERS, WESTMINSTER. 
 
 191 1.
 
 
 % 
 
 •Lmct^'
 
 H£ 
 
 \^ II- 
 PREFATORY NOTE TO 
 
 PRESENT EDITION. 
 
 1— 
 
 ^ The considerable degree of attention which 
 <has been attracted to railway problems of late, 
 Band the views held in some quarters that State 
 ownership and operation would provide an 
 effective solution of labour difficulties on British 
 railways, have led me to think that a re-issue 
 of the present work, originally published in 
 1908, might be of advantage to those who wish 
 "5 to study the question of Railway Nationalisation 
 ^rom the point of view of practical politics 
 'father than from the academical standpoints 
 Savoured by debating societies, school parlia- 
 ments, and the exponents of those socialistic 
 programmes in which railway nationalisation 
 naturally takes a leading position. 
 
 In the light of the recent attempt to bring 
 
 about a general railway strike in this country, 
 
 §. the matters dealt with in Chapter VIII., 
 
 ^ "State Railways and Labour," should, I think, 
 
 "^ be of special interest at the present moment ; 
 
 58166 
 
 2^->
 
 vi PREFATORY NOTE. 
 
 and the facts given on pages 157-172, in 
 reference to " A Wages Strike in Hungary," 
 "A 'Sympathy' Strike in Holland," and 
 " Labour v. Government in Victoria," might 
 be commended to the attention of the 
 British public in general and to that of railway 
 nationalisation advocates in particular.* 
 
 In regard to the railway troubles in Holland, 
 the course of events subsequent to those men- 
 tioned on page 165 has been especially signifi- 
 cant. The fact that the Dutch Government 
 had undertaken to revise the wages and labour 
 conditions of the railway workers — following 
 on the suppression, by means of troops, of the 
 railway strike in Amsterdam in 1903 — led the 
 supporters of railway nationalisation to argue 
 that, as a logical sequence thereto, the State 
 ought to own and operate all the railways itself. 
 In May, 1908, the Second Chamber, by forty- 
 six votes against thirty-nine, and after a debate 
 extending over five sittings, rejected a resolution 
 to the effect " that as soon as possible the 
 measures necessary for the operation of railways 
 
 * See also the Board of Trade Reports on : " Continental Railway 
 Investigations." [Cd. 5106 and Cd. 4878.]
 
 PREFATORY NOTE. vii 
 
 by the State should be prepared.'" A further 
 Commission was, nevertheless, appointed to 
 enquire into the alleged grievances of the rail- 
 way workers, and this Commission, which has 
 now presented its report (see The Times, 
 August 2P, 191 1)' has, besides dealing with 
 these particular matters (i) rejected by ten 
 votes against five a resolution that State 
 management is desirable ; and (2) accepted by 
 eight votes against seven a resolution that 
 management by a single company is desirable 
 (that is, in preference to management by the 
 two companies which now divide between them 
 the operation of the State-owned and the 
 company-owned lines, and are expected to 
 compete actively the one with the other). 
 
 Special attention might further be directed 
 to the extracts given on pages 427-430 from 
 the Report of the Royal Commission of 1865. 
 in reference to that Act of 1844 which is so 
 generally but so wrongly assumed to have 
 established a basis for the Government purchase 
 of the railways, should such a course be 
 eventually decided upon. The material fact
 
 viii PREFATORY NOTE. 
 
 to be borne in mind (although it is almost 
 invariably ignored) is that the " terms of 
 purchase " as laid down in the Act — namely, 
 a sum equal to twenty-five years' purchase of 
 the average profits for the three previous years 
 — referred exclusively to lines constructed by 
 virtue of Acts passed in the Session of 1844 or 
 subsequently thereto, and not to any railways 
 then already existing. By that time, however, 
 the main lines of communication, to the extent 
 of 2,320-|- miles (see pages 429-430 for full list), 
 had already been made ; and, if the State 
 should now decide on acquiring the railways, 
 not one of these main lines, or indispensable 
 sections of main lines, as operated to-day, would 
 come within the terms and conditions laid down 
 in the Act of 1844. 
 
 Besides dealing both with the general ques- 
 tion of railway nationalisation and with the 
 policy, or the practicability, of applying it to 
 British conditions, the book was further 
 designed to show that State ownership and 
 operation had either been a less conspicuous 
 success in certain other countries than was often
 
 PREFATORY NOTE. ix 
 
 represented or, alternatively, though applicable 
 to the countries concerned, was not therefore 
 suitable for adoption here ; while I further 
 sought to maintain that, as I say on page 396, 
 " The most practical way in which, if they are 
 allowed, the British railway companies can work 
 out their own salvation will be in a further 
 resort to their policy of combinations, alliances 
 or agreements." The last of the recommenda- 
 tions which I ventured to offer [see page 426) 
 was " That Parliament, traders, and the public 
 in general should show a more sympathetic 
 attitude towards the railways, which have clone 
 so much to promote the national well-being ; and 
 should assist rather than retard, exploit and 
 nullify, a rational policy which would secure the 
 best results that could possibly follow from rail- 
 way nationalisation, while avoiding the risk of 
 its many attendant evils and disadvantages." 
 
 The conclusion I thus sought three years aeo 
 to enforce has been abundantly confirmed by 
 the Report of the Departmental Commission 
 on Railway Agreements and Amalgamations, 
 issued in May, 191 1.
 
 X PREFATORY NOTE. 
 
 The report is, in effect, not alone a complete 
 abandonment of the traditional State policy of 
 compulsory railway competition, apart from due 
 regard for strictly economic considerations, but 
 is, also, an equally complete justification of the 
 railway policy of combinations and working- 
 aofreements. The Committee have come to 
 the " unanimous conclusion that the natural 
 lines of development of an improved and more 
 economical railway system lie in the direction 
 of more perfect understandings and co-operation 
 between the various railway companies, which 
 must frequently, although not always, be secured 
 by formal agreements of varying scope and 
 completeness, amounting in some cases to 
 working unions and amalgamations " ; and they 
 add that they have felt it their duty "to refuse 
 to adopt any suggestions or recommendations 
 having for their object to make such arrange- 
 ments difficult or impossible, and any which 
 would make them so onerous to the railway 
 companies as to deprive them of all the economic 
 advantages of a course of action they might be 
 able to prove would tend towards economy and
 
 PREFATORY NOTE. xi 
 
 efficiency in carrying out the objects for which 
 they originally received their powers from 
 Parliament." 
 
 Here we seem to be offered one practical 
 means of meeting certain of the difficulties that 
 arise in railway operation. 
 
 Another is foreshadow^ed in the undertaking- 
 given by the Government, as part of the settle- 
 ment of the railway strike of August, 191 1, that 
 they will, in 191 2, bring forward legislation 
 providing that any increase in the cost of labour 
 due to improvement of conditions for the staff 
 woukl be a valid justification for a reasonable 
 o-eneral increase of charores within the le^al 
 maxima, if challenged under the Act of 1894. 
 
 The effect of this legislation will be to place 
 the railway companies more on a level with 
 ordinary commercial companies in passing on 
 to the " consumer " the increased cost of pro- 
 duction ; but, though the extension of the 
 principle to rail transport must be regarded as 
 inevitable, one may anticipate much controversy 
 over the question, first, as to the proportions in 
 which the " reasonable o-eneral increase of
 
 xii PREFATORY NOTE. 
 
 charges " should be borne by traders and 
 travellers respectively, and, next, in regard to 
 the traders, by which classes thereof it should 
 be borne in preference to others. 
 
 Meanwhile the Socialists are preparing to 
 take advantap-e of the recent " unrest " in the 
 
 o 
 
 railway world by starting an agitation in favour 
 of railway nationalisation, the following an- 
 nouncement being made in The Times of 
 September i, 191 1 : — ■ 
 
 " Mr. W. C. Anderson, President of the Independent 
 Labour Party, announced yesterday that the party is 
 beginning a campaign in favour of railway nationalisation. 
 It is intended that every meeting arranged by the party 
 during the next few months shall deal with some phase of 
 the railway question, leading up to the purchase of the 
 railway systems of this country by the State." 
 
 In these circumstances there is the greater 
 reason why the country should have the fullest 
 opportunity of considering the whole subject in 
 the light, not simply of theory or assumption, 
 but of actual conditions at home and of accom- 
 plished facts abroad. 
 
 Edwin A. Pratt. 
 Septe^nber, 1 9 1 1 .
 
 CONTENTS. 
 
 CHAP. 
 
 I. INTRODUCTORY 
 
 II. FUNDAMENTAL PRINCIPLES 
 
 III. STATE V. COMPANY OWNERSHIP 
 
 IV. REASONS FOR STATE OWNERSHIP 
 V. STATE AID TO PRIVATE COMPANIES 
 
 VI. STATE RAILWAY FINANCE 
 
 VII. STATE RAILWAYS AND POLITICS 
 
 VIII. STATE RAILWAYS AND LABOUR 
 
 IX. STATE V. COMPANY MANAGEMENT 
 
 X. TRADERS AND THEIR GRIEVANCES 
 
 XL CONTINENTAL TRANSPORT CONDITIONS 
 
 XII. PURCHASE TERMS AND CONDITIONS 
 
 XIII. THE QUESTION OF SAVINGS 
 
 XIV. THE IRISH RAILWAYS 
 XV. STATE RAILWAYS AND NATIONAL PROSPERITY 
 
 XVI. BRITISH RAILWAY POSITION TO-DAY 
 
 XVII. SUMMARY AND RECOMMENDATIONS 
 
 APPENDIX : The Royal Commission of 
 1865 
 
 INDEX 
 
 PAGE 
 I 
 
 5 
 
 12 
 
 20 
 
 40 
 
 60 
 
 121 
 
 144 
 
 176 
 
 204 
 
 253 
 294 
 
 318 
 
 331 
 
 357 
 370 
 421 
 
 427 
 447
 
 RAILWAYS AND 
 
 NATIONALISATION. 
 
 CHAPTER I. 
 INTRODUCTORY. 
 
 For many years past it has been usual to asso- 
 ciate demands for the nationalisation of British 
 railways mainly with one or other of three classes 
 of the community : (i) Socialists, who advocate 
 as a matter of principle that the State should 
 control all the means of production, distribution 
 and exchange, and seek to nationalise the rail- 
 ways simply because such a step would be in 
 accord with their party propaganda and repre- 
 sent, as Mr. Bruce Glasier has said, "a begin- 
 ning in bringing the great monopolies into the 
 hands of the public "; (2) representatives of the 
 Labour Party, who believe that nationalisation 
 would lead to higher wages and shorter hours 
 for railway workers, and tend to improve the 
 labour position generally; and (3) certain 
 traders, who think that, under State ownership 
 
 B
 
 3 Railways and Nationalisation. 
 
 of the railways, they would secure lower rates 
 of transport and better conditions of rail trans- 
 port in general. The subject has also been a 
 popular one with lecturers, debating societies, 
 and school parliaments; but until, at least, 
 the General Election of 1906, and, also, the 
 railway troubles of 1907, it remained a matter 
 of academic discussion rather than one likely to 
 be brought within the domain of practical 
 politics. 
 
 But the question has recently entered upon a 
 somewhat new phase, because it is clear from 
 some recent utterances of leading members of 
 the Government that their attention is being 
 drawn to the relations of the State to the rail- 
 ways, and that the possibility has been enter- 
 tained of some fundamental changes being intro- 
 duced in the railway position, not alone as a 
 panacea for existing transport and economic dis- 
 advantages, but, also, as an alternative to a 
 policy of Protection ; though it is open to doubt 
 whether any leanings in this connection towards 
 a resort to railway nationalisation for the United 
 Kingdom will still be favoured by responsible 
 authorities when the whole subject has under- 
 gone thorough investigation from a practical 
 rather than from a theoretical standpoint. Then, 
 on February 11, 1908, there was a debate in the 
 House of Commons on a resolution, proposed by 
 Mr. G. A. Hardy, in favour of railway nation- 
 alisation ; while a still later development has been
 
 Introductory. 3 
 
 the formation (announced in The Times of May 
 22, 1908) of a Railway Nationalisation Society, 
 " for the purpose," as the Society itself says, 
 " of educating the public mind on the subject of 
 State ownership;" though the circular issued 
 leaves no room for doubt that the educating pro- 
 cess in question is to proceed exclusively along 
 the lines of converting the public mind to the 
 nationalisation idea. The Society in question, I 
 might remark in passing, seems to have politi- 
 cians rather than traders for its god-fathers. 
 
 To-day, therefore, the whole subject of railway 
 nationalisation may be spoken of as being " in 
 the air " to a greater extent, at least, than has 
 been the case before; and it is certainly desirable 
 that all the facts of the case should be set before 
 the country in regard alike to the general prin- 
 ciples of railway nationalisation, the results to 
 which they have led elsewhere, and the practica- 
 bility, or the desirability, of applying them here. 
 It is with these particular aspects of the question 
 I propose to deal in the chapters that follow. 
 
 There is the greater reason for the attempt 
 here made to enlighten the public mind in re- 
 gard to railway nationalisation well in advance 
 of any possible definite action, because political 
 developments of the day have shown that not 
 only are attacks on " capital " much favoured in 
 certain quarters, but that one can no longer feel 
 any certainty tha't even the most momentous 
 of measures, involving grave questions of 
 
 B 2
 
 4 Railways AND Nationalisation. 
 
 finance, of equity, or of national policy, 
 will always receive adequate discussion in the 
 House of Commons, where debates on subjects 
 however important may, as we find, suffer mer- 
 ciless curtailment to suit the exigencies of a 
 Ministerial programme. Some recent prece- 
 dents, alike in these directions and in the press- 
 ing forward of what are, avowedly, merely the 
 beginnings of revolutionary but immature social 
 changes — which chance and the future are to be 
 left to perfect — invest with greater importance 
 than ever the discussion of national questions by 
 the nation itself, and, also, the basing of such 
 discussion, as regards railway nationalisation at 
 least, on that widest possible knowledge of the 
 many and often conflicting factors involved by 
 which alone one can hope to form a right and 
 well-considered judgment.
 
 Fundamental Principles. 
 
 CHAPTER 11. 
 FUNDAMENTAL PRINCIPLES. 
 
 By the average person the phrase " railway 
 nationalisation " is generally employed as 
 though it represented a single well-established 
 principle, which everyone would understand at 
 once, and stood in need, therefore, of no exact 
 definition. 
 
 In effect, the phrase comprises two distinct 
 propositions: (i) State ownership, as the result 
 either of (a) construction or (b) purchase of rail- 
 ways ; and (2) State operation thereof. A State 
 can build railw^ays or acquire them; but, having 
 done either, it may prefer to hand them over to 
 a private company to operate. In the latter 
 case they would still be " State-owned," but they 
 would have to be considered from a different 
 standpoint from railways that are both State- 
 owned and State-operated. Thus "State-owner- 
 ship" and " railway nationalisation " cannot be 
 regarded as strictly synonymous terms, and 
 although the latter phrase is (in this country) 
 now generally assumed to include both of the
 
 6 Railways and Nationalisation. 
 
 factors in question, one must bear in mind that 
 this is not necessarily the case. 
 
 These considerations are the more important 
 because in various countries where the principle 
 of State-ownership of railways has been accepted 
 (often for unavoidable reasons, as I shall show 
 in another chapter), that of State-operation has 
 been declined ; while in certain instances this 
 attitude has not only quite recently been 
 affirmed, but is even being carried still further, 
 ■ — in direct opposition to the theories of the 
 " railway nationalisation " party in the United 
 Kingdom. 
 
 state-ownership : company operation. 
 
 The Government of the Netherlands, for ex- 
 ample, are the actual owners of a considerable 
 proportion of the railway mileage in Holland ; 
 but they have divided the operation thereof be- 
 tween two companies, — one specially formed (in 
 1863) for " the Exploitation of the State Rail- 
 ways," and the other, the Holland Iron Railway 
 Company, which owns lines of its own. A most 
 vigorous effort has recently been made by the 
 Liberal-Democratic Party in Holland to induce 
 the Second Chamber of the States-General to 
 pass a resolution expressing the view that a 
 scheme for the operation of the State railways 
 of the country by the Government itself, instead 
 of by the private companies, should be prepared 
 as soon as possible. The debate extended over
 
 Fundamental Principles. 7 
 
 five sittings, and resulted (May 26, 1908) in the 
 motion being rejected by 46 votes to 39. 
 
 In Mexico the Federal Government have, 
 through purchases of stock, now secured control 
 over about 7,000 miles of railway in that Re- 
 public. But the Government have no idea of 
 operating the lines themselves. Instead of at- 
 tempting to do so, they have (1908) brought 
 about the formation of a private company which, 
 under certain conditions — and subject to the 
 supreme control the State can exercise by reason 
 of its holding the majority of the stock — will 
 work the whole of the railways in question. 
 
 India, again, is often pointed to by advocates 
 of the nationalisation principle as a land where 
 the greater part of the railways are owned by 
 the State, and as constituting, therefore, an ex- 
 ample for England herself to follow. But, from 
 a Report of the Committee on Indian Railway 
 Finance and Administration, issued in May, 
 1908, I find that although the State certainly 
 does now own 22,622 miles of railway in India, 
 it has leased 16,458 miles of this total to operat- 
 ing companies, and itself works only 6,164 miles, 
 namely, the North- Western Railway, 3,569 
 miles; Eastern Bengal, 1,271; Oudh and 
 Rohilkhund, 1,292; Jorhat, 32. Concerning 
 these four State-worked systems the Com- 
 mittee say : — 
 
 Large capital expenditure for development must 
 be incurred on these lines in the near future, and
 
 8 Railways and Nationalisation. 
 
 direct working- by the State is not without its dis- 
 advantag-es. The consistent policy of the Govern- 
 ment of India for many years has been to arrange 
 for the railways of India, while remaining^ State 
 property, to be leased to companies which work 
 them on behalf of the Government on a profit- 
 sharings basis. There is no disposition on the part 
 of the Government to depart from this policy, which 
 has worked satisfactorily. We would, therefore, 
 suggest that one or more of the State lines above 
 mentioned might be leased to companies on the basis 
 above described. 
 
 These examples of quite recent date will suf- 
 fice to show that the " nationalisation of rail- 
 ways " is a phrase capable of different interpre- 
 tations, and requires to be clearly defined before 
 one can rightly understand what is meant there- 
 by. For present purposes, however, it must be 
 assumed that when advocates of " railway na- 
 tionalisation " in the United Kingdom sing the 
 praises of " State ownership " of railways, they 
 mean to include therein State operation as well. 
 In fact, it would seem to be the State operation, 
 with its possible advantages for themselves, in 
 which the Labour Party, at least, is mainly 
 concerned. 
 
 ACTION OF LOCAL AUTHORITIES. 
 
 Subsidiary to the question as to the active inter- 
 vention of the State in the provision or the 
 operation of railways, there is the further con- 
 sideration whetlier or not local authorities should
 
 Fundamental Principles. 9 
 
 assist in the same direction. In France the de- 
 partments and communes were authorised in 
 1863-4 to give financial support to local lines; 
 though, as I shall show later on, this authority 
 was, in their case, abused rather than discreetly 
 used. In Denmark a law passed in 1868 enacted 
 that half the cost of the land required for rail- 
 ways built by the State should be refunded by 
 the county councils, who were to raise the re- 
 quired sum by taxes imposed on fields and 
 meadows situate within the limits of the counties 
 through which the lines passed, and also on 
 the inhabitants of market towns. In Norway 
 the communes, in the case of lines owned and 
 operated by the State, have been required to 
 contribute to the capital cost, and to undertake 
 all expenses connected with the acquisition of 
 the necessary land, maintenance of fencing, etc., 
 without receiving any direct return ; while in the 
 case of other lines (much greater in extent than 
 those owned by the State alone) they have not 
 only helped to raise the capital, but are joint 
 proprietors of the railways with the State and 
 private individuals. In Canada the municipali- 
 ties have given considerable financial help to the 
 railways. In Ireland, again, there are lines 
 having " baronial guarantees of interest on 
 capital," any losses sustained falling upon the 
 localities concerned. 
 
 Here, therefore, in considering what is meant 
 by the somewhat vague phrase, " railway na-
 
 lo Railways and Nationalisation. 
 
 tionalisation," the further question arises as to 
 whether the action of the State, exclusively, 
 should be invoked, or whether the co-operation 
 of local authorities should be included as well. 
 
 DIFFERENCES IN CONDITIONS. 
 
 It must still further be kept in view that, 
 although a resort to nationalisation, in either 
 form or both, may, for one reason or another, 
 have been abundantly warranted in certain other 
 (and especially " new ") countries or colonies, 
 it does not therefore follow that the adoption of 
 a like policy by ourselves, in our own particular 
 circumstances and conditions, would be equally 
 justifiable. Even, therefore, if we were con- 
 vinced, first, of the soundness of the principles 
 involved, and, secondly, of the absolute wisdom 
 and efficiency with which they have been carried 
 out elsewhere, there would still remain the prac- 
 tical question whether they are really suitable 
 for application to-day to the United Kingdom. 
 
 Nor must advocates of the proposal omit to 
 lay down the exact purposes which nationalisa- 
 tion is intended by them to serve. I shall show 
 that different countries owning and operating 
 State railways employ them in very different 
 ways, according to national or colonial con- 
 ditions, whether from the financial, the economic 
 or the fiscal standpoint; sometimes, for example, 
 looking to them for revenue; sometimes using
 
 Fundamental Principles. ii 
 
 them to develop industries at tlie cost of the tax- 
 payer; and sometimes operating them as part 
 of the poHtical machinery for ensuring the effi- 
 cacy of " Protection." Once more, therefore, 
 exact definitions are necessary; and, in pointing 
 to all that other countries have done in the matter 
 of railway nationalisation, would-be reformers 
 here should say definitely which of these par- 
 ticular countries — differing as they do so 
 materially among themselves — they would have 
 us take as our pattern and example.
 
 12 Railways and Nationalisation. 
 
 CHAPTER III. 
 STATE V. COMPANY OWNERSHIP. 
 
 One of the stock arguments advanced by the 
 nationaHsation party is that private ownership 
 of railways is to-day found in only " two or three 
 countries," and that England, therefore, is quite 
 behind the times in adhering to so out-of-date a 
 system. But no one, so far as I am aware, has 
 yet attempted to show the real extent to which 
 the railways of the world are owned by States 
 and companies respectively. 
 
 To my own mind it has seemed desirable that 
 some definite figures should be given on this 
 particular aspect of the controversy, and, as the 
 result of a considerable amount of research, 
 correspondence and personal inquiry, I have 
 compiled two tables, giving the said figures for 
 (i) the United Kingdom and foreign countries, 
 and (2) British Colonies, Possessions and Protec- 
 torates, It has not been possible to obtain abso- 
 lutely complete returns, and, in the case of many 
 of the countries, no more recent statistics than 
 those for 1905 were available. But the details I 
 give may, I think, be regarded as approximately 
 correct, while, <_'\cn allowing for possible addi-
 
 State v. Company Ownership. 13 
 
 tions or corrections, the excess of company- 
 owned lines over State-owned lines, as shown in 
 the summary at the end of the tables, is so sub- 
 stantial that the broad results of the comparison 
 are not likely to be materially altered. 
 
 It should be noted that the figures relate to 
 ownership, and not to actual operation, there 
 being not only company-operation of State- 
 owned lines, but State-operation of company- 
 owned lines. (See foot-notes to Holland, 
 Austria, Hungary, Mexico, Peru, China and 
 Newfoundland.) Another important considera- 
 tion is that the figures represent route miles, or 
 length of line, and not length of track, one mile 
 of line having two, three, four or more sets of 
 metals still counting as only one mile. This 
 method of reckoning is to the disadvantage of 
 the United .Kingdom, where sections of railway 
 having up to nineteen separate tracks lying side 
 by side are to be found (see foot-note to United 
 Kingdom), while in a large proportion of foreign 
 countries and British Colonies, the lines, except 
 in the immediate neighbourhood of towns, are 
 mainly single track. 
 
 The tables are as follows : — 
 
 United Kingdom and Foreign Countries. 
 
 Country. Railways mvNED by 
 
 State. Comtanies. 
 Miles. Miles. 
 
 United Kingdom . . 23,063 (a) 
 
 France 1,868 (d) 27,133
 
 H 
 
 Railways and Nationalisation. 
 
 Country. 
 
 German Empire : 
 
 Prussia-Hesse . 
 
 Alsace-Lorraine 
 
 Bavaria . 
 
 Saxony 
 
 Wiirtemberg 
 
 Baden 
 
 Mecklenburg 
 
 Oldenburg (c] 
 Belgium . 
 Holland . 
 Kussia in Europe {c 
 
 „ Asia 
 
 Finland . 
 Norway . 
 Sweden . 
 Denmark 
 Switzerland 
 Portugal 
 Spain 
 Italy 
 Austria 
 Hungary 
 Bulgaria 
 Servia 
 Roumania 
 Turkey in Europe 
 Egypt . 
 Greece 
 Algeria . 
 Tunis 
 
 United States 
 Mexico . 
 Argentine Republic 
 Brazil 
 Uruguay . 
 Chile 
 Peru 
 
 Bolivia. . 
 Cuba 
 Honduras 
 China 
 
 Railways owned by 
 State. Companies. 
 Miles. Miles. 
 
 21,130 
 
 1,197 
 
 1,067 
 
 17 
 
 3,968 
 
 715 
 
 2,019 
 
 3 
 
 1,219 
 
 ^31 
 
 1,036 
 
 19 
 
 1,092 
 
 43 
 
 505 
 
 
 2,514 
 
 330 
 
 1,107 {^) 
 
 992 
 
 19,726 
 
 12,657 
 
 5,216 
 
 
 1,885 
 
 "168 
 
 1,354 (/) 
 
 219 (g) 
 
 2,605 
 
 5,095 (/o 
 
 1,137 
 
 855 
 
 1,488 (0 
 
 1,103 
 
 540 
 
 866 
 
 
 8,961 
 
 8,2i6(y) 
 
 1,956 (X') 
 
 5,158 
 
 7,818 (/) 
 
 4,828 
 
 6,448 (w) 
 
 736 
 
 235 
 
 336 
 
 49 
 
 1,968 
 
 17 
 
 
 1,238 
 
 1,434 
 
 
 
 '83o(;/) 
 
 
 1,940 
 
 
 428 
 
 
 218,101 {0} 
 
 
 13,905 (/) 
 
 1,721 
 
 11,047 
 
 4,294 
 
 6,299 
 
 
 1,210 
 
 1,592 
 
 1,525 
 
 918 (^) 
 
 242 
 
 16 (r) 
 
 378 {s) 
 
 
 1,500 
 
 57 
 
 
 673 (0 
 
 3,027 (?0
 
 State v. Company Ownership. 15 
 
 ^ Railways owned «y 
 
 Country. ^^^^^^ Companies. 
 
 Miles. Miles. 
 
 Japan 4,572 (?') 442 
 
 Siam 356 39 
 
 Nicaragua . . . . 171 {70) 
 
 Guatemala 415 (.r; 
 
 Totals . . . 108,577 362,620 
 
 NOTES. 
 
 (a) These figures are for 1906. The track mileage at the 
 same date was as follows : — ist track, 23,063 miles; 2nd, 
 12,934; 3rd, 1,363 ; 4th, 1,091; 5th, 186; 6th, III; 7th, 
 47 ; 8th, 29 ; 9th, 17 ; loth, 10 ; nth, 6 ; 12th, 4 ; 13th, 3; 
 14th to 19th, I mile each : total length of track, 38,872 miles; 
 length of sidings (reduced to single track), 14,032 miles; 
 total length (including sidings), 52,902 miles. 
 
 {d) Purchased by State, owing mainly to the financial 
 embarrassment of a group of small companies which had 
 constructed the lines. Bill passed through both Houses, 
 1908, for purchase of Western of P>ance railway by the 
 State. 
 
 {c) Totals for German Empire : State-owned lines, 31,430 
 miles ; lines owned by 76 companies (as shown by statistics 
 issued by the Reichs-Eisenbahn-Amt), 2,469 miles, though 
 the figures in the table account for only 2,125. One of these 
 private lines, the Pfalzbahn, will be incorporated in the 
 State system of Bavaria on January 1, 1909. 
 
 (d) Operated by two private companies, which pay the 
 State a rent for the use of the lines. 
 
 {e) Exclusive of Finland. 
 
 (/) The purely State lines have a length of 313 miles ; 
 but the State also operates 1,041 miles of lines owned jointly 
 by itself, communes, and private individuals. 
 
 (^) The private railways in Norway have all been sub- 
 sidised by the State, and only one of them pays a dividend 
 on ordinary shares. 
 
 (/i) Includes 1,715 miles of narrow-gauge lines. 
 
 (/) Originally constructed by private companies. Pur- 
 chased by State as result of Referendum in 1898. Other 
 sections also to be taken over. 
 
 (/) The Italian railway system was constructed partly by
 
 1 6 Railways and Nationalisation. 
 
 the Government and partly by companies, to whom conces- 
 sions had been granted, though the State afterwards acquired 
 possession of the chief hnes. In 1885 the administration of 
 all the railways in Italy was left to private enterprise ; but in 
 1905 the State assumed administration of its own lines, and 
 resolved on nationalisation of others. In this instance the 
 figure 8,216 represents mileage worked by the State (June 30, 
 1907), viz. : Owned by State, 7,784 miles ; belonging 
 entirely or in part to private companies or foreign adminis- 
 trations, 318 ; lines temporarily worked by the State, 
 114 miles. 
 
 (/') Secondary lines. Not to be nationalised. 
 
 (/) Includes 2,784 miles operated by the State railways 
 administration. Since these returns were made the Ferdi- 
 nands-Nordbahn, 819 miles, has been added to the State 
 system. Lines of five other.companies, with total of about 
 1,860 miles, are also to be acquired by the Government. 
 
 (/;/) Includes 4,855 miles operated by the State railways 
 administration. 
 
 (;/) Figures for 1904. 
 
 ((>) This total is for June 30, 1905, and covers "single 
 track railway mileage." The aggregate mileage, including 
 tracks of all kinds, for which substantially complete returns 
 had then been received by the Interstate Commerce Com- 
 mission, was 306,79674 miles, classified as follows : — Single 
 track, 2i6,973"6i miles (less therefore, than the known total) ; 
 second track, I7,056'30 miles ; third, i,6o9'63 ; fourth, 
 i)-i5'53; yard track and sidings, 69,94r67 miles. The 
 railway corporations included in the returns number 2,167, 
 and of these 1,169 ^^^ classed as " operating roads." 
 
 (p) Created and operated by companies. In 1907 the 
 Federal Government who, through purchases of stock, 
 already controlled 3,633 miles, obtained control also over 
 the Mexican Central (2,818 miles) and various small lines, 
 in order to check the designs of foreign financiers. Their 
 total was thus increased to 7,585 miles, the operation of 
 which has now been transferred to a new (Mexican) company, 
 formed under Government auspices. 
 
 (^) Figures for 1908. Though State-owned, these lines 
 are operated by an English Company, the Peruvian Corpora 
 tion, to whom they have been leased for a long term of 
 years. 
 
 (r) Leased to the Peruvian Government. 
 
 {s) Figures for 1906. Include 304 miles owned and
 
 State v. Company Ownership. 
 
 17 
 
 operated by an English company, the Antofagasta (Chile) 
 and Bolivia Railway Company, Ltd. 
 
 (/) Imperial Railways of North China. These were begun 
 as a private enterprise, but difficulties were experienced in 
 the raising of capital. The scheme was then taken up and 
 completed by Li Hung Chang as a Government under- 
 taking ; though the system was constructed under the super- 
 vision of British engineers, and is operated by them under 
 Chinese control. 
 
 (u) Built by foreign syndicates employing British, German, 
 Russian, Belgian, American, Japanese, and Chinese capital. 
 
 (■?/) Figures for 1908. Include 2,806 miles of companies' 
 lines purchased by the Japanese Government under the 
 nationalisation scheme of 1906. 
 
 (w) Leased to a company for 35 per cent, of gross 
 earnings. 
 
 (x) Originally constructed by Government. Transferred 
 to a company on their undertaking to carry out certain 
 extensions. 
 
 British Colonies, Possessions and Protectorates. 
 
 Colony, &c. 
 
 Canada . 
 
 Newfoundland 
 
 New South Wales . 
 
 Victoria . 
 
 South Australia 
 
 Western Australia . 
 
 Queensland 
 
 Tasmania 
 
 New Zealand . 
 
 India (e) . 
 
 Ceylon 
 
 Cape of Good Hope 
 
 Natal 
 
 Orange River Colony & 
 
 vaal 
 Rhodesia. 
 
 British Central Africa 
 British East Africa . 
 Northern Nigeria . 
 Southern Nigeria . 
 
 Railways owned by 
 Government. Companies. 
 
 Miles. Miles. 
 
 . 1,877 i'i) 18,702 (d) 
 
 645 (i-) 21 
 
 . 3,281 81 
 
 • 3,380 
 
 1,892 (./) 
 
 1,605 700 
 
 . 3,114 93 
 
 462 156 
 
 . 2,407 113 
 
 • 25,990 3,989 
 
 562 
 
 • 2,987 403 
 
 797 (/) 50 fe) 
 Trans- 
 
 . • 1,685 (/o 
 
 1,440 
 
 so 
 
 . . 584 
 
 23 
 
 . . 185 (/) 
 
 C.
 
 i8 
 
 Railways and Nationalisation. 
 
 
 
 Railways 
 
 OWNED BY 
 
 Colony, &c. 
 
 Government 
 
 Companies 
 
 
 Miles. 
 
 Miles. 
 
 Gold Coast 
 
 1 68 
 
 
 Sierra Leone . 
 
 
 227 
 
 
 Federated Malay States 
 
 
 396 
 
 
 Straits Settlements . 
 
 
 15 
 
 10 
 
 Jamaica . 
 
 
 185 
 
 
 Barbadoes 
 
 
 
 25 
 
 Trinidad . 
 
 
 81 
 
 
 British Guiana 
 
 
 
 95 
 
 Mauritius 
 
 
 130 
 
 
 Cyprus . 
 
 
 36 
 
 
 Malta 
 
 
 8 
 
 
 Totals . 
 
 52,722 
 
 25,928 
 
 NOTES 
 
 
 
 (r?) Figures for 1906. Total made up thus : Inter-Colonial 
 Railway, 1,478 miles ; Prince Edward Island Railway, 
 261 ; Temiskaming and Northern Ontario Railway (a pro- 
 vincial Government line), 138. 
 
 {b) Miles of double track in Canada (Government and 
 Companies' lines), 838. Railway lines, 194. 
 
 (f) Leased to a company, which is to work and develop 
 the property, bearing loss or taking profit. In 1905-6 
 expenditure exceeded revenue by ^26,700. 
 
 \d) Including 146 miles in the Northern Territory. 
 
 {e) These figures, which do not include foreign lines, are 
 for 1907. The total length of railways open in India at the 
 end of that year was 30,053 miles, classified as follows : 
 State lines, 22,531 miles ; Native State lines, 3,459 miles ; 
 assisted and unassisted companies, 3,052 miles ; guaranteed 
 companies, 937 miles ; foreign lines, 74 miles. 
 
 (/) Figures for 1906. Natal Government also own 
 88 miles of railway in the Orange River Colony, and (by 
 arrangement with the Intercolonial Council) operate a 
 further 88 miles there. 
 
 ig) Owned by Natal-Zululand Railway Company, but 
 operated by the Natal Government on a percentage basis. 
 
 {h) Acquired by the Imperial Government on the occupa- 
 tion of the new colonies. One part of the Orange Free State 
 railways had been constructed by the previous Government
 
 State v. Company Ownership. 19 
 
 out of revenue, and was therefore taken over without 
 payment. The lines of the Netherlands Railway Company 
 in the Transvaal were seized by right of conquest on the 
 occupation of the Transvaal, on the ground that the company 
 had taken an active part in the war on behalf of the South 
 African Republic ; but the debenture-holders were paid out 
 by the Imperial Government. 
 
 (/) Figures for 1907. Lines owned as follows: — Mashona- 
 land Railway Company, 547 miles ; Rhodesia Railways, 
 Limited. 884 ; Rhodes' Trust, 9. The Rhodesia Railways, 
 Limited, also own 112 miles of line in Cape Colony, and 
 394 miles in the Bechuanaland Protectorate. 
 
 (7) Figures for 1906. 
 
 SUMMARY. 
 
 COiMPANY-OWNED RAILWAYS : 
 
 United Kingdom and foreign countries 
 Colonies, Possessions, &c. 
 
 State or Government- owned 
 Foreign Countries 
 Colonies, Possessions, etc. 
 
 Excess of Company-owned over State 
 
 OWNED 
 
 Estimated total of world's railways* 
 Included in above figures 
 
 Mileage not accounted for ... 
 
 Percentage of company-owned to world's total 
 „ „ State-owned to world's total.. 
 
 „ „ mileage not accounted for 
 
 Proportion of company-owned to State-owned ... 2"4 to i 
 
 * As given in the " Archiv fiir Eisenbahnwesen." 
 
 C 2 
 
 Miles. 
 362,620 
 25,928 
 
 108,522 
 52,722 
 
 388,548 
 
 
 161,244 
 
 rE- 
 
 227,304 
 
 562,436 
 549,792 
 
 )tal ... 
 
 12,644 
 
 69-1 
 287 
 
 
 lOO'O
 
 AYS AND NATIONALISATION. 
 
 CHAPTER IV. 
 
 REASONS FOR STATE OWNERSHIP. 
 
 I come next to the important consideration — • 
 generally overlooked by railway nationalisation 
 advocates — as to the reasons which have led in 
 other countries to an adoption of the principle of 
 State-ownership of railways, with or without 
 State operation. We are constantly being told 
 of what has been done elsewhere; but is there 
 any real similarity between the conditions of 
 these other countries and our own ? Have we 
 ourselves been warranted in maintaining com- 
 pany-ownership instead of doing the same as 
 these other lands have done ? Have they, 
 further, always resorted to State railways from a 
 deliberate conviction that that is the better 
 system, or have they not, rather, often been 
 forced to adopt this expedient because, in their 
 particular circumstances, they had no alterna- 
 tive? 
 
 GERMANY. 
 
 To begin with Germany, where the railway 
 nationalisation principle has attained its highest 
 and most successful development, the policy oi 
 State purchase of company-owned lines, initiated
 
 Reasons for State Ownership. 21 
 
 by Prince Bismarck, was due to various causes. 
 Military considerations are assumed to have been 
 paramount. Situated as Prussia was, geo- 
 graphically, and in view of European political 
 conditions in general, it was thought in the 
 highest degree desirable, in the interests of that 
 kingdom — if not also of the prospective future 
 Empire — that there should be lines of railway 
 which, though not necessarily remunerative from 
 a commercial standpoint, would allow of a rapid 
 concentration or distribution of troops; and, for 
 the same reason, it was no less needful that the 
 State should be able to command, also, the use 
 of all the main lines of existing railway. There 
 were, however, other considerations besides; and 
 in this connection the Financial Times of 
 P'ebruary 20, 1908, says : — 
 
 Prussian railway history, which yet remains lo 
 be written, also shows how the investor may fare 
 at the hands of a State with designs on his property. 
 It is generally accepted that Prussia took over its 
 railways for military purposes, but strategic con- 
 siderations appear to have only been indirect factors 
 in determining the ownership of the entire system. 
 In brief, the development of the nationalisation idea 
 was somewhat as follows. The Government con- 
 structed a military line, which was a success so far 
 as its purpose was concerned. Subsequently Parlia- 
 mentary sanction was refused to further extensions 
 on the ground of cost. Then arose the brilliant 
 idea that if all the existing railways were once 
 vested in the Government, the consent of Parlia- 
 ment to authorise additional expenditure would be 
 Immaterial, provided that sufficient funds were
 
 22 Railways and Nationalisation. 
 
 available out of the secret reserves obtained from 
 the operation of lines in being-. The result of this 
 scheme was a strangling and starving- campaign 
 under the Bismarck regime, by which traffic was 
 diverted from the private companies, stock secretly 
 bought on Government account, and public opinion 
 worked up in favour of State control. These tactics 
 naturally depreciated values, and the Government's 
 eventual purchase was at a cheap rate. The facts 
 here outlined are old enough to be new to the 
 present generation, and may be commended to the 
 notice of Home Railway stockholders. 
 
 Among the further reasons for the acquisition 
 of the entire system by the State were the 
 following : — 
 
 Prince Bismarck aimed at establishing a policy 
 of Protection in .Prussia; but he found it would 
 be useless for the Government to impose hostile 
 tariffs on foreign imports if the railway com- 
 panies then operating were able to nullify those 
 tariffs (as they showed a tendency to do) by con- 
 ceding exceptionally low rates on the carriage of 
 foreign commodities from the ports to inland 
 centres. With State ownership of the railways, 
 the Government would be in a position to impose 
 such high rates as they pleased on foreign im- 
 ports, and to give correspondingly low rates 
 for the encouragement of exports, thus com- 
 pleting the Protection of the native producer, 
 and converting the railways into part of the 
 fiscal machinery of the kingdom. 
 
 Certain important financial considerations pre- 
 sented themselves to the Chancellor's mind. He
 
 Reasons for State Ownership. 2t, 
 
 was experiencing difficulty, from time to time, 
 in securing from the Prussian Parliament all the 
 supplies he wanted for the achievement of his 
 various schemes; but, provided he could effect 
 the nationalisation of the railway system, and 
 thus control, not alone the operation of the lines, 
 but also the finances thereof, he would be ren- 
 dered independent of Parliamentary votes to the 
 extent at least of the net railway profits, which, 
 after the meeting of all claims, would thus pass 
 into the Treasury to be made use of by the 
 Government for general State purposes. 
 
 Prince Bismarck further aimed, on the con- 
 clusion of the Franco-German War, at the 
 creation of an Imperial system of State Railways 
 for the whole of the German Empire, with 
 Prussia at the head thereof. From a transport 
 point of view there was much to be said in 
 favour of such a scheme. But no injustice 
 would be done to Prince Bismarck's memory if 
 one assumed that he was further inspired by 
 thoughts of giving greater power and prestige to 
 Prussia. 
 
 By this time various of the German States had 
 Government railways of their own. In both 
 Wiirtemberg and Bavaria the State had had to 
 take over and complete certain main lines started 
 by private companies which speedily got into 
 financial difficulties. In Baden no capitalists 
 could be found to build a line from Mannheim to 
 Heidelberg, and the State was obliged to under-
 
 24 Rait.ways \Nn Nationalisation. 
 
 take the enterprise itself. In Saxony the 
 Government offered practical encouragement to 
 railway companies by subscribing for their 
 shares, and guaranteeing payment of interest on 
 capital; but when, in 1845, the construction of 
 a line from Dresden to the Austrian frontier was 
 found necessary, there was no prospect of such 
 a line being built until the Government took the 
 work in hand. In Prussia itself the dimensions 
 of the State system, prior to complete nationali- 
 sation there, had been swollen by the Govern- 
 ment purchase of lines from companies which 
 had become bankrupt, especially following on 
 the financial crisis of 1848. 
 
 In most of the German States the prevalent 
 system was more or less "mixed"; that is to 
 say, some lines belonged to the Government and 
 some to private companies. But when the States 
 in Southern Germany realised the extent of 
 Prince Bismarck's aspirations, they proceeded to 
 check his idea of an " Imperial " system of rail- 
 ways — with Prussia at the head — by national- 
 ising the lines in their own individual territories, 
 thus rendering it impossible for the Prince — as 
 they rather feared he might do — to buy up the 
 companies operating in those territories, on his 
 finding the Governments themselves indisposed 
 to endorse his plans. In the result, independent 
 systems of State railways are to be found to-day 
 in Prussia and Hesse (combined), Bavaria, 
 Saxony, Wiirtemberg, Baden and Oldenburg,
 
 Reasons for State Ownership. 25 
 
 while the Mecklenburg Friedrich-Franz Railway 
 is also State-owned, the only lines thus far con- 
 stituting an " Imperial " system in the German 
 Empire being those in Alsace-Lorraine. 
 
 We have here a set of conditions, leading to 
 State ownership and operation of railways, 
 which cannot be paralleled by any conditions 
 past or present in the United Kingdom; and I 
 would submit that to this extent, at least, any 
 reasons for a change of policy on our own part 
 must be sought elsewhere than in the example 
 offered by Germany. 
 
 BELGIUM. 
 
 Instigated thereto by Leopold I., Belgium 
 began with vState lines, and had 200 miles in 
 operation by the year 1840. But the severity of 
 the water competition made the railways so 
 unremunerative that when the Governm^ent pro- 
 posed to build still more, the Chambers refused 
 their assent at the time, though more vState 
 lines were built subsequently. Private com- 
 panies were allowed to take up the work, and, 
 although some of these failed, and had to be 
 bought out by the Government, the successful 
 ones showed so much energy, foresight and 
 enterprise that the_y became powerful competitors 
 of the State system. " Rate wars " followed, 
 and the grave disadvantages of the dual system 
 were abundantly manifested. But the more 
 immediate reason for the decision, arrived at in
 
 26 Railways and Nationalisation. 
 
 1870, that the State should acquire control over 
 all the main routes of railway in the kingdom, 
 was a fear (for which there seems to have been 
 good ground) that German speculators might 
 buy up the private lines, or, at least, get com- 
 mand over them, and operate them to the 
 advantage mainly of German interests — political 
 and economic. Such a procedure might well 
 have proved disastrous for Belgium ; and, how- 
 ever much the actual operation of her railways 
 by the State may be open to criticism, it is 
 certain that, in the circumstances, their purchase 
 by the State was abundantly justified. 
 
 HOLLAND. 
 
 In Holland the water competition is still more 
 severe than in Belgium, and when, following on 
 the recommendations of a commission appointed 
 by him in 1836, William I. sought to induce the 
 States General to build a line of railway from 
 Amsterdam to Arnheim, as the first link in a 
 chain of rail communication with Germany, they 
 refused, and left him to start a railway company 
 on his own account. He lost ;^ 100,000 by 
 giving to this company a personal guarantee of 
 payment of interest, and for many years private 
 enterprise in railway construction had a desperate 
 struggle for existence in Holland. In fact it 
 became evident by i860 that vState action was 
 essential to the provision of a network of rail- 
 ways sufficient to safeguard Holland's economic
 
 Reasons for State Ownership. 27 
 
 interests in regard especially to her relations 
 with neighbouring countries. Hence the crea- 
 tion of a State system of railways alongside of 
 a system created, and still being extended, by 
 private enterprise; though, as already explained, 
 the operation of the State lines was entrusted to 
 companies instead of being undertaken by the 
 Government themselves. The State has added 
 to its own system by purchase from time to 
 time; but there are still considerable sections of 
 company-owned lines in Holland which the 
 Government prefer not to take over. 
 
 DENMARK. 
 
 Private enterprise, with State guarantees of 
 interest, started railway construction in Den- 
 mark. But the pioneer lines paid badly, and the 
 arrangements between the companies and the 
 Government were such that the former became 
 disinclined to run the risk of providing railways 
 not likely to yield a fair return. So the earliest 
 lines got transferred to the State, and, though the 
 offer of State subsidies, together with State pur- 
 chase of shares, led other companies to construct 
 still further lines, the plan did not always work 
 satisfactorily. More and more of the company- 
 owned lines thus passed over to the State, which, 
 meanwhile, had also built on its own account. 
 Between, however, 1894 ^^^ ^905 the State 
 system in Denmark increased only from 1,034 
 miles to 1,137, while the private railways
 
 28 Railways and Nationalisation. 
 
 increased from 337 miles to 855. The expan- 
 sion, therefore, has been with the latter rather 
 than the former, this fact being accounted for 
 by the large subsidies which the State gives to 
 the companies to encourage them to build lines 
 of their own, in preference to undertaking the 
 work on its own account. 
 
 FRANCE. 
 
 As shown by the table given in Chapter III., 
 the State Railways in France comprise only 
 1,868 miles, while those belonging to companies 
 have a total of 27,133 miles. In effect, the State 
 system was originally a collection of more or less 
 disconnected lines belonging to a group of 
 impoverished if not actually bankrupt com- 
 panies. Failing the possibility of making satis- 
 factory arrangements with the great companies 
 to take over the lines in question, it was enacted 
 by the law of May, 187S, that the State should 
 acquire them and operate them itself; though 
 such decision was spoken of in the Chamber at 
 the time as an " acte de bicnfaisance et de gene- 
 rosite extreme," the majority of the shareholders 
 being " small " people who had invested most 
 of their savings in the companies in question. 
 There were, in addition, other lines which the 
 Government constructed themselves because the 
 companies declined to undertake them on the 
 ground that there was no prospect of making 
 them pay.
 
 Reasons for State Ownership. 29 
 
 The purchase of the Western of France Rail- 
 way, agreed to (1908) by both Chambers, has been 
 a political move designed, in part, as a " sop " 
 to the anti-Clerical or anti-Conservative party, 
 whose interests the deal will advance in Nor- 
 mandy and Brittany, where Clericalism and Con- 
 servatism are in especially strong force. One 
 argument advanced in support of the scheme was 
 that the State railways system would acquire 
 outright the St. Lazare and Montparnasse 
 stations; "but, of course," a well-informed 
 American friend in Paris writes to me, " what- 
 ever have been put forward as the reasons, the 
 real dominating reason is that the politicians, 
 keen after 'soft-snaps,' wish to get possession 
 of the line and run and control it." Purchase 
 was opposed by trade associations, Chambers of 
 Commerce, and other public bodies, and 90 per 
 cent, of the Senate, it is said, were against it 
 individually; but political considerations carried 
 the day. 
 
 ITALY. 
 
 Of the railways in Italy the Board of Trade 
 Return, " Railways (Foreign Countries and 
 British Possessions)," issued 1908, says: — 
 
 It must be borne in mind that at different periods 
 of railway development in Italy huge sums have 
 been spent in the construction of lines which were 
 never expected to pay, but the existence of which 
 was a political necessity, and without which the 
 unification of the country could never have been 
 accomplished.
 
 so Railways and Nationalisation. 
 
 Under the system of concessions granted for 
 a certain period, and not likely, as it was seen, 
 to be renewed, the companies taking over the 
 operation of the railways had no great interest in 
 maintaining them in a state of complete efificiency 
 towards the end of such period ; but operation by 
 the State has been further hampered because the 
 railway workers, with powers of appeal to pro- 
 tecting deputies, refuse to submit to discipline. 
 
 SWITZERLAND. 
 
 The nationalisation of the Swiss railwa3's, as 
 the result of a referendum to the people of the 
 country, in 1897, was advocated at the time as a 
 purely economic measure, having for its objects 
 a less costly management, a lowering of the 
 tariffs, an improvement in the condition of the 
 staff, and the paying off of the capital ; though in 
 reality (as stated in an article published in the 
 Tribune de Geneve in May, 1908), it was the 
 result of a political move, a message issued by 
 the Federal Council laying down the principle 
 that the chief railways should be acquired by the 
 State. The movement was further strengthened, 
 on the one hand, by the fact that it was thought 
 undesirable that a large proportion of the railway 
 shares should remain in the hands of foreigners; 
 and, on the other, by an expectation on the part 
 of Labour that its own interests would be pro- 
 moted by State ownership and operation. To
 
 Reasons for vState Ownership. 31 
 
 the results of the adoption of this principle I 
 shall allude in Chapter VI. 
 
 JAPAN. 
 
 Japan's reasons for carrying out her nationali- 
 sation scheme of 1906 were founded in part on 
 military and in part on economic considerations. 
 In 1905 there were in Japan 38 private com- 
 panies owning and operating 3,268 miles of 
 railway, while the State owned and operated 
 1,461 miles. The dual system of ownership, 
 with all its disadvantages, being thus in full 
 force, the State resolved to take over 17 of the 
 chief lines belonging to the companies, and, 
 adding them to its own, operate the whole as a 
 State system, with what success I shall show 
 later on. 
 
 MEXICO. 
 
 The reasons why the Federal Government of 
 Mexico were, as mentioned in Chapter II., led 
 to acquire so extensive a control over the rail- 
 ways in that Republic are explained by Mr. 
 Charles Edward Russell in an article published 
 in the issue of the American magazine, 
 Cosmopolitan, for July, 1907. The railway 
 policy of the Mexican Government has been 
 founded on the principle of giving concessions to 
 private companies to build and operate the rail- 
 ways, though imposing on the said companies 
 exceptionally severe regulations, in order, among
 
 32 Railways and Nationalisation. 
 
 other things, to safeguard the interests of traders 
 and the public in general, and especially (as it 
 would seem) to check the advent into Mexico of 
 such abuses as had crept into railway operation 
 in the United States of America. A very con- 
 siderable network of railways was brought into 
 existence, under these conditions, though the 
 greater part of the capital of the different com- 
 panies had been provided by American investors. 
 A good deal of the stock w-as, indeed, held by 
 certain prominent financiers, of whom Mr. 
 Russell goes on to say : — 
 
 The seven kings of our railroad system looked 
 down to Mexico, and it found favour in their 
 sight. They said it was a good thing, and they 
 would push it along. They owned shares in many 
 lines ; they were building and planning many others. 
 .... How fine it would be if they were to combine 
 their interests and possess all the country ! . . . . 
 The Rock Island planned to carry its system south- 
 ward from El Paso through Mexico to the Pacific 
 coast, to the Isthmus of Panama, to regions beyond. 
 It v/as a gigantic scheme and certain to have a 
 glorious success. 
 
 Maps were made out showing how Mexico would 
 be parcelled out by the harmonious combination of 
 the kings. The Rockefeller lines reached here, and 
 the Harriman lines there, and the Morgan lines 
 over yonder, and when the combination had 
 been effected there would be nothing left for 
 anybody else, and nothing- for the combining 
 gentlemen to do but exploit the people and draw 
 dividends. It was a grand conception. From time 
 to time in the summer of 1906 the American news- 
 papers reported its cheery progress. Everything 
 was going well indeed ; the interests were being
 
 Reasons for State Ownership. s3 
 
 brought tog'ether, the necessary controls were being 
 secured, and in a few months the combination would 
 be perfected and fully launched to do the Mexicans 
 good and run their affairs for them. 
 
 But it seems that these very clever gentlemen 
 had reckoned without another who was cleverer 
 still, and that was Porfirio Diaz, President of the 
 Mexican Republic. While they were elabo- 
 rating their schemes with more or less publicity, 
 the President had taken measures of defence in 
 secret. In ways so carefully concealed, Mr. 
 Russell says, that the "seven Kings" never 
 heard of the matter, the President " had been 
 buying stocks. Emissaries had moved noise- 
 lessly around France, Belgium, Germany, Eng- 
 land and the United States, picking up what 
 they could find;" and they picked up so much 
 that early in December, 1906, it was announced 
 that " there would be no consolidation of the 
 Rockefeller, Morgan and Harriman interests in 
 Mexico because the Mexican Government held 
 a majority of the stock in each of the railroads 
 these gentlemen thought they owned." 
 
 BRAZIL. 
 
 In Brazil the company owning and operating 
 the West of Minas Railway, one of the first con- 
 structed there, drifted into financial difficulties, 
 and eventually became bankrupt. They put up 
 their lines to auction in 1903 and the Federal 
 Government were the purchasers ; but, although 
 
 D
 
 34 Railways and Nationalisation. 
 
 at present the railway is being worked by the 
 Government, it will eventually be leased to a 
 company. 
 
 BRITISH COLONIES. 
 
 In regard to British Colonies, Possessions and 
 Protectorates, it will have been noticed from the 
 table given under this heading in Chapter III. 
 that the proportion of Government-owned lines 
 is more than double that of the company-owned 
 lines. But this fact is in no way surprising, 
 inasmuch as in new colonies, where population 
 and capital were originally alike limited, and 
 railways were wanted even more for the purpose 
 of opening up country to future settlement than 
 for the supply of existing wants, the provision of 
 transport facilities might well devolve upon the 
 responsible Governments, rather than be under- 
 taken by companies operating mainly on com- 
 mercial lines, and in the expectation of getting 
 a fair return, not unduly postponed, on their 
 investments. 
 
 From this point of view I consider that adop- 
 tion of the principle of State-ownership of rail- 
 ways may be not only abundantly warranted but 
 practically unavoidable in Colonies and countries 
 of the type here in question ; and, to this extent, 
 while reserving criticism on the further material 
 detail of State operation, I am prepared frankly 
 to admit that sweeping assertions in respect to 
 railway nationalisation in general should not be
 
 Reasons for vStatk Ownership. 35 
 
 made either on one side or the other, each 
 country or Colony being, rather, regarded from 
 the standpoint of its ov. n particular conditions 
 and circumstances. 
 
 Australia. 
 
 In Australia railway construction was begun 
 both in New South Wales and in Victoria by 
 companies; but in each instance private enter- 
 prise broke down (in New South Wales because 
 the railway workers caught the gold fever and 
 went off to the diggings), and in each Colony the 
 Government were compelled to take over the un- 
 completed enterprises — with this result, among 
 others : that thenceforward it was generally con- 
 sidered that so costly a business as the provision 
 of railways must necessarily be left to Govern- 
 ments, which could raise capital mure easily than 
 companies, and need not be so anxious in regard 
 to financial results. There was the considera- 
 tion, again, that New South Wales, Victoria, 
 and Queensland, especially, could not hope for 
 full development until they had lines of railway 
 crossing the chains of mountains that rise to 
 heights of 3,000 or 4,000 feet a short distance 
 from the coastal fringe, the railways being 
 wanted to open up to settlement the plains on the 
 other side. 
 
 Pioneer work of this kind, mainlv in the 
 interests of colonial expansion, but absolutely 
 essential thereto, seemed to devolve much more 
 
 D 2
 
 36 Railways and Nationalisation. 
 
 upon the Colonial Governments than upon either 
 colonial or British investors, and one cannot 
 wonder that, in the first instance, at least, it was 
 mainly left to the former to undertake. Later 
 on, as the Colonies advanced in population and 
 prosperity, the financial difficulties in the way of 
 private enterprise would have been less acute. 
 But by that time there were political and labour 
 considerations which, even to the extent of 
 creating very grave abuses, favoured both State 
 construction and State operation of the railways ; 
 and, although the abuses have since been greatly 
 modified, the joint principle in question has still 
 been maintained. In the circumstances, how- 
 ever, it is difficult to see in what way the course 
 adopted by Australia, under conditions so very 
 different from our own, can possibly be offered 
 as an example for the Mother Country. 
 
 INDIA. 
 
 In India, again, railway construction was 
 begun by private companies under Government 
 guarantees of payment of interest on capital ; but 
 for many years (as mentioned in the " Report of 
 the Committee on Indian Railway Finance and 
 Administration "), " the earnings of the com- 
 panies fell short of the interest guaranteed, and 
 the deficit was a charge on the revenues of 
 India." If only for this reason it is not sur- 
 prising that the Government of India should 
 have preferred to take the railways in hand them-
 
 Reasons for State Ownership. 37 
 
 selves ; though, as already shown, they are now 
 more than ever disposed to transfer the actual 
 operation of them to companies, and to encour- 
 age the latter to raise capital on their own 
 account to facilitate further railway expansion. 
 
 SOUTH AFRICA. 
 
 In South Africa State ownership of the rail- 
 ways by the Colonial Governments was brought 
 about partly owing to the financial difficulties 
 experienced, or likely to be experienced, by pri- 
 vate companies (especially in carrying railway 
 lines over vast stretches of unsettled country in 
 order to link up the different Colonies or States), 
 and partly because the said Governments, in the 
 comparative absence of industries and enter- 
 prises which could be taxed, looked to the rail- 
 ways as a source of revenue. 
 
 To illustrate the conditions of railway pioneer- 
 ing in South Africa, I might mention that the 
 first railway constructed there was a line only 
 two miles in length connecting the harbour and 
 the town of Durban. The company which built 
 it could not, at the start, afford more than two 
 locomotives; and when these broke down simul- 
 taneously the officials had to resort to the ex- 
 pedient of employing a gang of natives to push 
 the wagons along on the rails. The financial 
 resources of the company were, in fact, so limited 
 that the staff occasionally had to accept, in lieu 
 of hard cash, orders on tradesmen for groceries
 
 38 Railways and Nationalisation. 
 
 and other goods, or else await the return of the 
 company's debt-collector with, possibly, suffi- 
 cient funds to pay them their wages. After a 
 time the company were able to extend their lines 
 from a length of two miles to ten. But there- 
 upon the Natal Government either concluded 
 that this would be a slow process of providing 
 the colony — to say nothing of the African Con- 
 tinent — with railways, or, alternatively, they 
 thought that if there were money in the enter- 
 prise they might as well have it for colonial pur- 
 poses. In any case, they began to construct 
 railways on their own account, and the little line 
 on which the natives used to push was taken over, 
 to become the nucleus of what is now the con- 
 siderable network of railways owned and 
 operated by the Natal Government. 
 
 Of the railwiiys in Cape Colony, Mr. J. \V. 
 Jagger. says in the " South African Railway 
 Magazine " for December, 1907 : — 
 
 In this colony the first lines, i.e., those to Wyn- 
 berg and Wellington, were built by private enter- 
 prise, the Government, however, rendering some 
 assistance by way of guarantee of interest, and, at 
 the same time, taking sub-guarantees from the 
 various districts, which arrangement was not satis- 
 factory. In 1873 Government took over the lines; 
 otherwise there is no doubt railways would not 
 have been greatly extended in the Cape Colony for 
 some years after that .... The railways 
 never paid full interest until 1887, when the traflic 
 to the gold-fields brought prospeiity. In this 
 country we have not consciously adopted State
 
 Reasons for State Ownership. 39 
 
 ownership and management. It has been thrust 
 upon us owhig to the want of private enterprise. 
 Had the State not taken it up, even to-day, 
 hundreds of miles of line now in existence would 
 not have been built, and the development of the 
 country could not have been pushed ahead . 
 The State has invested thirty millions of borrowed 
 money in our railways, and any deficiency incurred 
 is a first charg-e on the taxpayer, whether he can 
 meet his own obligations or not. 
 
 HOME CONDITIONS. 
 
 Speaking generally, and admitting the possi- 
 bility of a few exceptions, the reasons — political, 
 military, fiscal, economic, and more especially 
 financial — which have led, or have even, in many 
 instances, forced other countries to adopt the 
 principle of State ownership, are such as would 
 not apply to the very different conditions of the 
 United Kingdom, where railways have not yet 
 been converted into part of the political 
 machinery of the land; where, in our island 
 home, the same military considerations do not 
 arise as on the Continent; where railways are 
 operated independently of fiscal conditions ; 
 where we have a teeming population, and few or 
 no districts now requiring to be " opened up " ; 
 and where, until certain parties in the State 
 began to make their persistent attacks on 
 " capital," there has been no suggestion of any 
 difficulty on the part of private enterprise in 
 raising all the money wanted for either the 
 building or the adequate extension of our rail- 
 way system.
 
 40 Railways and Nationalisation. 
 
 CHAPTER V. 
 STATE AID TO PRIVATE COMPANIES. 
 
 Without always going to the length — volun- 
 tarily or necessarily — of building or acquiring 
 railways in the name of the State, the Govern- 
 ments of many different countries have rendered 
 important assistance to private companies in 
 order to encourage and facilitate the provision 
 by them of lines where such Governments might 
 otherwise have had to take upon themselves the 
 full responsibility of creating adequate transport 
 facilities. This practice may be regarded as an 
 alternative to actual nationalisation, and some- 
 times it has been only a possible, if not even a 
 recognised, preliminary thereto; but so far has 
 it prevailed throughout the world that there is 
 hardly any country outside Great Britain (and 
 exclusive of Ireland) in which, where railways 
 have been built at all by private companies, prac- 
 tical help in some shape or form has not been 
 given either by the State or by the local govern- 
 ing authorities. 
 
 Here, once more, we meet with conditions 
 which are invariably ignored by nationalisation 
 advocates who compare British with foreign rail- 
 ways, and seek to draw therefrom conclusions
 
 .State Aid to Private Companies. 41 
 
 unfavourable to the former. I have already 
 briefly indicated one or two instances in which 
 State aid has been given to railway companies 
 abroad ; but this aspect of the question requires 
 to be examined in somewhat greater detail. 
 
 FRANCE. 
 
 It is in France (hat the principle of State aid 
 to railway companies has undergone the fullest 
 development. In the early days of railway 
 history the French Chambers had so little faith 
 in the new means of transport that when, in 
 1838, the Government brought forward a scheme 
 for the building and operation of seven great 
 trunk lines by the State, they refused their 
 assent. It was, in fact, left for Englishmen to 
 take up the task of railway pioneering in France. 
 Following on the refusal in question, Mr. (after- 
 wards Sir) Edward Blount, an English banker 
 settled in Paris, undertook to raise money in 
 England for the construction of a line between 
 Paris and Rouen, if the Government would 
 grant him a concession. The Government pro- 
 mised that, if he would raise one-third 
 (^'600,000) of the required capital in France, 
 and another third in England, they would give 
 liim the concession and advance to him the re- 
 mainder of the capital at three per cent, interest. 
 So, with Mr. Thomas Brassey as the contractor, 
 and a gang of British navvies as workers, the
 
 42 Railways and Nationalisation. 
 
 line was made, and, when it was ready, an 
 Englishman was appointed as locomotive super- 
 intendent, and fifty English drivers in the ser- 
 vice of the London and North-Western Railway 
 Company were, by arrangement with that com- 
 pany, appointed to take charge of the locomo- 
 tives. 
 
 The principle of State aid, thus introduced 
 into France, underwent a further development 
 when, following on the financial troubles of 1839, 
 the Government agreed with a company which 
 had obtained a concession for a line between 
 Paris and Orleans to guarantee payment of in- 
 terest on its capital, four per cent, to be paid to 
 the State in respect to any advances thus made. 
 With a State guarantee of interest, the company 
 naturally found it easier to induce the otherwise 
 reluctant F'rench peasant to invest his savings in 
 their enterprise. 
 
 But, even under these conditions, railway con- 
 struction seemed likely to be very slow in a 
 country where many lines were required, and in 
 1842 a law was passed to facilitate the construc- 
 tion of nine main lines of railway in France 
 under the following conditions : — The State was 
 to acquire the necessary land, level the ground 
 and execute all earthworks, build bridges and 
 stations, etc., while the companies were to lay 
 down the permanent way, provide rolling stock, 
 and operate the lines for the term of their con- 
 cession, at the end of which period the railways
 
 State Aid to Private companies. 43 
 
 would revert to the State, the rolling stock, etc., 
 provided by the companies being taken over at 
 a valuation. There was a further financial 
 crisis in 1847, when the Government again came 
 to the help of the companies, and conferred on 
 them additional advantages, even annulling vari- 
 ous obligations which were pressing somewhat 
 heavily upon them. 
 
 In view of the controversies of to-day, the fact 
 may be recalled that the Republican Government 
 of 1847 seriously considered the question of ac- 
 quiring all the railways then existing in France, 
 and working them as a State system ; but the 
 project was abandoned in favour of a continuance 
 of private enterprise, supplemented by increased 
 State aid. This, indeed, was given on such a 
 scale that of the ;^"6o,ooo,ooo expended on the 
 lines down to the end of 185 1 the State had itself 
 contributed two-fifths. 
 
 Following on the amalgamation policy of 
 1852-7, the six great companies which then came 
 into existence were required by the Government 
 to undertake, without subvention or guarantee of 
 interest, the construction of 1,500 miles of 
 secondary lines. Grave financial troubles re- 
 sulted from their attempts to raise the 
 money in order to comply with this require- 
 ment (railway shares depreciating rapidly, 
 owing to the prospect of ^'160,000,000 of new 
 railway stock being issued in the course of a few 
 years), and in 1859 the Government agreed with
 
 44 Railways and Nationalisation. 
 
 the companies to guarantee payment of interest 
 in respect to these new lines, the sums paid to 
 be, as before, advances only, bearing interest at 
 four per cent. Subsequently very large sums 
 were paid over to different companies in accord- 
 ance with the guarantee in question. 
 
 Even State guarantee of interest, however, was 
 not found sufficient to lead to the provision of 
 all the lines desired, and the Government then 
 resorted to the expedient of making direct sub- 
 ventions in respect to local branches which the 
 companies did not care to touch on any other 
 terms. In this way the Government, prior 
 to 1863, made a contribution of over ;^9,ooo,ooo 
 to the cost of building these particular lines, 
 independently of the guarantee of interest on 
 others. Still more Government grants followed, 
 and departments and communes, also, were 
 authorised to contribute from a quarter to half 
 the necessary capital for building secondary lines 
 in their districts, — a power of which they availed 
 themselves with so much zeal and so little dis- 
 cretion that there was brought into existence a 
 considerable number of lines which seemed un- 
 likely to be able to earn enough to cover even 
 their working expenses. It was mainly a group 
 of these lines that the Government had to take 
 over, in 1878, and convert into a State system of 
 railways. 
 
 In 1879 the Government, adopting what is 
 known as the " Freycinet programme, " resolved
 
 State Aid to Private Companies. 45 
 
 upon the construction, at a cost of ;^ 140,000,000, 
 of some 180 new lines; but they soon found they 
 had undertaken too much, and it was now their 
 turn to seek the help of the companies. Hence 
 the conventions of 1883, under which, among 
 other things, the companies assumed fresh ob- 
 ligations in return for a considerable extension 
 of the " guarantee of interest " principle. 
 
 Altogether, the amount expended by succes- 
 sive French Governments on the construction, 
 completion, or purchase of railway lines has 
 been no less than ^192,000,000, of which sum 
 only ;[^7,ooo,ooo is to be put to the account of 
 the Chemin de Fer de I'Etat, the remainder 
 being in respect to lines conceded to and op- 
 erated by private companies. In addition, there 
 was still owing to the State, at the end of 1907, 
 a sum of ^48,000,000, of which ;^34, 000,000 was 
 on account of advances made, and ;^i4, 000,000 
 for unpaid interest on advances, under the State 
 guarantees to the companies. 
 
 Another interesting fact which might be men- 
 tioned in connection with the French railways 
 is that under a law passed in November, 1897, 
 departments, municipalities and Chambers of 
 Commerce are authorised to raise loans " for the 
 purpose of constructing, altering, or improving 
 any public railway station or stopping place," 
 the amounts thus advanced being repaid, at fixed 
 intervals within a period of not exceeding fifty 
 years, by means of extra charges imposed on
 
 46 Railways and Nationalisation. 
 
 passenger and goods traffic moving in or out of 
 such station, a special account thereof being kept 
 in the books of the railway administration con- 
 cerned. This law applies alike to State and 
 company-owned lines, and has already been 
 taken advantage of in the case of A^arious railway 
 stations, including those at La Rochelle, Nantes 
 and Tonnay-Charente, Nice, Bourg and Manthes. 
 
 In England not only do local authorities 
 refrain from offering any assistance to railway 
 companies in the building or improvement of 
 their stations, but any material alterations made 
 are at once taken advantage of as an excuse 
 for raising the assessment, even though the al- 
 terations may be solely in the public interests, 
 and not bring any extra return whatever to the 
 railwav company. This fact has, in some in- 
 stances, led to railway companies having to 
 decline to carry out station improvements they 
 would otherwise willingly have made. 
 
 Under the French practice it would have been 
 possible for the local authorities or for the Lon- 
 don Chamber of Commerce to raise a loan and 
 advance money to the London, Brighton and 
 South Coast Railway Company towards the 
 expenditure of considerably over ;^ 1,000,000 by 
 that company on the reconstruction of their Vic- 
 toria Station, and on the street widenings and 
 public improvements connected therewith, the 
 loan being repaid out of extra fares and charges 
 which the company would be authorised to
 
 State Aid to Private Companies. 47 
 
 impose on passenger and goods traffic going into 
 or coming out of the station. Under the British 
 practice the company themselves pay the very 
 substantial costs incurred, and get no contribu- 
 tion from the local authorities even in respect to 
 the widening of a portion of Buckingham Palace 
 Road and the approaches to and the roads over 
 the Eccleston and Elizabeth bridges, although if 
 these improvements had been carried out under a 
 County Council tramway scheme the cost would 
 have fallen in part upon the local rates. 
 
 GUARANTEE OF INTEREST. 
 
 The principle of a State guarantee of railway 
 companies' interest is one that has been adopted 
 in various other countries besides France. It 
 helped to smooth the path of several German rail- 
 way companies before the advent of nationalisa- 
 tion. It was resorted to by the Belgian Govern- 
 ment when some of the pioneer railway com- 
 panies there got into financial difficulties. It en- 
 couraged private companies in Denmark to per- 
 severe in their efforts. In Brazil the Govern- 
 ment, in granting concessions to private com- 
 panies, originally guaranteed a percentage — 
 generally from five to seven per cent. — on a fixed 
 capital outlay; but in that Republic the system 
 was, as stated in the Board of Trade Return, 
 " Railways (Foreign Countries and British Pos- 
 sessions)." " not found on the whole to work
 
 48 Railways and Nationalisation. 
 
 satisfactorily, for though some of the lines did 
 so well as to make no call on the Government 
 guarantee, many were constructed with the ap- 
 parent intention of living upon it entirely." 
 
 DENMARK. 
 
 The early railway companies in Denmark re- 
 ceived State aid in various forms. In some 
 instances the Government guaranteed interest at 
 the rate of four per cent. ; in others they sub- 
 scribed to the share capital. The latter pro- 
 cedure subsequently led to a system under which 
 the State gave the companies a fixed amount, 
 generally ;^95o a mile, with the right to take 
 over the lines under certain conditions; though 
 this arrangement was not found to work well, 
 and the State eventually bought up several of 
 the lines which had been so constructed. 
 
 LUXEMBURG. 
 
 In Luxemburg the companies constructing 
 secondary and cantonal (local) railways have re- 
 ceived from the State (by way of practical en- 
 couragement and assistance) mining concessions 
 according to the importance and extent of the 
 lines. One company, which has built 117 miles 
 of railway, has had successively about 1,494 
 acres of mining concessions; another, providing 
 25 miles, was given 350 acres of such conces- 
 sions; and still another, whose line is 27 miles
 
 State Aid to Private Companies. 49 
 
 long, was awarded 380 acres. In the case of 
 the Northern Hne (the Guillaume-Luxembourg), 
 the concession for which was given in i<S56, the 
 Government granted a subsidy towards the cost 
 of construction. 
 
 SPAIN. 
 
 Concerning vSpain the Board of Trade Return, 
 " Railways (Foreign Countries and British Pos- 
 sessions) " says : — 
 
 There are no State ralhvays in Spain, but the 
 State is at present assisting- in the construction oi" 
 a line between Betanzos and Ferrol, levelling- the 
 ground and making the bridges, while the conces- 
 sionaires will lay the rails, build the stations, and 
 finally work the lines, the amount to be thus 
 expended, i.e., 7,193,919 pesetas {£266,^^1) 
 counting as a subvention to the company. There 
 are also other companies in receipt of subvention, 
 amounting" in all to 8,000,000 pesetas (;^296,296), 
 in amounts varying from 25 to 50 per cent, of the 
 cost of building- one line. A recent Act likewise 
 guarantees 4 per cent, interest on lines with a 
 capital of not less than 50,000 pesetas per kilometre 
 .(^2,980 per mile) of line; but this law has not yet 
 conie into force. 
 
 In return for these subventions the State has 
 certain advantages, and will, also, become sole 
 proprietor of the railways at the end of 99 years 
 froni the date of the original concessions. 
 
 GREECE. 
 
 Of the position in Greece the Board of Trade 
 Return says : — 
 
 There are in Greece no State railways, properly
 
 50 Railways and Nationalisation. 
 
 so called ; that is to say, none of the railways have 
 been either wholly or partly acquired by the State. 
 But the State has an interest in most of the rail- 
 ways, in some cases a large interest, having spent 
 considerable sums in the construction of the lines 
 and receiving a certain share of the profits. There 
 are thirteen lines now working and administered by 
 companies. For all but three of these the State has 
 incurred expenditure in the form of either loans, 
 grants, or expropriations. 
 
 An appended table shows that the State ex- 
 penditure on railways in Greece, under the three 
 heads just mentioned, amounted at the end of 
 1904 to ;^3,627,9gi, and the direct receipts by 
 the State from all the companies during the 
 course of that year were ^'8,061 ; though, adding 
 indirect revenues in the form of taxes, dues, 
 stamps, etc., the total receipts of the State from 
 the railways in 1904 came to about £-\5,^5o. 
 
 INDIA. 
 
 In India every company which has constructed 
 a railway has, the Committee on Indian Railway 
 Finance and Administration state, " received 
 more or less assistance from the Government, 
 varying from a guarantee of interest to a free 
 grant of land onl}'." The latter practice has 
 been so general that the Committee say con- 
 cerning the modern companies that " in prac- 
 tically every case they have been provided with 
 land free of cost."
 
 State Aid to Private Companies. 51 
 
 CANADA. 
 
 Aid to railways in Canada lias comprised : 
 
 (1) Money grants by (a) the Federal Parliament, 
 (6) Provincial Legislatures, (c) municipalities; 
 
 (2) loans ; (3) Government guarantee of interest ; 
 (4) Government issue of debentures by way of 
 loan to railway companies; (5) Government 
 guarantee of railway bonds; (6) direct issue of 
 Government bonds to railways with a first mort- 
 gage on the companies' properties; (7) Imperial 
 Government guarantee of capital ; (8) share 
 capital locally distributed; (9) land grants; (10) 
 release of Government loans by placing them 
 behind other loans; (11) composition of Govern- 
 ment claims; (12) assumption by Government 
 of liabilities incurred by municipalities; (13) 
 direct construction by Government; (14) com- 
 bined land and money grants; (15) construction 
 in part by Government and part by company, 
 the latter leasing the Government-built road. 
 
 The amount of public money invested in the 
 construction of steam railways in Canada to June 
 30th, 1906, is shown by the following table, the 
 figures for which I take from The Canada Year 
 Book, 1906 : — 
 
 Dominion Government Aid : — 
 
 Loans | 15,664,533 
 
 Bonuses ... ... 183,562,951 
 
 Subscriptions to shares 
 
 or bonds ... 
 
 Paid up $194,188,584 
 
 £ 2
 
 52 Railways and Nationalisation. 
 
 Brought forivard 1194,188,584 
 
 Provincial Government Aid :— 
 
 Loans $ 4,648,956 
 
 Bonuses 39)877,676 
 
 Subscriptions to shares 
 
 or bonds ... 300,000 
 Paid up $43,278,022 
 
 Municipal Aid : — 
 
 Loans $ 4,066,854 
 
 Bonuses 12,371,994 
 
 Subscriptions to shares 
 
 or bonds ... 2,610,000 
 Paid up 817,135,164 
 
 Total paid up ... ^254,591,770 
 
 'i'he figures under the head of " Dominion 
 Government Aid " include costs of construction 
 of Government-owned railways (Inter-Colonial 
 Railway and Prince Edward Island Railway). 
 Excluding these items, the amount paid by the 
 Dominion Government for other than Govern- 
 ment railways, to 1906, was $118,474,316. 
 
 In addition to direct financial assistance, 
 Canadian railways have been aided by extensive 
 grants of land given, not alone for the building 
 of their lines, but also to enable the companies 
 to raise more capital by selling off such land to 
 their own advantage, and especially as it in- 
 creased in value, following on the construction 
 of the railway. In the case of the Canadian 
 Pacific Railway, which a private company under- 
 took and completed after successive Govern- 
 ments had shown themselves hopelessly incom- 
 petent to accomplish the task, the terms agreed
 
 State Aid to Private Companies. S3> 
 
 to included a subsidy to the company of 
 $25,000,000; a grant of 25,000,000 acres of land 
 (of which 7,000,000 acres were afterwards taken 
 back at $1.50 per acre); and the transfer to the 
 company when completed of the 700 miles of 
 line included in sections already under construc- 
 tion. 
 
 NEWFOUNDLAND. 
 
 Newfoundland is mainly indebted for her rail- 
 way system to the late Sir Robert Gillespie 
 Reid, a Scotsman who, after doing much im- 
 portant work in the building of railway bridges 
 in the United States and Canada, proceeded to 
 Newfoundland, and secured a contract to con- 
 struct and operate for 10 years a trans-insular rail- 
 road and telegraph system, in return for a grant of 
 5,000 acres of land, in alternate sections, for each 
 mile of railway built. The line was completed 
 to the extent of 600 miles in 1897. In the fol- 
 lowing year he made a further contract with the 
 Government to operate all trunk and branch 
 lines in the island for 50 years, paying $1,000,000 
 for the reversion of the whole at the end of that 
 period, and receiving additional land conces- 
 sions amounting to about 5,500,000 acres. 
 Under a subsequent agreement the colony was 
 given the option of recovering the railway sys- 
 tem at the end of the 50 years by paying back 
 the $1,000,000 with interest and a further sum 
 for betterments. Mr. Reid, who died in June,
 
 54 Railways and Nationalisation. 
 
 1908, was known as one of the largest land- 
 owners in the world. 
 
 UNITED states. 
 
 Pioneer railway companies in the United 
 States of America got assistance in the form of 
 land grants, supplemented in some instances by 
 direct financial aid. Mr. J. M. Trout says in 
 his book on "The Railways of Canada" that 
 the Pacific Railways Company had grants of 
 public lands amounting altogether to 35,000,000 
 acres, in addition to which the United States 
 Government issued $63,616,000 in six per cent, 
 currency bonds in aid of the undertaking. The 
 Northern Pacific Company had the right to take 
 alternate sections to the total extent of over 
 74,000 square miles. Very large grants of land 
 were also made by the United States Congress 
 to the different States in order that these, in turn, 
 could effect a free transfer of them to the railway 
 companies, whose finances, also, they materially 
 assisted by direct contributions, by guarantees 
 of interest (Alabama, for instance, guaranteed 
 eight per cent, interest on one of her railways to 
 the amount of $16,000 per mile of completed and 
 equipped railway), or in other ways. The com- 
 panies were aided, also, by being exempted from 
 taxation for a certain term of years, and by being 
 allowed to construct the initial lines in the most 
 primitive fashion, with a view to supplying im- 
 mediate wants, the understanding being that
 
 State Aid to Private Companies. 55 
 
 betterments would follow as the traffic grew and 
 the companies had more money. 
 
 In 1870 it M^as estimated that public bonds 
 to the extent of $185,000,000 and grants of 
 215,000,000 acres of land had been given to 
 various railroad corporations up to that time by 
 the United States Government and municipali- 
 ties. 
 
 In later years, and especially in the neighbour- 
 hood of large cities, American railway com- 
 panies have had to pay heavily for the land they 
 wanted for new lines or widenings. But 
 the practical assistance given in the earlier 
 days was of enormous advantage both in pro- 
 moting the work of railway construction and in 
 allowing of economical operation ; and these fac- 
 tors in the situation have a distinct bearing on 
 present-day transport conditions in the United 
 States. 
 
 experiences of BRITISH RAILWAYS. 
 
 I have selected these examples from countries 
 of various types, in different parts of the world, 
 in order to illustrate the kind of help which 
 States in general have either found it necessary,. 
 or thought it desirable, to extend to private com- 
 panies undertaking the responsible and costly 
 work of railway construction. When, from this 
 survey, we pass on to ask what successive British 
 Governments have done to render financial or 
 other practical assistance to private companies
 
 56 Railways and Nationalisation. 
 
 in the construction and operation of railways in 
 Great Britain (as distinct from Ireland) the reply 
 is — Nothing whatever ! There has been no 
 guarantee of interest; there have been no loans, 
 subsidies, bonuses, or free grants of land for 
 railway purposes, by either Imperial or local 
 authorities; there has not even been any lighten- 
 ing of the railway burdens and requirements in 
 directions in which sympathetic help and en- 
 couragement could have been given without 
 either encroaching on the public funds or 
 making any pretence of generosity. 
 
 In Great Britain the State stood passively by 
 whilst land-owners raised endless difficulties in 
 the way of railway construction and practised 
 the most shameless extortion on railway com- 
 panies, from whom the uttermost farthing was 
 wrung before they could get the land on which 
 their lines were to be built. The State has 
 sanctioned and encouraged a system of Parlia- 
 mentary procedure, in regard to the granting of 
 railway companies' powers, so costly that a 
 competent authority once estimated the ex- 
 penditure on this account alone at an average of 
 ;^4,ooo per mile of line actually constructed. 
 The vState enforces on the companies principles 
 of railway construction based on absolute com- 
 pleteness from the start — principles excellent for 
 the public, but much more costly than the system 
 adopted in countries where economy has been 
 allowed at first, with betterment to follow. The
 
 Statf An-) TO Private Companies. 57 
 
 vState has fostered a competition, and has im- 
 posed restrictions, regulations and conditions in 
 regard to safety appliances, hours of labour, un- 
 remunerative workmen's trains, etc., which, how- 
 ever justifiable — should that always have been 
 really the case — have added materially to the 
 working expenses. The State, also, itself levies 
 on the railways ;6350jOOo a year for passenger 
 tax, and ;^2,ooo,ooo a year for Income Tax, and 
 tolerates the policy followed by those local 
 authorities throughout the land to whom the 
 railways have long been a milch cow for the 
 purposes of local taxation, the sum total of such 
 taxation imposed on the railway companies of 
 the United Kingdom being now close on 
 ;^5,ooo,ooo a year. 
 
 State Control of Rates and Charges. 
 
 Not only, therefore, has there been no State 
 aid to railway companies in Great Britain, as in 
 other countries, but our own State policy has led 
 to the financial obligations devolving on railway 
 companies being greater than they should be, 
 and greater far than the corresponding obliga- 
 tions resting on railway companies elsewhere. 
 The enormous expenditure thus involved could 
 be met only by the rates, fares and charges to 
 be paid by users of railways built under these 
 particular conditions. Yet even here the State 
 has thought it imderstood the intricacies of rail 
 transportation better than the railwav experts,
 
 58 Railways and Nationalisation. 
 
 and, while showing little regard for investors 
 who have found the money for building and 
 operating the lines, thus saving the State from 
 the trouble and financial complications that a 
 system of Government railways might have in- 
 volved, has aimed at keeping these rates, fares 
 and charges down to the lowest possible pro- 
 portions. 
 
 To this end there have been Acts of Parlia- 
 ment, commissions, joint committees, and 
 departmental committees without end. Traders 
 throughout the land have been encouraged to 
 send in every conceivable complaint, however 
 trivial; the railway companies, besides incurring 
 serious dislocation of their business in attending 
 inquiries and meeting such complaints, have 
 been involved in an expenditure which, in the 
 aggregate, might have allowed of the reduction 
 of not a few of the rates complained of ; and asser- 
 tions by traders having votes have carried far 
 greater weight with politicians in office — and 
 desirous of staying there — than the protests and 
 explanations of companies with no votes at all. 
 
 The whole position is supremely illogical. To 
 the average person, who views the matter with- 
 out prejudice, it must appear that the railway 
 companies have sinned less than they have been 
 sinned against, and that State and people must 
 accept some, at least, of the responsibility for 
 present-day developments of past policy. 
 
 Admitting that certain of these developments
 
 State Aid to Private Companies. 59 
 
 are not only open to criticism but capable of 
 reform, it may still be argued that a complete 
 transfer of the railways of the United Kingdom 
 to the State, with all the consequences such 
 transfer would involve, should not be undertaken 
 without the most absolute proof of the need and 
 the desirability of so revolutionarv a change.
 
 6o Raiiavays axd Nationalisation , 
 
 CHAPTER VI. 
 STATE RAILWAY FINANCE. 
 
 When the advocates of State ownership at- 
 tempt to deal with the financial results of 
 nationalised railways, they have a twofold argu- 
 ment which, from their particular points of view, 
 may be applied satisfactorily to either profits or 
 losses. Should the raihvays in question show, 
 or claim, a profit, it is said, " See what an 
 advantage it is to the State to control all that 
 money instead of allowing it to go into the 
 pockets of private speculators." Should there 
 be no profit, or a loss, their plea is, " Railwavs 
 ought to be run in the interests of the com- 
 munitv, and not with anv idea of making a profit 
 at all."" 
 
 As a rule, however, the said advocates do 
 endeavuur to show^ that State operation of a 
 unified railway system is more economical, and 
 leads to better financial results, than the com- 
 pany operation of different lines. Lord 
 Brassey, for example, in speaking on railway 
 nationalisation at the Autumn meeting of the 
 Association of Chambers of Commerce in Sep- 
 tember, 1907, said : " In Germany and Russia,
 
 State Railway Finance. 6i 
 
 in Belgium, and more recently in Italy, railways 
 have become the property of the State. The 
 requirements of the public are fully considered ; 
 the results to the Exchequer have been satis- 
 factory." Sir John Gorst, when advocating 
 nationalisation in his Liverpool speech on 
 March 7, 1908, is reported to have spoken of 
 "the great surpluses of the German, Belgian, 
 Swiss, and Australian State railways as proof 
 of the financial success of national ownership;" 
 and Mr. Chiozza Money, M.P., and others havei. 
 had much to say to the same effect. I propose, 
 by looking into the results of State railways in 
 general, to let the reader judge whether or not 
 their financial success really has been so great as 
 the nationalisation party assume. 
 
 The usual way of showing a " profit " on the 
 operation of a State railway is to set down the 
 gross receipts and working expenditure for the 
 year, and to represent as " profit " the difference 
 between the former and the latter, without 
 making any allow"ance for payment of interest on 
 capital expenditure, etc.; although, when the 
 fixed charges are added to the figures, the 
 balance may at once be turned into a deficit. 
 There is also a disposition to ignore other in- 
 convenient items; to mix up the railway accounts 
 with the national or colonial debt; and to 
 manipulate the figures generally in such a way 
 as to give an impression that the financial posi- 
 tion of the State lines may be regarded with
 
 62 Railways and Nationalisation. 
 
 complete satisfaction. Examples alike of these 
 tendencies and of unremunerative working of 
 Government-owned lines, whether with or with- 
 out an unduly favourable presentation of the 
 accounts, are especially afforded by the railways 
 of Australasia. 
 
 NEW SOUTH wales. 
 
 In his " Wealth and Progress of New South 
 Wales," for 1894, ^^^' ^' A. Coghlan said con- 
 cerning the railways of that Colony : — 
 
 The cost of the lines opened for traflfic on June 30, 
 1895, was ;£,'36, 61 1,366. Of this amount ;^^903,565 
 has been provided out of the Consolidated Revenue 
 of the Colony, and debentures to the amount of 
 ;£^i,266,i46 have been finally paid off. The so- 
 called reduction of the railway debt is purely im- 
 aginary, seeing that the bulk of debentures retired 
 were renewed out of fresh loans, and the sum paid 
 from revenue to redeem loans was not furnished by 
 railway profits. 
 
 The same authority, in his "Statistical 
 iVccount of Australia and New Zealand, 1903-4," 
 said : — 
 
 In establishing the financial results of the working 
 of the lines, it is the practice of the railway autho- 
 rities to compare the net returns with the nominal 
 rate of interest payable on the railway loans out- 
 standing, ignoring the fact that many loans were 
 floated below par, and that the nominal is not the 
 actual rate of interest. A true comparison, of 
 course, is afforded by taking the rate of interest 
 payable on the actual sum obtained by the State
 
 State Railway Finance. 63 
 
 for its outstanding loans .... The rate of return 
 on capital represents the interest on the gross cost 
 of lines. In some cases the nominal amount of out- 
 standing debentures is less than the actual expen- 
 diture, owing to the fact that some loans have been 
 redeemed ; but as the redemption has been effected 
 by means of fresh loans charged to general service, 
 or by payments from the general revenue, and not 
 out of railway earnings, no allowance on this 
 account can reasonably be claimed. 
 
 Then in the report of the New South Wales 
 
 Government railways and tramways for the year 
 
 ending June 30, 1905, " the result of the year's 
 
 working " in regard to the railways was given 
 
 thus : — 
 
 Earnings... " ... ... ... ... ^3,684,016 
 
 Expenditure 3,192,147 
 
 Balance after paying working 
 
 expenses ^"1,491,869 
 
 To tlie casual observer this looked as if the 
 said balance represented profit. But on refer- 
 ring to the " general remarks "in the report one 
 hnds that the interest due on the capital invested, 
 calculated at 3'582 per cent., amounted to 
 ^^1,526,948, or ;^35,o79 in excess of the above- 
 mentioned balance, which thus represented a 
 deficit. One also learns, from the same 
 " general remarks," that on the recommendation 
 of a Special Committee appointed by the Govern- 
 ment a sum of ^600,000 advanced by the 
 Government about twenty-five years ago for the 
 purchase of material and general stores had been
 
 64 Railways and Nationalisation. 
 
 added to the capital account " for the first 
 time," while the committee further recom- 
 mended that a sum of ;6456,639 (^""434, 184 for 
 railways and ^22,455 for tramways), having 
 been defrayed from the Consolidated Revenue, 
 and therefore not a debit against the State, 
 should he regarded as " non-interest bearing 
 capital." 
 
 It was found possible to claim a real surplus 
 for 1905-6, for which year, accordingly, the 
 figures were set forth thus : — 
 
 Earnings ^4,234,791 
 
 Less expenditure ... ...^2,308,384 
 
 „ interest on capital ... 1,541,427 
 
 3,849,811 
 
 Surplus ^384,980 
 
 In the Chief Railway Commissioner's report 
 for 1906-7 the surplus, after payment of interest 
 on capital, is given as ^610,955. The same 
 report shows that ;^5o8,70i of the total amount 
 expended on construction and equipment of rail- 
 ways had been " paid from the Consolidated 
 Revenue," and, it is added, " no interest is pay- 
 able thereon." 
 
 Between a " balance after paying working ex- 
 penses " and an actual "surplus" there is, of 
 course, a very material difference; but while, in 
 the former case, the " interest on capital " is not 
 mentioned in the summary, or until the " general 
 remarks" are reached, there is no longer any
 
 State Railway Finance. 65 
 
 reluctance to give due prominence to so sub- 
 stantial an item when a real surplus can at last 
 be shown. It is further obvious that the con- 
 trollers of a Colonial Government railway have 
 an advantage over a private company in being 
 able both to use public money for twenty-five 
 years without having to regard it as " capital," 
 and to get from the Consolidated Revenue, as 
 "capital," substantial sums which are not to 
 bear any interest. 
 
 Nor must one ignore the fact that there are in 
 New South Wales a score or so of un remunera- 
 tive lines on which, as the Chief Railway Com- 
 missioner's reports show, the losses in the four 
 years, 1903-1906, after providing for working ex- 
 penses and interest, amounted to ;6i'393'974- 
 
 For an example of independent Australian 
 (opinion I turn to the PastoroUsts' Review (Mel- 
 bourne) for October 15, 1907, where I find the 
 following remarks in reference to a proposal for 
 the establishment of a Government line of 
 steamers, the chief argument advanced in sup- 
 port of such project having been the alleged 
 success of the Colonial railways: — - 
 
 The fact is that not a sing^le Government has 
 made a success of its railways. They have always 
 really been bankrupt, and get deeper and deeper 
 into the mire every year, besides which in some of 
 the States they are years behind the times. If the 
 lines were run by private companies with no general 
 taxpayer to draw upon, they would have been 
 wound up years ago. The fact is that enormous 
 
 F
 
 66 Railways and Nationalisation. 
 
 sums have been procured from the general taxpay.i 
 to make g"ood the deficits extending over many 
 years, and to purchase railway material. These 
 have never been debited to the railway accounts as 
 they should have been, and would be in any business 
 undertaking. Take the New South Wales railways, 
 alone, for example. Their accumulated deficit is 
 over ;^25, 000,000 already, and this sum gets larger 
 every year. The railways would be hopelessly in- 
 solvent if it were not for the taxpayer keeping them 
 solvent every year. . . . Government undertakings 
 never paid interest on cost yet, nor will they ever do 
 so. They only exist on subsidies from the tax- 
 payers. 
 
 VICTORIA. 
 
 When, on February 16, 1907, delivering a 
 speech in which he made an exhaustive review 
 of his own administration, Mr. Bent, Premier 
 for Victoria, said concerning the railways of the 
 Colony : *' We have practically ^'40,000,000 loan 
 money employed in the railways, and a few 
 years ago we were losing ;^'i,ooo a day on them, 
 and the rolling stock had got almost to danger 
 point." He took credit for the later improve- 
 ments, and for reductions in freights conceded in 
 1906; yet even the surpluses of the last few years 
 would seem to be due to special advantages 
 available in the case of a Government-owned 
 Colonial railway, though impracticable in that of 
 company-owned railways in the old world, while 
 if, in addition to the surpluses now being 
 claimed, one takes into account previous deficits.
 
 State Railway Finance. 67 
 
 the tinancial results as a whole are shown in a 
 very unsatisfactory light. 
 
 The deficits admitted in 1901-2 and 1902-3, 
 after payment of working expenses, special ex- 
 penditures, and interest charges, were ;^' 197, 227 
 and ;6'365,254 respectively. (I shall refer later 
 on to the earlier results.) Since then the sur- 
 pluses claimed, after making the same allow- 
 ances, have been : ;^5i9 in 1903-4; ;^649 in 
 1904-5; ^'198,965 in 1905-6; and /:279,i32 in 
 1906-7. But the report of the Railway Com- 
 missioners for the last-mentioned financial year 
 further mentions that the " amount provided out 
 of Consolidated Revenue for the construction, 
 equipment, stores, etc., of the railways, and on 
 w'hich no interest is charged," stood on the 30th 
 June, 1907, at ^'3,849,939, an increase during 
 this year of /'9i,959, made up as folk)ws : 
 Amount expended under Surplus Revenue Acts 
 and debited to simdry works of construction, 
 t^tc, /,'74,58o; amount expended under appro- 
 priations and votes, and debited to sundry works 
 of construction, etc., ;6i7j379- It is obvious 
 that if interest had been allowed for in respect 
 to these items, the financial results of the year's 
 operations w^ould appear in a very different liglit 
 from that in which they are presented. 
 
 Then the working expenses of the Victorian 
 railways are lightened by the omission from 
 them of any allowance in respect to pensions and 
 
 F 2 •
 
 68 Railways and Nationalisation. 
 
 gratuities. Tiius the Commissioners' report for 
 1 c)o6-7 says : — 
 
 The amounts paid in pensions and gratuities, 
 which are not included in the working expenses, 
 were ;^'94,926 and ;£^i 5,955 respectively, a total of 
 ;£3"iio,88i, as compared with ;^92,994 and ;^6,643 
 respectively, a total of ^99,637, in the previous 
 year. 
 
 Another material point to bear in mind is that 
 under " An Act to further amend the law 
 relating- to the Victorian railways," passed in 
 1896, it was enacted (Section 14) that — 
 
 In the following cases (that is to say) : — 
 
 (a) Where Parliament makes any alteration in 
 
 the law which occasions any increase of 
 expenditure by the Commissioner or any 
 decrease of the railway's revenue; or 
 
 (b) Where Parliament or the Governor in 
 
 Council directs the Commissioner to carry 
 out any system or matter of policy which 
 occasions or results in any increase of 
 expenditure by the Commissioner, or any 
 decrease of the railway's revenue; or 
 
 (c) Where Parliament authorises the execution 
 
 of any new line of railway which when 
 vested in the Commissioner does not pro- 
 duce suflicient revenue to cover the in- 
 terest on its cost of construction, and the 
 expense of its maintenance — 
 the annual amount of the increase of expenditure 
 or decrease of revenue or of the loss resulting from 
 such new line of railway shall be from time to time 
 notified in writing by the Commissioner to the Com- 
 missioners of Audit, and if certified by them, shall
 
 vState Railway Finance. 69 
 
 be provided by Parliament in the annual Appropria- 
 tion Act and paid to the Commissioner. 
 
 In the report of the Railway Commissioners 
 for 1905-6 it was stated that the amounts received 
 from the State Treasury under vSection 14 of 
 the Act of i8g6, and included in the gross re- 
 venue, were : For decrease in the revenue due to 
 the carriage at reduced rates of agricultural pro- 
 ducts, ^41,787; of Victorian coal, ^5,676; on 
 account of enhanced cost of Victorian coals pur- 
 chased during the year owing to a direction of 
 the Governor-in-Council fixing the prices to be 
 paid, ^5»i35- 
 
 The Commissioners recommended, however, 
 that in view of the improved position and pros- 
 pects of the railways, the allowance to be pro- 
 vided by Parliament for the carriage of agricul- 
 tural produce at reduced rates should, in the 
 ensuing year, be reduced to one-half of what was 
 actually being paid, or one quarter of the 
 amount that might be asked for under the Act 
 of 1896. This further reduction was made in 
 1906-7, the Parliamentary allowance on the item 
 in question being, for that year, ;^25,ooo. The 
 Commissioners then announced that, owing to 
 the continued improvement in the railway 
 revenue, no further payments on account of the 
 carriage of agricultural produce would be applied 
 for from the Treasury ; which I take to mean that 
 whilst agricultural products are still being car- 
 ried at unremunerative rates, the railways are
 
 70 Railways and Nationalisation. 
 
 now able to bear the loss themselves, without 
 asking Parliament for a subsidy from the 
 general finances of the Colony. In making 
 their announcement, however, in their report for 
 1906-7, the Railway Commissioners added : — 
 
 The reductions which have been made durino- the 
 last five years in these payments [i.e., payments 
 from the Treasury], tog-ether with the reductions 
 made during- that period in the rates on agricultural 
 produce, represent on this account alone a decrease 
 in the net revenue of, approximately, ;^ioo,ooo per 
 annum. 
 
 The State Treasury allowance to the railways 
 in 1906-7 for decrease in the revenue due to the 
 carriage of Victorian coal at reduced rates was 
 ^7,404 ; while in the same year the amount which 
 the Treasury re-imbursed to the railways in re- 
 spect to the enhanced cost of Victorian coal for 
 locomotive purposes owing to a direction of the 
 Governor-in-Council fixing the price to be paid 
 for such coal was ^3,893. 
 
 The amount of money either actually wasted 
 or, presumably, proposed, at some time or other, 
 to be wasted in Victoria on the building of un- 
 necessary lines is shown by a table given in the 
 report for 1906-7 under the heading of " Capital 
 expenditure incurred in respect of lines now 
 closed for traffic, and surveys of lines, not con- 
 structed, on which interest is charged against 
 the railways." Seven lines, one learns, of a 
 total length of 46 miles, and constructed at an
 
 State Railway Finance. 71 
 
 approximate capital cost of /^,i,8'j,^2j[, have been 
 closed for traffic, two of these (including one 15 
 miles long) being lines which had been dis- 
 mantled, 'ilie approximate cost of lines sur- 
 veyed but not constructed is given as /'3 16,461. 
 
 The following remarks made by the Victorian 
 Railway Commissioners in their report for 
 1905-6 as to the disposal of the surplus for that 
 year throw a further light on the financial condi- 
 tions under which Government railways may be 
 operated : — 
 
 It is to be regretted that the revenue of the rail- 
 ways for the year in excess of the working- expenses 
 and interest charges has not been made available 
 to entirely liquidate the extraordinary liabilities 
 appearing in our balance-sheet, amounting- at 30th 
 June, 1906, to ;^:i92,762. 
 
 We respectfully submit and strongly recommend 
 that the surplus revx'nue of the railways, that is, tlie 
 revenue in excess of the working expenses and in- 
 terest charges in full on the Railway Debt of tlu; 
 State, should be devoted 
 
 First — To the liquidation of liabilities chargeable 
 to revenue, thus eliminating from the balance-shcf:'.- 
 such objectionable items as " Deficiency in Rolli.;g 
 Stock, ;^'i54,4i3," and " Expenditure on Renewals 
 of way and works, and replacement of rolling- stock 
 temporarily charged to capital, remaining to l;e 
 repaid out of revenue ;^^38,349. " 
 
 Second — Towards providing the funds requiriid 
 for such additions and improvements of existitig^ 
 lines and for additional rolling stock as may Le 
 sanctioned by Parliament, thus to that extent 
 obviating the borrowing of additional money by the 
 State for such purposes, thereby increasing the debt 
 of the State.
 
 72 Railways and Nationalisation. 
 
 Third — Towards building- up a revenue reserve 
 fund, so that in a year or in years during- which, 
 by reason of unfavourable seasons or other causes, 
 the net revenue of the railways is not sufficient to 
 pay in full the interest charges on the Railway Debt 
 of the State, the deficiency may be made good out 
 of this Reserve Fund instead of out of the Consoli- 
 dated Revenue, as in the past. 
 
 The net result of the operation of the Vic- 
 torian railways is thus described in an article on 
 " The Failure of State-Owned Railways," which 
 appeared in the Melbourne publication, Liberty 
 and Progress, for February 25, 1908 : — 
 
 The Victorian deficit to date is, as far as can l:e 
 ascertained from the very imperfect accounts pub- 
 lished before the present Commissioners took office, 
 ^^7,758,152; and, though in the last four years the 
 Commissioners have paid surpluses amounting to 
 ;^'478,866 into the Treasury, yet as they have not 
 charged themselves with the pensions paid during 
 those four years to employes and officers of 
 the department, which amount to ;^4i3,7io, that 
 surplus is reduced at a stroke to ;^65,i56. More- 
 over, 1,986 persons are now ranked as being en- 
 titled to pensions or compensation, and the list, 
 which last year entailed a charge of ;;/5"i 10,881, con- 
 tinually increases. Indeed, since 1889 it has grown 
 from ;£^8i,284 to ;^i 10,881, an increase of ;^29,597. 
 
 In a later issue (that for April 25, 1908) the 
 same periodical, quoting from the Victorian 
 Railway Commissioners' " General comparative 
 statement for 15 years, from July i, 1892, to 
 June 30, 1907," shows that the total dead loss on 
 the Victorian railways was not ;^7,758,i52, as 
 previously stated, but ;^ii,504,9o6.
 
 vStatr Railway Finance. 73 
 
 QllEENSLAND. 
 
 The figures just quoted in regard to Victoria 
 suggest how inadequate annual reports are for 
 the purpose of affording a comprehensive survey 
 of a Colonial railway's finances as a whole. In 
 dealing, therefore, with the Government rail- 
 ways in Queensland, I think it better to turn at 
 once to such a comprehensive survey of them 
 as I find in Liberty and Progress for March 25, 
 1 908 , 
 
 Nothing, apparently, should be easier, that 
 journal remarks, than to find out the revenue of 
 the Queensland railways and the return they 
 make upon the capital invested, inasmuch as 
 the Commissioner of Railways issues an annual 
 report which is full of information. But his 
 details do nut agree with the still fuller and 
 more explicit account given by the Registrar- 
 General in " Annual Statistics of Queensland," 
 while further divergencies are found in an 
 "Ofificial Year Book," edited by Mr. Hughes, 
 of the Statistician's Department, and another by 
 Mr. Thornhill Weedon, who also holds official 
 rank as a statistician. " None of these," says 
 the writer of the article, " agree with the others, 
 nor does Mr. Coghlan's examination agree with 
 any of them. None of them covers the entire 
 ground except the Registrar-General, who 
 annually accounts for every sixpence of the 
 receipts and expenditure of the State, and he
 
 74 Railways and Nationalisation. 
 
 frankly acknowledges the manner in which the 
 earlier accounts were what might be called 
 'cooked,' though 'favourably presented' is, 
 perhaps, the politer term." 
 
 As an example of this tendency it is shown 
 that in the ofificial return of working expenses 
 in 1868 it was not thought necessary to include 
 under this head the salaries of the Railway Com- 
 missioner, of the engineer, or of their respective 
 staffs. 
 
 Another important factor in the situation is 
 that when Queensland decided to have her rail- 
 ways her population was very small, her credit 
 was low, and the investment was not popular 
 with financiers. In the result all those of her 
 railways that were constructed before 1872 were 
 made with money which had cost over 6 per cent. 
 Construction began in 1865, and the result of the 
 first five years' working was a loss of ^'403,266, 
 without taking into account the omitted salaries. 
 For the ten years from 1870 to 1879 the figures 
 of the various conflicting official reports leave no 
 room for doubt that there was a loss of 
 ^'1,376,606. In the decade 1880-89 the loss 
 amounted to ;{,'2,4i8,658, making a total loss to 
 that date of ^'4, 198,530. For the period 
 1890-99 the shortage was ^3,284,057, raising the 
 total deficit to ;^7,482,587. The writer of the 
 article concludes : — 
 
 The end of the century i^axe little liope of im- 
 provement. The official Year-Book tersely says the
 
 State Railway Finance. 75 
 
 total capital cost to the year 1900 was ;^2 1,495, 916. 
 The Registrar-General, however, appears to have 
 adopted the lower figures of the Commissioner, who, 
 in his last Report, treats a sum of ;^^i,4i8,784 tis 
 being a suspense account. The total expended, 
 acording to the Commisioner, is ;^2 1,839,081 on 
 opened lines, and ;£j'8i6,439 on unopened lines, 
 making- together ;^^22,725,520. But the total 
 amount charged against the railways in the state- 
 ment of the public debt is /i"24, 144,305, and that is 
 the sum on which the State pays interest. The 
 magnitude of the amount, the imperfection of ihe 
 accounts in earlier years, and the general desire to 
 minimise, as far as possible, the disastrous results 
 of governmental arrangement of an enterprise left 
 in older countries to commercial people who under- 
 stand it, may be inferred from the fact that no two 
 accounts agree, and also from the silence of the 
 experts as to the actual yearly burden. The net 
 earnings and net losses are given only in percen- 
 tage, excepting by the Registrar-General, and there 
 is a difference of ;^i,6i8,542 between his estimate 
 of the total cost to the year 1900 and that of the 
 official Year-Book. Mr. Coghlan, agreeing with 
 neither, gives a third estimate, putting the cost at 
 ;^205,468 less than that named by the Registrar- 
 General, from whose office he must, presumablv. 
 have obtained his information. 
 
 The seven years, 1900-1906, added ^2,532,874 
 to the previous deficit, thus increasing it to a 
 total of ;^io,oi5,46i. These figures, however, 
 it is explained, are only approximate, the lowest 
 official return being accepted, even when it 
 leaves large sums to the so-called "suspense 
 account " of close on ,^1,500,000, " The net 
 result," the writer pertinently says, " is that up-
 
 76 Railways and Nationalisation. 
 
 wards of ten millions has been lost in a vain 
 attempt to manage a business in which, from 
 first to last, little more than twice that sum has 
 been involved." 
 
 Further examination of the Queensland ac- 
 counts shows that in only three out of the 45 
 years over which they extend has the balance 
 available for payment of interest and all other 
 purposes, after covering working expenses, 
 amounted to over 4 per cent.; in seven years it 
 has been between 3 per cent, and 4 per cent.; 
 in ten it has ranged between i per cent, and 
 2 per cent.; and in six it has been less than 
 I per cent. 
 
 SOUTH AUSTRALIA. 
 
 Thanks to what is described as a " splendid 
 season " in the year ending June 30, 1906, the 
 South Australian railways, on which the capital 
 outlay has been ^{^13, 610,520, were able to show 
 " working results " for that year as follows : — 
 
 Earnin-s £h349,^(>S 
 
 Expenditure x^764,385 
 
 Interest on Loans ... ... 474,955 
 
 1,239,340 
 
 Surplus /i 10,425 
 
 " Such surplus revenue should, in future," 
 .says the Railway Commissioner in his report to 
 the Government, "be carried to a reserve ac- 
 count to meet deficiencies in unprofitable years 
 and replacements as found necessary."
 
 State Railway Finance. 77 
 
 But one finds once move how misleading it 
 may be to judge of a Colonial railway on the 
 basis of a single recent report without reference 
 to what has gone before. Turning to the merci- 
 less critic in Liberty and Progress, I read :• — 
 
 The South Australian lines, since their beg^innin^, 
 cost in working- expenditure ;£^i7,8o3,o7g, and in 
 interest on the sum invested in them ;£'i2,85i, 507, 
 a total of ;2^30,654,586. Their g-ross receipts for 
 the entire time have been ^^29, 144, 150, so that the 
 net loss has been ^1,510,436. 
 
 To this must be added the loss on the Northern 
 Territory lines, which from their beginning- to June 
 30 last amounted to ;^939,76o. Consequently, 
 without counting- anything- for the depreciation of 
 the plant, which certainly cannot now be worth the 
 ;^i4,904,686 expended upon it, the total loss to 
 South Australia is nearly two and a half millions — 
 ^2,450,196. 
 
 TASMANIA. 
 
 Concerning the Tasmanian railways, the Mel- 
 bourne journal reproduces balance-sheets for the 
 years 1886, i8g6, and IQ06, and says : — 
 
 The pith of the matter is that Tasmania has 
 expended ;^3,927,7i4 in the construction of rail- 
 ways which may or may not now be worth their 
 prime cost. In thirty years these railways have 
 earned a gross income of ;£^3,678,047, at a cost of 
 ;^2,892,886, leaving- the comparatively trivi'il 
 balance of ^^785,161 to set ag-ainst the enormous 
 interest charge of ;^'3,i 12,599, ^"d saddling- her 
 with a net loss of ;^2,327,438. 
 
 For 1905 the net loss on the Tasmanian rail-
 
 78 Railways and Nationalisation. 
 
 wiiys, after allowing for interest on capital, was 
 /'75,6i2, and in 1906 it stood at ^79,676. 
 
 WESTERN AUSTRALIA. 
 
 The one colony in Australia which is able to 
 show a net profit on its Government railways, 
 not only for the past few years, but on the 
 whole operation, is Western Australia, where 
 the net return on total earnings from the start, 
 in 1879, to present date, after allowing for 
 w'orking expenses and interest, has been 
 £431,692. 
 
 But the Western Australian railways have 
 points of interest which are especially instructive 
 in showing the basis on which a Government- 
 owned system may be operated, and the special 
 purposes it may be expected to serve, apart from 
 affording facilities for transport. 
 
 The Commissioner of Railways in the Colony, 
 Mr. William J. George, appears to be strongly 
 prejudiced in favour of the idea that, even when 
 a railway is owned by a Government, it should 
 be operated in accordance with the ordinary 
 principles of commercial finance, and apart alto- 
 gether from questions of sentiment. The 
 Colonial Government are free from such pre- 
 judices, with the result that there have been 
 differences of opinion between themselves and 
 the Railway Commissioner on the subject, 
 more especially, of coal and water. 
 
 The Government are anxious to develop the
 
 State Raii/\vay Finance. 79 
 
 Collie coal industry in Western Australia, and 
 to this end they want to have a preference given 
 to Collie coal for locomotive purposes on the 
 Government railways. The railway officials, on 
 the other hand, declare that the coal from New- 
 castle, New South Wales, not only produces 
 much better results than the Collie coal, but, 
 though costing more to buy, is cheaper to use 
 over a considerable portion of the system 
 because of a saving in haulage. The chief me- 
 chanical engineer reported in 1905 that " the 
 working expenses of the Department through 
 using Collie coal at places where Newcastle was 
 the cheaper were increased by ;^'29,ioo"; while, 
 taking what he calls the "equitable value" of 
 the Collie coal for actual locomotive purposes, 
 and comparing this with the contract price 
 which the Government persist in paying, the 
 Railway Commissioner calculates, in his report 
 for 1906, that an annual bonus or subsidy of 
 /,' 16,250 is paid to the Collie coal industry 
 through the expenses of the Railway Depart- 
 ment. The matter has been placed exhaustively 
 before the Government, and the representations 
 made as to the inferior quality of the Collie coal 
 compared with that from Newcastle have been 
 fully confirmed by scientific tests ; but the 
 Government have decided that, " as a matter 
 of policy " — that is to say, in the interests of 
 the Colonial coal fields — the course hitherto 
 adopted must continue.
 
 8o Railways and Nationalisation. 
 
 On the subject of water, the Railway Com- 
 missioner says, in his 1906 report : — 
 
 The Railway Department has purchas^.d 
 65,536,000 g-allons of water from the Goldfields 
 Water Supply Administration, and has paid 6s. 3d. 
 per 1,000. On every calculation that can he em- 
 ployed the " equitable value " of this water to this 
 department should be not more than 3s. per i,oco 
 gallons — a price which is actually quoted to many 
 small consumers. The actual payment included in 
 the accounts submitted with this report amounts to 
 ;£^2o,48o. At the " equitable value " named above 
 this payment would be ;^9,830, and the difference, 
 ;^io,65o, represents a credit to the Goldfields Water 
 Supply Administration which may be considered as 
 a bonus to the Scheme at the expense of the 
 Railway Department. 
 
 We revert here to the question of principle as 
 to whether, when a Government-owned railway 
 is, in the interests of State or Colonial policy, 
 compelled to operate on non-commercial and un- 
 remunerative lines, the losses it thus incurs 
 should or should not be made good out of the 
 general finances. I have shown that this has 
 been provided for in the case of Victoria; but in 
 Western Australia the burden falls on the rail- 
 way itself, and it is to the credit of the Railway 
 Commissioner there that, in the circumstances, 
 he can show such good results as he does. But 
 this commendablv outspoken oflicial says, in his 
 report for 1906: — 
 
 If the working- railways have (1) to pay more for 
 both coal and water than it is considered is the
 
 State Railway Finance. 8i 
 
 value equivalent ; (2) the freight rates reduced con- 
 siderably ; (3) not to take advantag'c of the wages 
 rates as laid down in the award of the Arbitration 
 Court; (4) to pay an ever-increasing- interest bill — 
 ;^348,467 for 1905 — 6, as against ^.2^2,8gi for 
 1901 — 1902 ; (5) the running of spur lines for the 
 development of agriculture, but which for some time 
 can scarcely be expected to return revenue in excess 
 of the expenditure, and so must become, for a time 
 at any rate, a charge on the more developed 
 branches of the railway system, and tend to increase 
 the ratio of working costs ; it is quite evident that a 
 surplus cannot be long maintained. 
 
 Still another suggestive item given in the 
 same report, and further bearing on financial 
 results, is the following : — 
 
 Payments under the Workers' Compensation Act 
 are being heavily felt by the Department. During 
 the year no less than ;^4,596 7s. 8d. was paid to 
 employes injured, or to the representatives of em- 
 ployes killed during the course of their employment, 
 and ;^2o6 15s. iid. in legal expenses connected 
 therewith, the total expenses amounting to 
 ;^4,8o3 3s. 7d. 
 
 The operation of the Act is so very comprehensive 
 that the sum paid greatly exceeds what would be 
 due under the Employers' Liability Act. That is to 
 say, payment is not confined to compensating em- 
 ployes for injury done by defect of the Department's 
 machinery or other negligence, but the Act requires 
 that even where the injury is due to the neglect or 
 default of the employe, unless absolute proof of 
 wilful and serious misconduct can be advanced, pay- 
 ment must be made. 
 
 The effect is that employes are provided with 
 a free insurance of ;^400 in case of death, and up to 
 :i£.^oo in case of disablement. 
 
 a
 
 82 Railways and Nationalisation. 
 
 nkw zealand. 
 
 The position of the railways in New Zealand 
 was described in somewhat glowing terms before 
 the Viceregal Commission on Irish Railways by 
 the Premier of the Colony, Sir Joseph Ward, 
 and other witnesses ; but there is another side 
 of the story, and this is very well brought out 
 in some trenchant criticisms on " New Zealand 
 Railway Finance " by Professor James Edward 
 Le Rossignol, contributed by him to an 
 American publication, Moody's Magazine, for 
 August, 1907. 
 
 Sir Joseph Ward said in his evidence:-— 
 " Our rates are fixed on the basis of a 
 return of about 3 J per cent." But Professor 
 Le Rossignol shows that this return of 2^ per 
 cent, is merely the difference between total earn- 
 ings and total expenditure for the year, and 
 leaves out of account any payment of interest 
 on the railway debt. He quotes as follows 
 from Sir Joseph Ward's Railway Statement for 
 1906 : — 
 
 The results may be summarised thus : — 
 
 Year 1906. Year 1905. 
 
 Total earnings ... ^2,349,704 ... ^2,209,231 
 Total expenditure ... 1,621,239 ... 1,492,900 
 
 ^728,465 i:7i6,33i 
 
 The net revenue, ;^72S,465, is equal to a return of 
 3'24 per cent, upon the capital invested in the open
 
 Statf-: Railway Finance. 83 
 
 lines, and 302 per cent, on the capital of 
 ;^24,092,o85 invested in opened and unopened lines. 
 
 On this Professor Le Rossignol remarks : — 
 
 The Railway Statement, which few people read, 
 does not state that the interest on the railway debt, 
 estimated at the averag"e rate of 3*75 per cent., 
 amounted to ;^^903,453, so that the so-called " net 
 profit on working- " of ;^728,465, when applied to 
 the payment of interest, becomes a net loss of 
 ;^i 74,988, as compared with a deficit of ;£'i46,307 
 for the previous year. 
 
 For the year 1906-7, 1 may here state, the 
 difference between gross revenue and working 
 expenses, called " profit on working," was 
 ;^8i2,ii8; but, allowing the same amount of 
 interest on the railway debt as before, namely, 
 ;^903,453, the so-called profit once more becomes 
 a deficit, of ;^9i,335, making a total deficit for 
 the three years of ^41 2,63c). 
 
 The Board of Trade return already referred 
 to says in reference to the New Zealand rail- 
 ways : " No capital charges have been repaid 
 out of revenue. The capital cost of the rail- 
 ways forms part of the National Debt of the 
 Colony, and the whole of the profits accruing 
 from the w-orking of the railways of the Colony 
 are paid into the Consolidated Revenue." From 
 this it would appear that the item of interest on 
 capital expenditure is conveniently omitted from 
 the railway accounts altogether. 
 
 Professor Le Rossignol admits that from the 
 New Zealand standpoint cheap transit is pre- 
 
 G 2
 
 84 Railways and Nationalisation. 
 
 ferred to revenue, and he quotes Mr. Henrv G. 
 Ell as having said, in a recent debate in the 
 House: "I do not regard with alarm the fact 
 that the railways are not paying interest by some 
 ^200,000 a year." The Professor suggests, 
 however, that while cheap transit is, doubtless, 
 highly beneficial to a community, " it does not 
 seem unreasonable to demand that the users of 
 the railways should pay at least the cost of the 
 service. To ask the tax-payers, as such, to 
 make up a railway deficit is," he rightly points 
 out, " to ask many people who do not enjoy the 
 benefits of railway transporation to pay for those 
 who do, and is a direct encouragement to 
 extravagance and inefficiency in the public 
 service." 
 
 In addition to the very considerable net loss that 
 has been sustained on the operation of the Aus- 
 tralasian State railways as a whole, there must 
 be reckoned the absence of that substantial sum 
 in rates and taxes which would have been con- 
 tributed to the Colonial finances had the railways 
 been in the hands of private companies. In his 
 book on " The Labour Movement in Austra- 
 lasia," Mr. Victor S. Clark estimates the 
 further loss thus sustained at ;^8oo,ooo a year. 
 
 capp: colony. 
 
 How difficult it is to arrive at definite con- 
 clusions as to the financial results of the Govern-
 
 State Railway Finance. 85 
 
 nient railways at the Cape is shown by the 
 following remarks which I iind in the third 
 report of a Commission appointed in 1904 by the 
 Governor of Cape Colony to inquire into and 
 report upon the public service there : — 
 
 No intelligible balance-sheet or profit-and-loss 
 account appears in any of the annual reports that 
 deal with the railway, and it would puzzle anyone 
 but a skilled accountant to collect the necessary 
 information from the published sources. It is true 
 that the general manager's report gives in detail the 
 cost of each line, and the revenue and expenditure 
 under a variety of heads for each line and system ; 
 but the materials are not brought together in a form 
 which readily shows whether or not the railway, as 
 a whole, is a paying concern — whether, in other 
 words, it would pay a dividend if it were the pro- 
 perty of a private company. The available figures, 
 moreover, require to be reconciled and modified . . . 
 before they can be made the basis of any satis- 
 factory calculation. 
 
 Criticising, from this point of view, the 
 general manager's report for 1903, the Com- 
 missioners show that, allowing for various items 
 in respect to interest and outstanding charges, 
 which they think should have been included, the 
 loss on working in that year may be taken to 
 be approximately ^'271,052, instead of only 
 ;{^i40,669, as calculated by the general manager; 
 and similarly the profit on working in 1902 
 would be only ;6'5 13,079, instead of ^'632,516. 
 They think that the general revenue is fairly 
 entitled, as " revenue re-imbursements," to in-
 
 86 Railways and Nationalisation. 
 
 terest on the railway floating debt, which is at 
 present about ^5,000,000; and they also mention 
 the fact that " while the charges incurred in 
 raising railway loans (including the discount on 
 loans) have since 1883 been debited as part of 
 the cost of construction of railways, no charge 
 has ever been made previous to 1904-5 for com- 
 mission on the payment of interest or repayment 
 of capital ; and no pensions, or contributions 
 from the general revenue to pension funds, have 
 ever been charged to the railways. On the other 
 hand, the railway service has never been credited 
 with premiums on loans, etc. It is obvious there- 
 fore," the Commissioners add, " that, in order 
 to ascertain the exact financial position of the 
 railway at the present moment an elaborate 
 investigation into the accounts would be 
 necessary." 
 
 The Commissioners further make some 
 remarks on the subject of unremunerative ser- 
 vices which throw light on the causes that may 
 lead to Government-owned railways, largely in- 
 fluenced by political considerations, showing 
 such poor results as they do. The report says 
 on this point : — 
 
 In considering' the working of the railway from 
 the financial aspect, the Commission has be«?n 
 gravely impressed by the extent to which the expen- 
 diture is swollen by causes which are, more or less, 
 outside the control of the railway management. 
 Several lines are worked at a considerable loss, and 
 without apparently any prospect of ever making a
 
 SiAFE Railway Finance. , 87 
 
 fair return on the capital invested in their construc- 
 tion. Between Cape Town and Simonstown several 
 thousands per annum are expended by the Depart- 
 ment in the employment of a staff whose numbers 
 could be greatly reduced if the passeng-er traffic was 
 under greater control and a system of single exits 
 and entrances introduced at the stations. Another 
 example of what the Commission has in view is the 
 class of coal used on certain sections of the railway. 
 A loss estimated by the chief storekeeper at not less 
 than ;^30,ooo per annum is borne by the Depart- 
 ment owing to the use of Indwe coal, in place 
 of Welsh, at East London, and the use of Colonial 
 coal at other centres entails a loss which would 
 largely enhance the above estimate. Again, 
 certain classes of traffic are carried at rates which 
 entail a considerable annual loss to the Department. 
 In addition to these matters, and involving a greater 
 loss than anything hitherto related, is the fact that 
 the railway is confessedly overmanned in most of 
 its branches. It is difficult to estimate with any 
 accuracy the extent of the financial burden thus 
 borne by the Department, for it is not merely con- 
 fined to the loss entailed in the employment of men 
 for whom no remunerative labour can be found 
 (though this loss in itself is very considerable, and 
 is estimated by the assistant general manager to 
 amount to the sum of ;^'ioo,ooo per annum), but 
 many other considerations are involved, since c-n 
 excess of staff over the legitimate requirements of 
 the Department must inevitably tend to a waste in 
 materials, inefficiency in work, slackness in discip- 
 line, and general habits of extravagance. 
 
 Later on in their report the Commissioners 
 refer to the construction of unprofitable lines, 
 and say : — 
 
 The Commission considers that the information
 
 88 Railways and Nationalisation. 
 
 laid before Parliament in connection with schemes 
 for new lines has in the past been often quite inade- 
 quate, and that Parliament has frequently been 
 moved to sanction such schemes without a clear 
 appreciation of the burden that will thus be thrown 
 on the taxpayer. 
 
 On the subject of unnecessary clerical 
 labour the Commissioners state : — 
 
 There seems to be, in the Railway Department, the 
 same tendency to duplicate clerical work which the 
 Commission condemned in its report on the Public 
 Works Department. Between the chief officers 
 stationed at headquarters something like 80,000 
 communications passed during- the year 1904, and 
 many of these might have been avoided by personal 
 communications between the officers concerned. It 
 is no doubt necessary and desirable to place on 
 record for future reference matters of importance, 
 but the number of useless letters that are written to 
 each other by clerks in the same department calls 
 for severe curtailment. The system of correspond- 
 ence generally seems to be unwieldy ; in one case 
 which incidentally came before the Commission no 
 less than fifty-eight communications (on five separate 
 tiles) were written in connection with the raising of 
 a wooden partition in a booking-office, a work which 
 cost about ;^'io. 
 
 Reference to the 1906 report of the general 
 manager of the Cape Colony Government 
 railways shows that, deducting merely total ex- 
 penditure from total earnings for the year, the 
 accounts certainly yield, on the whole, a good 
 credit balance; but against this must be put 
 interest due to the Treasury on capital expendi- 
 ture, and the full amount of capital entitled to
 
 State Railway Finance. 89 
 
 such interest in igo6 was ^'30,642,000. On 
 deducting these interest charges, the operation 
 of very few of the various sections leaves a 
 balance, and the final outcome is a substantial 
 deficit. In 1906, of the three main lines, only 
 one — the Midland (400 miles) — made a profit on 
 working, viz., ;^'ii2,i34. The loss on the two 
 others, the Western (800 miles) and the Eastern 
 (288) was ^75,334, leaving a net main-line profit 
 of X'36,800. Of the twenty-two branch lines 
 (1,414 miles) on which main-lines rates are 
 charged, only two made profits, amounting to 
 ^'4,405, the remaining twenty having losses, 
 which came altogether to ^^356, 305 ; while five 
 branch lines (278 miles) on which special branch- 
 line rates are charged, made losses to the extent 
 of ;{,'27,424. The total net loss on the whole 
 system in 1906 was thus ^'342,524, as against 
 one of ^'104,581 in 1905, and ji'56'j,o8o in 1904. 
 In his report for 1905 the general manager 
 referred to the decrease in the deficit for that 
 year, as compared with 1904, and stated that, 
 while there was a reduction of 2*34 per cent, in 
 the revenue for the year there was also one of 
 i7'28 per cent, in the expenditure; and he 
 added : — 
 
 It is hardly necessary to say that retrenchment 
 is an unpleasant undertaking ; but in order to place 
 the railways on a sound commercial footing", and 
 inspire public conlidcnce in further railway develop- 
 ment, it became absolutely necessary to show that,
 
 90 Railways and Nationalisation. 
 
 by abandoning- the policy of " waiting- for better 
 times," it was possible to make our railways con- 
 tribute largely towards the payment of working 
 expenses and interest on the large capital already 
 invested. 
 
 NATAL. 
 
 I have already, in Chapter IV., made some 
 references to the origin of the Natal Government 
 railways. To the facts there mentioned I may 
 add that the construction of these railways was 
 attended by great engineering difficulties. From 
 the sea level at Durban to Charlestown, on the 
 Transvaal frontier, a distance of 307 miles, the 
 line takes the form of a switchback. It rises to 
 various successive heights, ranging from 2,000 
 to 5,520 feet, the aggregate ascent in the distance 
 mentioned being equal to nearly 2J miles of a 
 vertical elevation. Up to a few years ago the 
 greatest weight the heaviest locomotives then 
 employed in Natal could haul up the steepest in- 
 clines in the direction of the Transvaal was 137 
 tons gross, or 80 tons net paying traffic. There 
 was also a tendency to assume that, because the 
 cost of construction was to be defrayed out of the 
 Colonial funds, everything should be perfect from 
 the start, the policy of the railway pioneers in 
 the United States being discarded in Natal even 
 in the case of purely agricultural lines opening 
 up virgin land to what were then extremely 
 limited markets. 
 
 Conditions such as these ha\e naturally
 
 State Railway Finance. 91 
 
 affected not only the cost of constructon, which 
 works out at an average of ;£i$,2g6 per mile, 
 but also the earning powers of the lines. In 
 igo6 the net surplus of earnings over working 
 expenses, betterments, interest, and sinking 
 fund charges (all, in the case of this Colony, 
 clearly shown and allowed for in the accounts), 
 was ,^62,368, as compared with ^295,147 in 
 1905, and ;^i7,5i5 in 1904. These net 
 returns on a capital expenditure of ,^13,536,000 
 are not especially brilliant, and the fluctuations 
 in the yield are a matter of some concern in a 
 Colony which is the more disposed to look to the 
 Government railways as a material source of 
 revenue because of the difficulties experienced in 
 inducing the Colonial Parliament to face what 
 has been described as " the distasteful expedient 
 of adequate taxation." 
 
 It is, however, an essential characteristic of the 
 Natal as of the other Government railways in 
 South Africa that their rates are arranged on a 
 strictly preferential basis. There are, in fact, two 
 distinct types of rates — special rates for Colonial 
 products and class rates for imports, all being 
 fixed on a mileage principle. The "South Afri- 
 can produce rates," as they are called, are so 
 low that they are admittedly non-productive. 
 They do not even cover working expenses. Im- 
 ports, on the other hand, pay rates which are 
 generally twice, and sometimes three times 
 higher; and it is the receipts from this source
 
 92 Railways and Nationalisation. 
 
 that are expected not only to enable the Govern- 
 ment lines to pay their way, but, also, to con- 
 tribute more or less to the Colonial exchequer. 
 From the latter point of view, the railway rates 
 on imports form part of the fiscal policy of each 
 Colony, supplementing the direct charges already 
 levied by the customs at the ports. So far does 
 this system prevail that at the annual meeting 
 of the Durban Chamber of Commerce in March, 
 ICJ08, the chairman, Mr. Henderson, in speaking 
 of the Colonial finances said : — " The unsatis- 
 factory feature of the position was the serious 
 falling otf in the import trade, which was, after 
 all, the mainstay of their financial prosperity. 
 It was from this trade that the Customs, har- 
 bours, and railways derived the bulk of their 
 revenue and profit. It was this trade which " 
 (among other things) " even enabled their coun- 
 try brethren to maintain their roads and bridges 
 and branch lines of railway." 
 
 THE CENTRAL SOUTH AFRICAN RAILWAYS. 
 
 The system known as the Central South 
 African Railways comprises the railways of the 
 Transvaal and the Orange Free State, taken 
 over and operated as Government lines, under 
 the supreme control of the High Commissioner 
 for South Africa, as one result of the Transvaal 
 War. Their organisation and administration 
 have been made the subject of very careful in-
 
 State Railway Finance. 93 
 
 quiry by a Commission appointed by the High 
 Commissioner, and the report of this Commis- 
 sion, dated Johannesburg, March 14, 1908, gives 
 some interesting facts as to the financial basis 
 on which the hnes are worked. It says, on this 
 particular point : — 
 
 Besides finding- a sufficient sum to meet the 
 estimated depreciation of the railway assets, the 
 administration, apart from other burdens, is also 
 providing- a sinking fund of one per cent, upon its 
 capital liabilities, which represent the portion of the 
 guaranteed loan of ;^35,ooo,ooo that has been 
 expended in the acquisition and construction of the 
 railways. This provision is practically sufficient to 
 pay off the whole of the capital liabilities in some- 
 thing between forty and fifty years. The Govern- 
 ment's policy in redeeming^ its capital liabilities is 
 not a question before the Commission, nor, indeed, 
 is it an open question at all, in view of the terms of 
 the Guaranteed Loan Ordinance of 1903 ; but, as a 
 theoretical proposition, the Commission do not think 
 it correct that the railways should contribute to 
 such repayments. They know of no other railway 
 which thus provides for the redemption of its whole 
 capital; and, from a railway point of view, the wiser 
 course would be to utilise the sum of ;^i 88,694 "ow 
 allotted annually for redemption purposes in 
 reducing rates or in providing better facilities of 
 transport. They recognise, however, that any recom- 
 mendation upon the point must be of an academic 
 nature ; as a matter of fact the railway profits are at 
 present used to relieve the revenues of the two 
 Colonies of the whole charges on account of the 
 interest and the sinking fund for the entire loan, and 
 not only for that fraction of it which represents 
 railway capital expenditure ; nor is there, pending 
 unification or federation of the South African
 
 94 Railways and Nationalisation. 
 
 Colonies, any practical prospect of relieving- the 
 railways from their extraordinary burden, still less 
 of releasing them from the discharge of those liabili- 
 ties which more properly belong to them. Never- 
 theless, if the day comes when it is no longer neces- 
 sary to utilise the railway system as an instrument 
 of taxation, the chang^e should certainly be made. 
 The railways should be emancipated from the burden 
 of the loan, and should be free to work out their 
 development on commercial lines. 
 
 CANADA. 
 
 The financial results of the Intercolonial Rail- 
 way in Canada, which has been vested in and is 
 controlled by the Dominion Government, are set 
 out as follows in the Board of Trade Return, 
 " Railways (P'oreign Countries and Posses- 
 sions) " : — 
 
 1904-5. 1905-6. 
 
 Miles in operation ... ... i,4i4'67 ... i,444'92 
 
 Earnings i;i,394,39i •■• ^^i, 571,232 
 
 Working- expenses .£i,749,037 ... i'l, 55^,505 
 
 Net loss (-) or profit ( + ) ... -^364,84 5 +£12,^27 
 
 It will be seen that no allowance whatever is 
 made here for interest on capital expenditure, 
 the sum total of which amounted on June 30, 
 1906, to ^16,699,000. Yet those of the colonists 
 who do not trouble to look into the accounts are 
 led to believe that in 1905-6 the lines actually 
 yielded a " profit " of ;^' 12, 700. 
 
 In an article published in the Toronto Mail 
 and Empire, in 1907, criticising the Inter-
 
 State Railway Finance. 95 
 
 colonial Railway, it was asserted that, while 
 revenue was duly credited to the railway, rails, 
 locomotives and cars were paid for by the Do- 
 minion ; and, also, that while not one cent had 
 been devoted to the payment of interest upon the 
 investment, the system had nevertheless made a 
 loss in four years of ;^8oo,ooo. Whereas, again, 
 the operation of each mile of the Canadian 
 Pacific costs 68 per cent, of its earnings per mile, 
 and the Grand Trunk a fraction less, the opera- 
 tion of each mile of the Intercolonial costs 125 
 per cent, of the earnings per mile. As regards 
 political influences the same authority said : — 
 " The entire railway is treated as patronage, and 
 every politician on the right side is entitled to 
 milk it." 
 
 Then the Montreal Gazette, in commenting in 
 its issue of May 27, 1907, on certain reports 
 concerning railway frauds in Russia, gave a list 
 of various scandals of a similar nature in the 
 Dominion, declaring that every job alleged 
 against the Russian Autocracy had been paral- 
 leled in Canada. " First," it said — ■ 
 
 There is the awful example of the Intercolonial 
 Railway, probably as to construction the most costly 
 single track system in North America, serving- a 
 good traffic-bearing country, with little or no com- 
 petition during much of the year, and in connection 
 with much of its length no competition at all; but so 
 mishandled that one of its managers, giving up his 
 job in disgust, said it was run like a comic opera. 
 
 Some years it does not earn enough to pay the
 
 96 Railways and Nationalisation. 
 
 cost of operation and maintenance, and every year it 
 needs a grant of one, two, three or four million 
 dollars out of the Treasury to keep it in condition 
 to do at a loss the business that conies to it. 
 
 When land is to be boug-ht for the road, somebody 
 who knows what is intended obtains possession of 
 it, and turns it over to the Government at 40, 50 and 
 100 per cent, advance. This is established by the 
 records of Parliament and the Courts of the land. 
 
 INDIA. 
 
 As already explained (page 7), the Government 
 of India prefer to leave their State-owned railways 
 to be operated, as far as possible, by private 
 companies, and in 1906-7, according to the re- 
 port of the Committee on Indian Railway 
 Finance and Administration, " the real net profit 
 to the vState, after meeting all charges properly 
 attributable to revenue," was upwards of 
 ;^3,ooo,ooo. So far, therefore, as actual finan- 
 cial results are concerned, it cannot be suggested 
 that the Government railways of India are other- 
 wise than a success. 
 
 But the Committee further say : — 
 
 The justification of the programme system is that 
 the Government, although it allocates to railways in 
 each year the full amount that it expects to be able 
 to provide consistently with financial prudence, is, 
 nevertheless, unable in any year to provide funds 
 for all the expenditure that would be profitable and 
 advantageous. . . . 
 
 Notwithstanding the large expenditure incurred 
 since 1900 in increasing the facilities for traffic on
 
 State Railway Finance. 97 
 
 open lines, the commercial and railway witnesses 
 were practically unanimous in their opinion that in 
 the years 1906 and 1907 the railways failed to deal 
 satisfactorily with the traffic offering, and we are 
 satisfied that this was the case. The chief com- 
 plaint has been regarding the inadequacy of the 
 supply of rolling- stock ; but the necessity for 
 improving- the lines by the addition of crossing- 
 stations, sidings, etc., in order to fit them for the 
 employment of additional stock has also been repre- 
 sented as pressing. . . . 
 
 There is wide scope for the construction of new 
 
 lines We are convinced that there will be 
 
 fruitful fields for large reproductive expenditure on 
 railways in the country for many years to come. . . 
 But at the same time we recognise the financial diflfi- 
 culties that may be experienced when the Govern- 
 ment commits itself to new and expensive schemes 
 on a large scale. 
 
 So the Committee recommend that, in addition 
 to the supply of increased funds for railway 
 purposes by the Government, the working com- 
 panies should not only have more of the State 
 lines transferred to them, but should be encour- 
 aged to raise money for railway purposes by the 
 issue of guaranteed debenture stock and share 
 capital, with a share of surplus profits, as '* a 
 useful alternative to direct borrowing by the 
 Government." 
 
 These various considerations detract somewhat 
 from the satisfaction with which a " real net 
 profit " of ;^3, 000,000 a year might otherwise be 
 regarded ; and they show, also, that even a 
 State may think it desirable to seek the assist- 
 
 H
 
 qS Rah, ways and Nationalisation. 
 
 ance of private enterprise, not alone in operating 
 its lines, but also in raising the capital required 
 for general railway purposes. 
 
 BELGIUM. 
 
 The financial position of the State railways in 
 Belgium has long been the subject of misappre- 
 hension because of the unsatisfactory, if not the 
 wholly misleading, nature of the accounts, the 
 main purpose of which seemed to be to conceal 
 the real facts from the Belgian people, and lead 
 them to assume that the State system was really 
 in a most flourishing condition. Advocates of 
 naticjnalisation in England have also readily 
 adopted this view without any attempt at inde- 
 pendent inquir}', and they have pointed to 
 Belgium as affording an example of State 
 wisdom, foresight, and enterprise which we 
 should not hesitate to follow. The actual posi- 
 tion of the lines, however, is now being more 
 clearly understood. Ministers and politicians 
 are rising in Belgium who insist on the old 
 fictions and concealments being abandoned, and 
 to-day it is the critics rather than the supporters 
 of railway nationalisation theories who will turn 
 to Belgium for arguments in support of their 
 contentions. 
 
 From the report of the Belgian Minister of 
 Railways for igo6, I find that if the balances 
 shown during the period of operation are alone
 
 State Railway Finance. gg 
 
 taken into account, there is a total of ^1,768,720 
 to the good. Rut, in makino^ up these balances, 
 no allowance has been made for interest to the 
 Treasur\- for larf^e sums advanced to the State 
 railways in years of deficit, and the report con- 
 siders that when the Treasury acts as banker 
 to the State railway, interest on borrowed money 
 should be allowed as in the case of a com- 
 mercial company borrowing from a private 
 banker. Taking these items into account, the 
 report shows that the net result, instead of a 
 balance of /'i, 700, 000, has been a deficit of 
 ;^2,87i,ooo. The report concludes by sug- 
 gesting that Belgium is evidently still far from 
 realising the fiction that the State railways, by 
 reason of their large yield, are " the milch cow 
 of the Treasury." 
 
 The story is carried further bv the report made 
 by M. Hubert, representing the Central Section, 
 on the Railway Budget for igoS. He therein 
 calls, as he says, "the very serious attention " 
 of the Chamber to the actual results of operation 
 as shown for igo7 and estimated for igo8. The 
 Budget demanded for the State railways a vote 
 ^'87g,ooo in excess of that for the previous year 
 (when it was ^6,500,000), and M. Hubert says, 
 " This is the greatest increase in expenses we 
 have ever had to record." Already, he states, 
 the proportion of total expenditure to net re- 
 ceipts has increased from 60*03 in 1904 to 62'6o 
 in Tgo5, 64"o7 in igo6, and, approximatelv, to 
 
 H 2
 
 loo Railways and Nationalisation. 
 
 6871 in 1907. With the increase in expenditure 
 proposed by the new Budget, there is, he finds, no 
 indication of any stop in this ascending scale. 
 While, in fact, the Budget contained supple- 
 mentary estimates for ;^'920,ooo, it provided for 
 an estimated increase in the receipts amounting 
 to only ;^640,ooo. It is also admitted that thf 
 net revenue in the past from the railways taken 
 over by the Government has been lower than the 
 estimated profits. M. Hubert continues : " We 
 have here a Very grave situation, for if a change 
 is not brought about we shall find ourselves in 
 this position : either we shall have to cover by 
 taxation a deficit more and more serious in a 
 public service, or we shall have to raise the rates, 
 a procedure which, in the actual situation, might 
 be dangerous for industry, and, consequently, 
 for the working classes." 
 
 AUSTRIA. 
 
 In Austria the State owns 5,000 miles of rail- 
 way, and operates 2,700 miles of companies' 
 lines. Of these it is now acquiring 1,860 miles, 
 thus adding ^1,500,000 to the annual charge 
 for interest. The State had already spent 
 ;^ 1 12,000,000 on its railways, but although the 
 official accounts show " net profits on working " 
 of ^2,289,000 in 1904, and ^2,976,000 in 1905, 
 the Board of Trade return says : — 
 
 No allowance is made in the above statement of
 
 Static Railway Finance. ioi 
 
 expenditure for the repayment of capital. As, how- 
 ever, the rate of interest paid by the State on the 
 loans raised for railway purposes is much higher 
 than the rate of profit earned, the net profit has 
 always to be supplemented by a large sum provided 
 by the Budget. The estimates for 1907 were : — 
 
 Amount payable by State for interest, ) 
 
 amortisation, &c., on capital for , ;^5,494,556 
 State railways ... ... ... ) 
 
 Less profit on working^... ... ... 2,827,132 
 
 Estimated deficit to be provided by) i- r r ^ .^. 
 .u. «.,^„«. ^ /, 2,667,424 
 
 the Budget 
 
 RUSSIA. 
 
 Russn has been exceptiijnally unfortunate, 
 from a financial point of view, in the operation 
 of her State railways. In Europe she has 19 
 different lines, with a total length of 19,113 
 miles, and of these only nine showed, in 1902 
 (the last year for which full figures are available), 
 a net profit after allowing for charges in respect 
 to interest and sinking fund, the net loss for the 
 year being ;^753,o59. On five separate lines in 
 Asia the Government made losses amounting to 
 ;^"2,736,725, the total loss in 1902 on the entire 
 State system in Europe and Asia (excluding, 
 however, Finland, the figures for which are not 
 included in the Board of Trade return) being 
 thus no less than ^3,489,784. 
 
 DENMARK. 
 
 Denmark has definitely laid down the prin-
 
 102 Railways and Nationalisation. 
 
 ciple that her State lines must pay their way, 
 and not be a burden on the taxpayers; but they 
 are not to be operated in order to produce 
 revenue for the Government " at the expense of 
 users of the lines." Fares, rates, and charges 
 are fixed on this basis, with the further stipula- 
 tion, under a law passed in 1903, that, from any 
 •balance left after meeting working expenses and 
 standing charges, bonuses shall be paid to 
 members of the staff, who thus have an incentive 
 to operate the lines with a due regard to effici- 
 enry and economy. The accounts for IQ06-7 
 shew : — 
 
 Receipts ^2,182,514 
 
 Expenditure ... i?733j324 
 
 Balance ^449,190 
 
 Interest on capital expenditure ) /• r,. 
 
 Bonuses to staff ... ^63,147 
 
 SWITZERLAND. 
 
 Concerning the Swiss railways, the Board of 
 Irade return says : — 
 
 The financial results of the purchase of the rail- 
 ways are described as satisfactory. Till the present 
 time the revenue has been suflicient (i) to cover 
 working" expenses; (2) to pay inteiest on the pur- 
 chase money ; and (3) to pay for sinking fund on the 
 debt incurred on the purchase. 
 
 This, presumably, is the official view. The 
 unoflicial criticism in the Tribune dc (icnhcH' —
 
 State Railway b'lNANci:. 103 
 
 to which I have already referred (page 30) in 
 giving" the reasons for the nationalisation of the 
 lines — shows that since the State took over pos- 
 session and operation the working day of the 
 railway staff has been reduced from twelve hours 
 to eleven; salaries and wages have gone up; 
 more or longer holidays have been given ; a con- 
 siderable addition has been made to the number 
 of ofificials — and there was an increase in the 
 working expenses by 35 per cent, between 1903 
 and 1907, while the receipts increased in the 
 same period by only 2S per cent. 
 
 ITALY. 
 
 Of the Italian State railways the Board of 
 Trade Return, already mentioned, says that the 
 net profits (;^'2,030,824) paid into the Treasury 
 for the year 1906-7 represent " rather less than 
 1 per cent, on the capital sum of ;^226,254,ooo 
 expended on the construction of the lines and 
 purchase of rolling stock." (See, however, in 
 this connection the reference to the Italian rail- 
 ways on page 29.) 
 
 SERVIA. 
 
 The receipts on the Servian State lines failed 
 to meet the interest on the railway debt by 
 ;^'92,300 in 1903, ;^57,20o in 1904, and ^92,700 
 in IVJ05.
 
 104 Railways and Nationalisation. 
 
 honduras. 
 
 Honduras has a Government railway, for the 
 building of which loans to the nominal amount 
 of ;^6, 000,000 were issued in London and Paris 
 between 1867 and 1870; but even now not more 
 than 57 miles have been completed. "It is 
 impossible," says the Board of Trade Return, 
 " to estimate the amount of money squandered 
 on the construction of this railway." 
 
 brazil. 
 
 In regard to the State railways in Brazil, the 
 Return says : — 
 
 It is only during- the last fev/ years that the 
 Central Railway [1,004 niiles] has shown any profit 
 at all, and that profit is so out of proportion to the 
 cost of construction it may be inferred that no 
 portion of the cost has been repaid. 
 
 CHILE. 
 
 The receipts in igo6 from the State railways 
 in Chile failed to cover the expenditure by 
 ;^i77,258. In his report on the trade of Chile 
 fnr 1907, the British Consul-General at Val- 
 paraiso says : — 
 
 The railways owned by the Government of Chile 
 g-ive no profit ; in fact, they have latterly been 
 worked at a loss. It may be strange that this 
 should be so, seeing- that the trunk system runs
 
 State Railway Finance. 105 
 
 through splendid country that produces largely and 
 promises to become much more fertile in future 
 years. For there can be little doubt that, run on 
 business lines, the railways could be made to pay, 
 with properly trained officials, a revision of tariffs, 
 and a greatly improved service. . . . 
 
 The most important part of the broad gauge State 
 railways is that between Valparaiso and Santiago, a 
 distance of 116 miles. All merchandise imported for 
 Santiago is landed at Valparaiso. 
 
 Of these 116 miles of 5 ft. 6 in. gauge, only 8^ 
 miles, from Valparaiso to El Salto, has a double 
 line. The congestion of traffic at this point would 
 be entirely relieved were this track doubled for the 
 entire distance, and [this] would obviate the neces- 
 sity of great expenditure on harbour works, such as 
 are proposed. . . . 
 
 The main line ... is suflering from inattention. 
 Neither ballast nor sleepers have been renewed, 
 and great damage has in consequence been done to 
 the rails, and many accidents have resulted. The 
 rolling stock is equally imperfect. Large numbers 
 of German engines have failed to come up to 
 expectations, and heavy steel wagons from Belgium 
 have shown up in a surprising manner the weakness 
 of the older wooden wagons. 
 
 The Consul-General's comments on the failure 
 of the State lines to produce a profit are the 
 more striking because the company-owned lines 
 in Chile are fairly successful. Comparing the 
 two systems, the Mining Journal declares that 
 the position of the State lines affords ** the most 
 palpable evidence of incompetent management 
 and careless administration, and the inevitable 
 consequence of political influence."
 
 io6 Railways and Nationalisation. 
 
 JAPAN. 
 
 The Railway Nationalisation Law carried in 
 Japan in 1906 involved the purchase by the State 
 of 17 lines of railway at a cost of about 
 ;^'5o,ooo,ooo, and has been a material factor in 
 the financial problems which have recently been 
 engaging the very grave consideration of 
 Japanese statesmen. The payment of the 
 /,'50,ooo,ooo is found to be only part of the 
 trouble. Those who inspired the scheme did not 
 stop to consider that in addition to buying the 
 existing lines, for the price mentioned, the State 
 would require to spend a large sum of money 
 alike on their betterment and on the provision of 
 new lines, some of which are very much needed. 
 
 In regard to the new lines, at least, the Govern- 
 ment find a difificulty in raising funds, and so 
 we get this curious result : that within two years 
 of the apparent triumph of nationalisation ideas 
 in japan, the Government have been proposing 
 to revert to private enterprise, in order to secure 
 the provision of additional transport facilities. 
 It is even contemplated that the new lines shall 
 not onlv be worked by electricity, but, in some 
 instances, run parallel to the Government 
 " steam " lines in order to " supplement " them 
 — presumably, to render unnecessary a heavy ex- 
 penditure on their widening or improvement. 
 
 Actual results are further indicated by the fol- 
 low ing ('\lract from the report on the trade of
 
 State Railway Finance. 107 
 
 Japan for the year 1907, by Mr. E. F. Crowe, 
 
 commercial attache to his Majesty's Embassy, 
 
 Tokio : — 
 
 The nationalisation of the railways of Japan was 
 completed in 1907. The last of the seventeen prin- 
 cipal private railways which were to be acquired by 
 the vState was taken over in October, so that it is 
 now possible to obtain some idea of the working of 
 the railways under the new system. Throughout 
 the year there have been bitter complaints both in 
 the native and foreign press about the railway 
 service. One of the principal motives of the 
 nationalisation of private railways was to remove 
 the impediments and correct the confusion arising 
 out of multiple ownership and divided administra- 
 tion. The critics, however, complain that the 
 number of accidents has increased, that the delays 
 in the transportation of goods are still excessive, 
 and that on some lines unpunctuality is the rule 
 and not the exception as it was in the days prior to 
 nationalisation. 
 
 Mr. Crowe refers to a report issued by the 
 Imperial Government Railway Bureau dealing 
 with some of these complaints. It accounts for 
 the shortcomings on such grounds as " not yet 
 time to bring into force all the suggested im- 
 provements " ; " rains and floods " ; and " move- 
 ment of troops during manoeuvres " ; and pleads, 
 as extenuating circumstances, certain reductions 
 in rates and fares; whereon Mr. Crowe re- 
 marks : — 
 
 From the above figures it will be seen that the 
 nationalisation has in some wa3's been successful, 
 but the country as a whole seems to have expected 
 more.
 
 mS Railways and Nationalisation. 
 
 PRUSSIA. 
 
 The country in the world which claims the best 
 financial return on the operation of her State 
 railways is Prussia, although the results even 
 there are not really so great as the average na- 
 tionalisation advocate represents. It has been 
 said often enough in print or in public in this 
 country that the Prussian vState railways show a 
 " profit " of about ^30,000,000 a year. Mr. L. 
 G. Chiozza Money, M.P., for example, in an 
 article published in May, 1908, sought to show 
 how, under State administration, " profit arose 
 unsought " on the railways in Prussia, and pro- 
 ceeded : — 
 
 Thus, in 1904, while the receipts were 
 _:^."78,6r)3,33o, the expenses were only ;^47, 553,497, 
 showing a net profit of ;^3i,i09,833, or 7'i9 per 
 cent, on the capital employed. In 1905 the 
 figures were even better. The receipts came to 
 ;£?85,02i,6i2, while the expenses amounted to 
 _A5i,54i,8o2, showing- a net profit of ^^33, 479,810, 
 or 754 per cent, on the capital employed. 
 
 A full translation which has been prepared of 
 the " Accounts of the Railway Administration " 
 gives Mr. Money's itenhs thus : — 
 
 Year. Receipts. Expenditure. Balance. 
 
 1904 ... ^78,588,970 ... ^48,487,696 ... ^30,101,274 
 
 1905 ... .^"84,933,970 ... i:52,53o,49o ... i;32,403,48o 
 
 The variations in the two sets of figures are, 
 however, a matter of detail. The essential point 
 is thai Mr. Money falls into the common error
 
 Statk Railway Finance. 109 
 
 of regarding the difference between receipts and 
 expenditure as " net profit," witiiout making 
 any allowance whatever for interest on capital 
 debt and other standing charges. 
 
 The accounts themselves are given in the 
 official report in such abundance, though with 
 such lack of clearness, that they perplex the 
 mind rather than present the financial situation 
 of the State lines in a way that can be readily 
 understood. The statement of accounts men- 
 tioned above comprises nineteen distinct 
 columns of figures, going back year by year 
 to 1882; but it will suffice to look at the items 
 for 1905. 
 
 Taking the balance of receipts over expendi- 
 ture in that year as ;^32,403,48o, there is 
 deducted a sum of ^5,332,598 " for interest on 
 the railway capital debt." This leaves (column 
 8) a net balance of ;^'27, 070,882. Then 
 column 10 says that " According to Sec. 4 of 
 the Act of 27th March, 1882, the original capital 
 debt is to be written off by taking from this net 
 balance (column 8) to the extent of f per 
 cent, on the capital debt," which stood at the 
 end of 11J05 at ;^' 146,422,353. The item given 
 under this heading for 1905 is ^^3, 182,941, and 
 column 1 1 shows that " the net balance 
 (column 8) after writing off this f per cent, 
 for sinking fund (column 10)" is ;^23,887,94i . 
 But the remaining columns proceed to allocate 
 the " net balance " shown in column 8 with-
 
 iio Railways and Nationalisation. 
 
 out regard to the apparent subtraction therefrom 
 of the sinking fund item of ^,'3, 182,000 shown 
 in column 10. The allocation of the said " net 
 balance" is given in these later columns as 
 follows : — 
 
 According to sect. 4, sub-sect. 3, No. i, 
 of the Act of 27th March, 1882, for 
 the gradual extinction of railway 
 debts taken over by the State pre- 
 vious to T879, ^"d also contracted 
 since then ... ... ... ... ^115,441 
 
 For the reimbursement of general 
 
 State expenditure ... ^23,205,049 
 
 For the formation or completion of a 
 reserve fund to be used for railway 
 administrative purposes ... ... 
 
 Extraordinary Sinking Fund for State 
 debts or for redemption of sanc- 
 tioned loans ... ... ^1,487,402 
 
 For the formation or completion of an 
 equalisation fund for the railway 
 administration ... ... ... ^2,262,990 
 
 Total £27,070,1 
 
 However all these figures are to be explained, 
 one fact which may, I think, be regarded as 
 certain is that the item of ;^23, 205,049 is the 
 amount which the Prussian Government secured 
 from the railways in 1905 for general State pur- 
 poses (" zur Deckung anderweiter etatsmassiger 
 Staatsausgaben "). How this net gain for the 
 Treasury was expended there is nothing in the 
 accounts to show; but the item in question, 
 though substantially less than the " net profit " 
 spoken of by Mr. Money, is certainly, in itself, a 
 substantial contribution to the State funds.
 
 State Railway Finance. i i i 
 
 Mr. Money is, however, again hopelessly 
 wrong in suggesting that the " profit " from the 
 Prussian State railways comes " unsought." 
 I will not now stop to go into details; but my 
 own inquiries into the operation of the Prussian 
 State railways have led me to the conviction 
 that thev are designed to serve three main inte- 
 rests, stated in the following order : the raising 
 of revenue as the first and most important object 
 of all ; political, commercial and fiscal con« 
 siderations second; and the welfare of the indi- 
 vidual trader as a very bad third. 
 
 One must further remember that if the rail- 
 ways in Germanv were owned by companies 
 instead of by the States, a considerably greater 
 sum would be raised in the way of taxation. In 
 Prussia the local taxes paid bv the State railways 
 amount to only ;^75o,ooo a year, whereas 
 our own railways — having approximately the 
 same length — contribute nearly ;^\5, 000,000 a 
 year. If the Prussian State railways adminis- 
 tration paid local taxation on the same basis as 
 the railway companies in the United Kingdom, 
 the net profits shown would have to be reduced 
 proportionately. As it is, the taxation which the 
 Prussian State Railways avoid falls upon the 
 ordinary taxpayer, who must set that item, 
 among others, against his possibly lower rates 
 for rail haulage. 
 
 Admitting, however, on the basis of the figures 
 given, that, from the standpoint of financial
 
 112 Railways and Nationalisation. 
 
 results, the State railways of Prussia are a 
 brilliant set-off to those of State railways — or the 
 majority thereof — in other parts of the world, 
 there still remains the consideration whether the 
 Prussian Government have or have not been 
 unduly anxious to keep up to a high figure the 
 net railway returns coming into their treasury, 
 with the result that they have refrained in the 
 past from incurring all the capital expenditure 
 necessary to enable the State railway system to 
 meet adequately the growing needs of the 
 trading community. In other words, have they, 
 for the sake of immediate profits, neglected 
 necessary developments in the interests of the 
 future? If so, then the fact should not be 
 ignored by those who would nationalise the rail- 
 ways of the United Kingdom in order that the 
 State — that is to say, the Government of the 
 day — may have the disposal of the "profits" 
 thereof for old age pensions, or any other pur- 
 pose that may appear to them desirable. 
 
 When the Prussian Government proposed 
 to assume control of the railways of that 
 kingdom, the representatives of commerce and 
 industry wanted an assurance that the sur- 
 plus from operation would be used for the 
 lowering of the rates, for effective mainten- 
 ance and development of the system, and for 
 other such purposes, rather than for revenue 
 purposes. The assurance was duly given, but in 
 i8q() the Minister of Finance (Von Miguel) called
 
 vStatk Railway Finance. 113 
 
 attention to the amount which could be devoted 
 from the railway balance to general State pur- 
 poses, and said : — 
 
 We do not care about the Increase in receipts ; 
 we only look at the net profit ; and therefore we 
 have every reason to deal carefully with the 
 treasure we possess in our railways, and cannot 
 afford to allow any decrease throug"h a reduction in 
 rates or an increase in expenditure. 
 
 Replying to tliose who criticised this policy, 
 the same authority said :-- 
 
 You talk about surplus. There is no surplus. 
 It is all absorbed in permanent expenses. If these 
 f/rofits are not used for general purposes it will 
 mean increasing the taxes by more than lOO per 
 cent., and that is wanted by nobody. You had 
 better leave us our treasure. This one will have 
 cheaper fares ; another will have better carriages 
 and more room ; a third will have new lines, even 
 though they should be unremunerative. This one, 
 again, wants better and finer stations; that one im- 
 provement of the road ; another lower rates . 
 In all this lies a danger to the State, — at least, 
 there would be if the Government were not strong 
 enough to oppose, occasionally, the desires of those 
 interested .... I assume that we Prussians 
 will always have as strong an administration. 
 
 So the Government kept their treasure, prac- 
 tised economy, lowered rates mainly when it 
 .served purposes of State so to do, and saw the 
 amount available from the railway revenue for 
 general State purposes increase on the " leaps 
 and hounds " principle year by year. Mean- 
 
 I
 
 114 Rah. WAYS and Nationalisation. 
 
 while, what was ihr position in regard to the 
 hnes themselves? 
 
 Ten years ago the British Consul at Diissel- 
 dorf, Mr. T. R. Mulvany, in a report to the 
 Foreign Office on the " Coal Industry in the 
 Rhenish-Westphalian Provinces," wrote that the 
 requirements of the Prussian State railways in 
 respect to rolling stock had been much neglected; 
 and he dealt, also, with the urgent need for the 
 reconstruction of the permanent way, saying that 
 associations of engineers had repeatedly drawn 
 the attention of the State railway authorities to 
 the fact that the rails in use were not able to 
 stajid the strain of the much heavier loads and 
 the accelerated traflic of that day, the result being 
 that, as he said, " were it not for the discipline 
 and good management of traffic officials, the 
 number of accidents would be far more alarming 
 than they are." Mr. Mulvany further made the 
 following remarks, which are especially signifi- 
 cant in the light of subsequent events : — • 
 
 Many years ago a man wlio was an authority on 
 iiidustrial and railway matters, foreseeing the de- 
 velopment of which the country was capable, advo- 
 cated the laying- down, at least on through-going 
 routes, of four lines of rails- two for goods and two 
 for passengers — so that the fast and slow traffic 
 might be kept separate and distinct. Of course, 
 the adoption of this system, under the greatly in- 
 creased value of land, buildings, and building sites, 
 would now involve the expenditure of a much larg-er 
 amount of capital than would have been at the time 
 n(M'essarv ; hut unless t-anals are constructed to
 
 State Railway Finance. 115 
 
 iclieve llie railways of tlie lica\ icr jioi'tioii of the 
 i^oods IralTic, it must doubtless sooner or later be 
 done. 
 
 For a time the Prussian Government hoped 
 that their policy of improving river navigation 
 and building fresh canals would render unneces- 
 sary the very heavy expenditure on railway 
 betterment that otherwise seemed to be inevit- 
 able, and that railway companies in the United 
 Kingdom or the United States would probably 
 have undertaken as a matter of course. But the 
 inadequacy of the State lines remained, so that 
 in a report on " Agriculture in the Rhenish 
 Province," which Mr. Mulvany's successor at 
 DUsseldorf, Dr. F. P. Koenig, presented to the 
 Foreign Office in 1906, one reads : — 
 
 It is a matter of fact that the German State rail- 
 ways are no long^er able to cope with the increasing- 
 amount of goods transport, and that something will 
 have to be done to alleviate the pressure on the 
 railroads, especially so on those of the \\ estphalian 
 coal and iron districts, and on those of the Rhenish 
 province, great industrial centres. 
 
 The grievances in Cjuestion were due, not alone 
 to an insulHciency f)r railwav lines, but, also, to 
 a chronic shortage of railway trucks. Turning 
 once more to oflicial atithority, I read in the 
 Report to the Foreign Office on the " Trade of 
 the Consular District of Frankfort " for igo6, by 
 Mr. Oppenheimer, British Consul - General 
 there : — 
 
 For years there have been complaints concerning 
 
 I 2
 
 iiT) Railways and Nationalisation. 
 
 the insufficient number of trucks at the disposal of 
 the commerce of the land, and more especially of 
 the coal industry ; and this scarcity at times be- 
 comes (especially in the autumn, when there is an 
 increased demand for coals) a real calamity. This 
 scarcity not only compels the mines to reduce the 
 output, but also affects the workmen by forcing 
 them at times to work in intermittent shifts only. 
 Industry at large complains that in consequence of 
 this scarcity it is put to great inconvenience because 
 the delivery of coal has ceased to be punctual. The 
 scarcity of coal and coke trucks was particularly 
 acute last autumn [igo6]. The highest figure for 
 the Ruhr district was reached in the month of 
 November, when, of the wagons needed, i2'2 per 
 cent, failed (against 6*9 per cent, in 1905) ; in the 
 Upper Silesian district the record was reached in 
 October, when i3'6 per cent, failed (against 10 per 
 cent, in 1905). . . . Quite recently the railway 
 administrations have been approached by the leading 
 mines and the coal syndicate for permission to allow 
 the construction of private trucks of 20 tons each 
 to facilitate the carriage from mines to foundries 
 generally. 
 
 The Chamber of Commerce of Mannheim, which 
 is the most important river port in the South of 
 Germany, complained that the scarcity of rolling 
 stock was unprecedented. During the month of 
 September there was an average scarcity amounting 
 to 288 per cent, of covered wagons, and 36 per 
 cent, of open wagons ; during the last week of Sep- 
 tember the figures amounted even to 36*5 per cent, 
 and 40 per cent, respectively. 
 
 Comparing recent State railway balances with 
 the wagon shortages for the same years (as given 
 in Mr. Oppenheimer's report), one gets the fol- 
 lowing significant table : —
 
 vStati: Railway Finance. 
 
 117 
 
 
 Balance of Prussian 
 State Railway 
 
 Shortage of 
 
 Wagons on 
 
 Prussian State 
 
 Railway System. 
 
 Year. 
 
 Surplus Available 
 
 for General State 
 
 Purposes. 
 
 
 ^ 
 
 Number. 
 
 1896 
 
 9,086, 1 76 
 
 36,109 
 
 1897 
 
 
 
 
 10,0 t 3,235 
 
 91,950 
 
 1898 
 
 
 
 
 I 1,723,676 
 
 43,391 
 
 1899 
 
 
 
 
 13,140,980 
 
 67,553 
 
 1900 
 
 
 
 
 14,500,980 
 
 31,900 
 
 I9OI 
 
 
 
 
 16,01 1,667 
 
 346 
 
 1902 
 
 
 
 
 i6,7o*=!,578 
 
 1,192 
 
 1903 
 
 
 
 
 18,151,912 
 
 16,456 
 
 1904 
 
 
 
 
 21,065,147 
 
 38,350 
 
 In i<)()5 the available balance went up to the 
 figure already stated -;{,'23, 205,049, and in igo6 
 it rose still further, to ;^"26,043,922. How the 
 wagon shortage on the vState railways stood in 
 the same years in different coal districts is shown 
 by the following figures, taken from Mr. Oppen- 
 heimer's report : — 
 
 Coal District. 
 
 Co.\L Wagon Shortage. 
 
 1905. 
 
 1906. 
 
 Ruhr 
 
 .Saar ... 
 Upper Silesia 
 
 Aachen 
 
 Brown Coal 
 
 157,871 
 14,473 
 
 73,774 
 3,046 
 9,275 
 
 175,081 
 
 16,286 
 
 54,503 
 
 3,494 
 
 10,350 
 
 Totals 
 
 258,439 
 
 259,714 
 
 In the result we have the eventuality foreseen
 
 ii8 Railways and Nationalisation. 
 
 so long ago by Mr. Mulvany's " authority on 
 industrial matters " : that is to say, the Prussian 
 Government find themselves compelled, at last, 
 to expend on their State railways a sum far in 
 excess of what would have been necessary had 
 they provided for inevitable future developments 
 at a time when land and building sites were of 
 less value, instead of devoting their efforts 
 mainly to securing a maximum of possible rail- 
 way profits for the State treasury. In March, 
 1908, the Prussian Parliament approved a rail- 
 way programme which will involve an expendi- 
 ture of no less than ^21,700,000. This amount 
 is to be spent on the building of new main, 
 branch or narrow gauge lines; the provision of 
 second, third, and fourth tracks for existing 
 lines; the general betterment of various sections; 
 the supply of additional rolling stock, and other 
 purposes. The criticism that the extensions, at 
 least, would have been less costly had provision 
 been made for them in the past is undoubtedly 
 just ; and it is strengthened by this further con- 
 sideration : that the sum thus required by the 
 Prussian Government for railway purposes was 
 included in a loan, floated in April, 1908, for 
 which they then found it necessary to pay 4 per 
 cent. 
 
 I would suggest that the very fact of a scheme 
 of railway betterment, involving an outlay of 
 /'21, 700, 000, being now brought forward by the 
 Prussian Government, fully substantiates the
 
 State Railway Finance. i 19 
 
 complaints as to undue economy in the past, and 
 shows, too, what may happen when a Govern- 
 ment learns to look upon railway operation as an 
 important source of revenue, independently of 
 Parliamentary votes. Railway nationalisation 
 may get rid of the assumed disadvantage of 
 private companies operating lines in the interests 
 of dividends; but if, for this, it should substitute 
 a Government still more keen, and still more un- 
 yielding, in operating the railways as a revenue- 
 producing machine, any possible benefit to the 
 community would certainly not be without its 
 drawbacks. 
 
 WOULD NATIONALISATION PAY? 
 
 Looking at the whole matter from no higher 
 standpoint than that of a purely business pro- 
 position, the general experience of other coun- 
 tries, apart from Prussia (allowing, however, for 
 the attendant drawbacks experienced there), does 
 not suggest that a financial gain to the commu- 
 nity through the nationalisation of raihvays in the 
 United Kingdom is to be regarded as a matter 
 of course. Granting, freely, that in certain of 
 the countries and colonies passed under review 
 the State may have felt obliged to undertake 
 either the provision or the control of the rail- 
 ways, and that in the case of our own colonies, 
 especially, great benefits have resulted from 
 the opening up of new country to settlement, 
 there is still no proof that State management, as
 
 I20 Railways and Nationalisation. 
 
 a whole, is more efficient, more economical, 
 and more business-like than company manage- 
 ment; neither, looking at the general results, 
 is there any ground for concluding therefrom 
 that State operation here would lead to such 
 striking monetary benefit for the nation as might 
 compensate for that disturbance with the finances 
 of the country which nationalisation would 
 inevitably involve.
 
 State Railways and Politics. 121 
 
 CHAPTER VII. 
 
 STATE RAILWAYS AND POLITICS. 
 
 Apart from those practical questions of vState 
 raihvav finance which I have already discussed, 
 the question of railway nationalisation gives rise 
 to serious considerations of policy in regard to 
 the possible introduction of political influences 
 which may operate to the disadvantage alike of 
 the railways themselves, of the national or 
 colonial Parliament, and of the public interests 
 in general. Experience has shown that these 
 influences may develop more especially in the 
 following directions : — (i) Electoral pressure on 
 railway ministers with a view to secure the con- 
 struction of what are known as " political " lines, 
 designed to serve the particular interests of in- 
 dividuals or of specially favoured localities, or, 
 alternatively, to provide employment for elec- 
 tors; (2) the creation of a large body of State 
 servants who might seek to induce their repre- 
 sentatives to use their influence in Parliament 
 to secure for them exceptionally favourable con- 
 ditions of labour, at the expense, if necessary, 
 of the general community ; (3) the development
 
 122 Railways and Nationalisation. 
 
 of a tendency among- politicians of all parties to 
 promise these advantages as a means of securing 
 the support of the employe-electors, even when 
 the latter refrained from bringing pressure to 
 bear on them in the directions stated; (4) the 
 possibility of the time and attention of Parlia- 
 ment being unduly taken up by discussions on 
 the grievances of traders or of railway servants 
 which, though concerning rri,atters of detail or 
 discipline that should properly be left with the 
 railway managers, could not be avoided by the 
 Government in power for fear of the political 
 consequences to themselves; and (5) the bringing 
 of electoral pressure to bear on a Government 
 to force them either to concede non-remunera- 
 tive rates to certain industries or to refuse con- 
 cessions to certain competing districts. 
 
 Political influences of these and other kinds 
 have been brought to bear on the building or 
 the operation of Government railways alike in 
 British colonies and in foreign countries, and it is, 
 to a certain extent, because of the possibilities of 
 abuse of the system afforded by State ownership 
 and State operation that these principles have 
 been, and still are, regarded with so much favour 
 in certain cjuarters. 
 
 AUSTRALIA. 
 
 Such abuse was certainly notorious enough in 
 the early days of the Australian railways. I 
 have referred, on page 70, to certain lines in
 
 State Railways and Politics. 123 
 
 Victoria which had been either closed or dis- 
 mantled because of the cost of working and the 
 insignificance of the revenue. In effect these 
 represent a t3qie of railway constructed becaiLse 
 the Railway Ministers were unable to resist the 
 pressure either of certain political supporters to 
 whom, personally, such lines would be useful, 
 though they were not required by the com- 
 munity; or, possibly, of electors who wished to 
 be employed to lay down the lines, and were not 
 likely to be averse to further employment if asked 
 to p-'U them up again a few years later. Owing, 
 again, to like influences, the railway staffs be- 
 came unnecessarily large, and the members 
 thereof got liberal pay for doing " the Govern- 
 ment stroke " during a generously-restricted 
 number of hours. 
 
 The financial results to the railways were de- 
 plorable. The working expenses rose 50 per 
 cent., while the receipts remained about the 
 same; repairs and the betterment of lines and 
 rolling stock were neglected in order that money 
 might be saved to meet the outlay on wages and 
 unremunerative branches; while the undue inter- 
 ference of politicians rendered impossible the 
 proper administration of the lines. 
 
 It was sought to overcome these various diffi- 
 culties by the appointment of Railway Commis- 
 sioners, who were (theoretically) to have almost 
 unlimited powers of management and control. 
 Victoria set the example in 1883, and South
 
 124 Railways and Nationalisation. 
 
 Australia, Queensland and New vSouth Wales 
 subsequently adopted a like policy. At first 
 these Railway Commissioners were able to make 
 their influence felt in checking the abuses which 
 had crept in ; but the Parliaments which voted 
 the necessary supplies controlled the situation, 
 and the pressure of the politicians, though exer- 
 cised less openly than before, still made itself 
 felt to such an extent that some of the Commis- 
 sioners found their position hopeless, and gave 
 up an apparently futile struggle against superior 
 forces. 
 
 To show that the pressure of the politicians 
 continued, notwithstanding the appointment of 
 the Railway Commissioners, I may allude to 
 what happened in New South Wales in 1902, or 
 14 years after Sir Henry Parkes had, bv adopt- 
 ing the policy in question, sought to check the 
 abuses due to the subjection of railway manage- 
 ment to political influences. The Labour party, 
 who then held the balance of power in the 
 Colonial Parliament, secured the passing of an 
 Act which forced the Railway Commissioners to 
 make concessions to the " running " staff at an 
 estimated cost of ;^6o,ooo a year, the most im- 
 portant of the new regulations being that the 
 men were to work eight hours a day instead of 
 nine. On the other hand, they considered that 
 ^6,000 a year was too much to divide between 
 the three Railway Commissioners, although 
 these gentlemen were discharging duties which
 
 Statr Railways and Politics. 125 
 
 here fall more or less upon the boards of 
 directors and the chief executive officers of the 
 railways. They desired to economise in this 
 respect by dispensinfj^ with the services of the 
 Commissioners and having, instead, a general 
 manager at the lowest possible salary, more 
 money being thus made available for the wages 
 of the " running staff," in whose welfare the 
 Labour party were mainly concerned. This, 
 however, will be found to be the invariable 
 attitude when " Labour " gets a controlling or 
 even an influential voice in the management of 
 publicly-owned enterprises. From the point of 
 view of the average labour representative the re- 
 sponsible officers are always paid too much and 
 the rank and file too little. 
 
 As further illustrating the conditions which may 
 exist in regard to colonial railway operation under 
 a regime of Government control, I would refer tc 
 an inquiry held in Victoria in igoi by a Select 
 Committee on the Management of the Railway 
 Department (Appointments and Promotions). 
 The department, it seems, had been invested 
 with power to make permanent appointments to 
 the Railway Service, but, " through lack of per- 
 ception or neglect " (as the vSelect Committee 
 reported) in making application for a sufficient 
 number of permanent employes, so-called " tem- 
 porary " employes had been put on by the higher 
 officials in the various branches to such an extent 
 that these " supernumeraries " represented, in
 
 126 Railways and Nationalisation. 
 
 i()Oi, no less than 34 per cent, of the staff^ — 
 ,vOo7 out of a total of 11,956. The Committee 
 found that " in making these appointments 
 official patronage was freely exercised, the 
 officials responsible being, apparently, influenced 
 in their choice by personal or other considera- 
 tions." There was an ofiicial register of appli- 
 cants, but the officer in charge of it admitted to 
 the Committee that " his list was practically a 
 farce, and that supernumeraries were appointed 
 irrespective of it." Under the Act dealing with 
 such appointments no person was to be employed 
 as a supernimierary for a longer period than six 
 months in any one year; but the Committee 
 say :^ 
 
 This provision is frequently set at defiance. 
 Many supernumeraries who come within the cate- 
 gory of those prohibited by the Act from being" 
 employed for more than six months have been kept 
 continually employed for years, their retention 
 apparently being", in most instances, the outcome 
 ol personal favouritism. Some of these, among 
 them the sons and relatives of oflRcials, applied and 
 were appointed as supernumerary repairers, and 
 were entered In the staff register as such, but were 
 immediately g-iven clerical work to perform. After 
 years of constant employment as supernumeraries, 
 when applications for permanent appointments were 
 invited, these men applied and were permanently 
 appointed as repairers, but have ever since been 
 eng-ag'ed at clerical duties. Many of the super- 
 numeraries have, by reason of their continuous 
 employment for ten or twelve years, virtually become 
 permanent employes.
 
 State Railways and Politics. 127 
 
 The Committee further say in their report:- — 
 
 Rcg-arding- the medical examination to test the 
 colour-sense and visual etBciency of candidates and 
 employes, your Committee is surprised to find that 
 the experts and the higher officials are not more in 
 accord in their determination of what degree of 
 efficiency is essential to the safety of the g-eneral 
 public. In numerous instances the certificates of 
 the medical g-entlemen have been over-ridden by 
 the opinions of officers in the various branches of the 
 Department. Employes performing- duties of great 
 responsibility have been allowed what is called a 
 practical vision test by the Department, and kept in 
 their positions despite the fact that they were pre- 
 viously unconditionally rejected by the medical men. 
 Cases are on record where engine-drivers rejected 
 by doctors for defective vision have been employed 
 until even the so-called practical test was beyond 
 their ability to pass. 
 
 One can scarcely conceive the possibility of 
 conditions such as these coming into existence 
 in the case of any company-owned railway in 
 the United Kingdom. It may be pleaded that 
 they have since been reformed in Victoria and in 
 tlie other colonies where they may have de- 
 veloped. But the fact that they should have been 
 found at all does not confirm the suggestion as to 
 the superiority of Government over company 
 management. 
 
 Even to-day there are politicians in Australia 
 who seek to gain the favour of electors by advo- 
 cating extensions of the railways regardless of 
 any considerations, either of railway policy or 
 of that colonial credit for which the railways
 
 128 Railways and Nationalisation. 
 
 constitute the chief asset. In the recent elections 
 in Queensland, as told by the Australian corre- 
 spondent of the Economist, in the issue of that 
 journal for April ii, 1908, one political leader 
 advocated the construction of a number of rail- 
 way branches, the cost of which would be very 
 great, while another leader, not to be outbidden 
 bv his rival, promised to support many more. 
 
 NEW ZEALAND. 
 
 Reverting to Professor Le Rossignol's com- 
 ments on the position of the Government railways 
 in New Zealand, it is significant to find that he 
 considers their "financial failure" (as he calls 
 it) to be largely due to political influences. This 
 American authority says : — 
 
 Politics have had altogether too much to do with 
 the construction of roads, the appointment and pro- 
 motion of officials, the frequency of service, the 
 fixing- of rates, and the departmental administration 
 in general. Railways have frequently heen built for 
 the sake of securing votes rather than traffic, and 
 business has been so often subordinated to politics 
 that it is no wonder that the net returns are political 
 rather than financial in their character. 
 
 He thinks, however, that even now, under effi- 
 cient management, the system could be made to 
 pay. " It is," he suggests, " altogether probable 
 that a private company could so operate the roads 
 as to pay interest on the capital cost, taxes on its 
 property, and moderate but increasing dividends
 
 State Rah, ways and Politics. 1^9 
 
 on its stock, and, at the same time, reduce rather 
 than increase the charges for passengers and 
 freight. From a mere financial point of view," 
 he adds, " it would pay the Government to sell 
 the railways to a private corporation, which, like 
 the railway companies of the United States, 
 would do much to develop the varied resources of 
 the country." 
 
 CAPR COLONY. 
 
 Dealing with the subject of " The Nationalisa- 
 tion of Railways " from the point of view of his 
 experiences on the Cape Government railways, 
 on which he has been engaged for some years, 
 Mr. W^illiam Ben Edwards said, in the course of 
 an article published in The Nineteenth Century 
 for March, 1908: — • 
 
 As the combined railways of the country would 
 form one of the greatest spending and earning 
 (lovernment departments in the world, it is obvious 
 that the head of the department would have to be a 
 Cabinet Minister, with a seat in the House ol 
 Commons, and answerable to the House for all the. 
 details of the business over which he presided. He 
 would at all times be liable to be questioned on any 
 and every trivial matter connected with the railways, 
 and, if he failed to satisfy his inquirer, the latter 
 could move the adjournment of the House to discuss 
 the matter, provided he received the support of forty 
 other members. . . . The author can remember 
 a case at the Cape when the Minister for Crown 
 Lands and Public Works was questioned about the 
 overcrowding of a compartment in which his inter- 
 rogator had travelled to Cape Town. In another case 
 
 K
 
 130 Railways and Nationalisation. 
 
 a member asked the Minister why he had not been 
 allowed to pass a barrier at the terminus to see 
 someone off when he had no ticket. 
 
 The ordinary Parliamentary procedure at the Cape 
 may be briefly described as follows : Suppose notice 
 of a question was given to-night, the Minister at 
 once communicated with the General Manager of 
 Railways, who, the first thing in the morning, would 
 transmit the wording of the question to the head 
 of the sub-department concerned, say to the 
 engineer-in-chief, who would at once telegraph for 
 particulars from his local subordinate on the spot, 
 commencing his inquiry "Parliamentary." The 
 local officer would reply with the necessary informa- 
 tion as quickl}' as possible, which would be sent on 
 to the Minister, who would, perhaps, to-morrow 
 night rise in his place in the House and answer his 
 inquirer in the words of the message sent by the 
 local official away up the country. It should be 
 understood that at the commencement of each 
 Session all chief district officers received strict in- 
 structions that any message commencing " Parlia- 
 mentary " was to have precedence of all ordinary 
 business except the safety of the trains and public. 
 
 It is also evident that the whole of the legislative 
 niachinery would be liable to be upset by a defeat 
 of the Government on a railway question. Would 
 the country be prepared to pass through a Cabinet 
 crisis, or even a general election, because a branch 
 line to some almost unknown spot was rejected? — 
 and this would only be the logical result if the 
 Government failed to carry their measure. The 
 Cape Government in 1890 went out of power on 
 being refused money for branch lines. 
 
 To this I may add that in 1907 the Governor of 
 Cape Colony appointed a Commission to enquire 
 into the question of railway management and
 
 Statk Railways and Politics. 131 
 
 the construction of new railways, and tiiis Com- 
 mission, in its report (which recommended the 
 establishment of a Railway Board to advise the 
 Minister of Railways in all important matters of 
 policy) said : — 
 
 It is impressed with the necessity of removing, 
 as far as possible, the management of the railways 
 fiom the influence of party politics without, at the 
 same time, lessening the legitimate right of control 
 which must be exercised by Parliament as the repre- 
 sentative of the taxpayers. 
 
 NATAL . 
 
 The colonv of Natal has its " political " lines, 
 these having been built to serve the interests of 
 certain agricultural communities in localities 
 where there could be little or no hope of working 
 expenses being covered under ordinary con- 
 ditions. On the other hand, the existence of 
 these verv lines was of invaluable strategic ad- 
 vantage in the eventful period of the Boer War, 
 from 1899 to 1902; they were of a still more 
 marked benefit during the native rebellion of 
 1906; and thev also conferred an incal- 
 culable advantage, not onlv on Xatal, but 
 on South Africa in general, in 1907, bv 
 allowing of the rapid manipulation and 
 quick distribution of troops from the branch 
 line termini at the time of the threatened rising 
 in Zululand. In these respects, therefore, the 
 building of the lines in question has, in this in- 
 
 K 2
 
 132 Railways and Nationalisation. 
 
 stance, been abundantly justified by unforeseen 
 results. 
 
 Another fact, not to be ignored, is that South 
 African legislators have a personal reason for 
 preferring Government to private ownership of 
 railways, inasmuch as, on being elected, each of 
 them receives a free pass entitling him to travel 
 over the Government lines, not onl)- in his own 
 colony, but in all the other British colonies in 
 South Africa as well. Such pass is available 
 during the full period of his membership, 
 whether the " House " to which he belongs is 
 in session or not. Should the member be a busi- 
 ness or professional man, requiring to go pretty 
 frequently between, say, Durban and Pretoria — 
 a journey of 511 miles, for which an ordinary 
 first-class return ticket costs ;^'8 8s. yd., and a 
 second-class return ;£6 3s. 4d. — the privilege of 
 being able to travel as a Parliamentary "dead- 
 head " whenever he pleases must be a valuable 
 perquisite; though the general manager of the 
 Natal railways, in his report for 1906, bewails the 
 fact that the issue of so many free annual passes 
 involves a " heavy loss of revenue " to the rail- 
 way department. 
 
 CENTRAL SOl'TII Al'KirAN RAILWAYS. 
 
 The Commission appointed in 1907 to inquire 
 into the organisation and administration of the 
 Central South African Railways (Transvaal and 
 Orange Free State) spoke very emphatically of
 
 Stati': Railways and Politics. 133 
 
 the dangers that might result from the exercise 
 of undue pohtical influence in the operation of 
 the lines. They said on this subject : — 
 
 Tfie Commission have been impressed by the 
 earnest warning which has been addressed to them 
 by several witnesses and informants against the 
 danger of allowing political influences to intrude 
 upon questions of railway construction and manage- 
 ment. Such influences may affect both matters of 
 domestic and matters of foreign policy. In the 
 former case they may have such consequences as the 
 construction of unrcmunerative lines, or granting of 
 un remunerative rates, or local purchase of supplies 
 w ithout sufficient justification ; or even the employ- 
 ment of unnecessary hands, or payment of unneces- 
 sarily high salaries or wages, or appointment of un- 
 suitable officers. Other colonies in South Africa 
 and elsewhere have experienced some or all of these 
 e\ ils. . . . From such consequences the Central 
 South African Railways have fortunately been free, 
 and it is most important that their freedom should 
 continue. In this view the arrangement made by 
 Lord Milner, which placed their administration in 
 the control of a body not responsible at first hand 
 to the popular electorate, was happily devised. 
 A joint administration, such as the Rail- 
 way Committee has been, has the great advantage 
 that it minimises, so far as may be, the mischief of 
 political interference. Whatever changes are made 
 in future, the Commission would not welcome any 
 step which would render such interference easier. 
 
 There is the question, again, as to how far a 
 Government-owned railway should be concerned 
 in the general policy of the State or Colony in
 
 134 Railways and Nationalisation. 
 
 wliich it operates. On this the Commission 
 said : — 
 
 The remaining aspect of the question, which con- 
 cerns what may be called the foreign policy of the 
 railways, is of even greater importance. In this 
 respect the Central South African railways share a 
 disability common to all the railways in South 
 Africa, which, from the days of their construction, 
 have been the pivot of South African inter-colonial 
 politics, and arc likely to remain so until some 
 definite steps towards their amalgamation are taken. 
 So long as this state of things lasts, it is obvious 
 that the larger questions of railway policy must be 
 determined by the Colonial Governments and Parlia- 
 ments which have so vital an interest in the issues 
 of which the railways are one battlefield. But the 
 unhappy results which have ensued, particularly in 
 the matter of the through rates from the ports, are 
 notorious throughout South Africa. The railways 
 are neither run as a commercial concern nor allowed 
 to play their legitimate part in promoting the de- 
 \'elopment of the country. ... As matters now 
 stand, not only does the financial equilibrium of the 
 respective colonies depend largely on their railway 
 revenue, and consequently on their power of at- 
 tracting and holding as large a share as possible 
 of the total South African traffic, but there is a 
 tendency to make an illegitimate use of the railways 
 for the purpose of creating trade and manufactures 
 in violation of the spirit of the existing Customs 
 Union. 
 
 There can be no doubt that in an undertaking of 
 such magnitude as a large railway it is unsound to 
 attempt to combine diplomatic and executive func- 
 tions. . . . They do not feel sure that any satis- 
 fcictorv solution can be found, short of the amal-
 
 State Railways and Politics. 135 
 
 gamation of all South African railways, and their 
 extraction from the slough of poHtics once for all. 
 
 BRAZIL. 
 
 A well-recognised form of political corruption 
 in Brazil, in the days when railways were more 
 extensively owned by the State, was the employ- 
 ment of a considerable number of extra workers 
 on the Government lines prior to or pending a 
 General Election. 
 
 BELGIUM. 
 
 The extent to which political influences are 
 brought to bear on the operation of the Belgian 
 State railways is fully shown by the translation 
 of M. Marcel Peschaud's articles in the Revue 
 Politique et Parlementaire which I have given in 
 my book on " State Railways." Here it may 
 sulBce to mention that M. Peschaud quoted the 
 following remarks made by M. Hubert so far 
 back as 1889 : — 
 
 Every instant some member rises, demanding im- 
 provements in the service, the creation of new 
 stations, the arranging of more stoppages, or the 
 concession of tariffs of greater advantage to in- 
 dustries in which he is interested. Then, for im- 
 proving the position of the officers, officials, and 
 labourers, notwithstanding the sums already ex- 
 pended under this head, what complaints and de- 
 mands are not put forward. Here we have an evil 
 inherent to exploitation by the States : money that 
 belongs to everybody belongs to nobody.
 
 136 Railways and Nationalisation. 
 
 In 1904, M. Peschaud further stated, the Bel- 
 gian Minister of Railways said that the sum 
 total of the expenditure involved in carrying out 
 the amendments proposed by a single deputy 
 would be ;6'90,40o; and in 1905 he further calcu- 
 lated that the amount concerned in the amend- 
 ments proposed for improving the position of the 
 personnel represented an increase in the salaries 
 and wages paid of 40 per cent. 
 
 Added to this, the grievances of the railway 
 servants are made the subject of almost intermin- 
 able debates, while Parliamentary candidates 
 openly bid for the votes of the railway electors by 
 promising them better conditions and assuring 
 them they have nothing to hope for in this 
 respect " from the other side." i 
 
 GERMANY. 
 
 There is much less suggestion of the exercise 
 of political pressure by railway men or their Par- 
 liamentary friends in Prussia, partly because the 
 Government are in a much stronger position 
 than is the case in lielgium or in the British 
 colonies, and partly because the working classes, 
 as a whole, have but a very slight representation 
 in the Prussian Diet. 
 
 Yet Social Democrats in the Imperial Diet do 
 not hesitate to bring forward the grievances of 
 their comrades on the vState railways, alleging 
 that the hours of service are too long and that
 
 State Railways and Politics. 137 
 
 accidents are the result. When, however, these 
 representations were once more advanced early 
 in 1908, the President of the Railway Bureau, 
 Dr. Schulz, showed that the larger number of 
 accidents occurred early in the day, when the 
 men were fresh, and not later on wiien they 
 might be supposed to be fatigued. 
 
 In Baden a Social Democrat was discharged 
 from the service of the State railways on his be- 
 ing elected a member of the city council, and pro- 
 tests were raised in the Parliament there by the 
 Social Democrats ; though the dismisal was de- 
 fended by the Prime Minister on the ground that 
 the Social Democratic party regards strikes as 
 one of the most important means of obtaining its 
 ends, and the State railway authorities could not 
 run any risk of interruption of so important a 
 public service. 
 
 On the other hand, there has been a consider- 
 able tendency in Germany to bring political 
 pressure to bear on the Government to prevent 
 the concession to one set of traders, or to one 
 particular district, of lower rates or advantages 
 that might possibly operate to the disadvantage 
 of other traders ur other districts. AAHiereas a 
 railwav company need consider only the people 
 served by its own lines, a Minister controlling a 
 network of State railways extending over the 
 whole country must balance as far as he can the 
 interests of one locality against those of another; 
 and, where there is conflict between these
 
 138 Railways and Nationalisation. 
 
 different interests, he may be forced to withhold 
 or to withdraw otherwise desirable concessions, 
 for fear of possibly undesirable political conse- 
 quences. As I have already dealt with this 
 branch of the subject in the chapter on " The 
 Railways of Germany " in my book on " Rail- 
 ways and their Rates," I will here do no more 
 than refer to the example, given on page 261 of 
 that book, showing how the Governments of 
 vSaxony, Baden and Wiirtemberg, by threatening- 
 Prussia with the opposition of their representa- 
 tives in the Reichstag and the Bundesrath to the 
 Imperial Bill authorising a commercial treaty 
 with Russia, compelled the Prussian Govern- 
 ment to cancel certain reductions of grain rates 
 which placed the traders in the three States in 
 question at a disadvantage. 
 
 FRANCE. 
 
 Much of the trouble experienced with the rail- 
 ways in France has been due to the fact that 
 deputies, }ielding to the pressure of their con- 
 stituents, themselves brought pressure to bear 
 on successive Ministries to construct or effect the 
 construction of small lines which may have been 
 of local convenience, but were doomed to be 
 financial failures owing to the insufficiency of 
 the traffic. It was mainly through inducing 
 the great companies either to build or to take 
 over lines of this description that the French
 
 State Railways and Politics. 139 
 
 Government had to enter into, with them, 
 those financial compHcations that came within 
 the range of " guarantee of interest." 
 
 As regards vState servants in France a law passed 
 in 1884 forbade State employes to form trades 
 unions; and even so thorough-going a Radical 
 as M. Clemenceau has persisted, in spite of all 
 protests, in his refusal to allow them to become 
 members of the Confederation du Travail, and 
 has spoken most vigorously in defence of the 
 position he has thus taken up. The main diffi- 
 culty felt by successive Ministers in France, in 
 the way of modifying the law, is the drawing 
 of the line between the right to form a trade 
 union and the right to strike. 
 
 HOLLAND. 
 
 Fear of possible political disadvantages was 
 one of the reasons why, in May, 1908, the Second 
 Chamber of the States-General in Holland re- 
 jected (after five days' debate) a resolution in 
 favour of a scheme for the operation of the 
 State railways there by the Government them- 
 selves, instead of by a private company as at 
 present. Dealing with this point in an article 
 on the subject which, following on a visit to 
 Holland, I contributed to the Railway Ne%vs of 
 June 6, 1908, I wrote : — 
 
 If, it was argued, the Government of a small 
 country like Holland, owning and operating all its 
 cwn railways, had to negotiate on questions of
 
 140 Railways and Nationalisation. 
 
 through traffic with the Government of a powerful 
 neighbour, also owning- its own railways, there would 
 be much more risk of delicate diplomatic situations 
 arising than if such negotiations were carried on by 
 private companies. One member, Mr. Plate (late 
 president of the Rotterdam Chamber of Commerce), 
 mentioned, without going into details, that Belgium 
 had been obliged to make certain concessions to 
 Germany in railway matters from what were 
 obviously political considerations. 
 
 It was held, also, that domestic as well as inter- 
 national politics might be involved. The Social- 
 Democrats had shown a special interest in the pos- 
 sibility of getting better wages and conditions for 
 the railway workers ; but the more cautious members 
 did not like the prospect of 30,000 railwaymcn being 
 directly employed by the State, especially as the 
 Dutch railways could not give higher wages than 
 at present, and still pay their way. Fears were, 
 again, very frankly expressed that there would be a 
 repetition in Holland of the conditions experienced 
 in Belgium, where, it was pointed out. Deputies bid 
 for the votes of railway electors by promising them 
 increased pay or other advantages, and compromise 
 the railway situation by trying to force the Govern- 
 ment to carry out the promises thus made. 
 
 In other directions there have already been ten- 
 dencies to introduce political or social considerations 
 into railway working in Holland. A certain 
 member of the Second Chamber actually induced the 
 responsible Minister to compel the Holland Railway 
 Company to stop the Paris-Amsterdam express at 
 Haarlem, because he would then be enabled to reach 
 his home by dinner time after the sittings of the 
 Chamber ; and the express has been locally known 
 by his name ever since. When, therefore, in the 
 course of the debate, a Social-Democrat member, 
 Mr. Schaper, said, " Why do you fear political inter- 
 ference with the railways ? We have already got
 
 State Railways and Politics. 141 
 
 the Hugenholtz express. What could be worse 
 than that?" there was a roar of laughter in the 
 House. In another instance, the Minister himself 
 tried to induce the Holland Company to put on a 
 new and confessedly non-remunerative train so that 
 the children in a certain district could get to school 
 in time ; but, as he would not either guarantee the 
 company against loss, or allow them to withdraw 
 another train instead, they declined, on this occasion, 
 to comply with his wishes. 
 
 VIEWS OF A DUTCH AUTHORITY. 
 
 In a conversation I had with the late president 
 of the Rotterdam Chamber of Commerce during 
 my visit to Holland, Mr. Plate made some obser- 
 vations so thoroughly to the point that I venture 
 to reproduce them. He said : — 
 
 There is no system which in itself is absolutely 
 perfect, but there is more to be said against the 
 operation of railways by the State than in its 
 favour. Much depends on national wants and 
 conditions, and, also, on the mutual relations of 
 Government and Parliament. In Prussia you have 
 a strong Government and a weak Parliament. In 
 Holland we have general elections every four years, 
 so that there might be a continuous change in rail- 
 way policy, the more so as even the details of 
 railway operation would — in our country — be made 
 subjects of Parliamentary debate. In England the 
 general elections are less frequent, and the railway 
 policy might be more permanent ; but you still have 
 a Parliament which is much stronger than the one in 
 Prussia. In the one case, therefore, the Govern- 
 ment can control the railways as they please, 
 Parliament having little or nothing to say ; 
 whereas both in Holland and in England Parliament 
 would have everything to say, and would readily
 
 142 Railways and Nationalisation. 
 
 impose its will on the Government. I remember 
 that an ex-Prussian Minister, who took part in the 
 negotiations for the purchase of the railways there 
 by the State, once said to me : " That Prussia should 
 have taken over her railways was quite right; but 
 the adoption of a like policy in your country — that's 
 another matter. State railways are only possible 
 where you have a strong Government, or where 
 Parliament does not want to interfere, and the opera- 
 tion can be carried on without Parliament being 
 consulted." 
 
 In Holland there would be two strong arguments 
 against State operation : (i) From the moment 
 the Government themselves undertook to work 
 the railways attempts would certainly be made 
 to bring influence to bear on Parliament in 
 order to secure increases of wages for the 
 employes. It would not be merely a question 
 of the Labour Party doing this out of sympathy 
 with their friends outside. Members of all 
 parties would think it desirable to secure the 
 electoral support of a large body of Government 
 v.'orkers. (2) Under a system of State operation, 
 people living in outlying districts — in the North ot 
 Holland, for instance — where the passenger traffic is 
 small, would demand of the Government that they 
 should have a larger number of trains, and be placed 
 more on a footing of equality with the residents in 
 central districts, where the traflfic is large. In each 
 of these two instances you would get Parliamentary 
 Interference and an increase in working expenses. 
 
 Then it is easier for a private company than it is 
 for a Government to put the right man in the right 
 place in the operation of a railway system. If a 
 private company thinks fit to pay a good salary in 
 order to secure the services of an exceptionally cap- 
 able man, it can do so. On a State railway It 
 might, in these circumstances, be necessary to get a 
 Parliamentary vote, and you would find there were
 
 State Railways and Politics. 14-5 
 
 members who, though keenly alive to the need of 
 good pay for the ordinary workers, would resent 
 the giving of a substantial amount to the occupant 
 even of a highly responsible post. 
 
 A railway company, again, in making an appoint- 
 ment, is in a position to consider efficiency only ; 
 while a Railway Minister will be expected, in 
 making his appointments, to satisfy his political sup- 
 porters and not to offend his political opponents. He 
 may thus be influenced by personal considerations, 
 and by a desire to be regarded as impartial, rather 
 than by the question of efficiency alone. 
 
 One must remember, also, that both private com- 
 panies and Governments make mistakes in their 
 choice of men. But whereas a private company can 
 easily get rid of, or transfer to another post, a 
 person found to be not the right man for the place, 
 it is much more difficult for a Government to make a 
 change which may involve questions and unpleasant 
 debates in Parliament. So the tendency would be 
 for an inefficient, though not absolutely incompetent. 
 State official to remain in his post, when once ap- 
 pointed, and the service might suffer in consequence. 
 
 Besides the certainty of wages questions being 
 raised in Parliament, there would be the prospect of 
 railway men's grievances being frequently brought 
 forward for discussion. In Holland petitions from 
 public servants with complaints to make are already 
 freely presented and debated on at considerable 
 length. What would be the position when we had 
 30,000 more State servants, as railway workers? 
 is it not likely, also, that heads of departments 
 would hesitate to discharge undesirable men if they 
 had to run the risk of all the unpleasantness which 
 Parliamentary intervention might involve? Do you 
 not think the whole tendency of such conditions 
 would be to weaken the discipline which ought 
 especially to be maintained in the operation of so 
 important an undertaking as a railway?
 
 T44 Railways and Nationalisation. 
 
 CHAPTER VlJl. 
 
 STATR RAILWAYS AND LABOUR. 
 
 " We most emphatically express the opinion," 
 declared a resolution passed, with only two dis- 
 sentients, at the Middlesbroug|i Congress of the 
 Amalgamated Society of Railway Servants in 
 October, 1907, " that State ownership is the only 
 practical solution that will confer permanent 
 benefit upon railway workers and all other sec- 
 tions of the community." 
 
 Labour's point of view on the nationalisation 
 controversy is essentially one of self-interest. 
 The words, " and all other sections of the com- 
 munity," were probably added to the foregoing 
 resolution for the sake of appearances ; but the 
 very slight regard that was shown for the in- 
 terests of these other sections in the threats of a 
 railway strike in the United Kingdom in the 
 autumn of 1907, as well as in railway troubles 
 elsewhere, strengthens the impression that the 
 one great attraction which vState ownership has 
 for the railway man who believes in it is the 
 possibility of his getting from the State shorter 
 hours and higher pay. Provided that he could 
 secure these results, the other sections of the
 
 State Railways and Labour. 145 
 
 coninuinity would have to take their chance, and 
 even, it may be, suffer in order that he may gain. 
 Sir John Gorst has assured railway men that, 
 with State ownership, shorter hours and higher 
 pay would accrue to them ; and it would certainly 
 be contrary to all precedent if, on the advent of 
 nationalisation, the railway men did not bring to 
 bear on the Government all the pressure they 
 could, political or industrial, in order to secure 
 the fulfilment of their aspirations. But, unless 
 the cost is to fall on the community, any really 
 material betterment of the railway men's posi- 
 tion under State ownership and operation would 
 be dependent mainly on the possibility of effect- 
 ing the much-talked-of economies. These, ac- 
 cording to the nationalisers, are to be secured 
 mainly through abolishing the railway directors, 
 getting rid of duplicate railway services, etc. 
 But any saving on the fees of the former would 
 probably go to paying the staff of State officials 
 taking over the duties of supervision, and would 
 not, probably, be available for the ordinary rank 
 and file; and any substantial reduction in the 
 number of trains run would mean that fewer men 
 would be wanted, so that many of the present 
 staff, instead of having their conditions im- 
 proved, would have to join the unemployed. 
 
 decreased staffs. 
 During the debate on the resolution from 
 which I have already quoted the unpleasant
 
 146 Railways and Nationalisation. 
 
 prospect of a decrease, under nationalisation, in 
 the number of railway men employed was pointed 
 out by Mr. Richard Bell, M.P., general secre- 
 tary of the Amalgamated Society of Railway 
 Servants. Amid cries of " Question ! " he 
 said : — - 
 
 He had listened to the speeches, and it was with 
 pleasure he recognised how ready and anxious and 
 willing every one of the speakers was to make 
 sacrifices in the interest of the public benefit. 
 But what he wished to say was just by way of re- 
 cording the fact that, when the time for the 
 nationalisation of railways came, many thousands of 
 rail way men would have to suffer. . . . There 
 was no question about it. There was a quantity of 
 surplus labour now which would be increased if all 
 competition were done away with and the railways 
 were put under one company or one body. They 
 must not forget the fact. 
 
 CLERICAL staffs. 
 
 One of the stock arguments of the nationalisers 
 is that, with a single State system the services 
 of " about 3,000 clerks "in the Clearing House 
 could be dispensed with, and economies secured 
 in this direction. " All this labour," says one 
 writer on the subject, " is pure waste, necessi- 
 tated by competition." Incidentally he does not 
 stop to consider that this competition has been 
 deliberately fostered by successive Governments, 
 supported by public opinion, since the earliest 
 period of railway history. Be that as it may, it 
 seems to be thought that the salaries of about
 
 State Rah. ways and Labour. 147 
 
 .^,000 clerks would be useful for increasing the 
 wages of drivers, firemen, platelayers and others. 
 Perhaps so. But it would also mean the throw- 
 ing of another 3,000 persons on the unemployed 
 list. 
 
 While, however, manual workers are ready 
 enough to demand that every possible considera- 
 tion must be shown for their own interests, they 
 are apt to ignore any right to equal consideration 
 on the part of clerks, accountants, bookkeepers 
 and others who may also have a pardonable 
 desire to live, and move, and have their being. 
 
 Ri:-ABS()RPTION IN OTHER INDUSTRIES. 
 
 When giving an address on the nationalisation 
 of British railways at the Wardle Free Library 
 in January, 1908, the Rev. H. V. Mills, of 
 Kendal, said, " If the railways were nationalised, 
 40,000 men would be rendered temporarily idle; 
 but such an impetus would be given to trade in 
 other directions that employment w^ould soon be 
 found for them." 
 
 Mr. Mills' assurance would probably not be 
 regarded by the 40,000 men as particularly reas- 
 suring. It is the same sort of argument that so- 
 called " temperance " reformers use when 
 advocating the wiping out of the liquor industry. 
 Unfortunately, industrial revolutions are not 
 recovered from quite so easily. There is the 
 personal difficulty in the way of men brought up 
 
 L 2
 
 148 
 
 Railways and Nationalisation. 
 
 to one particular class of work adaptin^^ them- 
 selves readily to another; and there is the com- 
 mercial difficulty in the absorption of unem- 
 ployed persons by industries already fully sup- 
 plied with men, and not likely, in the case in 
 point, to undergo further expansion simply be- 
 cause the State had acquired the railways under 
 conditions w^hich must, in themselves, have a 
 considerable effect on the money market. In the 
 end railway men would see brought about in the 
 railway world an industrial upset from which few 
 of them could hope to gain, and many would 
 be certain to lose. 
 
 NUMBER OF RAILWAY WORKERS. 
 
 A return issued by the Board of Trade shows 
 that the total number of railway servants, in all 
 grades, at the end of 1907, was 621,341, classified 
 as follows : — 
 
 Enginedrivers & mo- 
 
 
 Stationmasters 
 
 8,688 
 
 tor men ... 
 
 28,141 
 
 *Porters 
 
 56,402 
 
 Firemen 
 
 25,714 
 
 Policemen... 
 
 2,127 
 
 Goods guards and 
 
 
 *Engine cleaners ... 
 
 21,458 
 
 brakesmen 
 
 16,786 
 
 *Carmen and van- 
 
 
 Passenger guards ... 
 
 8,474 
 
 guards, etc. 
 
 24,256 
 
 Signalmen 
 
 28,658 
 
 *Carriage cleaners 
 
 
 Pointsmen 
 
 745 
 
 and e.Kaminers ... 
 
 10,720 
 
 Shunters 
 
 13,158 
 
 Men and women 
 
 
 Permanent way men 
 
 67,184 
 
 clerks 
 
 58,503 
 
 Permanent way in- 
 
 
 Boy and girl clerks 
 
 
 spectors 
 
 I, '45 
 
 (under 18) 
 
 10,672 
 
 Other inspectors ... 
 
 8,084 
 
 ^Labourers ... 
 
 59,812 
 
 Ticket collectors and 
 
 
 *Mechanics&artisans 
 
 93,797 
 
 examiners 
 
 4,163 
 
 ■^Miscellaneous 
 
 33,083 
 
 * Including persons under eighteen years of age.
 
 vStatr Railways and T.aboir. 149 
 
 THE LABOUR VOTE AND INTEREST. 
 
 Even if all the railway men now employed 
 were kept on, and whether they secured any in- 
 crease in wages and decrease in hours or not, 
 some very material changes might have to be 
 brought about in their general position. As 
 employes of the State they would have to be 
 regarded fnjm a different standpoint from that 
 of emploves of commercial companies. 
 
 1 have shown in an earlier chapter the sort 
 of political pressure which railwaymen in other 
 countries have, under State ownership, brought 
 to bear on their Governments in order to pro- 
 mote their own advantage. It is too much to 
 assume that there is no probability of similar 
 dif^culties arising here. What the position is 
 already was shown in some remarks made by 
 F.ord Joicey on the occasion of the annual meet- 
 ing of the Newcastle Chamber of Commerce in 
 May, 1908, when he is reported to have said, in 
 regard to railway nationalisation : — 
 
 He should always oppose such proposals, for 
 Government control would be neither as economical 
 nor as effective as private enterprise. A great 
 danger would also lie in political power given by 
 such nationalisation, a matter in which they had an 
 object-lesson in dockyard members, whose aim 
 seemed to be the betterment of their constituents at 
 the expense of the nation.
 
 I50 Railways and Nattonalisation. 
 
 THE EXAMPLE OF THE POST OFFICE SERVANTS. 
 
 The possibilities of the situation have been 
 further indicated by the action from time to time 
 of the organised forces of Post Office servants. 
 The Spectator stated the position in this respect 
 very clearly in its issue of July ii, 1908, when it 
 said concerning the Post Office employes : — 
 
 These men possess a powerful organisation, 
 which is admittedly devoted to the sole purpose ol 
 improving- the financial position of the postal 
 servants at the expense of the taxpayer. With this 
 object in view, the organisation brings pressure to 
 bear at every contested election, and Members of 
 Parliament are induced to make promises which 
 (-an only be redeemed at the cost of the Exchequer, 
 solely to obtain the votes of a body of men who are 
 indifferent to ordinary political issues. Already 
 many politicians are gravely regretting that the 
 House of Commons did not support Mr. Gladstone 
 and Mr. Disraeli when they had the foresight to 
 join in proposing that Civil servants should be dis- 
 franchised. It is impossible to contemplate with- 
 out the gravest alarm the prospect of a vast new 
 body of State employes directing their votes on the 
 same cynically selfish principles as actuate the 
 postal servants. 
 
 How the organised pressure here spoken of 
 operates in actual practice was shown in the 
 Hou.se of Commons on July 16, 1908, when, 
 after the Postmaster-General had made his 
 annual statement — in the course of which he 
 sliowed that the advances in the rates of pay, 
 1(t lucel the recommendations of the Hobhoust"
 
 State f\AH.^v.\^■s and f>ABorR. 151 
 
 Committee, would result in an ultimate increase 
 of ^"1,000,000 a year in the cost of working — 
 one member after another rose to bring forward 
 complaints from Post Office servants, mainly in 
 his particular constituency, six hours of the 
 sitting being thus taken up, apart from the time 
 the Postmaster-General had occupied with his 
 opening statement. Mr. Stuart (Sunderland) 
 spoke of it as "a remarkable debate," and it is 
 certainly doubtful if Al. Peschaud could find 
 anything more remarkable in the records even 
 of the Belgian Chamber in regard to the State 
 railway servants of that country. The Post- 
 master-General himself raised a mild protest, for 
 in winding up the debate he asked the members 
 " to look at the scheme as a whole, and not to 
 think so much about constituents as about the 
 service generally." The Globe of July 17, 1908, 
 was in no way too severe in its comments on 
 so deplorable an exhibition when it said : — • 
 
 It is high time that this form of log--rolling and 
 axe-grinding- should cease. It is as derogatory to 
 Parliament as it is damaging to the public service 
 that members of the House of Commons should per- 
 mit themselves to become mere delegates and 
 mouthpieces of certain sections of their con- 
 stitutents who happen to be highly org^anised 
 bodies, able and prepared to visit their displeasure 
 upon a recalcitrant member at the next election. 
 There can be no question that the votes of Post 
 Office servants at the polls in 1906 were largely cast 
 against the late Government because they had not 
 seen their way, in the interests of economical
 
 152 Railways and Nationalisation. 
 
 administration, to sanction all the demands made 
 upon them. This suited Mr. Buxton's party very 
 well then, and they profited by it, but now that he 
 is Postmaster-General he finds even his com- 
 placency must have its limits, if the profits from the 
 postal service are not to be reduced to a vanishing 
 point in obedience to the clamorous demands of 
 Radical members pressed very largely in support of 
 their own election interests. 
 
 railway men as state servants. 
 
 But the question which really concerns me 
 here is : — Looking at the example offered by the 
 Post Office servants and the influence they can 
 bring to bear on M.P.'s in furthering their own 
 purely personal advantages, what would be the 
 position when we had a body of over 600,000 
 State railway .servants, including a very large 
 proportion of electors, able to exercise alike on 
 individual members, on Ministers, and on Par- 
 liament itself a degree of pressure probably far 
 in excess even of that of the Post Office .servants 
 themselves ? 
 
 Under our present .system of representative 
 government, the railway electons — especially in 
 what are known as railway towns^ — would be able 
 alike to return more men of their own class as 
 M.P.'s; to influence candidates or members 
 anxious to secure or retain their support; and, 
 either through them or in other wa3'S, to exercise 
 considerable influence on a British Government 
 doinc" 'fll '* can to ]:)lease the electorate and make
 
 State Railways and Labour. 15,^ 
 
 its own position secure. The strength of the rail- 
 way men's position in having the right to elect, 
 or, at least, to vote for their employers, would 
 also be increased by the weakness of the Govern- 
 ment in having to depend for their continuance 
 in power on the favour of Parliament — a 
 position not recognised in Prussia, a country 
 whose State railway system is always held up to 
 us as an example to follow. 
 
 Such possibilities as those here indicated 
 would be, indeed, a source of danger to the in- 
 terests of the nation, and it would become a 
 matter for very serious consideration whether a 
 resort to nationalisation would not have to be 
 accompanied by some change in our electoral 
 system, or, at least, by some interference with 
 the degree of freedom with which railway men 
 in the United Kingdom can, under existing con- 
 ditions, take part in political questions. 
 
 VIEWS OF MR. WINSTON CHURCHILL. 
 
 As bearing on this point I would recall the 
 fact that in January, 1907, Mr. Richard Bell 
 wrote to Mr. Winston Churchill, who was then 
 Colonial Under-Secretary, expressing the ap- 
 prehension of members of the Amalgamated 
 Society of Railway Servants on account of a 
 circular issued by Lord Selborne to the 
 Government railway workers in the Transvaal, 
 prohibiting them from participating actively in
 
 154 Railways and NATiONALisATioisr. 
 
 electioneering, or from standing as candidates 
 for the Legislature. In his reply to this com- 
 munication Mr. Churchill said : — 
 
 It is very natural, and, in my opinion, very 
 proper, that British railway men should watch with 
 vigilance over the interests of their comrades in 
 similar employment in South Africa. There is, how- 
 ever, no ground for anxiety. 
 
 It must be remembered, hrst of all, that the Trans- 
 vaal railways — unlike British railways — are owned 
 and worked by the Government, and that those who 
 are employed upon them are not the servants of 
 private companies but of the State. It has long- 
 been held undesirable that regular Government ser- 
 vants should conspicuously take sides in party 
 politics, and, in consequence, the railway servants 
 in both the neighbouring self-governing colonies of 
 Natal and the Cape are expressly forbidden to do so. 
 Indeed, the circular which Lord Selborne has issued 
 makes rules which are less stringent than those en- 
 forced in these two colonies ; for whereas in the Cape 
 and in Natal Government railway servants are not 
 allowed to join any political association, they will, 
 in the Transvaal, under the circular, be allowed not 
 only to do so, but even to sign requisitions to candi- 
 dates. It is only prominent political activities that 
 are denied them so long as they continue as Govern- 
 ment servants to draw Government pay ; and I 
 think that such a restriction is at least as much in 
 their own interests as in those of the public service 
 generally. 
 
 Wherever State servants take an active part in the 
 warfare of political parties there is always the danger 
 that triumphant political parties will try to job their 
 own supporters into positions of profit and trust 
 and to exclude their opponents. Such a system has 
 b((n found everywhere to be fatal to good govern- 
 iiK-nt, and we should certainly not be justified in
 
 Statf Railways and I.aboi'r. 155 
 
 doing anything- to introduce it into those new 
 colonies for whose fair start we are responsible. 
 
 Granting that there is "no ground for 
 anxiety " on the part of British railway men at 
 present, the question is whether the conditions 
 referred to by Mr. Winston Churchill, no\v 
 President of the Board of Trade, would not 
 arise when the employes of the railway com- 
 panies became " regular Government servants," 
 and whether precautionary measures of the type 
 in question would not be as excusable, if not as 
 necessary, here as iMr. Churchill shows them to 
 be in South Africa. 
 
 tradk-unionism and strikes. 
 
 There are other directions, besides, in which 
 the liberties of railway men might have to be 
 curtailed on their becoming State servants. 
 
 In referring, at Liverpool, to the railway con- 
 troversies in the autumn of 1907, Sir John Gorst 
 said, " Nothing but the energetic interference of 
 Mr. Lloyd-George prevented a national railway 
 strike because the railway directors were so 
 foolish as to attempt to run a tilt against trade 
 unions." Are we to assume from this that if the 
 policy of nationalisation which Sir John Gorst 
 recommends were carried out, the Government 
 would themselves refrain from any such attempt, 
 and would give to railway men's trade unions, on 
 their threatening (o strike, all the " recognition "
 
 156 Railways and Nationalisation. 
 
 and power of intervention and control they 
 wanted ? 
 
 I will not stay here to discuss the certainly 
 debatable point whether the policy of bluff and 
 intimidation adopted by the Amalgamated 
 vSociety of Railway Servants in their 1907 cam- 
 paign would really have led to a strike of grave 
 proportions, had it not been for the intervention 
 of the Board of Trade, as Sir John Gorst quite 
 gratuitously assumes. But let us take it, for the 
 sake of argument, that the position was precisely 
 as Sir John describes. We get then the fact that, 
 whereas the President of the Board of Trade was 
 able to intervene between the railway companies 
 and a dissatisfied section of their servants, there 
 would have been no one in a corresponding 
 official, but independent, position able to inter- 
 vene had such a dispute arisen on British rail- 
 ways owned and operated by the State. The 
 Government, as one of the parties concerned, 
 could not have assumed the role of arbitrator or 
 mutual friend; and although, it is understood, 
 the railway companies themselves were fully pre- 
 pared, in IQ07, to risk the threats of an extremely 
 problematical strike, and to meet any possible 
 contingencies, rather than make the surrender 
 demanded of them, it is very doubtful if the 
 Government, having regard to the exigencies of 
 the political situation, would have been equally 
 firm had the railways been State-owned and 
 Slatr-oprrated. In any case, it is most undesir-
 
 State Rail ways and Labolr, 157 
 
 able that the Government of the country should 
 have to run the risk of drifting- into so anomalous 
 a position. 
 
 To illustrate the situation in which Govern- 
 ments and the community may alike find them- 
 selves placed on the occurrence of an actual 
 strike of railway men, I would offer three typical 
 examples, drawn from Hungarv, Holland and 
 Australia respectively. 
 
 a wages strike in HUNGARY. 
 
 The State railways in Hungary have a per- 
 sonnel of about 60,000 officials and employes, 
 and among these there existed in the early part 
 of 1904 considerable dissatisfaction on the subject 
 of salaries and wages, the discontented including 
 not only drivers, firemen, platelayers, etc., but 
 stationmasters, telegraphists and others. The 
 Government brought forward a measure for in- 
 creases to a total of about ^100,000 a year; but 
 tile prime movers in the agitation declared that 
 for the lower ranks this amount would allow of 
 an advance of only about eighteen shillings a 
 year, and the offer must, they said, be rejected. 
 They summoned a meeting of railway men to be 
 held in Buda-Pesth, and, on the authorities pro- 
 hibiting the gathering, a strike was threatened by 
 the two chief leaders, stationmasters near the 
 capital. These two were suspended, and on 
 the evening of April 19 they retaliated by de-
 
 158 Railways and Nationalisation. 
 
 daring a strike of all State railway employes in 
 Hungary. 
 
 The order thus given met with an instant and 
 widespread response. The telegraphists circu- 
 lated the command, and then went home. From 
 that moment, wherever news of the declaration of 
 war was received signalmen left their boxes, en- 
 gine drivers and firemen — mostly at midnight — - 
 got down from the locomotives of trains which 
 had not yet reached their destination, the other 
 grades left off work, and hundreds of passengers 
 found themselves stranded at wayside stations, 
 with no chance either of getting further that 
 night or of communicating with anxious relatives 
 and friends. The disregard of public interests 
 was absolute, and this, too, although the railway 
 men in the State service had, on appointment, 
 taken an oath not to absent themselves from work 
 without permission, while, under Article 480 of 
 the Criminal Code, they were liable to three 
 years' imprisonment for leaving the service with- 
 out giving notice. 
 
 The only trains allowed to pass on the 19th 
 were the up and the down Orient Express. 
 When the driver of one goods train approaching 
 Buda-Pesth showed an inclination to proceed in 
 spite of the strikers, several hundred of them 
 lay down on the rails, and declared that the train 
 could only pass over their bodies. Thereupon 
 the driver gave way. On the 20th a few trains 
 were run \\ith the help of some retired railway
 
 State Railways and Labour. 159 
 
 veterans and others; and on the 21st the Prime 
 Minister said in ParHament : — 
 
 It is a pity that our sense of humanity is against 
 meting out due punishment to those who were un- 
 faithful to their oaths and to their duties, or, at 
 least, to the ringleaders, who are well-salaried 
 men, and ought to have known better; but we have 
 adopted the principle of full pardon for all, provided 
 the strike is immediately ended. In order to facili- 
 tate this we have allowed a meeting of men to take 
 place to-day at Buda-Pesth, and shall allow the 
 formation of a union of State railway men, with as 
 many branches as they like to have. Should legiti- 
 mate objections then be raised against the Bill now 
 before the House, they will be duly considered. But 
 the men must not think that we are forced to give 
 way. We can resume traffic without them, and we 
 have thousands willing to fill the places of those 
 misguided men. 
 
 The negotiations thus opened broke dov^n on 
 the 23rd, when the strikers presented an ultima- 
 tum declaring that their full demands as to pay 
 and conditions — involving an increase in the 
 working expenses of ;^440,ooo a year — must be 
 conceded within 24 hours. The strikers evidently 
 regarded themselves as masters of the situation, 
 and there seemed to be some reason for their im- 
 pression. Not even milk and meat trains could 
 get through, and the price of provisions in Buda- 
 Pesth had already increased by from 25 to 50 per 
 cent. Valuable racehorses had been left to 
 themselves "somewhere down the line"; 300 
 wagons loaded with meat for export remained at
 
 i6o Railways and Nationalisation. 
 
 Belgrade, unable to get away, while passive de- 
 veloped into active resistance when malicious 
 damage was done to such an extent, in certain 
 districts, in the way of tearing up lines, cutting 
 telegraph wires, and rendering instruments un- 
 workable, that, according to the director of the 
 State railways, it would take six weeks to do the 
 necessary repairs. The fact should be mentioned, 
 also, that throughout the dispute the strikers re- 
 ceived direct encouragement from the sympathe- 
 tic attitude of the Opposition parties in Parlia- 
 ment, and especially of the Clericals. 
 
 In Hungary, however, the Army forces include 
 a " Railway Regiment " of about 2,000 men, and 
 on April 23 and 24 travellers in Hungary saw 
 military officers in uniform acting as station- 
 masters, and soldiers in uniform doing the work 
 of engine drivers, guards, pointsmen, telegraph- 
 ists and even porters. The Government, too, 
 were able to play a master stroke which brought 
 the whole trouble to a somewhat dramatic close. 
 
 In the " camp " which had been formed by the 
 strikers there were a large number of reservists 
 who had joined the railway service after leaving 
 the Army, and the Government threw a bomb- 
 shell among them in the form of an Army Order 
 calling up all these reservists, so as to compel 
 them to perform under a military regime the work 
 thev would not do as civilians. Disobedience to 
 such a summons constituted an offence against 
 military discipline punishable with imprisonment
 
 State Railways and Labour. i6i 
 
 up to 10 years; and violent resistance to superiors 
 engaged in carrying out the Order would be an 
 offence punishable with — death, by shooting! 
 
 So those of the strikers who were reservists had 
 no chance left; and when, as the Army Order 
 was read to them, they saw their camp entirely 
 surrounded by military and police, they did not 
 want to resist, or even to disobey. They returned 
 at once to their duties, the camp was broken up, 
 and on the 25th the railway strike was practically 
 at an end ; though the Socialists tried for some 
 days longer to foment a general strike of all 
 industries throughout Hungary in revenge for 
 the Army Order, which, they declared, 
 " trampled on the freedom of the workmen." 
 
 British railwav men will see from the story 
 here briefly told that State ownership does not 
 necessarily mean satisfactory conditions for the 
 workers, while there is a suggestion that " all 
 grades " really were affected in the troubles in 
 question, considering that even stationmasters 
 played the role of ringleaders. British traders 
 and travellers, in turn, will see that a railway 
 strike may just as readily occur under State as 
 under company ownership. They can also 
 speculate on what would happen in the event of 
 such a strike as the one in Hungary being de- 
 clared under conditions of State ownership of 
 railways in the United Kingdom, where the final 
 expedient so successfully resorted to by the 
 Hungarian Government would not be possible.
 
 1 62 Railways and Nationalisation. 
 
 Would our own Government at least form a 
 "Railway Regiment" in connection with 
 British State railways? This is done not only in 
 Hungary but in France, where (although the 
 proportion of State-owned to company-owned 
 lines is so small) a certain section of the State 
 system is operated exclusively by a constant 
 succession of military officers and soldiers, who 
 thus acquire a practical knowledge of railway 
 working, and to-day represent, in the aggregate, 
 a considerable force of railway reservists avail- 
 able in case of need. 
 
 A " sympathy strike " IN HOLLAND. 
 
 The strike of railway men in Amsterdam in 
 January, 1903, causing an entire suspension of 
 the railway trafiic there for one day, was due, 
 not to any persi^nal grievance of the railway 
 employes themselves, but to their " sympathy " 
 for another body of men, namely, the dock 
 labourers. The latter had already gone out on 
 strike, and, finding that their places were being 
 filled up by outsiders, they made overtures to 
 the Railway Employes Union to help them. 
 Thereupon this Union approached the managing 
 directors of the Dutch Railway Company and 
 called upon them not to convey by train any 
 goods which had been handled in the port of 
 Amsterdam by non-union labour. The Com- 
 pany for the Exploitation of the State Railways
 
 State Railways and Laroir. 16;, 
 
 were also concerned in the matter. The two 
 companies approached the Minister of Com- 
 merce at The Hacrue, and pointed out to him that 
 compliance on their part with the demands of 
 the men's leaders would involve a breach of one 
 of the main conditions of their own agreement 
 with the Government, namel}', that the com- 
 panies were bound to accept goods for transport 
 by whomsoever offered. They therefore asked the 
 Minister whether, if they surrendered to the men, 
 and thus avoided a possible dislocation in the 
 railway service, he would free them from 
 responsibility for default of their agreement. 
 The Minister replied that he was unable so to do, 
 and that, inasmuch as they were private com- 
 panies, they would have to accept full responsi- 
 bility for whatever they did. 
 
 At first, therefore, the companies refused to give 
 way to the men, who, carrying out their threat, 
 struck work in Amsterdam on January 30, and 
 were joined by the large body of municipal 
 workers employed on the various enterprises 
 owned by the city. The companies then said to 
 the Government, " If you will strengthen our 
 hands with police and troops, we will attempt to 
 go on." But there were not sufficient troops at 
 once available; the merchants and traders began 
 to give notice that the}' should hold the com- 
 panies responsible for all delays in delivery, and, 
 in the result, the companies surrendered to the 
 strikers on the 31st, agreeing to boycott the 
 
 M 2
 
 164 Railways and Natioxai.isation. 
 
 traders who had had the temerity to employ non- 
 union labour. 
 
 The Government realised the gravity of the 
 position thus brought about, and in the follow- 
 ing April they introduced into the Second 
 Chamfjer of the States General an Anti-Strike 
 Bill which, among other things, made it un- 
 lawful for anv railway employe' so to act towards 
 another as to interfere with the working of the 
 lines, and provided for the punishment of rail- 
 way men going out on strike. The main pur- 
 pose of the measure, as explained by Dr. Loeff, 
 Minister of Justice, was " to separate evilly-dis- 
 posed workers from the lo3^al section, in order to 
 prevent the recurrence of strike agitations based 
 on Anarchist movements." 
 
 The introduction of the Bill led the body 
 knov/n as " The CcMiimittee of Defence " to pro- 
 claim a general strike throughout Holland, not 
 alone of railway men, but of workers in all trades 
 and industries. The bakers, especially, were 
 called on to show their *' sympathy " with the 
 railway men, just as the latter had already given 
 a proof of their sympathy with the dock 
 labourers ; the diamond workers did respond, 
 and so did some of the gas workers. On the 
 other hand the power of the strikers to interfere 
 with the railway operation was now" decreased 
 by the fact that all the railway stations were 
 occupied by troops, while sufficient of the rail- 
 way men remained loval to allow of a restricted
 
 State Railways and Labour. 165 
 
 service of trains being run, though every train 
 carried a mihtary escort, by way of precaution. 
 
 The Second Chamber passed the Anti-Strike 
 Bill on April 9. It then went through the First 
 Chamber and became law within two days ; but 
 the railway men had, in the meantime, aban- 
 doned their own strike and the Defence Com- 
 mittee their general strike. As a set-off to the 
 very stringent enactments of the measure, the 
 Government undertook to revise the wages and 
 labour conditions of the railway workers, com- 
 plaints in relation thereto having been made in 
 connection with the second series of troubles. 
 But a still further event which happened — and 
 one that is especially noteworthy in view of what 
 1 have already said concerning the strike in 
 Hungary — was that during the debate on the 
 Anti-Strike Bill, the Second Chamber authorised 
 the Government to establish, in connection with 
 the Army, a Railway Brigade which would be 
 able to operate the railways in the event of any 
 further strikes occurring. 
 
 LABOUR V. GOVERNMENT L\ VICTORLK 
 
 Wages and general conditions of employment 
 had no direct concern with the strike of rail- 
 way servants that occurred at Melbourne, 
 Victoria, in May, 1903. The event was, rather, 
 a struggle for supremacy waged against the Go- 
 vernment, through the instrumentality of the
 
 1 66 Railways and Nationalisation. 
 
 railway employes, with the design of enabling 
 organised labour to become the dominating 
 factor in Victorian politics. It was, in part, a case 
 where State servants were made use of for pro- 
 moting what the Premier, Mr. Irvine, described 
 as "a long-meditated revolt against established 
 authority," and the issue of which, in his 
 opinion, concerned " not only Victoria but every 
 other country." 
 
 The political organisation of labour in 
 Victoria had been steadily proceeding for some 
 years prior to 1903, as, indeed, had been the case 
 in other Australian colonies besides. At the 
 same time the public services were becoming 
 more and more overmanned, each succeeding 
 Ministry, as it came into power, having to distri- 
 bute jobs among crowds of supporters expec- 
 tant of rewards for services rendered. The 
 public expenditure was cidvancing rapidly, and 
 it began to look as if the railways, especially, 
 were to be operated in the interests far less of 
 the colonists than of the actual or prospective 
 railway workers. Attempts were made in 
 Victoria to secure a more economical system of 
 operation, but they were frustrated by the organ- 
 ised forces of the railway men, who, in turn, had 
 the powerful supjjort both of the Labour Mem- 
 bers in the colonial Parliament and of the " Mel- 
 bourne Trades Hall," a federation of the labour 
 unions of the colony with which the railway- 
 men's societies were in close alliance. Not only
 
 State Railways and Labour. 167 
 
 were all attempts at retrenchment in railway- 
 operation frustrated, but the railway men, with 
 their influential backers, sought practically to fix 
 their own conditions of service. There was, 
 also, the danger that if the association betw'een 
 the Trades Hall and the railwaymen's unions 
 continued, the latter might be called upon (as, I 
 have shown, actually happened in Holland) to 
 take part in some dispute with which they had 
 no direct concern. The aims of the Trades Hall 
 itself were avowedly as much political as they 
 were economic, and the whole position consti- 
 tuted a source of no little danger to the political 
 and economic interests of the colony. 
 
 In the result the Railway Minister informed 
 the railway men that, while he did not object to 
 their having unions of their own, they must 
 sever their connection with the Trades Hall. 
 They refused, and thereupon the Prime Minister 
 assumed the lead, and gave notice that unless 
 the four railway unions affiliated with the Trades 
 Hall withdrew therefrom on or before the 12th 
 of May, the whole of their executive officers 
 would be suspended. At the same time he sum- 
 moned the State Parliament to meet to deal with 
 the threatened emergency. The men replied, 
 on May 8, that unless by five o'clock that day 
 the Premier withdrew his demand, the engine 
 drivers and firemen would go on strike at mid- 
 night. The Premier did not withdraw, and the 
 strike began at the hour stated.
 
 [68 Railways and Nationalisation. 
 
 To fight the battle thus proclaimed the railway 
 unions had /,70><J00 of their own, and they were 
 able to rely on obtaining a further ^30,000 from 
 other unions. But what they mainly depended 
 on was the great amount of inconvenience and 
 loss to which the public in general would be put 
 through a complete cessation of railway com- 
 munication in and around Melbourne. For some 
 days practically no trains — certainly no goods 
 trains — ran, and communication with suburban 
 and country districts ceased. The mail ser- 
 vices were disorganised, factories and business 
 places had to close, thousands of workers were 
 thrown idle, and food and other necessaries 
 rose to famine prices. But the very complete- 
 ness of the strike was the undoing of the strikers. 
 
 The citizens rose almost as one man against 
 those who had not only shown no consideration 
 for the public interests, but had abused the 
 power placed in their hands, had committed a 
 breach of trust, and had even sought to exploit 
 the public inconvenience to serve their own per- 
 sonal ends. So another battle cry now arose, 
 and that was one of " No surrender to the 
 strikers ! " Retired railway servants, with work 
 still left in them, turned up in hundreds; drivers 
 of mining engines offered their services; Soo 
 artisans skilled in machinery wanted to know if 
 they could help; mining students at the Mel- 
 bourne University entered upon the duties of 
 locomotive firemen with all the energy and enthu-
 
 State Railways and Labour. 169 
 
 siasni of youth ; other of the students became 
 special constables; merchants, tradesmen, clerks 
 and others volunteered to act as foremen, or in 
 other capacities; while the citizens generally 
 kept in the best possible spirits, and were pre- 
 pared to tolerate anything rather than let the 
 railway men win. " Never," said the Mel- 
 bourne correspondent of the Standard, writing 
 at the time, " was so universal and almost 
 instantaneous a demonstration made against a 
 revolt." The strikers certainly did their best. 
 They removed engine fittings; they greased the 
 rails; they tampered with the points; they threw 
 soap into the boilers and oil on the locomotive 
 water, and they adopted other little devices 
 besides. But it soon became evident they were 
 playing a losing game. 
 
 Parliament met on May 13, when the Premier 
 introduced a most drastic Anti-Strike Bill. 
 Raihvay men leaving their work without giving 
 fourteen days' notice were made liable to a fine 
 of ^100, or one year's imprisonment; they were, 
 also, to lose their pensions, and be disqualified 
 for future employment by the State. The Bill 
 further empowered the Railway Minister to fill 
 up the places of the strikers, by appointing other 
 men under a two-years' engagement, and to take 
 measures for the protection of the new hands; 
 it imposed penalties on persons who interfered 
 in any way with railway workers; the collection 
 or the distribution of funds for the strikers was
 
 I JO RailwyU's and Nationalisation. 
 
 declared illegal ; the police were authorised to 
 destroy all printed documents in support of the 
 strike ; and they were to disperse any assembly 
 of strikers attended by more than four persons. 
 
 Severe in the extreme as the proposals of the 
 Bill were, appearances showed that the measure 
 was certain to pass, more especially as it was to 
 be operative only so long as the strike lasted. 
 An overwhelming determination prevailed both 
 inside and outside the House that the Govern- 
 ment must be supported. But there was no need 
 for the Bill to go actually through. On the 
 evening of the second day after the introduction 
 of the measure the strikers were assembled at 
 one of their nightly entertainments, listening to 
 speeches by leaders who assured them they were 
 " winning all along the line," and to songs by 
 leaders' wives who sought to keep them in good 
 spirits, when some one came in and announced 
 the fact that, a complete surrender to the Govern- 
 ment having just been made by the leaders-in- 
 chief, " the strike was off." And so, for that 
 night, was the harmony. 
 
 Following on this outcome of the trouble, the 
 colonial Parliament passed a Constitution Act 
 Amendment Act which, among other things, 
 deprived railway servants of the right to vote for 
 any province or district; required that they 
 should be included in a separate and distinct 
 register ; and authorised them to elect from such 
 register one person to represent them on the
 
 State Railways and Labour. 171 
 
 Legislative Council, and two as their represen- 
 tatives on the Legislative Assembly. A later 
 Act, passed in igo6, repealed the separate 
 representation of railway servants thus set up, 
 and substituted a provision to the following 
 effect : — 
 
 4. (i.) In order that all officers may be enabled to 
 render loyal and efficient service to the State, it is 
 hereby enacted that no persons or class of persons 
 employed in any capacity (whether permanently or 
 temporarily) in the public service (including the Rail- 
 way Service, the Police Force, the State Rivers and 
 Water Supply Department, and the Lunacy De- 
 partment) shall either directly or indirectly take any 
 part whatsoever in or in relation to elections of 
 niemhcrs of the Legislative Council or the Legislative 
 Assembly, or directly or indirectly in any way take 
 part in the political affairs of the State of Victoria 
 otherwise than by recording a vote at a Parlia- 
 mentary election ; and no person or class of persons 
 so employed shall directly or indirectly use or attempt 
 to use any influence in respect to any matter affecting 
 the remuneration or position in the public service of 
 either himself or any other person. 
 
 (2.) If any person so employed is guilty of any 
 contravention of this section, then on proof thereof to 
 the satisfaction of the Public Service Commissioner, 
 the Commissioners of Railways, the Chief Commis- 
 sioner of Police, or the State Rivers and Water 
 Supply Commissioners, or the Inspector-General of 
 Insane (as the case may be), such person may, by 
 the said authority, be fined any sum not exceeding 
 ten pounds, and may be reduced in class, sub- 
 division, grade, or status and salary, or he may be 
 dismissed, or his services may be dispensed with, 
 provided that such person shall not be dismissed 
 or have his services dispensed with for any con-
 
 172 Railways and Nationalisation. 
 
 travention of this section without the consent of the 
 Governor in Council. 
 
 FURTHER POSSIBILITIES. 
 
 Reverting to the conditions in the United 
 Kingdom, I would suggest that there are still 
 wider possibilities here of labour troubles for 
 the Government in the event of their under- 
 taking a policy of State-ownership and State- 
 operation of the railways than have yet been 
 suggested. 
 
 " Manufacturer," writing to the " Engineer- 
 ing Supplement " of The Times of May 3, 
 itjoS, criticised the policy of English railway 
 companies in manufacturing their own require- 
 ments, and, alluding to the " huge establish- 
 ments like Crewe and Swindon," continued : "I 
 feel that the capture of these establishments is 
 at the bottom of the Radical or Socialistic cry 
 for the nationalisation of the railways." Such 
 capture would certainly be another step forward 
 in the nationalisation of "all the means of pro- 
 duction;" but for the labour unions it would 
 mean something more. The president of the 
 Newcastle-upon-Tyne Association of Students 
 of the Institution of Civil Engineers, Mr. J. D. 
 Twinberrow, in his address at the opening of 
 the 1907-8 sessi(jn, referred incidentally to the 
 nationalisation of British railways, which he 
 spoke of as " a means towards securing a cheaper 
 and better service for the public and increased
 
 State Railways and Labour. 17,^^ 
 
 remuneration (with less hibour) for the raihvay- 
 man," and added : — 
 
 The spokesmen of Labour welcome nationalisation 
 as a means to check the introduction of labour- 
 saving devices, and to prevent the adoption of 
 machinery of g'reater earning- capacity, the skill of 
 (he workman being defined as a constant quantity 
 not susceptible to improxement by the experience of 
 each succeeding generation. 
 
 It might Be, therefore, that the policy of 
 capture spoken of by "Manufacturer" would 
 have to be considered in conjunction with a 
 policy of checking and restriction, if these two 
 authorities are both correct in their anticipations. 
 
 We do, at least, get this undeniable position : 
 If the Government bought out the railway com- 
 panies, the " huge establishments "in question 
 would have to be included in the deal ; and if the 
 Government decided to retain them, and carry 
 on the processes of manufacture there, as before, 
 they would be brought into direct relations with 
 the unions, not alone of the regular railway ser- 
 vants, but of the engineers, the boiler makers 
 and the many other branches of labour which the 
 establishments in question comprise. Even, 
 therefore, if the Government avoided complica- 
 tions with the Amalgamated Societ}- of Railway 
 Servants, they might still be concerned in dis- 
 putes with some of these other labour unions, 
 or, through them, be involved in " sympathv " 
 strikes arising out of troubles in industries with 
 whirli thev had no concern whatever.
 
 174 Railways and Nationalisation. 
 
 Nor do we get to the end of the story even 
 here, for one may further ask, — If the Govern- 
 ment had already taken over the railways, would 
 they have been quite so ready as they were to 
 yield to political pressure in that matter of the 
 Miners' Eight Hours liill ? Mow the railways 
 are concerned therein is shown by a statement 
 issued by Mr. W. Temple Franks, secretary of 
 the Railway Companies' Association, and pub- 
 lished in the Railway News, from which I learn 
 that in 1907 the railway companies con- 
 sumed 16,101,000 tons of coal (including 
 12,093,890 tons used for locomotive purposes), 
 and that even a is. rise in price per ton 
 on the former figure would amount to about 
 ;^8oo,ooo per annum. 
 
 It is significant that when Mr. Gladstone 
 moved the second reading of the Bill, on June 
 22, 1908, and, in the course of his speech, asked 
 "What was the reason for this Bill?" there 
 were responsive cries of " Votes ! " Personally, 
 I am disposed to agree with the interruptions; 
 though it was really a matter not only of getting 
 votes, but of securing them at the expense of the 
 railway companies and others. One may, how- 
 ever, doubt very much indeed if Mr. Gladstone 
 would have had so free a hand if the railways, 
 whose working expenses may thus be increased 
 by at least ^800,000 a year as the result of the 
 measure, had been owned and operated by the 
 State, under the watchful eve of the Chancellor
 
 vStatf. Railways and Labour. 175 
 
 of the Exchequer. In this instance nationalisa- 
 tion might have taught the Government a useful 
 lesson. But, politically, it would have made 
 their position still more complicated. 
 
 So, from the point of view alike of the railway 
 workers, of the Government, and of the public, 
 the complicated labour problems involved must 
 be regarded as constituting a very important 
 phase indeed of the whole nationalisation con- 
 troversy. The nationalisers are disposed to 
 make light of them, and Sir John Brunner, in a 
 letter to The Times of May 25, 1908, even went 
 so far as to say: "A general railway strike 
 ought to be made, must be made, an impossible 
 thing. Through nationalisation it can he made 
 as impossible as a general strike of the Territorial 
 Army." To what extent this latter assertion 
 agrees with actual facts may be judged by the 
 reader himself on the basis of the stories told in 
 the present chapter.
 
 176 Railways and Nationalisation. 
 
 CHAPTER IX. 
 STATE V. COMPANY MANAGEMENT. 
 
 Are there any special merits in State manage- 
 ment which render it superior to management 
 by commercial companies, and have the public 
 reason for expecting really substantial benefits 
 through substituting the one for the other? 
 
 Here, in the first place, I think it only right to 
 combat the suggestion so often advanced by the 
 nationalisers that railway companies consist of 
 representatives of private enterprise who are 
 free to exploit the requirements and the conveni- 
 ence of the joublic solely in the interests of divi- 
 dends. Do railways really come within the 
 definition of "private enterprise?" They are 
 certainly created and operated with the money 
 of private individuals, and the loss, if any, falls 
 upon the investors ; but, apart from this material 
 consideration, British railways are subject to the 
 most thorough-going public control, in the 
 public interests, without having, in return, any 
 of the possible advantages of public ownership. 
 
 state control. 
 
 In one sense railway companies are traders, 
 since they provide, and sell at a profit — when
 
 State v. Company Management. 177 
 
 they can — a certain commodity, known as trans- 
 port. But they occupy a position entirely 
 different from that of any other body of traders. 
 They cannot construct their Hues until Parlia- 
 ment sanctions their schemes and approves their 
 proposed routes, after having given an oppor- 
 tunity to everyone interested to raise objections, 
 should he think fit. The lines, when completed, 
 must in turn be approved by the Board of Trade, 
 which body recjuires that everything shall be 
 perfect from the start in every possible detail. 
 The Board of Trade, again, has very wide and 
 almost drastic powers of supervision and control 
 in regard to safety appliances, operation of the 
 lines, hours of railway men, etc. 
 
 Parliament itself fixes the maximum rates a 
 railway company may charge, and if a company 
 should increase any rate — even though the 
 amount to which it is raised remains well within 
 the Parliamentary maximum — the company may 
 be called upon to justify such increase to the 
 Board of Trade, or, if necessary, before the Rail- 
 way and Canal Commissioners. 
 
 On this subject of State control I might recall 
 some observations in the report of the " Railway 
 Commission " appointed in 1865, with the Duke 
 of Devonshire as chairman : — 
 
 It is of no slight importance to the public that 
 railway companies should be compelled to apply to 
 Parliament for its sanction to every alteration of, 
 or addition to, their undertakings, and that any 
 
 N
 
 178 Railways and Nationalisation. 
 
 other railway company or person affected by the 
 change should have the liberty of being heard in 
 opposition. 
 
 The railway companies being thus continually 
 before Parliamentary committees, either to defend 
 their interests against invasion or to obtain further 
 concessions from Parliament, an opportunity is 
 aflorded to the public of bringing forward any 
 grievances from which they may suffer, and to Par- 
 li?ment of imposing such fresh regulations as the 
 public interests may require, as a condition of the 
 new concession. 
 
 Thus Parliament becomes an arbitrator between 
 the railway companies and the public, and the rail- 
 way companies voluntarily accept its decisions to 
 promote their own objects or interests. This 
 operates as a powerful inducement to the companies 
 to remove any grievances of which the traders in 
 their different districts might complain. 
 
 The position to-day is still the same. The 
 State can exercise absolute control without 
 experiencing the disadvantages and financial 
 risks attendant on actual ownership, and the 
 public have the benefit of such control without 
 any fear that if the railways do not pay the tax- 
 payers will have to make up the deficit. It is the 
 railway shareholders who stand to lose by reason 
 of the control from which the community benefit. 
 
 railway accidents. 
 
 Should any accident occur on the railways, a 
 most searching investigation is made by Govern- 
 ment officers appointed for that purpose, and the 
 public have an absolute guarantee that every
 
 State v. Company Management. 179 
 
 possible inquiry will be made, or step taken, that 
 may bring to light either careless operation or 
 hidden dangers. 
 
 Would there be, under a system of State 
 ownership and operation — when one Government 
 official might have to sit in judgment on another 
 —the same guarantee of safety for the public 
 that there is under the rigid control and super- 
 vision enforced by the State against the railway 
 companies? W^ould there not rather be a ten- 
 dency for this control and supervision to be at 
 least weakened when the railways passed over to 
 the State, and might not the result be aQ actual 
 increase in accidents rather than a reduction 
 below their already comparatively small pro- 
 portions ? 
 
 There is certainly not much encouragement 
 in this direction to be derived from the experi- 
 ences of State ownership and operation in 
 Belgium. In a despatch published in The Times 
 of June 14, 1908, the Brussels correspondent of 
 that journal, referring to an interpellation to be 
 addressed to the Government on the subject of 
 recent railway accidents in Belgium, said : — 
 
 Since May 19, I find, by collating various reports, 
 that no fewer than fifty-six persons have been killed 
 and 316 injured. No doubt these figures are excep- 
 tional, for they include the Contich collision, in 
 which forty persons lost their lives and, as it now 
 appears, 230 were more or less seriously hurt; and 
 the failure of a train to stop before reaching the 
 buffers in the Midi Station, whereby about forty 
 
 N 2
 
 i8o Railways and Nationalisation. 
 
 workmen were injured. But, making every g.llow- 
 ance for human stupidity, and without attempting 
 to prejudg^e the result of inquiries still proceeding', 
 there is clearly ground for demanding a serious in- 
 vestigation into the causes of the incessant rain of 
 nunor accidents with which the State railways have 
 been afflicted. . . . Regulations, however perfect,, 
 will not prevent the failure of a brake or brain to act ; 
 but the question is whether the State administration 
 spends the necessary money and takes the necessary 
 pains to secure that degree of intelligence among its 
 employes without which the finest regulations ever 
 framed merely produce a false feeling of safety. 
 
 Nationalisers in the United Kingdom rarely 
 fail, in their speeches or writings, to point to 
 the low fares at which one can travel in Belgium 
 as a striking proof of the blessings of vState 
 ownership and operation of railways. But, 
 judging from what The Times correspondent 
 says, there is another side to the question as well. 
 
 THE alleged " CONFLICT OF INTEREST." 
 
 In the circular issued announcing the forma- 
 tion of the Railway Nationalisation Society, it 
 was said : — 
 
 In some countries the law prescribes that the 
 railways shall subserve the common interest. In 
 this country they are frankly run for private profit. 
 The result is a conflict of interest between the rail- 
 way proprietors and the public. 
 
 Many other enterprises in this country besides 
 railways are frankly run for private profit.
 
 Statf v. Company Management. i.Si 
 
 Steamship companies work for private profit. 
 So do the companies operating iron and steel 
 works. So do manufacturers, tradesmen, agri- 
 cuhurists and market-gardeners who supply us 
 with out daily wants. vSo do theatre lessees, 
 actors and musicians who provide us with recrea- 
 tion. None of these are subject to a State con- 
 trol anything like so rigid as that which is 
 applied to railways; yet who suggests that there 
 is a conflict of interest between all these persons 
 and the public simply because of this element of 
 private profit? The existence of this very 
 element is only a direct incentive to study, antici- 
 pate, and provide for the wants and wishes of 
 the public in order that the desired profit may be 
 secured. 
 
 Instead of a conflict of interest there is 
 a community of interest; and what is true 
 of these traders and others here in ques- 
 tion is equally true of railway companies 
 themselves — but with this difference, that 
 the railway companies are rigidly bound 
 down to study the public interests to an extent 
 unsurpassed in any other undertaking; while, 
 unlike other traders, they are not free to raise the 
 price of the commodity they sell, however high 
 the cost of production (in the shape of working 
 expenses) may go up, or whatever may be the 
 exactions made upon them by Imperial or local 
 authorities.
 
 1 82 Railways and Natioxai.isation. 
 
 english and foreign lines compared. 
 
 Had the alleged conflict of interests between 
 the railway proprietors and the public really 
 existed, the former would have failed to show 
 adequate enterprise and foresight in making pro- 
 vision for the requirements of traders and travel- 
 lers. Have there been shortcomings in this 
 respect on the part of railway companies here, as 
 compared with State railways abroad ? 
 
 For an answer I turn to some remarks made 
 by Sir Robert Perks during the course of the 
 debate in the House of Commons on Mr. 
 Hardy's nationalisation resolution. He said, 
 among other things : — 
 
 Neither of the two underground railways in 
 London had a single penny of watered stock in 
 their capital, and one of them had carried more than 
 the entire population of the globe in the last thirty 
 years without any return whatever to the ordinary 
 proprietor. That might not show much sense on 
 the part of the proprietors, but it certainly showed 
 the sacrifice that had been made for the benefit of 
 London. . . , If our privately managed rail- 
 ways were compared, in the matter of passenger 
 service, with State-controlled railways abroad, it 
 would be found that the foreign railways were 
 slower, dearer, and afforded fewer comforts and 
 facilities, especially with regard to third class pas- 
 sengers, who constitute 90 per cent, of the travelling 
 public in this country. Let them take, for instance, 
 the lines between London and Edinburgh. We had 
 twenty trains a day running between London and 
 Edinburgh, and third-class passengers travelled by 
 every train. An Hon. Member below the gangway
 
 State v. Company Manageiment. 183 
 
 wanted to go even further, and provide third class 
 sleeping- carriages. There were only seven express 
 trains which ran between Paris and Marseilles, as 
 compared with twenty running between London and 
 I'dinburgh. There were fifty express trains a day 
 going out of Paris in all directions— to Germany, 
 Belgium, Austria, Italy, and various other places, 
 and there were only four of these which carried 
 third class passengers, whereas our trains carried 
 third class by almost every train. Then, let them 
 mark the very slow delivery of goods on the Con- 
 tinent compared with the rapid delivery here. The 
 airangements for through rates and transit were 
 most unsatisfactory on the foreign lines. There 
 were many works in Alsace-Lorraine which could 
 not get their coal and ore simply because the State 
 railways refused to make through quotations. There 
 were railways in this country which had made un- 
 fortunate speculations in connection with the outlay 
 of huge sums of money. For example, out of 
 7716,000,000 or ;^i7,ooo,ooo recently expended on 
 the underground lines of London, at least 
 ;£r8,ooo,ooo were at present wholly unremunerative. 
 1 hat was one of the risks which the nation ought 
 not, and, probably, would not undertake, and the 
 result would be that necessary lines would not be 
 built. Another great railway had spent /^6, 000, 000 
 or ;^, 7,000,000 in giving a new competitive service 
 to London. Nearly the whole of that capital was 
 unremunerative. 
 
 Here we get absolute proof that company 
 ownership of the raihvavs has indeed sought to 
 " subserve the common interest," even though 
 it may not have alwavs succeeded in fur- 
 thering its own. That the vState would have 
 done more for the public, or would even have
 
 184 Railways and Nationalisation. 
 
 done as much, is distinctly doubtful ; while if the 
 State were substituted for the companies there 
 would be two interests involved just the same as 
 at present. Should the State turn trader, that is, 
 become a dealer in transport, it must necessarily 
 demand payment for that which it sells. It will 
 still be to the interest of the Government (especi- 
 ally if operating on Prussian principles) to get 
 as good a return from the railways as they can ; 
 and it will still be to the interest of the trader to 
 try to get transport from them at as low a price 
 as he can. To this extent, therefore, and so 
 long as there are two parties to a bargain, the 
 " conflict of interest " in a matter of buying and 
 selling will not be got rid of merely by a change 
 of proprietor; and it is open to serious consider- 
 ation whether a Chancellor of the Exchequer 
 might not be quite as keen after railway profits 
 to add to his Budget as any of the existing com- 
 panies could be for dividends to pay to their 
 shareholders. 
 
 INITIATIVE AND ENTERPRISE. 
 
 It may be doubted, also, whether a State rail- 
 ways department, operating the entire railway 
 system of the United Kingdom, would show 
 quite the same degree of initiative, energy and 
 enterprise in catering for traffic as is displayed 
 by the existing railway companies in competing 
 for traffic so actively as they do one with 
 another.
 
 State 7'. Company Management. 185 
 
 The essence of State management is routine; 
 the fundamental principle of commercial man- 
 agement is enterprise. The State official with 
 a fixed salary and a secure position does the 
 work that comes before him ; but as a rule he has 
 no particular inducement to show initiative in 
 suggesting improvements, to display exceptional 
 energy in getting through his work, or to put 
 himself to any personal inconvenience in the 
 interests of individuals or of the community. 
 These qualities of initiative, energy and con- 
 sideration are far more likely to be found in the 
 servants of a commercial undertaking where 
 every department must be kept in a condition of 
 the highest efficiency to meet the competition of 
 rivals, to cater for the requirements of the public, 
 and to secure for the shareholders a fair return 
 on the money they have invested. 
 
 So one might reasonably expect to find that 
 when the State controlled all the railways there 
 w^ould be not alone an attempted economy in the 
 matter of working expenses, when rail competi- 
 tion ceased and the Government could do as 
 they pleased, but there would be also a pro- 
 nounced falling off in that initiative and enter- 
 prise which, under a company regime, have done 
 so much to improve the railway system, and 
 have so greatly and in so many different ways 
 afforded increased facilities to traders and 
 travellers.
 
 i.% Rahavays and Nationalisation. 
 
 TRAFFIC PROBLEMS AND THEIR SOLUTION. 
 
 Would State officials, again, be better quali- 
 fied than the officers of the existing railways to 
 deal with the problems that arise in the fixing 
 of railway rates; and would traders find it prefer- 
 able to deal with the former rather than the 
 latter? 
 
 Some very pertinent observations on these 
 distinctly practical points are made by Mr. W. A. 
 Robertson, of the New York bar, in " An argu- 
 ment against Government Railroads in the 
 United States," published in "The Annals of 
 the American Academy of Political and Social 
 Science " for March, 1907. Mr. Robertson 
 said, among other things : — 
 
 To one who has never considered the subject, the 
 intricacies of rate-making will prove a painful and 
 vexatious surprise. There are so many different 
 and discordant elements entering into the conditions 
 that an exact solution is impossible. , . . As 
 observed by the Industrial Commission, in its report 
 to Congress, " The conditions are highly complex, 
 and no simple and general rules can be made to 
 govern in all instances. The very complexity of the 
 problem emphasises the necessity for general direc- 
 tion ! " 
 
 The problem which a freight agent or traffic 
 manager has to meet is so different from that which 
 the public supposes, that it is hard to explain it in 
 a few words. The picture that seems vividly por- 
 trayed upon the minds of most men in that of the 
 general freight agent arbitrarily deciding upon 
 whatever rate he deems sufficient to pay for the 
 " cost of service " (the cost of actually moving a ton
 
 State v. Cc^mpany Management. i.Sy 
 
 of freight a certain distance), together with enough 
 to cover the Company's taxes and the interest on 
 the bonded indebtedness (which is generally 
 assumed to be needlessly and culpably large), and 
 to pay dividends on an artificial and imaginary 
 tapitalisation. In reality, this sort of reasoning 
 is putting the cart before the horse. The rate is 
 really dependent upon conditions in the world of 
 trade, the character of the commodity to be moved, 
 the extent of competition from other carriers, either 
 rail or water, and the possibilities of the develop- 
 ment of a line of business or a section of country. 
 
 When the rate has once been made and the 
 revenue earned, the next problem is the prosaic one 
 — very familiar to every housekeeper — of adjusting- 
 expenses to income. The name of these expenses 
 is legion : The wages of labour and the cost of 
 fuel and innumerable supplies are elements in 
 the cost of conducting transportation. The 
 maintenance of the roadbed and stations, and of 
 the terminal facilities in great cities — these are 
 elements in the maintenance of the physical pro- 
 perty of the road. New engines and cars and the 
 repair of old ones make up the account called main- 
 tenance of equipment. The taxes due the State, 
 and the interest on the bonded debt of the company, 
 make up the company's fixed charges; charges 
 which must be met if the corporation is to remain 
 solvent. Then there is still the need of setting 
 aside funds against the depreciation of the property, 
 the maintenance of a surplus against hard times, 
 and unlooked for expenses and emergencies; and, 
 lastly, the raising of a net revenue for dividends, 
 so that those who own the road may receive some 
 return on their investment. All these varied ex- 
 penses enter into the financial side of railroad 
 management. 
 
 It is idle to imagine that officials or clerks in a 
 Government bureau will be able to handle such
 
 1 88 Railways and Natiomalisation. 
 
 questions as we have mentioned better than the 
 trained, experienced and well-paid officers of a 
 railroad. Nay, it is difficult to think of their being 
 intelligently, speedily, and satisfactorily disposed of 
 at all by any Government department. Whoever 
 has had dealings with a great Government office 
 knows the truth of these words. 
 
 Enthusiastic reformers cheat themselves into the 
 belief that the weight of an enlightened public senti- 
 ment — the travelling and shipping public being 
 brought in daily contact with the railroad — would 
 compel an improvement in the conditions we have 
 pictured. Has the weight of public sentiment ever 
 permanently cured the lesser diseases of the body 
 politic? Has it brought effectiveness, economy, 
 and high character into the police, street, and water 
 departments of our great cities? How often is a 
 State capitol built within the appropriation? Have 
 the taxpayers of New York ever checked extrava- 
 gance and corruption on the Erie Canal, or taken 
 that formerly useful artery of travel out of 
 " politics? " 
 
 Even assuming that the tone of the public service 
 can be made equal to that of an ordinary business 
 house, the question still remains why Government 
 officials will be able to solve transportation problems 
 better than private individuals. There is no magic 
 in wearing the livery of Government, and no private 
 fund of knowledge is at the disposal of its officials. 
 They have no peculiar facilities for reaching correct 
 conclusions. The problems will not be a whit sim- 
 plified by placing the carriers in the hands of a 
 Government bureau. The difficulties that now hang 
 about the subject of freight rates are inherent and 
 rest in the very nature of the service to be per- 
 formed. Unless freight rates are to be prescribed 
 on a blind, arbitary, and unreasonable basis, with- 
 out regard to the real and ever-changing conditions 
 of the business world, the same difficulties that now
 
 State v. Company Management. 189 
 
 puzzle traffic managers, vex merchants, and assail 
 railroad commissions and courts, will be present as 
 surely and as potently under public service as under 
 ptivatc ownership. 
 
 But to the mercantile community the transfer of 
 ownership would be a change fraught with unending 
 and incalculable mischief. If there is one desidera- 
 tum for the shipping community and the world of 
 trade it is a system of freight rates that shall be 
 flexible and adaptable to the thousand and one 
 varying conditions of business. We have lately 
 heard so much about " stability of rates " and 
 " maintenance of the published tariffs " — necessary 
 ar.d proper as these are — that we have almost for- 
 gotten that flexibility is as essential as uniformity. 
 It is the glory as well as the weakness of our trans- 
 portation system that it is peculiarly American, 
 tjuly a plant of native growth, and that it has, on 
 the whole, adapted itself marvellously well to the 
 development and unprecedented expansion of our 
 country. This has resulted from a remarkable 
 power of adjustment to local needs in a land where 
 growth and change have been abnormally rapid. . . . 
 
 If in place of a management of this kind, at once 
 both sympathetic and self-interested, the merchants 
 had been obliged to meet the stolidity of a govern- 
 ment bureau, its circuity of operation, the desire to 
 postpone action till " after election," how different 
 must have been their experience. Or, if they had 
 been forced to deal with Congress, they might have 
 seen the measure succeed in one House or beifore 
 one Committee, only to be indefinitely delayed in the 
 other House or in Committee of the whole, or played 
 off against other interests in far-away sections ot 
 the country whose representatives demanded some 
 quid pro quo for their support. They would then 
 have realised the profound truth contained in the 
 observation of a great modern historian, that the 
 people's representatives and lawmakers have rarely
 
 igo Railways and Nationalisation. 
 
 accorded any great public privilege except under 
 strong pressure. 
 
 Under present conditions, the aggrieved merchant 
 n'ay always appeal from the railroad company 
 itself to Government aid in some form. State and 
 Federal commissions stand ready to adjust rates — ■ 
 sometimes, indeed, with " a strong hand and a 
 multitude of people " — and behind the Commis- 
 sioners are the courts. Everybody is ready and 
 willing to move against a railroad corporation. 
 But let the Government once become the supreme 
 monopolistic owner of the mightiest railroad in the 
 world, and how feeble and helpless will be the 
 shipper who pleads before some Government depart- 
 ment for relief in freight rates, having nothing but 
 the merits of his case to invoke in his behalf. 
 
 In confirmation of the views here expressed, I 
 would further point to the report of the Commis- 
 sion appointed to enquire into the organisation 
 and administration of the Central South African 
 Railways, where it is said : — ■ 
 
 The Commission have not inquired into the rates 
 in force on the Central South African Railways, but 
 there is evidence that these sutler from a rigidity 
 common upon all State railways. Governments 
 can never act with the same freedom as private in- 
 dividuals ; but they can at least entrust the im- 
 mcnsely difficult business of rate making to experts, 
 and leave them as far as possible unfettered. 
 
 GOVERNMENT ROUTINE IN FRANCE. 
 
 For examples of Government routine in regard 
 to requests from traders for modifications in rail- 
 way rates, I shall content myself with references
 
 State v. Company Management. 191 
 
 to two countries only, France and Prussia; and I 
 invite British traders to make their own com- 
 parisons between the stories of circumlocution 1 
 shall narrate and their personal experiences in 
 dealing with railway companies at home on like 
 occasions. 
 
 In France the Minister of Public Works exer- 
 cises an absolute control over railway rates and 
 charges, whether on the vState system (which is 
 1,800 miles in extent) or on the systems (having 
 a total mileage of 23,800) operated by private 
 companies. This control applies not only to any 
 increase in rates, as against the trader, but also 
 to any decrease proposed in his favour. The 
 Minister of Public Works is, in fact, influenced 
 by a two-fold consideration. In the first place 
 he desires that the welfare of trade and commerce 
 shall be safeguarded. In the second place he 
 has to remember that successive French Govern- 
 ments have advanced a very large amount of the 
 capital required for the construction and the 
 maintenance of the railways, and that these are 
 to become the property of the nation when the 
 periods for which the concessions are granted 
 expire. This will be between the years 1950 
 and i960. It is, therefore, considered desirable 
 that, in the meanwhile, nothing should be done 
 which would depreciate the earning powers of the 
 lines the State is eventually to take over, especi- 
 ally as the Government guarantee of interest 
 might conceivably lead the companies to make
 
 192 Railways and Nationalisation. 
 
 experiments, in the way of rate reductions, from 
 which they would refrain were they entirely 
 dependent on the results of operation. 
 
 For this dual reason there is a most elaborate 
 machinery which has to be set in motion before 
 any changes in regard to domestic railway rates 
 can be effected in France. Briefly stated, the 
 process gone through is as follows : — 
 
 1. The traders concerned send a statement of 
 their case to the railway company. 
 
 2. The statement is duly considered by the 
 leading officials of the company. 
 
 3. Should the company consider that the claim 
 made has been substantiated, they forward it to 
 the Minister of Public Works, setting out the 
 reasons for their own approval. 
 
 4. The Minister of Public Works directs that 
 copies shall be forwarded to (a) the Commercial 
 Control Department for report ; and (b) to the 
 prefect of each and every district through which 
 the section of line to be affected by the proposed 
 change runs; while notice of the proposal must 
 also be given in the Journal Ojficiel, lest other 
 districts interested in the matter may be desirous 
 of expressing their views. 
 
 5. Each prefect is required to acquaint the 
 local Chambers of Commerce with the proposal, 
 and give them the opportunity of making their 
 observations thereon. 
 
 6. Having been considered by the Chambers 
 of Commerce, the proposal, with their observa-
 
 State v. Company Management. 193 
 
 tions attached, passes on to the Tnspecteur de 
 I'Exploitation Commerciale de la Conscription, 
 who next sends it to the Controleur General, wlio 
 in turn refers it to the official representatives of 
 any maritime ports, navigable waterways, 01 
 mining districts affected. 
 
 7. From th«'ie individuals the proposal goes to 
 the Inspecteur General du Roseau ; and it is 
 gratifying to know that the real consideration of 
 the matter is now about to begin. 
 
 8. With the observations of the various autho- 
 rities through whose hands it has already passed, 
 the proposal is submitted to the Comit^ Con- 
 sultatif des Chemins de Far, one of four such 
 advisory committees operating in connection 
 with the Ministry of Public Works. 
 
 9. The proposal is considered either by an 
 individual member of the committee or, where 
 the matter is of special importance, by a sub- 
 committee appointed for that purpose, such sub- 
 committee holding an inquiry of its own, should 
 it think fit, and examining representatives either 
 of the railways or of the traders on the points at 
 issue. 
 
 10. A report on the results of such considera- 
 tion or inquiry is made to the Advisory Com- 
 mittee. 
 
 11. The Advisory Committee forwards the 
 documents with a recommendation of their own 
 to the Minister of Public Works. 
 
 12. The Minister of Public Works now Jooks 
 
 o
 
 194 Railways and Nationalisation. 
 
 into the matter, and decides for himself whether 
 or not the recommendation of the Advisory Com- 
 mittee shall be carried out, and the desired con- 
 cession granted or rejected. 
 
 Questions relating to export freights may be 
 settled in five days, while new rates for transit 
 traffic whch might go through Holland or 
 Belgium, and thus be lost to France, unless an 
 immediate decision were arrived at, may be con- 
 ceded within twenty-four hours. But in regard 
 to domestic consignments by rail, a change in 
 rates desired by the traders, and endorsed by the 
 railway companies themselves — such a matter, in 
 fact, as a deputation of traders might bring before 
 a general manager here, and get disposed of in a 
 twenty-minutes' interview, or thereabouts — 
 travels in France through all this official routine, 
 and it does so at a rate of speed which is essen- 
 tially petite vitesse. The simplest matters will 
 take several months to go the round, and I heard 
 recently of a case where the securing of official 
 approval of an alteration desired by certain 
 traders, and favoured by the railway company 
 concerned, took no less a period than two years. 
 
 GOVERNMENT ROUTINE IN PRUSSIA. 
 
 In Prussia, also, the Minister of Public Works 
 is the final authority, whose approval must be 
 obtained for all new rates or alterations of old 
 ones. But, since 1895, when the system then
 
 State v. Company Management. 195 
 
 existing was reorganised, the responsibility of 
 actually fixing and adjusting the rates — both for 
 goods and for passengers -falls, together with 
 administrative questions in general, on the 
 twenty-one State railway directorates which 
 divide between them, in clearly-defined areas, the 
 21,000 miles of the Prussian State railways. 
 These directorates, however, are bound by law 
 to consult a Circuit Advisory Council in regard 
 to all questions of rate alterations. The Circuit 
 Councils, of which there are nine, are composed 
 of representatives alike of the railways, of the 
 Chambers of Commerce and trade or agriculture 
 organisations, and of the local commercial and 
 industrial interests in general. Each has a 
 standing committee which first subjects to an 
 exhaustive examination any petition, request or 
 complaint sent in by traders, and advises the 
 Council thereon. The Circuit Council makes a 
 recommendation, in turn, to the railway directo- 
 rate, and this body is required to give careful 
 consideration to whatever the Circuit Council 
 may suggest, though it is not bound to concur 
 therein. The directorate can also ask for the 
 advice of the Circuit Council in regard to other 
 questions in which the interest or operation of 
 railways and traders are mutually concerned. 
 
 In addition to these Circuit Councils there is 
 in Prussia a National Council which " advises " 
 the Minister of Public Works in the same way 
 that the Circuit Councils advise the directorates. 
 
 o 2
 
 196 Railways and Nationalisation. 
 
 The National Council consists of forty members, 
 of whom ten are appointed by the various Prus- 
 sian State Ministers, and thirty are elected by 
 the Circuit Councils, which choose for the pur- 
 pose leading representatives of the various com- 
 mercial and trading interests of their districts. 
 Each member holds office for three years. The 
 National Council deals with general questions or 
 matters of policy in regard, not only to rates, but 
 freight classification, budget proposals, etc, 
 reporting thereon both to the Minister of Public 
 Works and to the Prussian Parliament. 
 
 The routine gone through in Prussia in 
 dealing with traders' petitions would appear to 
 be less formidable than in France; but in prac- 
 tice considerable time is occupied by the deliber- 
 ateness so characteristic of all State departments, 
 and more especially marked in the case of a 
 State railway, where, beyond the merits or 
 demerits of any question as between the railways 
 and the traders directly concerned, a variety of 
 other conflicting problems arise, such as whether 
 or not the State finances will permit of conces- 
 sions otherwise perfectly warranted and desir- 
 able in themselves; and the balancing of either 
 one set of political considerations against 
 another, or the mutual claims of rival sections of 
 the country all looking to one and the same 
 authority for the furthering or the preservation 
 of their interests. It is quite possible that on 
 some such grounds as these a concession which
 
 State v. Company Management. 197 
 
 would be readily granted by a railway company 
 may have to be refused by a State railway. 
 
 The great advantages claimed for the systems 
 in operation in France and Prussia are (i) that 
 the railway officials and the traders are brought 
 into closer relations, each being enabled to 
 understand better the wants of the other; and (2) 
 that traders have at their back official bodies 
 which can exercise influence in support of their 
 claims. 
 
 Applying these particular factors, however, 
 to conditions in the United Kingdom, one 
 finds : — ■ 
 
 (i) That traders here have no difficulty in 
 gaining access to the leading officers of a railway 
 compan)^ whenever they have any propositions 
 to advance, and that it is a matter of ordinary 
 daily business with the railway officials to study 
 the various conditions of trade, and to consider 
 how far the railway, if only in its own interest, 
 can meet them. 
 
 (2) That there is no need to set up elaborate 
 machinery to compel the railway companies to 
 do in these directions what they are already 
 willing to do without compulsion. 
 
 (3) That, in effect, the greater elasticity of the 
 company system secures to traders many more 
 concessions, which, also, are granted and ren- 
 dered operative in far less time, than is possible 
 under a rigid system of State operation.
 
 198 Railways and Nationalisation. 
 
 THE ANALOGY OF THE POST OFFICE, 
 
 The proposer of a resolution in favour of rail- 
 way nationalisation, discussed at a meeting of 
 the West Yorkshire Federated Chamber of 
 Trade, held at Keighley in November, 1907, said : 
 " When they thought of the excellence of the 
 State postal service ... he could not see why 
 on earth the raihvavs should not be equally well 
 managed." 
 
 Between the Post Office and the railways no 
 real comparison can be made. The Post Office 
 was built up by the State on virgin soil, and, 
 except in the case of the telegraphs, the organisa- 
 tion of it involved no capital expenditure in the 
 buying up of vested interests. Even including 
 purchase of the telegraphs there have been no 
 such financial complications as would arise now 
 if the State began to devise a scheme for acquir- 
 ing the railways and all they represent. Then the 
 principles of a postal service, based on a unified 
 system for the whole country, are altogether 
 different from those of a railway service, with its 
 necessary regard for local conditions, its un- 
 avoidable variations in rates, and the competi- 
 tion it meets with from sea, river, and canal. 
 The one service is comparatively simple, and is 
 mainly a matter of good organisation; in the 
 other there are endless complexities and technical 
 details, only to be dealt with effectively by men
 
 State v. Company Management. 199 
 
 who are railway experts, and have spent their 
 hfe at the work. 
 
 Is it certain, too, that the Post Office has 
 been so brilliant an example of successful man- 
 agement as many people represent? It does, 
 indeed, yield a return of ;[^3, 750,000 a year. 
 But no institution so sure of universal patronage, 
 and enjoying so absolute a monopoly as the 
 Post Office, could very well have been a com- 
 plete failure; w-hile, on looking into details, we 
 find that concessions and public advantages 
 have ever been extorted from the Post Office 
 rather than spontaneously conceded by State 
 officials, whose natural tendency it is to resent 
 innovations, to get alarmed at the risk and 
 trouble of new departures, and to act generally 
 on the principle of working in accord with old 
 lines and established precedents. The trouble 
 that Rowland Hill went through before he could 
 dispel the fears of the Post Office in regard to 
 penny postage is a matter of history; and the 
 trouble that the present persecutor - in - chief of 
 the Postmaster-General, Mr. Henniker Heaton, 
 gives himself to secure further concessions from 
 a department difficult to move, is a matter of 
 common knowledge. Is it not a reflection on 
 State management that the greatest advances 
 made by the Post Office have been due to the 
 persistency of outside and far-seeing reformers 
 rather than to the postal officials themselves ? 
 
 It may be that the Post Office is not solely to
 
 200 Railways and Nationalisation. 
 
 blame for these tendencies. Behind the Post- 
 master-General there is the Chancellor of the 
 Exchequer; and whenever the question arises of 
 making a concession which might diminish the 
 profits, if only for a time, the Chancellor of the 
 Exchequer may veto the proposal. 
 
 The assumption that State enterprises are run 
 solely in the interests of the general community 
 is no more true in the case of the British Post 
 Office than it is in that of the Prussian State 
 railways — unless the making of profits to pour 
 into the State Treasury be regarded as the main 
 object at which a Government should aim. 
 
 Nor has the Post Office attained a success in 
 any way complete. Mr. C. F. Parr, chairman 
 of Parr's Bank, has pointed out that — 
 
 Its subsidiary departments, its Savings Bank and 
 its Telegraphs, are both run at a heavy loss. Both 
 must have closed their doors long ago had they 
 been private enterprises, though in their case their 
 close connection with the Post Oflice gives them 
 special facilities for economical working. 
 
 Under competition or private effort, we should 
 long ago have rejoiced in those improvements which 
 Mr. Henniker Heaton presses year after year un- 
 availingly on the authorities. And, after all. it is 
 the excellence of the private carrying companies, 
 railways and others, which makes the postal service 
 what it is. 
 
 When the telegraph companies were bought 
 out by the State in 1869, the Government pre- 
 dicted that there woidd be a large annual profit —
 
 State v. Company Management. 201 
 
 just as the nationalisers to-day are prophesying 
 that the purchase of the railways would yield a 
 good return to the State. In fact the return on 
 the telegraphs was to be sufficient to repay the 
 whole of the purchase money within twenty-nine 
 years. What actually occurred has been thus 
 stated by the Spectator (July 11, 1908) : — 
 
 As a matter of fact, the profits which the com- 
 panies had been earning- disappeared altogether 
 within two years of the transference of their pro- 
 perty to the State. Since that date there has year 
 by year been a loss upon the undertaking-. If 
 compound interest be allowed on these losses, as is 
 only reasonable, the ag-greg-ate loss to the Exchequer 
 in the thirty-eig-ht years of State ownership will be 
 found to be well in excess of ;^30,ooo,ooo, and the 
 present annual loss to exceed ;^i,ooo,ooo. 
 
 The Postmaster-General himself said in his 
 annual statement on July 16, 1908 : — 
 
 The principal, in fact the only profitable head of 
 revenue we have now left in the postal system is 
 the penny stamp. That is really the sheet-anchor 
 
 of our postal revenue I do not think I need 
 
 dwell on the disastrous history of our teleg-raph 
 system. It was over-capitalised to start with ; then 
 came the reduction to sixpenny teleg-rams, and now 
 it is carried on at a very great annual loss to the 
 Exchequer. 
 
 Yet it is, indeed, with the Telegraph Depart- 
 ment rather than with the Post Office as a whole 
 that the comparison for present purposes should 
 be made, because in the former case there was an 
 actual " purchase " of established interests, as
 
 202 Railways and Nationalisation. 
 
 there would be with the railways but as there was 
 not in the collection and delivery of letters. In 
 acquiring the railways, also, the Government 
 would have the question of over-capitalisation 
 " to start with," and that of reductions of rates 
 — with increased expenses — to follow. Would 
 the " very great annual loss " again be very far 
 behind ? 
 
 Whatever the real success of the Post Office, 
 one could not say that equally good results — so 
 far as the public are concerned — might not have 
 been obtained if the various services rendered 
 had been left open to competition, instead of 
 becoming a State monopoly. Nor has the suc- 
 cess attained been such as to warrant in itself the 
 undertaking by the State of a far greater and far 
 more complicated business proposition, in the 
 form of the purchase and operation of the rail- 
 ways. 
 
 THE war office. 
 
 No resolutions, so far as I am aware, have yet 
 been passed representing the War Office as a 
 paragon of efficient State management, and as 
 affording proof of the capacity of the State to 
 take charge of the railways as well. On the 
 contrary. Commercial Intelligence, in its issue of 
 February 26, 1908, claimed to remember that " at 
 the time of the South African War it was freely 
 urged that any of our great railway adminis- 
 trators could have managed the campaign infi-
 
 State v. Company Management. 203 
 
 nitely better than the War Office, and the 
 Government itself showed its opinion of the 
 capacity of the railway world by appointing a 
 railway man as a commissioner to inquire into 
 the management of the war. Now," the journal 
 continues, " we are asked to substitute for the 
 railway official, as we know him, the Govern- 
 ment official." 
 
 Is it not a fact, also, that when, in March, 
 1905, a succession to the Earl of Selborne as 
 First Lord of the Admiralty, was wanted, the 
 choice fell upon the Earl of Cawdor, whose 
 appointment was especially approved because of 
 the experience he had gained and the capacity 
 he had shown as chairman of the Great Western 
 Railway Company ?
 
 204 Railways and Nationalisation. 
 
 CHAPTER X. 
 TRADERS AND THEIR GRIEVANCES. 
 
 When one comes to look into the reasons 
 advanced in support of railway nationalisation — 
 that is to say, leaving out of account the ques- 
 tion of party policy in its advocacy as a set-off 
 to the movement for tariff reform — one finds that 
 the chief grievances alleged by traders against 
 the railway companies fall under the head of (i) 
 unduly high rates and (2) undue preference to 
 foreign produce; while it is argued that there is 
 little hope of the railway companies themselves 
 affording relief in respect to either of these con- 
 ditions, the conclusion thus arrived at being that 
 the only real remedy could be secured if the 
 State should take over the whole of the rail- 
 ways, and, by operating them as a single sys- 
 tem, effect such economies that there would be 
 ample funds available alike for reductions in 
 rates and for an improvement in the position of 
 the railway servants. Other allegations and 
 theories are advanced in addition ; but the main 
 issue may, I think, be regarded as fairly des- 
 cribed in the brief statement of the case just 
 given. 
 
 With regard to the rates charged by British
 
 Traders and their Grievances. 205 
 
 railway companies it is, in the first place, es- 
 sential to a full and fair understanding of the 
 question at issue t(j consider the particular con- 
 diti(jns under which the railways were construc- 
 ted, inasmuch as, in the absence of State aid in 
 any shape or form, a railway company, when 
 recouping itself for the expenditure it has in- 
 curred, is necessarily dependent on the fares, 
 rates and charges imposed on those by whom the 
 lines are used. 
 
 A STORY OF SCANDALOUS PILLAGE. 
 
 The real position was put very fairly by Mr. 
 Lloyd-George in the course of the debate on the 
 resolution proposed in the House of Commons, 
 on February 11, 1908, by Mr. G. A. Hardy, in 
 favour of State purchase of the railways. Mr. 
 Lloyd-George said : — • 
 
 He agreed with the Hon. Member for Paddington 
 that there was a good deal of " water " in the 
 capital, but not sufficient appreciably to affect the 
 argument. He would remind his hon. friend that 
 the real difficulty was not so much water as the 
 land. If his hon. friend wanted to see the reason 
 why railway rates were so much cheaper on the 
 Continent than here, he must not place the respon- 
 sibility altogether upon the railway directors and 
 managers, nor even upon stockbrokers, because the 
 House of Commons was largely responsible — he 
 was not sure that it was not entirely responsible. 
 Before they were allowed to get any privileges for 
 the development ot their lines, railway companies
 
 2o6 Railways and Nationalisation. 
 
 had to go to a gigantic expense and spend huge 
 sums upon experts and others before they could 
 get a Bill through Parliament. Having, perhaps, 
 after a third try, got their Bill through, they were 
 allowed to go down into the country to buy a piece 
 of land. What happened? The persons whose 
 property was developed and whose property was en- 
 hanced in value by the transaction got ten times as 
 much value out of it as the railway companies. It 
 was a story of scandalous pillage from beginning to 
 end. The extravagant costs of the land and the 
 heavy expenses were sometimes increased by 
 ludicrous conditions. The London and North- 
 western expresses had to slow down in passing a 
 certain village to three miles an hour simply because 
 that condition had been inserted by some land- 
 owner. These circumstances and conditions had so 
 hampered our railways that it was no wonder 
 they could not compete with the railways of Ger- 
 many and other countries. The matter was a purely 
 business proposition, a proposition for the nation 
 to go into, and to mix it up with questions of 
 prejudice against railway directors was, in his 
 opinion, a mistake. It was quite unnecessary, and 
 created bitterness in the examination of a problem 
 which was a business one. 
 
 EARLY DAYS OF BRITISH RAILWAYS. 
 
 To illustrate the conditions under which the 
 earlier railways in the United Kingdom were 
 actually constructed, I cannot do better than give 
 some extracts from a work on " Our Iron 
 Roads," written by Mr. F. S. Williams, and 
 published in 1852, when the facts he states were 
 still fresh in the public mind. After describing
 
 Traders and their Grievances. 207 
 
 the initial steps taken in the promotion of a 
 scheme for a new railway, he proceeds : — 
 
 While the arguments and evidence have thus 
 been advanced within the Committee rooms, great 
 efforts have been made " out of doors " by the 
 friends of the Bill. Witnesses have been collected 
 wherever they could be useful, and without regard 
 to expense. If possible, the landowners whose 
 estates the line will traverse have been induced to 
 concur in the scheme, and to signify their assent 
 and consent thereto before the honourable and 
 select Committee. Merchants, manufacturers, and 
 tradesmen have been brought from the towns 
 through which it is intended that the line should 
 pass, to express their opinon in its favour. Ob- 
 jectors to the railroad are conciliated, to effect 
 which all practicable means are rendered available, 
 if they are men of note or influence. The system 
 of " buying off " opposition has, indeed, been car- 
 ried on to a prodigious extent. When landowners 
 have been asked by the Company whether they 
 approved or not the general design of the proposed 
 railway, they have frequently answered in the nega- 
 tive, although they have openly avowed their 
 anxiety that the railway should be formed, as it 
 would not only be a matter of great personal con- 
 venience to them, but that they hoped to gain a 
 "good picking" from it; and they have admitted 
 that their sole object in thus opposing the line was 
 to obtain from the Company a larger sum of money 
 for their land. Of the style in which opposition 
 was carried on in the Committee rooms, some illus- 
 trations may be given : — - 
 
 Often a proprietor, who owned perhaps half an 
 acre, was brought forward by those who were inter- 
 ested in opposing the measure, and counsel, agents, 
 and witnesses were supplied him, without regard to 
 expense, till every means had been exhausted of
 
 2o8 Railways and Nationalisation. 
 
 thus producing, through him, an adverse feeling in 
 regard to the project. Some one else was then 
 advanced for the same purpose ; and though it was 
 known to every one in the Committee room that 
 these were only the agents of a rival line or interest, 
 yet on the same day the same questions were raised, 
 the same arguments enforced, the same sort of 
 evidence given, to show that all railways were in- 
 jurious, in perhaps twenty different rooms. 
 
 One noble lord had an estate near a proposed 
 line of railway, and on this estate was a beautiful 
 mansion. Naturally averse to the desecration of 
 his home and its neighbourhood, he gave his most 
 uncompromising opposition to the Bill, and found, 
 in the Committees of both Houses, sympathising 
 listeners. Little did it aid the projectors that they 
 urged that the line did not pass within six miles 
 of that princely domain ; that the high road was 
 much closer to his dwelling ; and that, as the spot 
 nearest the house would be passed by means of a 
 tunnel, no unsightliness would arise. But, no ; no 
 worldly consideration affected the decision of the 
 proprietor; and, arguments failing, it was found 
 that an appeal must be made to other means. His 
 opposition was ultimately bought off for twenty- 
 eight thousand pounds, to be paid when the railway 
 reached his neighbourhood. Time wore on, funds 
 became scarce, and the Company found that it 
 would be best to stop short at a particular portion 
 of their line, long before they reached the estate 
 of the noble lord who had so violently opposed their 
 Bill, and whose aid they felt themselves sure of 
 obtaining for their second Bill, by which they 
 sought to be released from the obligation of con- 
 structing the line which had been so obnoxious to 
 him. What was their surprise at finding this very 
 man their chief opponent, and then fresh means had 
 to be adopted of silencing his objections ! 
 
 Other instances may be given. A line had to be
 
 Tradkrs and thkir Grievances. 209 
 
 brought near to the property of a certain member of 
 Parliament. It threatened no injury to the estate, 
 either by affecting its appearance or its intrinsic 
 worth; and, on the other hand, it afforded him a 
 cheap, convenient, and expeditious means of com- 
 munication with the metropolis. But the pro- 
 prietor, being a legislator, had power at head- 
 quarters, and by his influence he nearly turned the 
 line of railway aside ; and this deviation would have 
 cost the projectors the sum of sixty thousand 
 pounds. Now it so happened that the house of 
 this honourable member, who had thus insisted on 
 such costly deference to his peculiar feelings re- 
 specting his property, was afflicted with the dry 
 rot, and threatened every hour to fall upon the head 
 of its owner. To pull down and rebuild it would 
 require the sum of thirty thousand pounds. The 
 idea of a compromise, beneficial to both parties, 
 suggested itself. If the railway company rebuilt 
 the house, or paid ;£'30,ooo to the owner of the 
 estate, and were allowed to pursue their original 
 line, it was clear that they would be ;^'30,ooo the 
 richer, as the enforced deviation would cost 
 ;j£^6o,ooo; and, on the other hand, the owner of the 
 estate would obtain a secure house, or receive 
 ;^30,ooo in money. The proposed bargain was 
 struck, and ;^,"30,ooo was paid by the Company. 
 " How can you live in that house," said some 
 friend to him afterwards, " with the railroad coming 
 so near?" " Had it not done so," was the reply, 
 " I could not have lived in it at all." 
 
 One rather original character sold some land 
 to the London and Birmingham Company, and was 
 loud and long in his outcries lor compensation, ex- 
 patiating on the damages which the formation of 
 the line would inevitably bring to his property. His 
 complaints were only stopped by the payment of his 
 demands. A few months afterwards a little addi- 
 tional land was required from the same individual, 
 
 P
 
 210 Railways and Nationalisation. 
 
 when he actually demanded a much larger price for 
 the new land then was given him before ; and, on 
 surprise being- expressed at the charge for that 
 which he had declared would inevitably be greatly 
 deteriorated in value from the proximity of the 
 railway, he coolly replied : " Oh, I made a mistake 
 then, in thinking the railway would injure my pro- 
 perty ; it has increased its value, and of course you 
 must pay me an increased price for it." Thus it 
 is that in dealing with individuals, men have distinct 
 ideas of justice ; while in dealing with the abstraction 
 called a railway proprietary, many seem to think 
 themselves entitled to overreach and to cheat with- 
 out either restraint or dishonesty. 
 
 On one occasion, a trial occurred in which an 
 eminent land-valuer was put into the vtitness-box to 
 swell the amount of damages, and he proceeded to 
 expatiate on the injury committed by railroads in 
 general, and especially by the one in question, in 
 cutting up the properties they invaded. When he 
 had finished the delivery of this weighty piece of 
 evidence, the counsel for the company put a news- 
 paper into his hand, and asked him whether he had 
 not inserted a certain advertisement therein. That 
 fact was undeniable, and on being read aloud, it 
 proved to be a declaration by the land-valuer him- 
 self, that the approach of the railway which he had 
 come there to oppose, would prove exceedingly 
 beneficial to some propert}' in its immediate vicinity, 
 then on sale. 
 
 An illustration of the difference between the exor- 
 bitant demands made by parties for compensation, 
 and the real value of the property, may be men- 
 tioned. The first claim made by the Directors of 
 the Glasgow Lunatic Asylum on the Edinburgh and 
 (ilasgow Railway is stated to have been no less than 
 ;,£«'44,ooo. Before the trial came on this sum was 
 reduced to ;£,'io,ooo; the amount awarded by the 
 jury was ^Sy^- The opposition thus made.
 
 Traders and their Grievances. 211 
 
 whether feigned or real, it was always advisable to 
 remove, and the money paid lor this purpose, though 
 ostensibly in the purchase of the ground, has been 
 on many occasions immense. Sums of ;£^35,ooo, 
 ;^.'4o,ooo, ;^5o,ooo, ;^ioo,ooo, and ;^i2o,ooo have 
 thus been paid ; while various ingenious plans have 
 been adopted of removing the opposition of influen- 
 tial men. An honourable member is said to have 
 received ;^^30,ooo to withdrav/ his opposition to a 
 Bill before the House; and "not far off the cele- 
 brated year 1845, a lady of title, so gossips talk, 
 asked a certain nobleman to support a certain Bill, 
 stating- that, if he did, she had the authority of the 
 secretary of a great company to inform him that 
 fifty shares in a certain railway, then at a con- 
 siderable premium, would be at his disposal. This, 
 of course, is no bribery ; but we wonder whether it 
 explains the reason of some people having so many 
 friends in Parliament." Exceptions there have 
 been — we hope there have been many — to this spirit 
 of self-aggrandisement. It was of such that Sir 
 Robert Peel spoke, when, on turning- the first sod 
 of the Trent Valley line, he said to its Directors : 
 " I assure them there are many persons in this 
 neighbourhood who have not scrupled to sacrifice 
 private feeling and comfort, by consenting- to their 
 land being appropriated to the Trent Valley Rail- 
 way. They have given that consent from a con- 
 viction that this undertaking- was one conducive 
 to the public benefit, and that considerations of 
 private interest should not obstruct the great one of 
 the public good. But they have given their con- 
 sent also in the confidence that this is not one of the 
 ephemeral schemes proposed for mere gambling- 
 speculations, or from mere cupidity 01 gala. They 
 have given their consent in tlie confidence luwi belief 
 that the Directors of this railroad are men influenced 
 by the honourable ambition of conferring a public 
 l:)eneHt on the district with which they arc imme- 
 
 P 2
 
 212 Railways and Nationalisation. 
 
 diately connected, and that they look for reward, 
 not so much to immediate pecuniary gain, as to the 
 grateful acknowledgments of their fellow citizens 
 for a service rendered to them. On these grounds 
 there has been accorded a willing assent to the 
 passage of the railway through this locality." 
 
 One pleasing circumstance, however, highly 
 honourable to the gentleman concerned, must not 
 be omitted. The late Mr. Labouchere had made 
 an agreement with the Eastern Counties Company 
 for a passage through his estate, near Chelmsford, 
 for the price of ^^35,000; his son and successor, the 
 Right Hon. Henry Labouchere, finding that the 
 property was not deteriorated to the anticipated 
 extent, voluntarily returned ;^ri 5,000. 
 
 The cost of purchasing land, and for compensa- 
 tion, has been stated by Mr. Laing, in a paper 
 appended to the evidence given by him before a 
 Select Parliamentary Committee on Railways, as 
 follows : — 
 
 Newcastle and Carlisle Railway ... ^2,200 per mile. 
 Grand Junction ... ... ... 3,000 „ 
 
 South- Western ... ... ... 4,000 „ 
 
 Manchester and Leeds ... ... 6,150 ,, 
 
 London and Birmingham and 
 
 Great Western ... ... ... 6,300 „ 
 
 while, on three lines, the expenditure has averaged 
 ;^'i 4,000 per mile ! Mr. Laing estimated that the 
 positive waste of capital which had been incurred 
 in this country, under the head of land and com- 
 pensation (up to 1850), amounted to more than two 
 millions and a half sterling — a. sum which has been 
 immensely augmented since that return was made. 
 
 The expenditure incurred in procuring legislative 
 authority to construct railways has been, in many 
 cases, scarcely credible. While the Parliamentary, 
 surveying, and engineering costs of the Kendal and 
 Windermere Company amounted to little more than
 
 Traders and their Grievances. 213 
 
 2 per cent, on the total outlay of the railway, we 
 are assured that the Parliamentary costs of the — - 
 
 Brighton Railway averaged ... ^4,806 per mile. 
 jManchester and Birmingham ... 5,190 ,, 
 Blackwall '44i4 „ 
 
 The Brighton line had to contend with three or four 
 other companies during two successive sessions, and 
 when the Bill was before the Committee, the ex- 
 pense of counsel and witnesses was stated at ;^i,ooo 
 daily, extending over fifty days. The London and 
 Birmingham line escaped much of this cost by 
 coming earlier into the field ; but the Parliamentary 
 and surveyors' expenses even then amounted to 
 ;^72,ooo, which must be regarded as a reproach on 
 the system of legislation which thus permits impedi- 
 ments to be thrown in the way of works of great 
 and acknowledged usefulness. It is also affirmed 
 that " the solicitor's bill of South-Eastern Railway 
 contained 10,000 folios, occupied twelve months in 
 taxation before the Master, and amounted to 
 ;^240,ooo. One company had to fight so hard 
 for their Bill that they found, when at length they 
 reached the last stage — that of receiving the Royal 
 Assent — that their preliminary undertakings had 
 cost nearly half a million of money — a sum which 
 had been expended in merely acquiring the privilege 
 of making a railway, and the interest of which has 
 now to be paid by the passengers and goods that 
 travel thereon. Without opposition, the same bill 
 would !.rave been passed into an Act at a cost 
 not worth mentioning, in comparison with the real 
 expenditure. 
 
 The waste of capital, directly and indirectly, in 
 the formation of railways was (in 1852) estimated at 
 not less than ;^i 2,000,000, apart from the loss 
 which has been incurred in the support of unsuc- 
 cessful bills and the maintenance of unsuccessful 
 opposition. This sum would have been sufficient
 
 214 
 
 Railways and Nationalisation. 
 
 to construct a railway 600 miles long, at the rate 
 of ;^20,ooo a mile ; while the interest which has to 
 be paid by the public in the increased cost of 
 existing lines, amounts, at 5 per cent., to ;^6oo,ooo. 
 Of the costs of the projects which were ultimately 
 unsuccessful, a single illustration may be given. 
 In the celebrated battle of the Stone and Rugby 
 Railway, the inquiry continued during sixty-six 
 sitting-days, from February to August, 1839, and, 
 having been renewed in the following year, the Bill 
 was finally defeated at an expense to its promoters 
 of ;^i46,ooo. 
 
 The total expense per mile of some of the 
 English railways was as follows : — 
 
 North Western 
 
 South-Eastern 
 
 Eastern Counties 
 
 Great Western 
 
 Manchester and Sheffield ... 
 
 Brighton 
 
 Manchester and Birmingham 
 
 Manchester and Leeds 
 
 Croydon 
 
 Dock and Birmingham Junction 
 
 Blackwall 
 
 (Greenwich 
 
 /4i,6i2 
 44,412 
 
 46,355 
 
 46,870 
 
 56,316 
 
 56,981 
 
 61,624 
 
 64,588 
 
 80,400 
 
 ioo,oco 
 
 266,000 
 
 270,000 
 
 Omitting the three lines last mentioned, which it 
 would not be right to include in computing the 
 average, the expense of the remainder is about 
 ^^56,91 5 Pei- mile. 
 
 In addition, however, to the cost of the land 
 and the heavy Parliamentary expenses, one must 
 remember that Great Britain was the pioneer of 
 railways, and had to pay for costly experiments 
 of which countries starting later in the work of 
 railwav construction were able to take full ad- 
 vantage.
 
 Trahhrs and their GRrF.VANCES. 215 
 
 STATE RAILWAY PROMOTION. 
 
 To a certain extent the traders of to-day are 
 necessarily paying for the greed and extortion of 
 a past generation. Yet no scruple is shown by 
 the railway critics in comparing rates and 
 charges in force on lines built under these ad- 
 verse conditions with such lines as those in Ger- 
 many, where, as I shall explain in Chapter XI., 
 the promotion of a new railway by a State depart- 
 ment is, as regards procedure, little more than 
 a matter of otfice routine, with an appeal to 
 arbitration should any difficulty arise as to the 
 price to be paid for the land required. 
 
 The nationalisers may adduce these conditions 
 as a strong argument in favour of State railways. 
 It certainly would be if the question of the moment 
 were one of providing railways for a country 
 which had either none at all, or not sufificient. 
 In our own case, however, the extortion has 
 already been practised and the mischief done. 
 With comparatively few exceptions, we have 
 now practically all the lines of railway that we 
 require ; and the question to be considered is, not 
 the State construction, de novo, of a net-work of 
 railways for the country under a new and eco- 
 nomical system, but the State purchase of 
 existing railways, constructed under an old and, 
 as regards the expenditure involved, extremely 
 disadvantageous system. It is no longer a matter 
 of studying ideals. It is a matter of accepting
 
 2i6 Railways and Nationalisation. 
 
 the logic of established facts and dealing with 
 them as best we can. 
 
 COST OF CONSTRUCTION : COMPARATIVE TABLES. 
 
 How the cost of construction of railways in 
 the United Kingdom compares with that of rail- 
 ways in other countries throughout the globe is 
 shown by a table published in the " Bulletin of 
 the International Railway Congress Associa- 
 tion " for September, 1907. One gathers there- 
 from that British railways have been by far the 
 most costly to construct of any in the world; but 
 I think it only fair to say that the table must 
 be accepted with a certain reservation, and one 
 that makes the position not quite so bad as the 
 figures would suggest. The table gives "con- 
 struction capital per mile." But this means 
 route miles, and not track miles; and, as I 
 have shown in introducing the tables given in 
 Chapter III., the railways of the United King- 
 dom include a good deal of mileage with two, 
 three, four, five or more tracks, whereas a large 
 proportion of colonial and foreign (especially 
 American) railway mileage is single track only. 
 Even, however, allowing for this material con- 
 sideration, I am disposed to think that the 
 British railways may still be regarded as having 
 been " the most costly to construct of any in the 
 world." The table is as follows : —
 
 Traders and their Grievances. 
 
 21' 
 
 
 Year 
 
 Mileage 
 
 Construction Capital. 
 
 Countries and Railway 
 
 
 
 
 Systems. 
 
 To which the data as to 
 
 X/^ff.1 Psr 
 
 
 the cost apply. 
 
 local. 
 
 mile. 
 
 Europe. 
 
 
 Miles. 
 
 ! .C 
 
 Great Britain and Ireland : 
 
 
 
 
 
 The entire system 
 
 1903 
 
 22,430-6 
 
 1,245 050,000 
 
 155,506 
 
 Germany : 
 
 
 
 
 
 The entire system 
 
 1905 
 
 34,124-5 
 
 718,950,000 
 
 21,322 
 
 Austria- Hungary ; 
 
 
 
 
 
 Austria, the entire 
 
 
 
 
 
 system 
 
 1905 
 
 i3>o5o-3 
 
 295,300,000 
 
 22,62s 
 
 Hungary, the entire 
 
 
 
 
 
 system 
 
 Dec 31, 1905 
 
 11,297-3 
 
 150.450 000 
 
 13-360 
 
 France 
 
 1903 
 
 28,09^-6 
 
 716,350,000 
 
 25,497 
 
 Belgium : 
 
 
 
 
 
 Belgian State ... 
 
 1904 
 
 2,4837 
 
 85,950,000 
 
 34,602 
 
 Netherlands : 
 
 
 
 
 
 The entire system 
 
 1897 
 
 1,653-5 
 
 28,700,000 
 
 17,350 
 
 Denmark : 
 
 
 
 
 
 State railways ... 
 
 I 905- I 906 
 
 1,164-5 
 
 11,550.000 
 
 9,925 
 
 Norway : 
 
 
 
 
 
 The entire system 
 
 1905-1506 
 
 1,396-2 
 
 11,050,000 
 
 8,548 
 
 Sweden : 
 
 
 
 
 
 .State railways 
 
 1905 
 
 2,609-2 
 
 25,100,000 
 
 9,617 
 
 l^rivate Companies 
 
 1903 
 
 5,060-5 
 
 24,300,000 
 
 4,Soi 
 
 Russia (without Finland): 
 
 
 
 
 
 The entire system 
 
 1903 
 
 36,6839 
 
 612,100,000 
 
 16,685 
 
 Finland, State railways 
 
 1905 
 
 1,892-7 
 
 13,200,000 
 
 6,978 
 
 Roumania : 
 
 
 
 
 
 The entire system 
 
 I 904- I 905 
 
 1,975-4 
 
 35,450.000 
 
 17,953 
 
 Ser\-ia : 
 
 
 
 
 
 State railways ... 
 
 1904 
 
 3362 
 
 4,250,000 
 
 12,712 
 
 Bulgaria : 
 
 
 
 
 
 -State railways ... 
 
 1904 
 
 75; -2 
 
 6,200,000 
 
 8,567 
 
 Italy : 
 
 
 
 
 
 The entire system 
 
 1903 
 
 10,022-3 
 
 228,800,000 
 
 21,041 
 
 Switzerland : 
 
 
 
 
 
 The entire system 
 
 1904 
 
 2,603-6 
 
 55,750,030 
 
 21,807 
 
 Spain : 
 
 
 
 
 
 Northern railway 
 
 1903 
 
 2,271-8 
 
 46,200,000 
 
 20,345 
 
 Total and average for \ 
 Europe j 
 
 
 
 
 
 179,902-0 
 
 4,315,600,000 
 
 23,979 
 
 
 

 
 2l8 
 
 Railways and Nationalisation. 
 
 
 Year 
 
 Mileage 
 
 Construction Cai'ital. 
 
 COUNTHIES AND RAILWAY 
 
 
 
 
 
 Systems. 
 
 To which the data as to | 
 
 Total. 
 
 Per 
 
 
 the cost a 
 
 pply. 
 Miles. 
 
 mile. 
 
 Other parts of the 
 Globe. 
 
 £ 
 
 £ 
 
 United States of America 
 
 June 30, 1904 
 
 213,862-4 
 
 2,774,750,000 
 
 13.498 
 
 Canada 
 
 June 30, 1905 
 
 20,';97-0 
 
 262,200,000 
 
 12,731 
 
 Cuba 
 
 1905 
 
 1, 533 -6 
 
 13,650,000 
 
 8,932 
 
 Uruguay .. 
 
 I 898- I 899 
 
 997-3 
 
 11,050,000 
 
 ll,oSq 
 
 Chili: State railways 
 
 Dec. 31, 1898 
 
 I.375"! 
 
 15,800,000 
 
 11,302 
 
 Argentine Republic 
 
 1904 
 
 12,072-2 
 
 1 17, 700,000 
 
 9,753 
 
 British India 
 
 Dec. 31, 1905 
 
 28,289-7 
 
 243,700.000 
 
 8,615 
 
 Japan 
 
 Mar. 31, 1905 
 
 4=693-3 
 
 41,300,000 
 
 8,795 
 
 Siam 
 
 I 905- I 906 
 
 263-5 
 
 1,450,000 
 
 5,548 
 
 Java 
 
 1893 
 
 607-1 
 
 6,200,000 
 
 10,921 
 
 Algiers and Tunis 
 
 'Dec. 31, 1902 
 
 2,269-9 
 
 27,300,000 
 
 11,863 
 
 Cape Colony 
 
 !Dec. 31, 1905 
 
 2,986-4 
 
 30,550,000 
 
 10,237 
 
 Natal 
 
 Dec. 31, 1905 
 
 817-7 
 
 13,200,000 
 
 17,177 
 
 Sierra- Leone 
 
 1903 
 
 221-8 
 
 1,000,000 
 
 4,313 
 
 Gold Coast 
 
 1903 
 
 170-2 
 
 1, 800,000 
 
 10,300 
 
 Lagos ... 
 
 1903 
 
 124-9 
 
 900,000 
 
 7,081 
 
 Colony of New Zealand... 
 
 Mar. 31, 1905 
 
 2,373-7 
 
 22,150,000 
 
 9,325 
 
 ,, of Victoria 
 
 June 30, 1905 
 
 3-380-3 
 
 42, 00,000 
 
 12,456 
 
 ,, of New South 
 
 
 
 
 Wales 
 
 Tune 30, 1905 
 
 3.280-3 
 
 43,900,000 
 
 13,390 
 
 ,, of South Australia 
 
 June 30, 1905 
 
 1,745-5 
 
 I 5,850,000 
 
 7,940 
 
 ,, of Queensland 
 
 June 30, 1905 
 
 3,091-4 
 
 22,050,000 
 
 7,131 
 
 ,, of Tasmania 
 
 June 30, 1905 
 
 462-3 
 
 4,oco,ooo 
 
 8,248 
 
 ,, of Western 
 
 
 
 
 
 Australia 
 
 June 30, 1905 
 
 1,605 -o 
 
 306,820-6 
 
 9,500,000 
 
 5,922 
 
 Total and average for \ 
 other parts of the globe j 
 
 
 3,720,100,00.0 
 
 12,150 
 
 THE QUESTION OF EXCESSIVE RATES. 
 
 In view of all the facts and figures here stated, 
 it i.s obvious enough that the British railway 
 companies have started heavih' handicapped by 
 their cost of construction, and have certainly
 
 TrAOFRS and TIIF.IR GrIPA'ANCES. 210 
 
 been at a disadvantage as compared with State 
 railways built at a substantially lower sum per 
 mile in other countries, or with the railways of 
 companies which have received more or less 
 generous State aid. Supplementing the heavy 
 cost of construction, there has been the fact that 
 the requirements of Parliament and of the Board 
 of Trade, the exactions of local rating authori- 
 ties, and substantial advances in various items 
 of expenditure have borne heavily on the work- 
 ing expenses. In the circumstances it should 
 not be surprising if British railway rates did not 
 always compare favourably with those charged 
 elsewhere. 
 
 But are the rates charged always so high, and 
 do they always compare so unfavourably with 
 the rates charged on Continental lines (built and 
 operated under conditions entirely different) as 
 the nationalisers assert? Abundant figures are 
 advanced by them and by dissatisfied traders in 
 general from time to time, and the public are 
 apt to assume that on such figures implicit re- 
 liance can be placed. iMy own experience, how- 
 ever, in submitting them to the test of inquiry, 
 is that, while legitimate grievances certainly 
 may exist, figures of the type in question are 
 often either inaccurate in themselves or are used 
 without reference to some condition or service, 
 included or omitted, as the case may be, which 
 would show the real position to be very different 
 from what is alleged to be the case.
 
 220 Railways and Nationalisation. 
 
 FIGURES and fallacies. 
 
 As typical of the arguments used I might refer 
 to the following table of comparative rates given 
 in a pamphlet (published 1907) on " The 
 Nationalisation of Irish Railways : Defects of 
 the Present System," by Mr. William Field, 
 M.P., a member of the executive committee of 
 the recently-formed Railway Nationalisation 
 Society : — 
 
 For same Distance. 
 British German. Belgian. Dutch. 
 
 Hardware : 
 
 
 
 
 
 Birmingham to London ... 
 
 23/6 
 
 II 4 
 
 13 II 
 
 "'3 
 
 Cotton Goods : 
 
 
 
 
 
 Manchester to London ... 
 
 36- 
 
 20 - to 23 - 
 
 iS I 
 
 14 4 
 
 General Machinery : 
 
 
 
 
 
 Leeds to Hull ' 
 
 2; 
 
 46 
 
 S/- 
 
 56 
 
 Wool : 
 
 
 
 
 
 Liverpool to Manchester... 
 
 9/2 
 
 4/2 
 
 411 
 
 42 
 
 Cattle : 
 
 
 
 
 
 Hull to Manchester 
 
 59/3 
 
 38/6 
 
 29,6 
 
 37/6 
 
 Mr. Field admits that he quotes these figures 
 from Fabian Tract No. q8, " State Railwavs for 
 Ireland," published in October, 1899, and the 
 writer of the Fabian tract in question admits, in 
 turn, that he took them from what he calls a 
 " masterly " report presented by Sir Bernhard 
 Samuelson to the Associated Chambers of Com- 
 merce in 1886; but neither the writer of the tract 
 nor Mr. Field himself seems to have gone to the 
 slightest trouble to investigate the trustworthi- 
 ness of these now 20-year-old figures. Each
 
 Tradkrs and their Grievances. 221 
 
 repeats them, and various other writers have 
 done the same, as though they were absolutely 
 reliable. Yet the fallacies on which Sir Bern- 
 hard Samuelson's report was mainly based were 
 thoroughly exposed in 1886, the same year in 
 which it w.as issued, by the late Mr. J. Grierson, 
 general manager of the Great Western Railway, 
 in the appendix of his book on " Raihvay Rates, 
 English and Foreign." 
 
 Mr. Grierson said of the report which Mr. 
 Field serves up afresh tw-o decades after date : — 
 
 Sir B. Samuelson's report contains many errors 
 of detail. Comparisons throughout have been 
 made without due regard to the conditions attaching 
 to the rates, or to the different circumstances under 
 which the traffic is carried. . . . Many of the 
 deductions are inaccurate and misleading. 
 These errors make many of the comparisons value- 
 less. . . . Sir B. Samuelson has in numerous 
 cases assumed British rates, which include either 
 collection or delivery, and in some cases both of 
 those services, to be station-to-station rates, and 
 compared them as such with station-to-station rates 
 on the foreign lines. . . . In no single instance 
 has Sir B. Samuelson taken in his comparisons the 
 lower owner's risk chargeable at the option of the 
 consignor. ... In almost every instance Sir 
 B. Samuelson has taken the lowest rates in Ger- 
 many, Belgium, and Holland, which are applicable 
 only to full truck loads of 5 and 10 tons, and in 
 some cases, viz., Belgium, to a minimum weight 
 of 8 cwt. These he has used for the purposes of 
 comparison with English rates for any quantities 
 over 500 lbs. ... In some instances Sir B. 
 Samuleson has not included in the foreign rates the 
 charge for loading and unloading. . . . Such
 
 222 Railways and Nationalisation. 
 
 are some examples of the errors vitiating the com- 
 parison. 
 
 And such, it may here be added, is the au- 
 thority whom Mr. Field now brings forward, 
 over 20 years after this exposure, in support of 
 his own attack on the railway companies. Inci- 
 dentally I might mention that this same report by 
 Sir Bernhard Samuelson is one of the authori- 
 ties chiefly relied on by Mr. Clement Edwards, 
 M.P., chairman of the executive of the Railway 
 Nationalisation Society, in his book on " Rail- 
 way Nationalisation " (1898). 
 
 FIGl'RES AND FACTS. 
 
 As for the specific comparisons given by Mr. 
 Field, I find, as the result of my own inquiries, 
 that the reply thereto is as follows : — 
 
 Hardware. — The British rate, Birmingham 
 to London, applies to any consignment weigh- 
 ing over 306 lbs. and includes both collection 
 from the senders and delivery alongside ship. 
 The foreign rates are based on special tariffs 
 applying to full truck loads of not less than five 
 tons, and do not include either collection or 
 delivery. 
 
 Cotton Goods. — The Manchester to London 
 rate is given as 36s., but an export rate of 25s. 
 a ton has long been in operation, and imder it 
 many thousands of tons of cotton goods have 
 been conveyed from Lancashire to London for
 
 Traders and their Grievances. 223 
 
 export. This 25s. rate also includes collection 
 from consignor and delivery alongside ship, the 
 cost of which services would have to be added to 
 the German, Belgian and Dutch rates. 
 
 General Machinery. — The Leeds to Hull rate 
 should be given as 12s. 6d., not 25s. It includes 
 the same services as in the previous cases. 
 
 Wool. — No wool is carried between Liverpool 
 and Manchester. The rate quoted is a "paper" 
 rate, and is not used. There being no traffic, a 
 special rate has not been arranged. 
 
 Cattle. — The figures given under this head 
 are especially characteristic and misleading. 
 There is nothing to show whether they are rates 
 for truck-loads of cattle or quotations of rates per 
 head of cattle. Presumably they are the former. 
 In any case they further ignore the fact that the 
 charges for cattle vary s-xording to the size of 
 the truck and the number of beasts accommo- 
 dated therein. The rates for cattle from Hull to 
 Manchester from October, 1872, to December, 
 1892 (covering the period dealt with in the 
 Samuelson-Field figures), and the corresponding 
 rates since that date, are as follows : — 
 
 Size of Truck. Average Loading. Rates from 1872 I'rescnt 
 
 to 1892. ]\ale.s. 
 
 SmaU... ... 7 fat 10 lean cattle 24/3 25/- 
 
 Medium ... 8 ., 12 „ ,, 29/9 30/7 
 
 Large ... 9 „ 14 „ „ 39/3 3810
 
 224 Railways and Nationalisation. 
 
 It will thus be seen that the quotation in 
 respect to the British rate, 59s. 3d., reproduced 
 by Mr. Field, is 20s. in excess of even the high- 
 est actual rate for the period in question, while 
 no mention whatever is made of the existence of 
 other rates which are less thao the foreign rates 
 given. Further, the foreign rates may be in 
 respect to a considerable movement of cattle, and 
 this is certainly the case in Holland, where large 
 numbers of beasts are brought down to the coast, 
 and slaughtered there for the Dutch dead meat 
 trade with England. Between Hull and Man- 
 chester, however, cattle do not pass in any 
 appreciable number, and one line operating be- 
 tween those places has gone for twelve months 
 without carrying any cattle at all from either of 
 these points to the other. 
 
 Mr. Grierson concluded his comments on Sir 
 B. Samuelson's report thus : — 
 
 It is, of course, difificult for any person, even when 
 practically acquainted with railway business, to 
 appreciate the practical effect of the different condi- 
 tions under which traffic is carried on foreign and 
 English railways. It is not surprising that 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 he has prepared. Unfortunately, owing to 
 the omissions, the conclusions which he draws are 
 rn some cases erroneous and in others misleading. 
 
 That perfectly fair criticism still applies to 
 manv of the comparisons so freely made to-day;
 
 Traders and their Grievances. 225 
 
 but it is upon comparisons of this tvpe that the 
 nationalisers largely depend in the presentation 
 of their case. 
 
 A question of pineapples. 
 
 For a recent example of the assertions that are 
 accepted \vith implicit confidence by dissatisfied 
 traders, I would call attention to the following 
 extract from a report, published in the Daily 
 Telegraph of April 20, 1908, of the proceedings 
 at a meeting of the Canterbury Farmers' Club 
 and East Kent Chamber of Agriculture, when 
 the subject of railway rates was discussed : — 
 
 A case was quoted in which an importer brought 
 a cargo of 7,000 cases of pineapples from the Azores. 
 An endeavour was unsuccessfully made to obtain 
 satisfactory rates from Plymouth and Dartmouth 
 to London, and it was then practically decided to 
 unload the ship at Newhaven. Then someone sug- 
 gested Dieppe. The rates thence were found to be 
 even more favourable. The result was that the 
 ship was sent to Dieppe and unloaded there, the 
 pineapples being transhipped thence across the 
 Channel to Newhaven by the railway company, and 
 conveyed to London at a cheaper rate than they 
 were prepared to accept for them from Newhaven. 
 
 I have communicated with each of the railway 
 companies one or other of whom must have 
 been concerned in this not insignificant consign- 
 ment of 7,000 cases of pineapples, if the question 
 of its transport by rail had arisen at all. The 
 replies I have received show that in each instance 
 
 Q
 
 226 Railways and Nationalisation. 
 
 an inquiry had been made by the company, but 
 that nothing whatever was known of the matter 
 by their officers. " So far as we could find," 
 wrote one chief goods manager, " the statement 
 appeared to be an absolute invention — a pure 
 fabrication." 
 
 MISLEADING THE COMMONS. 
 
 Then, in the course of the debate on Mr. 
 Hardy's nationalisation resolution in the House 
 of Commons, Mr. Chiozza Money said, " It 
 seemed to him as true now as it was when it was 
 stated by a Parliamentary Committee in 1872 
 that the case of the public against the monopolist 
 charges of the railway companies was a very 
 strong one." But on referring to the report of 
 the Parliamentary Committee of 1872 I find that 
 the statement in question has a bearing quite 
 different from that which Mr. Money represents. 
 It occurs in the section headed, " Publication of 
 Rates," where the Committee show how " the 
 rates in the case of all the great companies are 
 numbered by millions," and proceed: — 
 
 On the other hand, the case of the public against 
 the railway companies is a very strong- one. They 
 are monopolists who are unlimited in their charges 
 for carriage. ... It is to their interest 
 
 to give the public all possible informa- 
 tion about their charges. . . . Under these 
 circumstances the Committee are of opinion that 
 
 every company should be compelled to 
 keep at every station a book of all the rates, etc.
 
 Traders and their Grievances. 227 
 
 These references to an entirely different 
 matter, and one in regard to which the recom- 
 mendations made have since been carried out, 
 were thus distorted by Mr. Money into a com- 
 plete misrepresentation of the facts, made in 
 the House of Commons itself, and accepted, 
 probably, by the majority of those who either 
 heard or have read them as a perfectly accurate 
 statement. 
 
 Numerous investigations of grievances and 
 allegations of the type here presented, with re- 
 sults akin to those mentioned, have led me to the 
 conviction that, while some of them may be 
 perfectly genuine, in no instance is it safe to 
 accept complaints as to specific rates or charges 
 on British railways until one has investigated 
 the matter, and ascertained the real facts of the 
 case. " Rates," says a circular issued by Mr. 
 Clement Edwards, Mr. Field, and the other 
 members of the Railway Nationalisation 
 Society's committee," are unreasonably high in 
 themselves." But there is always a suspicion 
 that, whether in giving actual figures, or in 
 making merely vague assertions such as this, the 
 leaders of the nationalisation party are so 
 anxious to make up a "case" against the rail- 
 ways that they do not always stop to inquire 
 fully whether or not their statements are really 
 warranted. The fact that one " authority " has 
 said something is considered sufficient in itself, 
 and fictions once started are rarely overtaken. 
 
 Q 2
 
 2 28 Railways and Nationalisation. 
 
 The whole question of railway rates is full of 
 complexities and anomalies, the result, in part, 
 of conditions geographical, economic, and com- 
 petitive (in regard especially to sea transport) 
 which could no more be ignored under State 
 operation of the railways than they can be under 
 company operation. But adequate inquiry would 
 show, probably, that Mr. Grierson's criticisms of 
 Sir B. Samuelson's figures apply, in one way or 
 another, to a very large proportion indeed of the 
 comparisons which are made between British 
 and Continental rates; though w'ith regard to 
 these there are still further considerations, with 
 which I shall deal in the next chapter. 
 
 PREFERENTIAL RATES. 
 
 The circular of the Railway Nationalisation 
 Society follows up the assertion that " rates are 
 unreasonably high " by alleging that " they are 
 even sometimes disastrous or oppressive to the 
 home trader through the preferential treatment 
 conceded to the foreign producer." 
 
 We have here another of the main arguments 
 on which the demand for nationalisation is based. 
 Mr. G. A. Hardy, when proposing his resolu- 
 tion in the Mouse of Commons, spoke of " the 
 preferential transport tax exacted by the railway 
 company, which frequently gave to the foreign 
 producer a monopoly here, to the exclusion of 
 our own farmers"; while the resolution itself
 
 Tradi^rs and thkir Grievances. 229 
 
 d(H-lared that in " view of the widespread com- 
 plaints on the part of traders, agriculturists, 
 and the general pubhc with regard to railway 
 charges and facilities, and particularly %vith 
 r('(rard to preferential treatment of foreign 
 goods," the time had come to consider how far 
 these evils could be remedied by State purchase 
 of the railways. 
 
 The nationalisers convenient])- ignore the fact 
 that the subject of preferential treatment was 
 investigated bv a Departmental Committee of 
 the Board of Agriculture appointed in 1904 " to 
 inquire into and report whether preferential 
 treatment is given bv the railway companies in 
 Great Britain to foreign and colonial, as com- 
 pared with home, farm, dairy and market garden 
 produce." The report of this Departmental 
 Committee was issued in 1906, and it stated, 
 among other things : — 
 
 In the view of the majority of the Committee, the 
 meaning to be attached to the words, " preferential 
 treatment," in the reference, is that their investiga- 
 tions should be directed to ascertaining whether 
 there is any preference beyond what is sanctioned 
 by the existing law; in other words, whether undue 
 preference is accorded by the railway companies to 
 foreign and colonial as compared with home 
 produce. 
 
 Dealing with this view, the Committee find that 
 the evidence has not established the existence of any 
 such undue preference.
 
 230 Railways and Nationalisation. 
 
 " preference " or " undue preference? '' 
 
 The whole question turns, of course, on the 
 difference between "preference" and "undue 
 preference." The railways give lower rates to a 
 trader who regularly consigns goods alike in 
 large quantities and under such conditions as 
 regards packing, etc., that they can be loaded to 
 the best advantage in the trucks than they do to 
 a trader who sends only small and occasional 
 consignments so packed, or with such absence 
 of packing, that they involve more trouble in 
 handling, take up more space in the wagons, and 
 are, generally, less remunerative to carry. In 
 these circumstances the former trader certainly 
 does get a preference over the latter, and it would 
 be inconsistent with the ordinary principles and 
 practice of commercial life if he did not. It is, 
 in effect, just the same preference that the whole- 
 sale man can invariably secure over the retail 
 man. 
 
 The real point is whether the railway com- 
 panies show " undue " preference, by conceding 
 to one trader rates which they refuse to another 
 under the same or similar circumstances and con- 
 ditions ; and of this, the committee declared, 
 there is no evidence. The rates given are open 
 to all traders, irrespective of nationality. If, in 
 efifect, foreigners, by reason of their greater 
 volume of production, or because of a better sys- 
 tem of marketing, due, in part, to an effective
 
 Traders and their Grievances. 231 
 
 s^'steni of organisation, can alone lake advantage 
 of certain rates, there is no reason why these 
 should be denied to them because British pro- 
 ducers are unable, or unwilling, for some reason 
 or other, to fulfil the same conditions. To do so, 
 and to lix the rates for the large consignments — • 
 which happen to come from abroad — on exactly 
 the same basis as the small consignments would 
 be unjust to the one trader, and, in effect, mean 
 the adoption of a protective policy for the other ; 
 while to compel the railway companies to con- 
 cede exactly the same rates to occasional con- 
 signments of ill-packed hundred-weights as they 
 give to regular truck-load lots would not only be 
 inconsistent with the aforesaid commercial prin- 
 ciples, but would rob the companies of the fair 
 profit to which they are entitled. 
 
 railways and protection. 
 
 Nationalisation of the railways could alter this 
 position on one condition only — the adoption, 
 namely, by the State of a policy of Protection 
 for the home producer, the railways becoming 
 part of the State machinery to be employed for 
 restricting foreign imports and assuring greater 
 chances to the home producer. The State would 
 then, in effect, give an undue preference to the 
 latter over the former, and the railways would 
 operate in accordance with the fiscal policy of the 
 country, as is the case in Germany. The State 
 could certainly do this, if it thought fit; but so
 
 2.12 Railways and Nationalisation. 
 
 long as the railways belong to commercial com- 
 panies they must necessarily be operated on 
 commercial rather than on political lines. 
 
 EQUAL MILEAGE RATES. 
 
 Another considerable group of grievances turns 
 upon the theory of equal mileage rates. If, it is 
 argued, the distances from A to B and from C to 
 D are equal, then the rates charged should also 
 be equal ; if it is a greater distance from C to D 
 than it is from A to B, then there should be a 
 corresponding difference in the rates ; if one 
 trader lives near to a large market, he should 
 not be deprived of his " geographical advan- 
 tage " (as it is called) by the concession to an- 
 other trader, at a considerable distance further, 
 of a rate which works out at substantially less per 
 ton per mile, and enables him to compete on the 
 same market with his more favourably-situated 
 rival. When railway companies disregard such 
 theories as these — and they invariably do — com- 
 plaints arise, and nationalisation is supported 
 because the equal mileage rate theory is more 
 especially favoured by State railway administra- 
 tions ; though the reasons for this favour can be 
 easily accounted for. The system looks simple : 
 given the rate and the distance, the charge will 
 be so much ; and it suits the convenience of a 
 Government which, having to satisfy mutual 
 jealousies and reconcile the interests of one dis- 
 trict with those of another, can sa}^, " Well, you
 
 Traders and their Grievanxes. 233 
 
 see, we treat you all alike. These are our 
 regfular charges, and we cannot discriminate by 
 giving different terms to different traders." 
 
 a south wales grievance. 
 
 To illustrate the nature of the grievances ven- 
 tilated from time to time in the United Kingdom 
 in connection with equal mileage rate theories I 
 might offer the following example, taken from a 
 short article on " Nationalisation of Railways," 
 published in the Great ]]\'stcrn Railway 
 Magazine for March, 1908 : — 
 
 Only last month an illuminating case affecting the 
 (ireat Western Company was before the Court of 
 the Railway and Canal Commissioners. The com- 
 plaint was that the Swansea fish rate to large con- 
 suming centres was not reasonable in view of the 
 same rate being charged from the more distant port 
 of Milford. The Court held that the Swansea rate 
 was reasonable, and that there was no case for 
 raising the other, inasmuch as it v.as " clearly in 
 the public interest that as many avenues of approach 
 to the markets as possible should be kept open " 
 and that " the rate to the various towns cannot be 
 raised if Milford fish is to compete in the markets 
 with that which comes from other ports." Here 
 was a case in which the Company were doing their 
 best to serve not only a struggling industry, but 
 also to carry cheap food to the public markets, 
 and getting pilloried for their pains ! 
 
 AX OIPRACTICABLE SYSTEM. 
 
 Various Royal Commissions and Parliamen- 
 tary Committees have investigated this question
 
 234 Railways and Nationalisation. 
 
 of equal mileage rates, and have invariably re- 
 ported upon it as impracticable, for the United 
 Kingdom at least. Among other reasons 
 advanced for this view is that it would shut out 
 the trader in (say) Scotland, Ireland, or Cornwall 
 from competing with traders located much nearer 
 to the London or the Midland markets, and lead 
 to a congestion of producers in the neighbour- 
 hood of large centres of population, instead of 
 leaving them to spread out through the country, 
 as it is desirable, in the national interest, that 
 they should do. 
 
 a comparison of results. 
 
 In the United States the non-ec|ual mileage 
 rates system has been carried so far that goods 
 from any point in the State of California are con- 
 veyed to any point east of the Mississippi at the 
 same rate. This " blanket system," as it is called, 
 practically ignores differences in distance. It 
 creates endless " anomalies " and " inconsis- 
 tencies " ; but it charges no more than the traffic 
 will bear; it has been of infinite service in 
 developing the resources of California; it has 
 enabled scores of places situated far from either 
 the Atlantic or the Pacific coast to become im- 
 portant centres of distribution ; and it has placed 
 the different eastern ports in a position of much 
 greater equality than would otherwise have been 
 possible. 
 
 In Australia and in South Africa, where equal
 
 Traders and their Grievances. 235 
 
 mileage rates are in vogue, the tendencies have 
 heen for producers to keep as near to the point 
 of consumption or to the port of dispatch as 
 possible, in order to save the considerable 
 difference they would have to pay in the fixed 
 and unyielding railway rates if they carried on 
 their business at any great distance. When the 
 rate from a place 200 miles from a port is about 
 four times the amount of the rate from a point 
 only 50 miles from the port — or any other dis- 
 tance in the same proportion — the trader will 
 naturally remain within the shorter radius if he 
 can, whereas if the difference is not so great as 
 to be prohibitive, he might prefer to go further 
 out, and so, indirectly, assist in a wider distribu- 
 tion of population. 
 
 A story from GERMANY. 
 
 An instructive story, dealing with the question 
 of equal mileage rates in Germany, in combina- 
 tion with considerations of politics, protection, 
 and geographical advantage, is told by Mr. 
 Hugo R. Meyer in the Journal of Political 
 Economy, published by the University of 
 Chicago Press. 
 
 Alluding to the results of three investigations 
 by the Statistical Department of Berlin into the 
 sources of the milk supply of that city and its 
 immediate suburbs, Charlottenburg, Schoneberg 
 and Rixdorf, Mr. Meyer said they showed that — 
 
 For all practical purposes the railway freight
 
 236 Railways and Nationalisation. 
 
 charges prohibit the importation of milk from points 
 distant more than 75 miles ; that the railway freight 
 charges are so high that it pays to utilize the 
 courts and backyards of Berlin, Charlottenburg, 
 Schoneberg, and Rixdorf for the purposes of 
 stabling milch cows, which supply 17 per cent, of the 
 milk consumed in those cities ; and that the effect of 
 the distance tariff has been to concentrate within a 
 distance of 56 miles of Berlin no less than 85 per 
 cent, of the dairy cows whose milk is sent to Berlin 
 by rail. 
 
 Mr. Meyer went on to say that in 1900 the 
 " Berliner Milch-Centrale " was founded by the 
 Brandenburg members of the " Bund der 
 Landwirte " (which he describes as " one 
 of the most powerful political organisations 
 in Germany "), for the purpose of keeping 
 up the price of milk sold in Berlin. The 
 retail dealers organised a counter-movement, 
 and appealed to the railway department for such 
 reductions in freight charges as would make it 
 possible to send milk into Berlin from points dis- 
 tant 187 miles; but, although the request was 
 supported by the leading commercial organisa- 
 tions of Berlin, it was refused by the railway de- 
 partment, such refusal being due, Mr. Meyer 
 alleges, to the unwillingness of the department 
 to precipitate a conflict of interests between the 
 near-by producer and the distant producer. 
 "The fact," he adds, "that the 'Bund der 
 Landwirte ' desired to raise the price of milk by 
 limiting the production for the Berlin market was 
 also a factor that influenced the railway depart-
 
 Traders and thfjr Grievaxcrs. 2,^>7 
 
 nuMil.." A scheme for bringing milk from Den- 
 mark to Berlin in tank-cars also had to be aban- 
 doned owing to the attitude of the State railways 
 administration, first of all in declaring that milk 
 was not one of the articles enumerated in the 
 tariff governing the shipment of liquids in tank- 
 cars, and afterwards in imposing a freight charge 
 on the weight of the tank, both coming and 
 going, so that the business became no longer re- 
 munerative. The results have been seen in a 
 serious scarcity of milk in Berlin in the summer 
 and autumn. Mr. Meyer adds : — 
 
 The wretched conditions under which Berlin is 
 supplied with milk are in no way due to lack of 
 enterprise on the part of the milk-dealers of Berlin, 
 nor are they in any way due to any lack of technical 
 efficiency on the part of the Prussian State rail- 
 ways. Those wretched conditions are due solely 
 to the fact that, under the making- of railway rates 
 by Government in Prussia, it has been found 
 politically necessary to make railway rates very 
 larg-cly on the principle that " the natural disadvan- 
 tages of the more distant producers " may not be 
 "overcome," lest "the producers nearer the 
 market" be "denied recognition of their more 
 r.nourable location. " 
 
 London's milk scpplv. 
 
 Comparing London conditions \\ith those of 
 Berlin, one finds that here there is no suggestion 
 either of politics influencing railway rates foi 
 agricultural products or of disadvantages being 
 placed on the distant as compared with the near
 
 238 Railways and Nationalisation. 
 
 producer. Nor is there any suggestion of a 75- 
 mile radius. Milk comes, for example, in fair 
 quantities to London from St. Erth, Cornwall, a 
 distance of 315 miles; it comes in very large 
 quantities from Egginton Junction, a collecting 
 point in North Staffordshire, distant 154 miles 
 from London ; and, also, and more especially, 
 from the district between Swindon, 77 miles 
 from London, and Bristol, 118 miles. This 
 spreading out of London's milk-supply area is 
 due to the policy of the British railway com- 
 panies (acting on principles directly opposed to 
 those of the Prussian State railways) in so ar- 
 ranging their rates as to enable producers at a 
 distance from great consuming centres to com- 
 pete better with those who, from a geographical 
 standpoint, are more favourably situated. Here 
 the ordinary rates per Liiperial gallon for the 
 transport of milk by rail are : — Up to 20 miles, 
 ^d.; above 20 and up to 40 miles, fd.; above 40 
 and up to 100 miles, id.; above 100 and up to 
 150 miles, ijd.; above 150 miles, ijd. (with a 
 minimum as for 12 imperial gallons per consign- 
 ment), such charges including carriage of the 
 returned empty cans, though not collection and 
 delivery. 
 
 There is no room for doubt as to which of the 
 two S3'Stems here described is the better from the 
 point of view of public interests. In the one 
 case we find an undesirable " discrimination " 
 in favour of the near producer; but, although he
 
 Traders and their Grievances. 239 
 
 gains, the dwellers in the capital suffer. In the 
 other case the near producer loses his geogra- 
 phical advantage, and meets a much keener 
 competition in the capital, to his financial dis- 
 advantage; but British agriculture gains by the 
 widening of the area of production; the com- 
 munity gain by the non-existence of any need for 
 dairy farmers to crowd into the immediate neigh- 
 bourhood of great towns, and consumers gain by 
 being assured abundant supplies of a necessary 
 of life at reasonable prices. 
 
 the trader and nationalisation. 
 
 Whether the grievances of the British trader 
 against the railway companies are always well 
 founded or not, and admitting that some of them 
 may be, the practical question arises : What are 
 his prospects of any real gain under a system of 
 railway nationalisation ? 
 
 The trader is told of economies from which he 
 would benefit by getting lower rates. If these 
 economies could, by any possible arrangement, 
 be made by the existing companies, he would 
 have a much greater chance of benefiting from 
 them than when, under nationalisation, a new 
 State department had to be set up, the cost of 
 which would prcjbably go far towards reducing 
 the amount of the possible savings, while his 
 claims for a share in the eventual balance might 
 have to compete with those of the railway men 
 for higher wages, and those of the Chancellor of
 
 240 Railways and NAnoNAi.iSATiON. 
 
 the Exchequer for contributions to the national 
 finance. To say the least of it, therefore, the 
 prospect of the trader securing any material 
 reduction in rates and charges (especially as the 
 lines would still be required to pay their way) is 
 distinctly doubtful. 
 
 TRAIN SERVICES. 
 
 Then the anticipated economies are to be 
 effected in part by a reduction in the number of 
 trains run. If this meant any material decrease 
 in the facilities now open to the trader for the 
 transport of his goods, he would have no reason 
 to rejoice over the new conditions. Nor, if the 
 Continental system of State ownership were 
 introduced here, might he approve of the 
 Continental system of railway operation, with 
 its slow and fast goods trains- — the latter, 
 ec|uivalent to our (ordinary goods services, cost- 
 ing double the " slow goods " rates — and the 
 keeping back of other than " fast goods " con- 
 signments for a day or two when necessary in 
 order to allow of better loading. This arrange- 
 ment would certainly permit of economies being 
 made in working expenses, but it would also 
 necessitate a considerable change in the trading 
 conditions of the United Kingdom, especially as 
 regards the keeping of larger stocks on hand by 
 the trader than is usually done under the present 
 system of practically express rail transport.
 
 Traders and thkir Grievances. 241 
 
 warehousing and wharfage. 
 
 There are other questions besides. The rail- 
 way companies have large warehouses in which 
 many traders in leading commercial centres store 
 their goods, otherwise having only a small office 
 from which they send their instructions to the 
 railway compan}- as to the distribution of the 
 consignments. It is duul)tful if these raihvay 
 warehouses pay in themselves, but they are of 
 great advantage to the traders, and they en- 
 courage traffic. If the Government took over 
 the railways, would they still afford the same, 
 facilities to the traders, or would they say, as the 
 directors of State systems on the Continent say : 
 " Our business is to provide rail transport. The 
 traders must provide their own warehousing " ? 
 
 The State might effect a saving in this wa}-, 
 but the result would be disastrous to many a 
 trader who now economises in rent, rates, taxes 
 and labour, thanks to the provision made forhim 
 by the railway companies — a provision of which 
 he is often able to take advantage without pay- 
 ing anything beyond the railway rate, when this 
 includes a certain period of free storage. 
 
 In addition to the warehouse accommodation, 
 a good deal of " wharfage " on the railway 
 sidings is placed at the disposal of traders, either 
 free or at a very low charge. In London the 
 coal merchants pay nothing at all for the space 
 allotted to them for their supplies on land adjoin- 
 
 R
 
 242 Railways and Nationalisation. 
 
 ing the railway stations. In Berlin the State 
 charges so high a rent for such accommodation 
 that the coal dealers have to set up their depots 
 some miles out, and cart, at considerable ex- 
 pense, into the city. 
 
 CREDIT. 
 
 In England a generous degree of credit is 
 allowed by the railway companies to traders, 
 many of whom thus practically carry on their 
 business (especially if one includes the w-arehouse 
 accommodation as well) with the railway com.- 
 pany's money. The Prussian State railway, on 
 the other hand, gives credit only when the trader 
 deposits in advance securities valued at the full 
 amount of the charges likely to be made against 
 him month by month. If, once more, our railways 
 are to be nationalised on the German model, 
 would the State retain the existing system, or 
 would its business motto be, "Terms: Cash," 
 as on the Prussian State railways and in the 
 15ritish Post Office? This practice would be an 
 economy for the railway, since it would reduce 
 clerical work and avoid the possibility of bad 
 debts. But what would the traders say? 
 
 considerations for the trader. 
 
 A revolutionary change in railway ownership 
 in this country might, therefore, involve a like 
 revolutionary change in the general trading con-
 
 Traders and their Grievances. 243 
 
 ditions, unless the Government, when seeking 
 to follow Continental methods, should abandon 
 some of the fundamental principles on which the 
 operation of the Continental State railways is 
 based. The traders have, in fact, much more 
 to consider than whether they would be likely to 
 get, in the way of rate reductions, any share in 
 the suggested, though wholly problematical, 
 savings. 
 
 They must consider, for instance, what would 
 be their relations with the railways when these are 
 no longer controlled by private companies, but 
 by State of^cials. Under present circumstances 
 traders wishing for an alteration in rates or some 
 change in existing conditions, can deal direct 
 with a railway officer, who, unless the matter is 
 one for inquiry or negotiations with other com- 
 panies, can generally give an answer straight 
 away ; and there are often occasions when the 
 great value of some desired concession depends 
 on the promptness with which it can be given. 
 In the chapter on " State v. Company Manage- 
 ment " I have shown what the course of proce- 
 dure under like circumstances on a Continental 
 railway may involve. I would remind the 
 reader, also, of the incident recorded on page 88, 
 where it is shown that so simple a matter as 
 the raising of a wooden partition in the booking 
 office of a South African Government railway in- 
 volved a correspondence extending over fifty- 
 eight letter?. 
 
 R 2
 
 244 Railways and Nationalisation. 
 
 As an enterprise working on business lines and 
 keeping closely in touch with industrial and com- 
 mercial developments, a railway company 
 ought, at least, to be always ready to consider 
 any business proposition likely to bring them 
 increased traffic or to develop a district in which 
 they are interested, though they may not always 
 see their way to comply with the requests 
 brought before them. 
 
 In the matter of claims, again, traders may 
 suffer many disappointments at the hands of 
 companies who scruple to grant company's risk 
 conditions for owners' risk rates, and are con- 
 sidered very unreasonable in consequence. But 
 even in these instances — and apart from the 
 numerous cases where compensation is granted 
 though no legal claim exists — it cannot be denied 
 that the trader rarely has to wait long for his 
 answer. 
 
 Would the position of the traders be improved 
 when they had to deal, not with a commercial 
 company, but with high Government officials 
 who might be less in touch with industrial and 
 commercial developments, might not have the 
 same capacity as trained railway men in dealing 
 with traffic problems, and, even if they were not 
 less sympathetic generally, would be bound by 
 official routine and circumlocution in general ? 
 Admitting, for the sake of argument, that the 
 trader has some really well-founded grievances 
 now, would they be likely to disappear entirely
 
 Traders and their Grievances. 245 
 
 under State ownership, or would nationalisation 
 simply produce a fresh crop of a new variety? 
 
 GERMAN traders' GRIEVANCES. 
 
 It is usual to say, as a convincing proof of 
 the complete satisfaction of German traders with 
 their present conditions, that " none of them 
 would revert from State to company ownership." 
 That may well be the case, if only because the re- 
 organisation of a business built up on the basis 
 of established transport conditions might in itself 
 be a serious matter. But there is no lack of 
 traders' grievances in Germany, the main dif- 
 ference being that, whereas the average German 
 takes a pride in the institutions of his Fatherland, 
 and is reluctant to admit to a foreigner, at least, 
 that any fault can be found with them, the 
 average Englishman is an inveterate grumbler, 
 and is ever ready to discredit the railways which 
 have done so much for the prosperity of his 
 country. 
 
 Apart from what I have already said in 
 Chapter VI. as to the inadequate " betterment " 
 of lines and the insufficient supply of wagons, 
 the main grievance of the traders in Germany in 
 regard to their State railways is that, inasmuch 
 as they are run too much with an eye to the 
 eventual profits, there is too little disposition on 
 the part of the State railways administration to 
 reduce the rates and charges on domestic trafific. 
 I say " domestic " because it is mainly these
 
 246 Railways and Nationalisation. 
 
 that are required to atone for the very small 
 margin of profit that may be left on export rates 
 kept abnormally low by the competition with 
 neighbouring countries, or for reasons of State 
 policy in fostering German trade abroad. 
 
 The expectation entertained at the time the 
 companies lines were taken over that the profits 
 would be utilised for the purpose of effecting 
 substantial reductions in rates has thus certainly 
 not been realised in the case of domestic rates in 
 Prussia, at least, and the dissatisfaction resulting 
 therefrom has been expressed by no less impor- 
 tant a body than the " Central verband Deutscher 
 Industrieller,'' an organisation formed of repre- 
 sentatives of the greatest industries in Germany, 
 including coal, iron and steel, metal wares, 
 textile fabrics, paper-making, &c.* 
 
 A subsidiary grievance in Germany is that 
 certain of the traders, and especially those deal- 
 ing in fragile commodities, such as furniture, 
 pottery, etc., sustain heavy losses by reason of 
 the refusal of the State lines to accept transport 
 of any goods " not properly packed " unless 
 with a note relieving the administration of all 
 responsibility in the case of damage. (vSee 
 page 285.) 
 
 The length of time taken in the delivery of 
 goods ; the absence of railway warehouses on 
 the English model; and the refusal of credit to 
 
 * See " German v. British Railways," page 50.
 
 Traders and their Grievances. 247 
 
 traders are not g^rievances in Germany, because 
 business there has been organised to meet the 
 stated conditions. But these things might well 
 become serious disadvantages here if, concur- 
 rently with State ownership, they were repro- 
 duced in the United Kingdom. Even, therefore, 
 if the German traders had no grievances at all, 
 and were absolutely satisfied with their own rail- 
 ways, their system would not necessarily be 
 equally well adapted to our own conditions and 
 requirements. 
 
 GERMAN RAILWAYS FROM AN ENGLISH STANDPOINT. 
 
 The impression which the operation of the 
 German State railways in general may make on 
 an experienced English traveller is well shown 
 by the following letter published in the Doily 
 Telegraph of February 22, 1908 : — ■ 
 
 TO THE EDITOR OF The Daily Telegraph. 
 
 Sir, — It would be very interesting to know what 
 Mr. Lloyd-George finds to eulogise in German rail- 
 ways. As one who has had fifteen years' experi- 
 ence of them, I have no hesitation in saying that 
 our own for speed, comfort, and frequency are 
 superior to any on the Continent. 
 
 Nationalisation on the basis of the present rail- 
 way capital would prove a bad bargain for our 
 nation. Third-class carriages in the Fatherland 
 have hard wooden seats, and on very few fast long- 
 distance trains is there any third class at all ! The 
 service is only half as frequent as ours and the fares 
 only a trifle lower. They have been raised twice 
 during the last few years, and the Government
 
 248 Railways and Nationalisation. 
 
 regards the railways as a money-earning- concern to 
 produce revenue. If anyone thinks that a Govern- 
 ment runs railways for the benefit of the pubhc 
 he is much mistaken. Goods trains are both in- 
 frequent and notoriously slow. At least three days 
 must be allowed for 100 miles for a wagon-load. 
 Urgent goods are not recognised unless one pays 
 double freight. Cheap excursions, which delight 
 thousands in this country, are unknown ; week-end 
 tickets do not exist. Mineral traflfic for ninety 
 miles, in ten-ton lots, costs 9s. per ton, which, I 
 think, in this country we can easily equal. 
 
 Finally, the red-tape is atrocious. Any unfor- 
 tunate wight who rides past his station is mulcted 
 in the difference and fined 6s. on the spot. No 
 excuses are available. One must pay forthwith. If 
 you overload a goods wagon you are fined pounds 
 for a few hundredweight put in on a dark winter 
 evening to empty a rulley. Demurrage is relent- 
 lessly enforced, and you are made to feel that you 
 are dealing with permanent Government officials 
 who do not give a straw for your convenience. In 
 busy times one must give at least twenty-four hours' 
 notice to secure a wagon. Consignment notes are 
 purchasable at every bookseller's, and are rendered 
 as accounts at the other end. I once had a parcel 
 of I cwt. from Stassfurt to Hamburg, and when it 
 arrived the note was stamped and countersigned bv 
 no fewer than twenty-two different persons ! It is 
 worth framing as a curiosity. 
 
 Our corridor trains running North cannot be 
 equalled for comfort and cheapness in any country 
 in the world, and oppressive goods rates could 
 easily be altered by legislation. If certain people 
 get our railways nationalised and see the result a 
 year afterwards they will be sorry they spoke. 
 
 Vours trulv, 
 
 VV.' A. RRIGGS. 
 
 II, Leadcnliall Street, E.G., Feb. 13.
 
 Traders and their Grievances. 249 
 
 BELGIAN TRADERS VIEWS. 
 
 In Belgium there is a good deal of discontent 
 among business men at the way in which the 
 State railways there are administered, and especi- 
 ally in respect to the uncertainty concerning the 
 real financial position of the lines, the pressure 
 brought to bear on the Government to make all 
 sorts of concessions to workers and others, and 
 even in regard to the rates, and more particularly 
 domestic rates. These various grievances have 
 been voiced bv the " Federation des Associations 
 Commerciales et Industrielles de Belgique," 
 which body, in asking what is the possible 
 remedy for the conditions in question, has 
 said : — ■ 
 
 It is much to be feared that, notwithstanding 
 the declarations so precise of the (Railway) Minister, 
 these abuses will last as long as the railways are 
 operated by the State, and controlled by a politician 
 who must always be subject to demands and pres- 
 sure of all kinds — without reckoning the established 
 fact that in all countries operation by the State is 
 more costly. It may be that, the position being 
 thus, the solution of the problem will have to be 
 found In the system adopted In Holland. 
 
 That is to say, in the operation of the State- 
 owned lines b}' a private company. 
 
 AISTRALIAN TRADERS' GRIEVANCES. 
 
 Turning from Europe to Australia, to see if
 
 250 Railways and Nationalisation. 
 
 the traders at the Antipodes are thoroughly satis- 
 fied with the way in wliich the railways are 
 managed there, I find in the Pastoralists' Review 
 (Melbourne) of December 16, 1907, some letters 
 from Mr. A. M. Pearse, secretary of the Stock 
 Owners' Association of New South Wales, and 
 Mr. F, M. Rothery, secretary of the Animals' 
 Protection Society of New South Wales, which 
 certainly do not suggest that Government opera- 
 tion of the railways in Australia is altogether 
 beyond reproach. So slow, it seems, are the 
 New South Wales cattle trains that it takes about 
 four days for live-stock to be carried a distance 
 of, say, 500 miles ; and so defective are the rail- 
 way arrangements that the animals thus brought 
 down to the coast from the interior stand in the 
 trucks without being given a scrap of food or a 
 drop of water during the whole of those four 
 days. " In the height of the summer," Mr. 
 Rothery remarks, " witli a temperature of from 
 100 to 105 degrees in the shade, one can readily 
 imagine the terrible suffering of the stock." Nor 
 is it the unfortunate animals alone who are pre- 
 judiced by these conditions. One has also to 
 consider the interests of the meat consumers, for 
 the latter, Mr. Rothery says, " little know of the 
 danger hidden in the veins of the cattle maddened 
 with the agonies of thirst, a danger that per- 
 meates and poisons the whole carcase before it is 
 
 drawn off at the abattoirs No wonder," 
 
 he declares, " there are at the present day so
 
 Traders and thkir Grievances. 251 
 
 many ailments among our peoole that years ago 
 were unheard of." 
 
 The grievance in question is in no way a new 
 one. "Year after year goes by," says Mr. 
 Pearse, "and the same complaints reach us. . . 
 . . In Argentina, where the railways are owned 
 by private companies, and where in everything. 
 relating to carriage of passengers or stock they 
 are years in advance of us, the law is that no 
 stock may be in a railway truck more than 
 twenty-four hours. If that time is reached, the 
 railways, at their own expense, must take them 
 out, feed and water them, and give them a spell 
 before re-trucking them." Mr. Pearse add.^ : — 
 " The stock agents and this Association have 
 brought the matter many times under the notice 
 of the Government, but no change has ever been 
 made. The losses are terrible year after year, 
 and the sufferings of the poor animals most 
 inhuman." 
 
 In the United Kingdom there could be an im- 
 mediate appeal, under such conditions as these, 
 to the Board of Trade, or the railway companies 
 themselves might be prosecuted for cruelty ; but 
 when the railways are owned by the State there 
 is no court of appeal and the traders are power- 
 less. 
 
 In a later issue of the Pastoralists' Review, 
 that for February 15, 1908, mention is made of 
 the delays that occur in New South Wales in 
 obtaining railway trucks for the removal of stock
 
 252 Railways and Nationalisation. 
 
 to other stations when there is a deficiency of food 
 on their regular pastures, and it is stated that in 
 two instances six weeks elapsed before the trucks 
 could be obtained, the result in one case being 
 that over ^1,000 had to be spent in fodder, 
 besides payment of rent for the land which had 
 .been arranged for. The excuse offered by the 
 Railway Commissioners was that " they would 
 not be justified in having vehicles available to 
 expeditiously meet all demands " ; but they have 
 now' ordered a further supply of wagons. 
 
 Whatever, then, the real nature of the British 
 trader's present grievances, it is evident that, in 
 trying to get rid of them by means of railway 
 nationalisation, he might only change them for 
 others of a different kind; while the actual ex- 
 periences of other countries which already have a 
 State railway system certainly do not suggest 
 that, by follow ing their example, he would be left 
 with no e:rievances at all.
 
 Continental Transport Conditions. 25; 
 
 CHAPTER XL 
 
 CONTINENTAL TRANSPORT CON- 
 DITIONS. 
 
 Much of the adverse criticism of railway rates 
 and charges in the United Kingdom is based on 
 comparisons with the rates and charges in force 
 on railways in Continental countries. But I 
 would suggest that no such comparisons can 
 fairly be made unless one bears fully in mind the 
 nature of the general transport conditions by 
 which the Continental rates and charges may be 
 governed. 
 
 Taking the case of Germany, Belgium, Hol- 
 land, and France, with which the comparisons in 
 question are, as a rule, more especially made, I 
 would remind the reader that these countries 
 form the western fringe of a great continent, and 
 that, apart altogether from the traffic they origi- 
 nate themselves, they constitute the gateways 
 through which vast quantities of commodities 
 pass between Central Europe in general and the 
 countries beyond the seas. Railway managers 
 or directorates in the border-lands of that con- 
 tinent have, therefore, not only to meet the 
 requirements of home producers and home con- 
 sumers, but, if they wish (as they naturally do)
 
 254 Railways and Nationalisation. 
 
 to achieve as great a commercial success as they 
 can for the systems they control, they must 
 strain every effort to secure as large a share as 
 possible of this transit traffic and of the profits 
 arising therefrom. The sum total of such traffic 
 is prodigious, and the proportions that are 
 secured by the aforesaid border-lands represent a 
 very important element indeed in their railway 
 business. This is especially the case with Hol- 
 land and Belgium, whose economic conditions 
 would be entirely different from what they are if 
 those countries formed separate islands, and if 
 their railways were dependent on the transport of 
 Dutch or Belgian traffic exclusively. 
 
 PROPORTIONS OF TRANSIT TRAFFIC. 
 
 As regards the possible extent of the transit 
 traffic passing through Continental countries, 
 one can gain some idea of its magnitude from 
 figures bearing on the subject given by Sir Cecil 
 llertslet, Consul-General for Belgium, in his 
 report on the trade and conmierce for Belgium 
 for 1906 and the first half of 1907. He says: — ■ 
 
 The returns of the transit trade of Belgium for 
 the year 1906 show a large increase over those of 
 the previous year. In that position which it occu- 
 pies geographically Belgium is so placed that large 
 quantities of goods are exported and imported 
 through it by foreign countries. Goods emanating 
 from Germany, Switzerland, and France are ex- 
 ported by way of Antwerp principally, and vice versA
 
 Continental Transport Conditions. 255 
 
 large quantities of merchandise are imported 
 through Belgium destined for those countries which 
 form the hinterland of Antwerp. 
 
 The figures for goods in transit during 1906 
 amounted to 4,406,100 tons, the value being 
 ^£^90, 756, 000, compared with those for the previous 
 year, which amounted to 3,692,600 tons of a value 
 of ;£^76,892,ooo, the respective increases being 19" 3 
 and 18 per cent., while the actual augmentations 
 amounted to 713,500 tons in volume and ;£^i3,864,ooo 
 in value. During 1906 the transit trade was chiefly 
 in connection with the German Customs Union, 
 France, the United Kingdom, the United States, the 
 Netherlands, and Switzerland, either in goods 
 emanating from those countries or destined to them. 
 
 There is the greater need to bear these very 
 material considerations in mind because a ten- 
 dency has been shown in certain Ministerial 
 quarters to attribute the prosperity of Continental 
 countries actually engaged in handling such 
 international traffic as this to their possession of 
 State railways, rather than to geographical and 
 economic factors to which the ownership of the 
 railways by the State, instead of by private com- 
 panies, is altogether subordinate. 
 
 No possible changes we could ourselves make 
 in regard to the operation of our railways — or 
 even the improvement of our ports — would be 
 likely to induce these border-lands of the Con- 
 tinent to neglect, in our special interests, the 
 advantages they derive alike from their geo- 
 graphical position and from their now being able 
 to do a direct trade with distant lands instead
 
 256 Railways and Nationalisation. 
 
 of through the Port of London, as in days 
 that are past. If this be so, then any attempt 
 to concentrate public attention unduly on the 
 existe'nce of State railways in connection with 
 the development of Continental ports, and to 
 leave these other matters out of consideration, is, 
 surely, equivalent to a misdirection of the jury. 
 
 HOLLAND and WESTPHALIA. 
 
 The fact that private enterprise was in no way 
 remiss in promoting trade and transport on the 
 Continent long before State railways became an 
 active force there, is well shown by certain events 
 in the history of Holland which, already told in 
 " Railways and their Rates," may here be 
 appropriately recalled. 
 
 Half a century ago two English railway men 
 — the late Mr. James Staats Forbes and Mr. 
 D. G. Bingham — were engaged to go to Holland 
 and do what they could for the Dutch-Rhenish 
 Railway, whose fortunes had fallen so low — on 
 account, mainly, of the water competition — that 
 its shares no longer had any market value. 
 About the same time, an Irishman, the late Mr. 
 \\''illiam T. Mulvany, formerly Commissioner of 
 Public Works in Ireland, had started some col- 
 liery companies in AV'estphalia, and he and the 
 two Englishmen met to consider what they could 
 do to promote the interests of their respective 
 concerns. In the end the railway men agreed
 
 Continental Transport Conditions. 257 
 
 that, if Mr. Mulvany would load his coal into 
 railway trucks instead of into river barges, they 
 would haul it in regular train-load lots from 
 Westphalia to the port of Rotterdam at rates 
 which (apart from questions of convenience) 
 w^ould compete with the water rates, the wagons 
 bringing the coal to return with iron ore for the 
 Westphalian ironworks. The traffic thus created 
 gave a stimulus to the early development of one 
 of the most important coal-fields in Europe; it 
 established the prosperity of the Dutch-Rhenish 
 Railway, for which system the Dutch Govern- 
 ment paid generous terms when taking it over 
 in 1900; and it laid the original foundation of 
 that wealth which Mr. Bingham, who still 
 happily survives at Utrecht, is now lavishing on 
 wisely-planned benefactions for his native town 
 of Cirencester. 
 
 water transport. 
 
 It is true that a large proportion of the inter- 
 national traffic is carried by water, and that Rot- 
 terdam owes her prosperity mainly to the com- 
 merce which passes along the Rhine to or from 
 Germany and the countries beyond. But this 
 very fact only accentuates the keenness of the 
 scramble for the traffic, and it leads the com- 
 peting railways to reduce their export rates to 
 exceptionally low proportions when there is any 
 prospect at all of their being able to prevent too 
 much of the business going to the waterways.
 
 258 Railways and Nationalisation. 
 
 To illustrate the magnitude of this Rhine 
 traffic, I might give some figures from the 
 report of the Rotterdam Chamber of Commerce 
 for 1906. The total Rhine traffic across the 
 German-Netherlands frontier in that year was as 
 follows: — With the Netherlands, 16,331,265 
 tons; with Belgium, 4,821,229 tons; Rhine 
 sea - traffic to or from English, Russian 
 or other ports, 357,200 tons; total, 21,509,694 
 tons. Of the 16,331,000 tons to or from 
 the Netherlands, in 1906, Rotterdam's share 
 was 13,357,000 tons. In 1905, Rotterdam's 
 total Rhine traffic was 12,771,000 tons; in 
 1904, 10,684,000 tons; in 1902, 8,197,000 tons; 
 in 1900, 7,845,000 tons; in 1898, 6,449,000 tons; 
 and in 1897, 5,914,000 tons. 
 
 These figures throw light on (i) the extent to 
 which the border countries of the Continent 
 depend on foreign trade for their traffic ; (2) the 
 intensity of the competition between water-borne 
 and rail-borne transport ; and (3) the jealous eye 
 with which Prussia regards the diversion of so 
 much German traffic to neighbouring countries. 
 
 One hears much concerning the great com- 
 mercial expansion of Germany ; but every fresh 
 1,000 tons added to her production in the West- 
 phalia and Rhineland districts probably means 
 an increase, more or less, in the Rhine traffic — 
 either in raw materials or in manufactured 
 articles— passing through the ports of Rotterdam 
 or. Antwerp, Holland and Belgium thus sub-
 
 Continental Transport Conditions. 259 
 
 stantially tapping" the increase in prosperity 
 which Germany would fain keep for herself. 
 
 WATER V. RAIL IN HOLLAND. 
 
 In Holland, 90 per cent, of the goods traftic 
 of the country goes by water, and the railway 
 receipts from goods are only slightly higher than 
 those from passengers. How this compares with 
 the corresponding percentages for Prussia-Hesse 
 and Belgium for the year 1906 is shown by the 
 following table : — 
 
 Railway System. 
 
 Receipts (in marks) per kilometre. 
 i From passengers. From goods. 
 
 Prussian-Hesse State railway 14*060 35'2C4 
 
 Belgian State railway ... I3'54i 33'3^9 
 
 Holland (entire system) ... i4'865 i5'6o4 
 
 THE RHINE-SEA TRAFFIC. 
 
 Concerning the Rhine-sea traffic to which I 
 have already referred, I might explain that there 
 are sea-going steamers which load at Rhine ports 
 up to Cologne and proceed thence without tran- 
 shipment either to German seaports or to ports 
 in England, Sweden, Russia, etc. They carry 
 on a direct coasting trafftc which competes very 
 materially indeed with the Prussian State railway 
 system. According to the report of the Central 
 Commission for the Navigation of the Rhine, as 
 
 s 2
 
 26o Railways and Nationalisation. 
 
 quoted in the " Annales des Travaux Publics de 
 Belgium," for February, 1908, the amount of 
 this Rhine-sea traffic in 1906 was 334,636 tons 
 (or slightly less than the figures given in the 
 Rotterdam report), the total being made up as 
 follows : — Traffic between Rhine ports and 
 Bremen, 12,801 tons; Hamburg, 181,194 tons; 
 Stettin, 22,258 tons; Dantzig, 19,722 tons; 
 Konigsberg, 15,051 tons; other German ports, 
 36,717 tons; English ports, 36,539 tons; Russian 
 and other ports, 10,354 tons. It will be seen 
 from these figures that the bulk of this river-sea 
 traffic is between Rhine ports and Hamburg. 
 
 Thus the Prussian State railways are con- 
 cerned not alone in the Rhine traffic that goes to 
 neighbouring countries, but also in that which 
 goes direct to German ports for shipment abroad, 
 or for local consumption, without, it may be, 
 touching the railway at all. The magnitude of 
 the Rhine traffic as a whole is shown by the fact 
 that in 1906 it amounted to 59,677,000 tons, while 
 the total number of vessels engaged in the trans- 
 port thereof was 10,736, including 1,286 
 steamers, and 9,450 barges or sailing ships. In 
 the same year ;^ 17 1,300 was spent in the various 
 States on river improvements, and ;^686,75o on 
 the Rhine ports. 
 
 Apart, therefore, from the other great natural 
 waterways of Germany, and taking the con- 
 siderations offered by the Rhine alone, I would 
 surr crest that it is impossible to arrive at a com-
 
 Continental Transport Conditions. 261 
 
 plete understanding of railway rates in Germany 
 unless one bears in mind how powerfully they 
 may be influenced by this question of water com- 
 petition within the limits of the German Empire 
 itself. 
 
 COMPETITIVE ROUTES. 
 
 Then we have the further geographical fact 
 that for a very large part of this transit traffic to 
 or from the countries of Central Europe there is 
 a choice of routes, the leading ports of several, if 
 not sometimes of all, the border-lands mentioned 
 being equally available. Even if the French 
 ports should not be able to compete as regards 
 commodities to or from the more northerly 
 countries, there would still be the keenest rivalry 
 between the North Sea ports alike of Germany, 
 of Holland, and of Belgium, the difference 
 between which in respect to distance and con- 
 venience might be comparatively slight. 
 
 A good example of the competition for traffic 
 which may go on is afforded by the city of 
 Nuremberg, which is the centre alike of Germany 
 and of Western Europe. Nuremberg is the 
 same distance from Hamburg and Bremen, on 
 the north, as it is from Trieste on the south ; 
 Antwerp, Rotterdam and Stettin are also equi- 
 distant; Genoa is but a few miles further than 
 Amsterdam ; while, including Ostend, Dunkirk, 
 Calais, Boulogne and Dieppe within the same 
 radius as Havre, it will be found that there are
 
 262 Railways and Nationalisation. 
 
 fourteen ports in six different countries — Ger- 
 many, Holland, Belgium, France, Italy and 
 Austria — which might compete for over-seas 
 traffic from this one German city. 
 
 For the busy manufacturing districts of West- 
 phalia the nearest, and therefore the natural, port 
 is either Rotterdam or Antwerp ; and, if railway 
 rates were fixed solely by considerations of dis- 
 tance, the German ports of Hamburg and 
 Bremen would have no chance of competing with 
 the Dutch and Belgian ports in respect to this 
 traffic in Westphalian commodities. The result 
 would be a loss of business alike to German rail- 
 ways and German ports, to the benefit of foreign 
 railways and foreign ports. 
 
 EXPORT RATES . 
 
 It is to prevent these consequences that the 
 Prussian State railways concede exceptionally 
 low rates from various manufacturing centres in 
 Germany, and especially in the Rhine district, 
 for goods consigned to Hamburg or Bremen for 
 export. Such rates are often spoken of as 
 "bounties on export," granted b\' the Prussian 
 Government in the interests of German com- 
 merce and the German trader. To a certain ex- 
 tent they are ; but I would suggest that they have 
 been conceded much more in the interests of 
 traffic on the Prussian State railways, and hence 
 to the direct advantage of the Prussian
 
 Continental Transport Conditions. 263 
 
 Exchequer, which benefits from the railway 
 profits. 
 
 The individual German trader is concerned 
 only in finding the cheapest route for his goods, 
 and, apart from this consideration, it is a matter 
 of detail for him whether he consigns to a foreign 
 country via Rotterdam or Antwerp, or via the 
 Prussian State Railways and Hamburg or Bre- 
 men. But his choice is of material concern to 
 the State railways, should they lose the traffic 
 they would like to carry. 
 
 So the export rates conceded by the State rail- 
 ways administration are governed more or less 
 by either the water competition or the shorter rail 
 route via a neighbouring country ; though these 
 export rates are always substantially lower than 
 the rates to the same ports for commodities in- 
 tended for local consumption, the difference in 
 some cases being one of 20 per cent. Compari- 
 sons are systematically made between such 
 export rates in Germany and ordinary domestic 
 rates on British railways; but the unfairness of 
 any such comparison is obvious. 
 
 the dortmund-ems canal. 
 
 Export rates of the type in question were in 
 force on the Prussian railways before these were 
 acquired by the State, and they were continued 
 and developed by the Prussian Government; hut 
 vast quantities of German export traffic still went
 
 264 Railways and Nationalisation. 
 
 by the Rhine to the foreign ports. Then, at the 
 personal instigation, as is understood, of the 
 Emperor himself, the Dortmund-Ems Canal was 
 cut, at great expense, so that water could com- 
 pete with water. Instead, however, of diverting 
 traffic from the Lower Rhine, the Dortmund- 
 Ems Canal has hitherto, and pending its further 
 extension to the Rhine, mainly served the pur- 
 pose of providing a fresh inlet for English coal 
 and Swedish iron, and the transit traffic through 
 Rotterdam and Antwerp is to-day greater than 
 ever. In the face of these very material facts, 
 therefore, I would invite transport reformers to 
 conclude that in endeavours to effect material 
 changes in economic laws even the will of a 
 powerful Emperor may be of no real avail. 
 
 THE STATE AND THE TRADER. 
 
 I have suggested that the Prussian Govern- 
 ment were much more concerned in endeavouringf 
 to retain German traffic for Prussian railways and 
 Prussian seaports than they were simply in bene- 
 fiting the German trader. This is shown by the 
 fact that while the Prussian State railway adminis- 
 tration gives very low rates indeed to the German 
 North Sea ports in order to capture the traffic, it 
 carefully avoids giving similarly low rates from 
 the same points of dispatch to the river Rhine. 
 In the former case one hears much as to what 
 the Prussian Government do for the trader.
 
 Continental Transport Conimttons. 265 
 
 But if the interests of the trader should clash 
 with those of the Government — that is to say, 
 should he desire exceptional rates so that he can 
 send his commodities to a Rhine port for convey^ 
 ance to Rotterdam by water, instead of giving 
 the State railways a long haul to Hamburg — he 
 will get no such concessions. In such circum- 
 stances as these the German trader is left to his 
 own resources. Strong complaints have been 
 made on this subject by traders in the district 
 concerned, and a Statement which has been 
 drawn up, setting forth their grievances in 
 respect to " the differential treatment of the 
 German Rhine ports, as compared with North- 
 Sea ports, in the goods tariffs of the Prussian 
 State railways," occupies no fewer than 24 
 closely-printed foolscap pages. 
 
 THE state and THE CANALS. 
 
 In German v, again, the construction of new 
 canals is imperative, especially in Westphalia, 
 owing to the fact that, under State management, 
 with its accompaniment of State economies for 
 the benefit of the State exchequer, the railways 
 have not undergone development commensurate 
 with the growing needs of trade and commerce. 
 The Government approve the construction of the 
 canals, but they want to have the right to impose 
 on the canal traffic such tolls as they think tit, 
 nominally for the purposes of raising better-
 
 266 Railways and Nationalisation. 
 
 ment funds, but more especially to enable them 
 to control the use of the canals, so that, while 
 these afford relief to the State railways, they 
 shall not compete unduly with them, to the detri- 
 ment of the railway revenue. 
 
 To give increased facilities to the trader is one 
 thing. To risk a decrease in the Government 
 receipts from the railways is another. If the 
 former can be done without involving the latter, 
 well and good. But in the present condition of 
 their national finances the Prussian Government 
 must regard political considerations as para- 
 mount. When in Germany the interests of the 
 State come to the front, those of the trader go to 
 the background; and this must necessarily be the 
 case whenever the national and the State railway 
 accounts are more or less united. 
 
 THE levant tariff. 
 
 Then for the southern and the south-eastern 
 portions of the German Empire the nearest route 
 to the markets of the Levant would be via Trieste 
 or the net-work of railways on the east of Ger- 
 many to Constantinople and Black Sea or Medi- 
 terranean ports. But the Prussian State 
 railways have arranged a German Levant tariff 
 under which abnormally low rates are granted in 
 order to retain the traffic in question alike for 
 German railways, German ports, and German 
 ships. The further the point of dispatch from
 
 Continental Transport Conditions. 267 
 
 Hamburg or Bremen — and, consequently, the 
 greater the competition with Trieste, etc. — the 
 lower do these through rates become, so that 
 goods will even be carried from points in the 
 south-east of Germany, via Hamburg or Bremen, 
 to Constantinople, Alexandria, and other ports 
 at an even lower rate than would be charged for 
 taking the same commodities to Hamburg or 
 Bremen only, when thev were not intended for 
 export. 
 
 For example, the " domestic " rate for goods 
 not specially classified, from Salzburg to Bremen, 
 a distance of 562 miles, is 55s. 6d. per ton for 
 ten-ton lots when those goods are for local con- 
 sumption ; but if the goods are consigned from 
 Salzburg, via Bremen, to a port in the Levant, 
 the through rate is 53s., or 2s. 6d. per ton less 
 than if the consignment goes to Bremen only. 
 For five-ton lots the corresponding local rate is 
 62s.- 8d. per ton, as compared with 55s. lod. for 
 the through rate, or 6s. rod. per ton less from 
 .Salzburg, via Bremen, to (sav) Alexandria than 
 from Salzburg to Bremen only. 
 
 diverting the traffic. 
 
 Rates of this kind are ostensibly given in the 
 interests of the German trader. But once more 
 we find that such apparent concessions may, in 
 many instances, be made still more in the in- 
 terests of the Prussian State railways. That is
 
 -268 Railways and Nationalisation. 
 
 to say, they are designed to enable the Prussian 
 Statesystem to divert from its natural course traffic 
 from the south of Germany which the North 
 German lines and ports would otherwise not 
 have a chance of handling. By such diversion 
 the Prussian State railways get a long haul 
 across the full extent of their lines; and though, 
 owing to the competition of those alternative and 
 shorter routes by which their through-rate is 
 governed, the Prussian State railway adminis- 
 tration has to be content with a modest return as 
 its proportion of that through rate, such return 
 probably yields a profit all the same. 
 
 The actual proportions of the through rates 
 paid to the railways and to the steamship com- 
 panies respectively are jealously regarded as 
 State secrets, and cannot, therefore, be told. 
 
 INTER-STATE COMPETITION. 
 
 Alike in the case of the Levant tariff and in 
 that of other special tariffs in force in Germany, 
 one system of State railways may be competing 
 most actively with another group of State rail- 
 ways within the limits of the empire, and many 
 of the exceptionally low rates are granted ex- 
 pressly to meet those conditions. There is, natu- 
 rally, a benefit to the trader who is the object 
 of this rivalry ; but what the State railways 
 mainly seek is to capture the traffic for their own 
 lines.
 
 Continental Transport Condiiions. 269 
 
 The Prussian State railways, for example, will 
 give no transhipment rates at the Rhine ports of 
 Ruhrort and Duisburg, because such rates would 
 facilitate Rhine traffic, to the detriment of the 
 Prussian railways and seaports and to the benefit 
 of Rotterdam. But transhipment rates for 
 Rhine cargo — such, for instance, as minerals for 
 Bavaria, iron and steel for Switzerland, and 
 petroleum for Wiirtemberg — are readily con- 
 ceded at Mayence and Frankfurt, when it is a 
 matter of capturing the traffic for the Prussian 
 vState lines at those points, instead of allowing it 
 to proceed further along the river, and pass on 
 to the State railways of Baden, without touching 
 those of the Prussian-Hesse system at all. 
 
 INTERNATIONAL COMPETITION. 
 
 When the rivalry extends to different countries 
 it becomes so keen that in France, for example, 
 special rates applying to transit traffic from Italy 
 or elsewhere which might pass through Belgium, 
 Holland or Germany unless secured at once for 
 the French railways and a French port, can be 
 brought into immediate operation should the 
 Railway Minister raise no objection within 
 twenty-four hours; although if the domestic 
 trader wants some concession he may have to 
 wait six months before his request can pass 
 through all the official routine. 
 The rivalry and the competition between the
 
 270 Railways and Nationalisation. 
 
 different State systems themselves on the Con- 
 tinent of Europe are factors of primary import- 
 ance in the railway and general transport con- 
 ditions there; but they obviously could not be 
 reproduced in the British Isles, should a resort to 
 the Continental principle of State ownership be 
 resolved upon. Under State ownership here we 
 should have neither the Continental transit traffic 
 nor the advantage of the influence which inter- 
 State or international conditions exercise — to the 
 advantage of traders — on Continental State rail- 
 way administrations. 
 
 RAILWAY rates AND PROTECTION. 
 
 There is the further consideration, to which I 
 have already alluded, that Continental railway 
 rates, especially those applying to exports or 
 imports, may be fixed much less on ordinary 
 transport principles than to meet political or 
 fiscal conditions. 
 
 As typical of the part which railway rates play 
 in the protection policy of German}', I might 
 mention that, some years ago, when there was 
 a poor fruit harvest in Holland, the German 
 growers did a good business in sending large 
 quantities of fruit to Dutch preserve-makers, 
 being helped so to do by exceptionally low export 
 rates on the Prussian State railways to the Dutch 
 frontier. In the following year fruit was 
 plentiful in Holland and scarce in Germany ; but
 
 Continental Transport Cjnditions. 271 
 
 when the Dutch growers wanted to dispose of 
 their surplus, they found that the rates from the 
 frontier to various points in Germany had been 
 fixed by the Prussian State railways at so pro- 
 hibitive a figure — in order to protect the German 
 growers against foreign competition — that the 
 market there was practically closed to them, and 
 they had to look to doing a bigger trade with 
 England instead. 
 
 LENGTH OF HAUL, 
 
 The Continental railway trafiic, again, differs 
 materially from that in the United Kingdom in 
 respect to that element of length of haul which 
 has so material a bearing on the question of rates, 
 when looked at from the point of view of amount 
 per ton per mile, and especially when com- 
 parisons are made with the trafiic in countries 
 where only short hauls are possible. This, of 
 course, was the important consideration which 
 did so much to nullify the comparisons made a 
 few years ago between American and British rail- 
 way rates; but the same considerations arise as 
 between this country and the Continent of 
 Europe. In the German Empire there are rates 
 in operation for hauls such as the follow ing : — 
 
 Coal, from Mysowlitz (Prussian Silesia) to 
 Neubrandenburg (near Stettin), 394 miles ; 
 
 Tin plates, steel plates and steel rails, from 
 Breslau to Emden, 494 miles;
 
 272 Raj r. WAYS and Nationalisation. 
 
 Pig iron, from Algringen, Alsace-Lorrain , to 
 Breslaii, 632 miles; 
 
 Grain, from Breslau to Friedrichshafen, 566 
 miles; and 
 
 Flour, from Breslau to Wangen-i-Algau 
 (Bavaria), 553 miles. 
 
 The average length of haul in Germany is over 
 seventy miles. In Great Britain it is only about 
 thirty. The terminal charges remain the same 
 whatever the distance the consignment is carried, 
 and these, in the case of a short haul, would alone 
 suffice to make the cost per ton per mile appear 
 much higher than in the case of a substantially 
 longer haul. 
 
 RAILWAY loading. 
 
 Supplementing the factors of heavy transit 
 traffic and of length of haul, there is the 
 important consideration as to the bulk in which 
 consignments are carried. In the case of 
 Germany some figures bearing on this point, 
 together with the average receipts from the 
 various classes of traffic, are contained in the 
 following table, which I take from the official 
 report* of the Prussian-Hessian State Railway 
 system for 1905 : — 
 
 ■'- " Bericht iiber die Ergebnisse des Betriebes der verem- 
 igten preussischen und hcssischen Staatseisenbahnen im 
 Rechnungsjahre 1905.
 
 Continental Transport Conditions. 273 
 
 Goods Traffic on the Prussian State 
 Railways during the year 1905. 
 
 I.— NORMAL TARIFFS. 
 
 A. Fast and Express Goods 
 
 P>. Piece Goods : 
 
 In general piece goods class 
 In special tariff classes 
 Goods in wagon loads : 
 
 Class A I 
 
 ., B 
 
 Special tariff class A 2 
 
 ., „ I 
 
 ,, ,, ,, II. (lo-ton loads 
 
 ,, ., ,, II. (5-ton loads) 
 
 „ ,, „ in 
 
 Total of B 
 
 7.102,595 
 2,994,585 
 
 2,081,624 
 4,526,942 
 4,451.617 
 
 11,310,495 
 7,604,976 
 4,124,687 
 
 57,469,831 
 
 „ ,, I 
 
 II. EXCEPTIONAL TARIFFS. 
 
 r. Fast goods, piece-goods, and wagon 
 
 loads of 5 to 10 tons | 353,227 
 
 2. Wagon loads of 10 tons and over ... j 161,303,368 
 
 Total of II 
 
 Total of I. and II I 
 
 101,667,352 
 
 103,806,227 
 
 161,656,595 
 
 265,462,822 
 
 II 38 
 
 11 05 
 
 6 52 
 
 5 22 
 
 5 35 
 
 4 09 
 
 2 67 
 
 5 17 
 
 5 49 
 
 17 24 
 3 " 
 
 3 14 
 
 4 06 
 
 This table shows, in effect, that the total 
 weight of the goods consigned by the Prussian- 
 Hessian State railways during the year 1905 was 
 265,462,822 tons, of which quantity 2,138,875 
 were carried as fast or express goods, and 
 10,097,180 as piece goods, while the remaining 
 
 T
 
 274 Railways and Nationalisation. 
 
 253,226,767 tons, representing nearly 95 per cent, 
 of the total, went either in wagon loads or in five 
 or ten-ton lots. 
 
 The large proportions of this percentage of big 
 loads are due to various factors, such as : — 
 
 (i) The application of special or exceptional 
 rates to quantities of not less than five tons; 
 whereas in the United Kingdom such rates are 
 often extended to quantities of only two or three 
 tons, traders here working down to this standard, 
 and making more frequent consignments on the 
 lower basis, where the German trader would con- 
 sign less frequently, but on the five-ton or ten- 
 ton basis. 
 
 (2) The collection of goods from the German 
 traders and others by forwarding agents who 
 make up (by combination, when necessary) five 
 or ten-ton lots, thus gaining advantage of the 
 lower rates available, and, nominally, at least, 
 sharing that advantage with their patrons. 
 
 (3) The fixing of the legal time limit for the 
 transport of goods (within which period the rail- 
 w^ay is not to be responsible for delay) on so 
 generous a scale that the railway people are able 
 to keep back ordinary consignments for one or 
 two days, if necessary, in order to secure better 
 loading, higher rates on the fast or express scales 
 having to be paid by senders of consignments for 
 which immediate delivery is required. 
 
 From a railway standpoint the working ex- 
 penses can naturally be kept lower when so large
 
 Continental Transport Conditions. 275 
 
 a proportion of the traffic is carried in big loads; 
 and although there is certainly a good deal of 
 traffic in bulk on the English lines, the condi- 
 tions of trade have led more especially to a fre- 
 quent despatch of small or comparatively small 
 individual consignments, each requiring separate 
 handling. 
 
 constrt'ction : working expenses. 
 
 There are still other conditions which have 
 operated to the advantage of most of the Con- 
 tinental railways. 
 
 (i) As a rule they have not been bled so merci- 
 lessly in the acquirement of their land as has 
 been the case with railways in the United King- 
 dom. In and around the large cities land has 
 naturally been expensive; but neither there nor 
 in the country districts have land-owners been 
 able to insist on the payment to them of 
 exorbitant sums, especially by Governments 
 constructing State lines. 
 
 (2) The Continental railways have saved on 
 that item of Parliamentary proceedings which 
 has often involved railway companies in the 
 United Kingdom in so formidable an expendi- 
 ture. The construction of a new line of railway 
 by the Prussian State Railway Administration 
 costs nothing at all in the way of Parliamentary 
 proceedings. The preliminary arrangements 
 are a matter of ordinary office expenditure, unless 
 
 T 2
 
 276 Railways and Nationalisation. 
 
 any person whose land it is proposed to take 
 should refuse to come to terms, in which case 
 there is a resort to arbitration. 
 
 (3) The expenditure on actual construction of 
 railways in most of the Continental countries, 
 and especially in those of Northern Europe — but 
 excluding lines in mountainous districts — has 
 been comparatively low. A physical map of 
 Europe will show that from the coast of Holland 
 there is a level plain across Germany and Russia 
 until one comes to the Ural Mountains, on the 
 eastern extremit}^ of Russia in Europe. From 
 the Hook of Holland to Berlin there is not a 
 single railway tunnel. There are important 
 bridges over rivers, and a costly overhead line 
 has had to be constructed in Berlin itself; but in 
 the whole of North Germany there is not, I have 
 been assured, a single railway tunnel. Even 
 cuttings and embankments are rarely seen. 
 These " level plain " conditions are to the ad- 
 vantage, not alone of cost of construction, but 
 also of working expenses, inasmuch as a loco- 
 motive can naturally haul a heavier load on the 
 flat than it can up a series of steep gradients. 
 
 (4) Nor, in Continental countries, is there any 
 exact equivalent to our Board of Trade — a body 
 requiring that railways shall be constructed from 
 the very outset with an absolute perfection of 
 completeness in every detail, and insisting on a 
 variety of requirements which, however desir-
 
 Continental Transport Conditions. 277 
 
 able, undoubtedly add considerably to the cost 
 both of construction and operation.* 
 
 (5) The general absence of fencing; the sparse 
 provision of footbridges ; the numerous level 
 crossings (often protected only by poles worked 
 with weights); the passing of trains along the 
 streets of a city (as in Hamburg) ; the non-use of 
 "chairs" in the laying of the rails: these and 
 other economies found on the Continent remind 
 one far more of the average American rather 
 than of the ordinary British railway, and they 
 must have tended still further to keep down the 
 cost of providing the lines. 
 
 WHAT THE RATES INCLUDE. 
 
 Thus, as I have shown, there is a multiplicity 
 of factors influencing Continental railway rates 
 — the competition of different countries for a vast 
 volume of transit traffic which may often pass 
 equally well through any one of them ; the com- 
 petition with the railways of great natural water- 
 ways and canals ; the desire of State railway 
 administrations for a maximum of possible 
 profit; political considerations in fostering com- 
 merce and influence abroad and protection of in- 
 dustries at home; hauls of such length that un- 
 less the traders got low rates they would be shut 
 out from the markets of the world; consignments 
 
 * See, in this connection, the reference to the Board of 
 Trade and the Irish railways, on page 344.
 
 278 Railways and Nationalisation. 
 
 in such bulk that they can naturally be carried 
 on the most favourable terms; and railways that 
 have themselves cost far less to construct than 
 the railways of the United Kingdom. All these 
 things go to make up a complex set of conditions 
 which have no parallel here ; and yet the rates 
 charged by the Continental, and especially by 
 the German, railways are incessantly being com- 
 pared with British railway rates, these being 
 adversely criticised — and even held up as a 
 reason for the immediate nationalisation of the 
 British railway system — if they should appear 
 to be higher. 
 
 I say "appear to be higher" because, apart 
 from the considerations already advanced, it 
 may happen that a rate on this side, for a like 
 distance, will include services which are not in- 
 cluded in the corresponding Continental rate ; so 
 that here, again, comparisons would be mis- 
 leading. 
 
 In the first place, the Continental rate might, 
 and often would, be exclusively for haulage from 
 one point to another, and would not include col- 
 lection, delivery, loading, unloading, and wharf- 
 age or warehousing, w^hich the Continental 
 trader w'ould have to provide, or pay for as 
 extras. 
 
 COLLECTION AND DELIVERY. 
 
 It is true that on the Southern railways in 
 England nearly the whole of the ordinary goods
 
 Continental Transport Conditions. 279 
 
 traffic is convtyed at " station-to-station " rates, 
 in which collection and delivery would not be in- 
 cluded, while in the case of nine of the principal 
 companies, operating mainly in the Midlands 
 and the North, the goods traffic (exclusive of 
 minerals) conveyed at special station-to-station 
 rates is about 74 per cent, of the whole. In 
 Scotland the proportion is 67 per cent. But 
 these figures still allow for a considerable 
 volume of traffic — more especially in London 
 and in the great industrial centres — which is col- 
 lected and delivered, and the arrangement under 
 which the railway van calls for goods at ware- 
 house or factory (whether by arrangement or on 
 the display of a card at the door), and takes away 
 goods which will be delivered direct to the con- 
 signee at the other end, at an inclusive railway 
 rate, must be a great convenience to many a 
 British trader. So far does the practice prevail 
 that in a paper read at the Paddington Debating 
 Society, Mr. H. C. Law, Superintendent of the 
 Paddington goods station, mentioned that the 
 Great Western Railway Company have at that 
 depot alone nearly 1,000 men and boys and 700 
 horses. 
 
 The Prussian State railway administration 
 save expense by leaving the trader to make his 
 own arrangements for collection and delivery, 
 and they may, therefore, be able to charge a 
 lower rate on the corresponding class of traffic. 
 But the w^ork of collection and delivery has to be
 
 28o Railways and Nationalisation. 
 
 done, and the trader can make his own calcula- 
 tion as to whether it is to his advantage to let the 
 railway company render this service to him, as 
 part of an inclusive rate, or whether he could do 
 it more cheaply himself if he paid only a station- 
 to-station rate. In any case, a fair comparison 
 of the British and Continental charges turns in 
 part on the question as to " what the rates in- 
 clude." 
 
 LOADING and UNLOADING. 
 
 In regard to loading and unloading a distinc- 
 tion is made in Germany between (i) goods in 
 less than car load lots (" Stiickgut "), and (2) 
 car load lots (" Wagenladung "). In the former 
 case the consignments are both loaded and un- 
 loaded by the railway. When unloaded they 
 are stored in the goods sheds until called for ; 
 but, unless they are fetched within twenty-four 
 hours, a charge is made for storage. Intimation 
 of their arrival is sent to the consignee by post- 
 card — the cost of which, I might add, must be 
 paid for by that individual, just as the consignor 
 must already have paid for his " Frachtbrief," 
 or consignment note (given to traders free of 
 charge in the United Kingdom), at the price 
 either of i pfennig per note, or 75 pfennig (gd.) 
 per 100. When car load lots are despatched 
 neither loading nor unloading is done by the 
 railway unless paid for extra. Should the un- 
 loading not be completed within twenty-four
 
 Continental Transport Conditions. 281 
 
 hours (or even within less time, if the wagon is 
 wanted) penalties are exacted as follows : For the 
 first twenty-four hours 2 marks (2s.) per wagon ; 
 for the second twenty-four hours 3 marks (3s.) 
 per wagon ; for each succeeding period of twenty- 
 four hours 4 marks (4s.) per wagon. Similar 
 charges are made should the loading of the 
 wagon not be completed within twenty-four 
 hours from the time at which it is placed at the 
 trader's disposal. 
 
 WAREHOUSING. 
 
 It follows from what I have already said that 
 in Germany the trader gets no free wharfage and 
 no free storage beyond the time given to him to 
 remove his goods. The English practices of in- 
 cluding in a railway rate a certain period of free 
 storage (with subsequent moderate charges) in 
 large warehouses provided by the railways for 
 that purpose (so that many traders do not rent 
 warehouses of their own), of giving free wharf- 
 age to London coal merchants and others, or of 
 allowing coal, hay or straw a substantial free 
 period in the trucks, thus facilitating the opera- 
 tions of the trader in disposing of these com- 
 modities, are unknown in Germany, where the 
 abuses once practised by certain classes of 
 English traders — and still not unknown — in re- 
 garding railway trucks as free warehouses on 
 wheels, would be impossible.
 
 282 Railways and Nationalisation. 
 
 GOODS TRAIN SERVICES. 
 
 In the next place the Continental rate might 
 be for transport by a slow goods train, by which 
 nothing like so quick a delivery would be 
 effected as in the case of the ordinary goods 
 service in Britain or Ireland. In Germany, for 
 example, if it were desired that goods should be 
 sent by rail at the same speed as they would be 
 carried here, the trader would have to pay at 
 least double, if not even fourfold, the ordinary 
 goods rates in force in that country. The actual 
 services in operation in Germany are as 
 follows : — 
 
 Frachtgut (Slow Goods) : Ordinary goods train 
 service at published rates. 
 
 Eilgut (Express Goods) : Faster goods on main 
 routes supplemented by slow passenger trains 
 on other routes, at double published rates. 
 
 Schtiellzugs-eilgut (Accelerated Express) : Fast pas- 
 senger train, at four times the published rates. 
 
 The times allowed for F'rachtgut and Eilgut 
 consignments are : — 
 
 Frachtgut — 
 
 Day of handing in not counted. 
 
 For actual forwarding ... ... 2 days. 
 
 For transit up to 62 miles i day. 
 
 Beyond 62 miles : for each 124 
 
 miles I ,, 
 
 Eilgut — 
 
 Day of handing in not counted. 
 
 For actual forwarding i day. 
 
 For transit, each 186 miles ... i ,,
 
 Continental Transport Conditions. 283 
 
 On this basis no claim for delay could be made 
 against a German railway if it carried a consign- 
 ment at Frachtgut rates for a distance equal to 
 that from London to Dublin within five days, 
 though so long a time would not necessarily be 
 taken in actual practice. Inspection of a num- 
 ber of consignment notes for the German State 
 railways shows that while, for places on the 
 direct route between Berlin and Hamburg, goods 
 from either city would be delivered in one day, 
 those to or from other parts of Germany, not on 
 main routes, take up to six or seven days in 
 delivery when only ordinary rates are paid. 
 
 In the circumstances, therefore, one must 
 decide with which service on the Continental 
 railways the rates in force here are to be com- 
 pared; and I think it quite possible that by the 
 time one has added to the German rate the actual 
 cost, or value, to the trader of all that may be 
 included in the British rate —collection, delivery, 
 warehousing, express transport, and so on — but 
 is not included in the German rate, it will be 
 found that not only, as a rule, does the German 
 " domestic " trader not pay less than the British 
 trader, but he may even pay more. 
 
 Then, also, it is material to know whether the 
 Continental rates with which comparisons are 
 made are "export," "transit," or "domestic" 
 rates (like being compared with like), and, also, 
 in what quantities the goods in question are 
 carried. It may happen that the Continental rate
 
 284 Railways and Nationalisation. 
 
 is for five or ten-ton lots, and applies to traffic 
 carried in very considerable quantities (as, for 
 example, complete train-loads of bacon or butter 
 in Denmark), while the English rates that are 
 quoted may, though still given as so much per 
 ton, either apply only to very much smaller quan- 
 tities of actual traffic, or, in fact, be ** paper " 
 rates for traffic in certain commodities not 
 carried at all between the points specified, but for 
 which lower rates would probably be at once 
 given if there were any prospect of such traffi( 
 being handled. 
 
 owner's risk. 
 
 As regards owner's risk, I have already 
 pointed out in my book on " German v. British 
 Railways " that although the Prussian State 
 railways do take the risk in regard to delays and 
 breakages, the legal time allowance for delivery 
 in the case of the ordinary services is so liberal 
 that the limit should rarely be exceeded ; while 
 the railways guard themselves so thoroughly 
 against the risk of breakages, by making such 
 strict conditions in respect to packing, that the 
 element of risk is reduced to a minimum. If 
 there is the slightest suspicion that a consign- 
 ment may, from the nature of the packing or 
 from the absence thereof, get damaged in transit, 
 thus throwing liability on the railway, the con-
 
 Continental Transport Conditions. 2S5 
 
 signer is required to sign a special declaration to 
 the following effect : — 
 
 Speciai, Declaraiion in Reoard to the Packing 
 OF Goods. 
 
 The Goods Depot of the Railway, at , 
 
 has, at my (our) request, accepted from me (us), for 
 transport to , consignments which are indi- 
 
 cated on the consignment note as follows : — 
 
 I (we) hereby expressly recognise the fact that 
 these consignments are 
 
 unpacked,* 
 
 in the following respects not sufficiently packed, 
 which condition has been duly specified on the con- 
 signment note. 
 
 (Signature and date.) 
 
 * The word "unpacked," or the words "in the 
 following respects not suflficiently packed," should 
 be struck out according to circumstances. 
 
 When I asked a forwarding agent in a large 
 way of business in Berlin what was meant by the 
 words " not sufficiently packed," he replied : — 
 
 In effect, general merchandise is regarded by the 
 German railv.'ays as sufficiently packed only when 
 it is in strong wooden cases, or, perhaps, in sub- 
 stantial baskets. Everything else must go on the 
 declaration freeing the railway of all responsibility 
 and leaving the trader to bear any possible loss. 
 
 Inasmuch, again, as there is only one rate in 
 Germany, it will be seen that the traders who 
 thus have to take the risk upon themselves get 
 no reduction on account of "owner's risk":
 
 286 Railways and Nationalisation. 
 
 though they are able to insure the goods by pay- 
 ing more. In certain trades strong complaints 
 are made by traders of breakages for which there 
 is no hope of redress, the special declaration 
 having been signed. The German State railways 
 admit nothing but absoluteh^ legal liability, and 
 claims are made with far less frequency than is 
 the case in the United Kingdom, because of the 
 hopelessness of enforcing them unless the legal 
 responsibility of the railway can be proved be- 
 yond the shadow of a doubt. As one German 
 trader put it to me, "It is better to save the 
 postage stamp." 
 
 FAIR COMPARISONS IMPRACTICABLE. 
 
 Looking at all the various factors and condi- 
 tions governing Continental as distinct from 
 British transport traffic, it will be seen, I think, 
 how very difficult, if not altogether impracticable, 
 it is to make really fair comparisons between the 
 Continental rates and our own. To state the 
 situation in a single sentence : Continental rail- 
 way rates are invariably based on conditions 
 geographical, economic or political, which are 
 not the same as those of our own country; and 
 they are, also, often exclusive of services the 
 addition of which — comparing export rates with 
 export rates, and domestic with domestic — might 
 well place them on an equality with our own, if 
 not sometimes raise them to a still higher figure.
 
 Continental Transport Conditions. 287 
 
 continental tariffs. 
 
 Before leaving this branch of the subject I 
 might further allude to the fact that one of the 
 favourite arguments of the nationalisation party 
 is that the system of tariffs on Continental rail- 
 ways is far simpler than is the case with the 
 British railways. " In Germany," they say, 
 "you give sixpence for two little books issued 
 by the State railway authorities, and from these 
 you can make your own calculations as to what 
 you have got to pay." To imagine, however, 
 that the two little books in question cover the 
 whole ground of German railway rates is 
 grotesquely inconsistent with the actual facts. 
 
 I have before me, as I write, a " List of 
 Tariffs " in operation in Germany, issued by the 
 Reichs - Eisenbahn - Amt, in Berlin. This 
 " List " — giving merely name of tariff, date of 
 issue, published price, number of supplementary 
 appendices, and the place where it can be ob- 
 tained — forms a book of 160 quarto pages, of 
 which 150 are occupied by a catalogue of tariffs 
 referring to rates for goods, live stock, and coal, 
 the remainder relating to passengers, baggage 
 and express consignments. It will suffice, per- 
 haps, if I deal with the former only. 
 
 An analysis of the list shows that the number 
 of railway tariffs in the German Empire in re- 
 spect to goods alone is 708. They fall into 
 three main classes: (i) inland tariffs, (2) tariffs
 
 288 Railways and Nationalisation. 
 
 for goods passing between Germany and foreign 
 countries, and (3) tariffs for transit traffic going 
 througli Germany from one foreign country to 
 another. 
 
 In the first of the three groups — inland tariffs 
 — there are 209, and these, supplementing the 
 general tariff, relate to nine different systems 
 within the Empire — namely, the independent 
 State systems for Prussia-Hesse, Bavaria, 
 Saxony, Wiirtemberg, Baden, and Oldenburg ; 
 the Reichseisenbahn (Alsace - Lorraine) ; the 
 Mecklenburg Friedrich Franz-railway, and the 
 private railways. (Incidentally I would point 
 out that a great mistake is often made in speak- 
 ing of the railways of Germany as though they 
 were all comprised in one and the same system. 
 There is as much competition and rivalry be- 
 tween the different State railway systems in the 
 German Empire as there is between different rail- 
 way companies in the United Kingdom.) 
 
 The tariffs for consignments from Germany to 
 foreign countries — Russia, Scandinavia, Eng- 
 land, Holland, Belgium, France, etc. — number 
 no fewer than 392, while those for transit traffic 
 number 107. 
 
 Of tariffs in respect to the transport of live 
 stock — in the same three classes — there are 120; 
 and of those relating to coal the number is 87. 
 
 Thus a complete set of all the railway tariffs 
 in operation in Germany would form a collection 
 of 915 volumes. The cost per volume ranges
 
 Continental Transport Conditions. 289 
 
 from one halfpenny to 6s. The 708 volumes 
 relating to goods cost ;;^35 iis. 3jd.; the 120 
 for live stock, ^■t^ is. o|d.; and the 87 for coal, 
 £2 los. lod.; the total cost of the 915 volumes 
 being £^\ 3s. ifd. 
 
 This great variet}^ of tariffs has done much to 
 strengthen the position of those forwarding 
 agents who play so prominent a part in the 
 transport of merchandise in Germany. Such 
 agents are experts in the manipulation of the 
 tariffs, and the average trader (unless, being in a 
 large way of business, he keep? an expert of his 
 own), generally prefers to leave them to solve 
 his transport difficulties rather than undertake 
 the task himself. 
 
 It has been suggested that the French system 
 is better, because there the various tariffs are 
 brought together in a single publication. This, 
 of course, is the Receiiil Chaix, issued every 
 three months, in two massive volumes, the very 
 sight of which would be likely to give a shock to 
 the nervous system of the average British trader. 
 Volume I, which contains the tariffs in respect 
 to Grande Vitesse, has 986 pages, and weighs 
 5 lbs. The Petite Vitesse volume has 1,726 
 pages, and weighs 12 lbs. The total number of 
 pages (the dimensions of which are 14^ by 10 
 inches) is thus 2,712, and the total weight of the 
 complete work is 17 lbs. 
 
 In Austria, also, the whole of the railway 
 
 tariffs are brought together in a single work- 
 
 u
 
 290 Railways and Nationalisation. 
 
 published annually, supplements being issued 
 from time to time during the year. But the 
 work in question comprises 14 volumes, has a 
 total of 6,000 pages, and weighs 30 lbs. 14 ozs. 
 
 RAILWAY FARES IN GERMANY. 
 
 There is no need for me to enter upon any 
 detailed comparison of British and Continental 
 passenger fares and facilities. Such com- 
 parisons in regard to fares must needs be falla- 
 cious unless one remembers that third class travel 
 on main lines of British railways is generally 
 equal to second class on the Continent, and that, 
 whereas here one can invariably go third class 
 by express trains, on the Continent this is the 
 exception rather than the rule. As against, 
 also, any comparisons of ordinary fares must be 
 put the very large number of excursion, tourist, 
 week-end, market, or other special tickets issued 
 here at reduced rates to an extent unsurpassed 
 on any State railway on the Continent. All 
 these are more or less familiar facts. But 
 certain changes in railway fares in Germany 
 have given rise to a misunderstanding which it 
 may be desirable to clear away. 
 
 On October i, 1906, a new tax, in the interests 
 of the Imperial Exchequer, was imposed in 
 Germany on railway, tramway, and steamboat 
 tickets (with certain exceptions, such as in the
 
 Continental Transport Conditions. 291 
 
 case of school children), the amounts of the tax 
 being fixed as follows : — 
 
 1st Class. 2nd Class. 3rd Class 
 
 On tickets up to 2 Mk.... Mk. 0-20 Mk. o-io Mk. 0-05 
 
 „ „ „ 5 » ••• n o'40 ,, 0-20 „ o-io 
 
 „ „ „ 10 „ ... „ o-8o „ 0-40 „ 0-20 
 
 „ „ „ 20 „ ... „ I -60 „ o-8o „ 0-40 
 
 „ „ ,, 30 >. ••• » 2-40 „ 1-20 „ o-6o 
 
 „ „ „ 40 „ .. „ 3'6o „ I -So „ 090 
 
 „ „ „ 50 >, ••■ V 5 '40 „ 2-70 „ 1-40 
 
 „ „ above 50 „ ... „ b'oo „ 4-00 „ 2-00 
 
 It will be seen that the tax was not imposed 
 on tickets issued to passengers by the fourth 
 class. 
 
 The effect of the tax has, admittedly, been dis- 
 appointing from a revenue standpoint, inasmuch 
 as persons who formerly travelled first class now 
 often go second ; the previous second class pas- 
 sengers go third class; and the fourth class has 
 been swollen by persons who previously travelled 
 third. 
 
 On May i, 1907, independently of the afore- 
 said Imperial tax, there came into operation a 
 " reform " of the existing tariffs in regard both 
 to passengers and to luggage. It is this " re- 
 form " which has been spoken of as having 
 brought about substantial reductions in fares. 
 
 What it did was to abolish return tickets, and 
 effect a reduction in the cost of single tickets. 
 
 The return tickets, however, had been issued 
 at less than the cost of two single tickets, the 
 sum total of which, notwithstanding the reduc- 
 
 u 2
 
 292 Railways and Nationalisation. 
 
 tions made, is, generally speaking, now higher 
 than the previous charge for a return ticket. 
 Although, therefore, a person making a single 
 journey, or not returning by the same route, 
 pays less than he did before, another person who 
 does so return, but is no longer able to purchase 
 a return ticket, pays more. 
 
 The effect of this new arrangement may be 
 illustrated by the following figures, showing the 
 past and present fares between London and 
 Berlin via the Hook of Holland, for which inter- 
 national journey return tickets are still issued, as 
 a matter of convenience, though at the total 
 cost of two single fares : — 
 
 
 Prior 
 
 to 
 
 Since 
 
 
 Reduc- 
 
 
 May I, 
 
 1907. 
 
 May I, 1907. 
 
 Increase. 
 
 tion. 
 
 
 £ s. 
 
 d. 
 
 / .. d. 
 
 .y. ./. 
 
 s. d. 
 
 1st single .. 
 
 . 4 12 
 
 2 . 
 
 •.434- 
 
 — 
 
 ... 8 JO 
 
 2nd single.. 
 
 • 3 3 
 
 3 • 
 
 .. 2 15 5 . 
 
 — 
 
 ... 7 10 
 
 1st return .. 
 
 6 12 
 
 . 
 
 •• 7 4 3 •■ 
 
 .. 12 3 
 
 — 
 
 2nd return . 
 
 . 4 II 
 
 4 • 
 
 .. 4 13 . 
 
 .. 3 S 
 
 — 
 
 The benefits of the " reform " system, there- 
 fore, exist in the case of one class of travellers 
 only, and are non-existent in the case of those 
 returning by the same route, the latter consti- 
 tuting a considerable proportion of the whole. 
 
 The " reform " system further abolished all 
 free luggage. Passengers had previously been 
 allowed to have 56 lbs. of luggage free. Under 
 the new arrangements all luggage put in the 
 van must be paid for. In this respect the Dutch 
 railways have followed the example of the
 
 Continental Transport Conditions. 293 
 
 German railways, so that the traveller from (say) 
 London to Berlin now has to pay (in addition to 
 the increased charge for a return ticket) five 
 shillings in respect to the 56 lbs. of luggage 
 which he was previously entitled to take free. 
 
 In Germany railway passengers seek to evade 
 the new charge by reducing their luggage to 
 such proportions that they can take it with them 
 into the carriage. The result is that the com- 
 partments and corridors of the express trains, 
 especially, get so blocked up with luggage that 
 considerable inconvenience is caused. 
 
 Altogether, the changes have led to much 
 adverse criticism in Germany, where they are 
 widely regarded in the light of very doubtful 
 advantages to the travelling public. 
 
 How disappointing the results have been to 
 the Government has been shown by the Berlin 
 correspondent of The Times, who, in an article 
 on " German Imperial Finances," published in 
 that journal on April 28, IQ08, said : — 
 
 The duty on passenger tickets continues to be 
 a conspicuous failure, with a revenue of only 
 ^^^930, 000, as compared with an estimate of over 
 p£: 1, 500, 000.
 
 2Q4 Railways and Nationalisation. 
 
 CHAPTER XII. 
 PURCHASE TERMS AND CONDITIONS. 
 
 Presumably, if the British Government 
 should decide to take over and " nationalise " 
 the railways of the United Kingdom, they would 
 be prepared to pay for them. 
 
 It is necessary to state this assumption, in 
 considering the financial aspects of the proposal, 
 because the fact cannot be denied (i) that the 
 Socialists would prefer to adopt a policy of direct 
 appropriation ; and (2) that they have been dis- 
 tinctly encouraged in this idea by the " time 
 limit " theory which the present Government 
 have developed in regard to the licensed trade. 
 \\'riting on the subject of the Licensing Bill in 
 The Socialist Review for April, kjoS, Mr. Philip 
 Snowden, M.P., said: — 
 
 The other valuable feature of the time limit is 
 that it establishes a precedent by which, without 
 compensation by, or cost to, the community, a 
 private monopoly may be transferred to the State. 
 Public opinion approves the time limit as sufficient 
 comipensation to the owners and license holders of 
 public-houses because their monopoly is one con- 
 ferred upon them by the State, and because the 
 traffic is one which ought not to be used to enrich 
 individuals at the expense of the community. This 
 precedent, furnished by non-Socialists, is one which 
 will not be forgotten when public opinion regrets
 
 Purchase Tkrms and Conditions. 295 
 
 the anti-social privileges conferred by our fore- 
 fathers and ourselves upon land monopolies, railway 
 monopolies, mine royalty monopolies, and all other 
 monopolies foolishly handed over to private indivi- 
 duals by the community. 
 
 Other Socialists have written or spoken to the 
 same effect. 
 
 Then Mr. Asqiiith, in referring to the 
 Licensing Bill in the course of his speech at 
 Birmingham on June 19, igo8, said : — 
 
 It represents the latest phase of the perpetual con- 
 flict which, generation after generation, the Liberal 
 party has been waging to assert the paramount 
 supremacy of public over private, and general over 
 particular interests. 
 
 ^[r. Asquith, it will be observed, said " latest " 
 and not "last" phase; and the assertion as 
 here proclaimed might certainly be made to 
 apply to railway interests as freely as to the 
 other interests in question. The principle would 
 obviously be the same, and, as Mr. Snowden 
 pertinently suggests, a precedent in regard to 
 details has been already set up in the theory of 
 a " time limit." 
 
 For the present, however, at least, one may 
 look at the possibilities and prospects of railway 
 nationalisation from the point of view of State 
 purchase, rather than State confiscation ; and it 
 is desirable to consider the question as to what 
 price would have to be paid, and the financial 
 issues generallv that purchase might involve, 
 should such step be resolved upon.
 
 2cj6 Raii.ways and Nai'ionalisation. 
 
 THE ACT OF 1S44. 
 
 The State has already had, since the passing 
 of the Railways Regulation Act of 1844, the 
 right to acquire considerable portions of the 
 railway system of the United Kingdom, that 
 right having been secured under the following 
 circumstances : — 
 
 In the year 1844 there was every indication 
 that the railways would become a great financial 
 success, and bring in very large returns indeed 
 to the fortunate shareholders. The dividends 
 then being paid on some of the lines were : — 
 
 London and South-Western 7J per cent. 
 
 Great Western ... ... 7^ 
 
 Manchester and Leeds ... 7J 
 
 Liverpool and ■Manchester g^ 
 
 London and Birmingham 10 
 
 Grand Junction ... ... 10 
 
 York and North Midland ... 10 
 To Sir Robert Peel's Government it not un- 
 naturally appeared desirable, in these circum- 
 stances, that the State should reserve to itself 
 the right to control a possibly excessive pros- 
 pcritv on the part of the railway companies, and 
 take steps to protect the interests of the public 
 at whose expense such prosperity might be 
 gained. Hence the Act of 1844, which was 
 leased on the virtual admission and assumption 
 that railway companies might rea.sonably be left 
 to pay dividends of anything below 10 per cent., 
 yet stipulated (hat when this amount was reached
 
 Purchase Terms and Conditions. 297 
 
 the Government had a right to intervene; and 
 such intervention, it was laid down, might take 
 one or other of two distinct forms. 
 
 In the first place, when a railway company 
 paid a 10 per cent, dividend, or over, the Govern- 
 ment might revise the company's rates, with the 
 view, apparently, of bringing the earnings below 
 the 10 per cent, limit. 
 
 In the second place, there was to be the option 
 of purchase, at any time after 21 years from the 
 first of January, 1845, in the case of any or all 
 lines constructed subsequently to the passing of 
 the Act; the terms laid down being twenty-five 
 years' purchase of the annual divisible profits 
 on the average of the three years next preceding 
 the date of purchase. 
 
 Although, however, laying down these prin- 
 ciples and "reserving" to the Government the 
 power to enforce them, the Act expressly re- 
 frained from putting the powers in question into 
 force at that time, clause 4 stating : — 
 
 Whereas it is expedient that the policy of revision 
 or purchase should in no manner be prejudg'ed by 
 the provisions of this Act, but should remain for the 
 future consideration of the Legislature upon grounds 
 of general and national policy .... be It enacted 
 that no such notice as hereinbefore mentioned, 
 whether of revision or purchase, shall be given until 
 provision shall have been made by Parliament, by an 
 Act or Acts to be passed in that behalf, for author- 
 ising the guarantee or the levy of the purchase 
 money hereinbefore mentioned. 
 
 Since this Act was nassod there have been
 
 298 Railways and Nationalisation. 
 
 many chang'es in the g^eneral position. The 
 railway system has expanded substantially, and 
 the traffic has greatly increased ; but the growth 
 in expenditure has far exceeded the growth in 
 receipts, while Parliament has subjected the 
 rates to repeated revisions without waiting for 
 the dividends to attain the 1844 proportions of 
 10 per cent. Thus the first option of the Act 
 has already been carried out ; but the second, 
 that of purchase, still remains in abeyance. 
 
 We may fairly assume that one reason, at 
 least, why these particular provisions of an Act 
 passed over 60 years ago have not been taken 
 advantage of is that the railway companies have 
 not, on the whole, been remiss in their obliga- 
 tions towards the public. 
 
 Looking more closely into the terms of pos- 
 sible purchase, as thus laid down in 1844, it 
 will be noticed that railways then already in 
 existence were not included in the scope of the 
 Act; and while it is true that the railway system 
 was still in its infancy in 1844, there had then 
 already been constructed 2,320 miles of railway 
 which constitute links of paramount importance 
 in the great trunk lines of to-day. The complete 
 list will be found in an extract from the Report 
 of the Royal Commission on Railways, 1865, 
 which I have given in an Appendix; and it 
 will there be observed that the Commissioners 
 remark, "This list includes (with the exception 
 of the Great Northern Railway) the main lines 
 of communication throughout l^ngland." Suf-
 
 Purchase Terms and Conditions. 299 
 
 fice it here to say that the Hnes already existing 
 in 1844 included such sections as London to 
 Birmingham, Birmingham to Manchester, and 
 Manchester to Liverpool (London and North- 
 western Railway) ; London to Bristol (Great 
 W'^estern) ; London to Colchester (Great Eas- 
 tern) ; Nine Elms to Southampton (London and 
 South-Western) ; and Birmingham to Gloucester 
 (Midland). vSuch indispensable parts of our 
 railway system as these would not come within 
 any power of purchase already provided for by 
 the Legislature, and would have to be acquired 
 independently of the terms specified by the Act 
 of 1844. One sees from this how impracticable 
 it would be to attempt to make anv forecast of 
 what tiie Government would have to pav. 
 
 Then the fixing of the terms of purchase on 
 the basis of twenty-five times the balance avail- 
 able for dividends, estimated on an average for 
 the three previous years, would exclude stock on 
 which no dividends at all have been paid during 
 that period, although there may be reasonable 
 hopes on such lines of dividends being even- 
 tually secured when trafific has increased owing 
 to the development of residential districts, 
 mineral resources, and so on. The Act does, 
 however, provide that if a company shall be 
 of opinion that twenty-five years' purchase of 
 the annual profits " is an inadequate rate of 
 purchase, reference being had to the prospects 
 thereof," the amount to be paid shall be left to 
 cirbitration. Presuma1:)ly, therefore, the pur-
 
 300 Railways and Nationalisation. 
 
 chase price of lines whose dividends are pro- 
 spective only would be decided by arbitration ; 
 so that once more an element of uncertainty is 
 introduced. 
 
 A DOUBTFUL PRINCIPLE. 
 
 Whether the price to be paid should still be 
 fixed on twenty-five years' purchase of the annual 
 divisible profits, or whether, under the altered 
 conditions of to-day, some other term of years 
 should be taken, are debateable details which I 
 will not here stay to discuss. I would, however, 
 raise the question whether the principle of 
 basing the purchase price on annual divisible 
 profits at all is in itself really sound and one 
 that should be accepted. 
 
 Let us assume, for the sake of argument, that 
 there are two railway companies of which one 
 ranks as " provident," and the other as more 
 or less " improvident." The former does every- 
 thing it can to maintain its lines in the best pos- 
 sible condition, and pays for everything it can 
 out of revenue. The latter aims at giving 
 as big a dividend as possible, is less careful in 
 regard to maintenance, and depends too much 
 on capital, in order not to diminish the available 
 revenue. On the basis of the 1844 Act the im- 
 provident company would get terms much better, 
 in proportion, than those secured by the pro- 
 vident company ; while the Government would 
 not get as good value when they paid more, in 
 proportion, to the one company, as when they 
 paid less, in proportion, to the other.
 
 Purchase Terms and Conditions. 301 
 
 If, again, it were tolerably certain that the 
 Government would, in the course of a few years, 
 acquire the lines on the basis of annual divisible 
 profits, a direct incentive would be offered to the 
 provident company to spend less on mainten- 
 ance, and to effect an increase in the dividends 
 w'hich would decide the price to be paid. 
 Savings on maintenance could be effected in such 
 a way — as, for instance, in regard to the re- 
 laying of rails — that the results might not be 
 noticed until some years after the Government 
 had acquired possession. 
 
 Whether or not the provident company 
 resisted the temptation to adopt such a course, 
 it would be treated unfairly — as compared with 
 the improvident company— under any hard and 
 fast application of the purchase principle in 
 question ; and the placing of a premium on 
 "annual divisible profits," to the discourage- 
 ment of betterments paid out of revenue, would 
 certainly not be to the advantage either of the 
 Government, as purchasers, or of the com- 
 munity as users. 
 
 THE TELEGRAPH ACT, 1 868. 
 
 Incidentally, and leaving aside for a mom.ent 
 the Act of 1844, it might be mentioned that 
 under the provisions of the Telegraph Act, 1868, 
 the terms of purchase of the United Kingdom 
 Telegraph Company were 20 years' purchase of 
 the net profits; an extra sum for certain defined 
 patent rights; a sum equal to the estimated
 
 302 Railways and Nationalisation. 
 
 aggregate value of the quoted ordinary share 
 capita! of the company ; and compensation for 
 loss of prospective profits. Apply such terms 
 to the railways, and the purchase price would 
 probal^lv far exceed the present capital value. 
 
 capital and shareholders. 
 
 Whatever price the Government did have to 
 pay, and whatever financial arrangement as to 
 the issue of railway bonds or otherwise they 
 might think it best to make, the sum involved 
 would be of enormous magnitude, and the 
 prospect of their making a good bargain for the 
 State altogether problematical. 
 
 According to the Board of Trade " Railway 
 Returns," the total amount of railway capital 
 returned as raised at the close of igo6 was nearly 
 ^'1,287,000,000, of which, however, more than 
 ^195,000,000, or 15 per cent., was due to 
 nominal additions on the consolidation, con- 
 version and division of stock. 
 
 The assumption so widely entertained that, 
 even allowing for " watered capital," the vast 
 sum which here comes into question represents 
 money put into British railways by "capitalists," 
 leaves out of account the fact that a very large 
 proportion indeed of the railway proprietors 
 have only small or comparative!}' small hold- 
 ings. What tliese may be is shown by tlie 
 following table, which I reproduce from the 
 Great Western Railway Magazine for July 
 1907 : —
 
 Purchase Terms and Conditions. 303 
 
 Company. 
 
 ' Number of 
 
 ■ Shareholders, Holdings 
 
 exclusive of of £'^00 and 
 , Debenture under. 
 
 Holders. ' 
 
 Percent- 
 age of 
 Holdings 
 of £iS°" 
 and under. 
 
 
 
 
 Per cent. 
 
 Belfast and County Down 
 
 1,663 
 
 1,176 
 
 70 
 
 Brecon and Meithyr 
 
 770 
 
 565 
 
 73 
 
 Caledonian 
 
 37-640 
 
 18,251 
 
 48 
 
 Cambrian... 
 
 1,250 
 
 801 
 
 64 
 
 Central London ... 
 
 2,739 
 
 2,108 
 
 77 
 
 City and South London... 
 
 2,300 
 
 1,538 
 
 66 
 
 Cork, Bandon and South Coast . 
 
 1,431 
 
 i,oS6 
 
 75 
 
 Colne Valley 
 
 320 
 
 289 
 
 00 
 
 East and West Junction 
 
 94 
 
 72 
 
 76 
 
 Furness ... 
 
 5.355 
 
 3,111 
 
 58 
 
 Glasgow and .South Western ... 
 
 11,520 
 
 5,776 
 
 50 
 
 Great Central 
 
 20,388 
 
 10,723 
 
 52 
 
 Great Eastern 
 
 27,5^35 
 
 12,617 
 
 45 
 
 Great Northern ... 
 
 29,446 
 
 13,350 
 
 45 
 
 Great Northern (Ireland) 
 
 8,406 
 
 5,323 
 
 63 
 
 Great North of Scotland 
 
 4,950 
 
 2,778 
 
 56 
 
 Great Southern and Western ... 
 
 11,4^3 
 
 7,205 
 
 62 
 
 Great Wes'ern ... 
 
 62,155 
 
 32,671 
 
 52 
 
 Highland... 
 
 5,640 
 
 3,971 
 
 70 
 
 Hull and Harnsley 
 
 6,228 
 
 5,041 
 
 80 
 
 Isle of Alan 
 
 566 
 
 480 
 
 84 
 
 Lancashhe and Yorkshire 
 
 27,100 
 
 11,857 
 
 43 
 
 London and North Western ... 
 
 53,968 
 
 23,536 
 
 43 
 
 London and South Western 
 
 24,142 
 
 10,992 
 
 45 
 
 London, Brighton & South Coast 
 
 19,965 
 
 12,587 
 
 63 
 
 London, Tilbury and .Southend . 
 
 3,250 
 
 1,700 
 
 52 
 
 Metropolitan 
 
 9,435 
 
 4,265 
 
 45 
 
 Metropolitan District 
 
 886 
 
 337 
 
 38 
 
 Midland ... 
 
 *8o,oio 
 
 26,040 
 
 32 
 
 Midland and South Western 
 
 
 
 
 Junction 
 
 1,449 
 
 1,222 
 
 84 
 
 Midland (Great Western) Irelanc 
 
 5,980 
 
 3,980 
 
 66 
 
 North Staffordshire 
 
 5,8co 
 
 2,770 
 
 47 
 
 Northampton and Banbury 
 
 69 
 
 43 
 
 62 
 
 North British 
 
 32,746 
 
 16,973 
 
 71 
 
 North Eastern 
 
 42,514 
 
 22,294 
 
 52 
 
 North London ... 
 
 1,726 
 
 839 
 
 48 
 
 Rhymney... 
 
 2, ICO 
 
 1,096 
 
 52 
 
 South Eastern 
 
 14,423 
 
 8,481 
 
 58 
 
 TaflfVale 
 
 6,683 
 
 5,129 
 
 76 
 
 Tlie ordinary stock has been sjilit.
 
 304 Railways and Nationalisation. 
 
 This table is certainly open to the criticism 
 that many of the investors would have stock in 
 several companies. On the other hand it is no 
 less true that many of them, especially among 
 the larger holders, represent banks, insurance 
 companies, thrift organisations, labour unions, 
 etc., each having a more or less considerable 
 number of individuals — in some cases, many 
 thousands — interested in the security of the in- 
 vestments. 
 
 DIVIDENDS. 
 
 The average dividends paid on the various 
 classes of capital in 1906 were, approximately, 
 3^ per cent, on the ordinar}^ capital, 3J per cent, 
 on the preference, 4 per cent, on the guaranteed 
 and 3J per cent, on the loans and debenture 
 stock; though it is pointed out by the Board of 
 Trade that " these rates are naturally lower than 
 they would have been had there been no nominal 
 additions to the capital of the companies. The 
 average rate of dividend or interest computed on 
 the total capital, as it would have stood if no 
 nominal additions had been made thereto, was 
 4'o8 per cent." 
 
 The rates of dividend or interest paid on each 
 description of capital in 1906 were as follows : —
 
 Purchase Terms and Conditions. ^:;o5 
 
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 fO n O .-+ t-^ p^ y~i O 
 
 
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 1
 
 3o6 Railways and Nationalisation. 
 
 This table shows how little the expectation 
 entertained in 1844, that 10 per cent, was likely 
 to become the normal rate of dividend for 
 British railway companies, has been realised. It 
 shows that if the Government had bought up the 
 railways at the prices of (say) 10 years ago they 
 would be regretting a bad investment to-day. It 
 shows, also, that even if the}^ took over the 
 Avhole of the lines at the present low prices, they 
 would have to acquire a very large amount of 
 stock on which there is no yield at all, while 
 there is much that does not return suflicient to 
 cover the interest they would have to pay on 
 the railway debt. In other words, they would 
 assume those burdens of over-capitalisation and 
 unproductive investment which now handicap 
 some of the companies so severely in their desire 
 to effect progress and reform. 
 
 The State would thus perpetuate some of the 
 greatest disadvantages of the present railway 
 position, if it did not actually increase them, in- 
 asmuch as those investors who are sufferers from 
 this position would be much less tolerant if they 
 had to deal with the State than they are in the 
 case of a company doing the best it can to meet 
 adverse circumstances. The State would also 
 concentrate in a single unified system a dead 
 weight of unproductive capital now distributed 
 among a number of companies ; though, consider- 
 ing that such unproductiveness is due in no 
 small degree to the policv adopted bv successive
 
 Purchase Terms and Conditions. 307 
 
 Governments towards railway companies in the 
 past, the falhng of some of the burdens in ques- 
 tion upon the shoulders, as it were, of Ihe State 
 would be only in accord with the dictates of 
 poetic justice. 
 
 THE OUTLOOK FOR THE STATE. 
 
 In the result, and bearing always in mind that 
 the present average yield from the lailways is 
 less than 3^- per cent., it is probable that the 
 utmost the Government could hope to do, as the 
 result of adopting a nationalisation policy, 
 would be to pay interest on the railway debt it 
 would create. Instead of the railway revenue 
 being available, as some enthusiasts assume, 
 for ■' reduction of taxation," or other such 
 purposes, it might be practically absorbed in 
 meeting merely a new set of obligations. The 
 raihvay shareholder would disap{)ear, but the 
 holder of Government stock would take his 
 place — with this difference : that if the earnings 
 fall off, the shareholder now has to go without 
 his dividend, whereas the holder of Government 
 stock would still expect the vState to pav him his 
 interest. 
 
 EXTENSIONS AND BETTERMENT. 
 
 The considerations thus far advanced relate to 
 purchase only. One must remember, however, 
 that, as the Japanese Government are finding, 
 the nationalisation of the railway system of a 
 
 X 2
 
 3o8 Railways and Nationalisation. 
 
 country involves not alone heavy financial 
 obligations for the acquirement of existing lines, 
 but the raising of further considerable sums to 
 defray the cost of extensions and betterment. 
 In our own case, for example, assuming that the 
 Government took over the railways on terms just 
 and reasonable to the present proprietors, what 
 would be their attitude towards that question of 
 converting steam traction into electric which, in 
 the view of some experts, is "becoming one of the 
 great problems of the near future ? Would the 
 Government, after burdening themselves with a 
 great financial responsibility, and especially with 
 a large amount of unremunerative stock, launch 
 readily into the very heavy expenditure necessary 
 for such a transformation in transport as this ? 
 If they were ready so to do, what would be their 
 position in raising fresh loans to provide for the 
 capital outlay — exceptionally large in their case, 
 because they would have to do work which, in 
 existing conditions, would be undertaken by a 
 number of individual companies? How would 
 the Chancellor of the Exchequer be likely to re- 
 gard such large capital expenditure on the rail- 
 ways when their accounts became part and parcel 
 of the ordinary finances of the country? 
 
 Even leaving aside the question of electric 
 traction, it is the poorest lines, from which little 
 or no return is obtained, on which, were the 
 entire system nationalised, the Government 
 would need to spend, relatively, the largest
 
 Purchase Terms and Conditions. 309 
 
 amount of money. Local residents and traders 
 who are ready to make allowances now would 
 cease to do so when the lines w-ere State-ow-ned 
 and the bottomless purse of the British taxpayer 
 became available for their improvement. 
 
 SUBSIDIARY UNDERTAKINGS. 
 
 A further group of considerations would arise 
 in connection w-ith those many subsidiary enter- 
 prises which have become associated with the 
 ownership and operation of railways in the 
 United Kingdom to an extent unknown in any 
 other country — a fact w^hich, in itself, makes any 
 possible policy of nationalisation here much 
 more intricate in its details than was the case, 
 say, when Prince Bismarck planned his purchase 
 of the Prussian lines. Fie made that purchase 
 at a much lower price than would have had to be 
 paid to-day ; he extended his scheme over a series 
 of years; and he had few or no " side-shows " to 
 deal with. British railway nationalisers would 
 buy to-day under unfavourable conditions; they 
 want to acquire the entire system at once ; and 
 there are many things besides railways and roll- 
 ing stock that must be taken into account in the 
 matter of terms. 
 
 One may assume that the State, in acquiring 
 the railways here, would be obliged to deal with 
 the subsidiary railway interests as a material part 
 of the railway system. The adoption, however, 
 of this reasonable, if not inevitable, course
 
 310 Railways and Nationalisation. 
 
 would not only affect the basis of purchase, as 
 defined by the Act of 1844 (since most of the 
 "side-shows" in question have come into exis- 
 tence since that Act was passed), but would 
 raise the problem as to what the State 
 should do with the enterprises in question when 
 it had them ; while, if the Government of the day 
 decided to carry them on, they would find them- 
 selves directly competing with a wide range of 
 private interests. There might thus arise serious 
 questions not alone of finance and of national 
 policy, but even of possible international com- 
 plications. 
 
 steamships. 
 
 At the present time, for instance, various 
 British railway companies control lines of 
 steamers performing regular and competing ser- 
 vices between England and Continental ports. 
 The Great Eastern Company has the Harwich 
 route to the Hook of Holland and Antwerp ; 
 the Great Central Company has steamers 
 between Grimsby and Rotterdam, Antwerp and 
 Hamburg; and the Lancashire and Yorkshire 
 operates between Hull and Zeebrugge (Belgium). 
 Then the Dutch Government are interested in 
 the Flushing route, served by the State lines in 
 Holland, while the Belgian Government own 
 and operate the Ostend-Dover route, worked in 
 conjunction with the Belgian State lines. If the 
 British Government took over all the railways
 
 PiRc iiASE Ti:rms and Conditions. 311 
 
 here, would they continue, and themselves 
 operate, the LLnglish steamship lines mentioned, 
 or would they, in the interests of economy, stop 
 the competition and keep, say, to only one of the 
 routes ? Alternatively, if they maintained them 
 all, as at present, would the Government 
 operate them as effectively as the different rail- 
 way ccmipanies are doing? 
 
 Still further, whether the Government main- 
 tained all the I'^nglish-owned steamship lines or 
 reduced their number, what would be their 
 attitude towards the Flushino- and the Ostend 
 routes ? \\"ould they, as owners of (say) the 
 Harwich route, still afford every possible 
 facility to these foreign-owned routes to compete 
 successfully with themselves? If they did not 
 do so — to their own pecuniary disadvantage — ■ 
 might there not be tlie possibility of diplomatic 
 controversies of a kind which can be far more 
 successfully avoided when the steamship- 
 owners on this side, at least, are commercial 
 companies ? 
 
 Nor must we overlook the steamship lines to 
 France and to Ireland which are controlled by 
 competing English railway companies. Would 
 the State continue all these as well? In the 
 case of Ireland, a prodigious sum of money has 
 been spent on the Fishguard route, the advan- 
 tages of which, especially for residents in the 
 South and West of England, have been greatly 
 appreciated. In all probability, however, if the
 
 312 Railways and Nationalisation. 
 
 State had acquired all the British railways lo 
 years ago, this Fishguard route would, on the 
 abolition of rail competition, never have been 
 created. With a monopoly of all the railways, 
 the interest of the Government in creating new 
 steamship services, however necessary or desir- 
 able, would have been nil. The results might 
 have made for economy, but they would cer- 
 tainly have checked a development of the facili- 
 ties for travel. 
 
 In addition to the steamships owned by the 
 railway companies there are the coasting vessels 
 which compete severely with the railways and 
 are responsible for many of the " anomalies " 
 in railway rates. Would the Government buy 
 up the coasting steamers, or would they still try 
 to compete with them, as the railway companies 
 have done? If they did neither, and sought in- 
 stead to abolish the anomalies by not giving 
 lower railway rates on trafific between ports than 
 for equal distances inland, they would see the 
 coasting steamers profit still more at the expense 
 of the railways. 
 
 DOCKS. 
 
 In the matter of docks, we have to bear in 
 mind the very substantial interests of the Great 
 Central Railway Company at Grimsby; of the 
 London and South- Western Railway Company 
 at Southampton ; the Great Western Railway at 
 Plymouth; the Taff Vale Railway Company at
 
 Purchase Terms and Conditions. 313 
 
 Penarth Dock (Port of Cardiff) ; the Barry Rail- 
 way Company at Barry (Glamorganshire) ; the 
 London and North-Western at Garston ; the 
 Midland Railway Company at Heysham, and so 
 on. Would the Government, in acquiring the 
 railways, take over these docks and operate them 
 in competition with docks elsewhere owned or 
 operated by private companies or by munici- 
 palities? If it transferred them to independent 
 companies there would still be the question as 
 to the relation of the railway lines to docks 
 which would retain their own competing inter- 
 ests, especially in regard to the Atlantic trade. 
 
 RAILWAY HOTELS. 
 
 Control of the railway hotels, which form part 
 of the British railway companies' organisations, 
 would, at least, afford the Government the 
 opportunity of giving the world an object lesson 
 as to the way in which licensed houses should 
 be conducted; though, perhaps, after having 
 acquired the licences — of course, at their " mono- 
 poly value "—they would say that the railway 
 hotels were " redundant " and abolish them 
 accordingl3\ 
 
 RAILWAY ENGINEERING W^ORKS. 
 
 Still further, in the " forties " the railways 
 did not manufacture their own engines and roll- 
 ing stock, nor were there in existence signal and 
 electrical works, and various developments in 
 connection with the engineering department. It
 
 314 Railways and Nationalisation. 
 
 cannot be supposed that this property could be 
 acquired on the terms set out for railways alone, 
 and big sums would have to be allowed for such 
 huge railway engineering establishments as 
 those at Crewe, Swindon and elsewhere. 
 
 canals. 
 
 What would the Government do with the 
 canals owned by the railway companies, and 
 necessarily to be taken into consideration among 
 the railway properties? If they bought and 
 decided to continue the railway-owned canals, 
 would they also buy up the canals owned by in- 
 dependent companies? 
 
 There has been much talk of late about the 
 canals being nationalised and improved, if not 
 reconstructed, at a very substantial cost, to en- 
 able them to compete better with the railways, 
 or at least — and, perhaps, more especially — to 
 coerce the railway companies into lowering their 
 rates. Would, however, the State, as an owner 
 of novv more or less obsolete canals, be willing 
 to spend a large sum thereon in order mainly to 
 compete with itself as an owner of railways? 
 
 RAILWAYS OR TRAMWAYS ? 
 
 I Tow, again, would the State, as an owner of 
 railways, act towards the municipalities as 
 ow^ners of electric tramwa3-s ? The latter, as 
 everyone knows, have become formidable com- 
 petitors of the railways for the transport of
 
 Pi^RCHASE Terms and Conditions. 315 
 
 suburban residents, and there are lines of rail- 
 ways where the receipts liave recently undergone 
 a very substantial reduction in consequence. 
 \\"ith costs of construction, standing charges 
 and working expenses all much heavier, a rail- 
 wav cannot compete for short-journey traflfic 
 witli municipal tramways more or less rate-aided 
 or rate-guaranteed; and hitherto the railway 
 companies have had to see a great deal of traffic 
 taken from them by their more favoured com- 
 petitors, whom, through the local rates, they may 
 have helped to establish. Would a Railway 
 Minister, with zeal stimulated by the Chancellor 
 of the Exchequer, regard such rivals com- 
 placently, and, as a member of the Government, 
 allow the municipalities to reduce State railway 
 earnings to a still lower point? 
 
 THE Ei-FECT ON AUTOMOBILISM. 
 
 There is yet another interest which comes into 
 consideration. I read in the issue of The Car 
 for February 19, 1908 : — 
 
 There are, no doubt, many who advocate the State 
 ownership of railways from a Socialist point of view, 
 but it solely concerns in The Car not what the poli- 
 tical effect might be, but what would likely to be the 
 effect on automobilism. First of all, if the State 
 were to own the railways, it would naturally be 
 jealous of all other means of conveyance and locomo- 
 tion. There would be continual pressure put upon 
 Parliament to make the use of motor-cars and motor- 
 lorries as unprofitable as possible, lest they should 
 injure the receipts of the railways. Any such
 
 3i6 Railways and Nationalisation. 
 
 schemes as motor-roads or the improvement of exits 
 from towns would be considered largely in a com- 
 petitive sense, for the Government would be bound 
 to see that their railway system paid as well as pos- 
 sible, and all competition, therefore, would be barred 
 by every means in their power. It would, of course, 
 be to their interest that roads should not be improved, 
 so that travelling- should be confined as much as pos- 
 sible to the State railways. There are States to-day 
 in which the development of State-owned railways is 
 having- this very effect. Secondly, the taxpayer would 
 also be appealed to by both parties to avoid anything- 
 which might increase taxation, and voters would be 
 tempted to discourage any form of locomotion which 
 would compete against railway travelling, in whose 
 profits they would share. Also comfort, speed, and 
 cheapness would be matters which would not trouble 
 a Government department once competition was eli- 
 minated. Therefore I maintain that were the 
 Government to take over the railways of this 
 country there would be distinct hostility between 
 autoniobilism and the policy which would have to be 
 pursued by the Chancellor of the Exchequer, and 
 motoring and its interests would naturally go to the 
 wall. 
 
 There could hardly be a question here of 
 State purchase. But there would be the possi- 
 bility of still another conflict between State and 
 private interests. 
 
 OPPORTUNITIES FOR GRIEVANCES. 
 
 It is reasonable to assume that if the railways 
 were nationalised the supreme control of the 
 system — w'ith such subsidiary undertakings and 
 interests as might be continued in association 
 therewith — would be entrusted to a Railway
 
 Purchase Terms and Conditions. 
 
 oW 
 
 Minister at the head of a State Railway Depart- 
 ment. It can hardly be supposed that every- 
 thing would simply be given over to the Board 
 of Trade — already overburdened with duties of 
 many kinds. But the main responsibility would 
 still rest with the Government, and the para- 
 mount authority with Parliament; and one can 
 imagine to what interminable questionings, 
 debates, and ventilations of grievances great or 
 small the administration of so complicated an 
 undertaking would give rise. 
 
 The well-honoured custom of sending railway 
 grumbles to The Times would die out. In 
 future every grumbler would want " his " mem- 
 ber to " bring the matter " before " the House" ; 
 and the already limited time available there for 
 dealing with great public questions would be- 
 come still less when Ministers had to deal with 
 swarms of questions and controversies arising 
 out of the real or fancied grievances of workers, 
 travellers, traders, or persons concerned in the 
 great variety of enterprises included in the 
 operation of a State railway offering, in the cir- 
 cumstances, exceptional scope for complications 
 and criticisms.
 
 3i8 Railways and Nationalisation. 
 
 CHAPTER XIII. 
 THE QUESTION OF SAVINGS. 
 
 The one comforting conviction to which the 
 nationalisation party pin their faith on matters 
 of finance is that State operation of a unified 
 system of railways would effect such great econo- 
 mies that not only need there be no uneasiness 
 as regards results, but large savings may be 
 anticipated as well. When they come to details 
 concernings these economies and savings, the 
 adherents of the said party invariably start off 
 with the boards of directors. Elaborate details 
 are given as to the total number of boards, the 
 number of members on each board, the age of 
 each member, the fees that are paid, and so on. 
 After this it is customary to make comparisons 
 with Prussian State railway conditions — to the 
 disadvantage of our own. Thus Mr. A Emil 
 Davies says in his book on " The Nationalisation 
 of Railways " : — 
 
 If it be urged that these directors are really re- 
 quired, IiJW is it that the Prussian State railways 
 ai.e worked without a single railway 
 di recto'/? 
 
 Other writers have represented that in Prussia 
 the entire .State railway system is directed by a
 
 The Ql'estion of Savings. 319 
 
 single Minister, who takes the place of all the 
 railway directors to be found here. Therefore, 
 they say, have vState railways, save directors' 
 fees, and you may expect to live happy ever 
 after. 
 
 The fact should be borne in mind that, under 
 the system in vogue here, directors are appointed 
 by the shareholders to watch over the financial 
 interests of property belonging to them in com- 
 mon, and to control matters of general policy 
 rather than take an active part in the actual 
 details of .working management, which are left, 
 rather, to expert railway officers. If the share- 
 holders who vote them their fees considered the 
 directors were not wanted, or were not earning 
 those fees, they could decline to elect them, 
 reduce them in number, or allot them less re- 
 mimeration. Shareholders are not generally 
 given to wasting their money when they have 
 the remedy^ in their own hands. 
 
 As for the qualifications and age of directors; 
 it is certainly the case that, as a rule — and allow- 
 ing for certain exceptions — railwav directors are 
 taken from the same classes as those from which 
 members of the Government are chosen; whilC; 
 considering the value to be attached to judgment 
 and experience, as distinct from ph\sical energv, 
 there is no more reason for setting up an age 
 limit in the case of railwav directors than there 
 . is in that of Cabinet Ministers. Such an age 
 limit is rightly imposed on railway officers,
 
 320 Railways and Nationalisation. 
 
 whose laborious daily toil may involve a con- 
 siderable strain on their physical or mental 
 powers ; but the position is different in the case 
 of directors, whose function is mainly a con- 
 trolling and advisory one. 
 
 THE SYSTEM IN PRUSSIA. 
 
 Whether British railway directors earn their 
 modest fees or not, and whether or not they 
 should be put on the same level as the unfor- 
 tunate City clerk who is " too old at forty," the 
 fact remains that they would no longer be 
 wanted, and their fees would, indeed, be saved, 
 if the State bought up all the lines. But would 
 there really be any financial gain thereby? 
 
 If we look to Prussia for evidence on which 
 to base an answer to this question, we shall find 
 that the position in that country is not exactly 
 what has been represented. 
 
 The suggestion that the Railway Minister 
 there does the work of all the directors of all 
 the railway boards in the United Kingdom is 
 highly complimentary to that gentleman, but is 
 not really warranted by the facts. It is true 
 that in Prussia the Minister of Public Works 
 stands at the head of the State railway system, 
 with its 21,000 miles of lines. But the respon- 
 sibility for the operation of the system, together 
 with the fixing and adjusting of fares, rates and 
 charges, and the deciding of administrative . 
 questions in general, is divided among no fewer
 
 The Question of Savings. 321 
 
 than twenty-one " Royal Railway Directories " 
 — each, in effect, a board of directors having con- 
 trol over all working details within its particular 
 division. Each directory, again, has its central 
 office, with clerks, treasurers, book-keepers, etc., 
 and each is at the head of an elaborate organisa- 
 tion, comprising advisory council, departments, 
 sub-departments, special offices, and so on. 
 
 I am far from saying that our own conditions 
 are perfect and incapable of improvement; but it 
 seems to me that if we eliminated the boards of 
 railwav directors in the United Kingdom and set 
 up, instead, in England and Wales, Scotland and 
 Ireland, twenty-one separate and distinct State 
 departments, each operating in an assigned terri- 
 tory, with an independent staff and all the 
 routine and red-tape which State administration 
 involves, there would not be much left out of the 
 saving on the fees to directors for a general in- 
 crease of railway men's wages, or a general 
 lowering of rates and fares, to say nothing of a 
 contribution towards old-age pensions or a de- 
 crease of the income-tax. 
 
 THE RAILWAY CLEARING HOUSE. 
 
 A Strong point is also made by the 
 nationalisers of the saving that would be brought 
 about through the abolition of the Railway 
 Clearing House, with, not alone its large force 
 of clerks, but, also, the small army of 
 men whose business it is to check the 
 
 Y
 
 ?.22 
 
 Railways and Nationalisation. 
 
 numbers of wagons and tarpaulins, so that, 
 if a wagon-load of ccjmmodities should go 
 from Brighton to Wick, not onl)- will all the 
 movements of that particular wagon be known, 
 but the Clearing House clerks will have the 
 data on which to decide what proportion of the 
 rate paid shall go to each company over whose 
 lines the wagon and the tarpaulin in question 
 have passed. 
 
 I make no attempt to sav how many men are 
 thus engaged on Clearing House work outside 
 the Clearing House itself. But it has still to be 
 proved that, even bv throwing the whole of these 
 people on the unemploved list, and adding 
 together alike their wages and the directors' 
 fees, the increased expenditure in other ways, 
 following on a resort to State purchase and State 
 operation, would not more than counterbalance 
 the sum total thus saved. 
 
 OTHER ECONOMIES. 
 
 There would be savings, again, in (i) the 
 running of fewer train services; (2) having 
 fewer receiving offices; (3) better loading; (4) in 
 the fact of locomotives, carriages and goods 
 wagons being joint stock, available for general 
 use, instead of having to be returned to a 
 particular company's system. The first of these 
 savings would be subject to complaints from 
 the public as to decreased facilities; but in point 
 of fact all four can be effected, in part, at least, by
 
 Thh Question of Savings. 323 
 
 combinations or working agreements among the 
 companies themselves, without (as I shall show 
 in Chapter XVI.) anv resort to the dubious ex- 
 periment of State purchase and State operation.* 
 
 It is further argued that imder nationalisation 
 the considerable sums of money spent by com- 
 peting or enterprising companies on advertising 
 would be saved. But one may assume that the 
 companies incur this expenditure because they 
 find that advertising pays, by bringing to their 
 lines traffic they might not otherwise get. If 
 companies run excursion trains or offer special 
 facilities to tourists, they must let the public 
 know what they are doing, and this can only be 
 done by advertising. 
 
 The other expedient would be not to run ex- 
 cursions, not to offer facilities to tourists, and thus 
 save on advertising, leaving people to travel by 
 ordinary trains at ordinary fares, with the result 
 that the public would not be so well served, and 
 the traffic receipts would decrease. Such a 
 {)olicy is so far suggestive of " penny wise and 
 
 * IncidciUally I would suj^^cst, in reference to the 
 rcccivinij;" offices, that when the railways became State 
 property the British public mig-ht expect to see such 
 offices set up in even greater number in town and 
 country, on a basis akin to that of the Post Office, in 
 order to suit their personal convenience. On the other 
 hand there has been in operation in London for some 
 years, at the corner of the Strand and Norfolk Street, a 
 joint receiving- office for the London and North-Western, 
 the Midland and the Great Northern Companies. 
 
 Y 2
 
 324 Railways and Nationalisation. 
 
 pound foolish," that even the Itahan State rail- 
 ways administration are discarding it in favour 
 of a very considerable increase in their 
 advertising. 
 
 PER contra : wages. 
 
 I have here made fair allowance, I think, for 
 the various economies which nationalisation 
 might effect; but, looking still at the matter — 
 for present purposes — as a purely business pro- 
 position, apart from all questions of politics and 
 policy, there are some per contra items which 
 cannot be left out of the reckoning. 
 
 Of the cost generally of setting up a State 
 system of control, on the lines of the Prussian 
 system, I have already spoken. But there are 
 other considerations, besides, and especially 
 those relating to wages and clerkage. 
 
 The possibilities of securing higher pay and 
 fewer hours of labour constitute the main 
 reason why certain sections of railwaymen and 
 their sympathisers are now favouring nationali- 
 sation, and the full force of their political in- 
 fluence and of their own and of kindred 
 industrial organisations would be brought to 
 bear on the realisation of this aim immediately 
 the railways were acquired by the State. A leaflet 
 recently issued by the Labour Party (which 
 claims to speak on behalf of a million workers) 
 declares that "the prosperity of a State is
 
 The Question of Savings. 325 
 
 bound up in its workmen," that the railway 
 men are notoriously underpaid and over- 
 worked " and their work " too dangerous," 
 and adds, "If the railways were the pro- 
 perty of the State this would be altered, and 
 altered quickly." 
 
 Even if an " all grades movement " were not 
 actuallv started, there would still be the ques- 
 tion as to how the Government would treat the 
 clerks and the ordinary staff of workers employed 
 on the less flourishing lines. These individuals 
 at present have to be content with lower rates of 
 remuneration than are given on more prosperous 
 railways, such as the London and North 
 Western, the Great Western and the Midland, 
 because they know that their own companies 
 cannot afford to pay them more. But would 
 thev be equally content when the lines in ques- 
 tion were controlled by the Government, who 
 could not make the same excuse ? Whatever 
 policy the railway workers as a whole might 
 adopt, would not those on the poorer lines of to- 
 day demand that the Government should at 
 least level them up to the position occupied by 
 others in the same district also employed by the 
 State ? Would there not be scope even here for 
 bringing much political pressure to bear on 
 the Government, and would not concessions 
 even to this limited extent make a considerable 
 addition to the working expenses, as against the 
 savingfs in other directions?
 
 .-^26 Railways and Nationalisation. 
 
 MAINTENANCE. 
 
 A minor question, though one not to be 
 Ignored, is whether or not a Government 
 Department, having charge of the whole of the 
 railways, would want, or would be expected, to 
 standardise the maintenance, so as to have 
 general principles applying to the entire rail- 
 way system, as in the case of the Post Office, the 
 Army and the Navy. At present there are great 
 variations in regard to permanent way, railway 
 stations, rolling stock, etc., according to the 
 financial means of the companies, different ideas 
 on the part of engineers or directors, nature of 
 the traffic in particular districts, and so on. One 
 may assume there would be no idea of re-laying 
 branch lines with the heaviest types of rail 
 simply because these were used for the main 
 lines. But, apart from such extreme standardisa- 
 tion as this, there would be a good deal of 
 " levelling up " called for in regard to the rail- 
 v.ays themselves, when they became a State 
 system, just the same as there would be in 
 respect to the pay of the railway workers. 
 
 DIMINISHED GROSS RECEIPTS. 
 
 Concurrently with the increase in working ex- 
 penses in these and other directions, there would 
 be a decline in the gross receipts. 
 
 Comparing Government Departments and 
 private-enterprise organisations in general, it
 
 The Otrstion of Savings. 327 
 
 cannot be denied that the average person 
 engaged in the latter has far more initiative, zeal, 
 enterprise, and ambition in the performance of 
 his duties than one tinds in the average State 
 servant. The former takes a personal interest 
 in the prosperity of the concern with which he is 
 connected, he feels pride in its success, and he 
 does all he can to promote that success, if only 
 because he knows that on the results he can show 
 to his superior officer may depend his chances of 
 promotion, chances which seem all the greater 
 when he remembers that many of the general 
 managers have risen from the ranks. So he 
 will go out of his way to " oblige " the public, 
 especially if, by so doing, he can earn a little 
 more for the company ; he does over-work or 
 Sunday labour cheerfully when the need arises; 
 and he develops unforeseen powers of eloquence 
 when he sees a chance of getting some 
 extra traffic for the line which he regards as 
 "his." 
 
 in the case of a State Department the personal 
 equation is very different. The JState servant, 
 with fixed hours, fixed salary, fixed prospects, 
 routine duties, and no special incentives to ex- 
 ceptional energy on his own account or to con- 
 siderateness towards others, may be a faithful 
 enough servant, but he regards his position and 
 the service itself from a wholly different stand- 
 point ; he gets into a gror)ve, and he is distinctly 
 apt to make tlu^ public in general feel that he.
 
 o 
 
 28 Railways and Nationalisation. 
 
 as a representative of the State, cannot be ex- 
 pected to exert himself specially in the interests 
 of those whom he seems to treat almost as his 
 inferiors. 
 
 Possibilities such as these offer strong reasons 
 against a transfer of the railways to the State, 
 and they also suggest that, should such transfer 
 take place, the lines will do less business, with 
 a corresponding decline in gross receipts. 
 Further, whether the State railways administra- 
 tion stopped the advertising or not, they would 
 doubtless please the nationalisers by discon- 
 tinuing the large staffs of canvassers and others 
 who at present show unremitting zeal in work- 
 ing up or securing traffic for their companies. 
 Here would be another saving in salaries, but 
 here would be another cause of decline in traflic 
 and traffic receipts, because much that is done 
 by these " industrial commissioners," as they 
 might be called, consists, not merely in the 
 diversion of business from one company's lines 
 to another, but in the creation of new business 
 based on the facilities offered alike by their com- 
 panies and by the districts they serve. If you 
 stop the whole of this machinery, and substitute 
 for it a rigid system of State control, operated 
 by State officials disposed to leave the traders 
 always to come to them, the result must be to 
 check alike industrial expansion and the railway 
 receipts, although estimates as to cost and 
 results of State purchase are invariably based on
 
 The Question of Savings. 329 
 
 the assumption that the traffic will continue as at 
 present. 
 
 In connection with the possible decline in 
 gross receipts, there is the further consideration 
 that the railway companies now get a certain 
 revenue from the Government for the conveyance 
 of mails, troops, etc. Would these be carried 
 free when the railways were nationalised ? The 
 State would not, perhaps, want to take money 
 from one pocket to put into another, but the 
 loss of the revenue froin these sources would 
 affect the railway receipts. The State railways 
 might save if they were not required to pay 
 into the Treasury the sums now received from 
 the railways for income tax and passenger duty, 
 but the Treasury would lose in proportion ; and 
 though the State, as an owner of railways, might 
 refuse to be exploited by the local authorities in 
 the matter of local taxation (as the railway com- 
 panies are at present) the burden from which the 
 lines would thus be relieved — to their advantage 
 — would, probably, only fall on the shoulders of 
 the ordinary ratepayers. 
 
 Looking at the matter from no higher stand- 
 point than that of a purely business deal, and 
 bearing in mind, on the one hand, the magnitude 
 of the sum that must be paid, not alone for the 
 railways, but, as I have shown, for their many 
 subsidiary enterprises as well ; and, on the other, 
 the increased expenditure and the decreased 
 receipts which would have to be set against the
 
 330 Railways and Nationalisation. 
 
 possible economies, the British taxpayer at 
 whose risk the purchase would be made should 
 indeed ponder well before he gives his assent to 
 so huge a gamble.
 
 Ttip: Irish Rmfavays. 
 
 CHAPTER XIV. 
 
 THE IRISH RAILWAYS. 
 
 " Perhaps," said the Globe of May 9, 1908, in 
 referring to a communication received from a 
 correspondent who, while opposed to railway 
 nationalisation in Great Britain, thought there 
 was something to be said for nationalisation of 
 the Irish lines, " Mr. Lloyd-George may feel 
 tempted to move the Ministry to make an ex- 
 periment in this direction, before plunging into 
 the vastly different and more complicated 
 question of English nationalisation." It has 
 indeed, been suggested in various directions that 
 this should be done, and proposals on the sub- 
 ject have been brought forward by a number of 
 witnesses examined before the Vice-Regal Com- 
 mission on Irish Raihvays, though other wit- 
 nesses have strongly dissented. In the circum- 
 stances, therefore, it may be of interest if I give 
 here a brief survey of the position in Ireland. 
 
 FACTORS IN THE SITUATION. 
 
 Comparisons of Irish conditions — whether in 
 the matter of railway rates or otherwise — with 
 conditions existing in countries on the Con- 
 tinent of Europe have been attempted by many 
 critics of the Irish railways ; but they must needs
 
 332 Railways and Nationalisation. 
 
 be delusive and unsatisfactory. In my own 
 opinion Ireland, in regard to matters of trans- 
 port, must be judged from her own standpoint 
 rather than from that of other lands. By reason 
 of her geographical position, Ireland can have 
 no such transit traffic as that which adds 
 so much to the prosperity of Belgium and 
 Holland. She has not even the same chance as 
 England has had to become a central mart for 
 the reception and redistribution of the world's 
 commerce. She is simply a starting point or a 
 terminus for traffic which she either originates or 
 else receives to supply her own needs. For 
 Ireland to be in a position similar to that of 
 Belgium or Holland — so far as geography would 
 allow — it would be necessary that American com- 
 merce for England and the Continent of Europe 
 should be landed at (say) Cork, and taken on to 
 Dublin or Belfast for reshipment, the railways 
 thus having a chance of handling transit as well 
 as domestic, export and import freight. 
 
 Of great industries in Ireland, employing a 
 large number of persons, there are (apart from 
 agriculture) only three — the linen industry in 
 north-east Ulster, ship-building in Belfast, and 
 Messrs. Guinness's Brewery in Dublin. The 
 production of minerals, again, is very small. A 
 large proportion of the surface of the country 
 consists of bog or barren land; no less an area 
 than 3,600,000 acres, or one-sixth of the total, 
 has been scheduled under the designation of
 
 The Irish Railways. 333 
 
 "congested districts" whose inhabitants — one- 
 seventh or one-eighth of the total population of 
 the country — are thus certified to be in need of 
 public aid. The decrease in the population itself 
 is continuous. 
 
 In all these respects, therefore, Ireland differs 
 essentially from Continental countries, and she 
 so far differs from Great Britain that, whereas 
 there has never been any question of State aid 
 being given to railways in England and Scot- 
 land, the Sister Isle has been regarded ever since 
 the earliest days of railway history as requiring 
 exceptional treatment. 
 
 STATE LOANS. 
 
 A Royal Commission appointed in 1836 to con- 
 sider what steps should be taken to provide 
 Ireland with railways recommended that — in the 
 assumed unwillingness of private capitalists to 
 come forward — the Government should them- 
 selves construct certain main lines, and a scheme 
 to this effect was drawn up by the Government, 
 and approved by Parliament. It fell through 
 however, and railway construction in Ireland 
 was left to private companies as in England and 
 Scotland, but with this difference — that the 
 Government of those days advanced substantial 
 loans out of the Consolidated Fund to the Irish 
 companies to assist them in raising the capital 
 they required, such loans being repaid as the
 
 334 Railways and Nationalisation. 
 
 finances of the companies permitted. By 1865 
 the sum total of the advances thus made was 
 ^'2,364,000, of which ^"1,209,000 had then been 
 refunded. 
 
 baronial guarantees. 
 
 There was also introduced by the Tramways 
 Act of i860 a system under which guarantees of 
 the payment of interest on capital expenditure^ 
 on tramways or railways authorised by the Lord 
 Lieutenant were made by the " baronies " passed 
 through. These "baronies," I might explair 
 for the benefit of those unfamiliar with the term, 
 constitute the largest sub-divisions of counties in 
 h'eland. Prior to the Local Government Act of 
 1898 and the creation of County Councils, the 
 affairs of the baronies were administered by 
 grand juries, who, in addition to their judicial 
 duties at Assizes, undertook the ordinary county 
 business and assumed financial responsibilities 
 on the credit of the rates. 
 
 In 1883 the Tramway and Public Companies 
 Act (Ireland) supplemented the baronial 
 guarantee of interest on capital required in the 
 construction of tramways (in which were in- 
 cluded light railways) by a recoupment from the 
 State of one-half the amount paid by the locality 
 in interest not exceeding 2 per cent, per annum. 
 Schemes under this Act had to be approved by 
 the grand juries of the districts concerned, but 
 one of various objections raised against the Act
 
 The Irish Rah. ways. 335 
 
 was that it " favoured the creation of small com- 
 panies, the management of which was not likely 
 to be as efficient as that of larger companies able 
 to command a more highly qualified staff," Nor 
 did the Act serve the poorer districts it was 
 specially desired to reach. 
 
 STATE GRANTS. 
 
 A further development followed in 1889, W'hen 
 the Light Railways (Ireland) Act — known as 
 Mr. Balfour's Act — introduced the principle of 
 free grants by the Government for light rail- 
 ways either to be constructed by railway com- 
 panies already having lines open for traffic, or to 
 be taken over by such companies and managed 
 and maintained by them, when constructed. An 
 essential preliminary, however, was a declaration 
 by the Lord Lieutenant that such light railways 
 were desirable, and that, owing to the circum- 
 stances of the district, special State assistance 
 was required. 
 
 As it was intimated that the Government were 
 prepared to spend considerably over a million of 
 money under this Act, there was no lack of 
 promoters desirous of showing them how- to ac- 
 complish their aim, and far more schemes were 
 scheduled than could possiblv be carried out. 
 vSo, in 1896, came the Railways (Ireland) Act, 
 which improved the procedure, helped to 
 restrict the schemes to those that were really
 
 336 Railways and Nationalisation. 
 
 practicable and necessary, and further laid down 
 that, except in the case of a railway constructed 
 wholly or mainly in a congested districts county, 
 the Government grant should not exceed one- 
 half of the total amount required for the con- 
 struction of the railway. A further stipulation 
 in regard to this vState aid was that all reason- 
 able assistance and facilities should be given by 
 those locally interested. 
 
 In the case of some of the light raiKvays con- 
 structed under the Act of 1889 the working com- 
 panies (as was pointed out by Mr. Joseph Tat- 
 low, manager of the Midland Great Western of 
 Ireland Company, in the evidence he gave before 
 the Vice-Regal Commission on behalf of the 
 Irish railway companies), preferred to have the 
 lines made as ordinary railw^ays (though with 
 somewhat lighter rails), and themselves found 
 the balance of the capital required — more than 
 ;i{^5oo,ooo in all — to make the lines of the 
 ordinary gauge and character. Not only this, 
 but a number of the State-aided lines are being 
 operated by the companies either at no profit or 
 even at a loss to themselves. 
 
 PRESENT POSITION. 
 
 The position to-day in regard to Irish rail- 
 ways constructed with the help of public money 
 may be stated as follows, on the basis of figures
 
 Tiir: Irish Railways. 337 
 
 given by Mr. Tatlow in the course of iiis 
 evidence (June 16 — 19, 1908) : — 
 
 Railways constructed under Tramways 
 (Ireland) Acts, i860 to 1883 : — 
 Mileage ... ... ... ... 30of miles 
 
 Capital guaranteed b} baronies ... ^^1,104,980 
 Other capital ... ... ... ;£^ 144, 300 
 
 Liability lor interest and loss on 
 working (igoO) : — 
 
 Baronies ^^3i,493 
 
 Treasury ... ... ... ;,£,"i7,684 
 
 Railways constructed under Mr. Bal- 
 four's Light Railways Act of 1889 
 and subsequent Acts : — 
 
 Mileage ... ... 305^ miles 
 
 Free Government contributions ... ;^^i,552,72i 
 Capital guaranteed by baronies ... ^^^'277, 000 
 Liability for interest and loss on 
 working (1906) : — 
 
 Baronies ... ... ... ^<3,697 
 
 Treasury ... ... ... ^^3,187 
 
 Total mileage of Irish railways... ... 3,36:^ miles 
 
 Total length of railways under the 
 Tramways and Light Railways 
 
 Acts 606I miles 
 
 Percentage of total railways ... ...18 per cent. 
 
 Liability for interest and loss on work- 
 ing (1906)— 
 
 Baronies ... ... ... ... ^{5^35, 190 
 
 Treasury ... ... ... ... ^'20,871 
 
 Total number of lines inchided in 
 
 figures ... ... ... ... ... 32 
 
 Number on which working expenses ex- 
 ceed receipts ... ... ... ... 10 
 
 The 3,363 miles of railway in Ireland are at 
 present owned by 38 railwav companies, of 
 which 28 are working companies, though of 
 
 z
 
 S3^ Railways and Nationalisation. 
 
 these the number which are of sufficient import- 
 ance to count among the " principal " com- 
 panies is only six. So recently as 1891 there 
 were 17 more companies, but these, with 503 
 miles of lines, have since been absorbed by the 
 " great " companies, which have become entitled 
 to that designation mainly because of successive 
 amalgamations of smaller lines. 
 
 THE QUESTION OF EXTENSIONS. 
 
 The facts I have already given show that, if 
 still more railways are wanted in Ireland, the 
 machinery which has already supplied 600 miles 
 with local or Imperial assistance is still available 
 without any reason for a resort to nationalisa- 
 tion on this ground, at least. In fact, Mr. 
 George A. Stevenson, Commissioner of Public 
 Works in Ireland, said to the Vice-Regal Com- 
 mission in reference to certain figures he gave 
 in the course of his evidence (December 13, 
 1 go6) : — 
 
 Mere fig^ures do not give a fair idea of the value 
 of the extensions ; but the map will show how 
 railways have been gradually pushed forward into 
 remote and, in some cases, unpromising locali- 
 ties, so that with one or two exceptions it would he 
 diflicult to point to any considerable district not 
 within reasonable distance of a railway, having re- 
 gard to the fact that railway extensions must have 
 some relation to the population to be served and 
 its distribution and the amount of the traffic to be 
 expected. 
 
 In this connection I may recall the fact that the
 
 The Irish Rah, ways. ^3'^) 
 
 Duke of Devonshire's 1865 Commission said in 
 their report: — " Ireland has certainly no reason 
 to be dissatisfied with the extent of railways con- 
 structed in it under the present system. In pro- 
 portion to the resources of the country it is fully 
 ('(|ual to that of the lines in the rest of the United 
 Kingdom." These observations were written 
 over 40 years ago, and since then many new 
 lines have been constructed; but there still exists 
 a certain demand for railways to be con- 
 structed with a total disregard for the qualifica- 
 tions mentioned by Mr. Stevenson. So long as 
 the Government find the money, such lines will 
 always be asked for, and nationalisation would 
 give a distinct impetus to fresh requests. It is 
 noticeable, however, that when any of the loss 
 falls upon the district served, the anxietv for un- 
 productive lines is much less acute. I gather 
 from a question put by Mr. Sexton to Mr. 
 Stevenson (574), that in 1905 the operation of 22 
 lines of railway resulted in a levy upon the 
 baronies, "very heavy in some cases," and 
 that in the case of the Cavan and Leitrim Rail- 
 way " the ratepayers have been so worried bv 
 the heavy liability that they will not consent to 
 even a small extension of a few miles." 
 
 Mr. Spxlon's suggestion was that " future light 
 railways in Ireland will very likely have to be 
 built by some central authority provided with 
 public funds." I take it this means, in other 
 words, that such railways, provided for districts 
 
 z 2
 
 340 Railways and Nationalisation. 
 
 where the traffic is inadequate to cover interest 
 and working expenses, are to be regarded as 
 charitable institutions, supported by the com- 
 pulsory contributions of the general taxpayer. 
 
 Turning once more to the Report of the 1865 
 Commission, I further read there, in reference to 
 Ireland : — 
 
 When capitalists undertake to construct a railway 
 for the conveyance of persons and things at a lower 
 rate than they can otherwise be conveyed, they un- 
 questionably confer a great advantage on the 
 public ; but this furnishes no reason for the Govern- 
 ment undertaking to reduce still further the cost of 
 conveyance by giving the aid of its credit, or by 
 making good the loss out of the public treasury. 
 
 The proposal to give a subsidy is, therefore, to 
 pay out of the public treasury for a further reduc- 
 tion of the cost of conveyance, when a great reduc- 
 tion has already been made by means of a special 
 contrivance, but to pay nothing when no reduction 
 has been made because the ordinary road is obliged 
 to be used. 
 
 NATIONALISATION AND SAVINGS : DIRECTORS. 
 
 The fact that there are still so many separate 
 railway companies in a country of no greater 
 proportions than those of Ireland is regarded 
 as a strong argument in favour of nationalisa- 
 tion of the Irish lines, at least; the advocates of 
 this proposal laying special stress on the savings 
 which they think would be effected in the fees 
 paid to all the different boards of railway direc- 
 tors.
 
 Thk Irish Railways. 341 
 
 At first sight there certainly does appear to be 
 good reason for their argument. But, on going 
 into details, one finds that the total remuneration 
 of the Irish railway directors in 1906 amounted 
 to ^{,'18,656, which works out at an average of 
 ^'491 per company, and ^'79 per director; while 
 as the directors of the six principal companies 
 received ^,'15,250 of the total, this leaves only 
 /^3,4o6 for the remaining 32 companies — an 
 Hverage of /,'io6 per company. Chairmen and 
 directors of small companies get, practically, 
 out-of-pocket expenses only ; those of the large 
 companies may, in return for their fees, be re- 
 quired to attend at the head offices five out of 
 six days a week, and spend much time in com- 
 mittees. 
 
 The figures given do not suggest that, after 
 paying the salaries of those who would work the 
 State department taking the place of the boards 
 of directors, under a nationalisation scheme, 
 there would be much to go towards a general 
 reduction of railway fares, rates and charges in 
 Ireland. Far more than ^"18,000 a year, one 
 would think, might be saved by the existing 
 companies, if absolutely necessary, without re- 
 sorting to an experiment which is certainly 
 speculative, and would be attended by some 
 degree of financial risk. 
 
 Incidentally I might mention that one of the 
 witnesses examined before the Vice-Regal Com- 
 mission, iMr. O'Dea, of the Irish Reform Asso-
 
 342 Railways and Nation m.isation. 
 
 ciation, suggested in his evidence that by the 
 conversion of the Irish railways into one system, 
 there might be effected a saving of a quarter of 
 a milhon. One of the Commissioners, Mr. J. 
 A. F. Aspinall (General Manager of the Lanca- 
 shire and Yorkshire Railway Company), there- 
 upon asked, " Supposing your figure of a 
 {juarter of a million to be right, have you ever 
 divided the total tonnage of goods carried over 
 all the Irish railways into that quarter of a 
 million, so as to be able to assign how much you 
 would be able to reduce the rate per ton to a par- 
 ticular place?" The witness replied, "Well, 
 1 never made that calculation." If the quarter 
 of a million yielded such presumably small 
 results, worked out on this basis, what would be 
 the case with the aforesaid balance of ^'18,000 
 to be saved by the abolition of the boards of 
 directors — even if w'e increase the amount some- 
 what by throwing out a few chief officers as 
 well ? 
 
 THE IRISH RAILWAY CLEARING HOISE. 
 
 It is further assumed that under a system of 
 nationalised or even unified railways in Ireland 
 there would no longer be any need for the Irish 
 Railway Clearing House, and that money would 
 be saved in this way. Once more we get an 
 apparently sound proposition. But it seems 
 that the staff of clerks engaged in the establish- 
 ment in question are concerned far less in regu-
 
 The Irish Rah. ways, 343 
 
 lating accounts between different railway com- 
 panies in Ireland than they are in dealing with 
 the charges, etc., on traffic passing between 
 Ireland and England. The Clearing House 
 would thus certainly have to be retained. 
 
 the SPEXDINCi DEPARTMENTS. 
 
 Nor, according to the railway witnesses 
 examined before the Vice-Regal Commission, 
 would there be much chance of a nationalised 
 railway system in Ireland effecting substantial 
 savings in the three great spending departments 
 — traffic, permanent way, and locomotive. 
 
 From the point of view of a Prussian vState 
 railway administrator the goods service in Ire- 
 land would certainly be open to criticism. In 
 order to facilitate despatch, and satisfy, especi- 
 ally, traders who keep small stocks and want 
 earlv delivery, goods received by the railway 
 companies up to six o'clock in the evening are 
 loaded at once, sent off by night trains, and 
 (with few exceptions) delivered early the next 
 day at any point along the line. The running 
 of the night trains increases the expense, and the 
 prompt despatch of consignments means that the 
 average load carried per railway wagon is only 
 about 2^ to 2^ tons. Nationalise the system on 
 the Continental model ; engage a Prussian rail- 
 way expert, if necessary, to show the Irish State 
 railway people how they should operate the
 
 344 Railways and Nationalisation. 
 
 lines on the most economical German plan, and 
 some decrease in working expenses might then 
 be anticipated ; but it would be mainly by keep- 
 ing back consignments for a day or two, or even 
 longer, whenever necessary, in order to make up 
 better loads, and by charging double rates to 
 traders who wanted to have their consignments 
 sent by " fast " goods trains, or four-fold rates 
 for despatch by the " express " of which the pre- 
 sent goods service in Ireland is practically the 
 equivalent. Economies through nationalisa- 
 tion ? Why, certainly, they could be made, in 
 the way here suggested. But what would the 
 Irish traders say? 
 
 The prospect of savings on permanent way is 
 doubtful; that there might have been savings in 
 this direction in the past is undeniable. " In 
 the early days of the system of railways," Mr. 
 Stevenson told the Vice-Regal Commission, 
 " the Board of Trade requirements were really 
 excessive, very excessive, and they to some 
 extent recognised that by revising their require- 
 ments as to signalling. For instance, certain 
 arrangements in the lines built under the Act of 
 i8g6 are much less burdensome than those built 
 under the Act of 1889." " Ireland, a sparsely 
 populated agricultural country," said Mr. 
 Tatlow, before the same authority, " is subject 
 to the same legislative enactments, the same 
 Board of Trade regulations and requirements as 
 England; the same costly signalling, block
 
 The Irish Railways. 345 
 
 working, continuous brakes, foot-bridges, plat- 
 forms, etc., and the same restrictions with 
 regard to mixed trains. These have greatly in- 
 creased the cost of railway working." 
 
 As for savings in the locomotive department, 
 some of the best economies already claimed by 
 the Irish companies of late years have been 
 through spending money on the acquiring of 
 more powerful locomotives capable of drawing 
 heavier loads, thus reducing the goods train 
 mileage run. 
 
 INCREASKS IN EXPENDITURE. 
 
 Assume, however, for the sake of argument, 
 that, in one way or another, railway nationalisa- 
 tion in Ireland might lead to a reduction of 
 expenditure in some directions. Would there 
 not, in all probability, be an increase in others? 
 
 When the Government acquired the railways, 
 demands would be made for a further provision 
 of unremunerative lines — notwithstanding Mr. 
 Stevenson's remarks on the approximate com- 
 pleteness of the present system. Residents in 
 districts already supplied with railways of a 
 primitive type — though, perhaps, now serving 
 their purpose — would want to have them recon- 
 structed and brought up to date. Small lines 
 taken over and made available for through 
 traffic as part of one large unified system would 
 have to undergo considerable improvements, in- 
 volving much expenditure, to place them on the
 
 346 Railways and Nationalisation. 
 
 same level of efficiency as the remaining portions 
 of the system. 
 
 Many of the smaller railways in the backward 
 parts of Ireland are narrow-gauge lines, built to 
 serve exclusively local purposes, and with no 
 idea that it would ever become necessary to 
 change them to the standard gauge and link 
 them up with the net-work of Irish railways in 
 general. These lines, especially, would form no 
 real asset, but involve a considerable expendi- 
 ture, either for a larger company or for the 
 vState, in taking them over, and this, too, with- 
 out anv prospect of an equivalent increase in 
 traffic. 
 
 Permanent way, rolling stock, and railway 
 stations on all these smaller lines w^ould need to 
 be brought up to the higher standard. Bridges 
 would require to be re-built, curves and gradi- 
 ents would require modification to adapt them 
 to a heavy broad gauge raihvay ; in fact, the 
 lines would practically have to be re-constructed. 
 
 When all this had been done, and the pre- 
 viously local and independent lines had been 
 turned into part of a State system, salaries and 
 wages would have to be levelled up at a very 
 considerable expense. 
 
 Then the traders and travellers who are pre- 
 pared to accept all sorts of excuses for the short- 
 comings of small Irish lines, in out-of-the-way 
 places, owned by companies which can some- 
 times only be kept going by baronial guarantees,
 
 TiiK Irish Railways. 347 
 
 would be far less tolerant Avhen those lines were 
 taken over by the Government or even by a 
 " great " company. They would want better 
 services and better accommodation, and the 
 traders, especially, would further be more dis- 
 posed to send in " claims " on any and every 
 possible occasion. 
 
 SOME RISKS AND AN ALTERNATIVE. 
 
 How, under State ov\nership, all these im- 
 provements and concessions, together with sub- 
 stantial reductions in rates and fares, would be 
 demanded with never-ending persistency, either 
 from the State railway department or from 
 the Government, and how refusals would be 
 made the subject of grievances to be brought 
 before Parliament itself, can be readily imagined 
 by those who are familiar with the nature of 
 Irish politics in general. 
 
 Without going to the extreme of State pur- 
 chase, it should be possible to reduce still further 
 the number of railway companies in Ireland by 
 continuing the policy of amalgamation; and 
 there are certainlv a number of the lines that 
 might thus be dealt with, although there are 
 others, operating independently of the large 
 systems, which, small as they are, may be 
 already serving a very useful purpose, and one 
 that would not necessarily be increased by the 
 loss on their part of independent existence. The 
 advantages of greater unity, while still pre-
 
 348 Railways and Nationalisation. 
 
 serving the element of competition, might thus 
 be secured without the various risks of a system 
 of State ov^nership under which competition 
 would no longer exist at all. 
 
 IRISH traders' grievances. 
 
 With the full catalogue of grievances ad- 
 vanced by Irish traders and others before the 
 Vice-Regal Commission on Irish Railways dur- 
 ing the course of over two years' sittings, I 
 cannot attempt here to deal. Many of those 
 grievances were certainly of a kind that called 
 for inquiry and explanation, and to this extent, 
 at least, the sittings of the Commission will do 
 good. Still more were based on anomalies or 
 misconceptions arising out of geographical fac- 
 tors, water competition, or other circumstances 
 which may well have led to erroneous impres- 
 sions. In one instance a witness advanced 
 figures to prove that the railway fares in Ireland 
 are substantially higher than those in England. 
 These figures were for many months accepted 
 in Ireland as trustworthy, until the first of the 
 railway officers to be called showed that the 
 witness in question had simply divided total 
 passenger receipts by total number of passen- 
 gers, without taking into account the average 
 distance travelled. He had, in fact, ignored the 
 enormous number of penny and twopenny fares 
 in and around London; whereas in Ireland, 
 where there is no suburban or inter-urban rail-
 
 The Irish Railways, 349 
 
 way traffic on anything like tiie same scale of 
 magnitude, the average distance travelled per 
 passenger is substantially higher, and the 
 average payment per third-class passenger is, 
 consequently, higher than in England; though 
 when like distances are compared, the average 
 Irish fare is lower, owing, mainly, to the practice 
 of charging considerably less for a return ticket 
 than the sum of two single fares. 
 
 As regards the grievances of individual 
 traders, I give a few examples which I have 
 come across in looking through the published 
 evidence : — 
 
 (1) A complaint that sevenpence was charged 
 for the transport of 28 lbs. of tobacco carried 
 from Belfast to Monaghan, this being, the wit- 
 ness said, at the rate of 46s. 8d. per ton, instead 
 of the nominal rate of i8s. 6d. per ton. (Me had, 
 of course, been charged the " small parcels " 
 scale.) 
 
 (2) A complaint by a witness that he had had 
 a beast killed in transit. Asked when it occurred, 
 he replied " about 25 years ago." 
 
 (3) A complaint that the railway companies do 
 not prtjvide cases in which dead pigs can be 
 hung up in the vans, and so removed direct to 
 the markets. 
 
 (4) A complaint that the rate of 3s. 6d. per 
 ton, including terminals, for carrying grain a 
 distance of 17 miles, was excessive. 
 
 (5) A complaint that the rate for Irish bacon
 
 350 Railways and Nationalisation. 
 
 from Enniskillen to Liverpool was higher than 
 that for American bacon from Liverpool to 
 Enniskillen ; though the witness admitted that if 
 the Irish bacon were packed in boxes (like the 
 American bacon) instead of in bales, it would go 
 at the same rate. Asked why he did not adopt 
 the system which allow^ed of the better loading 
 of the wagons, and thus secure the lower rate, 
 he replied, " The trade won't allow us." 
 
 WHAT THE COMPANIES HAVE DONE. 
 
 It will be for the members of the Vice-Regal 
 Commission, as the result of their exhaustive 
 and most painstaking inquiry, to express their 
 views alike on these and on the other much more 
 weighty questions that have come before them ; 
 and it will certainly be interesting to learn 
 whether they think that the indictment against 
 the Irish railway companies (who have avowedly 
 been " on their trial ") has been proved, or 
 whether they are satisfied that the companies 
 have had a greater and more practical desire to 
 serve Irish interests than they have received 
 credit for. 
 
 The evidence has, at least, brought out some 
 points in favour of the railway companies which 
 can be set against the complaints and grievances. 
 
 To get fish on the English markets as quickly 
 as possible, the Irish railway companies run 
 special trains at an average speed of 35 miles an
 
 Tfie Irish Railways. 351 
 
 hour, for distances up to 240 miles, with loads 
 of as small a quantity as 10 .tons or even less; 
 while fish merchants not certain of the best mar- 
 ket are allowed to consign to Holyhead, Liver- 
 pool, or Fishguard, the consignments to be dis- 
 tributed thence in accordance with telegraphed 
 instructions. An inclusive throughout rate is 
 charged, although there are, in effect, two com- 
 plete transactions. 
 
 Of live-stock fairs in Ireland there are, on an 
 average, 20 a day, excluding Sundays. The 
 traffic to and from these fairs is worked mostly 
 by special trains. In 1906 one of the Irish 
 railway companies ran 161 specials, and another 
 ran 1 19 specials, each with ten wagons of live 
 slock, or fewer than ten. To allow of live stock 
 being shipped by a particular boat a railway 
 company will despatch a special train, in no way 
 warranted by the number of wagons run. In the 
 case of cross-country traffic they also forward 
 live stock by passenger trains, at the goods train 
 rates, in order that time may be saved. 
 
 In a large number of instances specially low 
 rates are granted to encourage struggling indus- 
 tries, while nearly 80 per cent, of the goods 
 traffic on the Irish railways is carried at special 
 rates. It was suggested by some of the wit- 
 nesses that the railway companies required an 
 industry to be full grown at its birth before 
 making concessions. To this it was replied that 
 the companies often did not wait even to be
 
 352 Railways and Nationalisation. 
 
 approached by the parties interested, but them- 
 selves took the ini4:iative, acting on information 
 supplied by station - masters and canvassers, 
 although the companies had had some unfortu- 
 nate experiences in the way of giving rates and 
 facilities which the results did not justify. 
 Farmers and others, it was added, could get 
 further advantages if they would only co-operate 
 more freely, and avail themselves of the existing 
 lower rates for large or grouped consignments, 
 instead of sending individual consignments at 
 the higher rates. 
 
 A substantial proportion of the passenger 
 traffic in Ireland is carried at considerably less 
 than the ordinary fares. Among the special 
 facilities thus offered are market tickets (at slightly 
 over a single fare for the return journey) issued 
 weekly at a large number of stations; afternoon 
 tickets, to allow of residents within 30 miles of 
 Dublin going there to do shopping, or to visit 
 theatres, concerts, etc. ; traders' season tickets at 
 reduced rates; week-end tickets at about a single 
 fare and one-eighth ; tourist tickets; reduced fares 
 for agricultural shows, exhibitions, sports, in- 
 dustrial association meetings, etc.; and even free 
 season tickets for a term of years to persons 
 erecting a new house within a given radius of 
 certain stations. So far does the general practice 
 extend that Lieutenant-Colonel Plews, general 
 manager of the Great Northern of Ireland Rail- 
 way Company, informed the Vice-Regal Com-
 
 The Irish Railways. 353 
 
 mission (June 19, 1908) that on his company's 
 lines 51 per cent, of the passengers carried in 
 1905 travelled with tickets issued at cheap fares. 
 
 The Irish railway companies have also done 
 much to foster travel in Ireland by erecting or 
 taking over and conducting well-equipped hotels 
 in the interest of the tourist traffic, their expen- 
 diture under this head alone in recent years 
 exceeding ;^'5oo,ooo. 
 
 There is no need for me to go into details as 
 to the money expended in Ireland on the im- 
 provement of permanent way ; the provision 
 of better rolling stock (including breakfast and 
 dining cars); the enlargement of stations, etc.; 
 nor need I reproduce the available statistics 
 showing that, although the population of Ireland 
 has steadily declined, the traffic on the Irish rail- 
 ways has, during the last 15 years at least, steadily 
 increased. What I am here mainly concerned in 
 is the suggestion, which I now- make, that, in 
 view of the facts already given, it is very doubt- 
 ful indeed if State ownership of the Irish rail- 
 ways could have done more for the Irish people, 
 even if it would have done anything like so 
 much. 
 
 AN ELECTIVE IRISH AUTHORITY. 
 
 I will not attempt to indulge in any forecast of 
 the result of the inquiry by the Vice-Regal Com- 
 mission on Irish Railways; but on one phase of 
 the general subject dealt with by them I should 
 
 A A
 
 354 Railways and Nationalisation. 
 
 like to express a personal opinion, inasmuch as it 
 falls within the scope of the matters which the 
 present volume is designed more especially to 
 discuss. 
 
 Questions put to various witnesses by Mr. 
 vSexton were to the following effect : — Did they 
 not think that an elective Irish authority, acting 
 under the influence of, and being responsible to, 
 Irish opinion, and respecting the wishes and 
 interests of the people, with a working board of 
 railway experts subject to this supervising autho- 
 rity, would be much more likely to accomplish 
 the necessary reforms on the Irish railways? 
 My own reply thereto would be given thus : — 
 The experience of other countries, and especi- 
 ally of the British Colonies, shows that under a 
 condition of State ownership and operation it 
 becomes practically impossible (unless in the case 
 of an exceptionally strong Government) for the 
 railway experts who nominally control the rail- 
 ways to conduct them efficiently, on business 
 lines, and free from those political influences 
 which must inevitably prevail more or less when 
 the supervising authority is a popularly-elected 
 body, itself subject to pressure from electors or 
 others who are inspired mainly by considerations 
 of self-interest, and know nothing of, and per- 
 haps care less for, those manifold complexities 
 and intricate problems by which the operation of 
 railways under really sound conditions must 
 necessarily be attended. Sucli political influ-
 
 The Irish Railways; 355 
 
 ences may be kept down somewhat in a country 
 with an autocratic Government like that of 
 Prussia; but in Ireland there would be, in a pre- 
 eminent degree, the two-fold risk : (i) of mem- 
 bers of the supervising authority seeking to 
 retain the favour of their constituents by securing 
 for them railwav concessions regardless of the 
 effect thereof on the railways or on the public 
 funds on which they would expect to draw; and 
 (2) of Irish traders and others themselves en- 
 deavouring to force such action on their repre- 
 sentatives, whether the latter approved of it or 
 not. 
 
 Looking, therefore, on the one hand, at the 
 example of the colonies, and, on the other, at the 
 political conditions in Ireland itself, my own 
 opinion is that the plan of having either a State- 
 owned, or even an amalgamated, system of rail- 
 ways in Ireland controlled by a popularly-elected 
 local body would create very great difficulties, 
 would produce far less effective management than 
 at present, and, apart from the great probability 
 of political complications, would lead to such 
 financial results that the lines could only be 
 efficiently maintained by becoming a charge, 
 more or less, upon the general taxpayer. 
 
 I am, therefore, firmly convinced, in my own 
 mind, and as the result of such inquiries as I 
 have been able to make, that, whatever the future 
 of the Irish railways may be, and whatever 
 
 A A 2
 
 356 Railways and Nationalisation. 
 
 changes or reforms in the Irish railway system 
 may otherwise be found desirable in the interests 
 of the community, it will be to the advantage of 
 Ireland herself that the element of commercial 
 operation in the working of those railways 
 should be retained.
 
 State Railways and National Prosperity. 357 
 
 CHAPTER XV. 
 
 STATE RAILWAYS AND NATIONAL 
 PROSPERITY. 
 
 By several of the witnesses examined before 
 the Viceregal Commission on Irish Railways, 
 the view was expressed that the prosperity of 
 Germany, Belgium, Holland, and Denmark is 
 greatly due to the possession by those countries 
 of State railways; and the witnesses in question 
 left it to be inferred that if Ireland, also, had 
 State railways, she would be likely to secure an 
 equal degree of economic advancement. 
 
 The industrial and commercial well-being of 
 any nation is, no doubt, greatly influenced by 
 the possession of an efficient railway system, 
 and, where this cannot be supplied through 
 private enterprise, it is quite right ihat the State 
 should meet requirements. But the principle of 
 vState ownership of railways is not essential to in- 
 dustrial and commercial success — a fact which 
 is proved by the case of England, whose 
 achievements in this direction (achievements at 
 one time much more pronounced than those of 
 any of the other countries mentioned) have 
 been secured under a system exclusively of com- 
 pany-owned railways. Nor has Government
 
 358 Railways and Nationalisation, 
 
 ownership of railways been found requisite to the 
 industrial progress of the United vStates of 
 America. 
 
 ECONOMIC POSITION OF GERMANY. 
 
 Then, looking at the purely economic aspects 
 of the question, the great advance in the 
 prosperity of Germany of late years has been 
 due less to the ownership of her railway systems 
 by individual States than to the enormous 
 development of her coal, iron, and other in- 
 dustries. In regard to coal, a recent report by 
 the British Consul-General at Frankfort shows 
 that in 1906 the total production of mineral coal 
 in Germany was 136,480,000 tons (as compared 
 with 107,449,000 tons in 1902), of which 
 Prussia's share was 127,871,000. A later return, 
 published in the " Engineering vSupplement " of 
 The Times, gives the following figures respect- 
 ing the collieries in the Ruhr district of West- 
 phalia : — 
 
 
 1893. 
 
 1907. 
 
 Total output of coal ... 
 
 Value ... 
 
 Men employed ... • 
 
 38,613,000 tons. 
 
 / 1 2,378,000 
 
 146,440 
 
 80,155,000 tons. 
 
 ^40,000,000 
 
 300,000 
 
 In regard to iron ore, Lorraine furnished, in 
 1906, over 12,000,000 tons of this commodity 
 towards the very great amount required by 
 German ironworks, themselves established on
 
 State Railways and National Prosperity. 359 
 
 such a scale that in Westph^dia alone they give 
 employment to 142,000 workers. 
 
 Until Ireland can control like supplies of 
 native coal and iron ore, at least, no mere 
 transformation in the system of railway-owner- 
 ship could possibly enable her to emulate 
 Germany's industrial prosperity. 
 
 BELGIUM : HOLLAND : FRANCE. 
 
 Like considerations apply to any comparison 
 of Ireland with Belgium, where there are at 
 present no fewer than 122 collieries, with 296 
 pits in operation, the output for 1906 being 
 23,609,000 tons. The population is 614 to the 
 square mile, as against 137 to the square mile 
 in Ireland, and industries of all kinds abound, 
 which is certainly not the case in Ireland. 
 Holland, again, is much more indebted to water 
 transport than to rail transport, and, as I have 
 already shown, both Belgium and Holland are 
 greatly favoured by their geographical position, 
 which leads to the passing of so much uiter- 
 national traffic through their ports; while the 
 prosperity of France has been far more due to 
 the thrift of her people than to the policy 
 adopted by successive Governments in assisting 
 the railway companies there to construct new 
 lines, or in forcing upon them, with a guarantee 
 of interest, non-commercial lines, of which 
 many have been built in places where they 
 could not possibly be made to pay.
 
 ?6o Railways and Nationalisation. 
 
 DENMARK. 
 
 The great development, again, of Denmark 
 is due mainly to other causes than to her 
 possession of State railways. That country can 
 be much more fairly compared with Ireland than 
 the others already mentioned. Denmark, like 
 Ireland, is of circumscribed dimensions, has few 
 industries, and is, in fact, dependent on agri- 
 culture, though even in this respect she has no 
 greater natural advantages than Ireland. But 
 her agricultural workers, as a class, are 
 extremely industrious, toiling all day, and (in 
 the case especially of the younger among them) 
 studying at night in order to perfect themselves 
 in the technicalities of their business; and they 
 have a system of co-operation which embraces 
 every possible phase of their agricultural work, 
 provides for the most economical forms of 
 successful production, and ensures the best 
 possible system of marketing. 
 
 RAILWAY CONSIGNMENTS. 
 
 One effect of the widespread agricultural 
 organisation adopted in Denmark has been to 
 provide the railwa3^s there with consignments on 
 a scale to which Irish conditions ofifer no 
 possible basis of comparison. I understand 
 that in Ireland even live-ton lots of agricultural 
 produce, such as eggs, butter, and bacon, are 
 rare, and that the rates apply rather to con-
 
 State Railways and National Prosperity. 361 
 
 signments of a few cwts. ; whereas in Denmark 
 the average consignments from individual 
 traders or co-operative societies are: — Butter, 
 2 tons; bacon, 9 tons; eggs, 15 cwt. A record 
 number of pigs killed in Denmark in a single 
 week, for conversion into bacon, is 48,000. 
 
 Butter for export is produced exclusively in 
 factories situated in all parts of Denmark. The 
 farmer supplies milk only. In the morning he 
 leaves the full churns on the high road, and 
 there they are collected by a representative of 
 the factory, who, in the same way, in the after- 
 noon, returns the churns with the skim milk for 
 the pigs. From the factories tiie butter is sent 
 to Copenhagen or Esbjerg for shipment. The 
 average distance the consignments of butter, 
 bacon or eggs would be carried by rail before 
 reaching lilsbjerg ranges from 77 to 130 miles. 
 No through rates are granted from these inland 
 stations to England. Through rates apply from 
 the Danish port only. 
 
 government subsidies on transport 
 
 To facilitate the export of agricultural pro- 
 duce to England, the Danish Government grant 
 subsidies to the extent of 370,000 kroner, or 
 ;^20,555, a year to the steamships engaged 
 therein, those on the Esbjerg-Parkeston route 
 receiving ^'14,444, and those on the Esbjerg- 
 Grimsby route ^6,111. The principle of direct 
 financial assistance being thus established in
 
 362 Railways and Nationalisation. 
 
 respect to one branch of the export service, that, 
 namely, of the sea journey, I would suggest that 
 the rates charged on the other branch, the rail 
 journey in Denmark, may also have been 
 arranged (apart from the cjuestion of con- 
 signments in bulk) on a more or less subsidy 
 basis. 
 
 INCIDENCE OF PRODUCTION. 
 
 Looking at the various conditions which may 
 influence the very considerable oroduction in 
 Denmark, the extensive system of organisation 
 to which I have already referred naturally holds 
 the first place. But there are other influences at 
 work, and among these I might mention that in 
 Denmark there are fewer race meetings, sports, 
 and shows, and fewer feasts and festivals 
 (religious or otherwise) than in Ireland to give 
 the excuse for day or half-day holidays. 
 Excursions and trips are of rare occurrence, and 
 there is, again, a great saving of time on the 
 part of the farmer in the absence of all necessity 
 for his attending markets in order to make pur- 
 chases or effect sales. He buys all necessaries 
 at his agricultural co-operative society's store 
 in the village, and his products he hands over 
 to the co-operative undertakings, which pay him 
 cash and relieve him of all further trouble. In 
 this way he saves one or two days a week, as 
 compared with the average non-associated 
 farmer in the United Kingdom, and the time
 
 State Railways and National Prosperity. 363 
 
 thus gained can be devoted to management and 
 production. 
 
 SUNDAY WORK. 
 
 In most of the co-operative dairies in Denmark 
 there is no cessation of labour even on Sundays. 
 It is argued that inasmuch as the cows give their 
 milk and the pigs must be fed on Sunday the 
 same as on other days of the week, so dairy 
 work also must be done then. It is true that 
 differences of opinion have arisen on this ques- 
 tion. In certain districts a number of farmers, 
 influenced by religious sentiment, have started a 
 movement against doing any work at all on 
 vSundays, even in dairies; and they have split off 
 from the general organisations, and established 
 independent societies operating on the principle 
 of strict Sabbath observance. They form, how- 
 ever, the exception rather than the rule. 
 
 WINTER DAIRYING. 
 
 Anotlier material consideration in regard to 
 production in Denmark is found in that matter 
 of winter dairying in connection vith which the 
 suggestion has been made that Irish farmers 
 would do well to follow the example of the 
 Danes in this respect. 
 
 Winter dairying was started in Denmark about 
 thirty years ago. At that time prices for butter 
 were extremely high, because the practice in 
 question had not hitherto been adopted, and no
 
 364 Railways and Nationalisation. 
 
 supplies were coming in the winter from any 
 country in the Northern hemisphere. Anxious 
 to promote their agricuUural resources, the 
 Danes adopted the system. It involved a sub- 
 stantial outlay in the construction of buildings 
 and the importation of special food supplies ; 
 but a very considerable degree of success was 
 obtained in the way of creating an all-the-year- 
 round export trade. 
 
 To-day, however, the situation is not the same 
 as it was at first. Differences in seasons and the 
 facilities afforded by refrigeration enable 
 Australasia to send her summer butter to 
 British markets in our winter. Although, there- 
 fore, producers may now make a praiseworthy 
 effort to set up winter dairying in Ireland, they 
 could not hope to do so under the same favour- 
 able conditions as those which enabled Denmark 
 to establish her own position in this respect. 
 
 THE DANISH PEASANT AT HOME. 
 
 While, however, the conditions in Denmark 
 certainly do tend to swell the volume of pro- 
 duction, and hence to increase the competition 
 which Irish producers have to meet in English 
 markets, it is extremely doubtful if the average 
 Irish peasant would be willing to exchange his 
 way of life for that of the average Danish 
 peasant, even in the interest of an assumed 
 economic advantage.
 
 State Railways and National Prosperity. 365 
 
 The darker side of the picture was well painted 
 in an address given at the National Liberal Club 
 on November nth, 1907, by Mr. Erik Givskov, 
 an authority on the subject of small holdings in 
 foreign countries. He showed that the Danish 
 peasant generally lives on black bread, skim 
 milk, margarine and American pork and bacon, 
 while he has to export all the good things he 
 produces to England to obtain cash for his taxes 
 and interest on mortgage debt; that the net in- 
 come of Danish peasant farmers who have 
 obtained all the prizes it is possible to get for 
 excellent culture exceeds only in exceptional 
 cases ^50 a year; that a peasant farmer with 13 
 acres of land earns on an average ;^23 to j£,2i\ a 
 year after having paid his taxes and interest on 
 his purchase money, and that while, several 
 years ago, about 60 per cent, of the value of all 
 agricultural property in Denmark was mortgaged 
 ■ — to a very great extent to German capitalists — 
 the mortgage debt has, since then, very con- 
 siderably increased. 
 
 In a book on " The Transition in Agricul- 
 ture," which I myself published in 1906, 1 
 summed up the position in Denmark by saying 
 that " many a Danish farmer is, with all his 
 family, working for long hours, and looking to 
 England for the profits he makes on his produce, 
 not so much for his own gain as to satisfy the 
 demands of his German creditors."
 
 366 Railways and Nationalisation. 
 
 DENMARK AND IRELAND COMPARED. 
 
 Questions put by Mr. Sexton to various wit- 
 nesses examined before the Vice-Regal Commis- 
 sion show that that gentleman is indined to 
 attach great importance to the value of State-aid 
 as given, or assumed to have been given, in 
 Denmark. To Mr. John F. Power, president 
 of the Limerick Chamber of Commerce, he said, 
 at the sitting on November 21, 1906 : — 
 
 What can be a sadder reflection to an Irishman 
 than to know that Denmark, in the course of 10 
 years, has increased its exports to England in food 
 products, such as we produce, from ;^3,ooo,ooo to 
 ;^!^ 1 7,000,000 a year, just because their Govern- 
 ment gives them State railways and steamers and 
 organised industry, while the Irishman is left to 
 shift for himself, or be subjected to a burthensome 
 through rate? 
 
 Personally, and as the result of my own in- 
 quiries in Denm.ark, I dissent entirely from the 
 suggestion that this great export trade has been 
 built up by Denmark, "just because" of the 
 action of her Government. My own view is that 
 the Danish people are far more indebted to 
 themselves in the working out of their economic 
 salvation than they are to their Government. 
 The secret of their success is to be found in their 
 personal qualities, in their energy and foresight, 
 in their full realisation of the needs of the situ- 
 ation and their determination to meet them, 
 rather than in such State aid as they have
 
 State Railways and National Prosperity. 367 
 
 received. It was the people themselves who 
 started that system of heath reclamation which 
 was to make some amends to Denmark for the 
 loss of Schleswig-Holstein, following on the war 
 with Prussia. It was mostly the peasant farmers 
 who worked out that system of agricultural 
 organisation which has effected such revolution- 
 ary changes in Denmark's position. I cannot 
 here stop to repeat the story I have told else- 
 where ; but any suggestion that this admirable 
 system of organisation was " given " to the 
 Danish people by their Government is in no way 
 supported by actual facts. What the Govern- 
 ment really did was to give them a well-planned 
 system of agricultural and technical education, 
 which helped to complete the scheme of organis- 
 ation the people had originated for themselves. 
 It was not until these and the various other 
 fundamental conditions had prepared the way 
 for a substantial increase in production that the 
 State railways and the subsidised steamboat ser- 
 vices could begin to play a part which, though 
 certainly helpful, was subordinate altogether to 
 those main issues for which the full credit must 
 be given to the Danish people. 
 
 In the list of exports from Denmark during 
 1907 three items alone account for ;^i7,352,i8o, 
 namely: — Bacon (salted), ;^5,385,275 ; butter, 
 ;^' 1 0,1 92, 587; eggs, ;^i, 774,318. But it is to 
 her economic and social conditions rather than 
 to the fact of the ownership and operation
 
 368 Railways and Nationalisation. 
 
 of her railways by the State that Denmark is 
 indebted for her remarkable economic success, 
 and it can hardly be suggested that Ireland 
 would have any chance of sharing, or even ol 
 emulating, that success by a transfer of her own 
 railways to State management imless a corres- 
 ponding transformation were brought about, 
 also, both in her system of agriculture and in 
 the habits and disposition of her people. 
 
 Mr. Sexton reverted to his theory when, on 
 February 28, 1907, Mr. Alexander Cooke, vice- 
 president of the Council of the Belfast Chamber 
 of Commerce, gave evidence. I quote the fol- 
 lowing from the official report, though I leave 
 those who are more intimately acquainted with 
 the Irish people than I am myself to say whether 
 the witness's estimate of them is warranted or 
 not : — 
 
 Mr. Sexton : I should be very glad to adopt a 
 system which would give to this poor country any- 
 thing' like the development which has been achieved 
 in Denmark, Belgium, or several other countries. 
 Mr. Cooke : In Denmark the Government has had to 
 raise the rates. They could not live without it. 
 
 In Denmark you have a great commercial develop- 
 ment that the exports have increased in thirty years 
 from three millions to seventeen millions a year, and 
 they could very well afford to make a subvention 
 from the taxes? — If you could make the people in- 
 dustrious in Ireland as the Danes are, we would 
 have just the same result. In Belgium you won't 
 find a cow's grass in the whole country; you won't 
 find a man'who is lying on a ditch looking at a cow 
 grazing. Every acre of land'Js cultivated, raising
 
 State Railways and National Prosperity. 309 
 
 produce for export. There are two steamers bring- 
 ing- produce from Belgium into England at Goole in 
 the day, because the people are industrious. 
 
 You must give the people occasion for industry. — 
 You have not got the industrious people. You are 
 making a comparison betvk^een an industrious people 
 and a people who are lazy. 
 
 I say the system of railway rates in Ireland has 
 prevented the profitable employment of capital, has 
 deprived the people of the means of profitable 
 employment, and thereby has prevented industry. — 
 If you carried their produce for nothing you would 
 not make them raise it. 
 
 What do you mean ? — I mean they are too lazy. 
 They would not work. 
 
 All the Irish people? — You have in the west of 
 Ireland hundreds of men who go to Scotland every 
 harvest time, and come home with their ;^!^8 or j^io 
 earned in their pocket to pay their rent. They come 
 home and sit down and smoke, and, unless planting 
 a few potatoes in the spring before they go away 
 again, they don't work any more. 
 
 Because the wretched holdings they have offer no 
 incentive to industry. — You should see the wretched 
 holdings those Danes and Norwegians have who live 
 in comparative comfort; but they don't waste their 
 money drinking. 
 
 B B
 
 370 Railways and Nationalisation. 
 
 CHAPTER XVI. 
 BRITISH RAILWAY POSITION TO-DAY. 
 
 That the actual position of the British rail- 
 ways to-day is unsatisfactory is admitted on all 
 hands- -by the railway companies, in fact, as 
 frankly as by their critics, for the companies 
 find that working expenses are steadily 
 advancing, while revenue is too often growing 
 less. Meanwhile there is much talk of excessive 
 competition, waste, need for economies, and so 
 on, often with a concluding argument that 
 nationalisation would supply the best remedy. 
 
 The present difficulty is the climax to a long 
 series of struggles between two antagonistic 
 principles or conflicting forces. 
 
 the policy of amal(;a:\iation. 
 
 On the one hand the history of the Britisii 
 railways has been mainly that of the amalgama- 
 tion of a host of originally small or com- 
 paratively small companies by larger ones, until 
 the great systems of to-day came into existence. 
 The London and North-Western Railway Com- 
 pany, for instance, was formed in 1846 out of 
 the London and Birmingham, the Grand 
 Junction and the Manchester and Birmingham
 
 British Railway Position To-day. 371 
 
 companies, and it lias further amalgamated 49 
 undertakings, exclusive of those acquired in 
 combination with other large companies. The 
 Great W^estern Railway has been created out of 
 no fewer than 107 distinct concerns, apart from 
 joint amalgamations. Thirty years ago the Great 
 Western route from Paddington to Penzance 
 was divided among five distinct companies, and 
 the charms of the Hinterland of Penzance, now 
 visited annually by many thousands of tourists 
 ■■ — thanks to the splendid through services of 
 express corridor trains available — were prac- 
 tically unknown except to the most venturesome 
 of Englishmen. (3ther of the leading railway 
 companies have been made up, and have con 
 ferred great benefit on the community, in the 
 same way. So all the talk by the nationalisa- 
 tion party of the advantages of unified railways, 
 and the evils of undue competition, of which 
 one hears so much, is a very old story, and one 
 on which the railway companies, by their 
 amalgamation policy, have been acting for 
 decades past. 
 
 THE policy of COMPETITION. 
 
 On the other hand, and directly conflicting 
 with these efforts to develop the railways on sound 
 commercial lines, there has been the persistent 
 attitude of Parliament itself in stimulating the 
 element of competition in every possible direc- 
 tion, regard for the position of companies 
 
 B B 2
 
 372 Railways and Nationalisation. 
 
 already established being invariably ignored in 
 the supposed interests of the public. Whereas, 
 in France, successive Governments have allotted 
 separate spheres of influence to the great rail- 
 way companies there, allowing each to have its 
 own territory, in England the idea of towns 
 being served by two railway companies, so as to 
 ensure competition, has always been favoured 
 by Parliament. Not only this, but what has 
 repeatedly occurred is that, as the result of like 
 considerations, powers to construct new and 
 competing lines have been given to speculators 
 or syndicates seeking only to get themselves 
 bought up by the companies whose interests were 
 threatened, the said powers being abandoned 
 when the aspirations entertained have not had 
 the desired success. Further than this, it has 
 happened that when powers to construct a new 
 railway have been sought (i) by an establisiied 
 and responsible railway company in whose 
 recognised district the line would run, and (2) 
 by either an "outside" railway company or a 
 speculating syndicate, the Parliamentary Com- 
 mittee has favoured one of the latter over the 
 former — in order once more to ensure com- 
 petition. 
 
 combinations in self-defence. 
 
 As the outcome of these two antagonistic 
 policies the railway companies have, in self- 
 defence, found it expedient to " pool " traffic, or
 
 British Railway Position To-day. ^jp, 
 
 to make other arrangements between themselves 
 in regard to rates, routes, and facilities, in order 
 especially to protect the interests of the railway 
 proprietors. This is one reason why the com- 
 panies have not resorted of late years to those 
 competitions in rates into which, apparently, it 
 was expected they would be driven. But when 
 they have gone further, and have sought by 
 means of combinations to check waste, excessive 
 competition in services and the other evils held 
 up against them by the nationalisers as a cause 
 of reproach and a reason for State purchase, 
 County Councils, Town Councils, and other 
 local authorities, together with Chambers of 
 Commerce, trade associations and newspapers, 
 have raised an outcry with the design either to 
 prevent any such arrangement, or to render it 
 of no avail. 
 
 This position has been mainly due to the 
 attitude taken up by Parliament alike in its 
 encouragement of competition regardless of all 
 cost and consequences to the companies in 
 possession, and in the example it has set to the 
 country by showing extreme jealousy and 
 suspicion of all railway combinations. But if 
 the competition thus deliberately fostered has 
 become an evil, and if the further unification 
 hitherto checked and discouraged be indeed the 
 effective remedy, then it is clear that Parliament 
 is now face to face with a difficulty chiefly of its 
 own making and maintenance.
 
 374 Railways and NATioNAusATroN. 
 
 THE SOUTH-EASTERN AND CHATHAM AND DOVER 
 COMBINATION. 
 
 What has happened when two railway com- 
 panies seek to obtain Parliamentary sanction to 
 a working union between themselves is well 
 shown by the experiences of the South-Eastern 
 and the London, Chatham and Dover Railway 
 Companies in 1899. 
 
 The extremely keen competition carried on for 
 many years between the two companies in ques- 
 tion had had a distinctly prejudicial effect on 
 their finances, and the proposed working agree- 
 ment was intended to check much of the waste 
 that was going on. But no sooner were the 
 intentions of the companies made known than a 
 campaign of the most active, if not sometimes of 
 the most virulent type, was stirred up against 
 them. 
 
 The nationalisers make a strong point of the 
 fact that competing companies run trains which 
 start and arrive at about the same time, when, 
 under a unified management, one train would 
 suffice, and money could be saved by cancelling 
 the other train or trains. Mr. A. Rmil Davies 
 says in regard to "waste" such as this: — 
 
 All the money that is spent by the companies in 
 needless competition, it must be remembered, has to 
 be made up somehow or other, if they are to return 
 any interest to the stockholders, and it is on the 
 traders and the public that the burden ultimately 
 falls.
 
 British Railway Position To-day. 375 
 
 As it happened, the South Eastern and the 
 C'hatliam and Dover companies were riinninf^ 
 duphcate services of idenlicallv the same tvpe 
 as those here mentioned. Trains for Margate 
 and Ramsgate, Rochester, Dover, and other 
 places were leaving and arriving on each system 
 at practically the same time, and the working- 
 union proposed, in effect, to do precisely what 
 the nationalisers say ought to be done, and 
 could be done under State ownership. Every 
 town, however, where these dual services existed 
 at once took steps to oppose the companies un- 
 less they agreed to give them " no worse train 
 service " than thev had already — in other words, 
 to continue the duplicate trains as before, regard- 
 less entirely of anv question either of waste or of 
 economy. Local authorities, traders' organisa- 
 tions and local residents throughout Surrey, 
 Kent and Sussex rose in arms, as it were, 
 against the companies, and enterprising half- 
 penny newspapers, seeing in the campaign a 
 chance of self-advertisement and increased 
 circulation, fomented the agitation to the utmost 
 of tlieir power. 
 
 intimidation and Sl'RRENDER. 
 
 That the two railway companies concerned 
 were intimidated by the extreme vigour of the 
 opposition is undeniable. So much was this 
 the case that, with a view to smoothing their 
 course before the Hybrid Committee which was
 
 376 Railways and Nationalisation. 
 
 to deal with their Bill, they proceeded to make 
 such concessions to public clamour that they 
 rendered the effect of the Bill nugatory, and 
 eventually found themselves in practically no 
 better position than they had been in before. 
 Not only did they feel forced to assent to a con- 
 tinuance of the duplicate services, but in the 
 case of Rochester they bought off opposition 
 by an undertaking that all express trains 
 (except boat trains) should stop there, to suit the 
 convenience of the local residents. This stipula- 
 tion was carried out for some years, and was 
 then allowed to lapse on an undertaking being 
 given that Rochester should be supplied with a 
 new railway station. To meet the opposition of 
 the National Association for the Extension of 
 Workmen's Trains, the companies made con- 
 cessions which involved a decrease in their traffic 
 receipts of no less than ;^20,ooo a year. 
 
 Whether or not the companies should have 
 surrendered so much is a question on which it 
 is easier to pass judgment now, with the wisdom 
 that comes after the event, than it was during 
 the storm and stress of one of the most rabid, 
 grasping and selfish campaigns conducted 
 against British railways in recent years. The 
 two companies got their Bill, but they derived 
 little or no benefit from it. Even to-day, when- 
 ever they want to save the cost of running a 
 duplicate or an unnecessary train on the one line 
 or the other, they are checked by the local
 
 British Railway Position To-day. 377 
 
 authority or some local interest declaring that 
 any such procedure will be contrary to an 
 " agreement " extorted from them under the 
 conditions here detailed. The present position, 
 in fact, was thus described by Mr. H. Cosmo 
 Bonsor, Chairman of the vSouth-Eastern Railway 
 Company, at the half-yearly meeting of the Lon- 
 don, Chatham and Dover Company on August 
 4, 1908 : — 
 
 They could not close any stations, or take off any 
 trains which were unremunerative, or do anything by 
 which they could effect marked economies, simply 
 because when they went to Parliament for the 
 Working- Union Act a clause was inserted — through 
 the pressure of various towns and traders — pre- 
 venting the companies from taking off any facility 
 which was in existence at the time. They could not 
 even raise the price of their season tickets, or take 
 off any of the cheap tickets, even where they were 
 unremunerative, without going to the Board of 
 Trade or the Railway Commissioners. 
 
 MR. ASQUITII'S VIEWS. 
 
 The grim irony of the situation will be still 
 better appreciated when one recalls some remarks 
 made by Mr. Asquith at Manchester, on 
 March 13, igo8, on the occasion of the twenty- 
 fifth anniversary and banquet of the Oldham 
 Incorporated Chamber of Commerce. I take 
 the following from the report in The Times of 
 the following day : — 
 
 Alluding to the attitude of the State towards the 
 railways, Mr. Asquith said that, whilst he was not
 
 378 Ra'Lways and Nationatjsatio>:. 
 
 g^oing- to touch upon the vexed topic of the 
 nationalisation of railways, upon one thing" he 
 Ihoug^ht they were all ag"recd, and that was that a 
 great deal more mig-ht be done than has been done. 
 When they looked at the enormous waste, the un- 
 necessary expense, and the cut-throat competition, 
 the provision of duplicate or sometimes triplicate 
 facilities in cases where one service could suflice, 
 and the thousand other evils attendant on the pre- 
 sent more or less unreg"ulated system in regard to 
 railways, one could not help seeing- that an enormous 
 amount of money might be saved, trade better 
 served, and shareholders have a prospect of hig-her 
 dividends, if only they could introduce greater co- 
 ordination, more simplicity, and greater common 
 sense into the management of the railway system. 
 
 To what extent these remarks were intended 
 to serve the interests of party politics I cannot 
 say; but one can only charitably assume that, 
 when he made them, Mr. Asquith had forgotten 
 what actually happened when the South Eastern 
 and the London Chatham and Dover Railway 
 Companies, themselves recognising the evils 
 of "waste," "unnecessary expense," "cut- 
 throat competition," and "duplicate facilities," 
 did, indeed, try to " introduce greater co- 
 ordination, more simplicity and greater common 
 sense into tlic management of the raihvay 
 system." 
 
 THE BARGAINING POWER OF PARLIAMENT. 
 
 So we get to the position tliat not only is 
 Parliament itself directly responsible for the 
 creation of a good deal of the " cut-throat cotn-
 
 British Rattayay Position 'IV)-d.\y. 379 
 
 petition " which, to a certain extent, is at the 
 root of the present trouble, but it is the outcry 
 raised, and the direct intiniiflation brought to 
 bear upon ihem, whi-n they seek the aid of 
 Parhanient in getting rid of the evils in question 
 that make the companies hesitate to appeal to 
 that august assembly for help in remedying the 
 disadvantages of their situation. In certain 
 quarters, it is said, much value is attached to 
 what is called " the bargaining power of Parlia- 
 ment " in raihvav matters. But it cannot be to 
 the interest of the community that the possession 
 of these powers by Parliament should encourage 
 local authorities and others to levy what is 
 practically blackmail on the companies before 
 the latter can get authority to do things which 
 Mr. Asquith himself says they ought to do, and 
 even scolds them, indirectly, for not doing. 
 
 In view of the considerations here presented, 
 it is certainly significant that when, in IQ04, the 
 London and North Western Railway Companv 
 and the Lancashire and Yorkshire Raihvav 
 Company made the working arrangement which 
 came into operation on January i, 1905, thev 
 kept the terms of that agreement strictly within 
 the scope of their existing powers, so that the 
 need did not arise for their securing Parlia- 
 mentary sanction. 
 
 TRADE AND TRAFFIC. 
 
 Another important consideration, not fully
 
 380 Railways and Nationalisation. 
 
 appreciated by the average trader and his 
 political sympathisers, is that under the trading 
 conditions of to-day — and owing in part also to 
 tlie influence of the constant criticism and 
 agitation directed against them- the railway 
 companies have to do a great deal more for their 
 money than was formerly the case. In effect, 
 the ratio of increased cost both of handling and 
 of clerical work exceeds the ratio of increase in 
 tonnage and receipts, the items of working ex- 
 penses being thus swollen in greater porportion 
 than the items falling under the head of revenue. 
 Personally I regard it as so essential to a full 
 understanding of the railway position that the 
 conditions thus briefly indicated should be 
 realised by the British public that I have 
 begged, and have obtained, permission to repro- 
 duce here the following very clear and able 
 report, drawn up for his general manager by the 
 chief goods manager of one of the leading rail- 
 ways, and not originally intended for publica- 
 tion : — • 
 
 In order to work with as little capital as possible 
 and to minimise the risks from chang-es of market 
 conditions, the retailers and local agents keep but 
 little stock on hand, and depend upon quick transit 
 for the execution of the orders they receive. As a 
 consequence, instead of large consignments as 
 formerly, the railway companies are called upon to 
 convey small separate lots at more frequent 
 intervals, and with extreme expedition and regularity 
 of service. Hence the increase in the number of 
 invoice entries per ton ; and, although this process
 
 British Railway Position To-day. 381 
 
 of change has been going on for some years, it still 
 continues, and it does not appear that a level 
 has yet been reached. This increased subdivision of 
 the traffic not only causes a direct increase in 
 accounts work throughout, but also reacts relatively 
 upon the correspondence. 
 
 The keen competition of the present day is 
 responsible for a considerable amount of work ad- 
 ditional to that performed in the past. Traders 
 have readily taken advantage of the rivalry between 
 the various carriers to obtain many concessions in 
 the form of extra services and special conveniences. 
 In this way large collections of small or separate 
 packages sent in by stores or leading firms for con- 
 signment to their customers are so dealt with that 
 they necessitate a great and increasing amount of 
 handling and clerical work. The arrangements in 
 question are very convenient for the traders, but 
 they make it more diflficult for the railway company 
 to get a fair profit on what is done. 
 
 Then large firms in London have a number of 
 branches in the provinces, and as supplies for the 
 same are replenished daily from the principal store 
 in London, it means that a quick transit is essential ; 
 they expect that goods despatched from their store 
 in London, say, on a Monday, shall be delivered at 
 their shops in the provinces in sufficient time the 
 next morning to enable them to unpack the parcels, 
 and get them out of the way before their customers 
 arrive. 
 
 Demands from traders for services of this 
 character have become greater during the past few 
 years, and, what is more, they have not been con- 
 fined to traffic such as provisions, etc., but more 
 expeditious services are demanded for coal and other 
 mineral traffic, coal merchants nowadays paying far 
 greater attention than formerly to the working of 
 their wag'ons when passing over tlie railway either 
 full or empty.
 
 382 Railways and Nationalisation. 
 
 There is a greater tendency now on the part of 
 traders to clahn for damages to goods, be they ever 
 so small, and the consequence is that in some 
 instances additional staff has had to be employed to 
 meet the growth in the claims work at the stations 
 and the district offices. 
 
 The system under which small traders, whose 
 carriag-e accounts do not entitle them to ledger 
 accounts, are allowed credit (principally on a weekly 
 basis), has been greatly extended by railway com- 
 panies in order to find favour and secure their 
 business ; and the result is that larger numbers of 
 accounts have to be collected by the clerical staff, 
 correspondingly fewer items being collected by the 
 carmen on delivery. 
 
 Many of the large stores and others doing an ex- 
 tensive retail trade now send practically all their 
 small parcels "carriage paid"; the charges, how- 
 ever small in amount, cannot, as a rule, be obtained 
 by the company at the time of consignment, and 
 have to be specially collected afterwards. 
 
 The extension of the telephone system throughout 
 the country has contributed in no small decree to the 
 increase in the clerical expenses of the company. In 
 some places where the company already had tele- 
 phones, additional instruments have had to be pro- 
 vided, and at places where they did not exist in- 
 struments have had to be installed in order to meet 
 the demands of the traders, that means of com- 
 munication being now generally resorted to in the 
 course of business. In a number of cases this has 
 incurred extra expense in the provision of staff to 
 attend to the telephone ; and, while it is not over- 
 looked that the company also obtain some benefits 
 from the use of the telephones, there can be no 
 doubt that the greater advantage is secured by the 
 traders. To show to what extent the number of 
 public telephones has increased during recent years, 
 it may l3c stated that, while in 1904 there were 11 1
 
 British Railway Position To-day. 3S3 
 
 connections serving- the goods department, now there 
 are over 400. 
 
 Many traders have in recent years employed rail- 
 way rates experts for the purpose of analysing rail- 
 way rates and charges in order to obtain reductions 
 in the figures, rebates in respect of terminals, and 
 the re-classification of goods to a lower basis, and in 
 this connection they have spared no pains in getting" 
 tog-ether information bearing- upon matters about 
 which they consider they have grievances ; and repre- 
 sentations have subsequently been made to the 
 various Chambers of Commerce or other trade 
 organisations. In their pursuits they have been 
 encouraged by the open statement of the President 
 of the Board of Trade that he is prepared to con- 
 sider and deal with matters of this character, and by 
 other members of Parliament interesting themselves 
 in railway subjects. The publicity thus given to such 
 matters has contributed to the greatly increased 
 number of demands made for rebates and excep- 
 tional rates, and there has consequently been a larg-e 
 growth in the clerical work at the stations, and at 
 district and chief offices. 
 
 Apart from the expense involved in the course of 
 our own enquiries, a large amount of detail is 
 requisitioned by the Board of Trade, entailing con- 
 siderable cost to the company, as evidence of which 
 it may be stated that in connection with the com- 
 parison made between English and German methods, 
 representatives of this company had to be sent to 
 Germany to obtain particulars of the practices 
 adopted by the railways controlled by the Govern- 
 ment there in order that the true state of affairs 
 might be ascertained. 
 
 In order to illustrate, by actual figures, the 
 smaller ratio of increased receipts to increased 
 work on English railways under the conditions 
 here described (and especially under the present-
 
 384 
 
 Railways and Nationalisation. 
 
 day tendency to eliminate the middleman, and 
 do a direct trade, wherever possible), I give 
 the following details respecting five railway 
 depots of different types : — ■ 
 
 INCREASES IN 1906 OVER 1 899. 
 
 
 Traffic 
 
 Invoice 
 
 Correspondence 
 
 
 Receii'ts. 
 
 Entries. 
 
 Entries. 
 
 Deiot. 
 
 
 
 
 
 Per 
 
 
 Per 
 
 
 Per 
 
 
 
 cent. 
 
 
 cent. 
 
 
 cent. 
 
 
 {. 
 
 
 
 
 
 
 A 
 
 20,374 
 
 2-93 
 
 885,600 
 
 40 'O 
 
 Uncertain* 
 
 
 
 B 
 
 14,047 
 
 574 
 
 307,099 
 
 28-46 
 
 45,465 
 
 42'21 
 
 C 
 
 7,779 
 
 io'36 
 
 55,519 
 
 22"0 
 
 38,494 
 
 38-1 
 
 D 
 
 12,132 
 
 i4'33 
 
 71,521 
 
 24-3 
 
 18,888 
 
 i7"o 
 
 E 
 
 60,338 
 
 27-25 
 
 91,079 
 
 29"2I 
 
 146,219 
 
 5571 
 
 * Different method of registration in 1906 than 
 liable. 
 
 comparison not 
 
 TRADERS GRIEVANCES- 
 
 The sum total in 1906 of the invoice entries 
 (representing different parcels or consignments) 
 of which the increases are shown in this table was 
 5,438,000. But these figures relate only to five 
 depots on the lines of a single English railway 
 company. I leave persons endowed with greater 
 imaginative or arithmetical powers than my own 
 to estimate therefrom the possible grand total 
 of the entries in regard to all the parcels, pack- 
 ages, and consignments in general entrusted 
 to all the railway companies of the United 
 Kingdom in the course of a single year. I con-
 
 British Railway Position To-day. 385 
 
 tent mystll with the suggestion that it would 
 run into billions. 
 
 W^heii 1 turn to the number of traders and 
 others who- -at the cost only of a penny postage 
 stamp -have addressed formal complaints to the 
 Board of Trade in respect either to these billions 
 ot separate transactions or to grievances in 
 general against the railway companies, I find 
 from a Return issued by the Board that during 
 the two years, i(j()4 and 1905, the total number 
 of such complaints was only 146; Avhile in regard 
 to a certain proportion of the 59 cases in which 
 no settlement c(Uild be reached the Return says 
 " it seemed clear to the Board of Trade that the 
 complainants had no real ground for com- 
 plaint." 
 
 In point of fact, the people who have the most 
 claim to cherish grievances concerning the rail- 
 ways to-day are, not the traders, whom the rail- 
 way companies have spoiled rather than ill- 
 served, and not railway passengers, for whom so 
 much in the way of cheap and comfortable travel 
 has been provided, but the shareholders who, 
 though finding the money, have gained far less 
 in proportion than either. 
 
 Admitting, however, that there are still 
 various points connected with the relations 
 between the traders and the railways which, 
 though not warranting formal complaint to the 
 Board of Trade or the Railway and Canal Com- 
 mission, ma\- call for in(|uir\' and mutual con- 
 
 c c
 
 386 Railways and Nationalisation. 
 
 sideration, it should be quite possible to arrive 
 at some amicable arrangement or understanding 
 thereon by means of friendly conferences, such 
 as that of the Committee concerning which Mr. 
 Lloyd-George said in the House of Commons 
 on March 4th, 1908 : — 
 
 The informal railway conference which is meeting 
 at the Board of Trade is composed of representa- 
 tives of railway companies, traders, agriculturists, 
 the general public, and Government Departments. 
 Its object is to endeavour to arrive at a general 
 agreement with regard to such modifications of the 
 existing law, and of the relations subsisting both 
 among the companies and between the companies, 
 traders, agriculturists, and the general public as 
 may conduce to economy and elasticity of railway 
 working, and also provides for the equitable appor- 
 tionment of any advantages accruing therefrom. 
 The conference has decided to appoint several sub- 
 committees, consisting partly of its own members, 
 partly of others, to consider and report to it on 
 certain groups of questions, among which is the 
 question of the conditions and procedure for work- 
 ing agreements, combinations, and amalgamations 
 of railways, including any change in the relations 
 between the railways and the State which might 
 arise therefrom. 
 
 Those taking part in the conference are Mr. 
 Hudson Kearley, M.P., Mr. H. Llewellyn 
 Smith, C.B., and Mr. G. R. Askwith, of the 
 Board of Trade; Sir F. Forbes Adam, CLE., 
 Mr. A. Beasley, Mr. William Burton, Mr. A. 
 Kaye Butterworth, Mr. Ratcliffe Ellis, Mr. S. 
 Fay, Mr. W. Guy Granet, Mr. James C. Inglis, 
 Mr. W. F. Jackson, Mr. O. D. Johnson, Sir
 
 British Railway Position To-day. 387 
 
 W. T. Lewis, Mr. VV. H. xMitchell, Mr. A. 
 Mond, M.P., Mr. Ernest Moon, K.C., Sir C. J. 
 Owens, Mr. A. Siemens, Mr. J. A. Spender. 
 
 WAGES AND MATERIALS. 
 
 It is a familiar story that the working ex- 
 penses of railways have been considerably 
 swollen of late years by reason of increased pay- 
 ments on account of wages and materials; but 
 what this may mean in actual figures is not so 
 well known. From a detailed statement pub- 
 lished in Tlie Raihvay Neivs of April 4, 1908, 
 giving the sums paid by leading companies 
 during the half year for wages and materials in 
 the maintenance of way, carriage and wagon, 
 traffic and locomotive departinents, as compared 
 with the sums paid in the corresponding period 
 of the previous year, I learn that the aggregate 
 amounts paid for wages in the four departments 
 mentioned was ;^' 14,856,000, or ^'531,000 
 increase; and for materials, ;^"4, 538,000, or 
 ;^'309,ooo increase, a total increase on these two 
 items alone for the half year of ^840,000. The 
 significance of these figures becomes all the 
 greater when one remembers that such increases 
 have been steadilv proceeding for cjuite a number 
 of years. 
 
 Taking the wages paid in the traffic depart- 
 ment of some of the leading railways, one learns 
 that the increases in the last half-year of 1907 
 
 c c 2
 
 .388 
 
 Railways and Nationalisation. 
 
 over the totals for the last half-year of igo6 were 
 as follows : — 
 
 COMTANY. 
 
 Increase. 
 
 Per cent. 
 
 Great Central 
 
 20,316 
 
 6-0 
 
 Great Eastern 
 
 9-998 
 
 2-5 
 
 Great Northern 
 
 ",997 
 
 2-8 
 
 Great Western 
 
 39,646 
 
 5'i 
 
 Hull and Barnsley 
 
 6,909 
 
 16 4 
 
 Lancashire and Yorkshire 
 
 27,858 
 
 5 '3 
 
 London, Brighton and S. Coast ... 
 
 3,013 
 
 1-6 
 
 London and North-Western 
 
 49,290 
 
 4'i 
 
 London and South-Western 
 
 8,752 
 
 2-6 
 
 Midland 
 
 54,45 1 
 
 4-5 
 
 North Eastern 
 
 27,978 
 
 4-0 
 
 SAVIN(iS IN TRAIN .MILEAGE. 
 
 It is mentioned that "in the case of the Lon- 
 don and North-Western Company the increase 
 in maintenance of way department of ;^' 14,658 
 was entirely owing to the sum spent on the 
 strengthening" of bridges rendered necessary 
 owing to the heavier class of engines in use." 
 Some vears ago, it will be remembered, there 
 was much talk in this coiintrv about American 
 railway methods, and the British railway com- 
 l^anies N\ere criticised adversely for not having 
 more powerful locomotives capable of drawing 
 heavier loads, and thus saving train mileage. 
 Many of the companies have since adopted more 
 or less the practice in cjuestion, and one hears 
 much as to the number of train miles saved in
 
 British Railway Position To-day. 389 
 
 operation. But there is another side of the 
 story, namely, the considerable amounts that 
 liave had to be spent on the extensive recon- 
 struction or strengthening of bridges and the 
 laying of heavier metals to bear the heavier 
 engines and the heavier loads, so that the saving 
 in train miles has been very far indeed from 
 being all gain. It is even open to question 
 whether, in some instances, there has yet been 
 any gain at all. 
 
 RAILWAY companies' COAL BILLS. 
 
 To illustrate what the increased cost in 
 materials may mean to a railway company, The 
 Railway Neivs mentions that in the half-year in 
 question the Midland Railway Company spent 
 ^'255,000 on copper alone. Expenditure on the 
 up-keep of carriage and wagon stock has in- 
 creased, owing to the greater luxuries of travel ; 
 while the effect of advances in the price of coal 
 (of which commodity the railway companies use 
 over 16,000,000 tons a year*) may be indicated by 
 the case of the Caledonian Railway Company, 
 whose coal bill (as Mr. Herbert Gladstone was 
 informed by Sir Charles Renshaw, a member of 
 a deputation which waited on the Home 
 Secretary in March, 1Q08, in reference to the 
 Miners' Eight Hours Bill) rose from ;^' 15 1,000 
 for the year ending January 31, iSgS, to 
 
 * See page 174.
 
 3go Railways and Nationalisation. 
 
 ;^'36o,ooo in the year ending January 31, igo8, 
 the greater proportion of the increase being 
 due to the higher price. 
 
 On this important subject of railway com- 
 panies' coal bills, I take the following from 
 " Chat on 'Change " in the Daily Mail of 
 August 6, igo8 : — 
 
 As was the case in the second half of 1907, the 
 increase in the railway coal bills for the last six 
 months explains fully half the reduction in profits. 
 In the following; table we compare the additional 
 ^,mounts paid for coal, with the total reduction in 
 profits for the last half-year in the case of the prin- 
 cipal companies that have already issued their 
 reports : — 
 
 CoiMI'ANY. 
 
 Ex 
 
 Great Central 
 
 Great Eastern 
 
 Great Northern 
 
 Great Western 
 
 Lancashire and Yorkshire ... 
 London and South-Western 
 London, Brighton and S.C. 
 London, Tilbury & Southend 
 South-Eastern and Chatham 
 
 TRA Cost 
 OF Coal. 
 
 £ 
 38,600 
 44,000 
 38,000 
 44,000 
 22,000 
 34,000 
 12,000 
 1,600 
 21,500 
 
 Reduction 
 IN Profit.s. 
 
 £ 
 74,000 
 46,000 
 51,000 
 44,000 
 91,000 
 42,000 
 15,000 
 1,400 
 79,800 
 
 Total, nine companies ;^"255,7oo ;^'444,2oo 
 
 More than half the ag-g-reg"ate losses of these com- 
 panies is thus accounted for, and in the instances of 
 the Great Eastern, Great Northern, Great Western, 
 South-Western, Brig'hton, and Tilbury companies it 
 may be said that pra;ctically the whole of the reduc- 
 tion in profits was due to this Item. 
 
 WAGES AND WORK, 
 
 Reverting to the question of wages, I would
 
 British Railway Position To-day. 391 
 
 point out that while these have advanced the 
 amount of work done for them has shown a 
 steady tendency to decline. " We are getting 
 as much out of five men to-day," said an 
 authority on one of the leading lines, in the 
 course of conversation on this subject, " as we 
 got out of three men 15 years ago." More men 
 thus have to be employed to do the same amount 
 of work ; though tfiis, of course, is what the 
 labour leaders desire, regardless of the effect on 
 the earning powers of the companies. If the 
 present demands for shorter hours should 
 succeed, still more men will have to be put on, 
 and the wages bill will then go still higher. 
 
 The usual plea for these shorter hours is, of 
 course, that the men are working too hard. But, 
 oddly enough, demands for shorter hours are 
 now being put forward by railway men in 
 country districts on the ground that their work 
 is monotonous because there is so little for them 
 to do. This reason is especially pleaded by 
 signalmen, of the onerous nature of whose duties 
 so much is heard ! 
 
 Concurrently with the falling off in the 
 quantity of work done per man, the discipline of 
 considerable sections of railway workers has 
 been undermined by trade union influences. To 
 give a case in point : There is a practice under 
 which signalmen who do their work properly 
 during the year are paid a bonus. On the least 
 occasion when it is found necessary — on account
 
 392 Railways and Nationalisation. 
 
 of some mistake, for example — to suspend the 
 bonus of a member of the Amalgamated Society 
 of Railway Servants, the amount is made good 
 to him out of the emergency fund of that society. 
 The combined effect of higher wages, shorter 
 hours and less work will probably lead in the 
 course of time to a greater resort by the railway 
 companies — as a measure of self-defence — to 
 labour-saving appliances, in order that their 
 business can be conducted with fewer units. 
 There are various possibilities in this direction, 
 but meanwhile the growing v/ages list continues 
 to be a most important item in the increase of 
 working expenses. 
 
 THE BURDEN OF TAXATION. 
 
 Then there must be taken into account the 
 hampering effect on the railways of the 
 enormous increase in the amount of taxation thev 
 are called upon to pay. Some remarkable 
 figures bearing on this very essential considera- 
 tion were given in a paper by Mr. C. L. 
 Edwards, chief accountant of the Great Northern 
 Railway Company, read by him at a meeting 
 of the Royal Statistical Society on March 17, 
 1908. I will here content myself with repro- 
 ducing from Mr. Edwards' paper two tables, of 
 which the first gives a comparative summary of 
 inland revenue and local taxation contributed 
 by all the railways of the United Kingdom for 
 the years ic)o6 and i8qi ; while the second shows
 
 British Railw.^v Position To-day. 393 
 
 the effect of local taxation on net revenue of the 
 railway companies in the same period : — 
 
 COMPARATIVE SUMMARY OF TAXATION. 
 
 
 igo6. 
 
 1891. 
 
 Difference. 
 
 p.c. 
 
 I 
 Inland re\enue : 
 Passenger tax 
 Income tax 
 
 £ 
 356,642 
 2,062,090 
 
 £ 
 320,671 
 904,420 
 
 £ 
 + 35,971 
 4-1,157,670 
 
 II 
 
 + 128 
 
 -> 
 
 Local taxation* . 
 
 2,418,732 
 4,964,636 
 
 1,225,091 4-1,193,641 
 2,246,430 4-2,718,206 
 
 97 
 121 
 
 Total . 
 
 7,383,368 
 
 3,471,521 
 
 4-3,911,847 
 
 113 
 
 EFFECT OF LOCAL TAXATION ON NET REVENUE OF 
 RAILW.A.Y COMPANIES. 
 
 Percentage of Local Taxation 
 TO Gross Receipts. 
 
 Percentage of Net Revenue on- 
 Total Pail'-up Capital. 
 
 1906. 
 
 1891. 
 
 Difference. 
 
 1906. 
 
 1891. Difference. 
 
 Per cent. 
 4-24 
 
 Per cent. 
 274 
 
 Per cent. 
 4-1-50 
 
 Per cent. 
 3-45 
 
 Per cent. I Per cent. 
 3-87 '■ -0-42 
 
 Mr. Edwards also pointed out that if the per- 
 centage of local taxation had been the same in 
 rgo6 as in 1891, the net receipts would have 
 been ;i^ 1,752, 591 more, and the percentage of 
 net revenue on total paid-up capital would have 
 been 3-59 per cent, instead of 3*45 per cent. 
 
 * I have already shown, un page iii, that the amount 
 of local taxation paid by the Prussian State railways 
 (with whose rates those charged on British lines are 
 often compared) is only ^^750,000 a year.
 
 394 Railways and Nationalisation. 
 
 the need for action, 
 
 While the working expenses of the railways 
 have been increasing in the way described, and 
 while traders, passengers, workers, and local 
 authorities have all been gaining at the ex- 
 pense of the raihvav shareholder, the railway 
 revenue has further shown a falling off, due 
 to decline in trade, competition of suburban 
 tramways, omnibuses, motor cars, etc. In the 
 result the margin between receipts and ex- 
 penditure has become exceedingly small in the 
 case of some of the companies, and threatens to 
 become still less. 
 
 The general outcome of the situation was well 
 summed up by two tables given in the City 
 article of The Times of August 15, 1908. One 
 of these set out the gross receipts, expenditure 
 and net revenue of eleven railway companies — 
 Great Central, Great Eastern, Great Northern, 
 Great Western, Lancashire and Yorkshire, 
 London, Brighton and South Coast, London 
 and North- Western, London and South- 
 western, Midland, North-Eastern, and South- 
 Eastern and London, Chatham and Dover — for 
 the half-years ended June 30, 1908 and 1907, 
 showing a total decline of ;^52 1,000 in receipts, 
 an increase of ^'667,000 in expenditure, and a 
 consequent decrease in net revenue of no less 
 than ;^' 1, 188,000. 
 
 The other table gave, for the same companies.
 
 British Railway Position To-day. 395 
 
 the rates of dividends and amounts paid as divi- 
 dends on ordinary stocks, witii amounts carried 
 forward. In ten cases (reckoning, here, the South- 
 Eastern and the London, Chatham and Dover as 
 separate companies) there was a reduction in the 
 rate of dividend paid in 1908 as compared with 
 1907; in one (Great Central) no dividend was 
 paid in either year; and in the case of the Great 
 Northern the same amount as before, 3 per cent., 
 was paid, but at the cost of a substantial reduc- 
 tion in the amount carried forward, which stands 
 3f ;^6,549, as against ^'61,646. 
 
 Beyond, however, the question of the moment, 
 there is the question as to what will be the 
 position 10 years hence of the companies which 
 have been the most heavily hit. They cannot 
 go on indefinitely as they are, and the time mav 
 well come when, unless the State should buy 
 them out (a procedure which would be eminently 
 satisfactory to shareholders with no dividend at 
 all in sight), the only alternatives will be either 
 to stop working altogether or to increase fares, 
 rates and charges. 
 
 In the United States the railway position has 
 become so unsatisfactorv that the companies 
 there are now face to face with the problem 
 whether they shall advance the railroad rates 10 
 per cent, or decrease wages 10 per cent. If 
 they advance rates all round they will come in 
 collision with the Interstate Commerce Com- 
 mission, which has already given warning, by
 
 3<j6 Railways and Nationalisation. 
 
 a formal statement issued at the end of July, 
 1908, that " if the tariffs which by law the rail- 
 ways are bound to file in Washington 30 days 
 before a new rate goes into operation show a 
 general increase, the Commission will use its 
 almost unbounded powers of investigation with- 
 out waiting for representation on the part of the 
 shipper." "Then," adds the official warning, 
 " if any complaint arises, it will be able to act 
 very promptly." If, on the other hand, thev 
 reduce wages, the companies will bring around 
 their head a hornet's nest not only of labour 
 but also of political troubles. 
 
 r.eaving, however, the American railways to 
 solve their own problems, the question of the 
 moment here is how the British railway com- 
 panies are to keep down their working expenses 
 in order both to meet the increasing demands 
 made upon them and to make a better return to 
 the individual who is the person chiefly 
 aggrieved by present C(jnditions, namely, the 
 railway shareholder. 
 
 THE SOLUTION OF THE PROBLEM. 
 
 The most practical way in which — if thev are 
 allowed — the British railway companies can 
 work out their own salvation will be in a further 
 resort to their policy of combinations, alliances, 
 or agreements. Here, if they are given fair 
 play and a reasonable opportunity to operate 
 commercial enterprises on commercial principles,
 
 British Railway Position To-d\v, 307 
 
 they have facilities open to them in many ways 
 for reducing their working expenses. 
 
 There would not be quite so great a saving 
 as many people assume from the suppression of 
 " duplicate services," because one has to con- 
 sider not merely the persons travelling" by trams 
 between London and, say, Manchester, Exeter, 
 or Scotland, by different companies' lines, but, 
 also, passengers who would join or leave the 
 trains at intermediate stations. If the big cities 
 alone are considered, and a very material reduc- 
 tion is made in the rail facilities of towns of 
 second or third rate rank situate on a competing 
 route, but served by one company only, the new 
 state of things would create grievances far more 
 serious than anything that is suggested now. 
 The trains mainh' concerned, therefore, are those 
 of the through express or non-stop type. 
 
 There would be possibilities of considerable 
 savings in regard to management, joint in place 
 of separate receiving offices, joint use of rolling- 
 stock, better loading of goods wagons, the use 
 of a larger number of such wagons, the running 
 of trains by alternative routes in order both to 
 shorten distance and to relieve the congestion of 
 crowded lines, direct consignment of goods 
 under a unified management instead of there 
 being dealings with or between different com- 
 panies; in these and in other w^ays economies 
 could be effected without prejudicing the in- 
 terests of the public, who would, indeed, have
 
 398 Railways and Nationaijsation. 
 
 increased facilities in the use of tickets over 
 different companies' lines, the advantage of the 
 shortest routes in forwarding consignments, and 
 other benefits besides. 
 
 THE PROPOSED GREAT NORTHERN, GREAT CENTRAL 
 AND GREAT EASTERN ARRANGEMENT. 
 
 All these considerations are certainly to be found 
 in the proposed working agreement between the 
 Great Northern, the Great Central and the Great 
 Eastern Railways Companies, for which the 
 assent of Parliament is to be asked in the Session 
 of 1909. Already, among other things, the three 
 companies have arranged to have their receiving 
 ofKces in common, to have joint carting arrange- 
 ments, to discontinue some duplicate services, 
 and to make return and certain season tickets 
 available by either company's line. 
 
 But there are various other measures contem- 
 plated by the companies for which, on account, 
 in their case, of purely technical reasons (as the 
 Great Northern and the Great Central found 
 when they tried in 1908 to effect a dual arrange- 
 ment through the Railway and Canal Commis- 
 sioners) the assent of Parliament is necessary,* 
 
 * Tlie Railway and Canal Commissioners held that 
 I he Act of 1858, which authorised the Great Northern 
 and the Manchester, Sheffield and Lincolnshire (now the 
 Great Central) Railwaj' Companies to enter into a 
 working agreement, applied only to that part of the 
 Great Central undertaking which was in existence in
 
 British Railway Position To-day. 399 
 
 and the advantage to all concerned of some of 
 these further reforms is beyond dispute. Thus, 
 should the working agreement be approved by 
 Parliament, fish sent from Grimsby to London 
 by the Great Central would go to the Great 
 Northern company's Mint Street depot, which is 
 close to Billingsgate market, instead of being car- 
 ried first to Marylebone Station (the only London 
 depot of the Great Central Railway Company), 
 and thence carted through the streets of London 
 to Billingsgate, a distance of about four miles. 
 By the new arrangement this expense of cartage 
 will be saved, and the fish should arrive at 
 Billingsgate earlier, if not, also, in better con- 
 dition. In the same way fish from Yarmouth 
 or Lowestoft, on the Great Eastern Railway, for 
 the same market, would be delivered there from 
 the Great Northern Mint Street depot, instead 
 of being carted from the Great Eastern depot at 
 Bishopsgate. 
 
 Then the residents in the great manufacturing 
 districts served by the Great Northern and the 
 Great Central systems will obtain better access 
 to the seaside resorts of Norfolk and Suffolk 
 served by the Great Eastern ; colliery ow-ners 
 and traders in general in the former districts will 
 
 1858, and not to the company's extension to London. 
 A fresh Act must therefore be obtained, and it is pro- 
 posed that the new arrangement shall include not only 
 the two companies mentioned, but the Great Eastern 
 as well.
 
 400 Railways and Nationalisation. 
 
 have opportunities, by means of quicker and 
 more direct services, for developing- their busi- 
 ness in the Eastern Counties, and for getting 
 into closer connection with the London Docks, 
 while the possibilities to traders in either north 
 or east of dealing with a combined management, 
 in questions of through rates, instead of witli 
 t\\(j or even three separate companies, cannot fail 
 to be appreciated. 
 
 How the positicm is regarded from the stand- 
 point of the railways concerned is shown by the 
 following remarks by the chairman of the 
 Great [eastern Railway Company, Lord Claud 
 Hamilton, at the half-yearly meeting of the 
 shareholders on July 31, IQ08 : — 
 
 The one event in the past half year which no doubt 
 mainly interested you, and which will have a very 
 important bearing- upon your prospects in the future, 
 was the official announcement that this company 
 had decided upon an alliance with the Great Northern 
 and Cireat Central companies with a view to closer 
 working- in a spirit of harmony, and the avoidance of 
 that class of competition which, whilst proving of 
 no real benefit to the public, injuriously affected the 
 net receipts of all three companies. I have long 
 hoped for some such arrangement, and the experi- 
 ence of the past two or three years has conclusively 
 proved that without it the financial position of the 
 three companies in question could hardly be expected 
 to improve, 'but, on the contrary, might deteriorate. 
 All three companies are in varying- degrees suffering 
 from a diminution of traffic, increases in cost of 
 materials, and there has been a steady rise in wages. 
 We, and no doubt the other two companies, have all
 
 British Railway Position To-day. 401 
 
 practised the strictest economy and concentrated the 
 attention of our respective boards and officers upon 
 the all-important question of more economical 
 working- on every part of our systems, subject to the 
 maintenance of efficiency and the safety of the travel- 
 ling public. But in spite of our efforts the difficul- 
 ties we have had to face have been so strong- that 
 we were called upon to consider some other method 
 of attaining our end. I believe the one resolved on 
 will commend itself to the shareholders of the three 
 respective companies, for when it is carried through 
 it cannot fail to prove of material advantage to 
 them. What we shall ask Parliament to sanction is 
 a closer community of interests between the three 
 companies in the form of closer working on the lines 
 of the agreement between the Great Northern and 
 Great Central companies, the discontinuance of that 
 competition which, whilst, in fact, profitable to 
 none, has been a loss to all, and a gradual rearrange- 
 ment as opportunities occur of our passenger ser- 
 vices and goods arrangements, whilst offering- to the 
 public increased conveniences and greater facilities 
 for rapid and more direct through transit over the 
 joint system than can ever be obtained over the three 
 systems under present conditions. 
 
 The chairman of the Great Central Company, 
 Sir .Vlexander Henderson, speaking at the half- 
 yearly meeting of that company on August 7, 
 1908, said, concerning the proposed alliance; — 
 
 The competition that has prevailed for so long has 
 not been of any real benefit to the public, and has 
 certainly injuriously affected the net receipts of the 
 three companies. Notwithstanding the exercise of 
 great economy, we are all finding a decrease in our 
 net revenue, and it is essential we should find some 
 method whereby our shareholders should reap some 
 reward for their expenditure, , . . Of course we 
 
 D D
 
 4()2 Railways and Nationalisation. 
 
 inay not be successful in our appeal to Parliament, 
 but, whatever happens, the status quo ante is an 
 impossibility. . . - We can but hope that the period 
 of distrust and suspicion is past, and a new order of 
 thing's has taken its place. 
 
 Then, again. Lord Allerton, chairman of the 
 Great Northern, in dealing with the same matter 
 at the half-yearly meeting of that company on 
 August II, 1908, said: — 
 
 Any one who knew of the associations and con- 
 nexions between the Great Northern and the Great 
 Central companies— the equal ownership of joint 
 lines and the working- over one another's lines, to a 
 certain extent, of traffic in its passag^e from point to 
 point — would be aware that the same conditions 
 applied with respect to the Great Eastern Railway; 
 and the possibilities for improved working, improved 
 service to the public, and effective economy would be 
 g"reater by putting- the three companies tog-ether than 
 by putting- the two companies together. 
 
 After quoting from Mr. Asquith's speech at 
 Manchester the remarks I have already given on 
 pp. ,'^77-8, Lord Allerton proceeded : — 
 
 If that indictment had been made against the 
 directors by a shareholder in that room, it would 
 have been regarded as very strong ; but it was their 
 case. He believed that there was enormous waste, 
 and wherever there was enormous waste it was a 
 national loss. He might mention two matters in 
 which he was convinced that great savings might be 
 effected. Did the shareholders know that the cost 
 of collection and delivery to the three companies 
 represented ;^8oo,ooo a year, and that in many cases 
 three vans went over the same ground canvassing 
 for the same goods? Then, he found that the
 
 British Railway Position 'I o-day. 403 
 
 number of train miles per day which they were at 
 present getting- out "f a driver and his engine was 
 less than 60; putting it in other words, it was 354 
 miles in the particular week for which he examined 
 the figures, and he supposed that that might be 
 divided by six at least. He had not a doubt that if 
 the proposed agreement were sanctioned by Parlia- 
 ment, they might, by rearranging their working, 
 enable the engine to project itself a trifle further 
 every day. That would be a saving of money to 
 them, and an advantage in punctuality and delivery 
 to the traders and the service. ... It was some- 
 times said that by putting the railways together there 
 would be a monopoly, as it was called, in the dis- 
 tricts affected, and that the companies would behave 
 badly ; but the whole railway history of this country 
 was in direct conflict with that view. One could not 
 point to a single small railway which had been 
 absorbed by a large one and which had been worked 
 by the latter, in which there had not been an imme- 
 diate improvement in the service of the district. It 
 could not be otherwise. That was all that the three 
 companies were asking for in the arrangements they 
 proposed. 
 
 It is difificult to see what hidden dangers to 
 the community there can be in such very 
 |)ractical and common-sense arrangements as 
 these, and it is to be hoped that Parliament will, 
 in the circumstances, allay its time-honoured 
 suspicions of railway agreements, that local 
 authorities and trading or other organisations 
 will on this occasion be restrained from levying 
 blackmail, or at least from imposing merciless 
 exactions, as the " price " of their assent, and 
 that the way will be opened out for still more 
 
 D D 2
 
 404 R.Mi.wAvs AM) Nationalisation. 
 
 or such arrangements, in the interests, not alone 
 of the companies and of their -shareholders, but 
 also of the country in general. 
 
 i:XISTING POWKRS OF ARRANGEMENT. 
 
 The reference already made on p. 379 to the 
 arrangement between the London and North- 
 western and the Lancashire and Yorkshire 
 companies, which came into force in 1905, shows 
 that there are agreements railwa^• companies can 
 carry out between themselyes \yithout seeking 
 the Parliamentary sanction that appears to be 
 necessary in the particular case of the triple alli- 
 ance just mentioned. Railway companies are, 
 in fact, already able to make arrangements one 
 with another, on certain specified points, within 
 the range of their existing powers, and to the 
 adyantage alike of the public and of the share- 
 holders. They can, for instance, agree that 
 tickets issued by one company shall be available 
 for use over the lines of another company, so 
 saying competitiye trains and at the same time 
 benefiting their patrons. They can agree to 
 have receiving offices in common ; which means 
 that where two of such offices, owned by differ- 
 ent companies, are close together, one can be 
 done away with and rent and wages saved. This 
 might be an important consideration in a city 
 where land and property are of great value and 
 many of such offices exist; while, where, in the 
 case of a suburb or a country town, only one
 
 British Railway Positiox To-day. 405 
 
 companv has a receiving and inquiry office, the 
 single office would receive parcels, issue tickets, 
 collect advance luggage, or transact other busi- 
 ness for both, additional conveniences being 
 thus also conferred on the local residents. In 
 the same way there can be common use of either 
 companv's stations, town offices, etc. 
 
 Two companies can agree that the vans owned 
 by either of them shall collect for both. This will 
 allow of a certain number of vehicles, horses, 
 and drivers being dispensed with. It should be 
 of advantage t(^ the trader, who will be able to 
 give to the van-man of one company goods to be 
 carried by another c<jmpany, and will find his 
 premises less blocked by vans, since there will 
 no longer be the same necessity for so many to 
 call. It should, again, afford some relief to the 
 street traffic in large cities, inasmuch as fewer 
 vans will require either to stand in front of ware- 
 houses, while being loaded up, or to obstruct 
 other vehicles still further by their slow rate of 
 progress through the streets. Here, in itself, is 
 an important consideration both for city authori- 
 ties, faced with the grave problem of dealing 
 effectively with the ever-increasing street traffic, 
 and for motorists, to whom railway lorries in 
 town must often be still more annoying than 
 farmers' wagons in the country ; so that railway 
 companies ought to secure for their present 
 policv the commendation of these two classes 
 at least.
 
 4oC Railways and Nationalisation. 
 
 Companies can further agree between them- 
 selves, within the Hmit of existing powers, that 
 each will carry by the shortest route goods en- 
 trusted to another to deliver. This means, for 
 the companies, a more economical loading of 
 wagons (which now too often go only half or a 
 quarter full), and the possible saving of certain 
 of the goods trains; and, for the trader, a still 
 quicker transport tor his consignments (when 
 these are now taken by a long route and a short 
 one is available) and, especially, a still greater 
 guarantee of early delivery to the shopkeeper 
 wh(j replenishes his stock from day to day (more 
 or less) and to whom the difference <jf even an 
 hour (jr two in the arrival of fresh supplies in the 
 morning may be of material concern. 
 
 LONDON AND NORIH WESTERN AND LANCASHIRE 
 AND YORKSHIRE ARRANGEMENT. 
 
 It was on such lines as these that the London 
 and North-Western and the Lancashire and 
 Yorkshire companies made their friendly 
 arrangement, without requiring to ask Parlia- 
 mentary sanction ; and, although at first there 
 was the inevitable outcry, it was speedily found 
 that, while the shareholders would gain by the 
 taking off of duplicate trains and by the other 
 economies mentioned, the traders and the public 
 would also benefit through the concession to 
 them of the increased facilities. 
 
 The position from the railway standpoint was
 
 BuiTfsii Km I. WAY Position To-dav. 407 
 
 well summed up by the chairman of the London 
 and North-Western Company, Lord Stalbridge, 
 when he said, at the half-yearly meeting of that 
 company on February 17, 1905 : — 
 
 Had not both sides been reasonable and deter- 
 mined to exhaust every effort in coming' to an 
 understanding-, the two companies might easily have 
 been involved in a ruinous competition, entailing- 
 large capital outlay as well as greatly increased 
 expenses. 
 
 THK LONDON AND NORTH-WESTERN AND AIIDLAND 
 ALLIANCE. 
 
 The policy thus indicated has also been fol- 
 lowed up in another direction. At the half- 
 yearly meeting of the London and North- 
 Western Companv' in P'ebruary, 1906, f.ord 
 wStalbridge said : — 
 
 We are quietly, continuously, and, to an extent, 
 successfully doing all we can to promote co-operation 
 between companies, in order to avoid wasteful com- 
 petition. We may fail at first to carry through what 
 we may consider would be to the advantage of the 
 companies concerned ; but that is not surprising, 
 when you think of the enormous and conflicting 
 interests involved. That, however, does not dis- 
 hearten us or deter us from continuing our efforts. 
 One important agreement in this direction that we 
 made with the Lancashire and Yorkshire Railway 
 Company has been most beneficial to both com- 
 panies ; useless competition has been put an end to, 
 considerable economies have been effected in work- 
 ing, and heavy expenditure on capital account has 
 been avoided. We have also been able to give 
 incieased facilities to the public. We have arrange-
 
 4o8 Railways and Nationalisation. 
 
 ments, with the same end in view, with other com- 
 panies, notably with our principal competitor — the 
 Midland — and I have every reason to believe that, 
 where it is possible and in the interests of the share- 
 holders, the Midland and North- Western will extend 
 such co-operation. 
 
 A like announcement was made by the chair- 
 man of the Midland Company, Sir Ernest Paget, 
 who, at the half-yearly meeting" of the share- 
 holders of that company held in the same month 
 of 1906, said : — 
 
 We have made arrangements with the North- 
 western which will tend to the economical working 
 of both companies, and greatly to their advantage. 
 And, further than that, I am glad to say the North- 
 western Company have taken this matter up very 
 seriously with a view to getting competing com- 
 panies more together, and so avoid unnecessary 
 expenditure. I am afraid that the North- Western 
 Company have not received altogether the support 
 that we could wish ; at the same time, we hope 
 that they will not be discouraged, and Lord Stalbridge 
 told me they would not be discouraged ; but I am 
 quite sure, if they go on in this direction, they will 
 succeed in the end, and, further, I am quite sure of 
 this, that my colleagues and I will do all in our 
 power to further that end. 
 
 Sir Ernest Paget reverted to the same subject 
 at the meeling of his company in February, 
 1908, saying : — 
 
 The result of the arrangement which has been 
 made is very satisfactory indeed, and I hope we shall 
 go on and make further arrangements. 
 
 These further arrangements in the interest of
 
 British Railway Position To-day. 409 
 
 economies were duly made, and on August 6, 
 1 90S, there came the official intunation that : — 
 
 The London and North-Western and Midland 
 companies have arrived at an arrangement of a com- 
 prehensive character to endure for a long period of 
 years which will, it is hoped, be the means of 
 (.'n^bling- considerable economies in working expenses 
 Ui be ci'fected, while, at the same time, the public 
 W|ill obtain the advantage of increased facilities for 
 passenger and merchandise traffic. 
 
 The more comprehensive arrangement here 
 indicated is thus the outcome of earlier tentative 
 efforts, which prepared the way, and demon- 
 strated the practicability of the larger design now 
 resolved upon. I'he more recent departure (for 
 which, it seems, there is again no need to seek 
 for Parliamentary sanction) is thus to be regarded 
 as the evolution of a scheme well thought out, 
 and already well tested, rather than an expedient 
 hastily adopted by reason of the recent activity 
 of the nationalisation party. It is desirable 
 that this fact should be clearly understood, be- 
 cause there are members of the said party who 
 would have the world believe that it is their own 
 action which has led the various railway com- 
 panies concerned to take the course they are now 
 adopting. 
 
 All the advantages, both to companies and to 
 the public, already spoken of in connection with 
 the agreement of the London and North-Western 
 and the Lancashire and Yorkshire companies
 
 4IO Railways and Nationalisation, 
 
 will be repeated, though on a still larger scale, 
 by the arrangement between the London and 
 North- Western and the Midland. Considera- 
 tions as to through passenger train services 
 and carriages, interchangeability of tickets, 
 luggage in advance to be collected by one com- 
 pany and delivered from a station belonging to 
 the other, joint receiving offices, carriage of con- 
 signments by the shortest routes, and so on, arise 
 in even greater force in the one case than in 
 that of the other, the Midland being a line with 
 extremely widespread ramifications, while the 
 fvancashire and Yorkshire operates in a more 
 limited area. The London and North-Western 
 and the Midland systems are,, in fact, eminently 
 adapted to such an arrangement as that pro- 
 posed. " The geographical positions of the two 
 companies," said Lord Stalbridge, at the half- 
 yearly meeting of the London and North- 
 Western Railway Company on August 14, igo8, 
 " are such as to place them in competition for 
 traffic between many important places " ; and he 
 proceeded : — 
 
 We have long- desired to arrive at a means of so 
 combining- the interests of the two companies as to 
 enable the traffic in which both are interested to be 
 carried on with thoroug-h efficiency united with the 
 greatest economy, consistent with that efficiency, 
 in the common interest of both companies. Many 
 arrang-ements have been made with our Midland 
 friends with this object, but they have hitherto, 
 thoug^h important, been relatively, of a minor char-
 
 British Railway Position To-day. 41 t 
 
 acter. Now, however, I am glad to say that we 
 have been able to make an ag;reement which will, 
 we hope and believe, have very important results. 
 Its principles are, first, the elimination of all in- 
 ducements to excessive competition, which, while 
 expensive, produce no additional traffic; and, 
 second, co-operation in the working- of all competi- 
 tive traffic in the manner most convenient to the 
 public and most economical to both companies. 
 These being the principles, the mode of application 
 is the division of receipts from competitive traffic 
 in certain proportions based upon the actual carry- 
 ings of the two companies over a given period in 
 the past. It cannot be otherwise than a gradual 
 business to ascertain where, and in what ways, the 
 working of the traffic can be improved and econo- 
 mised. This work, however, is in progress, and 
 the inducement to the abstention from expensive 
 competition is in full force, because the settlement 
 of accounts, when necessary figures have been ascer- 
 tained, takes effect from the ist July last. You 
 may be sure that we shall lose no opportunity of 
 extending the arrangement, to the advantage alike 
 of the public and of the shareholders, applying, if 
 necessary, to Parliament for further powers. 
 
 Replying to a shareholder, Lord Stalbridge 
 stated that the combination with the Midland 
 company was to continue till 1999. 
 
 Sir Ernest Paget informed the shareholders 
 of the Midland company at their half-yearly 
 meeting on the same day that the arrangements 
 made were " for the pooling of all competitive 
 traffics." He added: — 
 
 This would eliminate unnecessary competition, 
 while also conducing to the better operation of both 
 their lines, which would undoubtedly result in large
 
 4T2 Raii,ways and Nationalisation. 
 
 economies. Those economies had always been most 
 desirable, but never more so than now. The princi- 
 ple of the arrangement was the poolings of the 
 whole of the traffic, and the division of the receipts 
 according- to the ratio of past earnings. An ar- 
 rangement of that kind could not be popular unless 
 there was some advantage to the public, and he 
 felt sure that the facilities which the railway com- 
 panies would be able to give to the travelling public 
 and to traders generally would very completely 
 allay any anxiety or fear as to the arrangement 
 which might exist in certain quarters, but which he 
 believed would prove to be absolutely and entirely 
 unfounded. 
 
 SOME POSSIBLE DIFFICULTIES. 
 
 While, however, the principle of alliances and 
 arrangements such as those here in question is 
 undeniably sound, and appears to offer the best 
 solution to the railway problems of the day, 
 there are certain difficulties which are not to be 
 overlooked in regard to the general application 
 of the principle in question. 
 
 Among other consequences of the policy 
 pursued by Parliament for so many years in 
 encouraging active competition between com- 
 panies must be reckoned a very great complica- 
 tion of railway interests, especially in regard to 
 running powers, routes, exchange of traffic, etc., 
 so that, although working agreements may be 
 brought forward which are perfectly fair to the 
 parties directly concerned, there is always the 
 possibility that some other company outside the 
 proposed new agreement may consider that its
 
 British Railway Position To-day. 41,^5 
 
 own interests are threatened by (say) a possible 
 diversion of traffic which it has hitherto handled. 
 
 The ramifications and complications of the 
 British railway system are thus almost inter- 
 minable, and the first phase of the great 
 educational work which must be carried out to 
 ensure the most economical methods of operat- 
 ing the lines, under more or less combined 
 working, applies to the railway companies them- 
 selves, inasmuch as it is for them to consider in 
 what way improvements can be effected in on^^ 
 direction without causing injury, or interfering 
 unduly with rights or reasonable expectations, 
 in another. Delicate situations may thus arise, 
 but, under a policy of give and take and of 
 considerations for the general good, they ought 
 not to be so far imsurmountable as to lead the 
 nationalisers to suggest that the best solution 
 after all would be for the Government to take 
 over the lot. There is the greater reason why 
 the one alternative is better than the other, 
 because effective co-ordination among the com- 
 ])anies should afford most of the advantages 
 that could be deri^•ed from nationalisation, with- 
 out the risk of those drawbacks of State owner- 
 ship and State operation which I have already 
 detailed. 
 
 On the other hand the existence of possible 
 difliculties of the type here indicated has had far 
 less to do with restraining companies from seek- 
 ing to enter into more of these alliances than
 
 414 Railways and Nationalisation. 
 
 their reluctance to expose themselves to the 
 denunciations and attacks which hitherto have, 
 invariably followed the announcement of any 
 such proposals. 
 
 ATTITUDE OF PARLIAMENT. 
 
 The next step will be to try to convert Parlia- 
 ment from the old fallacy that keen competition 
 between railway companies, regardless of the 
 consequences to themselves, is essential to the 
 welfare of the community. We have the most 
 striking proof already that competition carried 
 to excess, under the auspices, if not at the 
 direct instigation, of Parliament, finishes off by 
 being actually harmful to the community, since 
 a point is reached when not only are the share- 
 holders prejudiced, but the railway companies 
 themselves are checked alike in their enterprise 
 and in their power to make concessions to traders 
 and others. 
 
 It is impossible now to retrace steps already 
 taken, and, on account of the complications men- 
 tioned above, there may be some difificulty in 
 equitably dividing the United Kingdom into 
 different districts, in which each railway com- 
 pany, or group of unified companies, would have 
 its own sphere of operation, as was done years 
 ago under the practical and common-sense 
 scheme carried out in France. But it might, at 
 least, be suggested that when British railway 
 experts — who are confessedly among the most
 
 British Railway Position To-day. 4f5 
 
 competent of their class to be found in anv 
 country in the world- — ask support for schemes 
 which are aimed, not at getting any unfair 
 advantage over the public, but at placing their 
 lines on a sounder financial basis, Parliament 
 should regard such proposals with more 
 sympathy and less suspicion and prejudice, and 
 should also assure to the railway companies 
 ampler protection from any possible selfishness 
 and unreasonableness — if not even actual 
 rapacitv — on the part of local interests. 
 
 THE education OF THE PUBLIC. 
 
 The third phase of the policy here recom- 
 mended is the need for bringing home to the 
 mind of the community in general the fact that 
 amalgamations, combinations and working 
 agreements between railway companies, aimed 
 directly at a more economical operation of their 
 lines, must be to the direct advantage of the 
 public themselves, since it will add strength to 
 the railway position, allow the companies to 
 check waste, and enable them to give better 
 terms or increased facilities to their patrons. 
 
 Prejudices against railway companies live long 
 and die hard. It seems to be of little use to 
 point to w^hat British railway companies — not 
 only, as I have shown, without State aid, but in 
 spite of persistent State obstruction and State 
 handicapping in many different ways — have done 
 to promote trade and travel and to add to the
 
 4i6 Railways and Nationalisation. 
 
 enjoyment of the public. It is almost futile to 
 recall the fact that in no country in the world 
 has the trader been really better served by the 
 railways than in the United Kingdom; that in 
 no other land have travellers received more con- 
 sideration in the way of third-class accommoda- 
 tion in express trains, with well-lighted and well- 
 ventilated corridor carriages on bogey frames, 
 refreshment cars, and every possible comfort and 
 convenience for a long journey. All these 
 things, together with the multiplicity of chear) 
 excursions, tourist tickets, week-end trips, etc., 
 are apt to be forgotten, or taken for granted 
 \\ithout an atom of gratitude or appreciation, by 
 the average Englishman when it is a matter of 
 indulging in the favourite sport — almost as 
 popular as golf itself — of grumbling at the rail- 
 ways. Yet the aforesaid average Englishman 
 must see that the railways of his country cannot 
 all go on as they are, and that it will be more 
 prudent on his part to give them sympathetic 
 encouragement in any reasonable reorganisation 
 of their position they may seek to make, b\' 
 means of friendly arrangements based on 
 business lines, than to favour a resort to what 
 would be, in the case of the United Kingdom, 
 an essentially quixotic scheme of State purchase 
 nnd State operation. 
 
 DISTRUST OF RAILWAY COMBINATIONS. 
 
 The fears that the welfare of the traders especi-
 
 British Railway Position To-day. 417 
 
 ally will be endangered by railway combinations 
 are mainly imaginary. Such combinations, as w^e 
 find, have been proceeding since the early days 
 of railway history, and no prejudice to the com- 
 merce and industry of the country, but rather 
 substantial gain thereto, has resulted from the 
 amalgamation of groups of fifty, sixty or even 
 a hundred small companies into a great one. 
 With each amalgamation thus effected there has 
 already been a decrease in competition, and the 
 trade of the country has not yet been ruined by 
 the railways, nor have the railway companies 
 become all-powerful monopolists, accumulating 
 unbounded wealth at the expense of the country. 
 Should the same combination policy undergo 
 further development, the traders would still be 
 fullv protected by Parliamentary enactments 
 which not only compel the companies to keep 
 their rates within stipulated maxima, but, as I 
 have shown before, make them liable to be called 
 upon to justify their action if they even increase 
 the rates beyond the amounts at which these 
 now stand. If, to meet the new developments 
 (which will naturally be closely watched), it 
 should be found necessary to strengthen the 
 existing powers of Parliamentary control over 
 the railways in the interests of the traders or of 
 the community ; or if it should be found desirable 
 to afford still greater facilities to the traders in 
 the representation of their wishes or their griev- 
 ances, there should be no great difficulty in the 
 way of Parliament taking action accordingly, 
 
 E E
 
 4i8 Railways and Nationalisation. 
 
 and assuring any further guarantees the ahered 
 situation might really require. 
 
 A RAILWAY " TRUST." 
 
 These considerations are especially to be re- 
 membered when the question arises — as it prob- 
 ably will — whether the alliances now proceeding 
 or projected may not lead to the creation of a 
 railway " trust." Any uneasiness in this direc- 
 tion is probably based on the experiences of the 
 United States; but the railway conditions in that 
 country are altogether different from our own. 
 Built originally in a very primitive way, and 
 given at first an exceptional degree of freedom 
 and independence, the American railwa3'S 
 developed abuses, or were themselves subjected 
 to abuses, in regard to transport, which would 
 be impossible under the far stricter control exer- 
 cised over the British lines; while the fact that 
 the holding of railway shares in the United 
 Kingdom is spread over so large a number of 
 persons — of whom a great proportion seek a 
 safe investment rather than have any wish to 
 speculate — decreases the risk of British railways 
 becoming the sport of financiers to the same 
 extent as is the case with American railways. 
 
 Bearing in mind the strong hold which Parlia- 
 ment, under any possible conditions, will still 
 be able to exercise over consolidated (^r allied 
 railway systems here, I should say that the com- 
 parison would be far less with American "trusts" 
 than with those great French railway companies
 
 British Railway Position To-day. 419 
 
 who divide France between them, and, in the 
 circumstances, have a monopoly and a freedom 
 horn competition far greater than could now be 
 effected through any practicable railway com- 
 binations in the United Kingdom. So far as I 
 am aware, there is no suggestion that these 
 French companies — themseh^es subject to strict 
 Government control — either abuse their powers 
 or avail themselves of the absence of competition 
 to overcharge, or to neglect the interests of, the 
 populations they are expected to serve. On the 
 contrary, the fact that they do not have to waste 
 alike their resources and their energies on coni- 
 petition of the "cut-throat" kind renders them 
 better able to cater for the wants and require- 
 ments of the particular territories assigned to 
 them. 
 
 scope for reassurance. 
 
 The British public should, in fact, satisfy 
 themselves that, \\ith a further decline in the 
 extent or in the keenness of railway competition, 
 the companies, while effecting useful economies, 
 will not either abandon their forward progressive 
 policy — which it is to their own advantage they 
 should maintain — or take any undue advantage 
 of the trader, from whose increased prosperity 
 they will themselves directly benefit. 
 
 There is no ground for suggesting that the 
 virtual monopoly already enioyed bv the North- 
 Eastern Railway Companv in a considerable 
 
 E E 2
 
 420 Railways and Nationalisation. 
 
 portion of its district has been detrimental to the 
 commercial welfare of that part of England. 
 Nor, I am sure, has Cornwall suffered in any- 
 way because of the supremacy there of the 
 Great Western Railway. On the contrary, where 
 one company has a district to itself, it is all the 
 more concerned in helping to bring about there- 
 in a substantial commercial and industrial ex- 
 pansion, the benefits of which — from a railway 
 standpoint — would not have to be shared with a 
 competitor. 
 
 The soundness of the policy here advocated is 
 thus confirmed by experience past and present, 
 and, in giving it their cordial support, traders 
 and the public will find they have nothing to 
 lose but much to gain from adopting a more 
 sympathetic attitude towards the railways and 
 rendering what help they can in placing the 
 railway position in general on a firmer and more 
 prosperous basis. 
 
 Even, however, when this attitude has been 
 adopted, and this help given, the path of the 
 companies will be by no means smooth, for they 
 will still have to reckon (as the State itself would 
 do, if it bought them out) with that heavy capital 
 expenditure — due to causes described in earlier 
 chapters — which, greater far than in the case of 
 other systems of railways elsewhere, must always 
 leave them at a disadvantage that no possible 
 combination or co-ordination can fully surmount.
 
 Summary and Recommendations. 421 
 
 CHAPTER XVII. 
 SUMMARY AND RECOMMENDATIONS. 
 
 The survey of railway nationalisation in 
 practice, as given in the present volume, estab- 
 lishes, I consider, certain distinct propositions, 
 the more important of which I would summarise 
 as follows : — ■ 
 
 (i) Railways may be either constructed or 
 acquired by a State, and may then be either 
 operated by the State itself or transferred to 
 private companies; these distinctions and 
 differences showing that the phrase " railway 
 nationalisation " is open to various interpreta- 
 tions, and that specific definitions are essential. 
 
 (2) State construction of railways may be 
 fully warranted, and even deserving of high 
 commendation, in lands where new country has 
 to be opened up for settlement, where popula- 
 tion and financial resources are alike limited, 
 and where private enterprise is unequal to so 
 costly and, it may be, so speculative an under- 
 taking. 
 
 (3) State purchase of railways may be equally 
 unavoidable and equally expedient in lands 
 where private enterprise has resulted in failure, 
 or where material considerations of national
 
 422 Railways and Nationalisation. 
 
 defence, protective policy, State finance, or 
 international relations are directly concerned. 
 
 (4) Accepting propositions (2) and (3) as 
 applying to various foreign countries and 
 British colonies, it does not necessarily follow 
 that the sarne reasons would in themselves justify 
 either State construction or State purchase of 
 railways in the United Kingdom, where an 
 almost complete network of raihvays (but for a 
 few desirable connecting links, branch lines, 
 and widenings) already exists, rendering State 
 construction unnecessary ; where the factors 
 mentioned as justifying purchase would not 
 apply; where private enterprise in both con- 
 struction and operation has been equal to all 
 reasonable requirements for three-quarters of a 
 centurv; where the question of purchase price 
 would be greatly complicated (a) by the over- 
 capitalisation of many of the lines, owing, in 
 part, to State policy in the past; (b) by the dead- 
 weight of unremunerative capital, for which 
 allowance must be made and the burden of 
 which must be assumed ; and (c) by the many 
 subsidiary enterprises now forming an essential 
 part of railway ownership and operation ; and 
 finally, where the sum total of the purchase 
 money would be prodigiously large, the prospect 
 of material gain most uncertain, and the pro- 
 bability of serious interference with the national 
 finances bevond the shadow of a doubt. 
 
 (5) State operation of railways elsewhere has
 
 SlMMARV AND RfXOMMICXDATION'S. 423 
 
 not been shown to be more economical, more 
 efiicient, and better for traders and travellers 
 (especially those of the third class) than opera- 
 tion by companies at home; whereas we have 
 distinct evidence that vState operation may in- 
 volve (a) deliberate presentation of the railway 
 accounts in an unduly favourable light, in order 
 to convey a wrong impression to the taxpayers; 
 (h) the introduction into railway administration 
 of political influences which render impossible 
 operation on ordinary business lines, encourage 
 deep-seated and widespread corruption, and 
 tend to degrade the character and mar the 
 efficiency of the national or colonial Parliament; 
 (c) serious evils in the creation of a large body 
 of State servants, who may provoke grave 
 la!)our troubles, or, as elector employes, may 
 either themselves use their political privileges to 
 their personal advantage, or, alternatively, be 
 made use of by Governments or Parliamentary 
 candidates to serve their own particular end, 
 bribes being thus offered, or pledges being thus 
 given, the fulfilment of which, would be pre- 
 judicial both to railway and to national interests; 
 and (d) a possibility that the desire of the rail- 
 way companies to secure a reasonable return on 
 invested capital may be superseded by a much 
 more active endeavour on the part of a Finance 
 Minister to obtain large contributions from the 
 railway revenue for the national exchequer. 
 (6) That even where State ownership of rail-
 
 424 Railways and Nationalisation. 
 
 ways has been necessarily or justifiably adopted, 
 such disadvantages and dangers as those men- 
 tioned in proposition (5), and others besides, 
 would be avoided by the State entrusting the 
 actual operatfon of the lines, under suitable con- 
 ditions, to private companies.* 
 
 (7) That, inasmuch as the real function of a 
 Government is to govern, it is better that a 
 Government should (where this is practicable) 
 be content to control railways rather than to own 
 and operate them. 
 
 (8) That the operation of railways by com- 
 mercial companies, under such effective control 
 by the State as is already enforced in the United 
 
 * Supplementing what I have already said on this 
 point in connection with Holland, Mexico and India 
 (pp. 6-8), and Belgium (p. 249), I might here mention 
 that in the last-named country the provision of an ex- 
 tensive system of light railways (the building of more 
 main lines of railway there having practically ceased) 
 has been undertaken, since 1885, by the " Soci^t^ 
 Nationale des Chemins de For Vicinaux," the shares in 
 which are held almost exclusivelj' by the State, the pro- 
 vinces and the communes. The Society has a monopoly 
 of the construction of these light railways, but it has 
 renounced exploitation, and prefers to transfer the 
 operation of them to private companies, in order, ac- 
 cording to M. Colson, the eminent French authority on 
 railways, " to avoid the intrusion of politics." (" Trans- 
 ports et Tarifs," 3rd edition, p. 777). The operation of 
 13S lines of these light railways, now open, with a total 
 length of about 1,860 miles, has thus been divided bv the 
 Society between 37 different companies. (For details as 
 to the origin, development and present position of the 
 Belgian light railways system, see an article on " Nos 
 Chemins de Fer Vicinaux," by M. C. de Burlet, in the 
 " Revue Economique Internationale " (Brussels), 15-20 
 Fevrier, 1907.)
 
 Summary and Recommendations. 425 
 
 Kingdom in regard to construction, working, 
 safety, rates and charges, etc., is far better for 
 traders and the community, inasmuch as it 
 ensures adequate protection of the pubHc in- 
 terests ; is more elastic ; is more free from the 
 red-tape and routine characteristic of State 
 departments; is in closer and more sympathetic 
 touch with those interests of trade and com- 
 merce which are also the interests of a railway 
 company; and is more likely to offer greater 
 facilities in the way of excursions, cheap fares, 
 and comfortable travel. 
 
 (g) That various sections of the party favour- 
 ing nationalisation of the British railways are 
 inspired far less by considerations for traders, 
 travellers, and the large body of railway share- 
 holders than by socialistic views, personal in- 
 terests, and motives of political expediency. 
 
 (10) That the direct association of the railway 
 system with the machinery of party politics 
 would in itself be prejudicial in the highest 
 degree to the political, commercial and moral 
 welfare of the country. 
 
 On the basis of this series of propositions I 
 would recommend : — 
 
 (i.) That the principle of railway nationalisa- 
 tion be not adopted in the United Kingdom. 
 
 (ii.) That, in place thereof, the railway com- 
 panies be permitted and encouraged to make, 
 where necessary, such alliances or arrangements 
 among themselves as would allow of desired
 
 426 Railways and Nationalisation. 
 
 economies being effected, without any disadvant- 
 age — and even with actual material beneht — to 
 the community. 
 
 (iii.) That Parliament, traders, and the public 
 in general should show a more sympathetic 
 attitude towards the railways, which have done 
 so much to promote the national well-being; and 
 should assist rather than retard, exploit, and 
 nullify, a rational policy which would secure the 
 best results that could possibly follow from rail- 
 way nationalisation, while avoiding the risk of 
 its many attendant evils and disadvantages.
 
 Royal Commission of iS6>. 427 
 
 APPENDIX. 
 
 THE ROYAL COMMISSION OF 1865. 
 
 The question as to whether or not the State should 
 acquire the railway system of the United Kingdom 
 was fully considered by a Royal Commission on Rail- 
 ways appointed — under the presidency of the Duke 
 of Devonshire — in 1S65. The Commission decided 
 against recommending any such step, their refe- 
 rences to the subject in the report they presented 
 (now out of print) being as follows : — • 
 
 Go\crnment Purchase of Railways. 
 
 Ha\ ing thus described the origin and progress of 
 the railway system, we proceed to enquire whether 
 any fundamental change is required in it by the 
 public interests. 
 
 It was clearly contemplated by Parliament that it 
 might be desirable at a future time to reconsider the 
 relations of railways to the State, inasmuch as it is 
 stated in the Act of 1844 that it is not intended to pre- 
 judge by its provisions the policy of revision and pur- 
 chase, but to leave the question open for the future 
 consideration of the Legislature upon grounds of 
 national policy. 
 
 As the period of 21 years fixed by that Act for the 
 purchase of railways authorised in 1844 has now 
 elapsed, the proper opportunity for a full examination 
 of the question has manifestly arrived.
 
 428 Appendix. 
 
 Act of 1844. 
 
 We will in the first place examine the provisions 
 of the Act of 1844, and the manner in which they 
 could be carried into effect. 
 
 The Act provides that after the end of 21 years 
 from the ist January next after the passing of any 
 Act of the Session of 1844 or any subsequent 
 Session of Parliament for the construction of any 
 new line of passenger railway, such line of passenger 
 railway, whether a trunk, branch or junction line, 
 sanctioned in that or any subsequent Session, and 
 whether such new line be constructed by a new com- 
 pany or by an existing company, shall be liable to be 
 purchased for a sum equal to 25 years' purchase of 
 the average annual divisible profits for three years 
 before such purchase, provided these profits shall 
 equal or exceed 10 per cent, on the capital; and if 
 not, the railway companies shall be at liberty to claim 
 any further sum for anticipated profits, to be fixed by 
 arbitration. 
 
 The company owning such line is to keep and 
 render to the Treasury accounts of the receipts and 
 expenses for the three years, distinguishing such 
 receipts and expenses, if a branch, or if worked in 
 connection with other railways, from the receipts and 
 expenses on such other railways. 
 
 It is especially enacted that the option of purchase 
 shall not extend to any railway the construction of 
 which was authorised before the Session of 1844. 
 But any railway company subject to its provisions 
 may require that if the Government purchase a 
 branch of their line sanctioned subsequently to 1843, 
 they shall also purchase the whole of the company's 
 lines. 
 
 It is declared by the Act that, in order to prevent 
 the public resources from being employed under 
 these powers to sustain an undue competition against 
 any independent company or companies, the powers
 
 Royal Commission of 1865. 
 
 429 
 
 are not to be exercised by the Treasury until Parlia- 
 ment has by law authorised the guarantee or the levy 
 of the purchase money and determined the manner 
 in which the option is to be exercised. 
 
 Railways exempted. 
 
 There were 2,2,20^ miles of railway sanctioned 
 before the Session of 1844, which are, therefore, ex- 
 cluded from the provisions of the Act. The follow- 
 ing- statement shows the companies to which these 
 railways belong, with the length of each. 
 
 Railways Authorised by Parliament to the End of the 
 Session of 1843. and which ark Now Open : — 
 
 Birkenhead : 
 
 Chester to IJirkenhead 
 Piodmin and Wadehridge . 
 Bristol and K.xeter 
 Caledonian : 
 
 Glasgow, Garnkirl;, and 
 Coatbridge . 
 
 PoUoc and Govan . 
 
 Paisley and Greenock 
 
 Dundee and Newtyle 
 
 Wishaw and Coltness 
 Dnblin and Drogheda 
 Dublin and Kingstown 
 Dundee and Arbroath 
 Glasgow and Soulh-Western : 
 
 Main line 
 
 Kilmarnock and Troon 
 
 Paisley and Renfrew 
 ( ircat Eastern : 
 
 London to Colchester 
 
 Stratford to Newpoi t 
 
 Hertford to Ware . 
 
 Yarmouth to Norwich 
 Great Western : 
 
 London to Bristol . 
 
 Didcot to Oxford . 
 
 Swindon to Cheltenham 
 Lancashire and Yorkshire 
 
 Manchester to Norman 
 ton ... 
 
 Preston and Wyre . 
 
 Manchester and Bolton 
 Lancaster and Preston June. 
 Llanelly .... 
 London and Blackwal] , 
 
 Miles 
 
 16 
 75 
 
 575 
 32 
 
 7i 
 16 
 
 48 —176 
 
 20:i 
 20J 
 
 3r| 
 
 i'T 
 
 7t 
 
 40 
 
 .3^ 
 
 Mile 
 London and North Western : 
 
 London and Birmingham 112 J 
 
 Grand Junction 
 
 Liverpool & Manchester 
 
 Manchester and Birming- 
 ham .... 
 
 Chester and Crewe . 
 
 Leamington Branch 
 
 Blisworth and Peterboro' 
 
 Aylesbury 
 
 Kenyon and Leigh and 
 Bolton and Leigh 
 
 We^t London . 
 
 North Union . 
 
 St. Helen's 
 London and .South-Western 
 
 Nine Elms to Southamp- 
 ton .... 
 
 Bishopstoke to Gosport . 
 London, Brighton & South 
 Coast : 
 
 London to Croydon 
 
 Croyd n to Brighton 
 Manchester, ShelTield and 
 Lincolnshire : 
 
 Manchester to Sheffield - 
 Maryport and Carlisle 
 MidUmd : 
 
 North Midland 
 
 Midland Counties . 
 
 Birming'iam and Derby 
 Junction 
 
 Sheffield and Rotherham 
 
 Bristol and Gloucester . 
 
 Birmingham & Gloucester 
 
 Leicester & Swannington x6 — 
 
 !— <H 
 
 402 
 
 7V( 
 
 48^ 
 7h 
 3° I
 
 430 
 
 APPENDIX. 
 
 North British : 
 
 Fdiiiburgh ar.d Glasgow 
 
 W/lsontown, Morning- 
 side and Coltness . 
 
 Edinburgh, Leith and 
 Granton 
 
 Monklands 
 
 North Eastern : 
 
 Brandline: Junction . 
 Durham Junction . 
 Durham and Sunderland 
 Great North of England 
 Hull and Selby 
 T.eed-i and Selby 
 Newcastle and Carlisle . 
 Newcastle and Darlington 
 Junction 
 *Pontop and South Shields 
 York and North Midland 
 Newcastle and Nortli 
 
 Shields 
 Whitby and Pickering . 
 
 West Hartlepool : 
 
 Hartlepool . . i6 
 
 Miles 
 46 
 
 36— 94j 
 
 27.J 
 
 5 
 
 48 
 
 Miles 
 
 West Hartlepool — Con. 
 Great North of Eng- 
 land, Clarence & 
 Hartlepool June. 8 
 'Clarence . . 37 
 Stockton & Har- 
 tlepool . . S 
 Preston and Longridge 
 Scottish North-E stern: 
 
 Arbroath and Forfar 
 South-Eastern : 
 
 Reigate to Dover . 
 Canterbury to Whitstable 
 Maidstone Branch . 
 Bricklayers' Arms Branch 
 London and Greenwich . 
 Stockton and Darlington, 
 including the 'Bishop's 
 Auckland and Weardale 
 Railway .... 
 TaflfVale .... 
 Ulster (Belfast to Porta- 
 do rt n) 
 
 Total 
 
 -69- 
 
 39°! 
 
 2,32oJ 
 
 Note —The railways marked thus * being principally used for mineral traffic 
 may perhaps not be considered passenger railways under the Act. 
 
 This list includes (with the exception of the Great 
 Northern Railway) the main lines of communication 
 throughout England. 
 
 It would, therefore, appear that if the State elected 
 to purchase the railways, it would never, unless with 
 the concurrence of the proprietors of the lines, 
 become the possessor of the whole of the principal 
 main lines of railway, such as the Great Eastern, 
 London and North Western, Great Western, and 
 London and South Western, but in these cases would 
 become possessor only of numerous lines which (like 
 the Trent Valley) are integral parts of the several 
 systems ; nor would the State at the present time 
 become the owner of more than those lines, or parts 
 of lines, or branches which were sanctioned during 
 the years 1844 and 1845. In every succeeding year 
 it would be entitled to take so much of the existing 
 railwavs as was authorised in the twenty-first pre- 
 ceding ycai".
 
 Royal Commission of 1865. 431 
 
 Accounts Required. 
 
 It would be very difficult, even if it were possible, 
 to frame accounts to sbow with any approach to 
 accuracy the receipts and working expenses upon 
 these separate portions of railways so as to form a 
 basis for purchase. 
 
 This condition of things is sufficient to account for 
 the Treasury not having required the companies to 
 render any such accounts of receipts and expenses 
 as were (Contemplated by the Act of 1844. 
 
 Supposed Financial Adxanlages. 
 
 The question, however, of Government purchase 
 deserves full inquiry in a broad point of view, and 
 the expiration of the period fixed in the Act of 1844 
 affords a good opportunity for inquiring, with the 
 help of the experience which has now been acquired, 
 whether a change of system is desirable. 
 
 The transfer of the railways to the State has been 
 recommended by several witnesses, partly for the 
 sake of its direct financial advantages, partly as 
 affording the means of introducing an improved 
 system of management. 
 
 The expectation of direct financial advantages is 
 based upon the assumption that, as the Government 
 can borrow money on more favourable terms than 
 any other parties, this difference in the rate of inte- 
 rest would either be available as profit to the State 
 or would afford an opportunity for the reduction of 
 rates. 
 
 It is possible that a profit from this source might 
 be obtained, if Government could buy the railways 
 at 25 years' purchase of their average net profits; 
 but at present unless the profits amounted to 10 per 
 cent, on the capital expended, an additional amount 
 would have to be paid, to be fixed by arbitration, and
 
 4.32 Appendix. 
 
 it is probable that any arbitrator between the Govern- 
 ment and private companies on such a question would 
 make a very large allowance for future increase of 
 profits. 
 
 There being- also above 2,300 miles (including 
 some of the most important lines in the country) not 
 subject to the Act of 1844, the purchase of these 
 lines, which would be absolutely necessary to carry 
 out the scheme, could only take place with the consent 
 of the proprietors, and this could only be obtained 
 by the offer of liberal terms. 
 
 It is probable, therefore, that in practice much of 
 the assumed profit would disapear in the extra price, 
 above the assumed 25 years' purchase, which would 
 have to be paid. 
 
 In addition to the diminution of assumed profit 
 arising from this cause, it must not be forgotten 
 that as the Government would have to enter the 
 market to borrow ;^40o,ooo,ooo or ;^50o,ooo,ooo to 
 carry out the operation, the terms upon which this 
 could be raised would in all probability be materially 
 affected. 
 
 The depressing effect upon public securities would 
 be equally felt whether the Government conducted 
 the whole operation at once, or whether it came into 
 the market year after year to repeat an operation of 
 about ;^25,ooo,ooo a year; and it is not easy to fore- 
 see what the price of Consols would be under the pro- 
 posed addition of ;^50o,ooo,ooo to a national debt. 
 
 It is therefore probable that the Government would 
 have to exchange the income of the railway com- 
 panies for an equivalent incom.e in Consols, to avoid 
 being called upon to make cash payments for the 
 purchase money, which would ha\e to be paid out of 
 money borrowed in Consols. 
 
 It cannot therefore be expected that under the 
 provisions of the present law much profit could result 
 to the State from the transaction as a financial 
 operation.
 
 Royal Commission ov 1865. 43^ 
 
 Improved Management. Leasing-. 
 
 We have next to consider whether, if the State 
 owned the railways, it would be able to improve the 
 system of management. None of the witnesses have 
 recommended direct management by Government 
 officers ; but, in the opinion of some, great advan- 
 tages would be derived from the adoption of a plan 
 of leasing the railways in groups. 
 
 In the absence of any sufficient data furnished from 
 experience it is difficult to express an unqualified 
 opinion on this proposal, but we are unable to per- 
 ceive that the expectation referred to rests upon any 
 solid foundation. 
 
 The capital required by lessees for working a 
 group of lines would no doubt be comparatively 
 small, but yet it is manifest that Government could 
 not safely enter into engagements with any lessees 
 who are not prepared to give ample security for the 
 payment of the stipulated rent. 
 
 Practically, therefore, the lessees would be either 
 joint stock companies or wealthy capitalists ; if the 
 former, there is no ground for assuming that the 
 directors of these companies would possess qualifica- 
 tions not to be found in those who now manage the 
 affairs of railway companies ; if the latter, they would 
 not in most cases individually possess the knowledge 
 or experience required for the direct management 
 of the concern. In either case, therefore, it is 
 probable that the actual conduct of the business 
 would fall into the hands of the present staff, as the 
 servants of joint stock companies or private 
 capitalists, but if other persons undertook the duty 
 there is no guarantee that they would possess more 
 capacity than the present officers, while it is clear 
 that they would possess less experience. 
 
 Again, the transaction must necessarily be 
 attended with risk to the lessee. They would be in 
 
 F F
 
 434 Appendix. 
 
 this position : if the net earnings should exceed the 
 rent even by a small amount, such small excess might 
 afford a good dividend on the comparatively small 
 capital invested by them ; but, on the other hand, if 
 the rent should exceed the net earnings by only a 
 small amount they would be altogether deprived of 
 any dividend. It is therefore naturally to be antici- 
 pated that any lessess, in calculating the rent they 
 would be prepared to offer, would make large allow- 
 ances for the speculative character of the under- 
 taking, and consequently it is far from manifest that 
 the State could rely on obtaining a rent adequate to 
 reimburse it for the outlay in purchase. It further 
 appears to us improbable that lessees would be found 
 willing to fetter themselves by conditions imposing 
 on them the reduction of fares and rates, or otherwise 
 depriving them of the liberty of managing their 
 affairs as they might think most conducive to their 
 interests ; and we are unable to perceive that their 
 position would be more favourable than that of the 
 existing- boards for trying the effect of experiments, 
 which, though they might ultimately be advant- 
 ageous, would, on the assumption we have made, 
 necessarily be attended with immediate loss. 
 
 It has not been distinctly pointed out to us in what 
 respects it is to be expected that the system of 
 management by lessees would be superior to that of 
 the existing boards ; but it is obvious that there are 
 but two possible sources of improvement, viz. : (i) 
 the reduction of working expenses ; and (2) the 
 obtaining a greater amount of work from the engines 
 and carriages, and so increasing the receipts in pro- 
 portion to the expenses. 
 
 We shall have occasion in a further part of this 
 report to refer at length to these questions ; at 
 present it may be sufficient to remark that these are 
 questions the bearing of which is thoroughly under- 
 stood and the importance appreciated by the general 
 managers and other railway officers, persons for the
 
 Royal Commission of 1865. 435 
 
 most part well qualified by their sag-acity and ability 
 for their position. 
 
 The general result of our enquiries is, that in the 
 great heads of expenditure an increase rather than a 
 decrease is to be anticipated, and that the economy 
 arising from carrying full train loads could bv. 
 obtained only at the sacrifice of convenience and 
 accommodation. 
 
 Further Objections to Government Purchase. 
 
 The financial view of leasing railways to companies 
 for limited periods involves this further consideration. 
 Either the improvements required to the lines and 
 stations to provide for additional accommodation 
 must be directly paid l^or by the State, or the State 
 would have to allow for them at the end of a 
 lease. In either case the question of the necessity 
 and the mode of the execution and cost of the works 
 would require a detailed consideration on the part of 
 the State. 
 
 The Crown as the owner of the railway property of 
 the country would be obliged to employ properly- 
 qualified engineers and others to investig"ate the 
 details above mentioned, and to watch over the 
 national property, in order to take care that it was 
 kept in proper working order by its lessees, and that 
 all the conditions of the leases were duly complied 
 with. Considering the g-reat responsibility and 
 delicacy of the duties they would have to perform, 
 this staff of officers would have to be highly paid ; 
 and, having regard to the manner in which establish- 
 ments have grown up in this country, bringfing in 
 their train compensations and superannuations, the 
 expense on this account would probably ultimately 
 become a not inconsiderable percentage on the 
 receipts from the lessees. 
 
 The practical result of any scheme for the national 
 purchase and leasing of railways would merely be to 
 
 F F 2
 
 436 Appendix. 
 
 substitute the lesser sense of responsibility of a 
 lessee for a limited period administering the property 
 of others, for the heavier and more durable responsi- 
 bilities of owners managing their own property. But 
 if the Government as lessors interfered to any great 
 extent with their lessees, there would then be a 
 divided and a still less eflficient administration, of 
 which any profit would go to the lessees, whilst any 
 loss resulting from it would in the end be made to 
 fall on the public revenue. 
 
 There is yet another diflficulty contingent on the 
 proposal which should be adverted to in considering 
 the question of the purchase of railways by the 
 Crown and their lease to companies or individuals. 
 The original terms of the lease, and the more or less 
 stringent enforcement of its conditions, might be 
 tempered by political considerations, seeing how 
 large an influence the railway companies necessarily 
 must exercise in the localities which they severally 
 accommodate. Therefore the exercise of a discre- 
 tionary power over them would be open to serious 
 objections, and would inevitably lead to abuses. 
 
 These consequences could only be guarded against 
 by defining the power and duty of the Crown in 
 respect of the railway property by the most precise 
 enactments, which would in effect regulate the use 
 of the railways by positive laws of general applica- 
 tion. But it is impossible to over-estimate the diffi- 
 culty of framing such general laws as would be 
 applicable to the many particular cases which arise 
 from the great variety and diversity of productive 
 and commercial undertakings in this country. 
 
 And, as there is no intention of cheapening the 
 means of conveyance by railway at the expense of 
 the national exchequer, all general laws should be 
 such as would not entail any loss in the administra- 
 tion of the railways. 
 
 Parliament has reserved to itself the right to pass 
 any general law to regulate the railways owned by
 
 Royal Commission of 1865. 437 
 
 the several companies, therefore it would be just as 
 easy to legislate on this basis for the existing- system ; 
 and hence any alteration in the law, if desirable, 
 could be obtained by the machinery of the present 
 companies without transferring the administration of 
 the railways to new companies. 
 
 Hitherto our remarks have been confined to the 
 railways merely, but the railway enterprise of the 
 country has not been so restricted. It has, on the 
 contrary, extended to a great number of collateral 
 undertakings, not only to extensive factories for the 
 construction or repair of jts works and rolling stocK, 
 to large stations, machinery, warehouses and other 
 matters for the receipt and delivery of goods, and to 
 arrangements for the supply of coal, but also to the 
 subsidiary undertakings of canals, docks, harbours 
 and steam ve'^sels, to facilitate and economise the 
 transport of passengers, animals and merchandise. 
 These have been by special Acts declared part of 
 the undertakings of the several companies, and have 
 been carried on out of their capital. The earnings 
 and expenditure on account of them have also been 
 blended with the revenue and working expenses of 
 the companies. 
 
 We think the Crown, if it purchased the railways, 
 would be compelled to become the purchaser of all 
 these subsidiary undertakings ; but it would then 
 become necessary, as soon as this new policy had 
 been adopted, to consider the position of the rest of 
 the canals and docks which are not so connected 
 with railways, and which under such an arrangement 
 would be to some extent obliged to carry on a com- 
 petition with the State and its resources. 
 
 In the event of the Crown becoming the owner of 
 the existing railways, it would either be necessary to 
 adopt some entirely new system in regard to the 
 further construction of railways, or their construction 
 would devolve entirely upon the State. 
 
 Either proposals for new lines would be dis-
 
 4^8 Appendix. 
 
 coLiraged by the Government as tending- to diminish 
 the revenue ; or, if this consideration were disre- 
 garded, schemes might be devised for new Hnes, so 
 as to leave those existing- a charge upon the State. 
 At present these difficulties are of no public concern, 
 being the ordinary contingencies incident to private 
 enterprise. In any case, however, an end would be 
 put to the present spirit of enterprise on the part of 
 existing railway companies or others ; but the liberty 
 which is at present enjoyed of promoting new lines of 
 railway is not only the best safeguard against abuse, 
 but the surest means of securing for the public the 
 greatest benefit from the present system. 
 
 French Opinion. 
 
 We would, in conclusion, call attention to an 
 extract from the report of the French Commission 
 which reported in 1863 upon the construction, 
 working and management of French railways ; the 
 Commissioners, whilst vindicating their own system 
 of regulated protection, observe as follows : — ■ 
 
 " One understands the complete liberty of action 
 left to the English companies by their Special Acts in 
 that country of free competition, where the antag- 
 onism between private interests, coristantly in pres- 
 ence of each otlicr, has long been recognised as an 
 essential condition for duly protecting the public 
 interests. By virtue of this system, which has been 
 applied without reserve to railway concessions, very 
 active competition exists between the English rail- 
 way companies, so much so that as soon as the 
 apathy or want of intelligence of one company allows 
 the service of its line to deteriorate, a new enterprise 
 springs up, and by offei'ing greater facilities to the 
 public appeals to the trade of the country, and forces 
 the first company to bring its working up to the 
 level of public requirements. In France, the 
 absence, almost complete up to the present time, of
 
 Royal Commission of 1865. 43^ 
 
 all competition amoiii^st railways, discards that valu- 
 able equilibrium which is the sateouard of British 
 industry. '' 
 
 General Conclusions. 
 
 On the various grounds we have mentioned we 
 cannot concur in the expediency of the purchase of 
 the railways by the State, and we are of opinion that 
 it is inexpedient at present to subvert the policy 
 which has hitherto been adopted of leaving the con- 
 struction and management of railways to the free 
 enterprise of the people, under such conditions as 
 Parliament may think fit to impose for the general 
 welfare of the public. 
 
 IRISH RAILWAYS. 
 
 Proposals for Government Purchase. 
 
 It has, however, been suggested that Ireland might 
 be treated in an exceptional manner. It has been 
 urged by the witnesses from that country, and also 
 by other gentlemen of experience connected with 
 railways, that there would be no financial difficulty 
 in purchasing the Irish railways, and that the pur- 
 chase might be effected on terms which would allow 
 of such a saving in the interest on debentures and 
 dividends on preference capital as would afford a 
 margin fairly applicable to a reduction of rates 
 They also urge as an additional recommendation of 
 the measure that it offers the only practicable means 
 of escaping from the evils arising from the excessive 
 number of small independent companies. 
 
 The capital sanctioned for the Irish railways is about 
 ^^36, 000, 000, but of this only ^."26,390,000 was 
 actually raised by shares and debentures at the date 
 of the last return in 1865. Hence their purchase by 
 the State would not be (exposed to financial obstacles 
 as in England, but in all other respects the proposal 
 is open to all the objections to which we have 
 adverted in the foregoing observations. In one par-
 
 440 
 
 Appendix. 
 
 ticLilar it may be deemed more objectionable than in 
 the case of the Enghsh railways, inasmuch as it is of 
 more importance not to discourage private enter- 
 prise and self-reliance in that country. 
 
 We shall not here make any further reference to 
 the question of amalgamation, but shall return to the 
 subject in a subsequent part of the Report. 
 
 Besides the proposal for the direct transference of 
 the Irish railways to the State, various suggestions 
 have been laid before us involving the principle of 
 affording the aid of the State, with a view to the 
 reduction of rates. By some witnesses it has been 
 recommended that advances should be made to the 
 companies sufficient to enable them to pay off their 
 debenture debt and their preference capital on condi- 
 tion of an equivalent reduction of rates ; by others it 
 has been proposed that a certain proportion of any 
 loss which might result from such reduction should 
 be borne by the State. All these proposals appear to 
 us to be contrary to sound principle. 
 
 It would be unjust to subsidise railways in order to 
 induce a reduction of rates without doing the same 
 for canals, inland navigations, and other means of 
 locomotion of a proprietary character. The subsidy 
 would have to be extended to future railways for 
 those parts of Ireland not yet provided with railway 
 facilities. 
 
 When capitalists undertake to construct a railway 
 for the conveyance of persons and things at a lower 
 rate than they can otherwise be conveyed, they 
 unquestionably confer a great advantage on the 
 public ; but this furnishes no reason for the Govern- 
 ment undertaking to reduce still further the cost of 
 conveyance by giving the aid of its credit, or by 
 making good the loss out of the public treasury. 
 
 The proposal to give a subsidy is therefore to pav 
 out of the public treasury for a further reduction of 
 the cost of conveyance, when a great reduction has 
 already been made by means of a special contrivance,
 
 Royal Commission of 1865. 441 
 
 but to pay nothing when no reduction has been made 
 because the ordinary road is obliged to be used. 
 
 No facts have been disclosed to us in evidence 
 which would justify us in disregarding these con- 
 siderations, or in recommending for adoption any of 
 the proposals above adverted to. 
 
 Inadequate Dividends. 
 
 Ireland has certainly no reason to be dissatisfied 
 with the extent of railways constructed in it under 
 the present system. In proportion to the resources 
 of the country it is fully equal to that of the lines in 
 the rest of the United Kingdom. It is complained 
 that their profits have been for the most part insuffi- 
 cient ; but the inadequacy of the returns appears to 
 be due to causes which are not peculiar in Ireland, 
 but exist in England where the circumstances are 
 similar. 
 
 The main sources of the prosperity of English rail- 
 ways, viz., the large transport of passengers, arising 
 from commercial activity and a wealthy population, 
 and the carriage of goods arising from great manu- 
 facturing towns and mineral production in the centre 
 of England, do not exist in Ireland ; but where these 
 elements are wanting, as in the agricultural counties 
 of Norfolk, Suffolk, and Essex, and in the centre of 
 Wales, the railways are as unprofitable as any in 
 Ireland. 
 
 Alleged High Rates. 
 
 On the part of the public it is complained that the 
 charges are so high that the resources of the country 
 are in consequence not developed. An opinion has 
 also been very generally expressed, with more or less 
 confidence, that the increase of traffic which would 
 follow a large reduction of charges would be so 
 great as ultimately to entail no loss. There is no 
 doubt that in certain circumstances a well-considered 
 reduction is advantageous, and we understand that
 
 442 Appendix. 
 
 in some cases where the policy of lower fares than 
 usual has been adopted by railway companies the 
 results have been satisfactory, but we have no facts 
 before us to justifv an opinion that a general reduc- 
 tion on a larg-e scale would not be attended with loss. 
 
 The geographical position of Ireland, and the 
 condition of its industry, are by no means favourable 
 for a great increase of railway traffic. The country 
 enjoys in a remarkable degree the benefit of natural 
 harbours, creeks and rivers, so that no part of the 
 country is more than fifty miles distant from a con- 
 venient port, whilst the greater part is much nearer. 
 The mineral productions are raised, and the manu- 
 facturing industry is carried on near the sea coast, 
 where the principal towns are situate, and enjoy the 
 advantage of importing their raw material from 
 abroad by sea. 
 
 The industry of Ireland is mainly employed upon 
 agriculture, and the amount of traiTic from such 
 industry is necessarily limited in quantity as com- 
 pared with that of manufacturing districts. 
 
 The imports into the interior are in like manner 
 restricted to the comparatively small bulk or weight 
 of articles other than food produced and consumed 
 by a rural population, whilst the absence of com- 
 mercial activit}', or of a wealthy resident population 
 in the central parts of Ireland, produces to the lowest 
 degree both the necessity and the disposition to 
 travel. 
 
 It has been complained that the cattle trade is 
 prejudiced, and there is no doubt that a large 
 quantity of lean stock are driven from one part of the 
 country to another along the roads, and are not con- 
 veyed by railway. As there are many districts at a 
 considerable distance from the nearest railway, much 
 of this description of stock would still continue to 
 travel by the roads, however large a reduction might 
 be made in railway rates. It is stated, also, by the 
 witnesses who have given evidence on this question,
 
 RoYAF. Commission of 1865. 44,^ 
 
 that nothing- short of a very great reduction in rates 
 would induce graziers to send their lean stock by 
 railway ; and as this description of traffic, even at 
 present rates, does not appear to be very remunera- 
 tive, it is evidently probable that a reduction of fifty 
 per cent., as is asked for, might be attended with 
 serious loss. 
 
 The coal traffic of Ireland is very limited in 
 quantity. The bogs have hitherto supplied much of 
 the interior with fuel, but peat seems to be gradually 
 becoming dearer with the rise in the wages of labour, 
 and coal will therefore naturally have a tendency to 
 supersede it. It is probable that if its price could 
 be materially reduced, an important stimulus would 
 be given to its consumption. The charge, however, 
 for transporting coal at Dublin from ships to the 
 railway stations is stated to be 3s. 6d. per ton, a sum 
 equal to fifty per cent, of the railway rate to the 
 centre of Ireland, and unless the cost of this trans- 
 port can be reduced, no lowering of railway rates 
 would ha-se a fair trial or could have much effect. 
 It is not immaterial to remark, in reference to this 
 question, that coal is not dearer in the interior of 
 Ireland than in the south of England. 
 
 It has been stated that the development of mining 
 industry is not encouraged by the railway companies ; 
 but it does not appear that any offers of valuable 
 mineral traffic have been made to them and declined. 
 It must be borne in mind that mineral traffic at low- 
 rates is profitable only Avhen conveyed in full train 
 loads and for considerable distances. 
 
 As the average distance for which goods could be 
 conveyed in Ireland cannot be estimated at more 
 than thirty miles, the effect of a reduction of rates in 
 stimulating industry and enterprise would not be 
 such as to alter the conditions under which they now 
 exist in Ireland. After making a reasonable allow- 
 ance for terminal charges a reduction to one-half the 
 present rate, which may be taken at the average of
 
 444 Appendix. 
 
 i^d. per ton per mile, would only be is. lofd. a ton 
 for thirty miles, or less than 6d. on a quarter of 
 g'rain, and about id. on a cwt. of flax. 
 
 Results of Railway Enterprise in Ireland. 
 
 A comparison of the results of railway enterprise 
 in Ireland with that in Scotland forcibly illustrates 
 these considerations. The population of Ireland at 
 the last census was 5,798,967, that of Scotland 
 3,062,294. At the end of 1865 there were 2,200 
 miles of railway open in Scotland, the cost of which 
 had averaged ;£^22,82i per mile. In Ireland there 
 were 1,838 miles of railway open, the cost of which 
 had averaged ;£.^ 13,965 per mile. The gross receipts 
 from traffic for the year in Scotland amounted to 
 ;£i,8i2 per mile of railway, and in Ireland to ;£^945 
 per mile of railway ; and whilst the net receipt in 
 Scotland yielded 4.4 per cent, on the whole money 
 invested, in Ireland the net receipt yielded only 3.5 
 per cent. The rates authorised to be levied by the 
 railway companies are as high in Scotland as in 
 Ireland. It is owing to the different circumstances 
 of the country and the condition of its industry that 
 railways are more profitable in Scotland than in 
 Ireland. 
 
 General Conclusions and Recommendations. 
 
 On these several grounds, having come to the 
 determination that it is inexpedient that the railways 
 should be purchased by the State, we consider that 
 there is not sufficient reason for excepting Ireland 
 from this general conclusion ; but as it has been the 
 established policy to assist railways and other public 
 works in Ireland, we recommend that when Parlia- 
 ment thinks fit to make advances to Irish Railway 
 Companies the money should be lent for a fixed 
 period of considerable length, so as to enable the 
 company to develop its resources before it is called
 
 Royal Commission of 1865. 445 
 
 on for repayment. We are, however, of opinion that 
 advances should not be made to the Irish railway 
 companies as a condition of reducing their rates and 
 fares, but that as the railway companies have the 
 best opportunities of judging whether rates can be 
 reduced so as to be recuperative within a reasonable 
 time, they should be left to carry out such experi- 
 ments at their own risk.
 
 INDEX. 
 
 Act of 1844, 296 — 301, 310 
 Adam, Sir F. Forbes, 386 
 Advertising, Railway, 323 — 4 
 Agricultural Co-operation, 352, 
 
 362 
 Agricultural I'roduce, 360 — i 
 Allerlon, Lord, 402 — 3 
 .\inalganiated Society of Rail- 
 way Servants, 144, 146, 156, 
 
 173, 392 
 Amalgamations, Railway, 338, 
 
 3^7, 370-1 
 
 Antwerp, Transit Traflic, 254 
 
 Argentina, Railways in, 251 
 Aspinall, Mr. J. A. F. , 342 
 Ask with, Mr. G. R., 386 
 Asquith, Mr., 295, 377-8, 379 
 Austria, Financial Results, 100 ; 
 
 Tariffs, 289—290 
 Automobilism, Nationalisation 
 
 and, 315—6 
 
 Bell, M.r., Mr. Richard, 146, 
 
 153 
 
 Bent, Mr., 66 
 
 Bingham, Mr. L). G., 256 
 
 Bismarck, Prince, 21, 22.23, 24 
 
 Hlount, .Sir Edward, 41 
 
 Board of Trade, Powers of Con- 
 trol, 177 ; Requirements of, 
 344 — 5 ; Complaints to, 385 ; 
 Conference, 386 
 
 Bonsor, Mr. H. Cosmo, 377 
 
 Briggs, Mr. W. A., 248 
 
 Brassey, Lord, 60 
 
 Br.TSsey, Mr. I homas, 41 
 
 Brazil, Reasons for State Pur- 
 chase, 33 ; Results of Opera- 
 tion, 104 ; Railways and 
 Politics, 135 
 
 Brunner, Sir John, 175 
 
 Bullet, M. C. de, 424 
 
 Burton, .Mr. W., 386 
 
 Butterworth, Mr. A. Kaye, 3S6 
 
 Balfour, Mr., 335 
 
 Barry Railway Company, 313 
 
 Beasley, Mr. A., 386 
 
 Belgium, Reasons fur State 
 Ownership, 25 — 6 ; Financial 
 Results, 98 — 100; Political 
 Influences, 1 35 — 6 ; Railway 
 Accidents, 179 — 180 ; Belgian 
 Traders' Views, 249 ; Transit 
 Traffic through Antwerp, 254 
 — 5 ; Collieries in Belgium, 
 ■;59 ; Density of Population, 
 359 ; Light Railways, 424 
 
 Caledonian Railway, 389 
 Canada, .State, Provincial and 
 [Municipal Aid to Comi^anies, 
 51 — 3 ; Intercolonial railway, 
 94—6 
 Canadian Pacific Railway, 52 
 Canals, Dortmund- Ems Canal, 
 263— ;4 ; Stale and Canals in 
 Germany, 265 — 6 ; Canals 
 and Railways in England, 314 
 Canvassers, 328 
 
 Cape Colony, Early Days of 
 Cape Railways, 38 ; Railway
 
 448 
 
 Index. 
 
 Finance, 84 — 90; Fostering 
 Local Industries at Cost of 
 Railways, 87 ; Overmanning, 
 87 ; Excessive Red-Tape, 88 ; 
 Political Influences, 129 - 
 131 ; Railway Men and 
 Politics, 154 
 Capital, Railway, 302, 305 — 6 
 Cattle Trains in New South 
 
 Wales, 250 
 Cawdor, The Earl of, 203 
 Central South African Rail- 
 ways, Financial Basis of Ope- 
 ration, 93 — 4 ; Political In- 
 fluences, 132 — 3 ; Politics 
 and Colon al Policy, 133 — 4 ; 
 Railway",Servants and Politics, 
 153 — 5 ; Rigidity of Rates on 
 State Railways, 190 
 Chile, Results of Operation, 
 
 104—5 
 
 Churchill, Mr. Winston, Views 
 on Railway Men as State 
 Servants, 153—5 
 
 Clark, Mr. Victor S., 84 
 
 Clemenceau, M.,Si39 
 
 Coal jConsumption, 174, 3^9 — 
 390 
 
 Coasting Steamers, 312 
 
 Coghlan, Mr. T. A., 62, 73 
 
 Collection and Delivery, 278 — 
 280 
 
 Colson, M.,1424 
 
 Company Operation of State- 
 owned Lines, Holland, 6 ; 
 Mexico, 7 ; India, 7 ; Brazil, 
 33 ; Belgium,j424 
 
 Company Ownership of Rail- 
 ways, Statistics, 12 — 19; State 
 Control, 176 — 7; the Question 
 of "Private Profit," 180 — I ; 
 English and Foreign Lines 
 Compared, 1182 — 3 ; Initiative 
 and Enterprise, 184-^5, 326 
 — 7 ; Preferable for Ireland, 
 355-6 
 
 Competition, British Railways, 
 57) 371 — 2; Between River 
 
 and Rail, in Germany, 257 — 
 261 ; Water and Rail, in 
 Holland, 259 ; Competitive 
 Routes on the Continent, 261 
 — 2 ; Inter-State Competition, 
 268 — 9 ; International, 269 — 
 270 
 
 Competitive Routes, 261 — 2, 268 
 
 Construction, Cost of, in the 
 United Kingdom, 56, 183, 
 205 — 214 ; on the Continent, 
 275 — 7 ; World's Railways, 
 217—8 
 
 Cooke, Mr. A., 368 
 
 Credit to Traders, 242 
 
 Davis, Mr. A. Emil, 318, 374 
 Delivery of Goods, on the Con- 
 tinent, I S3, 282 — 3; in the 
 United Kingdom, 240, 344, 
 380-2 
 Demurrage, Charges for, in 
 
 Germany, 280— i 
 Denmark, Local Authorities Aid 
 Railway Construction, 9 : Rea- 
 sons for State Ownership, 
 27 — 8 ; State Aid to Com- 
 panies, 48 ; Financial Results 
 on'State Lines, loi — 2 ; Rail- 
 way Consignments, 360 — i ; 
 Government Subsidies on 
 Transport, 361 ; Incidence of 
 Production, 362 — 3 ; Sunday 
 Work, 363 ; Winter Dairying, 
 363 ; Danish Peasant at Home, 
 364 — 5 ; Denmark and Ireland 
 Compared, 366 — 9 
 Directors, Railway, 318 — 320, 
 
 340—1 
 Dividends, Railway, 304 — 6 
 Docks, Railways and, 312 — 3 
 Dortmund-Ems Canal, 263—4 
 
 Edwards, M.P., Mr. Clement, 
 
 222, 227 
 Edwards, Mr. C. L., 392—3
 
 Index. 
 
 449 
 
 Edwards. Mr. W. B., 129 
 Electric Traction, 308 
 Ell, Mr. Henrv c;., S4 
 Ellis, Mr. Ralcliffe, 386 
 Engineering Works, Railway, 
 313 
 
 1- AY, Mr. S.. 386 
 
 Field, M.P., Mr. William. 
 
 220 — 4, 227 
 Finances of State Railways, 
 Germany, 60, 61 ; Russia, 60 ; 
 Belgium, 61 ; Italy, 61 ; 
 .Switzerland, 61 : Australia, 
 61, 65 ; New South Wales, 
 62 — 6 : Victoria, 66 — 72 ; 
 Oueensland, 73—6 ; .South 
 Australia, 76 — 7 ; Tasmania, 
 77 ; Western Australia, 78 — 
 81 ; New Zealand, 82 — 4 ; 
 Cape Colony, 84 — 90 ; Natal, 
 90 — 92; Central South 
 African Railways, 92 — 4; 
 Canada, 94 — 6 : India, 96 — 8 ; 
 Belgium, 98—100; Austria, 
 100 ; Russia, toi ; Denmark, 
 loi — 2 : Switzerland, 102 — 3; 
 Italy, 103 ; Servia, 103 ; 
 Honduras, 104 ; Brazil, 104 ; 
 Chile, 104 — 5 : Japan, 106 — 
 7 ; Prussia, 108 — iig 
 Forbes, Mr. James Staats, 256 
 Forwarding Agents, 274, 289 
 France, Local Auihorities Aid 
 Local Lines, 9 ; Reasons for 
 State Ownership, 28 ; Pur- 
 chase of Western Company's 
 Lines, 29 ; State Aid to Com- 
 panies, 41 — 8 ; Political In- 
 fluences, 138 — 9; Military 
 Operation of State Lines, 
 162 ; Routine, 191 — 4 ; Tran- 
 sit Rates, 269 ; Published 
 Tariffs, 2S9 ; Economic Posi- 
 tion, 359 ; Great Companies 
 in United Kingdom and 
 France Compared, 41S — 9 
 
 I-ranks, Mr. W. Temple. 174 
 Free Passes for Legislators, 132 
 
 (iieoRGE, I\Ir. William J., 78 
 Germany, Reasons for State 
 Ownership, 20 — 5; Prussia, 
 21 — 3 ; Wiirtemberg, 23 ; 
 Bavaria, 23 : Baden, 23 ; 
 .Saxony, 24 : Oldenburg, 24 ; 
 Mecklenburg Friedrich-Franz 
 Railway, 25 ; Imperial Sys- 
 tem in Alsace-Lorraine, 25 : 
 Political Influences, 136 — 8 ; 
 German Traders' Grievances, 
 245 — 7 ; German Railways 
 from an English Standp:iint, 
 247 - 8 ; Rail v. Water, 257 
 — 261 ; Competitive Routes, 
 261 — 2 ; Export Rates, 262 
 — 3; Length of Flaul, 271 
 
 — 2 : Rate Comparisons, 277 
 — 286 ; Goods Train Services. 
 282—3 ■ Railway Tariffs, 287 
 
 — 9 : Railway Fares, 290^3 ; 
 Economic Position, 358—9 
 
 Ciladstone, Mr. Herbert, 174, 
 
 ,389 
 
 (dasier, Mr. Bruce, I 
 
 Gorst, Sir John, 61, 145, 155, 
 156 
 
 Granet, Mr. W. Guy, 386 
 
 Grierson, Mr. J., 221 
 
 Great Central Railway Com- 
 pany, 310, 312. 3S8. 390, 394, 
 398—402 
 
 Great Eastern Railway Com- 
 pany, 310, 388, 390, 394, 39S 
 — 401 
 
 Great Northern Railw.ay Com- 
 pany, 388, 390, 394, 398—403 
 
 Great Northern of Ireland, 352 
 
 _ 3 
 Great Western Railway Com- 
 pany, 203, 312, 325, 371, 
 388, 390, 394, 420 
 Greece. State Aid to Companies. 
 49-50 
 
 G G
 
 450 
 
 Index. 
 
 Guarantee of Interest, 42 — S_. 
 334) 337 
 
 Hamilton. Lord Claud, 400 — i 
 
 Hardy, M.'r., Mr. G. A., 2, 
 182, 205, 226, 228 
 
 Haul, Average Length of, in 
 Germany, 272 ; in Great 
 Britain, 272 
 
 Heaton, M.P., Mr. Henniker, 
 199, 200 
 
 Henderson, Sir Alexander, 401 
 — 2 
 
 Herlslet, Sir Cecil, 254 
 
 1 [ill, Rowland, 199 
 
 Holland, Company Operation 
 of State Lines, 6 ; Reasons 
 for State Ownership, 26 — 7 ; 
 Political Considerations, 1 39 — 
 143 ; Strike of Railway Men, 
 162 — 5 ; Dutch-Rhenish Rail- 
 way, 2156 — 7 ; Transit Traffic, 
 257 — 8 ; Water v. Rail, 259 
 
 Honduras, Railways in, 104 
 
 Hotels, Railway, 313, 353 
 
 Hours of Labour, Shorter, 391 
 
 Hubert, AL, 99, 100 
 
 Hull and Barnsley Railway, 388 
 
 Hungary, Railway Strike in, 
 157 — 162 
 
 Lndia, Company Operation of 
 State-owned Lines, 7 — 8 ; 
 Reasons for State Action, 
 36—7 : State Aid to Com- 
 panies, 50 ; Financial Results 
 of operation, 96 — 8 
 
 Inglis, Mr. J. C, 386 
 
 Intercolonial Railway (Canada), 
 
 52 . ' . 
 
 Ireland, \ ice-Regal Commis- 
 sion, 82, 331, 336 — 354; 
 Situation in Ireland, 332 — 3 ; 
 State Loans to Railways, 333 ; 
 Baronial Guarantees, 334 ; 
 State Grants, 335 ; Railway 
 
 Position To-day, 336 — 8 ; 
 Question of Extensions, 338 — 
 340 ; Railway Directors, 341 ; 
 Irish Railwiy Clearing House, 
 342—3 ; Savings, 343 — 5 ; 
 Increases in Expenditure, 
 345 — 7; Amalgamations, 347 ; 
 Traders' Grievances, 348 — 
 350 : What the Companies 
 have Done, 350 — 3 ; Pro- 
 posed Elective Authority, 
 353 — 6 ; Ireland Compared 
 with Germany and Belgium, 
 359 ; Denmark, 366 — 9 
 
 Irvine, Mr., 166 
 
 Italy, Political Reasons for 
 Railway Construction, 29 ; 
 Results of Operation, 103 ; 
 Railway Advertising, 324 
 
 Jackson. Mr. W. F., 386 
 
 Jagger, Mr. J. W., 38 
 
 Japan, Reasons for State Pur- 
 chase, 31 ; Cost of Purchase, 
 106 ; Results of Operation, 
 106 — 7 ; Extensions and 
 Betterment, 307 — 8 
 
 Johnson, Mr. O. D., 386 
 
 Joicy, Lord, 149 
 
 Kearley, M.P., Mr. Hudson, 
 
 386 
 Kcenig, Dr. F. P., 115 
 
 Labour and Railways, Exces- 
 sive Number of Employes, 
 Cape Colony, 87 ; Australia, 
 123 ; Railway Men's Wages 
 in Belgium, 136 ; Labour and 
 Politics in Germany, 136—7 ; 
 in France, 138—9 ; in Hol- 
 land, 140, 143 ; Labour and 
 Nationalisation, 144 — 5 ; De- 
 creased Staffs, 145—8 ; Num- 
 ber of Railway Workers, 148 ;
 
 Index. 
 
 451 
 
 Labour Vote and Interest, 
 149 ; Railway Men as Stale 
 Servants, 152 — 5 ; Railway 
 Troubles of 1907, 156; the 
 Railway Strikes in Hungary, 
 157; Holland, 162; and 
 Victoria, 165 ; State Rail- 
 ways and Labour Unions, 
 
 172-3 
 
 Labour Party, I, 8, 144, 324 
 
 Lancashire and Yorkshire Rail- 
 way Company, 310, 379, 388, 
 390. 394. 404, 406 
 
 Land Grants to Railway Com- 
 panies, India, 50 ; Canada, 
 52 — 3 ; United States, 54 — 5 
 
 Law, Mr. II. C, 279 
 
 Leopold I., 25 
 
 Le Rossignol, Professor, 82 — 3, 
 128 
 
 Levant Tariff, 266 — 7 
 
 Lewis, Sir W. T., ^Sj 
 
 Light Railways, in Ireland, 
 334—7, 339 ; in Belgium, 424 
 
 Lloyd-George, Mr., 155, 156, 
 205, 247, 331, 386 
 
 Loading and Unloading, 280 — i 
 
 Local Authorities, Action of. 
 
 8-9. 375. 379. 403, 415 
 London, Brighton and South 
 Coast Railway, 46, 388, 390, 
 
 394 
 
 London and North - Western 
 Railway, 42, 313, 325, 370, 
 379, 388, 394,^406—411 
 
 London and .South - Western 
 Railway Company, 312, 388, 
 390, 394 
 
 London, Tilbury and Southend 
 Company, 390 
 
 Luxemburg, State Aid to Com- 
 panies, 48 — 9 
 
 Mexico, Company Operation 
 of State-owned Lines, 7 ; 
 Reasons for State Purchase, 
 31—33 
 
 Meyer, Mr. Hugo R., 235 — 7 
 Midland Railway Company, 313, 
 
 325, 3^^, 389, 394 
 Mills, The Rev. H. V., 147 
 Miners' Eight Hours Bill, 174, 
 
 389'; 
 Mitchell, Mr. N. H., 387 
 Mond, M.P., Mr. A., 387 
 Money, M.P., Mr. Chiozza, 61, 
 
 108, no. III, 226 
 Moon, K.C., Mr. Ernest, 387 
 Mulvany, Mr. T. R., 114 
 Mulvany, Mr. William T., 256 
 
 Natal, Railway Pioneering in 
 South Africa, 37 ; Reasons 
 for Government Action, 38 ; 
 Characterof Lines, 90; Finan- 
 cial Results, 91 ; Railway 
 Rates, 91 ; Political Lines, 
 131 ; Free Passes for Legisla 
 tors, 132 ; Railway Servants 
 and Politics, 154 ■ 
 
 New .South Wales, Reasons 
 for Government Action, 35 ; 
 Financial results, 62—6 ; Rail- 
 way Commissioners, 124 ; 
 Cattle Trains, 250—1 ; Rail- 
 way Wagon Shortage, 251 — 2 
 
 New Zealand, Railway Finance, 
 82 — 3 ; Political Influences, 
 128—9 
 
 Newfoundland, Railways in, 53 
 
 —4 
 
 North-Eastern Railway Com- 
 pany, 388, 394, 419—420 
 
 Norway, Communis Aid Rail- 
 way Construction, 9 
 
 (J'Dka, Mr., 341 
 
 Oppenbeimer, Mr., 1 15 
 
 Orange Free State. See Cen- 
 tral .South African Railways 
 
 Owner's Risk, in England, 244 
 in Germany, 746, 284 — 6 
 
 Owens, Sir C. J., 387
 
 452 
 
 Index. 
 
 l^AGET, Sir Ernest, 40S, 411 
 
 I'arkes, Sir Henry, 124 
 
 Parliament and the Railways, 
 Control over Rates, etc., 
 177 — 8; Attitude towards 
 Railway Companies, 205 — 6, 
 373> 377—9, 403. 412, 414— 
 5>.426 
 
 Parliamentary Procedure, Cost 
 of, in England, 56, 212 — 3 ; 
 in Prussia, 275 
 
 Parr, Mr. C. F. , 200 
 
 Fearse, Mr. A. M., 250, 251 
 
 Perks, Sir Robert, 182 
 
 Peschaud, 'SI. iNIarcel, 135, 136 
 
 I late, Mr., 140, 141 
 
 Plews, Lieut. -Col. , 352 
 
 Politics and Railways, In Cape 
 Colony, 86—7 ; Chile, 105 ; 
 Australia, 123; Railway Com- 
 missioners Appointed, 123 — 
 
 4 ; Pressure of Labour Party 
 m New South Wales, 124; 
 Abuses in Victoria, 125 — 7 ; 
 Bids for Votes in Queens- 
 land, 128 ; Votes and Rail- 
 ways in Is'ew Zealand, 128; 
 Parliament and Railways in 
 Cape Colony, 129 — 131 ; Free 
 Passes for South African 
 Legislators, 132; Views of 
 Central South African Rail- 
 ways Commission, 132 — 3; 
 Railways and Colonial Poli- 
 tics, 134; Position in Ger- 
 many, 136 — 8 ; France, 138 — 
 9 ; Holland, 139 — 143 ; 
 Labour Vote and Literest, 
 149 ; Example of Post Office 
 Servants, 150 — 2 ; Railway 
 Men as State Servants, 152 — 
 
 5 ; Political Strike in Vic- 
 toria, 165 — 172; Politics and 
 Wages, 325 
 
 p. St Office, Political Pressure of 
 Postal Servants, 150 — 2; 
 Organisation and Operation 
 of Post Office, 19S— 202 
 
 Power, Mr. John F., 366 
 
 Protection, Railways and, 2, 11, 
 22, 231, 235, 270—1 
 
 Prussia, Reasons for State 
 Ownership, 20 — 23 ; Financial 
 Results, loS — III ; Question 
 of Betterment, 112 — 115; 
 Wagon Shortage, I15 — 117; 
 Further Expenditure on State 
 Lines, 118 — 9; Government 
 Routine, 194 — 7 ; Organisa- 
 tion of Prussian State Railway 
 System, 195 ; Rates for Milk 
 for Berlin, 235 — 7 ; Coal 
 Wharfage in Berlin, 242 ; 
 Credit to Traders, 242 ; Rail 
 i: Water, 257 — 261 ; Com- 
 petitive Routes, 261 — 2 ; Ex- 
 port Rates, 262 — 3 ; Dort- 
 mund-Ems Canal, 263 — 4 ; 
 State and Trader, 264 ; State 
 and Canals, 265 ; Levant 
 Tariff, 266 — 7 ; Inter-State 
 Competition, 269 ; Railway 
 Rates and Protection, 270 — i ; 
 Railway Loading, 272 — 4 ; 
 Construction and Working 
 Expenses, 275 — 7 ; Rates 
 Exclusive of Collection and 
 Delivery, 279 ; Loading and 
 Unloading. 280 ; Warehous- 
 ing, 281 ; Conditions under 
 whicli State System Pur- 
 chased, 309 ; .System of Con- 
 trol, 320 — I 
 
 Purchase Terms, Socialist View, 
 294; Act of 1844, 296 — 
 301 ; Outlook for State, 307 ; 
 Extensions and Betterment, 
 307 — 8 ; Subsidiary Under- 
 takings, 309—314 
 
 Quee.nslamj, Reasons for Go- 
 vernment Action, 35 ; Finan- 
 cial Results, 73 — 6 ; Railway 
 Commissioners Appointed, 
 124
 
 Index. 
 
 45: 
 
 Railway Accidents, 178—180 
 Railway and Canal Commission, 
 
 177 
 
 Railway Clearing House, in 
 London, 146, 321 — 2 ; in 
 Dublin, 342—3 
 
 Railway Commissioners, Ap- 
 pointment of, in Australia, 1 23 
 
 Railway Nationalisation, Parties 
 Favouring Demand, 2—4; 
 Differences in Principles, 5 — 6; 
 Company Operation of Stale- 
 Owned Lines, 6—8 ; Action 
 of Local Authorities, 8 — 9 ; 
 State-Owned and Company- 
 Owned Lines Compared, 12 — 
 19 ; Reasons for State Owner- 
 ship, 20 — 39 ; the Question of 
 Financial Gain, 119 — 120; 
 Effect on Labour, 144 — 8 ; 
 Labour Vote and Interest, 
 149 ; Example of Post Office 
 Servants, 150 — 2; Effect on 
 Political Position of Railway 
 Men, 152 — 5 ' -'^^o Guarantee 
 against Railway Strikes, 155 
 — 175 ; State Management not 
 Superior to Company Manage- 
 ment, 176 — 190 ; Govern- 
 ment Routine in France and 
 Prussia, 190 — 7 ; Cost of Rail- 
 way Promotion, 215 ; Pur- 
 chase Terms and Conditions, 
 294 — 317 ; Question of Sav- 
 ings, 318 — 330; Nationalisa- 
 tion as Applied to Ireland, 
 331 — 356 ; National Pros- 
 perity and Nationalised Rail- 
 ways, 357 — 8 ; Railway Agree- 
 ments Preferable to Nationali- 
 sation, 413, 421 — 426 
 
 Railway Nationalisation Society, 
 3, 180, 222, 227, 228 
 
 Railway Rates, Controlled by 
 State in U.K., 57 — 8, 177 — 8, 
 417 ; Unremunerative Rates 
 on Government Lines, Mc- 
 toria, 68 — 70 ; Western Aus- 
 
 tralia, 78— 79 ; Cape Colony 
 87 ; South Africa, 91 ; Intri- 
 cacies of Rate-making, 186 — 
 190 ; Rigidity of Rates on 
 State Railways, 190 ; Altera- 
 tions of Rales in I'rance, 
 190 — 4 ; in Prussia, 194—6 : 
 in the United Kingdom, 197 ; 
 Alleged Excessive Rates. 
 218—226; Preferential Rates, 
 22S — 231 ; Equal Mileage. 
 232 — 4 ; American Railway 
 Rates, 234 — 5 ; Milk Rates ir. 
 Germany, 235 — 7 ; in Eng- 
 land, 237 — 9 ; Prospects of 
 Lower Rates through Nation- 
 alisation, 239 ; German E.\- 
 ]3ort Rates, 262—3 ; Levant 
 Tariff, 266—7 '> Protective 
 Rates, 270 — I ; Transit Rate> 
 in France, 269 ; Services In- 
 cluded, 277 — 2S4 ; Compari 
 sons Impracticable, 286 ; 
 Continental Railway Tariffs, 
 287 — 290 
 Railway Regiments, Hungary. 
 160 ; France, 162 ; Holland, 
 
 Railway Stations, Assistance in 
 Construction of, 45 — 6 
 
 Railway Workers, 148. ^SVf also 
 Labour and Railways. 
 
 Railways, British, Views of 
 Ministers, 2, 295, 377 — 8; 
 liritish and Foreign Railways 
 Compared, 39; Attitude of 
 State Towards, 56 — 7, 205 — 
 6. 414 — 5 ; State Control of 
 Rates and Charges, 57 ; 
 Number of Railway Workers, 
 148 ; Facilities Offered, 182 — 
 3 ; Relations of 'Jraders with 
 Jvailways, 197, 384 — 5, 417 ; 
 Companies Plundered b)- 
 Landowners, 207 — 212 ; Par- 
 liamentary Costs, 212 — 3: 
 Cost per Mile of Certain 
 Lines, 214 ; Cost of Con-
 
 454 
 
 Index. 
 
 struction Compared with 
 Other Countries, 217 — 8 ; 
 Railway Rates, 218 — 233; 
 Warehousing and Wharfage, 
 241 — 281 ; Credit to Traders, 
 242 ; Collection and Delivery, 
 278 — 9 ; Policy of Amalgama- 
 tion, 370 — I ; Policy of Com- 
 petition, 371—2; Combina- 
 tions in ^"elf-defence, 372 — 4 ; 
 South-Eastern and Chatham 
 and Dover Combination, 374 — 
 6 ; Mr. Asquith's Views, 377 — 
 8 ; Trade and Traffic, 379 — 
 384 ; Board of Trade Com- 
 mittee, 385 — 7 ; Wages and 
 Materials, 387—8 ; Train 
 Mileage, 388—9 ; Coal Hills 
 389 — 90 ; Wages and Work 
 390 — 2 ; Taxation, 392 — 3 
 Need for Action, 394 — 6 
 Solution of Problem, 396 — 8 
 Railway Companies' Arrange- 
 ments, 398 — 412; Possible 
 Difficulties, 412 — 4; Parlia- 
 ment, Public, and the Rail- 
 ways, 414 — 420 
 Reid, Sir Robert Gillespie, 53 
 Renshaw, Sir Charles, 389 
 Rhine Traffic, 257 — 260, 269 
 Robertson, Mr. W. A., 186 
 Rothery, Mr. F. M., 250 
 Rotterdam, Transit Traffic, 258 
 Royal Commission on Railways 
 
 ('1865), 177, 298, 339, 340 
 Russell, Mr. Charles E., 31 
 Russia, Financial Results, loi 
 
 Samuelson, Sir B., 220—224 
 Savings, 318—33° 
 .Servia, Financial Results, 103 
 Sexton, .M.P., Mr., 339, 354, 
 
 366, 368 
 Siemens, Mr. A., 3S7 
 Smith, Mr. H. Llewellyn, 386 
 S-nowden, M.P. , Mr. Philip, 
 
 294, 295 
 
 Socialists and Nationalisation' 
 I, 294, 295 
 
 -South African Produce Rates, 91 
 
 South Australia, Financial Re- 
 sults, 76 — 7 ; Railway Com- 
 missioners, 123 — 4 
 
 Shareholders, Railway, 302 — 4, 
 
 385 
 South Eastern and Chatham and 
 
 Dover Companies, 374 — 7, 394 
 Spain, Slate Aid to Companies, 
 
 49 
 
 Spender, Mr. J. A., 387 
 Stalbridge, Lord, 407, 410 — i 
 State Aid to Private Companies, 
 40 ; France, 41 — 8 ; Denmark, 
 
 48 ; Luxemburg, 48 ; Spain, 
 
 49 ; Greece, 49 — 50 ; India, 
 50; Canada, 51 — 3; New- 
 foundland, 53 ; United States 
 of America, 54 ; Ireland, 
 333—7 ; Denmark, 361 
 
 State Ownership, Reasons for, 
 Germany, 20—5 ; Belgium, 
 25 — 6 ; Holland, 26 — 7 ; Den- 
 mark, 27 — 8 ; France, 28 — 9 ; 
 Italy, 29 ; Switzerland, 30 ; 
 Japan, 31 : Mexico, 31 ; Brazil, 
 ^;^ ; British Colonies, 34 ; 
 Australia, 35 ; India, 36 ; 
 South Africa, ^y — 9 ; Home 
 Conditions, 39 
 
 Steamship Services, Railway 
 Companies, 310 — 12 
 
 Stevenson, Mr. G. A., 338, 339, 
 
 344, 345 
 Strikes of Railway Men, Hun- 
 gary, 157 — 162; HpUand, 
 162 — 165 ; Victoria, 165 — 172 
 Subsidies on Transport, 361 
 .Switzerland, Reasons for State 
 Purchase, 30 : Results of 
 Operation, 102 — 3 
 
 Taki-' Vale Railway Company, 
 
 312 
 Tariffs, Continental, 287 — 290
 
 Index. 
 
 455 
 
 Tasmania, Financial Results, 
 
 77-8 
 Tatlow, Mr. J., 336, 337, 344 
 Taxation, Railways and, Exemp- 
 tions in U.S.A., 54 ; Amounts 
 Imposed in United Kingdom, 
 57, 392 — 3 ; Colonial Rail- 
 ways and Taxation, 84 ; 
 Prussian State Railways, 1 1 1 
 Telegraph Act, 1868, 301 
 Telegraph Department, 200— 
 
 202 
 Traders and the Railways, Hope 
 to Secure Reduced Rates, i ; 
 Relations with Railway Com- 
 panies, 197 ; Grievances, 204; 
 (Question of Excessive Rates, 
 218 — 226; Preferential Rates, 
 228 — 231 ; Equal Mileage 
 Rates, 232—4 ; Milk Rates, 
 237 — 9 ; Gain from NationaO- 
 sation Problematical, 239 — 
 245 ; Warehousing and 
 Wharfage, 241 ; Credit, 242 ; 
 German Traders' Grievances, 
 245 ; Belgian Traders, 249 ; 
 Australian Traders, 249 — 252 ; 
 State and Trader in Prussia, 
 264 — 5 ; Irish Traders' Grie- 
 vances, 348 — 350 ; Conditions 
 of Trade, 380 — 3 ; Com- 
 plaints, 384 — 5 ; (Question of 
 Combinations, 416 — 420 ; 
 Attitude towards Railways, 
 426 
 Traffic Problems, 186 
 Train Mileage, Savings in, 3S8 
 Tramways, Railwaysand, 314 — 5 
 Transvaal. See Central South 
 
 African Railways. 
 Trout, Mr. J. M., 54 
 Twinberrow, Mr. J. D., 172 
 
 United States of America, 
 Assistance Given to Com- 
 panies, 54 — 5 ; " Blanket " 
 Rates, 234 ; Position of Rail- 
 
 ways to-day, 395 — 6 ; Rail- 
 way Trusts, 418 
 Unremunerative Lines, Victoria, 
 68, 70, 123 ; Western Austra- 
 lia, 81 ; Cape Colony, 86, 89 
 
 Victoria, Reasons for Govern- 
 ment Action, 35 ; Financial 
 Results, 66 — 72 ; Provision for 
 Unremunerative Rates, 69 ; 
 Unremunerative Lines, 70 — i, 
 123; Political Pressure, 123; 
 Railway Commissioners Ap- 
 pointed, 123 ; Abuses in Ap- 
 pointments and Promotions, 
 125 — 7; Rail waymen's Strike, 
 165 — 170; Anti-strike Legis- 
 lation, 170 — I 
 
 Wages, 324—5, 387—8, 390—1 
 
 Wagon-load Lots, in Germany, 
 272 — 4 ; in Denmark, 361 
 
 Wagons, Shortage of, in Ger- 
 many, 115 — ^8; in New 
 South Wales, 251 — 2 
 
 War Office, 202 
 
 Ward, Sir Joseph, 82 
 
 Warehousing and Wharfage, 
 241, 281 
 
 Water Transport, Rhine, 257 — 
 261 ; in Holland, 259 
 
 Western Australia, Financial 
 Results, 78 ; Colonial Coal 
 Industry Developed at Cost 
 of Railways, 79 ; ditto. Water 
 Supply, 80 ; Workers' Com- 
 pensation Act, 81 
 
 Western of France Company, 29 
 
 William I. (Holland), 26 
 
 Vv^illiams, Mr. Y. S., 206 
 
 Winter Dairying, 363 — 4 
 
 Working Expenses, Effect of 
 Big Loads, 274 — 5 ; Advan- 
 tages on Continental Rail- 
 ways, 275 — 6 ; Increase of, 
 394 ; Savings in, through 
 Combination, 396 — 412 
 
 Workmen's Trains, 57, 376
 
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