UC-NRLF SB 5flD fil? net, GERMAN Versus BRITISH RAILWAYS EDWIN A. PRATT tti of s (California GERMAN v. BRITISH RAILWAYS. FIRST IMPRESSION, i8th February, 4,000 copies. SECOND IMPRESSION, 4th March, 4,000 copies. GERMAN v. BRITISH RAILWAYS WITH SPECIAL REFERENCE TO OWNER'S RISK AND TRADERS' CLAIMS. BY EDWIN A. PRATT Author of "Railways and their Rates," " American Railways," " British Canals," "The Organization of Agriculture," etc. OF THE UNIVERSITY 1 / LONDON: P. S. KING & SON ORCHARD HOUSE WESTMINSTER 1907. NOTE. THE matter contained in the following pages represents a substantial expansion of an article on " Railways and Traders in Germany," published in the " Financial and Commercial Supplement " of The Times on February n, 1907. 167188 CONTENTS. INTRODUCTORY. PART PAGE I. OWNER'S RISK AND TRADERS' CLAIMS 4 Liability of German Railways 4 The German Owner's Risk Note 6 Definition of Packing 7 Meeting of Claims 9 Traders' Claims in England n German Traders and Packing 13 Faulty Direction of Goods 13 English Railway Companies and Owner's Risk .... 15 The Joint Claims Committee 17 Self-Insurance 18 II. TRANSPORT CONDITIONS IN GERMANY AND ENGLAND COMPARED 21 Services, Classification and Rates 21 Collection 25 Forwarding Agents 26 Time Allowance for Transport 28 Delivery 33 Demurrage 34 Warehousing 35 Loading and Unloading 38 Other Facilities 38 Credit Accounts 39 Comparisons of Railway Rates 41 Local Taxation 43 Parcel Post 45 III. THE "GREATEST SATISFACTION" STORY 49 Prussian Railway Policy 50 Revenue or Transport ? 51 The Shortage of Wagons 53 The Resort to Waterways 55 A Budget of Grievances 56 Conclusion 59 UNIVERSITY I GERMAN v. BRITISH RAILWAYS INTRODUCTORY. IN replying to a deputation of traders which waited upon him on December I3th, 1906, mainly in regard to the question of owner's risk, Mr. Lloyd- George, President of the Board of Trade, is reported to have said : " Do you see the way they work in Germany ? There is no such thing there as owner's risk, but there is a limit to the risk where they give reduced rates. Even in this case, however, if the railway is guilty of gross negligence or wilful misconduct, then it is liable for full compensation. That is how I understand it ; but I have no official information. It is practically the same in European countries, and even in the United States. I cannot speak with any official infor- mation, but this is the information which the Board of Trade has got." Mr. Lloyd-George proceeded : " I may say here that in the near future we will have to reconsider the whole question of railway rates from beginning to end. I have been very much impressed since I came to the Board of Trade with what one speaker has called the great and growing discontent with the whole system, and I am also impressed with this : I meet some German traders from time to time, and they impress on me their greatest possible satisfaction with their railway system. Whether the German is a much more contented animal than the B.R, B 2 GERMAN v. BRITISH RAILWAYS. Britisher, I do not know ; but, from what I hear from that country, they are very satisfied with their railway system, and consider that the railway system in that country is doing its very best to assist and to promote industries, and even to develop the weak industries. That is the feeling throughout the whole of Germany, as far as I can see." In these remarks by Mr. Lloyd-George we find two distinct propositions : (i) That there is no such thing as owner's risk in Germany; (2) that there is general satisfaction in Germany with the railway system. Mr. Lloyd-George admitted that in regard to the first he could not speak with any official information, while his second proposition was avowedly based on the assurances given to him by "some German traders " whom he meets " from time to time." He further mentioned that he had instituted an inquiry into the whole question of railway transport in other countries ; yet he was, apparently, so far satisfied with such information as he had already gleaned in respect to the position at home and abroad that he was able to say at once to the deputation : " I think you have made a case for a grievance. I think you have also made a case for something being done, and done at the earliest possible moment, to redress it ; and you may depend upon it that, as far as I am concerned, I will use all the influence I possess with the Government in order to induce them next year to deal effectively with this question." Such attitude on the part of Mr. Lloyd-George invests with special interest the position of the railways in Germany and the relations of German traders thereto. Following, therefore, on the pronouncement of the President of the Board of Trade, I thought it worth while to visit Germany, and make close inquiry, alike in official and in commercial circles, as to what the facts of the case really are, with a view to setting them forth in somewhat greater detail than those contained in the chapter on " Germany " in my book on " Railways and their Rates." It further occurred to me that, inasmuch as the position in Germany is so often INTRODUCTORY. 3 spoken of here by traders and others in a way which shows that much general misconception exists on the subject, such an inquiry might, perhaps, be of advantage to those desirous of learning the actual facts and unable to make an investi- gation into them on their own account. It seemed to me, also, that however well the German railway system might be adapted to German conditions, it could not necessarily be regarded as suitable for the very different conditions in many respects of our own country. I have sought, there- fore, to regard the position from a strictly British and practical, rather than from a German or an academical standpoint ; and, while I fully recognise the fact that there are many excellent features in connection with German railways, and am, also, anxious not unduly to wound German sensibilities, my point of view is, nevertheless, essentially a critical one in making such comparison between German and British conditions as falls within the special purpose of the present work. In giving here the results of the inquiry thus made, I propose to deal, first, with the question of owner's risk and the liability of the German railways in general; secondly, with the operation of German railways (from the trader's standpoint) as compared with British ; and, thirdly, with the question as to whether or not there really is general satisfaction on the part of German traders towards their railways. B 2 PART I. OWNER'S RISK AND TRADERS' CLAIMS. ACCORDING to Mr. Lloyd-George, " there is no such thing as owner's risk in Germany." If by this he means no such thing as an " owner's risk " rate, distinct from a " company's risk " rate, then he is perfectly correct. The double rate does not exist in Germany, as it does here, and, although provision is certainly made in the German railway regula- tions (" Eisenbahn-Verkehrsordnung," paragraph 81) for the arrangement he speaks of, as to a limit of risk where reduced or exceptional rates are conceded, in practice little advantage is taken of this clause, there being comparatively little opportunity for obtaining such rates. But if, by owner's risk, one means the conveyance of merchandise under conditions (apart from exceptional rates) which leave the trader to bear the loss of damage, etc., then it can only be said that such risk plays as great a part in railway transport in Germany as it does in England, though with this fundamental difference, that, whereas here the trader pays a lower rate when he accepts " owner's risk," in Germany the trader pays the ordinary rate, without any reduction (except in the contingency stated above), but runs the risk all the same. In other words, the English trader has owner's risk at " O.R. " rates, and the German trader must take owner's risk at the equivalent of " C.R." rates. LIABILITY OF GERMAN RAILWAYS. Mr. Lloyd- George can hardly have been aware of these facts when he made his comparison between the German and the English system. But facts they are. Theoretically, OWNER'S RISK AND TRADERS' CLAIMS. 5 I know, the German railways do take the risk in regard to the loss, diminution in bulk, or damage of consignments while under their charge. But, practically, the degree of their liability is reduced to the lowest possible minimum, and concessions offered by one hand are covered with so many restrictions by the other that their value, from the trader's point of view, is most seriously reduced. For instance, paragraph 75 of the German Railway Regulations sets forth the responsibility of the railways, as just mentioned, but goes on to say : " Provided that such loss, reduction in bulk or damage is not due to the fault of the sender, to an act of God" (" durch hohere Gewalt" = "force majeure "), "to a defect in packing not externally apparent, or to the natural quality or constitution of the goods, especially as regards their danger of deterioration, wasting or leakage." It is further laid down (in effect) in paragraph 77, that : (1) If, under a particular tariff, or by direction of the sender, goods are consigned in an open wagon, the railway is not answerable (apart from actual loss or serious decrease in bulk) for damage due to the risks with which such a method of consignment is associated. (2) In the case of commodities which, from their nature, ought to be packed, in order to guarantee them against entire or partial loss or damage, but in respect to which the sender has made a declaration acknowledging that they are either unpacked or insufficiently packed, the railway is not answerable for damage due to the risks with which, again, such method of consignment is associated. (3) When the loading or unloading is done by the trader, the railway is not responsible for any damage resulting directly therefrom, or indirectly through defective loading. (4) If the goods are of such a nature that there is special danger of their complete or partial loss or damage through breakage, rust, natural deterioration, unusual leakage, drying up or dispersal, then the railway is not answerable for any damage that may result from this danger. (5) When living animals are sent, the railway is not to be 6 GERMAN v. BRITISH RAILWAYS. responsible for loss arising from the peculiar risks which their transport necessarily entails. (6) If consignments, including animals, which ought to be forwarded in charge of some person representing the con- signor, are unaccompanied, the railway will not be responsible for any damage resulting therefrom. This list of exceptions is followed by a general condition to the effect that : " If, having regard to the circumstances, the loss sustained might have been due to one of these causes, then it shall be assumed that such was the case." Such a condition as this does not seem to leave much chance for the average trader ! It is true that, as Mr. Lloyd-George men- tioned, " if the railway is guilty of gross negligence or wilful misconduct, it is liable for full compensation." Paragraph 88 of the Railway Regulations, dealing with this point, lays down that : " If the damage has been done intentionally or through gross carelessness (durch Vorsatz oder grobe Fahr- lassigkeit), then in any case the full amount of the loss sustained can be claimed." But Mr. Lloyd-George attaches too much importance to this qualification. On paper it looks well very well indeed. When, however, I asked various German traders, who have extensive dealings with the rail- ways, if they experienced much difficulty in proving "gross carelessness," they gave a smile of incredulity, and replied : " The thing is practically impossible. The railways fence themselves round with so many conditions that one can rarely bring ' gross carelessness ' home to them. The law courts are generally sympathetic towards the trader (especially as the compensation paid comes out of the public purse), but that is often his only chance." THE GERMAN " OWNER'S RISK " NOTE. Reverting to the exceptions given above, I would call attention to sub-section (2) in reference to the non-liability of the railway for damage due to defective packing. It is here that the question of owner's risk more especially comes in. Paragraph 58 of the Railway Regulations states that so far as the nature of the goods necessitates their packing, to OWNER'S RISK AND TRADERS' CLAIMS. 7 protect them against loss or damage during transport, the responsibility for taking the necessary measures in this direc- tion rests with the sender. If the sender does not take such measures, then the railway should it refrain from refusing to carry the goods at all may require him specially to notify on the consignment note that the goods are either "un- packed" or " insufficiently packed," and he must also fill up and give in a form to the following effect : SPECIAL DECLARATION IN REGARD TO THE PACKING OF GOODS. The Goods Dep6t of the Railway, at , has, at my (our) request, accepted from me (us), for transport to , con- signments which are indicated 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 consignment note. (Signature and date.) * The word " unpacked," or the words " in the following respects not sufficiently packed," should be struck out according to circumstances. When various parcels or packages are included in one consignment, this declaration need only apply to those which are either unpacked or insufficiently packed. Should a trader be constantly sending goods in either of the two conditions here specified, from a particular station, he can make a general declaration on another form. Here, then, we have the German " owner's risk " note, without which the railways there will not carry certain classes of goods at all, though with which they still require payment of the same rates as if they assumed the risk, instead of relieving themselves from all responsibility unless the almost impossible feat of proving wilful damage or gross carelessness can be brought home to them. DEFINITION OF PACKING. " But," the reader will naturally ask, " what is regarded in Germany as constituting * insufficient packing ' ? " I devoted 8 GERMAN v. BRITISH RAILWAYS. a good deal of time to trying to get a correct definition of this phrase, and the conclusion I arrived at was that any- thing is " insufficiently packed," in Germany, which may cause the railway to run the slightest possible risk of having to pay compensation for damage. In other words, the rail- way only agrees to take the risk under such conditions that, as far as human foresight goes, there is no probability of damage occurring. When I sought the views of a forward- ing agent who deals with vast quantities of every class of goods in the course of the year, and is therefore well quali- fied to give an opinion, he replied : " In effect, general merchandise is regarded by the German railways as sufficiently packed only when it is in strong wooden cases, or, perhaps, in substantial baskets. Everything else must go on the declaration freeing the railway of all responsibility, and leaving the trader to bear any possible loss." Goods in bales or crates, for instance, come under the definition of " insufficiently packed," and require the special declaration just the same as commodities that are not packed at all. In one warehouse I saw a very substantial-looking crate, made of broad strips of wood three-quarters of an inch thick, and so solid that a man could have stood on the top without going through. But there were open spaces of about one inch between the different strips forming the crate, and on this account, I was told, the railway people would regard the consignment as " insufficiently packed," and would only accept it for transport on an " owner's risk " declaration. It is with them that the decision rests. Still further, it is expressly stated in the " Deutscher Eisenbahn Gutertarif, Theil I., Abteilung A.," that " such goods as, for example, unpacked skins, simply tied round with rope, and sugar in loose loaves, will not be accepted for transport" otherwise than on the special declaration. Liability is also refused by the German railways should the damage be due either to faulty packing not externally apparent when the goods were accepted for transport, or to what may be construed into the insufficient packing of fragile goods. In regard, again, to such commodities as cigars and OWNER'S RISK AND TRADERS' CLAIMS. 9 meat products, even the "owner's risk" statement is not sufficient. Goods of this class are not to be accepted for transit at all unless, in addition to being accompanied by the special declaration, the packages are sealed up in such a manner that pilfering cannot take place without detection. Should wax be used, an impression of the seal must be put on the consignment note. In regard to other commodities, also, stringent regulations are laid down in order that the risk run by the railway may, as far as possible, be non- existent. In effect, therefore, it may be assumed that wherever an English railway company would require a trader to hand in an owner's risk note for " damageable goods when not properly protected by packing," the German State railway would certainly insist on an even closer definition of the words " properly protected," and would show an even greater strictness in requiring the special declaration note; the main difference between the two practices being (i) that, as already mentioned, the German pays the same rate, while the English trader generally pays on a lower scale ; and (2) that the German railways are legally responsible only for " gross or wilful carelessness," while the English railway company is relieved by the owner's note from all responsibility for loss or injury " except upon proof that such loss or injury arose from wilful misconduct on the part of the company's servants." MEETING OF CLAIMS. On the former of these points the advantage is clearly in favour of the British trader ; on the latter, it would appear to be in favour of the German. Here, however, we come to the fact that while, from considerations of policy, of sentiment, or otherwise, the English railways have often met claims in respect to damage even where the transport has been at " owner's risk," in Germany the State railways keep strictly within the range of their legal liability, and know nothing of policy, sentiment or anything but what is " in the bond," in dealing with traders' claims. On the whole, there is no reason for doubt that, notwithstanding the difference in io GERMAN v. BRITISH RAILWAYS. responsibility, British traders have extracted far more com- pensation under " owner's risk" from their railway companies than the German traders have done from their State lines under like conditions. What one finds in Germany is that when goods sent under the special declaration get damaged, the trader rarely goes to the trouble of making a claim, because he knows in advance that he would not be likely to get anything. When, however, such proof can really be given as, for example, in the case of a consignment of goods damaged by rain owing to a defect in the closed wagon in which they had been loaded the railway readily acknow- ledges liability, and pays, sometimes within a month or six weeks, if the matter is a simple one, but taking substantially longer if there are complications. In Germany the claims are mainly in respect to actual losses, those for damage being, for the reasons stated, much less frequent. In England about 60 per cent, of the total are for damage. Claims even of the most trivial kind, or where only the ordinary risk has been run, are sent in freely, because it is thought there is always the possibility of getting something by way of compensation, in addition, of course, to the saving the traders have already effected by consigning at " owner's risk " rates, and by adopting an economical form of packing. The claims for damage made by British traders are largely in respect to unpacked or insufficiently packed goods, par- ticularly those manufactured from iron and steel (some of which are especially brittle and liable to damage, as, for example, stoves, grates, ranges, light castings, rain-water pipes, bedsteads, fenders, and gas and water tubes) ; clay goods (such as sanitary pipes, glazed bricks, terra-cotta, retorts and tiles) ; or to other damageable goods (glass, preserves in jars in cases, wines and spirits, earthenware, furniture, phonograph records and hardware) ; many of which are not only very fragile, but are forwarded either not protected at all, or not properly protected by packing. It is absolutely certain that on the German State railways none of the goods here specified would be accepted otherwise OWNER'S RISK AND TRADERS' CLAIMS. n than at owner's risk ; and it is no less certain that, if damage arose, the owners would stand absolutely no chance whatever of getting compensation unless they could prove " gross or wilful negligence." TRADERS' CLAIMS IN ENGLAND. As examples of claims (especially of a frivolous or unreason- able kind) made by British traders for goods damaged, more particularly where the packing has been at fault, I may mention the following, which have come under my notice : A claim for is. Sd., for one lamp and one can, broken in a case of glass and a cask of hardware, sent at ordinary risk. A claim for nd., for one dish and one vase broken, in a 4-cwt. case of glass, etc., sent at ordinary risk. A claim for is. 8d., for one frame and one vase broken, in a 4-cwt. case of glass at ordinary risk. (These three instances are typical of a very large number of claims preferred by teamen who give presents to their customers, and are in the habit of receiving consignments of a great variety of fragile goods all packed together.) A claim for 2s. 6d., for 3 quarters short weight on a 7-ton load of pig-iron. A claim for 5^., for five broken eggs, in a 2-cwt. case of eggs from the Continent. A claim for 12 95. 6d., on account of iron and bars loaded and sheeted by senders in their private sidings, and con- signed at owner's risk arriving at destination wet and rusty, owing to the ends not having been properly covered when the sheeting was done. Many claims for sums ranging from Sd. to is. 3^. each, in respect to jars of fruit-preserve broken or pilfered, mainly owing to defective packing. Claims under is., in respect to a tin of black oil packed with broom-heads, found broken on unpacking, the brushes being damaged by the contents; and an art flower-pot, chipped in a crate of pottery weighing several cwt, the damage being due to defective packing. A claim for twelve bricks alleged to have been chipped or 12 GERMAN v. BRITISH RAILWAYS. broken in a truck containing 2,150 bricks, loaded by the senders and unloaded by the consignee, and simply hauled by the railway. A claim for cleaning some tubes which had been sent unprotected by packing and had become dirty. Claims for damage to furniture of a light character and low price, wrapped in canvas covering, with a little straw, and carried at owner's risk. Claims in respect to new, empty luggage-trunks, wrapped in canvas only ; for pianos in canvas or mats ; a typewriter in metal cover, wrapped in brown paper, for consignment by goods train ; a clock and pictures, packed with a treadle sewing-machine in a matchwood case ; an overmantel, sent in a flimsy crate from which it got loose ; bundles of steel, not protected by packing, and becoming rusty ; cloth, insuffi- ciently packed in canvas to prevent it from being chafed by other goods ; ready-made garments, packed in paper only ; sanitary pipes without protection by any packing material whatever ; and so on, almost ad infinitum. I do not hesitate to say, in respect to the whole of the claims here specified, that, had the commodities in question been consigned on German State railways by German traders (i) they would not have been accepted for transport at all without the special declaration note absolving the railway from all liability on account of the goods being either un- packed or insufficiently packed; (2) that in these circum- stances no German trader in his sober senses would dream of making a claim against a German State railway (whatever he might do here) in respect to the damage of such goods ; and (3) that, if he did, he would not have the ghost of a chance of securing a single penny of compensation unless he could prove " gross carelessness." Apart from the more frivolous or unreasonable claims, there are, of course, many which traders may regard as essentially reasonable, from their own point of view, even although the traffic has been carried under owner's risk. But it is extremely doubtful if, even here, the German traders are in a better position than the British. OWNER'S RISK AND TRADERS' CLAIMS. 13 GERMAN TRADERS AND PACKING. One effect of the merciless strictness of German railways in enforcing the special declaration has been to make traders in Germany more careful about their packing than is so often the case here. Another is that many of them regularly insure their rail consignments (with private insurance companies) against damage or loss, knowing as they do the difficulty they might experience in sustaining claims against the State lines. Where such insurance is effected the amount of the premium must be added to the railway rate as representing the cost of transport. Not only, therefore, does the German trader fail to get a lower rate on account of "owner's risk," but he may have to meet these insurance charges as well. But there are commodities which must either necessarily go unpacked, or which cannot, for one reason or another, be sufficiently packed ; and in either of these cases the market value of the article might not permit of the added cost of insurance. As these goods are bound to go on the special declaration, the risk of the owner is complete, and certain classes of traders in Germany among them furniture dealers and makers of stoves or other iron castings complain most bitterly, notwithstanding the assertions of Mr. Lloyd- George's friends, about the hardness of their fate. They are compelled to send at " owner's risk ; " they get no reduction in rate ; they cannot insure ; damages representing serious losses to themselves repeatedly occur ; yet, because they have to sign the special declaration, and because they cannot prove "gross carelessness" against the railway, they know that there would be absolutely no chance whatever of their maintaining a claim, even if they sent one in. As one large trader put it to me : "They had better save the postage stamp." FAULTY DIRECTION OF GOODS. In addition to the claims for actual damage, a large number are made against British railway companies for losses or delays mainly due either to the inadequate addressing of goods, or i 4 GERMAN v. BRITISH RAILWAYS. to the marking (where no actual address is given) being insufficient, or in some cases becoming obliterated in the handling. The German railways accept liability in respect alike to losses and to delays ; yet, once more, in order to reduce this liability to an absolute minimum, their Regula- tions emphasise the requirement that the address or marks on all piece-goods shall be expressed in "permanent and clear characters, so that no possibility of mistake may arise," such address or marks to correspond exactly with the con- signment note. In practice, unless this is done, the railway disclaims all responsibility. If a German railway employe were offered goods marked in a way which he regarded as inadequate or unsatisfactory, he might simply refuse to take them until the fault had been remedied. Alternatively, if merchandise bearing a mark, but without the destination station, should be received, the railway officials are autho- rised by the Regulations to place the name of such station on the consignment where this is practicable (obtaining the information, presumably, from the consignment note), and to charge the trader a stated fee for so doing. If conditions such as these were enforced in Great Britain, one of the most frequent sources of trouble would be avoided. In the " Second Report of the Standing Joint Committee of Midland Chambers of Commerce on Railway Matters," I find a letter, written in November, 1905, to the Assistant Secretary of the Railway Department, Board of Trade, by the general managers of the Great Western, the London and North- Western, the Midland, and the North Staffordshire Railways, saying, among other things : "It may be observed that many losses of goods and most of the delays and mis- deliveries connected with the Midland districts arise from the fact that by far the greater proportion of goods delivered to the companies are sent under mark and without address. For several years past the companies have made special efforts to induce traders to assist them to carry their goods promptly and accurately by addressing them in such a manner as when an article gets separated from its consign- ment or invoice there will be such information on it as will OWNER'S RISK AND TRADERS' CLAIMS. 15 inform the company what to do with the article." Reference is made to notices issued to the traders from time to time, and the letter proceeds : " When the deputation from the Midland Chambers of Commerce conferred with the Great Western, London and North- Western, Midland, and North Staffordshire Railway Companies in London on January 6th, 1904, further efforts were made to bring about the improve- ment so much needed, but without success, although some of the deputation considered the requests of the companies reasonable. Nevertheless, it is the practice of the companies, in reference to intact packages actually lost in transit, and to goods mis-delivered by error on the part of the companies, and not subsequently recovered and correctly delivered, to pay, without prejudice, compensation to the traders concerned, whether the goods were sent without address or otherwise." The notices referred to above were issued in August, 1900, June, 1901, and May, 1902. All three impressed on manu- facturers and traders the importance of addressing goods in full, particularly when forwarded in small consignments, and requesting the co-operation of the traders, so as to facilitate despatch generally; while the notice issued in June, 1901, further said : " It is hoped that the traders will in future so address their packages which they wish to forward under mark with at least the name of the town of their destination, to enable the companies to accept them for conveyance." The contrast between these repeated, but, apparently, useless appeals by British railways to their patrons and the peremp- tory edicts issued by the German State railways is certainly striking enough ! ENGLISH RAILWAY COMPANIES AND OWNER'S RISK. To the question of liability for delay I shall revert in Part II., under the heading, " Time Allowance for Trans- port." Before, however, leaving the general subject of traders' claims, I should like to add one or two facts I have ascertained as to the attitude in respect to them of the railway companies at home. 16 GERMAN v. BRITISH RAILWAYS. From what I have already said, it will be assumed that British traders send in many more claims than is the case with German traders. That assumption is, I think, well founded, not so much, I should say, because of any greater care in handling in Germany as compared with England (the conditions in this respect being approximately the same), but either because of the more careful packing in Germany, or, more especially, because the German trader does not make claims when he knows they will not be met. What number of claims may actually be made in Germany I cannot say ; but from inquiries made at home I learn that one of our leading companies has received over 24,000 claims in a single month. Whereas, however, in Germany claims are dealt with strictly from the point of view of legal liability of the railways, in the United Kingdom they are considered on their merits, whether the traffic has been carried at owner's risk or company's risk. The general position in England in regard to owner's risk may be indicated very briefly. The railway companies, in order to protect themselves against claims for damage in respect to certain articles especially liable to injury, have insisted (as the German State railways do), either that such goods shall be properly packed when handed to them for conveyance ; or, alterna- tively, that the consignor shall take all risk arising from their unprotected condition. It is only where experience has shown that such a stipulation is necessary that the com- panies enforce it ; but (again like the German State railways) they claim that the decision as to what constitutes proper packing must rest with them. The arrangement is one that seemed to apply more especially to commodities in respect to which traders would prefer to take the risk of occasional damage rather than pay the higher rates for company's risk, and incur also the greater cost of secure packing. Such con- dition, again, has generally been included, during the past forty years, in the concession of lower rates for the encourage- ment of particular branches of traffic, and it is fairly obvious OWNER'S RISK AND TRADERS' CLAIMS. 17 that the practice has an advantage for the trader, because, if the railway companies are to be precluded from entering into a bargain with a body of traders under which the latter can send their traffic without incurring considerable cost in packing, they, in self-defence, must either charge higher rates or decline to accept such traffic unless it is thoroughly well packed. Special contracts on the lines indicated were made mainly to meet the wishes of the traders, but in course of time the stress of competition among the railways led the individual companies, as a matter of policy, and to retain the favour of particular traders, to show much latitude in meeting claims, even when they were in no way legally responsible. In the end many of the traders became more and more exacting, their idea evidently being that they could play off one company against another, and at the same time could practice still greater economy in their methods of consign- ment, in order to save alike on the packing and on the return carriage thereof, so that the packing was often gradually reduced to a vanishing point. In proportion, therefore, as the traders became more persistent in lodging claims, the opportunities for making claims increased, owing to the still more unprotected condition in which consignments were being forwarded. THE JOINT CLAIMS COMMITTEE. These conditions led the railway companies to reconsider their position, and in 1902 it was resolved that all claims on traffic carried at owner's risk should be dealt with by a Joint Claims Committee. Although it was fully understood that in future such claims would not be met in the same fashion as before, there was a general feeling that each and every claim that was made should still be inquired into as if the owner had not taken the risk of conveyance. In effect, the railway companies, under the sanction of the said Joint Committee, regularly pay claims on owner's risk traffic for (a) packages lost in transit ; (6) packages stolen ; (c) goods mis-delivered by the B.R. c i8 GERMAN v. BRITISH RAILWAYS. company and not recovered; and (d) damages, delays, etc., due to wilful misconduct. If, in investigating claims for damage, partial loss, or delay, there is found to be evidence of wilful misconduct on the part of the railway servants, the companies do not require the trader to prove "wilful mis- conduct " in the terms of the owner's risk note but deal with the claim in what they regard as, in the circumstances, a " reasonable manner." The change of policy thus effected by the railway com- panies was naturally viewed with great dissatisfaction among the general body of the traders, and especially among those who had become accustomed, not only to receiving the benefit from owner's risk rates lower than the ordinary rates, but also to having their owner's risk claims readily met and to forwarding their consignments with as little packing as circumstances would allow. Efforts were made to upset the position of the railways in reference to goods not properly protected by packing, but this was confirmed in the Court of Appeal at Edinburgh on November 21, 1904, in an action brought against the North British Railway Company for damage to a consignment of furniture through the alleged fault of the defendants' servants. Then it has further been represented that, under the present conditions, claims are rejected indiscriminately, but this allegation is not confirmed by the fact that out of 294 claims made against one English railway company in a given period, in respect to traffic carried under the owner's risk note, no fewer than 112 were paid. Out of 2,003 claims made on owner's risk traffic carried during a period of three months, 717 (or 35 per cent.) have been met ; and of the 2,402 claimed, 772 (or 32 per cent.) was paid. In Germany nothing like these proportions would have had any chance of being met if similar claims had been made by traders there in regard to traffic carried under the special declaration. SELF-INSURANCE. While, as I have shown, the German trader gets no reduc- tion in rate when he accepts owner's risk, and has to insure OWNER'S RISK AND TRADERS' CLAIMS. 19 if he wants to avoid loss, the saving which the British trader effects on " O.R. " as against " C.R. " rates is practically a self-insurance, the difference between the two rates far ex- ceeding the loss sustained as represented by the claims disallowed. To illustrate this fact I may give three specific instances in regard to firms whom I will indicate by the letters " A.," " B." and " C." : A. B. C. Saving effected by firm during a stated period by consigning at O.R. instead of C.R. 6,000 1,573 360 Percentage of above to total amount paid to railway ... 39 p.c. 21 p.c. 20 p.c. Claims made by firm and disallowed, during same period ... ... ... 4 60 14 It is, further, a mistake to assume that the difference between the reduced and the ordinary rate is due entirely to the risk being undertaken by the owner instead of by the company. In the fixing of the precise amount of these exceptional rates the question of risk is generally only one of various factors. The tendency in certain quarters is to regard the owner's risk rate as the standard rate, and to say that, because 5 per cent, is considered sufficient to cover claims, therefore the company's risk rate should be only 5 per cent, above the owner's risk rate, whereas it may be, and often is, considerably more. But the actual position is the other way about. It is the company's risk rate that is the standard rate, and if it be argued that 5 per cent, is suffi- cient to cover claims, then an owner's risk rate should not, in turn, be more than that amount below a company's risk rate. In point of fact, exceptional rates for the encourage- ment of traffic (especially when passing in large quantities) have been given with reductions as low as 30, 40, or even 50 per cent., below the ordinary rates ; but, assuming that 5 per cent, might still cover the risk of which the company were saved by the trader, the remaining difference of 25, 35, or 45 per cent, would be due to other considerations altogether. The traders get the lower rates, without which, they c 2 20 GERMAN v. BRITISH RAILWAYS. consider, certain classes of traffic could not be consigned, but they obviously secure, also, a good " insurance " margin with which to cover the ordinary risks of transport. Altogether, it certainly appears to me that the British trader is better off than the German trader in regard to this question of owner's risk and of claims in general. The reader may suggest, however, that the German trader is, nevertheless, in the superior position because of the lowness of the rates at which he can transport by rail. This point, and the differences between the German and the British system of rail transport, I will consider in Part II. 21 PART II. TRANSPORT CONDITIONS IN GERMANY AND ENGLAND COMPARED. SERVICES, CLASSIFICATION AND RATES. WHAT the Germans pride themselves on most in regard to the operation of their State railways is its undeniable simplicity, as compared with the complications of our own system. They have two services for their goods traffic: " Eilgut," or express goods, equivalent to " grande vitesse " in France, and " Frachtgut," or ordinary goods, equivalent to "petite vitesse " in France, and very much slower than the goods service in England. Here the provision of two distinct goods services, fast and slow, would be impracticable, from the point of view alike of the railways, with their crowded lines, and of the traders, with their absolute reliance on quick delivery. The " Eilgut " service is subdivided into (a) fast goods trains, the rates for which are double those for slow goods trains ; (6) fast goods with special tariffs for fish, milk, fruit and other perishables carried at ordinary rates ; and (c) express passenger train ("courier"), the rates by which are fourfold those charged by slow goods train. The " Frachtgut " service is the ordinary slow goods service. For this the classification is (a) "Stiickgut" (consignments in less than wagon loads), with special tariffs for particular commodities ; (6) wagon loads in 5 or lo-ton lots (grouped or otherwise) in various classes, and also with special tariffs; (c) " sperriges," or bulky goods, such as timber ; and (d) raw materials. 22 GERMAN v. BRITISH RAILWAYS. The rates are based upon distance, irrespective of direction, and traders can obtain books which will show them the particular class into which certain goods fall, and the rate per 100 kilos, that the transport of such goods, in such class, for the stated distance, will cost. British traders may be disposed to envy the simplicity of this classification and rate basis. It must, however, be borne in mind that the complexities and anomalies of our own system are, to a great extent, due to (i) the peculiar conditions under which our railways came into being; (2) the attempts made by Parliament from time to time to regulate railway operation on other than strictly commercial lines ; and (3) to the efforts made by the railway companies to adapt their classification and rates to the requirements of traders by the concession of reductions or of increased facilities. The German system has greater simplicity, but far less elasticity, than the British. It is based on principles akin to those on which the laws of the Medes and Persians were established. Instead of being elastic, it is, rather, cast-iron. Our English railway companies aim, more or less success- fully, at adapting the operation of their lines to the needs of the traders. In Germany, the traders must adapt their requirements to the fixed principles of the railway laws and regulations. In England, if a trader went to the chief goods manager of a railway company, and said, " I propose to start a bacon factory in (say) Cornwall, but I cannot get my produce on the London market to compete with that from places very much nearer unless you quote a lower rate for bacon from my town," the officer would be able, and probably willing, to make the concession at once, if he found the conditions desirable and if his own line alone were concerned, or after consultation with other companies who might also be interested. The same conditions would apply to a trader who wanted to start a lime works in a place from which lime had not been sent before, or who desired a lower rate for the consignment, say, of 1,000 tons of traffic from one point of a company's system to another. Such TRANSPORT CONDITIONS COMPARED. 23 concessions have introduced complications, anomalies and elaborations which may well seem to the average trader to be wholly lacking in logic or consistency. The position might, and probably would, have been materially improved, as a whole, if Parliament had left the railway companies with a greater degree of freedom to work out a simpler system. Even though, for example, they are free to reduce rates as much as they please, they are bound to show prudence in making experiments in this direction, because of the difficulty that may arise in putting reduced rates back to their original level, should circumstances so require. All the same, it cannot be denied that concessions of the type referred to above may have been of material advantage to the particular classes of traders who have applied for them. In Germany such things as these would be practically impossible. The reply there would probably be, in effect : " Here are our rates ; they are the same for you as for anyone else, and if they don't suit your business, so much the worse for you." Alternatively, if a combined effort were made by the traders of a particular district to secure a lower rate, their request would first be considered by a district advisory committee, consisting of railway officers and local representatives of commerce, industry and agriculture. This committee would investigate the matter with characteristic German thoroughness, and report to a central advisory committee, similarly constituted. From the central advisory committee the matter would go with a recommendation to the responsible Minister, who would give the final decision, probably within six or twelve months of the time when the application was first made. The Minister has, however, the power to decide at once in a matter of real urgency. Extreme care in the granting of special concessions is unavoidable in a State system where so many interests are concerned, and the welfare and possible objections of one set of traders have to be so guardedly balanced against the wishes of another set, while political factors of various kinds may be concerned in Germany in what British railway managers would regard as strictly commercial questions. The effect, 24 GERMAN v. BRITISH RAILWAYS. again, of equal mileage rates is, among other things, to make it difficult for traders located at a distance from an important consuming centre to hold their own against competitors located within a narrower radius. As against the apparent advantages of the German system there are these and other drawbacks which must be obvious to the British trader, and it is really doubtful if that person would be content to see the said system transplanted here (when he once fully realised all it involved), however com- plete may be the assumed satisfaction of the Germans themselves in regard to conditions to which they have adapted their trade. But even in Germany the " fixed rate " principle has been repeatedly departed from, alike for goods and for passengers. The various special tariffs for the former, and the return tickets, rundreise tickets, tourist tickets, Sunday tickets, season tickets, etc., for the latter, are all divergences from rules which could not possibly be carried out to their logical issue. There is even a party of reformers in Germany which insists that many of what they consider the serious defects of their railway system are directly due to the cast-iron rates and regulations which other would-be railway reformers in our own country regard as " simplicity." There is another party which never fails to remember one material fact which the British trader generally manages to forget that, even if the rate per ton per mile for a certain commodity be less in Germany than in the United Kingdom, the German trader may still be heavily handicapped by a greater length of haul from the point of production to the point of consumption or of embarkation. The actual mileage to be covered may, from the point of view of trade competition, completely nullify any advantage the German trader secures from a lower rate per ton per mile as against the British trader. What the German has really to consider is, not average cost per mile, but the sum total of the carriage to be paid before he can get his goods from, say, an inland town to the coast, such sum total being the amount by which they will be handicapped by the time they arrive on the market. From this point of TRANSPORT CONDITIONS COMPARED. 25 view one has only to compare the distance from Dresden to Bremen, or from Niirnberg to Hamburg, with those from Birmingham or Sheffield to London, Liverpool or Hull. COLLECTION. Apart from the fact that in Germany most of the railways are State-owned, while in the United Kingdom the railways belong to private companies, the fundamental difference in the actual operation of the two systems (especially from a trader's point of view) is found in the fact that German State railways confine themselves to rail transport only, the rates charged being all " station to station," whereas in the United Kingdom the railway companies undertake much more, so that in many cases their rates include services which in Germany have to be paid for separately. Nothing could be easier and less troublesome than the consignment of goods by rail in our own country. Should the trader be in a large way of business, railway carmen will call on him every day, or even two or three times a day, to collect such goods as he may wish to forward by train ; or, in the absence of a general arrangement, he need only put a card in the window to attract the attention of a passing car- man. The goods in question are pointed out to the carman, to whom, also, a consignment note should be given, though this the railway people are often left to write out themselves. Assuming that the goods are safely delivered, the trader is troubled no further until he is called upon for payment. Should he not be a regular sender or on a carman's line of route, he will probably find a railway " town " office not far away, to which goods can be sent without any need for taking them to the railway depot. In Germany the collection of merchandise is not done by the railways. This branch of the transport work is left to forwarding agents. If, in a large city, some trader should write to the railway, " Please collect so-and-so from me," the instructions are transferred to an officially-recognised firm of agents or carriers who are bound to do the work according to a fixed scale of charges. In some cases, if the trader 26 GERMAN v. BRITISH RAILWAYS. applied direct to the firm they might decline to collect, because of the distance being too great or the consignment too small ; but if the request be made through the railway the carriers are bound by the terms of their contract to comply. In any case, however, the collection is not done by the railway itself. Where the trader has his own horses and vehicles, and can use them conveniently for sending goods to the railway, he dispenses with the forwarding agent, and does his own cartage ; but otherwise the services of the forwarding agent will generally be called into requisition. FORWARDING AGENTS. There are other reasons, apart from the collection of goods, for employing the forwarding agents, who have a very strong hold upon the miscellaneous traffic in Germany, and with whom a vast proportion of the traders alone come into contact. To illustrate the general position in the large towns, I take the case of Berlin. In that city there are about sixty firms of forwarding agents. The largest of these will each have, in Berlin itself, a staff of 200 or 300 clerks, carmen, stablemen, etc. ; 100 or more horses ; many drays or other vehicles; extensive warehouses, and so on, while some have branch establishments in other towns and in other countries. One firm, whose premises I was permitted to see, employ, altogether, in Germany or elsewhere, 1,000 persons. These sixty firms in Berlin have formed a combination for the joint purpose of fixing rates and making up profitable loads. Under the first head they check excessive competi- tion and any " cutting " of rates. The trader who thinks that one forwarding agent is charging him too much, and goes elsewhere, will find the charges still the same. Under the second head the combination receives at central depots the consignments collected by its members, and makes them up into 5 or lo-ton lots, for which lower terms can be obtained from the railways than if the individual consign- ments were forwarded separately by the senders. It is claimed that in this arrangement there is a benefit both for TRANSPORT CONDITIONS COMPARED. 27 the senders and for the forwarding agents, the senders paying less than they would to the railway for single consignments, while the forwarding agents gain their profit from the balance of the difference in charge between a small consignment and a 5 or lo-ton lot. Thanks to the combination of agents, 5 or lo-ton lots can generally be made up daily for leading towns ; but in the dull season the despatch may take place only two or three times a week, goods being kept back a day or so, if necessary, to allow of the 5 or 10 tons being com- pleted. Should a certain proportion of the consignments from such places as Berlin, Cologne, or Hamburg, be going to a small town, say, on the other side of Dresden, they will form part of a 5 or lo-ton lot to Dresden, and be sent thence to destination at the ordinary goods rate. Forwarding agents also play a leading role in the con- signment of goods to foreign countries. An average collection of the tariffs to which reference may have to be made in regard to consignments of this class runs into between 200 and 300 volumes, and most of the German traders prefer to have such transport complications solved by specialists rather than deal with them in their own establishments. Of the facilities offered by forwarding agents in the way of warehousing, I shall speak later. The charges made by the forwarding agents in Berlin in respect to collection of general merchandise work out at 25 pfennigs for every 50 kilos., and, to begin with, this charge must be added to any German railway rate in regard to which the corresponding rate on an English railway would include, at least, collection. In fact, taking the case of Berlin alone, the substantial expenses of the sixty firms of forwarding agents, together with such profits as their businesses may yield, have all to be met out of the payments made to them by traders. In other words, the cost of this elaborate organisation must, in great measure, be added to such payments as are made to German railways for rail trans- port alone ; although, as a rule, it is only the latter that the average English critic takes into consideration in the com- parison he makes between German and English railway rates. 28 GERMAN v. BRITISH RAILWAYS. Commodities moving in large quantities, such as coal iron, eggs, etc., would not go through forwarding agents. TIME ALLOWANCE FOR TRANSPORT. The official time for the transport of goods on the German State railways is drawn up on a generous scale, from the point of view of the railways themselves. It does not necessarily follow that the said official time is fully occupied, and, in practice, goods will generally go from station to station well under the legal limit. But that limit leaves what a British railway company would regard as a wide margin for contingencies, and, unless it be exceeded, no claim for damages owing to delay can be enforced. Whereas, on the one hand, the railway accepts the principle that a trader is entitled to compensation for delay, on the other hand the time limit is such as once more to reduce the risk of the railway to an almost absolute minimum. The day on which the goods are received by the railway does not count. The legal limit begins with the following day. Thus, if consignments are handed over to the railway at 10 a.m. on Monday morning, the railway need not start operations in regard to their despatch until 12.1 a.m. on Tuesday morning. Should the day following the one on which ordinary goods (" Frachtgtiter ") are presented be a Sunday or a public holiday, the legal limit begins twenty-four hours later. Even then there is an allowance of either one or two days (according to the service) for getting the goods ready. The number of days for the actual rail transport is according to the distance the goods are carried. In effect, and excluding the day of handing in, the time allowance works out thus : EXPRESS GOODS ( " Eilguter " ) : Days. Despatch ... ... ... ... ... i Each 300 kilometres (186 miles) ... ... ... i ORDINARY GOODS ( " Frachtgiiter 5> ) : Despatch... ... ... ... ... ... 2 When the distance does not exceed 100 kilometres (62 miles) ... ... ... ... ... i When the distance exceeds 100 kilometres : for each 200 kilometres (124 miles) ... ... ... i TRANSPORT CONDITIONS COMPARED. 29 This legal limit, one should further bear in mind, expires, not with the delivery of the goods to the consignee, but with their arrival in the railway station to which they are sent, or with the despatch of an intimation, by post or by messenger, to the consignee that they are at his disposal. Should they thus arrive before midnight of the last day allowed they will be within the time limit, although the consignee may not be able to obtain them until the following day. To take a concrete case, we will assume that a certain consignment of general merchandise is handed in at Berlin on a Monday morning for a trader in Cologne, 590 kilometres (366 miles) distant, the transport to be by ordinary goods train. The first day, Monday, would not count ; Tuesday and Wednesday would be allowed for loading, etc., and the actual rail transport must begin on Thursday morning. According to the time-scale they would have an allowance of three days for the journey, reaching Cologne on Saturday night. The following day, Sunday, would also not count, so that if the trader in Cologne obtained his goods on the Monday he could make no claim against the railway for delay. In other words, a full week might be taken for the con- veyance of goods a distance of 366 miles. Not only are unavoidable hindrances thus provided for, but opportunities are given for keeping goods back a day or so in order to secure better loading. Incidentally, the fact that " the first day does not count " increases, I think, the tendency to late working in German warehouses and other business places. In England, where the first day does count, there is every inducement for the trader to hand over his goods to the railway carmen as early in the day as possible, since he knows that they are not likely to be kept on hand longer than is absolutely necessary. As a rule, too, the carmen do not collect after half-past six o'clock for the night trains. In Germany a good deal of the collecting (by the forwarding agents) is done late in the evening, and the reception of goods at their depdts, in preparation for the rail transport, goes on principally at night. A representative of one of the leading firms of GERMAN v. BRITISH RAILWAYS. forwarding agents in Berlin informed me that they had even been called on, over the telephone, to fetch a consignment from a trader as late as n o'clock at night ! Comparing the German official times given above with the actual rail transport of ordinary merchandise in the United Kingdom, we get the following examples of the latter : Stations. Miles. Train Service. Time occupied. h. m. London to Edinburgh . 399 8.12 p.m. to 7.50 a.m. ii 38 Dublin 333 2.42 6.20 15 38 ,, Liverpool . 199 7.12 2.45 7 33 ,, Birmingham in 8.27 1.35 5 8 In each of these instances consignments, however small, handed in one afternoon or evening, a short time before the departure of the train from London, would be actually delivered to the consignee somewhere between 9 and n o'clock the following morning. I do not suggest that all British goods train services are equal to the examples given above ; but the running of express goods trains, with vacuum brakes, at passenger train speed, is now an ordinary feature of goods traffic in the United Kingdom. Many " specials " are also run for the transport of cattle, meat, wool, bananas, fruit and vegetables, fish, milk, etc. The companies are further expected to carry many descriptions of owner's risk traffic with the same expedition as company's risk traffic, e.g., heavy consignments of meat carried at the reduced or owner's risk rate are sent from Scotland to London, and receive the same transit as if carried at company's risk, claims actually being preferred for delay in the event of delivery being effected in the market by, say, 5.30 a.m. on the day due, instead of by about 2 a.m. or 3 a.m., when the salesmen expect delivery. The fact that British railway companies thus give what is practically an " express" delivery at ordinary rates has had a remarkable influence on the development of retail TRANSPORT CONDITIONS COMPARED. 31 trade. As I have already related in my book on " Railways and their Rates," a large number of traders no longer keep on hand large stocks of particular articles, but order fresh supplies from the manufacturer or the wholesale house by telegraph or telephone as needed, in absolute confidence that the railway will bring them to the door the next day. To such an extent is business now built up on this system in England that a trader has actually been known to send in a claim to a railway company because a certain consignment was delivered to him one hour later than usual ! Claims for two, three or four hours' delay are very numerous. Wholesale houses, again, would run a risk of losing a good deal of business unless they could guarantee delivery the following day. If they could only say, " The goods shall be sent by rail, and you may expect them in four or five days," the reply would probably be, " I cannot wait." A further result of the system has been to facilitate the operations of large trading concerns which have, throughout the country, any number of branches up to 200 or 300, but keep there only sufficient stocks to cover immediate require- ments, supplementing them from day to day from some central depot, and relying on the prompt service of the railway companies. They save, in the first place, on the value of their stock, because if the supplies sent to the different branches took three or four days instead of one to reach their destination that is to say, if they went by a slow goods service instead of a fast one the traders in question would always have a much larger proportion of their goods en route, and therefore lying idle. In this way there is a saving on capital. There is a further gain on the amount of accommodation required at the various branches, and, therefore, on rent, rates and taxes ; and with this double saving the concerns in question are able to conduct a greater number of shops, and thus do a larger amount of trade than would otherwise be possible. There is the advantage, again, of such traders being able to buy up supplies in substantial quantities as, for instance, 200 tons of bacon in the cheapest market, and promptly distribute 32 GERMAN v. BRITISH RAILWAYS. them thence to the local branches according to require- ments. Incidentally, one further effect of these conditions has been greatly to reduce the average weight of and the average receipts from the consignments handled by the railways in this country. Taking the ordinary merchandise traffic, the average weight per consignment in London, Manchester and Birmingham would be from 2 cwt. to 5 cwt., and the average weight of the packages comprised therein may be put at between 2 qrs. and 4 qrs., while the average receipts per consignment on all traffic handed in and out of London by one of the companies which is in a specially favoured position in regard to length of haul is only 6s. 6d. In these circum- stances the cost of handling must be calculated, in the United Kingdom, not per ton, but per consignment. The larger the number of individual consignments in proportion to the sum total of the traffic, the larger must be the clerical staff employed, and the more, therefore, is the proportionate cost of handling swollen. Although, as I have said, the transport in Germany would generally be less than the legal time limit, one may never- theless assume that if the German trader wanted to make absolutely certain of a service as prompt as that secured by the British trader, he would either have to consign by an express goods train, the rates for which, as already mentioned, are double those for an ordinary goods train, or else pay "courier " rates, fourfold the ordinary goods rate, for consign- ment by certain specified passenger trains. Apart from shopkeeping, if goods sent by a Berlin merchant to Hamburg for shipment by a particular steamer did not reach that port until after the steamer had left (although he had allowed what he regarded as a reasonable time for transport), he would have no claim whatever against the railway if the full period of time allowance had not been exceeded. The German trader can, if he should think fit, and if his commodities will bear the increased cost, insure with the railway against delay. In that case the liability of the railway towards him is increased, provided that the delay in TRANSPORT CONDITIONS COMPARED. 33 question has not resulted from some cause for which the rail- way is not responsible or which it could not have prevented. In either of those cases the liability becomes non-existent. Otherwise it is as follows : I. WHEN THERE HAS BEEN NO INSURANCE OF DELIVERY : (a) Without proof of actual loss sustained : when the delay has exceeded twelve hours the railway rate which has been paid is to be returned in the following proportions : One day's delay, one-tenth of the rate; two days, two-tenths; three days, three-tenths ; four days, four-tenths ; over four days, five-tenths. (6) With proof of actual loss : compensation up to the return of the whole of the rate paid. II. WHEN THE TRADER HAS INSURED FOR PROMPT DELIVERY : (a) Without proof of actual loss sustained: double the amount stated in I. (a) should the delay exceed twelve hours. (b) With proof of actual loss : the amount of such loss, though not exceeding the sum for which the trader has insured, as indorsed on the consignment note. This insurance of delivery counts as still another " extra," over and above the ordinary railway rate ; but, owing to the additional cost, it does not seem to be resorted to, except in special cases. The average trader prefers to save his money and take the risk. As a rule he would order consignments at longer notice, and reckon on the railways taking longer time, instead of expecting goods to be rushed through the country at the speed which is regarded as a matter of course in England. There is a still further alternative open to persons trading in Germany in the lighter classes of merchandise, the resort, namely, to the parcel post. With this I shall deal later on. DELIVERY. General merchandise is, in Germany, delivered to the consignee by officially recognised carmen, empowered to B.R. D 34 GERMAN v. BRITISH RAILWAYS. charge according to a fixed scale ; but the trader is at liberty to give notice to the railway that he will himself send to the station for his goods, no further charge being then made, provided that the consignment is taken away within a speci- fied number of hours. The usual charge for delivery is at the rate of 5 marks per ton, with a minimum of 40 pfennigs ; but this is for delivery to the consignee's door only. Should the carman be asked to bring the consignment into a hall, room or yard, or to take it into a cellar, and should the consignment be one that he can handle by himself, he is entitled to do this, and to ask for 10 pfennigs per 50 kilos, additional. Here, again, the German charge for delivery must be added to the German railway rate when it is compared with an English rate which includes delivery, i DEMURRAGE. In Germany consignees may be allowed twenty-four hours in which to remove ordinary merchandise from the railway depot after notice has been given to them of its arrival, and, generally speaking, twelve hours in which to unload wagons containing 5 or lo-ton lots ; though, of late, there has been a tendency to reduce the latter time-allowance to ten, eight, or even six hours, owing to the shortage of wagons. The notice of arrival is generally given to the trader by means of a post card, which must be produced when the goods are claimed either by the trader or by the forwarding agent whom he instructs to collect for him. This card, in addition to giving time of posting and particulars of the consignment, informs the trader that unless he removes the goods by a specified hour he will have to pay for the space occupied, for detention of the truck, or for delivery by a carman (should the railway send the goods on). He is further told that, alternatively, the railway may hand the goods over to the official carrying firm to be warehoused by them at the trader's cost and risk. For consignments under cover a penalty of 10 pfennigs per 100 kilos, for each twenty-four hours (or 4 pfennigs per 100 kilos, if in the open air) must TRANSPORT CONDITIONS COMPARED. 35 be paid. For delay in unloading (as also in loading) wagons the penalty is 2 marks per wagon for the first twenty-four hours, 3 marks for the second, and 4 marks for each following period of twenty-four hours. Here, once more, much greater liberality is shown by the English companies. They allow two clear days to discharge wagons containing "station to station " traffic that is to say, if the wagons arrived on a Monday the two following days would be allowed for discharge. Should the allotted time be exceeded, the trader is liable to demurrage. The generally recognised charge on this account is 35. per truck a day ; but the penalty is very often not enforced at all, or, where it is, the matter is mostly compromised. In South Staffordshire demurrage is strictly maintained, but even there the charge is reduced to is. 6d. per truck a day after three clear days. Many British traders systematically use the railway wagons as warehouses, not unloading them for weeks together, until it suits their convenience, or until the commodity they contain has been disposed of to some eventual purchaser who is willing to accept delivery. Lime is invariably kept in the railway wagons until it is wanted, and a consignment of grain or hay may be sold many times over on the market before it is finally removed from the railway wagon. Much latitude in these respects has been shown by the railway companies here, and the traders have benefited greatly therefrom, though the privileges granted have been much abused. In Germany the traders are allowed no latitude whatever, and any delay to say nothing of abuse involves penalties which are strictly enforced. WAREHOUSING. The railway warehouse plays an important rSle in the daily operations of many an English trader. In Germany it plays no role at all. The railway warehouse, as a place for regular storage, practically does not exist on State lines, whose only purpose it is to carry commodities and persons from one place to another by rail. In this country what is known as collection and delivery D 2 36 GERMAN v. BRITISH RAILWAYS. traffic is often entitled to a week's free warehousing. On shipping traffic a fortnight's free warehousing is often given, and that period is extended to a month in the case of certain commodities, such as textile fabrics, earthenware and pro- visions. Beyond the periods mentioned a charge is made, either at the rate of so much per ton or a rental for an allotted space. A very large number, indeed, of our traders, especially in the principal commercial or industrial centres, rely exclusively on the railway companies to do their warehousing, and many of them so arrange their regular consignments from the manufacturers that they do not exceed the " free " period at all, and therefore pay nothing beyond the ordinary collection and delivery rate. All that such traders want, in addition, is an office where they can receive persons, show samples, and write letters. They require no warehouse beyond that which the railway companies place at their disposal, and, though it may be said that they really pay for the " free " accommodation through the railway rate, it is certain that if this rate were one purely for transport from station to station, the trader would not get the same accommodation elsewhere for any- thing like the difference that could be made between a " C. and D." and an " S. to S." rate. Nor for the amount of rent he pays when he exceeds the free period would he be likely to secure equal advantages elsewhere, In either case, again, the railway people will go through his ware- housed stock for him as often as he desires, and deliver portions thereof to different customers according to his instructions. Manufacturers, especially in Lancashire, who send large consignments abroad, further avail themselves of the free storage period to despatch their goods to the railway ware- house at the port as they are ready, there to be stored until they can be shipped, thus saving space and avoiding incon- venience at their own factories. Allied to warehousing is wharfage. A coal merchant, for instance, can have his supplies stored on the railway sidings, paying a small rent in the country, but no rent at all in TRANSPORT CONDITIONS COMPARED. 37 London, and he may work up a good business with only a small office, in addition, where he can receive orders. The same conditions apply to a builders' merchant who gets " wharfage " on a railway company's property at a nominal rent. In all such cases there is a substantial saving in establishment charges. Should anyone ask what the State railways of Germany have done to provide like facilities for German traders, the reply in respect to warehouses is " Nothing." All they do is to arrange for sufficient space, etc., for the reception and despatch of consignments. They have left to private enter- prise the supply of warehouses, and traders who require such accommodation must pay for it independently altogether of the cost of rail transport. Their wants are generally supplied by the forwarding agents, the largest of whom have extensive warehouses where they not only receive and arrange for the consignment of collected goods, but store them as well, if desired. Generally speaking they will keep their patrons' goods for forty-eight hours without charge. After that they expect to be paid at the rate of 3 marks per ton per month for warehousing. The British railway practice of an alter- native rental for an allotted space is not much followed in Germany, except in such cases as that, say, of a wine dealer who takes cellarage for a stated period. The German forwarding agents, like the British railway companies, doubt if the warehouses really pay, but they also agree in thinking that such accommodation brings business. Whereas, however, in England the free storage is taken full advantage of by traders, those in Germany are less anxious to avail themselves of warehouses which must be paid for as an extra, and there is a greater tendency in that country for the traders to do their own warehousing, whenever possible. Bonded store accommodation is provided by the leading British railway companies at their principal stations, so that rail-borne traffic can be kept in bond on the spot, every requirement being fully met without the traders having to pay the duties until they are ready to clear the goods out of bond. Such bonded warehouses are to be found in 38 GERMAN v. BRITISH RAILWAYS. German ports. But they have not been provided for the traders by the State railways. In regard to wharfage the German railways certainly allot space on sidings to coal merchants or other traders ; but the rent charged is often so high that I heard in Berlin of coal dealers who had had to remove from the sidings because they could not make the business pay. Sites alongside the lines may also be obtained by forwarding agents and others for warehouses ; but here, also, the rent charged is high and the conditions are very exacting, since the trader, however much he has spent on the buildings, may have to clear out at very short notice ranging from a fortnight to three months should the railway suddenly decide that it wants the site for itself. LOADING AND UNLOADING. In many cases in England these services are performed by the railway companies without charge, even when the trafBc is carried at "station to station " rates. In Germany if the rate charged throws the obligation to load or unload on the trader, he must pay extra should he desire the railway men to do this work for him. He may, in fact, be called on to do his own loading of a consignment in any way of a substantial character. If he were sending even a dozen iron pipes he might be required to put them in the truck himself, though he would have so to pack them that the truck could be used for other commodities as well. Should a sender arrange for a 5 or a lo-ton load, the truck will be weighed after he has completed the loading, and if it is found that he has exceeded the quantity stated on the consignment note, he has to pay what amounts to a heavy penalty. OTHER FACILITIES. The facts already recorded fully justify the conclusions : (i) That there is a far more intimate relationship between railway companies and traders in the United Kingdom than there is between State railways and traders in Germany; I UNIVERSITY TRANSPORT CONDITIONS COMPARED. 39 and (2) that an English railway rate may include many terminal services which would be excluded from the German railway rate, and the cost of which must be added thereto. Besides, also, such inclusive services, as rendered in England, there are others for which low, if not nominal, charges are made by the companies in order to encourage traffic or to facilitate cheap delivery. These include : Lighterage ; insur- ance, at a fixed premium, against fire, of goods stored in railway warehouses ; taking out bills of lading, etc. ; clearing services for bonded goods from the Customs ; the letting-out of hampers and cloths for the conveyance of meat and poultry traffic to the principal markets ; the placing of facilities at the disposal of agents for the casing, cording and marking of packages of tea on the railway companies' premises, to insure the safe transit of the traffic ; provision in some instances of potato or general markets adjoining railway stations ; and the lending of corn sacks to traders desiring to have the use of them. CREDIT ACCOUNTS. An important feature of the British .railway system is that traders get credit in the form of monthly ledger accounts, a porter's monthly account, or short credit. Those having ledger accounts may, in effect, often have from six weeks to close on two months' credit, sums due from them, say, in the early part of January not being paid until the end of February. One cannot say that it is altogether a good system for the railways. They are kept waiting for money which ought to be producing revenue in other directions, and they make a certain proportion of bad debts. But from the point of view of the traders the arrangement has many advantages. It enables them to do business with the railway company's money, and there is no doubt that some of them, whether companies or individual traders, would hardly be able to carry on but for the credit they thus secure from the railway companies. In Germany, on the other hand, the State railways are operated on the principle of not trusting the traders at all. 40 GERMAN v. BRITISH RAILWAYS. It is held that, just because they are State railways, they must run no risk. Private railway companies can do as they please ; but State railways should not hazard possible losses, which might prejudice the proprietary interests of the com- munity. Generally speaking, therefore, the cost of consign- ment must be paid for at once, either by the consignor or forwarding agent at the time of despatch, or by the consignee when the goods are handed over to him. The only exception is in the case of traders whose business with the railways exceeds 15 a month. These are allowed to open a monthly account, on condition that they first hand over securities equal in value to one and a half times the total of their average monthly payments to the railway. Should the business done exceed the amount of such deposit, the trader must either forward additional securities, or, alternatively, pay at once for such consignments the charges on which would raise the total above the deposit. Should the trader omit to pay up at the end of the month, and especially if he should fail in business altogether, the railway can realise the securities, or portions thereof, keep the amount due, and give the balance to the trader. Otherwise the railway collects dividends and interest on the securities deposited, and credits the trader with the sums thus coming to him. All the same, the effect of this deposit system, as compared with the credit account system in vogue in England, is that an enormous amount of traders' capital in Germany is so far locked up that they cannot invest it directly in their own business. There are many firms whose payments to the German railways amount to 5,000 a month, and I heard cf coal merchants in Berlin who do business with the State railways to the extent, probably, of close on 50,000 a month. But not even traders of this type would get any credit from the railway unless they fulfilled the stated conditions in regard to a deposit. When to the free warehousing or to the wharfage already referred to, one adds the advantages of this credit system, one sees still further with what a very modest sum a man might start business in England. It is obvious that, if TRANSPORT CONDITIONS COMPARED. 41 he had a small office, a desk, a chair, some bill-heads and a pen and ink, he could practically work for a time with a railway company's capital for the remainder of his require- ments. But he would not be able to do this in Germany. COMPARISONS OF RAILWAY RATES. The facts already given show, I would submit, how absolutely illusory comparisons of British and German railway rates may be when they are regarded solely from a mileage point of view, and leave out of calculation the material difference between a slow and a fast goods service, and the various advantages to the trader, over and above rail transport, which may be included in the British rate, as against the exclusively station to station rate of the German State railways. One authority in Germany with whom I discussed this matter a gentleman well acquainted with British as well as German conditions even went so far as to say : " I consider that if the cost of the various services included in your railway rates were added to ours, the German rates would be found higher than the English." Much of the misapprehension which has arisen on this point is due, however, not only to the disregard of subsidiary services, but also to the fallacious comparison of German export rates with English domestic rates. To encourage German commercial and industrial interests, and, also, to meet the severe competition of Dutch and Belgian ports, the German State railways grant exceptionally low rates to Hamburg and Bremen for commodities intended for export, such rates being substantially less than those for like quantities of the same goods going to the said ports for local consumption. If these export rates (which, again, will be station to station rates) are compared with our own domestic rates (especially if the latter be collection and delivery rates), there may well be a substantial difference. Here I may remark that Germany is not alone in conferring on her traders the advantage of special export rates. Similar rates are granted by English railway 4 2 GERMAN v. BRITISH RAILWAYS. companies in respect to our principal ports, as the following examples show : From. To. Description of Traffic. For Town. For Foreign Export. Man- chester. Liver- pool. Cotton and linen goods in bales, boxes, cases, packs, or trusses. per ton. us. 8d., collected in Man- chester. per ton. 8s., collected in Man- chester. Man- chester. Bristol. Ditto. 35s- C. &D. 255., C. &D. Man- chester. Glasgow. Ditto. 325. 6d., C. &D. 255., C.&D. Leeds. London. Woollen, worsted, and stuff goods in hampers, bales, or boxes. 43 s - 4^-> C. &D. 325. 6d., C.&D. North- ampton. Liver- pool. Boots and shoes, in cases, casks, or boxes. 325. id., collected in North- ampton. 235. 4