THE 
 
 RAILWAY RATES QUESTION
 
 PRINTED BV 
 
 SPOTTISVVOODli AND CO., NEW-STREET SQIARE 
 
 LONDON
 
 THE RAILWAYS 
 AND THE TRADERS 
 
 a. 1^3. 
 
 A SKETCH OF THE 
 
 RAILWAY RATES QUESTION 
 
 IN THEORY AND PRACTICE 
 BY 
 
 W. M. ACWORTH 
 
 M.A. OXON. AND OF THE INNER TEMPLE, BARRISTER- AT-LAW 
 
 LONDON 
 
 JOHN MURRAY, ALBEMARLE STREET 
 
 1891
 
 BY THE SAME AUTHOR. 
 
 THE RAILWAYS OF ENGLAND. Illustrations. 
 8v i4.f. 
 
 THE RAILWAYS OF SCOTLAND. Map. Crown 
 8vo. 5.C 
 
 London: JOHN MURRAY.
 
 o 
 
 ■HE" 
 
 
 ^ 
 
 PREFACE 
 
 " Of the many wa}'s in which common-sense 
 
 inferences about social affairs" — so writes Mr. 
 ;— Herbert Spencer in his most recent essay — " are 
 
 flatly contradicted by events, one of the most curious 
 «c is the way in which, the more things improve, the 
 ~j louder become the exclamations about their badness." 
 
 Of this tendency of human nature Mr. Spencer gives 
 
 rvi 
 
 not a few striking examples. He might, however, 
 JL have found another at least equally striking in the 
 ° attitude of the English public to the Railway Com- 
 panies. A generation back the companies did pretty 
 -? much what was right in their own eyes, and let their 
 ' will avouch the deed. Speaking even of a time as 
 recent as twenty years back, the most competent of 
 American observers — Professor Hadley — expresses 
 his unbounded astonishment at the *' impudence " 
 with which they " openly defied a regularly con- 
 stituted public authorit}-." And in those days 
 Parliament and the public made a {q.\\ timorous 
 
 42.'r^58
 
 [6] THE RAILWAYS AND THE TRADERS 
 
 protests, one or two half-hearted attempts at 
 legislation, and submitted. And now, to-day, when 
 the Railway Companies have learnt the lesson of 
 triumphant democracy, when in every direction they 
 are showing their anxiety to meet and even to forestall 
 the demands of public opinion, popular feeling is 
 running strongly in the direction of substituting for 
 the old English system of legal redress for proved 
 injuries, of Government inspection and publicity, a 
 new system of direct State regulation, of constant 
 and minute interference by a Government depart- 
 ment. 
 
 The attempt to substitute the one system for the 
 other, not as part of a well-thought-out and deliber- 
 ately adopted course of policy, but by a series of 
 hap-hazard and piecemeal decisions, can, I am per- 
 suaded, only lead to failure and disappointment. It 
 will before long, in my judgment — and an author has 
 a traditional right to be egotistical in a preface — land 
 the country quite unexpectedly in a logical impasse, 
 from which there can be no outlet except by State 
 purchase of the entire railway system. Now, I am 
 no foe of Government railways. On the contrary, I 
 believe that in countries with a population less self- 
 reliant than our own such a policy is necessary. In 
 a country with a bureaucracy as well-trained and as
 
 PREFACE [7] 
 
 wcll-organised as that of Prussia, it may even be 
 desirable. Nay more, I am not concerned to deny 
 that even here State-purchase might do something to 
 bring up the worst raihvay services more nearly to 
 the level of the best. But a careful study of the 
 evidence has convinced me that in the long run State 
 control ends in keeping down the best to the level 
 of the worst, and that, taking them for all in all, 
 the private railway companies of England and the 
 United States have served the public better than the 
 Government railways of the Continent or of our 
 Australian Colonics, and — which is still more to the 
 point — are likely to serve it better in the future. 
 
 When, therefore, it was suggested to me some 
 months back, on behalf of the Railway Companies' 
 Association, that I should attempt a sketch of the 
 Railway Rates question from the Railway point of 
 view, I gladly complied. The case for the opponents 
 of the existing system has been publicly stated again 
 and again. The Railway Companies have hitherto — 
 unwisely as I think — been content that their defence 
 should be entombed in Blue-books ; and the pages 
 which follow — the responsibility for which is of 
 course entirely my own — are almost the first attempt 
 to make it generally accessible to the public. Need- 
 less to say, I am not vain enough to imagine that
 
 [8] THE RAILWAYS AND THE TRADERS 
 
 any words of mine can produce an appreciable effect 
 on the decision of the momentous question with 
 which Parhament will be called on to deal within the 
 next few months. Still, if they enable any member, 
 whether of Parliament or of the public, who desires 
 to approach the question in a judicial frame of mind, 
 to see that the Railways have something to say for 
 themselves as well as the Traders, to realise that 
 some of the problems presented for solution are not 
 as simple as they appear at the first glance, my 
 purpose in writing them will have been accom- 
 plished. 
 
 February, 1891
 
 CONTENTS 
 
 INTRODUCTION 
 
 PAGE 
 
 Private ownership and management of railways practically confined 
 to Great Britain and the United States — Possibility of change 
 to system of State ownership — Need for competent criticism of 
 the issues involved — Absence of such criticism here — Contrast 
 offered in this respect by the Continent and the United States 
 — Value of American experience to us — Self-contradictory ac- 
 cusations made against our railways — The complaint of Cardiff 
 that the foreigner is not favoured —Greenock versus Liverpool, 
 and Wick versus Grimsby — Professor Hunter, M.P., on losing 
 rates ........... i 
 
 PART I 
 RAIL WA Y PRINCIPLES 
 
 CHAPTER I 
 
 COST OF CARRIAGE 
 
 Mr. Jeans and the ' exact Cost of Working ' — Why precise Figures 
 are unattainable — The demand for Rates based on cost of ser- 
 vice — An expert opinion on the point — The items which make 
 up cost of service — Movement expenses — What is a train-load ? 
 —Station expenses — Fixed charges — American statistics —In- 
 terest on capital — Cost of service, if it could be ascertained, no 
 guide in fixing a rate . . . . . . . • I7
 
 [lO] THE RAILWAYS AND THE TRADERS 
 
 CHAPTER II 
 
 EQUAL MILEAGE RATES 
 
 PAGE 
 
 Want of logic in the critics — A railway not a carrier's cart — Tolls 
 for the use of the road — The way to put an end to railway 
 competition — The Liverpool traders' demands in theory and 
 practice — Sea competition — Long and short haul — A typical 
 instance — The German ' reform ' tariff ..... 35 
 
 CHAPTER III 
 WHAT THE TRAFBTC WILL BEAR 
 
 No evidence that the traffic cannot bear the rates — The exorbitant 
 profits of the railway companies — The margin of viability — A 
 principle leading, not to high, but to low rates — Report of the 
 Inter-State Commerce Commission — The consumer more impor- 
 tant than the trader — Analysis of train-mile expenditure — How 
 rates, fixed according to what the traffic can bear, first origi- 
 nated — When competitive with sea-carriage — When article 
 carried is of small value — The Delaware oyster growers — How 
 special rates are really fixed — ' Group ' rates — Exceptional im- 
 port rates — Using railways as instruments of Protection — A 
 case for the Cobden Club — All loss and no gain — Export rates 
 — A Turkish atrocity ........ 49 
 
 CHAPTER IV 
 WHAT THE TRAFFIC WILL NOT BEAR 
 
 Charging what the traffic will bear, a principle widely adopted in 
 other transactions of daily life — Analogies from turnpike tolls, 
 from taxation, from local rates, from professional charges, from 
 brokers' commissions — Whether one portion of the traffic is 
 done at the expense of the rest— Utilisation of bye-products — 
 Joint cost — The extreme difficulty of rate fixing — Experiment 
 the only practical guide — Reductions mainly in low-class traffic 
 — Depriving places of their natural geographical advantages — 
 Some applications of this theory — The Traffic Act of 18S8 and 
 special import rates ........ 78
 
 CONTENTS [if 
 
 CHAPTER V 
 
 WHO SHALL FIX THE RATE ? 
 
 PAGE 
 
 The railway manager as a special providence — Mr. Jeans and the 
 Lancashire and Cheshire Conference on secret rebates — Trans- 
 portation experts — From the carrier's point of view — Rate 
 fixing not an exact science — A task requiring the constant 
 employment of a large staff — French and American experience 
 on this point — Taxation must be fair all round — Arbitration 
 between rival interests — Irresponsible monopolists — The power 
 of public opinion — Reduction of passenger fares — Competition 
 actual and potential — Two companies may starve where one 
 can grow fat — The West Shore and the ' Nickel Plate ' Rail- 
 roads — The restraining influence of laws and law-courts — Can 
 a more satisfactory substitute be found ? — The price at which 
 the French nation has purchased its rights of control — Too 
 late in the day to set up the French half-way house here — 
 Political influences, real or suspected — State interference cer- 
 tain to lead to keeping rates high — Professor Hadley's opinion 
 —r Fetching back the age of gold ...... 96 
 
 PART II 
 RAILWAY PRACTICE 
 
 CHAPTER VI 
 
 SOME EXTORTIONATE RATES 
 
 The meaning of the word —The typical trader's attitude — Rates 
 may stop traffic without being extortionate — Indefensible 
 inequalities — Nature's discriminations — Traffic not worth 
 carrying — Actual working expenses— A testimonial from 
 Sheffield — Cost of carriage in case of tea, Bradford woollens, 
 and cotton — The extent of the consumer's interest — Fish 
 Traders' Associations — Where does the money go ? — An 
 exceptionally expensive traffic — A labourer's annual budget — 
 The railways, the middlemen, and the public — The traders' 
 dilemma .......... 120
 
 [I2] THE RAILWAYS AND THE TRADERS 
 
 CHAPTER VII 
 COMPETITION AND COMBINATION 
 
 PAGE 
 
 Robert Stephenson's aphorism — Practical experience on the ques- 
 tion — English rate wars — All loss and no gain — American rate 
 wars — Sir Bernhard Samuelson's ideal as seen in actual opera- 
 tion — The value of fixity of charge — What the American public 
 thinks — What the Inter-State Commerce Commission thinks — 
 What railway experts say — The argument that the advantages 
 of competition in facilities may be bought too dear — The alter- 
 native, stagnation — The deliberate conclusion of the Italian 
 Commission — Does the public in fact pay the bill? — Railway 
 business must be looked at as a whole — The paramount 
 importance of speed — The price the foreigner is ready to pay 
 for it — A railway only a shop on a gigantic scale . . . 146 
 
 CHAPTER VIII 
 
 CONTINENTAL RATES 
 
 The secrecy of English railway accounts — The need for ton-mile 
 statistics — Two English amateurs and one Continental expert — 
 Some detailed comparisons of rates, here and on the Continent 
 — Continental facilities compared with English — Time of 
 delivery — Compensation for damage — Station accommoda- 
 tion — Miscellaneous points — Where the Continental stations 
 are — The German Spediteiir — Is he to be acclimatized here ? — 
 A glance at the tariffs of other countries — The Cape, Ceylon, 
 Argentina, Australia — Indian traffic conditions — Where paper 
 comparisons would land us . . . . . . .176 
 
 CHAPTER IX 
 
 AMERICAN RATES 
 
 Magnificent, but niythical, presents — The average American rate 
 — On the basis of Chicago — The result to the American share- 
 holder — The British capitalist and the Farmers' Alliance — 
 Averages meaningless — Extreme instances — Professor Hadley's 
 estimate — American hotel-keeping — The great wholesale 
 secret — American plasticity — The car-load the real American 
 unit — The economy thereby effected — The price paid — Neglect 
 of local traffic — Ruining the American farmer — The action of
 
 CONTENTS [13] 
 
 PAGE 
 
 Parliament and the Courts here in keeping rates up — Contrast 
 with the American legal decisions — The individual versus the 
 public — The cost of terminals in New York and Philadelphia — 
 Carrying capacity of English and American lines — Manufac- 
 tures and raw produce — Comparative cost of car-load and less- 
 than-car-load traffic — The price paid for safety — The public 
 attitude towards new lines here and in America — Two com- 
 panion pictures — The tubular-frame car fad — The real question 
 for decision — Some specimen American rates — Rates in the 
 Southern States — A summary of results .... 204 
 
 Note o.v the American ' Express ' system .... 245 
 
 CHAPTER X 
 
 WHY ENGLISH RATES ARE HIGH 
 
 Some prevalent misconceptions — Rates fixed at the point where 
 the largest net revenue can be obtained — Where capital cost 
 does come in — What traffic a line can hold — The Barry Railway 
 and Dock Company — Agricultural branches — Their extravagant 
 cost — The need for further capital expenditure — Full train- 
 loads in theory and practice — Sweeping reductions in pas- 
 senger fares — Some Great Western figures — Neglected recom- 
 mendations — Sir Rowland Hill and the Royal Commission of 
 1865 — Canal competition here and elsewhere — Competition by 
 sea — The Liverpool ' plate-way ' scheme — The prospect before 
 the American railroads — Rapid rise of expenses — Competition 
 in facilities — A public benefactor ...... 249 
 
 PART III 
 THE PROBLEM FOR PARLIAMENT 
 
 CHAPTER XI 
 
 THE traders' demands 
 
 The Lancashire and Cheshire version of the Parliamentary 
 history — The report of Mr. Gladstone's Committee of 1S44 — 
 The Committee of 1846 — The Committee of 1853 — The Royal 
 Commission of 1S67 — The Joint Committee of 1872 — The
 
 [I4] THE RAILWAYS AND THE TRADERS 
 
 Committees of 1881-2 — The history of terminals — In Parlia- 
 ment — In the Courts — The principle now admitted — Its pro- 
 posed application — Two mutually inconsistent policies — The 
 balance of advantage — Killing the golden goose — The traders' 
 real protection — Terminal charges on a cost-of-service basis — 
 A gigantic mare's nest — Classification — The brand-new 40-class 
 classification — The ' cast-iron ' classification — The English and 
 American classifications compared ..... 282 
 
 CHAPTER XII 
 
 THE BOARD OF TRADE PROVISIONAL ORDERS 
 
 Train-load rates — Providence on the side of the big battalions — 
 A judgment of the Inter-State Commerce Comiiiission — Prac- 
 tical American experience — Uselessness of fixed maxima — Pro- 
 fessor Hadley's account of the Granger attempt — Extortion not 
 absolute but relative — Maxima fixed by nature better than by 
 Parliament — An illogical position — Mr. Hudson's opinion- 
 Sir Henry Tyler and Sir Thomas Farrer on the question — Other 
 witnesses on the point — The recommendations of the Com- 
 mittee of 1882 — The Railway Companies' Consolidation Bills — 
 The Traffic Act of 1888— The untenable position of the Board 
 of Trade — Mr. Facing-both-ways — Wanted, aprinciple — Exist- 
 ing rates may be justified, but must be reduced — The new 
 truck-hire schedule — The official after his kind — Are the Board 
 of Trade proposals in the interest of the British public ?— New 
 railway capital urgently needed — Where is it to come from ? — 
 Amateur critics on extravagance of working expenses — Cur- 
 tailment of facilities — Crippling the smaller companies — 
 Pettifogging reductions — The logic of the Board of Trade 
 position — Symmetry on paper — A solemn warning to all 
 English railways, ' Never reduce rates ' — The treatment of the 
 Great Eastern — The outlook for the future .... 326 
 
 APPENDIX A 
 
 Railway Rates for Provisions to Birmingham . . 369 
 
 APPENDIX B 
 
 Detailed Comparison of Analogous Rates in England 
 and America 371
 
 THE RAILWAYS AND THE TRADERS 
 
 INTRODUCTIOxN 
 
 From China to Peru— the statement is made in 
 all literalness — the nations of the world have, after 
 somewhat more than half a century's experience, 
 finally decided either that their governments shall 
 own and work their railways, or at least that in return 
 for a generous measure of State support their railways 
 shall accept an equally ample measure of State con- 
 trol. Two countries only are to be excepted — im- 
 portant exceptions without doubt, seeing that between 
 them they contain half the railway mileage and half 
 the railway capital of the world — the United Kingdom 
 and the United States. 
 
 Whether or no these two great nations will in the 
 end follow the example of the rest and nationalise 
 their railways, is one of the serious problems of the 
 future. Probably in neither country is there at the 
 present moment any considerable body of opinion 
 convinced in favour of the step, though large numbers, 
 in America more especially — for discontent with 
 private management is much more acute there than 
 here — are prepared to listen to arguments in favour 
 
 B
 
 2 INTRODUCTION inteo. 
 
 of State ownership, or, if not ownership, supervision 
 and responsibihty, with at least benevolent neutrality. 
 But if a step so grave, a step which at one stroke 
 would double the annual budget of either country 
 and add to its permanent civil service five per cent, of 
 the adult male population, is to be taken at all, it 
 evidently ought not to be taken except after full con- 
 sideration of all the facts involved. And it is in the 
 belief that these facts are less familiar to the public in 
 England than elsewhere that the following pages are 
 written. 
 
 No one can be so well aware as the writer of his 
 lack of qualification for the task. " Who then " — said 
 Rasselas, when his guide explained to him what was 
 meant by philosophy — " who then can be a philo- 
 sopher ? " So too one might ask, " Who is qualified to 
 discuss the problem of railway charges from the 
 double point of view of railway profits and public 
 interest ? " The man, it may be answered, who can 
 unite in his own person the following characteristics. 
 He must have a thorough training in the abstract 
 principles of political economy ; he must have a 
 close practical familiarity with the conditions under 
 which the different industries of the country are 
 carried on ; must know for each trade the amount of 
 raw material used, its sources, its cost, the amount of 
 the finished product, its destination, the quantities in 
 which it is consigned, the proportion of bulk to value, 
 the severity of the competition to which the manu- 
 facturer is exposed, and fifty things more. For all 
 these matters enter, or should enter, into the con- 
 sideration of a railway manager in fixing a rate, and
 
 iNTHO. THE IDEAL CRITIC 3 
 
 the justice or injustice of the rate when fixed can 
 therefore only be properly appreciated by one who 
 is similarly qualified. Then, further, the railway 
 manager must know, as far as it can be known, the 
 cost of working different descriptions of traffic, what 
 allowance to make in each case, according as the dis- 
 tances arc long or short, the gradients are easy or 
 difficult, the traffic is all in one direction or fairly 
 balanced inwards and outwards, speed is essential or 
 unimportant, the goods are easy or difficult to handlej 
 and so forth — and on all these matters his critic must 
 be able to follow him intelligently. Last but not 
 least among the necessary items of the apparatus 
 criticus, may be mentioned sufficient legal training to 
 appreciate the bearing of the rules as to discrimina- 
 tion and undue preference as laid down by Parliament 
 and interpreted by legal decisions. 
 
 Such would be the qualifications of the ideal 
 critic. But in Great Britain, strange as it may seem 
 for a country which gave birth, not only to George 
 Stephenson, but to Adam Smith, one result of our 
 system of private management and consequent lack of 
 publicity is that criticism falls even further short of 
 this ideal than elsewhere. In France or in Germany, 
 where the change of each railway rate is as much an 
 act of State as the imposition of a new or the discon- 
 tinuance of an old excise or customs duty, railway 
 questions necessarily arouse considerable public atten- 
 tion. The subject is one as to which each citizen 
 may be called on from time to time for his opinion 
 Where a reduction of rates has to be made up, not by 
 reduced dividends at the expense of individual share- 
 
 B 2
 
 4 INTRODUCTION inteo. 
 
 holders, but through taxation at the expense of the 
 pubhc at large, the matter is evidently one of practical 
 politics. So, again, if the construction of a new branch 
 line depends upon the political pressure which a local 
 member of the legislature can bring to bear upon the 
 government, his constituency may be trusted to keep 
 their attention fixed on the point. Consequent!}', in 
 Continental countries, we find that an unceasing and 
 intelligent interest is taken in all railway questions. 
 Professors lecture on the subject of railway trans- 
 portation to their pupils at the universities, and 
 publish exhaustive treatises which are accepted as 
 classics. A particular railway policy is identified 
 with the name of some prominent statesman — a 
 Depretis, a Freycinet, a Bismarck — and is fought for 
 by his followers with all the science and knowledge 
 which they can enlist in his support. 
 
 With us railway literature of a serious kind is, 
 with the single exception of Mr. Grierson's admirably 
 temperate but necessarily partisan work on " Railway 
 Rates," absolutely non-existent. Two illustrations 
 may perhaps be given. In Professor Hadley's well- 
 known work on " Railroad Transportation " — a pro- 
 fessor of political economy at Oxford or Cambridge 
 would as soon think of publishing a treatise on grocers' 
 shops as on railways — there is a rough bibliography 
 of the subject.' For English railway history readers 
 are referred to the works of Gustav Colin.- Only 
 
 ' Railroad Transportation, its - Untersuchungen iiber die Eng- 
 
 History and its Laws. By Arthur lische Eisenbahnpolitik. By Gus- 
 
 T. Hadley, Professor in Yale tav Cohn. 3 vols. Leipzig, 1874, 
 
 College, Connecticut. Putnam's 1S75, 1883. 
 Sons, New York, 1886.
 
 iNTiJO. DEARTH OF RAILWAY LITERATURE 5 
 
 three English authors arc named : Professors Sidgwick 
 and Jevons and Sir Thomas Farrer, each of whom, in 
 works deaHng with other subjects, incidentally de- 
 votes a few pages to railway questions. Take again 
 Mr. Jeans's oft-quoted work on " Railway Problems." 
 Everyone must admire the patience and ingenuity 
 with which Mr. Jeans has collected and elaborated 
 his very interesting statistics ; but in discussing pro- 
 blems of such difficulty an author who occupies the 
 position of a pioneer labours under almost insuper- 
 able difficulties. And, apart from mere statistics, Mr. 
 Jeans appears only to have been able to find two pre- 
 decessors in the field from whom to borrow — Nicholas 
 Wood, the last edition of whose work was published 
 in 1 83 1, and Mr. Dorsey, the author of a prize 
 essay, which obtained, as it assuredly deserved, a 
 gold medal from the American Society of Civil 
 Engineers, for a paper demonstrating conclusively 
 that in every single item, from baggage-checks to 
 bogie-trucks, American railways differ from English 
 much as cheese docs from chalk. 
 
 Continental railway literature is unfortunately of 
 but little use to English students. Not only is it in 
 a foreign language — and the prose of your German 
 professor or Regierungsrath is not as a rule as limpid 
 as that of Lessing or Heine — but also it deals with 
 conditions so different from our own that it is almost 
 impossible to argue from one to the other. Military 
 reasons, which are almost without weight here, are all- 
 important there. Private capital, which is scanty and 
 timorous in the one case, is superabundant and over 
 venturesome in the other. Trade in Enszland is much
 
 6 INTRODUCTION inteo. 
 
 further developed, more highly organized, more sensi- 
 tive, more flexible ; between all important points 
 there are two if not three competing routes ; further, 
 the competition of that great free-trader, the sea, if 
 not actually hi esse, is always in the background ; 
 our government, from the administrative side at 
 least, has much less authority, less prestige, than the 
 governments of France or Germany. It may well 
 be that conclusions which are correct on Continental 
 data would be incorrect if it were sought to apply 
 them here. 
 
 There is, however, one country from which we in 
 England can obtain information of the utmost value. 
 That country, needless to say, is the United States. 
 It is true that, there as here, railways are private 
 enterprises ; but in the States they arc something 
 more. They are enterprises that for a generation 
 past have been managed full in the public view. The 
 reasons for the difference are not far to seek. In the 
 first place railways in this country came merely as 
 an improvement of existing means of conveyance. 
 In America they have been from the outset almost 
 the only means. In the West railways went first, and 
 highways, if they came at all, only followed after. 
 London Road is to this day a main street, not only in 
 Manchester, but in Edinburgh; but it is impossible to 
 imagine a New York Road in St. Louis or Cincinnati. 
 Then, again, America has forty legislatures, while we 
 have but one. The very number of railway bills 
 which are presented to our Parliam.ent every spring 
 prevents any considerable amount of public interest 
 being directed to any one of them. Half a dozen
 
 iNTBO. ABSENCE OF PUBLICITY 7 
 
 committees are engaged simultaneously in the con- 
 sideration of as many different bills. Their decisions 
 are announced, but their reasons are never given, and 
 it is not impossible that, if they were, it would be 
 found that committees A, B, and C had rejected bills 
 for the very reasons which had induced committees 
 D, E, and F to pass analogous schemes in the 
 adjacent rooms. 
 
 For our English method of dealing with each 
 case per se on its merits, whatever may be its advan- 
 tages, has, especially when the judges are laymen 
 with no general scientific knowledge of the subject 
 under discussion, at least this disadvantage, that the 
 broad principles involved need never be brought out 
 at all, unless it be, which it often is not, the interest 
 of either applicant or opponent to do so. What- 
 ever may be the decision of the committee, only 
 in the rarest instances is it reviewed in the House 
 downstairs. Contrast this system with the American 
 one. The passage of a railway Act, the modification 
 of the railway charter, may be the most important 
 event of the legislative session at Springfield or at 
 Hartford. The matter is dealt with by the ordinary 
 procedure to which public bills are subjected. The 
 newspapers discuss it at length, railway officials and 
 prominent public men are interviewed on the subject. 
 Even the pernicious system of " lobbying " has this 
 advantage, that suggestions are made and opinions 
 expressed to legislators privately which could not or 
 would not be expressed publicly. 
 
 But there is much more than this. The railway 
 question in America is tenfold more important than
 
 8 INTRODUCTION intko. 
 
 with US. The carriage of goods, except of the com- 
 monest and cheapest kinds, amounts with our short 
 distances to such a very small percentage of the total 
 price, that it is onl}^ in times when trade is bad that 
 the charges made arc scrutinised. In America the 
 rate is a question of life and death. The farmer in 
 Iowa or Missouri may, as happened a few years back, 
 be burning his grain for fuel while his rivals further 
 east in Illinois and Wisconsin are selling it at 
 profitable rates in the Liverpool market. However 
 cheap be the American rate per mile, and however 
 extortionate the English one — let us here assume, for 
 the sake of argument, that the one is four times as much 
 as the other for the same service — it is evident that a 
 thousand half-pence are more important to the man 
 who pays them than fifty two-pences. 
 
 There is another reason : the French private, as we 
 know, carries a field-marshal's baton in his knapsack ; 
 in a country where there are no foreign affairs, and no 
 army or navy to speak of, the carricre oiivcrte auxtalcjits, 
 tlie career which attracts the best intellect of the coun- 
 .try, is the railway service. Not only the great fortunes, 
 but the great reputations of the country have been and 
 are made in it. The President of the Pennsylvania 
 Railroad or of the New York Central — the latter of 
 whom is commonly spoken of as a possible President 
 of the United States — is a much more important 
 personage than mere Cabinet Ministers. Their 
 movements are chronicled, their utterances are re- 
 corded from day to day by the newspapers, most of 
 which print, it may be added, a column or two of 
 railway intelligence in every issue. For all these
 
 iNTiio. AMERICAN RAILWAY LITERATURE 9 
 
 reasons, and many more which mic^ht be given, rail- 
 way questions have been much more scientifically 
 studied and discussed in America than here, and the 
 public at large is much more familiar with the main 
 principles involved. I offer no apology, therefore, for 
 the fact that in what follows large use is made of 
 American railway literature, which in fulness and 
 value far surpasses anything existing on this side of 
 the Atlantic. 
 
 One advantage the American railways owe to the 
 fierce light of publicity in which they live and the 
 consequent enlightenment of the American people on 
 railway questions. With all their faults, and they 
 are neither few nor small — one might carry the 
 famous quotation further and add that hatred itself 
 can deny to American railway management no title 
 to glory except virtue — American railways are 
 seldom pilloried for crimes which they have not 
 committed. The English railways are often tried 
 and convicted on each of two mutually inconsistent 
 counts at the same moment. Here is an instance. 
 If there is one charge whose heinousness has 
 impressed the public mind more than another, it is 
 that our railways have " favoured the foreigner," that, 
 in the words of the report of the House of Commons 
 Committee of 1882, "imported produce is given a 
 bounty over home produce by being carried at a lower 
 rate. . . . That the export trade enjoys rates which 
 are preferential as compared with those for the home 
 consumption trade." The most commonly quoted 
 instance has been the rate of 2^s. per ton for meat 
 from Liverpool to London, as against 45J. to London
 
 lO INTRODUCTION intro. 
 
 from intermediate stations. The fact that such are 
 the rates is undeniable. Let us assume for the 
 moment that they are absolutely unjustifiable. The 
 company which imposes them, let us admit, is simply 
 levying blackmail upon the necessities of the 
 struggling English farmer. But what then shall we 
 say to the following, culled within the last few 
 months from the leading columns of a London daily 
 paper .'' 
 
 " Railway rates are seriously affecting an industry 
 recently established in Cardiff, for the supply to 
 London amongst other places of meat from New 
 Zealand and the South American ports. The rate 
 for dead meat from Cardiff to London, a distance of 
 162 miles, is T)^s. per ton, or 2/^^. per ton per mile. 
 From Liverpool, which is 201 miles, the rate is only 
 2^s. per ton, or i f\yd. per ton per mile. From Bristol 
 to London, a distance of 118 miles, the rate is 20i". 
 per ton, or 2d. per ton per mile. Thus it will be seen 
 that the Cardiff rates are something like 30 per cent, 
 more than those of Bristol and Liverpool. It is 
 satisfactory to know that the Cardiff Chamber of 
 Commerce is taking vigorous action in the matter ; 
 but as the trunk lines are in agreement, they will 
 find it difficult to remove the grievance of which they 
 justly complain." 
 
 It is evident that the writer can have no sympathy 
 with the struggling British farmer when he quotes 
 with approval these " preferential " rates for foreign 
 produce which are given at Liverpool and Bristol. 
 Perhaps he has come to the conclusion that the con- 
 sumer in London has also an interest, that, namely, of
 
 INTRO. TO BE AND NOT TO BE II 
 
 getting his meat as cheap as possible ; possibly he 
 even sympathises with the traders and " dockers " at 
 Cardiff who are trying to make a livelihood out of the 
 establishment of a new industry. 
 
 But when the Cardiff Chamber of Commerce 
 takes the vigorous action which it promises, it is not 
 difficult to know what will be the reply of the Great 
 Western Railway. " Gentlemen," the Company will 
 answer, " what would you have ? You can't both have 
 import rates and not have them simultaneously. You 
 say that the Cardiff import rate is higher in propor- 
 tion than that given to Liverpool and Bristol. Quite 
 true ; but these are old-established rates, and yours is 
 a new one. We are by no means sure, if we were 
 taken before the Railway Commission under Section 
 27 of the Traffic Act of 1888, whether we should be 
 able to justify either the Liverpool or the Bristol 
 rate. Still we are prepared to run the risk sooner 
 than disturb an old-established trade. But when 
 you come and ask us to make a new rate, it is a 
 different matter. In view of the wording of the Act — 
 and you must remember that it was passed at the 
 instance of the Chambers of Commerce and Agri- 
 culture — we must be very careful not to make any 
 difference in the charges for home and foreign 
 merchandise in respect to the same or similar 
 circumstances. Some concession we can make to 
 you, because your meat comes in wholesale quantity, 
 and because it is worth less per pound than ordinary 
 Welsh mutton. That we have done. Further we 
 cannot go, except by deliberately defying the Act of 
 Parliament. No doubt you would be able to satisfy
 
 12 INTRODUCTION iktro. 
 
 the Commissioners that with a 35^. rate the trade will 
 never make much progress at Cardiff, that the meat 
 will continue to go all the waj^ to London by water, 
 that a 25^ rate would be better for you, and better 
 for us, for we would rather take 500 tons at a profit 
 of 5^. than 100 tons at a profit of 15^". But all that 
 would be of no avail, for, as you of course remember, 
 the Act specially provides that the Commissioners 
 shall not have the power to sanction any difference 
 in the rate for home and foreign produce unless it 
 corresponds to a difference in cost of service, and that 
 difference, as you must admit, is fully allowed for. 
 
 " You suggest that we might reduce our rate for 
 local meat. But, if we did that, we should have to 
 reduce the rate proportionately all along the line from 
 here to London. And then would come in the question 
 whether we were not giving the farmers on the South 
 Wales line an undue preference compared with those 
 on our main line to Cornwall or in North Wales and 
 Cheshire. Even supposing we were to face this loss, 
 that' would only be the beginning, for we should be 
 at once called upon to adjust all our other rates 
 in conformity. You see all our rates hang together. 
 We have always had to be very careful not to favour 
 one class of traffic at the expense of another, and we 
 have to be tenfold more careful nowadays. Accord- 
 ing to Professor Hunter, M.P., 'The existing law is' 
 — and we are not inclined to risk a law-suit to prove 
 him mistaken — ' that railways are not to reduce their 
 rates merely upon one particular part of the line 
 without giving the benefit of that reduction all round.' 
 We are very sorry, gentlemen, to be able to make no
 
 iNTEO. CONTRADICTORY ACCUSATIONS 1 3 
 
 Other answer. Nobody can be more anxious to 
 develop the trade of Cardiff than we are, but you 
 must see it is impossible." 
 
 It is easy to imagine the railway compan}- making 
 some such reply as this ; it is not so easy, however, to 
 see what the Chamber of Commerce would say in re- 
 joinder. But let us leave the question of special 
 import rates for the present. We shall return to them 
 later on, when the time comes for discussing the basis 
 on which rates ought to be fixed. Here is another 
 instance of the way in which inconsistent charges are 
 brought against the English railways. Witness after 
 witness before the Committees of 1881 and 1882 pro- 
 tested against the railway companies, in the words of 
 Mr. Barclay, M. P., "neutralising the natural advantages 
 of any locality by giving cheaper rates to a locality 
 not so favourably situated." According to Mr. (now 
 Sir William) Forwood, its mayor, Liverpool is " de- 
 prived of the advantages of its natural geographical 
 position " by the low rates given to Barrow and Fleet- 
 wood. Mr. Grotrian, an ex-president of the Hull 
 Chamber of Commerce, declared that the rates charged 
 in the north-eastern district were all " based upon a 
 system of preference to the northern ports of Hartle- 
 pool and the Tyne over the port of Hull." 
 
 More typical still was the complaint of the London 
 sugar refiners, which is thus summarised in the Com- 
 mittee's report : " Thirty-nine towns in England to 
 which sugar is sent are at an average distance of 
 292 miles from Greenock, and the same towns are at 
 an average distance from London of only 156 miles. 
 The rates for these distances from London and Gree-
 
 14 INTRODUCTION intro. 
 
 nock, respectively, are about the same, representing 
 in the case of the Greenock rate I'ogd., but in the 
 case of the London rate Ti^d. per ton per mile. 
 In other words, sugar from Greenock is for the same 
 sum. carried double the distance as sugar from London. 
 This enables Greenock to compete at these thirty- 
 nine towns, and this is what the refiners of London 
 object to. The demand from London, therefore, is 
 that either the rates for the longer distance should 
 be raised or those for the shorter distance reduced. 
 The effect of compliance with this demand would be 
 to close some of these markets against Greenock 
 sugar, to deprive the northern lines of a considerable 
 portion of their trade, handing it over to the southern 
 lines, and to give a practical monopoly to the London 
 sugar refiners, who would be real gainers by the 
 transaction." 
 
 Such is the Committee's account of an instance in 
 which the railways have certainly gone further than 
 usual in depriving a place of its natural advantage of 
 geographical position, in which they seem fairly open 
 to the charge brought against them by one witness of 
 claiming a right to interfere as a special providence. 
 It is only right to add that the verdict of the Com- 
 mittee on this evidence is given in the words following 
 the passage already cited : " It does not appear to 
 your Committee that such a result " (as the closing, 
 namely, of southern markets to Greenock sugar for 
 the benefit of London refiners) " would be either just 
 or reasonable. . . . This competition cannot but be 
 advantageous to the public. That Greenock sugar 
 refiners should be in the same market as the sus!"ar
 
 INTRO. LONG AND SHORT DISTANCE TRAFFIC 1 5 
 
 refiners of London, while it may be a grievance to 
 London refiners, must be an advantage to Greenock 
 refiners, and cannot be a disadvantage to buyers of 
 sugar." 
 
 This is plain speaking, and would seem to imply 
 that the Committee had scant sympathy with the 
 wrong of Liverpool and Hull. The Committee, how- 
 ever, was not infallible. Instances undoubtedly do 
 occur where railways have given certain towns undue 
 preferences over others. Let us suspend our judg- 
 ment for the present. Meanwhile, we may notice at 
 once that, if the companies have sinned by too much 
 levelling-up the distant places, it is at least hard that 
 they should be charged simultaneously with keeping 
 distant places out of the market by extortionate rates. 
 And yet the charge is constantly made. Take the 
 fish rate for instance. The Scotch fishing ports 
 average from three to four times as far from London 
 as Grimsby. The rate is about double, and yet an 
 influential witness from Scotland declares that his 
 trade is strangled by high rates. In other words, if 
 the rate were less he would be better off One may 
 admit the fact without accepting his deduction as to 
 the iniquity of the railway companies. There is, or 
 was in the days of the Pharaohs, much good brick- 
 earth in Eg}^pt, yet there is no need to credit the 
 Peninsular and Oriental Company with extortion as 
 a reason why Egyptian bricks cannot compete with 
 Kent stocks in the London market. " Witnesses 
 from Forfarshire and Cornwall," says the Committee's 
 report, " contend that with the lower rates the traffic 
 in fish and vegetables would develop enormously
 
 1 6 INTRODUCTION inteo. 
 
 and prove more advantageous to the railway companies 
 than the present Hmited traffic at high rates, while 
 not only those engaged in fishing and farming would 
 greatly benefit, but also the consumers in the large 
 centres of population." 
 
 The benefit to producer and consumer may be 
 taken for granted, but the gain to the companies 
 must surely depend on what is the cost of the service 
 they render. On this point the evidence of the critics 
 is somewhat conflicting. Professor Hunter, M.P., 
 says : " From Wolverhampton to London the railway 
 companies charge 455. a ton for English meat, and for 
 American meat to London they charge 2$s. from 
 Liverpool, so that in that case I should strongly 
 suspect that they are charging the people about 
 Wolverhampton in order to make up the loss from 
 Liverpool." One must hope that the Professor's sus- 
 picions are unfounded. The 25^. rate, for roughly 
 200 miles, is equal to i^d. per ton per mile, which is 
 about three times the average charge made for trans- 
 porting one ton one mile on the American railways. 
 If this be a losing rate, what shall we say for the 
 critics who tell us that English railways can, or at 
 least ought to be able to, carry as cheaply as their 
 American rivals } The truth is^ we may safely take it 
 for granted that no English railway carries any 
 regular goods traffic at a loss — it may of course carry 
 an individual load of fish or other perishables under 
 exceptional circumstances — though the profit in some 
 cases is very much larger than the profit in others. 
 But it is time to see what is meant by the expression, 
 " cost of carriage."
 
 PART I 
 RAILW ^A Y PRINCIPLES 
 
 CHAPTER I 
 
 COST OF CARRIAGE 
 
 " The railway managers of this country," says Mr. 
 Jeans ^ in the work to which we have already 
 referred, voicing a complaint which has been made 
 scores of times by critics of English railway 
 management, " profess that they are unable to 
 furnish the exact cost of working any particular 
 description of traffic. It would be extremely un- 
 gracious to suggest that it probably does not suit 
 their purpose to know too much on this subject. 
 But it is beyond all question that, if this item is not 
 known on English lines, it is well enough known on 
 foreign ones. It has been proved, for example, in the 
 United States that the cost of working goods traffic 
 within the last few years has been reduced by one- 
 half, and in some cases even more." It will not need 
 any very exhaustive consideration of the question to 
 convince any ordinary reader that the charge against 
 
 ' Raihvay Problems, p. 304.
 
 1 8 COST OF CARRIAGE cu. i. 
 
 English railway managers, that they profess them- 
 selves unable to furnish " the exact cost of working 
 any particular description of traffic," simply because 
 it does not suit their purpose to give the information, 
 is not so much extremely ungracious as extremely 
 foolish. English railway managers do not furnish 
 the information, for the very sufficient reason that 
 they cannot, and that in the nature of things it is 
 impossible that they should be able to do so. 
 
 Take an illustration from a case a thousand-fold 
 more simple than railway traffic. A doctor keeps a 
 carriage. Sometimes he drives one horse, sometimes 
 a pair. Some of his patients live close round the 
 corner, others several miles off. At one time an 
 epidemic brings on his hands half a dozen cases in 
 adjoining houses. At another the sickness is dis- 
 tributed equally in all directions throughout his 
 district. Once or twice a week his wife borrows the 
 carriage to visit her friends. At the end of the year 
 the doctor, after making an estimate — and it can only 
 be an estimate — of the depreciation of horses and 
 carriage, finds that his stable has cost him, say, 250/. 
 So far so good, but supposing he is asked what 
 percentage of a particular patient's bill is due to 
 what we may call, in American phrase, " transporta- 
 tion " expenses, will he not reply that the question is 
 unanswerable? He can divide the 250/. by the total 
 number of visits he has paid in the twelvemonth, and 
 say that the result is the cost of each visit, though 
 even then he has neglected his wife's use of the 
 carriage — which, however, as she never would have 
 expected to ha\c it, if there had not been a carriage
 
 cu. I. EXACT COST OF WORKING 1 9 
 
 already provided for professional purposes, he is 
 probably quite justified in doing — but further than 
 this he cannot go. If he attempts to give the actual, 
 instead of the average, cost of every single visit, his 
 answer is so largely made up of conjectures and 
 estimates as to be absolutely valueless. 
 
 Take another instance. An omnibus starts from 
 Hammersmith and runs right across London to Bow. 
 In the course of its journey it carries a hundred 
 different passengers. Some of them travel a few 
 hundred yards, others for several miles. Some get 
 in when the omnibus is nearly full ; at another time 
 a single passenger has the whole vehicle and the 
 services of the horses and two men all to himself. 
 Add the fact that, before the particular journey 
 commences and after it was finished, men and horses 
 were engaged, some for a longer and some for a 
 shorter time, in earning money on other routes, so 
 that the one single run can only be debited with a 
 part, more or less indeterminate, of their cost per diem, 
 and it will be sufficiently evident that, with the best 
 intentions in the world, the omnibus proprietor is 
 not in a position to state what is the cost to him of 
 the conveyance of any particular passenger. And if 
 this be so in such simple matters as single carriages 
 or single omnibuses, what shall we say in the case of 
 an organism as vast and as complicated as that of a 
 railway company ? 
 
 The cost of the brougham or the omnibus includes 
 no item for the provision of a roadway over which to 
 run, or a staff to open gates and let down drawbridges. 
 But to bring a ton of goods up from Liverpool
 
 20 COST OF CARRIAGE en. i. 
 
 implies not mcrcl}- 5,000/. worth of engine and trucks 
 and guard's van, and the services of driver, guard 
 and fireman and of the men who load and unload 
 at the two ends— that is the smallest matter — it 
 implies also a share of the services of, say, two 
 hundred signalmen, and twice as many permanent- 
 way inspectors and platelayers, and the use of the 
 20,000,000/. sterling of capital which is invested in 
 the North Western line between Edgehill and Broad 
 Street. Not of course that the single ton of goods 
 ought to be debited with a large share of the charges 
 under these two latter heads. Still, it should bear its 
 share, and if that share must be, as I think it can be 
 shown to be, matter of computation incapable of 
 accurate ascertainment, it is evident that on this 
 ground alone " the exact cost of working any par- 
 ticular description of traffic " is and must remain a 
 figure about as conveniently vague as the size of the 
 traditional lump of chalk. 
 
 Here is how Mr. Alexander- puts the case. 
 " Railroads, in common with authors, doctors, inven- 
 tors, labourers, lawyers, manufacturers, and most other 
 people who have anything to sell, base their prices 
 upon the value of what they offer, rather than upon 
 its cost. The case of a railroad's estimating the cost 
 of doing a particular piece of business is not unlike 
 that of a lawyer estimating the cost of giving an 
 opinion. He has fitted himself for that particular 
 business, and, as it were, invested his life in the 
 
 - Raihuay Practice. By E. P. book, which might with ad van- 
 Alexander. Putnam's Sons, New tage have contained a good deal 
 York, 1887. An admirable little more than sixty pages.
 
 en. I. RATES BASED ON COST 2 1 
 
 education and experience necessary to transact it. 
 His time is good for nothing else, and if he is not 
 called upon for opinions, will be worthless to him. 
 He can therefore render opinions up to a certain 
 limit almost without cost, except for stationery. So 
 a railroad is a large fixed investment capable of 
 furnishing transportation and nothing else. Up to 
 certain limits it can always take additional business 
 without cost, except for a very small amount of fuel. 
 The money it receives for the new business above the 
 small additioiial cost, is all clear profit. It adds that 
 much to the ability of the road to serve other patrons 
 at low rates." 
 
 " But," says Mr. Jeans, " if this item is not known 
 on English lines, it is well enough known on foreign 
 ones. It has been proved, for example, in the United 
 States that the cost of working goods traffic has 
 been reduced by one-half" This latter fact is no 
 doubt true, but it is beside the point. Mr. Jeans asks, 
 if his words mean anything, for the exact cost of 
 working, not goods traffic or passenger traffic as a 
 whole on the average, but particular descriptions of 
 traffic — passengers, say, first, second or third class, 
 coal or pig iron, vegetables or leather, tea or Man- 
 chester goods, each independently. 
 
 Nor is Mr. Jeans alone in his demands by any 
 means. Witness after witness before the House of 
 Commons Committee of 1881 and 1882 made the 
 same claim. Mr. Muspratt, for instance, ex-President 
 of the Liverpool Chamber of Commerce, expressed 
 the opinion that, except in the case of raw materials, 
 the rate of conveyance should be fixed " upon the basis
 
 22 COST OF CARRIAGE ch. i. 
 
 of the cost of conveyance." And when asked, " There 
 is no exception to that rule which you would lay 
 down ? " he replied, " No." Professor Hunter, M.P., 
 author of a well-known work on railway law, repeated 
 again and again the statement that the true principle 
 of railway management was to charge everybody " a 
 rate according to the cost of conveyance to the 
 company." Mr. Simons, who appeared as represent- 
 ing the colliery owners of South Wales, in answer to 
 the question, " Are you prepared to say that the 
 railway companies should be compelled to make the 
 same percentage of profit on every portion of their 
 line .'' " said, " I am prepared to say that is what I 
 hope for as the result of this and future discussions." 
 In answer to a member of the Committee, Mr. 
 Barclay, M.P., whose own views are apparently 
 formulated in a leading question put to another 
 witness in these words : " You would advocate that 
 the railway companies should charge in proportion 
 to the cost of conveyance, and not upon some 
 arbitrary terms that they themselves adjust," Sir 
 William Forwood expressed the opinion that " the 
 cost to the railway company of performing the 
 service ought to be adopted as a fundamental 
 principle in adjusting the rates for carriage." It is 
 evident, therefore, that when the views of these 
 gentlemen prevail, it will be necessary to determine 
 the cost of the carriage of each article. 
 
 Let us see how it is to be done. No one doubts 
 that the American reports — and it is impossible not to 
 admire their exhaustive statistics— give separately the 
 cost of working goods traffic as a whole and passenger
 
 CH. I. AN EXPERT OPINION 23 
 
 traffic as a whole, or, as the report of the New 
 York Central more accurately puts it, the " ex- 
 penses allotted to transportation of freight," and the 
 " expenses allotted to transportation of passengers " ; 
 but American railway men are much too clear-headed 
 not to know that these expenses, as far as certainly 
 fully one-fourth of the whole is concerned, are not 
 actual facts, but simply estimates ; while the most self- 
 possessed and courteous amongst them would probably 
 find it difficult to suppress a smile if he were asked 
 to give, as it is stated he does give, " the exact cost 
 of transporting each particular kind of traffic." But 
 on this point it is perhaps worth while to call a 
 witness whose capacity no one is likely to dispute, Mr. 
 Albert Fink — probably, when experience of practical 
 management, grasp of abstract principle, and power 
 of literary expression, are all taken into account, the 
 first railway authority in the world. 
 
 Here is what Mr. Fink says : ^ "A careful 
 investigation shows that, under the ordinary condi- 
 tions under which transportation service is generally 
 performed, the cost per ton-mile in some instances 
 may not exceed one-seventh of a cent, and in 
 others will be as high as J}^ cents per ton-mile on 
 the same road. ... It is impossible to predetermine 
 the cost of carrying freight on any one road, unless 
 the conditions under which it is to be 'carried, as far 
 
 * Mr. Fink has unfortunately mittees. The quotations in the text 
 never published any connected arefromareprint of the Annual Re- 
 work on railway rates. His portof the Louisville and Nashville 
 luminous writings on the subject Railway Company for 1874, con- 
 are scattered amongst a multitude tained in a volume of col/er/auea, 
 of pamphlets and reports of evi- which is not, however, published, 
 dence before legislative com- entitled Railroad Transportation.
 
 24 COST OF CARRIAGE ch. i. 
 
 as they affect the cost of transportation, be previously 
 known. ... A mere knowledge of the average cost 
 per ton-mile of all the expenditures during a whole 
 year's operation is of no value whatever in determining 
 the cost of transporting any particular class of freight, 
 as no frcigJit is ever transported under the average 
 condition under w/iick tlic whole years business 
 is transacted." Or, in other words, Mr. Jeans's " exact 
 cost of working any particular description of traffic " 
 is as far removed from the facts of real life, and as 
 much a figment of the imagination, as Plato's ideal 
 table. 
 
 It will not need any ver}' lengthy consideration to 
 see why this must be so. Broadly speaking, the cost 
 of carriage, whether of passengers or of goods, is made 
 up of four items : locomotive or movement expenses, 
 terminals or station expenses, maintenance of way 
 and works, interest on capital. Let us consider them 
 separately. In round figures, an English locomotive 
 costs on the average i,ooo/. a year, for wages, fuel, 
 repairs, and depreciation. It runs in that period, say, 
 20,000 miles. In other words, it costs is. per mile. 
 If it runs with a load of 50 tons behind it, it will 
 perhaps burn 20 lbs. of coal per mile ; when it is haul- 
 ing 600 tons it will perhaps burn 60 lbs. So that 
 between, practically, no load at all and a long and 
 heavily loaded train the variation in locomiOtive cost 
 is hardly more than the price of 40 lbs. of coal, or say 
 from lid. to is. id. But the iid. may have to be 
 charged upon perhaps 20 tons of paying load, and the 
 IS. id. perhaps on 400 tons. Anyone practically 
 familiar with the conditions under which our English
 
 CH. I. WHAT IS A TRAIN-LOAD ? 2$ 
 
 Sfoods service has to be carried on will know that 
 this immense discrepancy represents not simply the 
 theoretical possibilities, but actual facts. 
 
 An engine, for instance, may run between London 
 and Rugby with forty fully loaded waggons behind 
 it, while the branch that diverges from Weedon may 
 only be able to supply loading for two or three 
 trucks. Yet an engine must go down the branch at 
 least once a day, and collect what traffic there may 
 be. The few hundred-weights of meat, of butter, or 
 of vegetables, or the small consignments for the local 
 grocer or draper, cannot be kept back for a month or 
 two till a train-load has been collected. Now for 
 another point. On one line the traffic in opposite 
 directions is fairly balanced, on another it is all in one 
 direction. A train-load of coal into London, for 
 instance, must evidently be debited with the cost of 
 sending back the train of empty trucks. At Hull, 
 or at Liverpool, imports and exports are not so 
 very disproportionate to one another. Or, again, on 
 a line some hundreds of miles in length, a loco- 
 motive can run straight forward for the whole of 
 the time it is supposed to be at work. On a short 
 branch the time lost at the two ends is often much 
 more than the time during which it is actually in 
 motion. 
 
 One factor more. There are lines in this country on 
 which 45 trucks is the recognised engine load. There 
 is one line, at least, on which the gradients limit the 
 load to a single truck, and loads of lO and 12 trucks 
 are by no means uncommon. The traffic on the 
 line from Birmingham to Bristol, for instance, has to
 
 26 COST OF CARRIAGE ch. i. 
 
 pay in perpetuity a tax of 5,000/. a year, because 
 the best way that could be found through the Lickey 
 Hills implied a gradient of i in 37^ for two miles, and 
 the working of this gradient involves the constant 
 maintenance on the spot of five assistant or " banking " 
 engines. Mr. Fink, in the paper already referred to, 
 brought all the considerations which have been sum- 
 marised above to the test of actual figures. He 
 analysed the movement expenses on his own line, 
 and this is what he found : that on the main line they 
 amounted to 7365 of a cent per ton per mile ; on the 
 Glasgow branch they reached 5 '492 8 cents, or more 
 than seven times as much No wonder he protests 
 against the crude notions according to which " the 
 ton-mile, without further inquiry as to its adaptability, 
 is made the measure of cost." " If," he continues, 
 "by comparing the tariffs of different roads, or the 
 tariff for different services on the same road, a differ- 
 ence be discovered, the road charging the higher 
 rates stands convicted of practising extortion and 
 undue discrimination." 
 
 Here is an English instance to show how difficult 
 it is to apportion even actual movement expenses to 
 particular portions of traffic. One of our great lines 
 used at one time to compete by a very circuitous route 
 for the carriage of coal to London. The chairman 
 went very carefully into the matter, calculated the 
 receipts per ton per mile, and finally came to the 
 conclusion that the traffic did not pay. Accordingly, 
 by his orders, the competition for this traffic was 
 abandoned. At the end of the year the gross receipts 
 were reduced by its absence to the extent of 20000/.
 
 CH. I. TERMINAL EXPENSES 27 
 
 " But where," said the chairman, " is the economy in 
 locomotive expenses ? " It could not be traced. 
 Presumably there had been a saving ; evidently 
 40,000 or 50,000 tons of coal had not been hauled for 
 nothing ; but the cost, whatever it was, had been so 
 inextricably mixed up with the rest of the expenses, 
 that it was impossible to disentangle it, and say pre- 
 cisely where the saving had come in. An analogy 
 between railways and hotels suggests itself Every 
 new guest who enters an hotel undoubtedly costs some- 
 thing for food actually eaten ; yet in an hotel with 
 500 or 600 persons to feed every day, the addition of 
 an extra half-dozen would make no perceptible alter- 
 ation in the manager's bills. All it could do would 
 be to reduce the theoretical cost per head per diem 
 from, say, ^s. to 2s. ii|(/. 
 
 Perhaps after this it will seem somewhat of a 
 paradox to add that of the four classes of expenditure, 
 for which the rates charged have got to furnish the 
 recompense, the expenses of movement are unques- 
 tionably those which can be most easily ascertained 
 and allocated to each different description of trafiic. 
 But such is the fact, as will be seen when we come to 
 deal with the other three classes. Take station or 
 "terminal " expenses, as they are commonly called here, 
 including under this head, not what are in future to be 
 known as " station terminals " (allowance, that is, for 
 the cost of providing the permanent accommodation), 
 but merely the expenses of handling the traffic. Now, 
 it is obvious that, if there are two similar consignments 
 alongside in the Great Northern goods shed at Far- 
 ringdon Street, and the one is loaded into a truck to
 
 23 COST OF CARRIAGE ch. i. 
 
 go to Hornscy or Southgatc, and the other to go to 
 Aberdeen, the cost of loading and unloading, weighing, 
 invoicing, shunting, &c., will be identical. But in 
 the case of the short distance this cost will be perhaps 
 three-quarters of the whole charge made to the sender, 
 in the other it will not be more than a fifth part. 
 
 Further, the consignments are by no means similar. 
 Tea and furniture stand side by side in the fifth, or 
 highest class of the classification, but to load a ton 
 of tea is one thing, to load a ton of furniture is quite 
 another. Then, again, in a London station or at 
 Aberdeen there is a separate goods-staff, and it is 
 quite certain that the whole of their wages must be 
 debited against the consignors of the goods taken as 
 a whole ; but at a small station, where the station- 
 master and the porters are responsible both for goods 
 and passenger work, no line can be drawn. The 
 trader may say, as he said again and again by the 
 mouth of his representatives at the Board of Trade 
 inquiry last year, " These people arc here in any case, 
 and have to be paid to attend to the passengers ; it 
 costs you nothing to employ them between whiles to 
 load and unload our goods." But the passenger can 
 with equal justice reply, " These men are retained to 
 deal with the goods, it is preposterous to add anything 
 to the price of our tickets because every hour or two 
 they come out of the goods sheds and open the car- 
 riage doors for us." And the one contention would 
 be just as reasonable as the other. 
 
 Yet it is out of an equation with this indefinite 
 number of unknowns that the railway companies are 
 assured they ought to have no difficulty in extracting
 
 cii. I. MAINTENANCE OF ROAD 29 
 
 the precise proportion of the total rate which can pro- 
 perly be allocated to the payment of station expenses. 
 If the railway companies are unable, however, perhaps 
 Mr. Fink's figures will be useful to those who are 
 anxious to formulate their own scale. He found that 
 the percentage of the total rate due to this one item 
 varied from 4'3 on the Knoxville branch to i8'i per 
 cent, on the main line. Putting it another way round, 
 as the cost per ton-mile, his figures show that on the 
 Knoxville branch station expenses cost '1823 of a 
 cent per mile ; on the main line they reached '3233 ; 
 while on the short Glasgow branch they were no less 
 than '9563. 
 
 Now we come to the third head, or maintenance 
 of road, under which we may, for convenience' sake, 
 include signalling. Two things here are obvious. In 
 the first place, every road, and every mile of that 
 road, has different cost of maintenance. The main- 
 tenance of the Forth Bridge or the Severn Tunnel is 
 one thing, the maintenance of the landward approaches 
 on either side is quite another. Even on an ordinary 
 line there must be taken into consideration the 
 contour of the country, whether tunnels and viaducts 
 are few or many, whether the soil is light or heavy, 
 whether stone for ballast is readily accessible, and 
 fifty things more. The lay-reader, for instance, might 
 be startled to know what some of the Lancashire 
 railways have had to spend to prevent their trains 
 descending into the mine-workings beneath them — it 
 having pleased a beneficent legislature, doubtless for 
 good and sufficient reason, to provide that the con- 
 veyance of land to a company, under the Railway
 
 30 COST OF CARRIAGE ch. i. 
 
 Clauses Consolidation Act, shall not, like an ordinary- 
 conveyance, avail to pass all the rights which the 
 vendor has in the property, but that, unless the 
 company, after buying the land, not as a rule at too 
 modest a price, goes on to make a separate bargain 
 for the minerals, the landowner, on giving a month's 
 notice, may proceed to dig, not only coal, but brick- 
 earth lying within six feet of the railway sleepers. 
 Here is one item of the total cost of maintenance 
 which it would puzzle the most accomplished statis- 
 tician to divide proportionately among the different 
 descriptions of traffic passing over the London and 
 North Western, or the Lancashire and Yorkshire. 
 
 Or, again, when the Llanddulas Viaduct between 
 Chester and Holyhead was washed away by a storm 
 some ten years ago, and the company had first to divert 
 the traffic by another route, then to erect a temporary 
 wooden bridge, and then to replace the permanent 
 structure — ought the accountant of the North 
 Western to have been able to furnish the exact cost 
 of working the Irish traffic under all these different 
 conditions ? Let no one answer that these things are 
 accidents ; that it is only normal conditions which 
 must be regarded. There are no normal conditions 
 applying to any single individual consignment. " No 
 freigJit is ever transported under the average condition." 
 
 But the difficulty is not merely in deciding what 
 expenses are to be reckoned in calculating the cost of 
 carriage. The difficulty of settling what traffic is to 
 bear them is at least equally great. Much the larger 
 part of the permanent-way expenditure remains con- 
 stant, whether ten or two hundred trains a day pass
 
 CH. I. INTEREST ON CAPITAL 31 
 
 over the line. Ballast washes away, sleepers rot and 
 rails rust, bridges and station-buildings need repoint- 
 ing and repainting, ditches must be cleaned out and 
 hedges trimmed, signals must be maintained, and 
 signalmen paid their wages, whether the traffic be 
 great or small. What could be the practical value of 
 a North Western table which should show that, say, 
 •i^d. was the average cost per ton-mile of the main- 
 tenance of the road, if a little further investigation 
 showed that this average was made up, as of course 
 it would be, of figures as wildly discrepant as those 
 which Mr. Fink worked out on the Louisville and 
 Nashville ? On that company's system, the main- 
 tenance of road on the main line, with numerous 
 bridges and heavy works, cost for one year 1,134 
 dollars per mile. On the Glasgow branch it cost 84 
 dollars, say one-fourteenth. But, on the other hand, 
 the main line had over 400,000 tons of freight over 
 each mile of it ; the branch had about 6,000, or, say, 
 one sixty-seventh. Consequently, the charge against 
 each ton of goods on the branch comes out to 178 of 
 a cent, as against '26 on the main line. In other 
 words, on cost-of-carriage principles, the charge under 
 the head of maintenance of road for the use of the 
 cheap line would have to be seven times as much as for 
 the use of the dear one. 
 
 The fourth and last of the items which go to make 
 up the cost of carriage is interest on capital.^ If it 
 
 '' We shall see later on that well ; if not, providing it pays 
 
 interest on capital never enters working expenses, it is better than 
 
 into theconsideration of a manager nothing. But though cost of 
 
 in fixing a rate. He gets the best capital does not affect individual 
 
 price he can. If it pays interest, rates, it does affect the rates as a
 
 32 COST OF CARRIAGE en. i. 
 
 was difficult under the three previous heads to settle 
 what share of the total cost was to be borne by each 
 particular kind of traffic, the difficulty here is enhanced 
 tenfold. In the other cases it was possible to ignore, 
 or at least to keep in the background, the question 
 of the value of the article transported. But it is impos- 
 sible to do so any longer, for the practice of the 
 civilised world is agreed in this, that, though possibly 
 all classes of traffic ought to be called on to pay their 
 share of the working expenses, the cheaper kinds 
 ought to be largely relieved of the obligation to pay 
 interest on construction capital. Even in German}-, 
 where more than anywhere else the so-called 
 " natural " system of basing the tariff on cost of 
 service has been adopted — a system, in fact, about as 
 natural as the old English legal system of paying a 
 solicitor in accordance with the length of the deed he 
 drew — even in Germany the attempt to make coal 
 pay as large a share towards interest on capital as 
 drapery goods would be a revolution. 
 
 Here, in London, to take one obvious instance, 
 such a system would render it impossible to con- 
 tinue bringing in bricks, or carrying out street 
 refuse, over railways which have cost hundreds of 
 thousands of pounds per mile. But, leaving this point, 
 
 whole. For, if the total earnings who invests 10,000/. in building 
 
 do not give a reasonable interest, a mile of line it is evidently in- 
 
 no new capital will come into the different whether that line carries 
 
 business, and improvements and 1,000/. worth of traffic, worked at 
 
 new construction will be brought 50 per cent, of the gross receipts, 
 
 to a standstill, till either rates are or 2,000/. worth of traffic worked 
 
 raised or the volume of traffic in- at 75 per cent. Either one-half 
 
 creases so as to give a sufficient mar- of 1,000/. or one-quarter of 2,000/. 
 
 gin of interest. To the capitalist gives him hisincomeof 500/ ayear.
 
 CH. I. FIGURES VALUELESS WHEN FOUND 33 
 
 to which we shall have to refer more at length later 
 on, it is evident that, if interest on capital has to be 
 taken into consideration, the proportion of the rate 
 attributable to this cause must of necessity be ten 
 times as high on a line which can only afford traffic 
 for six trains a day as on one where sixty can be 
 profitably employed. P'urther, the rate must rise and 
 fall in different parts of the system according as con- 
 struction is rendered, by the natural features of the 
 country, expensive or cheap. Again, is the company 
 to claim the interest on all the capital that stands in 
 its books as expended, regardless of the fact that the 
 capital was wastefully spent on a badly planned line, 
 or a line that never was wanted at all ; or even that 
 the contractor was paid in shares issued at a discount 
 of sixty or seventy per cent. ? Is such a scheme as 
 this in the public interest ? One question more. Who 
 is to determine what rate of interest the railway capital 
 is to bear ? And supposing a competing company to 
 open a rival line, say from London to Bristol, is an 
 Act of Parliament to be passed forthwith to enable 
 the Great Western to raise its charges, so that its 
 diminished traffic may still permit the proprietors to 
 receive their old return ? 
 
 But perhaps enough has been said, not, indeed, to 
 prove — where the details are so bewilderingly nume- 
 rous that only the outline of a case can imperfectly be 
 sketched, it would be too much to claim that any- 
 thing has been proved — perhaps enough has been 
 said to show two things. In the first place that " to 
 furnish the exact cost of working any particular de- 
 scription of traffic " is a problem which the raiavay 
 
 D
 
 34 COST OF CARRIAGE ch. i. 
 
 manager has some slight justification for declaring 
 insoluble : and in the second place, that, if any such 
 figures could in fact be furnished — unless, indeed, 
 customers could be found who would be ready to pay 
 two or three shillings per ton per mile in certain 
 instances for the carriage of their coal or ironstone — 
 they would be of about as much value for fixing a work- 
 a-day schedule of rates as would be a computation of 
 the united ages of the board of directors multiplied 
 by the amount of the general manager's salary.
 
 35 
 
 CHAPTER II 
 
 EQUAL MILEAGE RATES 
 
 Cost of service, however, is not the only principle on 
 which it is asserted that rates ought to be fixed. 
 Another principle, that of equal mileage, has also its 
 devotees. Indeed there are some railway critics who 
 find it possible to worship at both shrines at once. 
 Sir William Forwood, for instance, Mayor of Liver- 
 pool and ex-President of the Liverpool Chamber of 
 Commerce, told the House of Commons' Committee 
 of i88r, as we have seen a few pages back, that "the 
 fundamental principle in adjusting the rates " ought 
 to be the difference of " the cost to the railway com- 
 pany of performing the service " — yet half an hour 
 before the same witness is reported to have expressed 
 himself as follows : 
 
 Q. You are perfectly satisfied that the principle 
 of equal mileage rates ought to be applied, having 
 regard to distance .*' 
 
 A. I think so in any general system of railway 
 rates. 
 
 Q. There can be no doubt about the clearness of 
 that principle .'' 
 
 A. I am quite sure of it. 
 
 At the intervening quarter, Sir William amalga-
 
 T,6 EQUAL MILEAGE RATES cii. ii. 
 
 mates the two principles together in the following 
 remarkable confession of faith : 
 
 " I think that if we had general legislation on the 
 subject it should lead to equal mileage rates for equal 
 distances, and that the cost of conveyance would be 
 a consideration that would enter into the fixing of 
 those rates." 
 
 Bearing in mind the facts and figures as to cost of 
 conveyance which have been gi\en in the last chapter, 
 we can hardly be wrong in concluding that the most 
 striking feature of Mr. Forwood's system of equal 
 mileage rates, fixed after consideration of the cost of 
 service, would be their inequality. 
 
 Professor Hunter, M.P., likewise lays down that 
 " equal mileage rates should be the rule, but that any 
 railway company desiring to depart in any respect 
 from equality should prepare a scale and obtain the 
 sanction of the Railway Commissioners to that scale," 
 though, as we have seen already, he also lays it down 
 that the railways ought to charge everybody " a rate 
 according to the cost of conveyance to the company," 
 and we have also seen that the cost of conveyance to 
 the company bears no fixed relation whatever to the 
 distance the traffic is carried. 
 
 If such be the logic of mayors and professors, it 
 would be \\-aste of time to cite the opinions of the 
 smaller fry. But a glance at the Indexes to the 
 Reports of the House of Commons' Committee in 
 both 1881 and 1882 will be sufficient to show that 
 numerous other witnesses asked for equal mileage 
 rates subject to one or more specified exceptions. 
 The Committee's report, it is only fair to say, declares
 
 CH. II. THE CARRIERS WACC.ON 37 
 
 that equal mileage rates, strictly so called, " have not 
 been advocated on this occasion as before former 
 Committees," and that no doubt is the fact. The 
 schoolmaster — experience, the best of all his tribe — 
 has been abroad since 1853, and even since 1867 
 or 1873 has had time to teach something. And 
 experience has taught even the least observant critic 
 that equal mileage rates, pure and simple, are an 
 absolute impossibility. In truth, equal mileage rates 
 are only cost-of-carriage rates in their crudest form. 
 The earliest critics judged by the analogy which 
 to them was most familiar — the carrier's waggon. The 
 carrier had nothing to do with the maintenance of the 
 turnpike. He had no stations to provide ; instead 
 of maintaining an expensive staff at fixed points, 
 whether there was work for them to do or not, he 
 picked up his consignments here and there along the 
 road. He paid a toll of so much a mile, proportioned 
 roughly to the weight of his vehicle, and beyond this 
 his chief expenditure was for actual haulage. For 
 services such as these a mileage tariff, coupled with a 
 rough-and-ready classification of goods, not so much 
 perhaps according to their value — for the commoner 
 and cheaper kinds of goods simply stopped at home — 
 as according to the space they occupied, was an 
 equitable method of remuneration enough. It needed, 
 however, no very exhaustive study of the question to 
 show that at least three circumstances must largely 
 modify the cost of railway working. A carrier's waggon 
 was usually, no doubt, pretty full ; if more goods were 
 offered than he could take they had to wait till the 
 next time he came along the road. But a railway
 
 38 EQUAL MILEAGE RATES ch. ii. 
 
 company on one line may be able to spread the cost 
 of its locomotive over a full train-load, on another it 
 can only secure traffic to fill half a dozen trucks. Or 
 again, it may be limited to the same load, not by the 
 impossibility of obtaining more, but by the exceptional 
 severity of the gradients. Once more, it is obviously 
 cheaper to carry one ton of goods one hundred miles 
 than to carry a hundred separate consignments of 
 one ton each for one mile. These three considera- 
 tions therefore must, it is admitted, affect the cost of 
 working, and Professor Hunter accordingly is willing 
 that they and they only should be allowed for, as 
 modifying what, except for these accidents, ought to 
 be an equal mileage rate. 
 
 But the only reason which can be given why these 
 considerations should be regarded, and fifty others, 
 some of them certainly at least equally important, 
 should be disregarded, is because they are obvious, 
 while the others are not equally patent at first sight. 
 There is no need to repeat again what these latter 
 considerations are. They have been enumerated in 
 sufficient detail already, and one of the most important 
 amongst them, the cost of terminal accommodation and 
 handling, which is the same whether the goods be 
 carried five miles or five hundred, is not likely to be 
 o\'erlooked nowadays by any who has ever come 
 within hearing distance of a Chamber of Commerce. 
 But we may well emphasize at this point the fact 
 that, as was shown in the last chapter, cost of con- 
 veyance or equal mileage rates can at best only be 
 applied to one portion of a railway company's business. 
 For an English railway company, it must always be
 
 CH. ir. TOLLS FOR THE USE OF THE ROAD 39 
 
 remembered, carries on as a rule two separate and not 
 infrequently separated businesses. Its most con- 
 spicuous business is that of a carrier, but it is also a 
 capitalist owner of a road. In Ital}', and also to some 
 extent in Holland, the State owns the line and private 
 companies work the traffic. Not a few instances 
 where the two functions of carrier and road proprietors 
 are dissociated can be found here too. The East 
 London Railway Company, for example, and the City 
 of Glasgow Union have never carried a passenger or a 
 ton of goods. The former of these companies leases 
 its line to its larger neighbours for a fixed money 
 rent, the latter employs tv/o other companies as its 
 agents to work the line and receives in payment an 
 agreed proportion of their receipts. The Metropolitan 
 and Metropolitan District Companies are carriers of 
 passengers but not of goods. The North London, 
 on the other hand, only owns 17 miles, but it works 
 over nearly five times that length of line. 
 
 Now, admitting for the moment, for the sake of 
 argument, that mileage distance, as modified by allow- 
 ance for gradients, &c., is a reasonable basis for calcu- 
 lating the proper remuneration of the carrier, it has 
 obviously nothing in the world to do with the charges 
 for the use of the line. These latter must depend 
 upon two main considerations, the cost of making and 
 maintaining the road, and the amount of the traffic 
 which passes over it. Everybody, in days when turn- 
 pike tolls existed, admitted the justice of imposing 
 an extra toll for passing over an expensive bridge. 
 And, on the other hand, every one can see that, though 
 Waterloo Bridge may have cost as much as the
 
 40 EQUAL MILEAGE RATES ch. n. 
 
 Menai Suspension Bridge, a toll of 2d. in the one 
 case was as fair and gave as good a remuneration to 
 tile proprietors as \s. in the other, for the reason that 
 the London traffic was sixfold denser than that of 
 Anglesea. 
 
 There is one argument against equal mileage 
 rates, which seems tolerably obvious to anyone who 
 reflects on the subject, which, however, as I have 
 never seen it more than mentioned by English writers, 
 is perhaps worth bringing forward at this point. 
 Our English railway system, unlike that of the 
 Continent, has grown up on the basis of competition. 
 It is true there are some people who believe that 
 English railways have ceased to compete, because 
 nowadays they agree to maintain identical rates, as 
 though, forsooth, there could be no competition be- 
 tween the Grand and the Langham Hotels as long as 
 the charge for bed and breakfast, for attendance and 
 dinner, is the same at both establishments. Those, 
 however, who know how railway work is really carried 
 on are well enough aware that the competition is as 
 intense as ever, only that it takes the form, not of de- 
 creasing the charge but of increasing the accommoda- 
 tion provided. Traders, moreover, have not ceased to 
 put their trust in competition as their best protection. 
 
 When, for instance, there was the great fight in 
 the Parliamentary Committee rooms last session, to 
 decide whether the North British should be permitted 
 to absorb the Glasgow and South Western, the 
 mercantile witnesses on the one side supported the 
 proposal on the express ground that the North 
 British would be a stronger competitor with th^e
 
 en. II. AN EMBARGO ON CO-MTETITION 41 
 
 Caledonian in the West of Scotland than ever the 
 South Western had been ; on the other hand, traders 
 who opposed the scheme declared that they did so 
 because it was more difficult for three competitors to 
 agree to cease fighting than when there were only two. 
 Now it is evident that Professor Hunter's system 
 of equal mileage rates, modified by allowances for 
 gradients, average length of haul, and volume of 
 traffic, would, equally with his alternate system of 
 rates based on cost of conveyance, put an absolute 
 embargo on the competition between different railway 
 companies. At the present moment, for instance, the 
 Midland, the Great Northern, the Great Western, 
 and the Great Eastern, all compete with the North 
 Western for the traffic between Liverpool and London. 
 The mileage is in no two cases the same ; the dis- 
 tance being 193^, 220j, 229, 237^, and 261 miles by 
 the five lines respectively. It is safe to say that the 
 cost of carriage by the North Western must be less 
 than by any of the rival routes, three of which have, 
 in addition to extra distance, to contend with excep- 
 tionally heavy gradients, while the Great Western has 
 to " lighter " its traffic across the Mersey from Birken- 
 head. Now the theorists who would- fix railway rates 
 on what they term a natural basis are face to face with 
 this alternative. Either the rates by the different 
 routes must be different, in which case, of course, all 
 competition is at an end, and the North Western 
 takes the whole of the traffic, or else, the rates re- 
 maining the same by all the lines, and being in practice 
 fixed by the shortest mileage, the Midland, the Great 
 Northern, the Great Western, and the Great Eastern
 
 42 EQUAL MILEAGE RATES en. ii. 
 
 must be content to add to the cost of carriage less 
 than their theoretically proper percentage of profit. 
 
 Now there is no question that the Liverpool trader, 
 whatever may be his abstract ideas, in a committee- 
 room at Westminster, on the ethics of railway manage- 
 ment, will prefer the second horn of the dilemma 
 when he gets back to his counting-house in Dale 
 Street. He is quite clear that he gains by the main- 
 tenance of competition between the different railway 
 companies in Liverpool, and he means to maintain it, 
 even though in so doing he makes himself an accom- 
 plice in the crime of charging the traffic, not according 
 to cost, but according to " what it will bear." Pro- 
 bably he will hold to this opinion even though he be 
 assured by the traders in Stockport and Warrington 
 that he is getting this benefit at their expense, as it 
 is evident that, if the Midland can afford to carry all 
 the way to Liverpool for, say 35^'., it must be able, 
 if the officials choose, to carry at a lower price to a 
 place thirty miles nearer London. 
 
 But unfortunately the Liverpool trader has made a 
 dangerous admission. He has acknowledged that a 
 railway may be justified in taking half a loaf when the 
 alternative is that it gets no bread, even if by such con- 
 duct it deprives another railway company of " the ad- 
 vantages of its geographical position." The Midland 
 thereupon turns round and says : " Now you will under- 
 stand why we have made our rate from Leeds to 
 Barrow^ the same as the rate from Leeds to Liverpool- 
 It was not because we wanted to reduce our own per- 
 centage of profit, but because we knew that, if we 
 attempted to put the rate any higher, the Lancashire
 
 CH. II. RATES FIXED I3V THE SEA 43 
 
 and Yorkshire or the North Western would get hold 
 of the traffic and take it to Liverpool. You see the 
 principle cuts both ways and Liverpool can't always 
 expect to benefit by it." But at this point the trader 
 is suddenly called back to Westminster to explain 
 the theory of the application of railway rates in a 
 perfect vacuum, so his answer to the Midland goods 
 agent cannot be recorded. 
 
 In his absence, however, we must be allowed to 
 carry the discussion one stage further. Once admit 
 competition between two companies, and the whole 
 theory of equal mileage or cost-of-service rates 
 vanishes into air. For if two railway companies may 
 compete on land, why not a railway company on 
 land with a steamship company on sea ? Is the 
 Great Eastern, for instance, to stand aside and leave 
 the traffic between London and Yarmouth to go by 
 water ? Is it not better that it should make what 
 profit it can on a low rate — the steamer rate J^his a 
 small addition for speed and certainty of delivery — 
 even though it seems to be acting unfairly by charg- 
 ing no more for the 120 miles to Yarmouth than it does 
 to Ely and Thetford, which are not much more than 
 half way ? But the matter docs not end here. Nor- 
 wich, let us say, which is a dozen miles on the London 
 side of Yarmouth, gets the benefit of the cheap rate 
 induced by the steamer competition to Yarmouth. 
 But to Norwich the Great Eastern has a competitor, 
 the Eastern and Midland, which comes in by a longer 
 route round by Peterborough and Lynn, but is of 
 course obliged to adopt the Great Eastern rate. 
 Now this line to get to Norwich passes through
 
 44 
 
 EQUAL MILEAGE RATES 
 
 Melton Constable, a market town of some importance, 
 at which it has no competition. Melton Constable is 
 distant 120 miles from London, and has no access 
 to the sea, so the Eastern and Midlands can charge 
 between London and this town an ordinary local 
 rate. The result is that a ton of goods may pay from 
 
 h'u:UrtTBoi^UiUs 
 
 London to Melton Constable, say 25^., and another 
 ton may be carried in the same truck 20 miles 
 further at a total charge of 15^. Now it would be 
 easy to represent this as simply gross extortion with- 
 out a shadow of justification. On the other hand, it 
 is equally easy for the manager of the Eastern and
 
 CH. 11. LONG AND SHORT HAUL 45 
 
 Midlands to reply — and in his case there is no question 
 of bloated dividends, for the debenture interest is long 
 in arrear, and it is only by very hard work that the 
 line is made to pay its working expenses at all — that 
 he cannot get more from the people of Norwich, and 
 he cannot afford to take less from the inhabitants of 
 Melton Constable. The Norwich rate pays actual 
 movement expenses, and a small part of its share of 
 the fixed charges. Unless Melton Constable and its 
 neighbours are prepared to pay, not only the working 
 expenses of their own traffic in full, but also a part 
 of the working expenses of the Norwich traffic, the 
 line will have to be closed altogether. And that, 
 though it would matter comparatively little to the 
 people at Norwich, wdio have the Great Eastern to 
 fall back upon, would be a fatal blow to the prosperity 
 of Melton Constable. 
 
 But this point is of such fundamental importance 
 that we must come back to it in the next chapter. 
 Meanwhile let us notice that in America, a country 
 which, if low rates mean happiness, should surely be 
 the paradise of the farmer and the trader, not only is 
 it a habitual practice, where w^ater competition comes 
 in, to make the rates for the portion of the distance 
 higher than for the whole ; ' but in several instances 
 
 • The famous " long and short exercised its dispensing power with 
 haul clause" of the Inter-State considerable freedom. The word- 
 Commerce Act is very far from ing of the clause is as follows : 
 being the drastic provision it is com- "It shall be unlawful for any 
 monly supposed to be. Indeed it common carrier subject to the pro- 
 is safe to say that it does not go at visions of this Act " [i.e. engaged 
 all as far in the direction of equal in commerce beyond the limits of a 
 mileage as the English statutes single state) " to charge or receive 
 and English decisions have gone. any greater compensation in the 
 Moreover, the Commission has aggregate for the transportation of
 
 6 EQUAL MILEAGE RATES ch. ii. 
 
 where two lines compete, the one being direct and 
 level, and the other hilly and roundabout, it has been 
 recognised as fair that the longer and more expensive 
 line should charge a lower rate, as if it charged the 
 same as the direct route it would be unable to secure 
 any share of the business at all. At the opposite 
 pole from the United States stands the German 
 Empire. 
 
 The nearest approach to equal mileage rates that 
 can be found anywhere is probably the so-called 
 " reform tariff" which has been in force for about a 
 dozen years on the German railways. The German 
 Government occupied an exceptionally strong posi- 
 tion for trying an experiment of this kind. It could 
 ignore the complaints of its customers whose esta- 
 blished position was affected, in a way no private 
 English railway company would venture to do for an 
 instant. The whole of the railways of the country 
 were under Government control. Their territory was 
 mainly inland and comparatively little exposed to sea 
 competition. The German traders were secured in 
 their own markets by a strong protective tariff, while 
 their external trade was but a small percentage of the 
 
 passengers, or of like kind of pro- Commission appointed under the 
 
 perty, under substantially similar provisions of this Act, such com- 
 
 circumstances or conditions, for a mon carrier may, in s]~)ecial cases 
 
 shorter, than for a longer distance after investigation by the Commis- 
 
 over the same line in the same sion, be authorised to charge less 
 
 direction, the shorter being in- for longer than for shorter dis- 
 
 cluded within the longer distance, tances, for the transportation of 
 
 but this shall not be construed as passengers or property, and the 
 
 authorising any common carrier Commission may from time to time 
 
 within the terms of this Act to prescribe the extent to which such 
 
 charge or receive as great com- designated common carrier may be 
 
 j)ensation for a shorter as for a relieved from the operation of this 
 
 longer distance; provided, how- section of this Act." 
 ever, that upon application to the
 
 CH. IT. THE GERMAN " REFORM TARIFF " 47 
 
 whole. Further, the poHtical history of the country 
 had prevented the aggregation of particular trades in 
 particular districts in anything like the measure to 
 which we are accustomed here. 
 
 But even with all these advantages, nature was too 
 strong for the German Government. In theory the 
 reform tariff is based upon an equal charge per ton per 
 mile, plus a fixed terminal charge for station services. 
 At the outset it was found that the terminal, if charged 
 in full, would be so heavy as to kill the short-distance 
 trade. It therefore was deliberately fixed at less than 
 its real amount, and the loss of revenue thence accru- 
 ing was balanced by an increase of the mileage 
 charge. But then came the further difficult}-. The 
 short-distance traffic had been relieved at the expense 
 of the long (or at least longer) distance traffic, and 
 the mileage rate had consequently been made so 
 heavy that German goods could not bear the cost 
 of transit from the interior to the frontier. So an 
 elaborate series of special export rates had to be 
 introduced — it was no part of Prince Bismarck's policy 
 to encourage imports — to redress the balance. Finally, 
 after the scales have been pushed and pulled, first to 
 the one side and then to the other, the y^;r///z' /"//y 
 Eisenba/unvesen^' the official organ of the IMinistry of 
 Public Works, is able triumphantly to proclaim that 
 only 50 per cent, of the tonnage returning 39 per 
 cent, of the revenue is now carried at special rates — 
 rates, that is, fixed, not according to mileage, but 
 according to an arbitrary determination of what the 
 
 * P. 279 in the volume for 189c.
 
 48 EQUAL MILEAGE RATES ch. ii. 
 
 traffic will bear. If it needs all this calculation to 
 know whether the principle will apply or not, and 
 if, when all is said and done, it will only apply to 
 fifty cases out of every hundred, is it not very ques- 
 tionable whether the principle is fit for active service at 
 all ? But if cost of service and equal mileage fail us, 
 there is nothing to fall back upon but the principle of 
 charging what the traffic will bear.
 
 49 
 
 CHAPTER III 
 
 WHAT THE TRAFFIC WILL BEAR 
 
 "Charging what the traffic will bear" is a principle 
 which has unquestionably got a bad name. " Bleed- 
 ing the traffic to death " is pretty much the interpre- 
 tation which has been put upon it by indignant 
 traders from time to time. It is, however, satis- 
 factory to learn, from Board of Trade reports, income 
 tax returns, and similar documents, that the trade 
 of the country is not yet moribund. Like Dryden's 
 milk-white hind, it is "still doomed to death but 
 fated not to die." This, however, may be wholly due 
 to the native vigour of the patient. The charges of 
 the companies may be extortionate and exorbitant, 
 even though the trade of the country has prospered 
 under them. Probably, indeed, some of the rates 
 do actually deserve this condemnation. Unless the 
 management of the lines were wholly in the hands of 
 beings angelic, not only in virtue but in intelligence, 
 it would be unduly sanguine to expect anything else. 
 But, in dealing with a question as large as that of 
 English railway management, we must claim a right 
 to neglect individual cases and to lock at the working 
 of the system as a whole. The assertion that English 
 rates are extortionate might be fairly held to be esta- 
 
 E
 
 50 WHAT THE TRAFFIC WILL BEAR ch. m. 
 
 blished if either of two things could be proved : that 
 Enghsh railway companies avail themselves of their 
 position as monopolists or semi-monopolists to exact 
 from the public markedly more than the normal rate 
 of return for their capital, or else that the)- charge the 
 public markedl}' more than is charged elsewhere 
 under the same conditions/^;- tJie same services. On 
 this second head we shall have something to say later 
 on ; meanwhile, let us deal briefly with the first point. 
 In 1889, the most prosperous year the English 
 railways have ever known, the return on the 
 876,000,000/. sterling which they have cost averaged, 
 according to the official Board of Trade figures, a little 
 under 4^ per cent. Less than one two-hundredth 
 part of the whole received more than 8 per cent, and 
 even this was quite exceptional, as in the previous 
 year the proportion earning this rate of interest was 
 less than one three-hundredth of the whole. About 
 one-tenth of the total capital is returned as having 
 earned in 1889 more than 6 per cent., but this over- 
 represents the actual success, for the bulk of the stock 
 returning this high rate of interest belongs to two 
 great companies, the North Western and the North 
 Eastern, whose shares have for many years past com- 
 manded a high premium, and who have taken advan- 
 tage of this circumstance to put 6/., 7/. or 8/. worth 
 of new work and new materials into their line for 
 every 5/. they have added to the nominal amount of 
 their ordinary capital. In the last half-yearly report 
 of the London and North Western, under the head of 
 " receipts on capital account," stands this entry : " Pre- 
 miums on issue of stock and shares, 5,142,874/. 4.9. 5^."
 
 CH. HI. ELOATEI) MONOPOLISTS 5 1 
 
 At the other end of the scale we find no less than 
 one-fifteenth of the capital receiving no dividend 
 whatever, a good deal of it never likely to receive any. 
 \^'ithout labouring the point further, we may then 
 take it as proved that, if by " extortionate " we are 
 to understand " producing an excessive or unfairly 
 large return to the companies," it is only by an abuse 
 of language that our English goods rates as a whole 
 can be called extortionate. Perhaps, however, we 
 shall not be far wrong if we assume that persons who 
 bring the charge of extortion refer not so much to 
 the rates as a whole as to indi\idual rates and to the 
 apparent disproportion between them. Further, and 
 this point is of the ver}- greatest importance, they may 
 be ready to admit that their own rate/tv se is reason- 
 able enough ; yet they say the company proves it to 
 be extortionate by the fact that it is ready to treat a 
 competitor so much more favourabh*. " Often," sa}'s 
 the report of the Committee of 1882, they "really 
 mean, not that the rates they pay themselves are too 
 high, but that the rates that others pay are too low." 
 The ]\Iayor of Blackburn, for instance, is compelled to 
 admit that, after all said and done, the total sum 
 charged him for the carriage of his cotton is so frac- 
 tional a part of its value that it cannot seriously be 
 supposed to cripple his trade ; still nothing can shake 
 his conviction that, if the company can afford to carry 
 coal at 4s. Sd., it must be an abuse of strength to 
 compel him to pay over the same distance los. \od. 
 for the carriage of cotton.^ 
 
 ' See Mr. Harrison's evidence before the Conmiittee of iSSi, 
 Questions 2525-2976. 
 
 E 2
 
 53 WHAT THE TRAFFIC WILL BEAR en. iii. 
 
 Mr. Harrison's contention — and I quote Mr. 
 Harrison because he brings forward categorically what 
 is the underlying gravamen of scores of other traders' 
 complaints — raises the whole question of the basis on 
 which railway rates ought to be fixed. We have seen 
 that they cannot be fixed on a mere mileage basis, or 
 even on the less crude basis of the cost of conveyance 
 phis a fixed percentage of profit. And this, in brief, 
 for the following reasons : 
 
 1. The cost of conveyance cannot practically be 
 ascertained ; the cost of an average consignment for 
 an average distance is of no use as a guide to the cost 
 of an individual consignment under its own special 
 circumstances. 
 
 2. If it could be ascertained, the standard could 
 not be applied : {a) because it would absolutely pro- 
 hibit all competition, it being inconceivable that the 
 cost of conveyance by two competing routes would be 
 identical ; {b) because the full cost of conveyance,//2^.c 
 a full share of profit, would produce so high an 
 average rate of charge that goods of little value could 
 not afford to pay it. They, therefore, would not go 
 at all ; the railway would lose the profit, whatever it 
 was, which it formerly made by carrying them, and, 
 in order to maintain its financial position, would be 
 compelled to raise its rates on the remainder. There- 
 upon the process would again be repeated. Other 
 goods, hitherto just above the " margin of viability " ^ 
 — if one may coin a phrase, in order to show how 
 
 - The doctors have attempted venture to think that the word 
 to introduce the word " viable," ought to mean " capable of travel- 
 importing it apparently via Paris, ling." 
 to mean " capable of living." I
 
 CH. III. THE MARGIN OF VIABILITY 53 
 
 Ricardo's famous doctrine of rent applies — would fall 
 below it. They, too, would cease to travel, the rail- 
 way would raise its tariff once more, and so on da 
 capo, till finally the line was left empty, save perhaps 
 for occasional consignments of Brussels lace and 
 bullion. There was, says Mr. Alexander, in his 
 " Railway Practice," a " hotel in Arkansas, whose 
 proprietor charged each guest the expenses of the 
 house since the last one left, and collected with a 
 shot gun." 
 
 But if cost of conveyance be abandoned as the 
 basis of a tariff, the only other basis is that of charging 
 what the tariff will bear, subject, however, to this 
 limitation, that the carrier shall always make some 
 profit, however small, out of the carriage — that the 
 railway, that is (for the profit may in certain cases be 
 indirect), shall be on the whole better off if the traffic 
 goes than if it does not go. The phrase, let it be con- 
 fessed at the outset, is an unfortunate one. " Not 
 charging what the traffic will ;/^?/ bear," would be more 
 logically accurate. No company could ever attempt 
 to attain the maximum of charge which the most 
 expensive class of goods could support. The price 
 of a seat, for instance, in a first-class carriage is, 
 as Sir Bernhard Samuelson once remarked, precisely 
 the same whether the occupant be a Rothschild or 
 one of his clerks. So, again, there is not a little 
 traffic in bullion between London and Liverpool. 
 The rate is 10/. per ton, and as the value of gold is 
 something like 100,000/. per ton, it is safe to say that 
 the rate would need to be a good deal higher before 
 it induced the Bank of Enf^land to withdraw its
 
 54 ^VHAT THE TRAFFIC WILL BEAR cii. in. 
 
 bullion shipments from the " Etruria " or the 
 " ]\Iajestic " and send them to New York by a cattle 
 boat from the London Docks. Here, at least, Mr. 
 Jeans will probably admit that his strictures on 
 English management are not justified by the facts. 
 " The railway companies " (so we are told in " Railway 
 Problems ") " make no secret of the fact that, in cases 
 where there is little or no competition compelling a 
 different course, the guiding principle is that of im- 
 posing on the traffic just as vuicli as it will bear." 
 The words which I have italicised are, of course, 
 simply a parody of the real principle. 
 
 It should not, I think, be difficult to demonstrate 
 that the principle of charging what the traffic will bear 
 is one which leads not to high rates but to low rates. 
 Two facts at least will not be denied by anyone 
 acquainted with the rudiments of the question. The 
 United States have pushed the principle further than 
 any other country in the world, and the United 
 States have the lowest freight rates in the world. 
 Later on I hope to show that the one fact is the 
 logical consequence of the other. 
 
 Here is the account of the matter given in their 
 first annual report by the Inter-Statc Commerce Com- 
 mission, a body whose reason for existence, it is worth 
 remembering, was mainly the efforts of American 
 railroad managers to charge the non-competitive 
 portion of their traffic rates which it could not bear. 
 This fact, however, has not blinded the Commission 
 to the value of the principle when properly applied. 
 " It was," they say, "very early in the history of railroads 
 perceived that, if these agencies of commerce were to
 
 CH. in. FROM THE PUBLIC STANDPOINT 55 
 
 accomplish the greatest practicable good, the charges 
 for the transportation of different articles of freight 
 could not be apportioned among such articles by 
 reference to the cost of transporting them severally ; 
 for this, if the apportionment of cost were possible, 
 would restrict within very narrow limits the commerce 
 in articles whose bulk or weight was large as compared 
 with their value. On the system of apportioning the 
 charges strictly to the cost, some kinds of commerce, 
 which have been very useful to the country, and have 
 tended greatly to bring its different sections into more 
 intimate business and social relations, could never have 
 grown to any considerable magnitude, and in some 
 cases could not have existed at all, for the simple 
 reason that the value at the place of delivery would not 
 equal the purchase price with the transportation added. 
 " The traffic would thus be precluded, because the 
 charge for carriage would be greater than it could 
 bear. On the other hand, the rates for the carriage 
 of articles which within small bulk or weight concen- 
 trate great value would on that system of making 
 them be absurdly low ; low when compared to the 
 value of the articles, and perhaps not less so when the 
 comparison was with the value of the service in 
 transporting them. It was, therefore, seen not to be 
 unjust to apportion the whole cost of service among 
 all articles transported, upon a basis that should 
 cojtsider the relative value of the service more than 
 the relative cost of carriage. Such method of appor- 
 tionment would be best for the country, because it 
 would enlarge commerce and extend communication ; 
 it would be best for the railroads, because it would
 
 56 WHAT THE TRAFFIC WILL 15EAR ch. hi. 
 
 build up a large business ; and it would not be unjust 
 to property owners, who would thus be made to pay in 
 some proportion to benefit received. Such a system 
 of rate making would in principle approximate 
 taxation ; the value of the article carried being the 
 most important element in determining what shall be 
 paid upon it." 
 
 Later on in the same report they recur to this 
 subject in the following words : " To take each class 
 of freight by itself and measure the reasonableness of 
 charges by reference to the cost of transporting that 
 particular class, though it might seem abstractly just, 
 would neither be practicable for the carriers nor con- 
 sistent with the public interest. The public interest 
 is best served when the rates are so apportioned as to 
 encourage the largest practicable exchange of products 
 between different sections of our country and with 
 foreign countries, and this can only be done by making 
 value an important consideration, and by placing upon 
 the higher classes of freight some share of the burden 
 that on a relatively equal apportionment, if service 
 alone were considered, would fall upon those of less 
 value. With this method of arranging tariffs little fault 
 is found, d.nd perhaps none at all by persons iv/io consider 
 the subject from the standpoint of public Interest." 
 
 In these concluding words the Commissioners hit 
 square on the head one of the most important points 
 in the whole question. A producer or a trader may 
 object to a system which makes his trade pay a por- 
 tion of his neighbour's charges ; may object even 
 where a portion of his expense of transport is charged 
 on his neighbours, because some one else has managed
 
 en. III. OUT-OF-POCKET COSTS 57 
 
 to shuffle off a still larger share ; but while only a 
 section of the nation are cither producers or traders, 
 all are consumers, and the interest of the consumer 
 must therefore be paramount. And that the system 
 of charging what the traffic can bear is in the inte- 
 rest of the consumer there can be no doubt whatever. 
 But it is time to see what the expression really means 
 when stripped of glosses improperly put upon it. 
 
 To understand what the phrase does mean, and 
 how the principle which it embodies is applied in 
 practice, let us analyse in outline the receipts and 
 expenditure of the English companies. As the figures 
 we shall use are only for purposes of illustration, 
 there can be no harm if we keep them as round as 
 possible. A train, then, earns roughly 5 x. a mile. One- 
 half of this sum, 2s. 6d. a mile, is absorbed in working 
 expenses, the other half goes to pay interest on capi- 
 tal. But the 2s. 6d. for working expenses can be 
 divided once more into two parts : one-half of the 
 expenditure is on fixed charges, maintenance of road, 
 signalling and telegraphs, office expenses, and so forth, 
 which are only slightly affected by the addition of 
 new business ; the remaining is. '^d. is the actual out- 
 of-pocket expense of working that particular train. 
 Unless therefore a train can be got to pay is. T,d. per 
 mile it will not be run at all, except — and in practice 
 in England the exception is doubtless an important 
 one — that a branch train, earning even less than this, 
 may be run to act as a feeder for the main line. 
 Rates on the whole must be fixed to give a return 
 of 5^-. ; but if in the case of a particular traffic they 
 produce 2^-. 6d. the traffic pays its way, though there
 
 58 WHAT THE TRAFFIC WILL BEAR ch. hi. 
 
 is no profit left for capital. Even at is. t,/^. the 
 company is not actually out of pocket. At any point 
 above 1.5". ^d. the company is better off if the traffic 
 goes than if it does not go. 
 
 For IS. 6(/., say, pays working expenses and 
 leaves a contribution of 3^'. towards the fixed charges 
 which are equally incurred whether this particular 
 train is run or not. Now let us apply these facts. 
 A railway is built to connect, say, Birmingham with 
 London. The two places have hitherto had no 
 connection except by canal-boat or by coach. The 
 railway naturally fixes its rates on what we may call 
 the ^s. scale. Even then they are so much bclnw the 
 rates previously exacted by the canal that th.j com- 
 pletion of the line is hailed with pseans of ;.cclama- 
 tion, and the shareholders, whose capital has built the 
 railway, are looked upon as national benefactors. 
 Then, in a year or two, another company, the Grand 
 Junction, gives Birmingham access to the sea at 
 Liverpool also. It likewise invests its money in the 
 belief that the Birmingham-Liverpool traffic will be 
 ready and willing to pay on the 5^. a mile scale. Nor 
 is it disappointed : the traders show their gratitude to 
 the new-comer in the most practical manner by aban- 
 doning the canals and using the railway almost exclu- 
 sively. But then the London and Birmingham and 
 the Grand Junction unite their undertaking, and with 
 the advent of the London and North Western, with 
 its through route all the way from sea to sea, from 
 London to Liverpool, commences a new order of 
 things. Liverpool and London have been accustomed 
 to communicate with one another by ship. Their
 
 CH. III. LOCAL AND THROUGH RATES 59 
 
 traders show none of the alacrity to make use of the 
 new method of communication which was displayed 
 by Birmingham. It may''be better, say the}-, than 
 the old, but it is certainly not cheaper. Thereupon, 
 the North Western directors take counsel and say, 
 " What shall we do ? Birmingham and its neighbours 
 evidently cannot furnish traffic sufficient to fill our 
 line, which half the day stands empty, earning nothing, 
 while the cost of maintenance and the interest of our 
 shareholders' capital runs on all [the same." And 
 thereupon they resolve to make an attempt to induce 
 the Liverpool men to send their London traffic b)- the 
 railway instead of by sea, and they^ go to them and 
 offer a 4s. rate, which the Liverpool men accept. 
 
 And this was how the ^directors reasoned : " The 
 4^-.," said they " will pay not only the cost of moving 
 the Liverpool traffic, but also its full share of the esta- 
 blishment charges. Further, it will contribute is. 6d. 
 per mile towards paying our dividend. A small sum 
 certainly, but it is better than the alternative — nothing, 
 which is what the Liverpool traffic pays us as long as 
 it continues to go by water. Probably Birmingham 
 will complain at the outset that our through rate per 
 ton for the whole distance is 40i'., while the sum of the 
 two local rates would be 50^^. ; but when the matter is 
 explained to them they cannot fail to see that the 
 mere fact that goods passing through Birmingham pay 
 a lower rate per mile than goods starting from there 
 is no injury to them. They will believe us when we 
 say that we should be only too happy for our own 
 sake to charge the Liverpool people more, if we could 
 persuade them to pay it, and when we point out to
 
 6o WHAT THE TRAFP^IC will bear ch. hi. 
 
 them also that, in so far as the Liverpool traffic helps 
 to give us a reasonable rate of interest for our money, 
 there is a smaller balance which we are likely to ask 
 Birmingham to make up." 
 
 It was, we may assume, in some such way as this 
 that railway managers reasoned in the early days when 
 first competitive rates had to be established. And if 
 the principle involved had always stood out as clearly 
 as it does in the ideally simple condition of things 
 which we have imagined here, no doubt the Birming- 
 ham traders would have frankly admitted the cogency 
 of the argument. At least such traders have been 
 known to exist in America, if not in England. Here 
 is a story of actual fact told by Professor Hadlcy in 
 his " Railroad Transportation : " 
 
 " On the coast of Delaware, a few years ago, there 
 
 was a place which we shall call X , well suited for 
 
 oyster growing, but which sent very few oysters to 
 market, because the railroad rates were so high as to 
 leave no margin of profit. The local oyster growers 
 represented to the railroad that if the rates were 
 brought down to one dollar per hundred pounds the 
 business would become profitable, and the railroad 
 could be sure of regular shipments at the price. The 
 railroad men looked into the matter. They found that 
 the price of oysters in the Philadelphia market was 
 such that the local oyster-man could pay one dollar 
 per lOO lbs. to the railroad and still have a fair profit 
 1-eft. If the road tried to charge more, it would so 
 cut down the profit as to leave men no inducement to 
 enter the business. That is, those oysters would bear 
 a rate of one dollar per hundred pounds and no more.
 
 CH. III. JUSTIFIABLE DISCRIMINATION 6 1 
 
 Further, the railroad men found that if they could get 
 every day a car-load, or nearly a car-load, at this rate, 
 it would more than cover the expense of hauling an 
 extra car by quick train back and forth every day, 
 with the incidental expenses of interest and repairs. 
 So they put the car on, and were disappointed to find 
 that the local o}'ster growers could only furnish 
 oysters enough to fill the car about half full. The 
 
 • Philadelphia 
 
 / 
 
 <-' 
 
 Y 
 
 / Y to Philadelphia, 1 dollar. 
 Ra'-p" ■■ ^ *° '^' "' I'^tits. 
 
 ] \' r-^ TJi.;i„ 1,1,1 i ' I.'ic^l traffic, 1 dollar, 
 i ^ " Pl'il^Jclphia -, Through traffic, 75 cents. 
 
 expense to the road of running it half full was almost 
 as great as of running it full ; the income was reduced 
 one-half They could not make up by raising the 
 rates, for these were as high as the traffic would bear. 
 They could not increase their business much by 
 lowering rates. The difficulty was not with the price 
 charged, but w ith the capacity of the local business. 
 It seemed as if this special service must be aban- 
 doned. 
 
 " One possibility suggested itself At some dis- 
 tance beyond X , the terminus of this railroad^ 
 
 was another oyster-growing place, Y , which sent 
 
 its oysters to market by another route. The supply
 
 62 WHAT THE TRAFFIC WILL 15EAR ch. hi. 
 
 at Y was very much greater than at X ■■ ; the 
 
 people at Y were paying a dollar a hundred 
 
 pounds to send their oysters to market. It would 
 
 hardly cost twenty-five cents to send them from Y 
 
 to X . If, then, the railroad from X to 
 
 Philadelphia charged but seventy-five cents a hundred 
 
 pounds on oysters which came from Y , it could 
 
 easily fill its car full. This was what they did. They 
 
 then had half a car-load of oysters grown at X , 
 
 on which they charged a dollar, and half a car-load 
 
 from Y , on which they charged seventy-five cents 
 
 for exactly the same service. 
 
 " Of course there was a grand outcry at X . 
 
 Their trade was discriminated against in the worst 
 possible way — so they said — and they complained to 
 the railroad. But the railroad men fell back on the 
 logic of facts. The points were as follows : (i) a 
 whole car-load at seventy-five cents would not pay 
 expenses of handling and moving ; (2) at higher 
 rates than seventy-five cents they could not get a 
 whole car-load, but only half a car-load ; half a car- 
 load at a dollar rate (the highest charge the article 
 would bear) would not pay expenses. Therefore : (3) 
 on any uniform rate for everybody the road must 
 lose money ; and (4) they would either be compelled 
 to take the oyster-car away altogether, or else get 
 what they could at a dollar, and fill up at seventy-five 
 cents. There was no escape from this reasoning ; and 
 
 the oyster men of X chose to pay the higher rate 
 
 rather than lose the service altogether. 
 
 " This is a typical case. The business of a railroad 
 is of two kinds. Some of its business, like the oysters
 
 CH. III. HALF A LOAF OR NO r.READ 6t, 
 
 of X , must be done over this railroad, or not at 
 
 all. Of such business it is sure, even at high rates ; 
 the only limit is the value of the service — the excess 
 of the selling price at market above cost of production 
 
 at X . But a railroad may also do business like 
 
 that of the oysters from Y , which can be sent to 
 
 market by other routes. To do this it must make 
 special concessions at lower rates." 
 
 Unfortunately railway rate problems refuse as a 
 rule to present themselves in a form dissected out and 
 separated from surrounding circumstances like an 
 anatomist's specimens. They are complicated with 
 questions of classification, of the allowance which 
 should be made for exceptional conditions, gradients, 
 or what not ; of the amount of increased traffic which 
 reduced tariffs would bring ; of the method in which 
 the existing traffic ought to be worked so as to pro- 
 duce the best economic results, and fifty things more. 
 Further, the trader, who in ordinary times never gives 
 these subjects a thought, brings to their considera- 
 tion, in periods of bad trade, a mind in which philo- 
 sophical calm is not induced by the knowledge that, 
 while he is losing money, the railway shareholder 
 who sits at home at ease is still receiving a six per 
 cent, dividend. No wonder the result of his consider- 
 ation is for the most part unscientific. No wonder if 
 he is anxious to run with the hare and hunt with the 
 hounds : if at one moment he declares, as the Liver- 
 pool witnesses did before the Committees in iS8i and 
 1882, that railway companies ought not to be allowed 
 to deprive a place of the advantages of its geographical 
 situation — in other words, that equal mileage rates
 
 64 WHAT THE TRAFFIC WILL BEAR ch. ni. 
 
 ought to be put into force in order to handicap Fleet- 
 wood and Barrow out of the race — and then the next 
 moment he goes on to assume as self-evident that the 
 North Western Railway has no corresponding rights 
 to its advantages of geographical position, and that 
 he has a natural right to the benefit of the differential 
 tariff which is secured to him by the fact that the 
 different companies competing to Liverpool, and 
 therefore compelled to charge the same rates, arrive 
 there by routes of varying length. 
 
 Let us leave therefore for a time the heated air of 
 contemporary controversy and come back to a con- 
 sideration of another problem which had to be solved 
 in the early days. The story of the Mr. B., who, 
 when it was suggested that the London and Bir- 
 mingham Railway should commence the carriage of 
 coal, exclaimed, " Coal ! Why they will be asking us 
 to carry dung next ! " has become classic, and may 
 serve to remind us that there was a time when through 
 traffic in coal and other low-priced articles — as dis- 
 tinguished from the short distance coal traffic which 
 lines such as the Stockton and Darlington, and the 
 Monkland and Kirkintilloch, and the Leicester and 
 Swannington, were built to serve — was thought to 
 be impossible. Newcastle could put coal into the 
 London market by sea for a price far below that which 
 it would cost — "cost" including movement expenses, 
 fixed charges, and interest on capital — to bring coal 
 to London from Derbyshire or Staffordshire. One 
 can fancy Robert Stephenson and Mr. Ghm discussing 
 the question. The case was not, it will be seen, at 
 all the same as the Liverpool one. The Liverpool
 
 cH. III. can't tay or won't pay 65 
 
 traders could pay higher rates if they chose, but, 
 having the sea to fall back upon, they refused to give 
 the railway more than the sea rate////j a certain small 
 addition for extra speed and certainty of delivery. 
 For the Staffordshire coal-master there was no such 
 freedom. At the one end the cost of his coal was 
 fixed by the rate of wages and the other expenses of 
 production, at the other end the price he could get 
 for it was also fixed by the competition of the sea- 
 borne article. The railway rate must be less than 
 the difference between these two figures, otherwise 
 his coal would stop at home. Say, for the sake of 
 argument, that the difference between them was Ss., a 
 sum which, when worked out at a mileage rate, would 
 evidently give a good deal less than a penny per ton. 
 To such rates the London and Birmingham Com- 
 pany was in those days unaccustomed, but it wanted 
 the nevv^ traffic, and it could get that traffic on no better 
 terms. So down the rate came, and its fall, along 
 with that of the Liverpool rate, taught the lesson 
 that, when a certain locality, from its advantageous 
 geographical position, ccv// not pay its full share of 
 fixed expenses and dividend, or when a certain article, 
 from its small value, cannot pay its full share, the 
 railway company will be wise, both in its own interest 
 and in that of the public, to accept the traffic on the 
 best terms it can get — always provided, however, that 
 better paying traffic is not thereby crowded off the 
 line, and that the new traffic at least yields some 
 profit. Of the interest of the raih\'ay in taking this 
 course we have spoken already. That the Liverpool 
 trader and the Staffordshire coal-master also gain, needs 
 
 F
 
 66 WHAT THE TRAFFIC WILL EEAR ch. m. 
 
 no demonstration. That the senders of more highly 
 charged goods do not suffer is equally clear. They 
 were paying full rates to start with ; if anything, the 
 extra profit of the new traffic is likely to reduce their 
 rates. Finally, that the London public gains by the 
 opening of new routes or new sources of supply is 
 unquestionable. Doubtless the Liverpool shipowner 
 complained of the competition with the craft by which 
 he had his wealth. Doubtless the Newcastle coal- 
 owner protested that he was being " deprived of the 
 advantage of his geographical position," and with 
 truth, if not with justice. But their right to do any- 
 thing more than protest could only be recognised on 
 principles which would give every butcher and baker 
 a right to compensation if their neighbours transferred 
 their custom to a shop a couple of miles off. 
 
 Here then, in its most simple form, we can see the 
 principle of " charging what the traffic will bear " at 
 work. At the risk of repetition, we must emphasize 
 once more two facts. Its effect has been to raise 
 rates nowhere, to reduce them somewhere, and there- 
 fore on the whole to bring down the average. 
 Secondly, to benefit the consumer by widening the 
 area of supply, and so securing that the products he 
 consumes shall reach him charged with no monopoly 
 profits. And, thirdly, to benefit the country at large by 
 opening up fields of profitable industry in districts 
 which previously were handicapped out of the contest 
 by the cost of carriage. 
 
 Now let us briefly notice one or two other appli- 
 cations of the same principle. An ironmaster wishes 
 to increase his output, but he cannot get more ore from
 
 CH. iir. PRACTICAL RATE MAKING 6/ 
 
 the mines which at present supply him, and which are 
 situated at an average distance of 20 miles, as they 
 are already being worked to their full capacity. So 
 he casts about and finally meets with some deposits 
 at a distance of 30 miles from his works. Before, 
 however, making up his mind to purchase, he goes to 
 see the manager of the railway and puts the case to 
 him. "At present," he says, " I am paying is. Sd. a 
 ton for the carriage of my ore 20 miles. I can't afford 
 to pay you at the same rate for the 30 miles. What 
 can you do for me? If you can make mc a sub- 
 stantial reduction it will be worth your while, as if I 
 get my new blast furnaces you will have another 
 1,000 tons of pig-iron every week to carry." 
 
 " Well," replies the manager, " let me think over it, 
 and see how what you ask will affect your neighbours, 
 and I will let you know in a day or two. By-the-by, 
 before you go, just tell me : your present ore, I think, 
 gives about 50 per cent, of metal — what is the grade of 
 the ore at your proposed new mine ? " " Not so good, 
 unfortunately," is the answer. " I doubt if it will run 
 to as much as 40 per cent." The manager does think 
 over it, he causes a rate-clerk to tabulate the other 
 ore rates of the district, and to work out accurately 
 what amount of 40 per cent, ore will be needed to 
 produce each ton of " pig " ; he considers how often 
 his engine will be able to go backwards and forwards 
 each day, and what profit roughly he may expect 
 from the new pig-iron traffic ; and then he makes up 
 his mind as to what he thinks will be a reasonable 
 rate. Then, perhaps, he consults the company's 
 solicitor as to whether the rate he means to offer will
 
 68 WHAT THE TRAFFIC WILL BEAR ch. hi, 
 
 be liable to be objected to as affording the applicant 
 an undue or unreasonable preference over his com- 
 petitors ; and if the answer is, as he expects, that there 
 seems no reason to fear this, he sends off his letter, 
 which runs as follows : " Referring to our conver- 
 sation of two days since, I have the pleasure to inform 
 you that, on the understanding that you expect to be 
 able to raise about 300 tons of ore a day from your 
 new mine, I shall be ready to recommend my directors 
 to give you a rate of 2s. per ton. I may add, how- 
 ever, that I am recommending this partly in conse- 
 quence of the low grade of the ore, as the rate is a 
 good deal below our usual scale." 
 
 Take another instance, which is given in Mr. 
 Grierson's book on " Railway Rates " as an actual 
 piece of history. " About 30 years ago, when the iron- 
 works at Westbury in Wiltshire were constructed, it 
 was anticipated that fuel would be obtained from the 
 Radstock district, about 14 miles distant. But, after 
 sinking collieries, it was found that the coke was not 
 suitable, so that it has now to be obtained from South 
 Wales, a distance of about 130 miles. The pig-iron 
 is sent to South Wales in the return coke waggons, 
 and also to South Staffordshire, a distance of 140 miles. 
 The coke and pig-iron are carried at special low rates 
 below those in force for traffic to intermediate stations. 
 Without such special rates, or if mileage rates were 
 charged, the works would have to be closed." Now 
 carry this one step further. Suppose that Westbury, 
 jinstead of being inland, had been on the sea, and that 
 the pig-iron had been usually sent away to South 
 Wales by water. Would not the Great Western have
 
 CH. Ill, GROUP RATES 69 
 
 said : " Here are our coke waggons going back 
 empty ; any rate for pig-iron which will pay some- 
 thing more than the difference between the cost of 
 hauling an empty and a full waggon will be a profit- 
 able rate for us ? " And would not the company have 
 been wise to try to undersell the ships which hitherto 
 had done the business, even though the profit to itself 
 was but a \ery small one, and such as it could not 
 dream of taking as an accepted standard ? 
 
 Take another instance. The cost of getting house 
 coal in the various collieries of the South Yorkshire 
 district is precisely similar, let us say. So is the value 
 of the coal when brought to bank. The only difference 
 is that some collieries are 20 miles further from London 
 than others. The owner of the nearest colliery is 
 forced by the competition of Newcastle and Derby- 
 shire to be content with an average profit ; the owner 
 of the furthest colliery cannot in the long run work 
 for less. Either, therefore, the railway must forego its 
 charge for the extra 20 miles of haulage, or else the 
 nearest colliery monopolises the market. So the 
 railways put in force what is termed a " group " rate, 
 and London consumers and Yorkshire colliers have 
 both good reason to thank them for their action. 
 
 One instance more, which raises the most 
 burning question of all, that of special export and 
 import rates. It perhaps may be a sign of audacity 
 rather than of discretion to attempt to defend these 
 latter. The House of Commons Committee of 1882, 
 which laughed equal mileage and cost-of-service 
 theories to scorn, which when invited to curse 
 " grouping " blessed it altogether, which accepted it
 
 JO WHAT THE TRAFFIC WILL BEAR cii. iir. 
 
 as self-evident that companies engaged in long 
 distance traffic should be satisfied with what profit 
 they could get, when to get a more satisfactory profit 
 was impossible ; the Committee which recommended 
 that " the right of railway companies to charge for 
 station terminals should be recognised by Parlia- 
 ment," and reported that " on the whole of the 
 evidence they acquit the railway companies of any 
 grave dereliction of their duty to the public " — this 
 same Committee did not venture to stand up for 
 exceptional import rates. 
 
 But neither, on the other hand, did they condemn 
 them outright. " It must," says the Committee, "be 
 admitted that, when a farmer sees American wheat 
 carried at a lower rate than his own, or when a manu- 
 facturer near a market has his profits in that market 
 reduced by a competitor at a distance who is brought 
 into the market by the lower rate given to him, it is 
 not surprising that there should be complaints and 
 that attempts should be made and from time to time 
 repeated, to fix some standard by which rates shall 
 be determined." After which cautious avoidance of 
 the question whether these complaints are or are not 
 justified, the Committee passes on to show conclu- 
 sively — drawing its illustrations however only from 
 internal traffic — that exceptional long-distance rates 
 may be for the public interest, and further that a fixed 
 standard of charge is both practically unattainable 
 and theoretically undesirable. Now, why at this 
 point the Cobden Club did not step down into the 
 arena it is impossible to imagine. An annual excur- 
 sion to Greenv.-ich cannot absorb the whole energies
 
 cii. III. A CASE FOR THE COBDEN CLUB 71 
 
 of that august society. Yet never was there a clearer 
 case for its intervention. 
 
 The Committee justified a low rate for fish from 
 Wick and a comparatively high rate from Grimsby, 
 though the railways made a very different percentage 
 of profit, on the ground that they could not get more ; 
 that if the rate were raised the long-distance traffic 
 would either go by sea or cease to go at all ; that it 
 was for the benefit of the London consumer that both 
 places should be in the market in competition, and that 
 the starvation or other inconvenience thereby caused to 
 the fishermen at Grimsby was balanced by the advan- 
 tage to the fishermen at Wick. Now it is absolutely 
 indisputable that precisely the same considerations 
 applied to the American meat from Liverpool and the 
 Belgian hops from Boulogne. The sole difference was 
 that the fishermen were fellow-countrymen, the pro- 
 ducers of the meat and the hops were foreigners. 
 Look at the facts. It was not denied that the American 
 meat was at a disadvantage already, that its total rate 
 from Wyoming or Dakota — for American beef does 
 not come into existence at the Liverpool Docks — was 
 twice or thrice that which the English farmer had to 
 pay ; that American beef was, when it reached its 
 market, an inferior article, and as such entitled to a 
 lower classification. Still less was it denied that the 
 North W^estern authorities were ready to take a 
 higher rate, if they only could get it. 
 
 It was acknowledged that, if the rate were raised, 
 the beef would either cease to come or would go 
 round to London by sea. Now it must have been in 
 the interest of the Londoner that this meat should
 
 72 WHAT THE TRAFFIC WILL BEAR or. iii. 
 
 continue to come — for meat is even more a necessary 
 of life than fish — that it should come, moreover, by 
 the shortest and quickest route, so as to arrive in as 
 good condition as might be. And if the English farmer, 
 who had retired to the workhouse, and the English 
 landlord, who in lieu of rent was harvesting a fine 
 crop of thistles and ragweed, suffered, did not the 
 farmer in Wyoming gain in equal degree, and was he 
 not also a man and a brother ? And yet the Cobden 
 Club never spoke one word in defence of his rights. 
 
 Now, it is quite possible to believe that Free Trade 
 is a dogma which ought to be, if it is not, held and 
 acted upon semper, 7ibiq7ie, ab oinnibiis. It is possible 
 also to believe that in this work-a-day world no 
 abstract political principle is of universal application, 
 and that, in the very exceptional conditions of ten 
 or twelve years ago, when a sudden combination 
 of circumstances (which can hardly, one would 
 think, ever again recur simultaneously) crushed the 
 British agricultural interest to the ground, some 
 special assistance ought to have been given to that 
 interest, even though theorists might raise the cry of 
 Protection. But what is surely impossible of belief 
 is that, while the policy of the Government of the 
 country continued to be a Free Trade one, it was the 
 duty of individual citizens who happened to be rail- 
 way managers to inaugurate a policy of Protection. 
 
 Take the second of the two cases of " favouring 
 the foreigner," of which we heard so much a few years 
 back — a case which is still from time to time, though 
 the rate has long ceased to exist, thrown in the teeth 
 of the South Eastern Railway — the charge of 35.T. per
 
 CH. iir. VEILED PROTECTION 73 
 
 ton for hops from Ashford to London as against 
 lys. 6d. for foreign hops from Boulogne, via Folkes- 
 stone and Ashford. Admit for the sake of argument 
 that the 35^'. rate for Enghsh hops was a high one,^ 
 though it was proved to demonstration that the real 
 rate for purposes of comparison was only 26s. 6d., 
 and that the English traffic was exceptionally ex- 
 pensive to work. Still, it could not be denied that it 
 was perfectly legal, and further that it only amounted 
 to from li to 2 per cent, of the value of the article. 
 
 It was evident that the foreign hops were much 
 cheaper to carry, were worth less, and therefore had 
 a right to a lower rate, and }'et that their total rate 
 from the point of origin must have been at least as 
 high as the rate for the English hops. It was evident 
 also that the South Eastern could not raise the 
 French rate, as there were half a dozen steamers, 
 some of them no doubt heavily subsidised by the 
 French Government, ready and willing to take the 
 hops to London by water at the same price, and in 
 almost the same time. And yet the attempt of the 
 company to earn an honest halfpenny — a penny 
 being absolutely unattainable under the circumstances 
 — was received with a perfect storm of indignation. 
 Once more, the only difference in principle between 
 Boulogne hops and Wick fish was that the hops were 
 Belgian and the fish Scotch. Can the outcry be 
 
 ^ The present writer has no liljcral policy would he judicious 
 
 wish to go back heie from the in the interest not only of the 
 
 position which he has publicly public but of the shareholders, 
 
 maintained more than once of late, Such a belief, supposing others 
 
 that the charges of the South to share it, might explain, but 
 
 Eastern are too high — that, in could not justify, the outcry about 
 
 other words, the adoption of a more the Boulogne hops.
 
 74 WHAT THE TRAFFIC VriLL BEAR ch. hi. 
 
 explained, therefore, except as an instance of the 
 natural and corrupt love of Protection implanted in the 
 human breast ? And against such a reappearance of 
 the old Adam ought not the Cobden Club to have 
 entered its solemn protest ? Have not the foreigners 
 who grow hops as strong a claim to its good offices 
 as those who grow sugar-beet ? 
 
 One v/ord more about import rates. Public 
 opinion has prevailed, and the Boulogne hops now go 
 by water. By the same way, and for the same reason, 
 went also last summer the German cherries which the 
 Dutch boats brought over from Flushing to Oueen- 
 borough, and Vvdiich formerly Chatham and Dover 
 trains brought up from that point. The bar;" -owners 
 on the Medway and the Thames gained, :t; may be 
 presumed, the profit which the Chatham and Dover 
 lost ; the London doctors, too, perhaps gained some- 
 thing, as the cherries mostly arrived somewhat the 
 worse for their journey. But where the advantage 
 came in, either to the London consumer or to the 
 rival Kent producer, is by no means so apparent. 
 
 Why the Kent producer did not gain, may be 
 seen from an illustration borrowed from a pamphlet 
 published a short time back in France, dealing 
 with a precisely similar question.^ From Bordeaux 
 to Paris the rate for wine is 6 centimes per 
 litre. From the Spanish frontier, 200 miles further, 
 to the same destination, it is 4 centimes, the reason 
 for the difference of course being the water com- 
 petition via Havre. But at the 6 centimes rate 
 3,000,000 tons arc carried as against 200,000 tons 
 ■* La Ccucurrence, Paris, i8S6.
 
 CH. III. A FRENCH ILLUSTRATION 75 
 
 at 4 centimes. An agitation being raised against 
 the French raihvays for " favouring the foreigner " — 
 and very justly, one cannot but think, considering 
 that the French national policy is Protectionist, and 
 the French Government largely subsidises its rail- 
 ways — the demand is made that the Bordeaux rate 
 and the Spanish rate shall be properly readjusted. 
 " No ! " replies the author of the pamphlet — writing 
 obviously on behalf of the French companies — " we 
 cannot raise the Spanish rate, and we will not lower 
 the Bordeaux rate. If you like we will cancel the 
 Spanish rate altogether ; the total traffic is small and 
 the margin of profit still smaller, but we cannot afford 
 to tamper with a rate which is reasonable in itself 
 and at which 3,000,000 tons are carried." One more 
 instance of the truth of what has been stated already, 
 that the abolition of a so-called " preferential " rate — 
 it has been proved over and over again in the case of 
 judgments of the Railway Commission — means not 
 levelling down, but levelling up. 
 
 Export rates need not detain us long. Their chief 
 interest is the evidence they afford in disproof of the 
 oft repeated assertion that man is a reasoning animal. 
 Theoretically we all admit that the political economy 
 primer is correct, when it tells us that exports can 
 only be paid for by imports. But practically we 
 resent special import rates, though they increase the 
 quantity of foreign beef or hops which we can obtain 
 in the English market in exchange for a given quan- 
 tity of English manufactures, while we approve of 
 special export rates which mean the increase in a 
 foreign market of the amount of our manufactured
 
 76 WHAT THE TRAFFIC ^^TLL BEAR ch. iir. 
 
 goods which will need to be given in exchange for a 
 certain quantity of foreign produce. If the consumer 
 pays the carriage, as it is commonly supposed he 
 does, logically we ought to be more anxious to cheapen 
 the rates on imports than on exports. Practically, 
 however, the feeling runs all the other way, and while 
 shippers are entirely conscious of their advantages, 
 the local consignee only complains, if he complains 
 at all, on the ground that if the railway can afford to 
 carry for the shipper at 2$s. per ton, it ought to carry 
 for him for less than 40jr. But with this fallacy we 
 have already dealt at quite sufficient length. Export 
 rates, it should perhaps be added, rest on the highest 
 statutory authority. The first Railway Act ever 
 passed, that for the Stockton and Darlington, pre- 
 scribed as a maximum toll for coal for local use ^.d. 
 per ton per mile, for coal for export the maximum 
 w^as \d. 
 
 There is one other point which, to those who think 
 that the course of trade can be regulated by Acts of 
 Parliament, should not be without interest. England 
 is not the only country where there has been an agita- 
 tion against import rates as " favouring the foreigner." 
 A general manager at, let us say, Constantinople, 
 wrote a letter not so long since to the manager of 
 an allied road across the frontier, at, say, Athens, 
 and this is the substance of what he said : " The 
 agitation against our special import tariff is becoming 
 so serious that I expect we shall have to yield to it. 
 Now, it will never do to kill our exchange traffic. 
 What I suggest is this. There is no feeling against 
 .special export rates. Therefore I will make a merely
 
 CH. III. NATURAM EXPELLAS FURCA JJ 
 
 nominal rate, say is. a ton, on goods exported to 
 Athens, and you can then levy on them as soon as 
 they getjon your side of the frontier a rate twice as 
 heavy as you get now. In return you will be content 
 with a nominal rate on what you send to us, and I can 
 cover our existing revenue by doubling the rate from 
 the frontier to Constantinople. The senders will pay 
 just the same as before, and I can report to the Minister 
 that special import rates have been abandoned." With 
 w^hich piece of evidence of the ability which railway 
 managers bring to the decision of the question, what 
 the traffic will bear, we will postpone further considera- 
 tion of the subject to the next chapter.
 
 CHAPTER IV 
 
 WHAT THE TRAFFIC WILL NOT BEAR 
 
 The objections that are taken to the principle of 
 charging what the traffic will bear fall under two 
 main heads : the one theoretical, that the principle 
 itself is wrong ; the other practical, that its equitable 
 application is a task so difficult and so delicate, that, 
 even supposing the best and most upright intentions 
 on the part of the railway managers of the country, 
 the power to make rates is larger than can safely be 
 entrusted to any private individual, and that the 
 practical abuses have been so great in the past as to 
 point to the conclusion that, if the principle must be 
 applied at all, its application can only be entrusted 
 to State officials. That the principle must be applied, 
 simply because no other principle can possibly be 
 adopted, has been argued at sufficient length in the 
 previous chapters. But it is worth while here to add 
 to that argument that the objectors perhaps fail to 
 see how common the application of the same principle 
 is in all the affairs of life. Take the turnpike roads 
 themselves for instance. Theoretically, no doubt, a 
 toll calculated on the amount of damage done to the 
 road was an eminently just one. Practically, however, 
 the principle was never enforced. A light dog-cart,
 
 CH. IV. ANALOGY OF TAXATION 79 
 
 weighing only two or three hundred-weight, was 
 charged the same as a ponderous carrier's cart, weigh- 
 ing two or three tons. The dog-cart, it was felt, could 
 bear a heavier rate. Needless to say, the taxation of 
 the country is adjusted on the same principles. A 
 Rothschild receives no more benefit, it may well be 
 argued, from the army and the navy than a clerk on 
 200/. a year. Each is protected in life and limb, and in 
 the possession of his whole property ; but the one pays 
 in income tax a thousand-fold more than the other. 
 
 Take again the principle of local rates. A 
 man who lives in a house rated at 1,000/. a year 
 makes no more use of the roads, or of the street 
 lamps than his neighbour in a 20/. cottage. The 
 services rendered to the two men by the local au- 
 thorities are precisely identical ; }-et the one, because 
 it is felt that he can afford it, is fairly made to pay 
 fifty times as much as the other. The principle, in 
 fact, is this. The government of the country, the 
 maintenance and cleansing and lighting of the streets, 
 have to be provided for somehow, and the money for 
 so doing must be raised from those who can best 
 afford to pay it. Now, consider the case of the rail- 
 way. We must, of course, ignore the movement ex- 
 penses, for they increase or diminish in direct propor- 
 tion to the volume of traffic which actually goes, and 
 they therefore must in fairness be charged upon that 
 traffic itself; but, as we have seen, out of the 
 70,000,000/. sterling which the railways of Great 
 Britain annually obtain from the public, one-half is 
 required to pay 4^ per cent, interest to the persons 
 who have provided the road, while half of the re-
 
 80 WHAT THE TRAFFIC WILL NOT BEAR ch. iv. 
 
 mainder goes to maintain that road in a fit condition 
 for the use of the traffic. This fifty odd milhons, 
 therefore, may fairly be looked upon in the light of a 
 tax to be levied upon the total traffic, in a manner 
 which, on the whole, is most for the convenience of 
 the public at large. 
 
 No analogy will bear being pushed too far, and it 
 is of course open to critics to ask, for instance, why 
 on this principle a first-class passenger gets a ticket 
 at the same price, whether he be an officer on half- 
 pay or a millionaire financier ? The reply would be, 
 I conceive, that it is for the same reason which pre- 
 vents the Government from introducing a graduated 
 income tax, or from imposing an ad valorem scale of 
 duties on wine or tea. Theoretically, this might be 
 right ; in practice, the difficulties of working it out 
 would be so large, and the cost of collection would be 
 so great, that the whole of the increased receipts 
 would be swallowed up in increased expenditure, and 
 nobody would gain. But, leaving taxation, we shall 
 find that, in every affair almost of life, the principle 
 of charging what the traffic will bear is fully recog- 
 nised. Water, for instance, is supplied in every town 
 in the kingdom, not at so much a gallon, but in return 
 for a percentage charge on the rent of the house. 
 No one supposes that a bachelor in Piccadilly or St. 
 James's Street uses more water than a dozen poor 
 families in the East End ; but water is a necessity of 
 life, just as much as railways, and those who under- 
 take to provide it must be rewarded for their outlay 
 somehow. Take again the professions. A doctor 
 visits a patient, and charges him half a guinea ; he
 
 CH. IV. A FURTHER ANALOGY 8 1 
 
 then goes into the next room, and prescribes for the 
 patient's cook at the charge of half a crown. It would 
 surely be a slur on an honourable profession to assert 
 that the doctor gave five-fold more attention to the 
 one case than to the other. Take, again, a solicitor 
 who undertakes the conveyance of an estate. The 
 wisdom of Parliament has enacted that his remune- 
 ration shall be fixed on an ad valorem scale, which 
 allows him to receive ten times as much where the 
 purchase-money is 100,000/. as where it is only 5,000/. 
 And yet, as every lawyer knows, the larger the estate 
 the more likely the title is to be free from difficulties. 
 In commercial matters, too, the same principle is 
 almost universal. A stockbroker sells Consols for a 
 commission of one-eighth per cent., though the 
 trouble and cost to him is practically the same, 
 whether the amount sold be large or small. But 
 here comes in another point, where also the analogy 
 to railway practice is instructive. The stockbroker, 
 instead of dealing directly with his client, may be 
 employed to make the sale by a banker or a solicitor, 
 and the intermediary, who introduces the business, 
 will claim to be permitted to share the commission. 
 The stockbroker consents, reasoning doubtless some- 
 what as follows : — 
 
 " I am accustomed, as a rule, to charge A. 25^ 
 for selling 1,000/ stock, and B. 12/ \os. for selling 
 10,000/, and this is fair enough, for B. can afford to 
 pay ten times as much as A., and I have got to make 
 a living out of the business somehow. But now, 
 when C.'s banker comes, and claims half the commis- 
 sion on the sale of C.'s 10,000/ Consols, I hardly see 
 
 G
 
 82 WHAT THE TRAFFIC WILL NOT BEAR en. iv. 
 
 how I can refuse to give it ? I am obviously not 
 hurting B. ; he will pay the same commission in any 
 case, and, though somebody declares that I am taking 
 this business at a loss, and recouping myself by over- 
 charging the rest of my clients, who pay me the full 
 commission, this is evidently nonsense, for it costs me 
 nothing to do the business, beyond a few pence for 
 papers and stamps. But if I don't take the half 
 commission, I shall not get the business at all, with 
 the result that I shall be 6/. 5^". poorer, and have to 
 live and keep my office going just the same as before." 
 
 The stockbroker's calculations furnish then two 
 analogies to the case of the railway. He charges what 
 his traffic will bear, subject howev^er to this, that if 
 he attempts to make certain classes of traffic, which 
 occupy an exceptionally strong position for dictating 
 their own terms, pay the full rate, he loses that traffic 
 altogether, and therefore, acting on the principle that 
 half a loaf is better than no bread, he does this 
 exceptional business at less than his ordinary per- 
 centage of profit, less than the percentage perhaps at 
 which he could do the whole of his business and live. 
 
 The theory that railway companies do one portion 
 of their business at a loss, and recoup themselves by 
 overcharging the rest, is really so unreasonable that it 
 hardly deserves to be met with serious argument. But 
 it is so often met with that one is forced to believe that 
 there arc some people who really believe it. So a short 
 consideration of the matter will not be out of place. 
 Railway companies have been constantly told that 
 they carry American meat or French hops at the ex- 
 pense of their English customers ; but wh}' they should
 
 CH. IV. UTILIZATION OF BYE-rRODUCTS 8^ 
 
 do SO, unless on the supposition that the managers 
 are not only knaves, but fools, which hitherto has 
 not been asserted, no trader has ever condescended 
 to explain. It would be at least as reasonable for a 
 gentleman in the stalls at Drury Lane to declaim 
 against the management of the National Theatre, 
 which, having charged him los. 6d. for his seat, then 
 proceeded to admit the gods at a shilling a head 
 at his expense. Or, take another and a better 
 analogy, that of an hotel. An hotel has this in 
 common with the railway, that a large part of the 
 fixed expenditure runs on just the same whether the 
 house be full or empty. But what should we say for 
 the intelligence of a summer visitor at Ilfracombe, who 
 protested against the hotel proprietor entertaining, at 
 his expense, the few guests who were attracted in 
 December by the offer of special winter boarding terms .^ 
 
 Here, again, is a more elaborate comparison with 
 a condition of affairs which in manufacturing in- 
 dustries is common enough, and is there known as 
 the utilisation of bye-products, for which we are in- 
 debted to Professor Hadley.^ 
 
 " A wire manufacturer imports the rods which he 
 intends to draw out into wire. He finds them covered 
 with rust. As the first step in his process he washes 
 off that iron rust with sulphuric acid. The washings 
 are often allowed to run to waste. But if a manu- 
 facturer will put up the necessary sheds for collecting 
 them, and boiling them down, he can obtain a quan- 
 tity of crystallized sulphate of iron, or copperas. 
 The commercial value of this copperas is very small. 
 
 ^ Railroad Transportation, p. 113.
 
 84 WHAT THE TRAFFIC WILL NOT BEAR en. it. 
 
 It is probably not worth as much as the acid which 
 it contains. Certainly no one would think of delibe- 
 rately dissolving iron in sulphuric acid, and selling 
 the copperas thus made. But the wire manufacturer 
 has the material on his hands in the form of washings. 
 It is better for him to sell for the merest trifle rather 
 than let it run to waste. 
 
 " Now suppose a legislator says : ' Here is this man 
 making arbitrary discriminations. He has the only 
 wire-mill in the region, and so makes a large profit on 
 this wire, while he allows the consumer of copperas to 
 have it at prices which hardly pay expenses. In fact, 
 he sells it at a less sum than the materials cost him. 
 Let us enact a law which will prevent him from 
 making more money on one part of his business than 
 another.' What would be the result of such a law ? 
 Would he reduce his price on wire so as to make no 
 more profit than on his copperas ? Obviously not. 
 Would he reduce his prices for wire, and raise them 
 for copperas ? No. He could not sell his copperas 
 at the higher prices, or he woulci have charged them 
 to begin with. The only result will be that he will 
 stop making copperas. His prices for wire will re- 
 main the same. If an}-thing, they will tend to run 
 higher, because one slight source of advantage is cut 
 off, so that competitors are not so likely to be tempted 
 to come into the business. It would be nonsense for 
 the man who buys wire to say that he is ' taxed ' to 
 furnish another man with copperas below cost." '^ 
 
 - It i; worth notice that if the district, he would have been able 
 
 Avire manufacturer had had, not to charge the same rate of profit 
 
 only a monopoly of the wire-trade, on the copperas as on the wire, 
 
 but of the copperas trade of his subject only to this, that he might
 
 cii. IV. JOINT COST 85 
 
 In a paper on the " Theory of Railroad Rates," 
 read last December at Washington, before the 
 American Economic Association, Professor Taussig, 
 of Harvard Universit}', dealt with the whole question 
 of the relation between rates and cost in a very lucid 
 manner. Nearly the whole of the expenses of a 
 railway are, as he pointed out, of the class known to 
 economists as "joint cost." The classical instances of 
 this are gas and coke, and mutton and wool. Let us 
 see what this means. Ask the Gas Light and Coke 
 Company what it costs them to produce a hundred- 
 weight of coke ; their reply must be that this depends 
 on what the public will pay for the gas. Put the 
 question the other way round, and ask them what it 
 costs to produce a thousand cubic feet of gas, and they 
 will reply that this depends on the price at which the 
 public will purchase their coke. The working ex- 
 penses of the whole operations of the company are 
 so much. The result of those operations is the out- 
 put of a certain quantity of gas and a certain quantity 
 of coke. Supposing that they can get for the gas the 
 whole of their outlay plus interest on capital, the cost 
 of the coke to them is nothing. Anything they can 
 sell it for is pure profit. Now take, on the other 
 hand, a Durham firm, manufacturing coke for the use 
 of the neicrhbourincr blast furnaces. The firm can use 
 
 then have made the copperas so where there are waterways acce=- 
 
 dear that no one would use it. So sible, or where, as in the case of 
 
 with a railway. The German coal, full rates would kill the traffic. 
 
 Government, for instance, has a But in England there are not only 
 
 monopoly of its railways, and can rival railways, but sea competition 
 
 charge, therefore, the same rate issaid to affect three-fifths of all the 
 
 of profit all round, except where station rates in the country. (See 
 
 foreign competition conies in, or Report of Committee of 1872.)
 
 86 AYHAT THE TRAFFIC WILL NOT BEAR ch. iv. 
 
 a certain quantity of gas, no doubt, to heat its coke 
 ovens, but for the rest it has possibly no market 
 whatever. In this case, evidently, the coke must be 
 looked to for the repayment of the cost of production 
 and the interest on capital, and the most that can be 
 expected of the gas is that it shall help in some slight 
 degree to lighten the burden. 
 
 Take, again, the instance of mutton and vool If 
 the price of mutton at Smithfield is high enough to pay 
 for keeping sheep in Lincolnshire, any price that the 
 farmer can get for his wool, over and above the cost of 
 shearing and packing, is so much to the good. But 
 the squatter in Australia, whose mutton is worth, per- 
 haps, -^d. per pound, practically depends upon the 
 price he can get for his wool. But neither farmer nor 
 squatter can say positively what it costs him to pro- 
 duce either a pound of mutton or a pound of wool. The 
 English farmer can say that, if the price of mutton falls 
 to fourpence, he must either get more for his wool, or 
 else go out of the business ; and the Australian squatter 
 can say that if the increasing demand for frozen mutton 
 enables him to sell his meat for a penny a pound, he 
 can afford to reduce the price of his wool ; but be- 
 yond that neither the one nor the other can go. 
 
 The price of what is in each case the main article 
 of production is largely determined by the value which 
 the public puts upon what may be termed the bye- 
 product — the wool of the English farmer, the mutton 
 of the Australian squatter. Now compare this with 
 the case of the railway, The company invests its 
 capital, provides an extensive plant and a large staff, 
 in order to furnish transportation for passengers of
 
 CH. IV. VARIETIES OF TRANSPORT 8/ 
 
 different classes, and for goods, whether these latter 
 be silks and velvets or coal. The railroad and its 
 equipment is provided for passengers and freighters 
 on their joint account. Fix for the company what it 
 will receive for passengers and merchandise, perhaps 
 it may be able to answer what it must charge for 
 moving a ton of coal. Fix again the receipts from the 
 coal and the merchandise, and it may be possible to 
 find the cost of working a passenger train ; but as in 
 practice the one side of the equation is always variable, 
 it is impossible to give a positive value to the other. 
 
 Broadly, this principle can be laid down. For the 
 service as a whole, the cost of the service must 
 measure the rate, which is, in other words, to say that, 
 if the rate falls below this point, accommodation will 
 be curtailed and new construction will stop ; if it rises 
 permanently above this, fresh capital will be attracted 
 into the business. On the other hand, for any single 
 part of the service, the only measure of the rate is the 
 value which the public puts upon that service. If, 
 for example, the Penzance mackerel or the Bradford 
 woollens will not bear the rate charged, the traffic 
 falls off or ceases altogether, and the rate comes down 
 in order to entice it back again. But, whether the 
 rate be high or low, so long as it pays mere move- 
 ment expenses there is no question of working the 
 traffic at the expense of other traffic. In one sense it 
 is no doubt true that the more the company can get 
 out of Bradford goods the cheaper it can afford to 
 work its coal, but if the Bradford goods decline to pay 
 fourpence a mile it is better for the coal-master that 
 they should be enticed back on to the road by a rate
 
 88 WHAT THE TRAFFIC WILL NOT BEAR ch. iv. 
 
 of twopence, rather than that his coal should be left 
 to bear the whole of the railway charges unaided. 
 
 If our analysis thus far is correct, it is evident that 
 the position of a railway manager is immeasurably 
 more difficult than that of a gas company or a farmer. 
 Broadly speaking, the relation between gas and coke, 
 between mutton and wool, is constant. To so many 
 cubic feet of gas belongs also, as of course, the pro- 
 duction of so many hundredweight of coal. So much 
 mutton, so much wool. And whether coal is dear 
 or cheap, whether sheep be fed on grass or turnips^ 
 the result is pretty much the same. And the farmer 
 or the gas company has nothing to do but sell each 
 of the products at the highest price it will fetch. But 
 with a railway it is very different. The produce is in- 
 finitely various, and consists of transportation : for 
 passengers, at various speeds, under various conditions 
 of comfort or discomfort, on a contract for a single 
 journey or for a series extending over many months ; 
 and for goods, under conditions yet more infinite in 
 their variety. Exactly what each of these forms of 
 transportation costs no man can tell, and therefore no 
 man can tell what in each case is the profit of the 
 company. It is known, however, that an improve- 
 ment in the transportation at the same price, or a 
 reduction of the price for the same facilities, is almost 
 certain to increase the quantity sold : must, therefore, 
 increase the gross profit, but may or may not increase 
 the net profit, of the sellers. 
 
 A manager, therefore, surmises— it is reall}- no- 
 thing more than a guess, for two men equally qualified 
 will come to diametrically opposite conclusions on the
 
 CH. IV. AN INTRICATE CALCULATION 89 
 
 same evidence, and actual experience alone can settle 
 which of the two has decided correctly — that he will 
 increase his net earnings by reducing such and such a 
 rate, that he cannot afford to reduce such and such 
 another, and he acts accordingly. The result some- 
 times proves him right, and sometimes wrong. The 
 effect of a reduction may be that, whereas he was carry- 
 ing 500 tons at 2i^-> giving a gross profit of 75/. and a 
 net profit of 37/. 10s., he now carries 1,500 tons at 
 2s. 6d., giving a net profit of 75/. It may be that the 
 reduction of the rate only increases the traffic from 500 
 tons to 750, in which case his profit remains stationary, 
 and while the trader has gained, the railway is where 
 it was. Or, once more, the traffic only increases to 
 600 tons, and then, though the trader has gained, the 
 railway profit has fallen from 37/. los. to 30/. 
 
 And then naturally the railway manager casts 
 about for some new source of income. In this sense, 
 and in this sense only, can it be said that one portion 
 of a railway company's business is done at the ex- 
 pense of the rest ; that, if one portion gives a small 
 profit, the rest of the business will have — if capital is 
 to continue to flow into railway enterprises — to redress 
 the balance. In any other sense the phrase is mean- 
 ingless. A railway is no more likely to increase the 
 rate on fish, in order to be able to carry American 
 meat at a loss, than a gas company is likely to raise 
 the price of gas in order to be able to give away its 
 coke gratis. 
 
 There is one leading principle which guides the 
 practical railway manager in reducing rates. He 
 never makes, if he can help it, a reduction which will
 
 90 WHAT THE TRAFFIC WILL NOT LEAR ch. iy. 
 
 be inappreciable by those who have to pay it, for he 
 could not hope by so doing to develop fresh traffic. 
 One i^cnny on a local rate of sixpence for coals may 
 possibly make a difference. On a rate of six or seven 
 shillings to London, it could hardly do so. Again, 
 the practical man knows that on valuable articles the 
 railway rate can produce no effect one way or another. 
 The inhabitants of Lancashire will not buy more 
 velvet dresses, even if the stuff were carried all the 
 way from Lyons gratis. Reductions, therefore, when 
 made by goods managers, are mainly in considerable 
 percentages on articles of small value, the trade in 
 which is capable of almost indefinite increase. Here, 
 on the other hand, is an instance of rate reduction 
 based not on practical considerations, but on abstract 
 theory. The Great Northern rate for musical instru- 
 ments from London to Knebworth is 255. The 
 Board of Trade Report proposes to reduce it to 24^". 31^. 
 Now, it is tolerably safe to say that, if Lord Lytton 
 wished to buy a new grand pianoforte, he would not 
 be deterred by the fact that he would have to pay 
 \2s. 6d. for carriage. Nor, if he found the charge 
 brought down to 12s. i^d., is it likely that the unex- 
 pected economy would induce him forthwith to pur- 
 chase a second. In a word, a pettifogging alteration 
 such as this — and this is only a type of hundreds and 
 thousands — simply means to the railway a dead loss 
 with no prospect of recoupment from increase of 
 traffic, and to the customer a gain so infinitesimal that 
 nine hundred and ninety-nine times out of a thousand 
 he will be utterly unconscious of it. 
 
 Take another instance. Almost an entire page of
 
 CH. IV. USELESS REDUCTIONS 9 1 
 
 the Report to the Lancashire and Cheshire Traders' 
 Conference is devoted to an exposure of the crass 
 folly of the railway management which for years 
 retained imitation lace in the same class and charged 
 it at the same rate as the hand-made article. A 
 refusal " to distinguish between lace at 2d. per yard 
 and lace at 2/. 2s. per yard " — could anything be more 
 unreasonable ? Let us look at the facts. The writer 
 has taken a piece of Nottingham lace, not a narrow 
 piece worth only 2d., but a piece three inches wide 
 and costing 8^. per }-ard. He finds it to weigh per 
 yard 2 drachms. In other words, it is worth 4/. ^s.A^d. 
 per pound, say, in round figures, 9,557/. per ton, or 
 more than its weight in silver. Now, it is quite true 
 that if anybody were to spend two millions and a half 
 sterling in collecting a ton of fine Brussels lace, he 
 would be able to send it down from London to 
 Nottingham by goods train for 52^". 6d. But is this fact 
 sufficient to prove that other lace, w-orth over 9,000/., 
 is unable to bear a similar charge ? As has been said, 
 the companies have lateh-, in order to avoid further 
 irritation, brought down the rate to a^Js. 6d., with a 
 further reduction to 40.y. on consignments for export. 
 It is, perhaps, unduly sanguine to expect that the 
 change will do much to restore to Nottingham its 
 former prosperity, unless for the reason that the 
 manufacturers will be able in future to devote to the 
 improvement of their designs the time which they 
 have spent to little profit in a barren wrangle. 
 
 Another argument which has been largely used 
 is that fixincf the rates accordincr to what the
 
 92 WHAT THE TRAFFIC WILL NOT BEAR ch. iv. 
 
 traffic will bear, means depriving places of the 
 advantages of their natural geographical position. 
 To this, the only answer is to say that of course it 
 does, and that unless one holds " the monstrous faith 
 of many made for one," we cannot but desire that it 
 should. Put the claim for the advantages of geo- 
 graphical position in its baldest form, and one sees 
 what it means. The railways running into London 
 have established an elaborate system of workmen's 
 trains and cheap fares. Some pressure is now being 
 put upon them to extend that system, even though 
 they should do it at a pecuniary loss. Now, suppos- 
 ing Lord Northampton or Lord Alington,or some other 
 large owner of workmen's property, were to come for- 
 ward and protest that he was being deprived of the 
 advantages of his geographical position, that the action 
 of the companies was reducing the rental value of his 
 estate — what would be thought of such a claim ? 
 Would not anyone who ventured to make it be told 
 with emphasis that his selfish personal interests 
 could not be allowed to stand for a moment in the 
 way of the general good ; that it was for the public 
 interest that workmen should have more space for 
 their houses ; and further that, from the mere indivi- 
 dual point of view, his interests as a landlord in 
 London might be balanced against the interest of 
 the landlord at Neasden or Earlsfield, whose estate 
 was proportionally enhanced in value. 
 
 If such be the argument as applied to workmen's 
 dwellings, why should the same considerations be 
 ignored when it is a question of workmen's food or 
 workmen's clothing ? The truth is that by nature all
 
 en. IV. GEOGRAPIIIC/iL SELFISHNESS 93 
 
 men arc Protectionists at heart, and that the cry in 
 favour of preserving the advantages of geographical 
 position is one which has been raised again and again, 
 from the first moment when raihvays began to revolu- 
 tionise the trade of the world. 
 
 At a meeting of the Statistical Society in the year 
 1843 a paper was read on the " Agricultural Prices of 
 the Parishes of Middlesex." The writer pointed out — 
 the quotation is from a contemporary railway journal 
 — " that the railway had greatly affected prices in 
 the cattle market at Southall, and had occasioned 
 much discontent among the farmers, who complained 
 that In consequence of the facility that it afforded 
 for the rapid transfer of stock from one county to 
 another, they had been deprived of the advantages 
 which they formerly possessed from their proximity 
 to London ; 500 head of sheep and 100 head of 
 cattle had upon more than one occasion been sud- 
 denly introduced into the market from the West of 
 England, and the prices had been proportionately 
 forced down." The complaint of the Southall 
 farmers was fortunately disregarded. Had it been 
 otherwise, by this time, no doubt, the entire parish 
 would have been turned into one vast series of cattle- 
 fattening sheds, and Southall market might have been 
 a monopoly as lucrative as that of Covent Garden. 
 
 For, it should be observed that, in the view of 
 the geographically well-situated farmer or trader, 
 cheap carriage of cattls for him to fatten, or raw 
 materials for him to work up, is apparently open to 
 no objections. However, as we know, the Southall 
 farmer did not get his way, and cattle continued to
 
 94 WHAT THE TRAFFIC WILL NOT BEAR ch. iv. 
 
 pour into London from the West of England. Then 
 the raihvay system extended itself to the furthest 
 corners of Scotland and Ireland. The little red 
 Highlanders and black polled-Angus were seen at 
 Smithfield side by side with the great Hereford and 
 Devon oxen. Then it was the turn of the West of 
 England farmer to complain, and once more his 
 grumblings were met with the answer that London 
 wanted more food and wanted it cheaper. 
 
 The railways of Great Britain had now reached 
 the end of their tether, but, thanks to the railways of 
 America and the triple-expansion marine engine, the 
 rapidly rising demand of the British working classes 
 for wholesome animal food was met by the produce 
 of the boundless Western prairies, and then at length, 
 after a long series of years of steady enhancement, 
 the price of meat grew stationary, and finally began 
 to descend. Once more the farmer — the farmer this 
 time throughout the British Islands — and his land- 
 lord had been deprived of the advantages of their 
 geographical position — to their loss doubtless, but 
 to the benefit of the immeasurably more numerous 
 consumers. 
 
 But here comes in the strange part of the story. 
 The railway companies, which in their humble way 
 had been endeavouring — not, of course, without an 
 eye to their own advantage — to promote the trade 
 of the country by improving communication, and 
 which certainly would never have presumed to at- 
 tempt to thwart the declared policy of Parliament 
 and the British nation by imposing exceptional taxa- 
 tion on beef because of its foreign origin, suddenly
 
 CH. IV. IMPORT DUTIES ON FOOD 95 
 
 found themselves assailed with a storm of indig- 
 nation, and, as the upshot of eight years of agi- 
 tation and strong language, the Railway and Canal 
 Traffic Act of 1888 was passed. By that Act it is pro- 
 vided that " no railway company shall make, nor shall 
 the Court or the Commissioners sanction, any differ- 
 ence in the treatment of home and foreign merchandise 
 in respect of the same or similar services." 
 
 The intention of the section is obvious, but any one 
 familiar with the history of the question would natu- 
 rally have expected the words to be expressed in a pre- 
 cisely opposite sense, for nothing can be more certain 
 than that the railway companies were as innocent of 
 treating or wishing to treat American beef in a way 
 different from that in which they would have treated 
 English beef, if they could have got it under the same 
 circumstances, as Air. Gladstone was of discriminating 
 in favour of our fellow-citizens in Australia and the 
 Cape Colony, when he reduced the duty on Bordeaux 
 wines. The section of the Act referred to still waits 
 interpretation at the hands of the Railway Commis- 
 sioners ; but the railway companies will perhaps be 
 wise in the interval, if they understand it to mean, 
 as certainly the public understands it, that while pro- 
 ducers in Great Bntaln mter se have no absolute right 
 to their advantage of geographical position to the 
 detriment of the consumer, where the producer is a 
 foreigner this rule is reversed. 
 
 But let us leave this point and come to another 
 and a more important one.
 
 96 
 
 CHAPTER V 
 
 WHO SHALL FLX THE RATE? 
 
 The very fact that railway rates must affect such im- 
 portant interests over so wide an area is not infre- 
 quently advanced as a reason why the power to fix 
 rates should not be entrusted to private individuals 
 at all. " We object," said one trader, frankly, before 
 the Committee of 1881, "to a railway manager acting 
 as a special providence to set up one town and pull 
 down another." Other traders press their objection 
 not because they dislike a despotism, but because 
 they look upon the despot as ignorant of the subject 
 with which he attempts to deal. Before the Board of 
 Trade representatives at Westminster last year the 
 point was strongly pressed that only those who were 
 in the trade themselves could judge what classifica- 
 tion was just, or what rates the trade could bear. A 
 third objection has been taken. It is expressed as 
 follows by Mr. Jeans : '— 
 
 " The w'ell-known custom of the railways is to 
 profess to carry out the spirit of the law, which 
 required that they should treat alike all traders in the 
 same description of merchandise in the same locali- 
 ties ; but they make differential rates by allowing 
 ' Raihvay Ffoblcms, pp. 293, 294.
 
 cii. V. SECRET REBATES 97 
 
 large rebates and discounts, and there is probably no 
 company that has not got secret arrangements of the 
 kind." And again : " There is not a single trader in 
 the country who is not well aware that the railway 
 companies do not, as required by the Traffic Act, 
 avoid undue or unreasonable preference or advantage 
 in favour of particular persons or descriptions of traffic ; 
 that they do not, as required by the Railways Clauses 
 Consolidation Act, 'charge the same tolls equally at 
 all times to all persons ; ' and that the)' do not, as re- 
 quired by the same Act, exhibit all charges actually 
 made upotT one toll-board or more, in distinct black 
 letters on a white ground, in some conspicuous place 
 on the stations." 
 
 Let us deal with these points seriatiiu, and though 
 Mr. Jeans's point comes last, we will take it first, be- 
 cause, if the railway managers are, as Mr. Jeans says, 
 dishonest, the fact must largely aficct our view of the 
 whole question." No one ever suspects the permanent 
 civil servants of the Crown of dishonesty. And dis- 
 honesty is so serious a matter — has produced, for 
 instance, in the United States, such terrible results — 
 that if honest management cannot be got from the 
 
 - On the blackboard count, if thrice their size, if they were to 
 Mr. Jeans's law had been correct, aflbrd wall-space for the Parlia- 
 the managers would, perhaps, have mentary blackboards. But in fact 
 been wise to plead guilty, and if the clause of the Act to which Mr. 
 asked what extenuating circum- Jeans refers does not deal with 
 stances they could allege, to point " charges actually made " at all, 
 out that a literal compliance with but only with tolls. After the dis- 
 the Act would have caused a cussions of the last few years it 
 famine in Baltic timber in the may, I think, be assumed that the 
 Surrey Docks, while exiguous reader least familiar with the sub- 
 station premises, such as those of ject knows the distinction between 
 St. Pancras or Paddington, would a toll and a rate or a charge. 
 have needed to be enlarged to 
 
 H
 
 98 WHO SHALL FIX THE KATE ? en. v. 
 
 existing raihva\^ managers, most of us would be in- 
 clined to advocate, if not State ownership, at leasta very 
 stringent measure of State control. Let us see, there- 
 fore, what the evidence is. In the old days of railways, 
 there is no question that advantages were given to 
 one trader above another for private reasons. Small 
 blame to the railway men of those days if it was so. 
 A wholesale merchant nowadays does not consider 
 himself a misdemeanant because he allows a per- 
 sonal friend to obtain a retail quantity of goods at 
 wholesale price, and in the early da}-s the public 
 character which distinguishes the trade t)f railways 
 from the trade of private firms had not been suffici- 
 ently appreciated. It was to put a stop to this that 
 the Act of 1854 was passed. If we may judge from 
 exhaustive investigations which have taken place since 
 then, that Act has not failed of its purpose. 
 
 The Royal Commission of 1867 reported as fol- 
 lows: "It is due to the railway companies to state that 
 whatever may have been the transactions of the com- 
 panies at the commencement of railway enterprise, it is 
 now generally regarded by them as impolitic to grant 
 any preference tending to favour individual traders, 
 and some managers disapprove of the transmission of 
 large quantities of goods on more favourable terms than 
 smaller quantities. The witnesses examined before us 
 concur in the expression of belief that there is no dis- 
 position on the part of the railway companies to afford 
 personal preference for the special profit of individual 
 traders ; but that the distinctions of rates made by 
 railway companies are based upon considerations af- 
 fecting the profit and interest of the railway companies
 
 CH. V. A VERDICT OF ACQUITTAL 99 
 
 themselves." Again, in 1872, there was an inquiry 
 by a very strong Joint Committee of both Houses. 
 The only allusion to the matter in the report is in 
 these words : " One railway manager almost admits 
 that all traders are not charged equally." But Sir 
 Thomas Farrer, speaking as the permanent official 
 head of the Board of Trade, and taking on not a few 
 points a position strongly hostile to the companies, 
 gives this evidence : " It seems to me that it really is 
 to the interest of the companies to give this publicity. 
 One sees that there are all sorts of suspicion of unfair 
 favour on the part of the traders, but in almost every 
 case, when it comes to be sifted, it is shown that there 
 is very good reason for Vv-hat is done ; and why should 
 not the companies let the traders know it .''" Lastly, 
 the Committee of 1882 dealt with the subject very 
 definitely, and this is what they say : " Your Com- 
 mittee report that on the whole of the evidence they 
 acquit the railway companies of any grave dereliction 
 of their duty to the public. It is remarkable that no 
 witnesses have appeared to complain of ' preferences ' 
 given to individuals by railway companies as acts of 
 private favour or partiality, such as were more or less 
 frequent daring the years immediately preceding the 
 Act of 1854." 
 
 As far as the present writer is aware, no trader 
 brought any charge of this kind before the recent 
 Board of Trade Inquiry at Westminster. This being 
 so, Mr. Jeans's language is, to say the least of it, 
 unfortunate. " Secret arrangements for large rebates 
 and discounts " might naturally be supposed to imply 
 dishonest arrangements. As there is no published
 
 lOO WHO SHALL FIX THE RATE ? ch. v. 
 
 evidence in support, it really is Mr. Jcans's duty to 
 produce it. The injured trader need not be deterred 
 by considerations of expense. If he has got a good 
 case, it is quite worth his while to bring- his action. 
 A differential rate, not granted dishonestly but in all 
 good faith, is understood to have involved a Scotch 
 Railway Company recently in damages and costs 
 estimated at something like 140,000/. 
 
 A similar charge is insinuated— it is not made in 
 definite terms — in the Report to the Lancashire and 
 Cheshire Conference. After asserting that " railways 
 have had granted to them the virtual monopoly of 
 the highways of the kingdom," ^ which is only another 
 way of saying that the members of the Conference 
 have not sufficient belief in their own reiterated 
 assertion that railways ought to be able to charge 
 lower rates to induce them to put their money into a 
 competing line ; the Report goes on to formulate as 
 one of the demands of the traders that the companies 
 shall " give no private advantage or favour to anyone, 
 even though it might seem for their own immediate 
 benefit to do so." By all means let the traders hammer 
 on an open door if it pleases them. But when their 
 neighbours ask what the noise is about, let us not be 
 put off with a disingenuous insinuation that they 
 fancied the door had been kept shut in their faces all 
 the time. 
 
 * It will no doubt be said that profit by the fact that ihcy or their, 
 the existing companies have ob- lathers had the courage and the 
 tained access to towns which could foresight to put their savings into 
 only be secured nowadays a: a building the Liverpool and Man- 
 cost that is virtually prohibitory. Chester line, though the j^ractical 
 Be it so. Have the North VV^st- men told tliem tliat they were 
 ern ])roprietors then no right 'o going to bury them in Chat Moss
 
 cii. V. TRANSPORTATION EXPERTS lOI 
 
 But even grantinc^ the honesty, it is asserted that 
 raihvay managers lack the requisite knowledge. 
 Doubtless they do. If there be one man who ought 
 to take all knowledge to be his province, that mail is 
 a railway goods manager. No doubt it is also true 
 that the goods manager knows less of the iron trade 
 than an iron-master, less of the cotton trade than a 
 Liverpool cotton-broker, less of the corn trade than a 
 Mark Lane corn merchant, and so on. At the same 
 time, it is probable, not only that he knows as much 
 about the transportation of iron or cotton or corn as 
 the specialists, but also that he knows very much more 
 about cotton and corn than the iron man, and very 
 much more about iron than the man who deals either 
 in corn or cotton. No man can know everything, and 
 just as the iron-master, and the cotton-broker, and the 
 corn-factor may all go to the same solicitor and the 
 same counsel for a legal opinion, on matters affecting 
 their respective trades, so it may well be that the best 
 opinion any one of the three can obtain on a question 
 of transportation is that which will be given them by 
 the transportation expert. 
 
 Here, as it seems to me, is where the case, put with 
 
 When a Lancashire or Cheshire profit, the superior economy of 
 
 trader devotes years of hi.; life his process enables him to pro- 
 
 and thousands of pounds to per- duce at a cheaper rate goods which 
 
 fecting some new process of spin- command the full price in the 
 
 ning or Aveaving, and his inven- market ? And as, with a com- 
 
 tion at length turns out a success, placent chuckle, he puts the whole 
 
 does he look upon himself as a of the difference into his own 
 
 "virtual monopolist," bound to pocket, does he not tell himself 
 
 give the whole benefit to the that it is to the enterprise of 
 
 public at large ? Does he not private capitalists, stimulated by 
 
 rather congratulate himself that, a legitimate hope of personal 
 
 while his rivals may have to be advantage in return, that England 
 
 content with a narrow margin of owes her commercial supremacy ?
 
 102 WHO SHALL FIX THE RATE ? en. v. 
 
 great force of language in the Lancashire and Cheshire 
 Conference Report, breaks down. The Report com- 
 plains that the railway managers claim the right to 
 settle the classification for themselves ; that, while 
 they are ready to hear what the traders have to sa}-, 
 they refuse to allow them a voice in the final deci- 
 sion. The writers, however, hardly make out their 
 case. The proceedings of the traders themselves on 
 this very classification question show where their 
 knowledge of the subject falls short. They claimed, 
 for example, that vinegar and British wines ought 
 fairly to be placed in the same class as beer. From 
 the trader's point of view, they were no doubt correct. 
 The articles were not dissimilar in value, difficulty 
 in handling, liability to damage, and so forth. But, 
 from the carrier's point of view, the gap between 
 them was a wide one. The one traffic goes in train 
 loads, the other a barrel at a time. The railway 
 contention, that from the point of view of the carrier 
 British wine is one thing and beer quite another, is 
 surely justified by this single fact. Or take another 
 instance. The tin-plate trade, with their eye on the 
 immense traffic in their staple to Liverpool for ex- 
 port, protested naturally enough against the rate the 
 railways proposed to fix in the schedules. " Quite 
 right," replied the railways, " if all the traffic went to 
 Liverpool in truck-loads, but you forget that a com- 
 pany like the Great Eastern only meets with tin plates 
 in the form of a single box sent down from London 
 to the local tinsmith. You cannot expect the Great 
 EasLern to deal with this traffic at the wholesale rate." 
 Let it, however, be frankly admitted that, when
 
 cu. V, NOT AN EXACT SCIENCE IO3 
 
 all is said and done, the ignorance and the short- 
 sightedness of the goods manager must remain a 
 source of difficulty. He gives a special rate in one 
 place and the traffic grows and prospers under 
 it. But when he invites us to accept this prosperity 
 as a proof of his wisdom, we may reply, " What 
 about the traffic that doesn't go ? What about the 
 traffic which might have been developed at all the 
 other places in the neighbourhood, if it had not been 
 handicapped out of the race by the special rate which 
 you gave to a single point." The question is of 
 course unanswerable. It depends upon a calculus 
 of probabilities whose value every man must esti- 
 mate for himself What the goods manager would 
 reply if he is wise, is, that, as the fixing of rates is 
 not an exact science, there must be left a discretion 
 somewhere, and there is no evidence that anyone 
 else would have exercised it better than he has done. 
 People often speak as though the fixing of rates 
 were something done by a single irresponsible in- 
 dividual, and they say — fairly enough, doubtless, if 
 their premisses were correct-^that the task is one 
 which should be entrusted to an individual who 
 represents, not the private interests of the railway, 
 but those of the nation at large. But if there is any 
 force in the considerations which have been urged in 
 the foregoing pages, it should now be evident that 
 fixing rates is not a matter that can be done in the 
 abstract, it can only be attempted by those who arc 
 in actual contact with the facts, and in a position to 
 judge what the effect of changing one rate will be not 
 only on the particular trade which is directly affected,
 
 104 
 
 WHO SHALL !• IX THE RATE ? 
 
 but on all the other rates which arc left unchanged.' 
 Nor is the task one which can possibly be undertaken 
 by a single man, or even by a small body of men. It 
 is safe to sa)- that, if the power to fix rates were given, 
 as is sometimes proposed, to the Board of Trade, that 
 
 * A remarkable illustration of 
 this is furnished by recent American 
 history. When the system of bring- 
 ing " dressed beef" from the West 
 to the Atlantic cities in refrigerator 
 cars first came into use, the railway 
 companies had to settle what rate 
 they should charge. As far as the 
 individual rate was cor.cerned 
 there seemed to be no special 
 difficulty in fixing it on the ordi- 
 nary considerations. The traffic 
 was of a high class, and could 
 stand a high rate. On the other 
 hand, it was in full truck loads, 
 large in volume and constant, and 
 the consignors, who employed 
 their own men to keep the cars 
 iced, practically were their own 
 insurers. But there was a further 
 and much more serious question. 
 The "dressed beef" trade, partly 
 from natural and partly from his- 
 torical causes, was the monopoly 
 of a few immensely powerful 
 Chicago firms. If the rate was 
 fixed at a point which made it 
 materially cheaper to supply New 
 York with " dressed beef," rather 
 than as heretofore to send in cattle 
 "on the hoof," the following result 
 was inevitable. The Chicago firms 
 would be able to outbid the New- 
 York buyers in the Western mar- 
 kets. Live cattle would cease to 
 be sent Hlast, and the slaughterers, 
 the tanners, the gut-scrapers, the 
 horn-workers, and fifty trades 
 more, would be ruined. The next 
 stage would be that, having ob- 
 tained control of the situation, the 
 
 Chicago houses would l)e able, on 
 the one hand to dictate to the 
 Western producer what price he 
 should receive for his cattle, and 
 on the other to dictate to the 
 New York consumer what price 
 he should pay for his beef. From 
 this prospect the railway com- 
 panies, taught by tlieir experience 
 ill the case of the Standard Oil 
 Company, recoiled. Their com- 
 missioner, Mr. Fink, went to 
 Chicago and took a mass of evi- 
 dence as to the comjiarative cost 
 of the two methods of carrying 
 meat to New York, and then the 
 railways deliberately fixed the 
 "dressed beef" rate at a point 
 which, as compared with the exist- 
 ing rate for live cattle, made it 
 precisely as profitable to adopt the 
 one method of transportation as 
 the other. This was certainly 
 claiming to interfere as a special 
 ])rovidence with a vengeance, and 
 it was easy to declaim against a 
 deliberate attempt to prevent the 
 consumer from getting the benefit 
 of improved business methods. 
 But on the whole American 
 opinion appears to have approved 
 of the action of the railways. An 
 English observer will, however, 
 naturally thinJc that a jiolicyasfar 
 reaching as this ought to be, as it 
 has been for forty years in Eng- 
 land, and would be now in the 
 United States (though it probably 
 was not when the event occurred), 
 subject to review by tlie courts of 
 justice of the country.
 
 PRACTICAL RATi:-MAKING 
 
 10^ 
 
 board would be compelled either merely to register 
 the decisions of the railway companies, to make 
 itself responsible, that is, for actions whose justice it 
 had no power to check, or else to appoint a staff 
 of inspectors all over the country who would be 
 numbered by hundreds if not by thousands. The 
 task \\ould be an expensive one, for the Board of 
 Trade inspectors could hardly be expected to under- 
 take any other employment. Under present circum- 
 stances the railways have their inspectors ready to 
 hand in the station agents, district goods managers, 
 canvassers, and others who cannot help unconsciously 
 assimilating information as to the working of each 
 particular rate in the course of their ordinary avoca- 
 tions.' 
 
 ^ On this point the evidence of 
 Mr. Fink before a committee of 
 the United States House of Re- 
 presentatives in 1882 is worth 
 quoting. He was deaHng with a 
 bill which had been referred to 
 the committee, providing for tlie 
 appointment of nine commis- 
 sioners, with power to fix maxi- 
 mum rates throughout the country, 
 and this is what he said : " It 
 would be utterly impossible for 
 nine men to regulate the trans- 
 portation tariffs over one hundred 
 thousand miles of railroad with 
 the view of making them just to 
 the public as well as to ihe railroad 
 companies. To perform this work 
 intelligently and properly it would 
 require the duplication of just such 
 an immense organisation as the 
 railroad companies now possess 
 for the very same purpose. Each 
 one of these twelve hundred rail- 
 road companies has at least one 
 officer who has special charge of 
 
 tlic tariffs of the road, and who 
 often has many assistants, all 
 trained experts in the transporta- 
 tion business, and who from many 
 years' experience on particular 
 roads, understands the wants of 
 the people who are served by these 
 roads. The officers are in constant 
 contact with the shipping [i.e. for- 
 warding] communities either per- 
 sonally or through agents espe- 
 cially appointed for that purpose, 
 or through the many station agents 
 located along the lines of the roads. 
 The latter are in constant com- 
 munication with the shippers 
 [traders], and are in a position to 
 know exactly their wants, receive 
 their requests, hear their com- 
 plaints, and report the same to 
 the superior officer. In this way 
 all the facts that are necessary to 
 be considered in the establish- 
 ment of tariffs are brought before 
 the proper authorities, who are 
 enabled to take intelligent action
 
 io6 
 
 WHO SMALL FIX THE RATE ? 
 
 It may be added that, since Mr. Fink gave the 
 evidence just cited, the United States Commission 
 on Inter-State Commerce has come into operation. 
 It has no control over traffic which arises and ter- 
 minates within the frontier of a single State, nor does 
 it attempt to fix rates. Apart from its judicial duty 
 of deciding in individual cases brought before it by a 
 specific complainant, it merely collects and files in- 
 formation as to tariffs and rates. Yet for this purpose 
 it requires a staff of scores of clerks. The sum 
 originally set apart by Congress for the expenses of 
 the Commission was 20,000/. per annum, and here is 
 what the Commission says on the subject in its first 
 Report : — 
 
 thereupon. Assuming that these 
 station agents are located along 
 the line of these roads at a dis- 
 tance of five miles apart, there 
 would be ten thousand agents, who 
 report to the general freight 
 agents, and who bring the ship- 
 pers in direct contact with the 
 head of the railroad administra- 
 tion, enabling it to judge of the 
 wants of the people and to in- 
 telligently establish the tariffs. 
 
 It is not reasonable to suppose 
 that nine commissioners, who 
 stand entirely outside of these 
 organisations, who have no such 
 means of acquiring correct infor- 
 mation, and who perhaps, in the 
 first place, may have no know- 
 ledge of, much less experience in, 
 the transportation business, could 
 evolve out of their own minds just 
 and proper transportation tarifts, 
 or could control, even if they were 
 possessed of the highest accom- 
 plishments in that direction, a 
 work that requires the services 
 and agencies of twenty thousand 
 
 people, who although not exclu- 
 sively engaged in this business, 
 wdiose services are necessary for 
 the intelligent and proper conduct 
 of the business. A work of this 
 kind, if it is to be done effectually 
 and properly, cannot be concen- 
 trated upon nine men. 
 
 In France, with but 12,000 
 miles of railroad instead of 100,000 
 miles as in this country, where 
 there is governmental control of 
 the railway tariffs, there is a board 
 composed of thirty-three men, with 
 the Minister of Public Works at 
 their head, all the members being 
 educated experts and men of 
 thorough experience in railroad 
 management. The establishment 
 of such a commission, composed of 
 men who are at least as competent 
 to deal with these questions as the 
 railroad managers themselves, 
 might be justified — from the point 
 of view, that is, as Mr. Fink went 
 on to explain, of practical pos- 
 sibility, as distinguished from the 
 question of justice or expediency.
 
 en. V. A LARGE UNDERTAKING IO7 
 
 " The force of assistants which the appropriation 
 made by the Act enabled the Commission to engage 
 is so small that any steps in this direction of prepar- 
 ing model forms of tariffs and classifications have up 
 to this time been quite out of the question. Some 
 idea of the labour devolved upon this clerical force 
 may be formed when it is known that as near as can 
 now be estimated 110,000 books, papers, and docu- 
 ments showing rates, fares, and charges for transporta- 
 tion, and contracts, agreements, or arrangements be- 
 tween carriers in relation to intcr-state traffic have 
 been filed in the office of the Commission, all of which 
 require appropriate classification and systematic 
 arrangement. It has been quite impossible to do 
 more with these than acknowledge the receipt, classify 
 and index them, and put them in order for reference. 
 The organisation of a general system upon which 
 they might most usefully be made has not been 
 attempted, nor even any systematic investigation of 
 their contents for the purpose of observing to what 
 extent the provisions of the Act to Regulate Com- 
 merce is complied with in their preparation." 
 
 Of course the traders are discontented with the 
 result ; it would be no paradox to say that, if they 
 were all equally discontented, that would be the 
 best possible testimony to the skill and impartiality 
 of the existing officials. The business of the goods 
 manager is, as we have seen, to extract a certain 
 revenue, sufficient to pay expenses and 4^ per cent 
 interest on capital, out of A, B, C, D, and the rest of 
 the alphabet. If A is satisfied with the share of the 
 burden that is laid upon him, it is tolerably good evi-
 
 I08 WHO SHALL FIX THE RATE? cii. v. 
 
 dencc that B, C, and D arc paying a little more than 
 their just proportion ; but if all the lot cry out, an 
 impartial observer will be apt to think that the 
 arbitrator must have adjusted the burden with re- 
 markable equity. 
 
 The objection will no doubt here be taken that it 
 is absurd to describe a railway goods manager as an 
 arbitrator. An arbitrator has no interest in the 
 question at issue, the railway manager's business is 
 to extract the utmost possible profit for his company. 
 The answer to this is, that that docs not prevent him 
 arbitrating fairly as between the different classes of 
 traders. The master of a house, for instance, might 
 be trusted to bring to the decision of the question^ 
 whether a certain domestic operation belonged to the 
 department of the housekeeper or the butler, a mind 
 unbiassed b}' the consideration that the household 
 collectively was responsible for performing the whole 
 work of the establishment. 
 
 Then there are not a few checks upon the arbitrary 
 volition of railway companies. In the first place, there is 
 a most wholesome dread of alienating public sympathy. 
 People talk of the irresponsible tyranny of bloated 
 monopolists, but if any single member of the public 
 wmII go boldly into the ogre's den, say at Paddington 
 Cross or King's Euston, it is quite possible that he 
 will find the monster cowering beneath the latest on- 
 slaught of the " Evening Sputtcrcr." And, indeed, 
 apart from the natural desire to be well spoken of, as 
 a mere matter of self-interest it is well worth the 
 while of any raihva}' company to make considerable 
 sacrifices in order to stand well with the public.
 
 CH. V. THE rOWER OF PUBLIC OPINION IO9 
 
 Any one who has paid attention to the subject 
 could give instances where railwa\' companies hav'e 
 obtained very considerable traffic from their rivals, 
 simply on the ground of a reputation for fairness and 
 liberality. Further, it may be said that no railway 
 company has an interest in extorting from the public 
 more than a reasonable remuneration for its services. 
 We have seen already how fractional a part of the 
 whole capital of the companies is that which is pay- 
 ing any exceptional rate of interest ; and it must be 
 remembered that if the past is any guide to the 
 future, the 8 per cent, dividends of 1889 will be 6 
 per cent, when the next wave of depression arrives. 
 No one knows better than the railway managers 
 themselves that any permanent increase of revenue 
 must, in some form or other, be shared with the public. 
 Let us assume, for the sake of argument, that 
 it is correct that the goods rates have not been re- 
 duced for forty years past, that the traders are paying 
 not onl}^ the same price, but the same price for the 
 same services, as they did in the year of the Great 
 Exhibition. Even then, there would remain the fact, 
 which every man over fifty can verify from his own 
 personal knowledge, that passenger fares have practi- 
 cally been reduced in the proportion of two or three 
 to one. It is impossible to deny that a third-class 
 passenger of to-day gets, over the greater part of the 
 country, for one penny a mile, accommodation which 
 is better in every respect than the first-class passenger 
 of forty years ago got for threepence. Even sup- 
 posing class were to be compared with class, the 
 same thing holds to a great extent. A newspaper, a
 
 no WHO SHALL FIX THE RATE? en. v. 
 
 short time back, asserted that " nothing had been 
 done to make the first-class or second-class carriage 
 better or cheaper than it was thirty years ago." The 
 present writer took the trouble to check the state- 
 ment, and he found that between 1858 and 1888 the 
 amount of space alloted to a first-class passenger on 
 the North Western had risen from 26 to 90 cubic feet, 
 that the fare to Liverpool had fallen from 45^". to 29^-., 
 and to Carlisle from 66s. to 40s. 6d. 
 
 The desire to retain the good opinion of the public 
 is not the only influence which operates to keep the 
 railway managers on their good behaviour. Competi- 
 tion is always visible as a warning figure in the back- 
 ground. But competition, say the traders, is of no 
 use. After a time the new company comes to terms 
 with the old, and an agreement is made between them 
 to maintain rates. This, no doubt, is true, but it is 
 also true that at the early period of the competition 
 the rates are usually reduced, and that they seldom 
 go back again to their original point. Witness the 
 rates just quoted to Carlisle and Liverpool, both of 
 which were the result of Midland competition. 
 Again, the construction of a competing line, except 
 in cases where the existing line is absolutely full, is 
 always a very severe blow at the prosperity of the old 
 one. It is common to speak as though, if one line 
 can pay 5 per cent, on a certain capital, two lines be- 
 tween the same points, both equally expensive, should 
 each earn 2^ per cent. ; but that this is very far from 
 being the case can be easily shown. As we have seen, 
 under English conditions of service, each train from 
 A. to B. earns five shillings a mile. Now imagine these
 
 en. V. POTENTIAL COMTETITION III 
 
 trains duplicated, and suppose, which fortunately is 
 not entirely true in practice, that they do not develop 
 any new traffic. Their earnings will now fall to 
 2s. 6d. a mile. For the new company must give as 
 good a service as the old one, if it wants to induce the 
 public to come to it, while the old one dare not reduce 
 its accommodation for fear it should lose even more 
 than half the traffic. Both companies, therefore, 
 instead of earning ^s. a mile, come down to 2^". 6d., 
 and 2s. 6d., as we have seen, while it will pay the 
 whole of the working expenses, will leave nothing 
 whatever for interest on capital. 
 
 English people have never seen a case of this kind, 
 because no English compan}- has ever had its lines 
 paralleled from end to end. But this is practically 
 what happened in America a few years back in the 
 case of the West Shore and the " Nickel Plate " rail- 
 ways. The capitalists who found the money for these 
 undertakings reasoned apparently on the theory that 
 if the existing New York Central Company was earn- 
 ing 8 per cent, and they could get half the traffic, they 
 would be able to earn a dividend of 4 per cent. But, 
 for the reasons we have stated, they reckoned without 
 their host. The dividend on the New York Central 
 side of the Hudson River disappeared altogether, 
 but without emerging across the water. Railway- 
 managers, however, are fully able to appreciate the 
 significance of these facts, and a railway manager will 
 do a good deal to avoid furnishing the idea of a com- 
 peting line with a congenial soil to grow in. When, 
 therefore, traders assert that competition between 
 companies affords them no protection, we reply that.
 
 112 AVIIO SHALL FIX THE RATE? ch. v. 
 
 even if it were true that competition between existing- 
 companies does not — and it is not true because, if a 
 draper who has been accustomed to measure his stuff 
 carefully, begins to sell a yard and a quarter as a yard, 
 it is nonsense to say he has not reduced his prices — 
 competition of non-existing but possible companies 
 affords them a great deal. 
 
 There is another protection to which the traders 
 can trust^that, namely, of the law. The law on the 
 subject of discrimination and undue preference has 
 been laid down in the course of forty }'ears in very 
 considerable detail, and the upshot of it all is 
 this : — That a railway company at its peril — and 
 the peril is, as was shown in the Scotch instance 
 quoted some pages back, a prett}' serious one — gives 
 to any one trader or any one trade or any single 
 locality a rate which it cannot justify when compared 
 before an impartial tribunal with the rates which it 
 has given to all the other traders and trades and 
 localities over the whole of its system. Now, it is 
 easy to argue, and the point is one that must be dealt 
 with presently, that the Acts of '54 and 'y;^ and 'd>^ 
 have fettered the railways too tight, have kept rail- 
 way rates up by making a local and tentative reduc- 
 tion too dangerous, but to say that they have left the 
 traders at the mercy of some despotic railway manager 
 is really ridiculous. If the traders of Bradford really 
 feel that they are unfairly treated in comparison with 
 Manchester, if the merchant princes of Liverpool 
 really think that their geographical position is unfairly 
 attacked, they surely can afford to subscribe 1,000/. 
 amcngst them and test the question. If they will not,
 
 cii. V. CONTINENTAL ALTERNATIVES II 3 
 
 or cannot, one may be forgiven for believing that their 
 grievance cannot be a very serious one. 
 
 Now of course no reasonable person will argue 
 that the present system of fixing rates is absolutely 
 satisfactory. There are believed to be a hundred 
 millions of them in existence, and in that number it 
 would be very strange if there were not a good many 
 which were too high, a good many which were too 
 low as compared with others imposed under parallel 
 circumstances ; a great many, in fact, which for one 
 cause or another could not be justified, in some 
 instances legally before the Railway Commission, in 
 other instances as matter of policy before a tribunal 
 of perfectly enlightened and perfectly dispassionate 
 railway experts. The practical question is, not 
 whether the present system is perfect or imperfect, 
 but whether any system which can be substituted for 
 it would be likely to produce better results. 
 
 There seem to be two possible alternatives to our 
 English systcni of freedom to private managers to vary 
 their rates within the limit of their statutory maxima, 
 and subject to appeal to a court of law. The one, the 
 German system of downright State-purchase; the other^ 
 the French system of a State Board of Control. Of 
 State purchase, we may have something to say later 
 on. Let us here notice what might be expected to be 
 the effect of the French system. We are not con- 
 cerned now with the question, whether the English 
 Government, which has done nothing for the com- 
 panies, would have any moral right to claim such 
 a control. The French people have paid nearly 
 
 I
 
 114 WHO SHALL FIX THE RATE? ch. v. 
 
 200,000,000/. sterling in capital outlay, and continue 
 to pay some millions per annum in the form of 
 guaranteed interest, to the railway companies, and 
 though some observers may think that they have got 
 uncommonly poor value for their money, no one will 
 deny that at least they have purchased a right to the 
 authority which they exercise. 
 
 The question for us to consider is merely whether 
 on the whole the State control of tariffs does or does 
 not benefit the trade of the country. It does not, as 
 we have seen by the instance of the differential rates 
 for Spanish and French wine, prevent the French 
 railways from " favouring the foreigner," who, indeed, 
 is favoured in all directions by special transit rates 
 from Marseilles, from Italy, and Switzerland, to the 
 Channel ports and vice versa. One thing it does do 
 and that a very serious one ; it involves the Govern- 
 ment of the country in the unpopularity with which 
 these rates there as here are received.. Still less does it 
 succeed in producing any of that beautiful mathemati- 
 cal simplicity of rates based on cost phis a percentage 
 of profit, which Professor Hunter and his friends so 
 fondly desiderate. According to the writer from whom 
 we have already quoted, 80 per cent, of the total goods 
 traffic of France was in the year 1886 done at special 
 rates. In other words, the Minister with the advice 
 and assistance of his thirty-three experts — and no 
 one who knows the splendid training which French 
 railway men receive will doubt their technical skill 
 — having fixed a tariff to the best of his ability, sub- 
 sequently finds that Nature is too strong to be held 
 by Government red tape, even of the most superior
 
 CH. V. HAVE WE GOT THE MEN? I15 
 
 qualit}', and in four cases out of five is forced cither to 
 withdraw or to modify his decisions. 
 
 Now it would almost be a sufficient answer to any 
 proposal to adopt the French system here, to point 
 out that, outside the service of the railway companies 
 themselves, this country is incapable of producing, 
 not merely thirty-three, but three railway experts. 
 If it could, there is no reason whatever to imagine 
 that their decisions would be generally acceptable. 
 Here at least we are not without recent experience to 
 guide us. After working at the subject day and night 
 for nine months, Lord Balfour of Burleigh and Mr. 
 Courtenay Boyle did, as representing the Board of 
 Trade, arrive last August — with the assistance of the 
 ablest men at the Bar, and the best expert evidence 
 available in the country — at drafting a schedule, not of 
 rates to be actually charged, but of statutory viaxima 
 — needless to say, a comparatively simple affair. To 
 any one who is qualified to appreciate the difficulty 
 of their task, the success which they achieved will 
 seem cjuitc remarkable. Even so, there were instances^ 
 few no doubt in proportion to the total number of 
 rates, but actually very numerous, in which — as in the 
 example of the rate for grand pianos quoted a few 
 pages back — it can hardly be argued that their de- 
 cision was in the interest either of the railway com- 
 panies or of the public at large. But what has since 
 happened ? The railway companies and the traders' 
 associations have each expressed their profound dis- 
 satisfaction. Portions of the case — no one quite 
 knows which — have been reheard in canicrd — no one 
 quite knows by whom— and in the Brovisional Orders 
 
 I 2
 
 Il6 WHO SHALL fix the rate? en. v. 
 
 jus^ submitted to Parliament the draft schedules of 
 Lord Balfour and Mr. Boyle have been subjected to 
 wholesale modifications. If railway companies and 
 traders are not still more dissatisfied than before, they 
 certainly ought to be, for the new schedules are unques- 
 tionably much less capable of a logical defence than 
 the old. Moreover, their changes are based on ex 
 parte statements, which the other side has not only 
 had no opportunity of cross-examining, but even has 
 in some instances had no chance of hearing. 
 
 And at this point the case must go before the final 
 tribunal of Parliament. With the considerations 
 which should guide the two Houses in the decision 
 we must deal at a later point. Meanwhile, the present 
 writer will venture on this prophecy — and any one 
 who has studied the history of railway legislation in 
 the Western States of America will be ready to admit 
 its .'Z/zw/v' probability — that if Parliament passes the 
 Board -of Trade Provisional Orders at all in their 
 present form, the agitation on the subject of railway 
 rates will increase tenfold in force and volume. The 
 one man whose rate is raised — and the companies are 
 sure to raise some rates in the attempt to prevent as 
 far as they can a reduction of dividend — will make 
 his disapproval audible above the whispers of satisfac- 
 tion from the ten who liave secured an almost im- 
 perceptible reduction ; and members of Parliament, 
 who had fondl},' fancied a disagreeable questicMi 
 settled, will find themselves confronted with the 
 problem in more formidable shape than ever. They 
 will have to face the alternative, either to acknowledge 
 their mistake and to retrace their steps, leaving to the
 
 CH. V. POLITICAL CONSIDERATIONS 11/ 
 
 railway companies the responsibility of selling an 
 article of commerce to their customers on commercial 
 terms — subject al\\a)-s to the stringent control of 
 public opinion and the law courts — or else to assume 
 to the State the direct responsibility of managing the 
 railways and pa}Mng the interest on 876,000,000/. of 
 railway capital. 
 
 But of this more anon. Let us go on to notice 
 here one necessary effect which would be produced, if 
 it were proved permanently possible for a Government 
 department to fix rates ab extra. Imagine, no impos- 
 sible supposition, that one member for Liverpool was 
 President of the Board of Trade, and that the same 
 great city had another representative in the Cabinet : 
 would there be much chance of Liverpool being, as its 
 citizens would call it, " deprived of the advantages of 
 its geographical situation," by reasonable concessions 
 to Barrow or to Fleetwood, even though such con- 
 cessions might not only be for the benefit of these 
 two equally deserving towns, but also for the advan- 
 tage of the English consumers generally ? The ques- 
 tion paper of the House of Commons is not too short 
 at present, but imagination shrinks from conceiving 
 the dimensions to which it would grow if the Presi- 
 dent of the Board of Trade were to be liable to be 
 called to account every afternoon, not only for the 
 rates he had given, but also for those he had refused 
 to give. People may appeal to the analogy of the 
 Post Office, and assure us that this department has 
 been kept absolutely free from the suspicion of poli- 
 tical influence. Possibly ; and when they can go on 
 to tell us that postage stamps are one of the largest
 
 Il8 AVHO SHALL FIX THE RATE? en. v. 
 
 items in a merchant or manufacturer's expenditure, 
 and that the department is in the habit of selling 
 penny stamps to one man for a halfpenny, and to 
 another man for a penny farthing, for reasons which, 
 however good in themselves, are absolutely invisible 
 to the casual observer, then, but not till then, there 
 will be some point in the analogy. 
 
 In brief, the position is this : — A Government de- 
 partment, regulating tariffs ab extra, will either permit 
 the present system of discrimination and competition 
 to go on, in which case it will assuredly be accused of 
 acting from political motives, however unfounded the 
 charge may be, or, on the other hand, and this is much 
 more probable, it will, like the German Government, go 
 as near as it can to the cost of service principle. Now 
 this, if the considerations urged in the foregoing pages 
 have any force, is diametrically opposed to the public 
 interest. To alter a tariff, to give a special rate here, 
 some special facility there, in order to develop a new, 
 or maintain an old industry, implies much trouble 
 and much responsibility. To refuse the concession 
 implies neither. It is always easy to say that to grant 
 it would be unfair to som.eone else. 
 
 A railway manager, however, is ready to take the 
 risk, because his will be the credit if, as he expects, the 
 alteration results in benefit to his company ; and his 
 directors and shareholders are ready to support him, 
 because they hope for increased dividends. A State 
 official has no such inducement. The blame may be 
 his for not preventing a mistake, the credit of making 
 a success can hardly be so. " Can't you leave it alone ? " 
 is his natural motto. This is no mere theory. Pro- 
 fessor Hadley, who recognises to the full, as every
 
 cH. V. can't you leave it alone? 119 
 
 American must do, the evils of competitive private 
 management, and is by no means blind to the merits of 
 the Continental system, thus sums up the subject/' 
 
 "These principles" (of the Continental Govern- 
 ments) "tend to keep rates up. The roads do not 
 lower the local rates to any extent, but rather raise 
 the through ones. They level up instead of levelling 
 down. They are not occupied with the question how 
 to lower rates, but how to keep the right proportion 
 between existing rates. In trying to decide that 
 matter fairly, they are tempted to put everything high 
 enough to leave themselves elbow-room. In their 
 anxiety to decide what is a fair rate in proportion to 
 other rates under existing circumstances, they neglect 
 the question, ' How can we change circumstances so 
 as to make lower rates .'' ' " 
 
 " One thing is quite clear " — the words arc those 
 of no railway advocate ; they are taken from the report 
 made by Lord Balfour of Burleigh and Mr. Courtenay 
 Boyle on the recent proceedings at Westminster — 
 " the special rates are all fixed at the express insti- 
 gation of the traders. They are granted with the ob- 
 ject of fostering the development of trade, and they 
 have the effect of opening up markets which would 
 otherwise be inaccessible to distant traders." If any 
 one, be he trader or only a mere consumer, wishes to 
 put an end to this state of things, and to return as 
 near as may be to the age of gold, when the Middle- 
 sex farmers had in the London cattle market the full 
 advantage of their geographical position, he cannot 
 do better than devote his energies to securing a 
 Government control of railway rates. 
 
 ^ Raib-oad Tratisportalion, p. 250.
 
 I20 
 
 PART II 
 
 RA /LJrAV PR AC TICE 
 
 CHAPTER VI 
 
 SOME EXTORTIONATE RATES 
 
 We have dealt with the question wlicther Enghsh 
 rates as a whole can be fairly called extortionate. 
 Let us now see whether, though inapplicable to the 
 rates as a whole, this condemnation of certain indi- 
 vidual rates or classes of rates may not after all be 
 deserved. First of all let us consider what the word 
 itself means. " Extortionate " is sometimes used 
 merely to imply a rate which the trader would prefer 
 not to pay. The leading counsel opposed to the 
 railway company at the recent Board of Trade 
 inquiry expressed very much this idea in the follow- 
 ing remarkable words : " Surely a rate that would 
 stop the traffic cannot be a reasonable rate." Accord- 
 ing to the Board of Trade report, a large section of 
 the traders were of the same opinion. One gentle- 
 man, indeed, on their side put his case forward in 
 these words, which deserve to become classic : — 
 
 " Lerwick. 
 " What we want is to have our fish carried at half 
 present rates. We don't care a whether it pays
 
 en. VI. THE TYPICAL TRADER 121 
 
 the railway or not. Railways ought to be made to 
 carry for the good of the countr)-, or they should be 
 taken over by the Government. This is what all 
 traders want, and mean to try and get." 
 
 It is interesting to observe en passant that the 
 Berwick gentleman has the shrewdness to perceive 
 that railways being taken over by the Government is 
 by no means necessarily the same thing as their 
 carrying for the good of the country. But it is not a 
 little remarkable that so able a man as Mr. Balfour 
 Browne should commit himself, even for a moment, to 
 such a statement as that a rate which would stop the 
 traffic cannot be a reasonable rate, when it is perfectly 
 obvious that with nine-tenths of the potential traffic 
 it always must be a question whether it can bear 
 the cost of transport. No one surely doubts that 
 passengers would travel more if tickets were given 
 away gratis, or that coal is necessarily dearer, and 
 therefore scarcer, in London than at the pit's mouth, 
 because of the cost of carriage. Peat may be had for 
 nothing on the Surrey commons, but delivered in a 
 London park, a cubic }'ard of it is worth a guinea, and 
 the trees and shrubs have consequently to grow as 
 best they can in the London clay. 
 
 To a great extent the rates have in each of these 
 cases stopped the traffic. Is this fact alone sufficient 
 to prove them unreasonable and extortionate .'' Is it 
 not incumbent on any one who makes such a charge 
 to go on and prove that on these individual rates the 
 company is making an excessive profit t Theoretically, 
 this may be proved in two ways ; by working out
 
 122 SOME EXTORTIONATE RATES ch. vi. 
 
 the actual cost to the company — this, however, as we 
 have shown, is practically impossible — or it may be 
 proved by a comparison wdth other rates under cir- 
 cumstances as similar as may be. Even this latter 
 course is quite an impossibility to an ordinary person 
 with no special knowledge of the subject. So many 
 considerations come in, that, even for a court of 
 justice assisted by the evidence of experts, it is one 
 of the most difficult things in the world to decide 
 whether the circumstances really are similar, whether 
 or no, that is, the rate is a fair one. Certainly the 
 fact that it stops the traffic is no evidence of unfair- 
 ness. It was not denied, for example, before the 
 Committee of 1881 that a rate of 40^-. a ton would 
 have stopped the traffic between Liverpool and 
 London in American beef Yet, the conduct of the 
 North Western was declared to be unreasonable, pre- 
 cisely because their rate did not stop the traffic. 
 
 There are, however, circumstances in which any- 
 body can say that a rate is extortionate. If, for 
 example, as happens repeatedly in America, A. 
 is charged 20 cents, and his neighbour B., alongside, 
 and engaged in the same trade, is charged 16 cents^ 
 for precisely similar services, no one will deny that 
 A.'s rate is extortionate. On this point English 
 railway men are as strong as any trader or any 
 court of justic,e can be. Only they deny that such 
 things happen in this country at all. Before the 
 Committee of 1 881, it was put to Mr. Grierson, the 
 late general manager of the Great Western Railway, 
 whether it w'as not possible for the officials who 
 were responsible for fixing the rates to have friends.
 
 en. VI. NATURAL DISCRIMINATION 1 23 
 
 Here is his answer : " If you mean by that, that they 
 would favour any person, I am happy to say that 
 over a period of thirty years, during which I have been 
 manager of raihvays, I have never known such a case 
 arise either upon the Great Western or any of the 
 Hues I have been connected with, and I do not re- 
 member such a case becoming pubHc with regard to 
 any other company." 
 
 Or again, it may be claimed on behalf of a par- 
 ticular town or district, that its rates taken all round 
 are extortionate ; take a higher range, that is, than 
 those given to other districts for similar distances. 
 South Staffordshire, for example, claims that its 
 rates are markedly higher than those of South 
 Wales or Cleveland. Nor is it possible to deny the 
 fact. The only answer is that Nature, not the rail- 
 ways, discriminates against South Staffordshire. If 
 Providence would remove the sea from the neigh- 
 bourhood of South Wales and Cleveland, the railways 
 might be able to make those districts pay more, and 
 might then be able to afford to let South Staffordshire 
 pay less. Meanwhile the railways have at least done 
 what they can to mitigate the disadvantages of the 
 South Staffordshire position. Thanks to the railways 
 it can compete, not very advantageously certainly, but 
 still it can compete, with Cleveland and South Wales 
 in foreign markets. Without the raihvays, it is im- 
 possible to imagine that it could compete at all. 
 
 As a rule, however, it is not a particular person or 
 a particular place which claims a reduction, so much 
 as a particular class of traffic. Railways are told that 
 they ought to carry iron or coal for nothing, or next
 
 124 SOME EXTORTIONATE RATES cu. vi. 
 
 to nothing, because they are cheap. Or again, fish 
 and milk, because they are clear, and the public 
 cannot afford to buy enough of them. Let us look 
 at these two different classes of traffic a little more 
 particularly. It is of course true, that a main part 
 of the cost of iron-ore or coal is due to railway 
 charges. Still, if it be true, as we have seen in 
 previous chapters, that these articles are already 
 carried at prices which leave less than the average 
 profit for capital, it is evident that the word " extor- 
 tion " is out of place. For all that the charge is made 
 from time to time. There was one instance before 
 the Committee of 1881 ; which is worth notice, both 
 for its own sake, and also for the prominent position 
 of the gentleman who brought it forward — Mr. (now 
 Sir Alfred) Hickman. In brief, his complaint was 
 that the railways, ^vhich proved by doing it the 
 possibility of carrying traffic at less than a halfpenny 
 per ton per mile, should in another place charge him 
 something like threepence for apparently similar 
 services. When, however, the Great Western general 
 manager got into the b(jx, and was asked what he 
 had to say to the suggested halfpenny per ton for a 
 distance of six miles, he unhesitatingly replied that 
 he would much prefer to be A\ithout such traffic 
 altogether. " The traffic would not be worth carry- 
 ing, it would have and must have the effect of block- 
 ing our main line, for the traffic would have to pass 
 up a very hea\y incline, and the rate would be too 
 low to block our main line for it." 
 
 Here is a typical case. The traffic was for a 
 short distance, over heavy gradients, and passing
 
 cii. VI. THROUGH AND LOCAI^ TRAINS 1 25 
 
 along a portion of a great through route. Sir Alfred 
 calculated that the engine could take 240 tons of 
 coal, or say a load of some twenty-eight trucks, 
 and on an ordinary road no doubt he was right ; 
 but the engineer's calculation is that to haul a load 
 up a gradient of i in 50 implies from five to six 
 times the power which is necessary on the level. 
 So Sir Alfred's four-and-twcnt}' trucks shrink to 
 five to start with. Next, he expresses the opinion 
 that " it will cost the same practically per mile in 
 engine power to draw a train a hundred miles as 
 to draw it twenty miles." In fact, he is prepared 
 to maintain that " if an engine has only to draw a 
 truck load six miles distance, you will get as much 
 work out of it as if it \\ent on for a hundred miles 
 right off" 
 
 Let us bring this belief to the test of figures, 
 as produced from actual practice before the Board 
 of Trade inquiry last summer. An engine with a 
 stopping goods train takes 1 1 hours and 20 minutes 
 over the 47 miles between Llanclly Dock and Swansea 
 Valley Junction ; a second engine with a through 
 goods train goes from Paddington to Weymouth, 
 which is almost four times the distance, in forty 
 minutes less time. Another engine takes 10 hours 
 55 minutes in covering the 59 miles from Bristol to 
 Wells and back, while the 194 miles from Paddington 
 to hLxeter is done in /h hours. Through trains, in 
 fact, give an average of 18 miles an hour; short- 
 distance trains an average of five. Or put the 
 comparison another way. Between Paddington and 
 Didcot the work done per hour by the engine of
 
 126 SOME EXTORTIONATE RATES en. vi. 
 
 a stopping train is equivalent to the haulage of i6o 
 trucks one mile. The engine of a through train 
 hauls 493 the same distance in the same time. In 
 plain English, the man who expects as many revenue 
 miles out of the engine of a " pick up " train as out 
 of the engine of a "through goods" is as unreason- 
 able as the man who should expect a letter-carrier to 
 deliver at every house from the Bank to Putney 
 Bridge because that is the average length of a 
 " walk " in the country. 
 
 Mr. Gricrson's third point is, however, much the 
 most important of the three. " We arc not pre- 
 pared," he says, " to block our main line at this 
 price." If it be true, as we have attempted to prove 
 above, that the low-class trafiic at cheap rates seldom 
 or never pays its full share of expenses and profit, 
 but only at best a portion of the latter, we can easily 
 see that no one is ever likely to build a new railway, 
 simply for the accommodation of traffic at a half- 
 penny a mile. A company having a main line not 
 full to its utmost capacity, may be ready to spend 
 money on improving accommodation at one or two 
 points, in order to get the haulage of coal for 150 
 miles even at a halfpenny per mile. But it will never 
 increase its accommodation at those points for the 
 sake of coal which is only going over the line for 
 two or three miles. When, therefore, the line is 
 already full, short-distance traffic must expect either 
 to pay high rates, or to be pushed on one side to 
 make room for the through traffic. 
 
 A moment's consideration will show that this 
 must be so. Short distance traffic cv JiypotJiesi can-
 
 en. vr. SIMPLE ARITHMETIC 12/ 
 
 not repay fifty or a hundred miles further on the 
 cost incurred for it at its point of origin. There on 
 the spot or nowhere it must yield a rate sufficient to 
 pay working expenses plus interest on capital. Now it 
 is safe to say that at the point Sir Alfred Hickman's 
 works are situated between Dudley and Woh^er- 
 hampton, a new line could not be built for less than 
 the average cost of English railways, or say 50,000/. a 
 mile. Take working expenses at 50 per cent, for the 
 sake of argument, this would imply that to pay 5 per 
 cent, interest the line must carry 5,000/. worth of traffic 
 per mile/^rrt;2;;«;«, or say in round figures 100/ worth 
 per w^eek. At a halfpenny a ton this would mean 
 48,000 tons of coal a week, which on heavy gradients 
 would imply at least 480 trains, or So trains /rr diem. 
 Needless to say it is in the highest degree improbable 
 that any such amount of traffic could in fact be 
 furnished. But the matter does not end here. The 
 calculation that a coal train at a halfpenny per ton 
 per mile can be worked for 50 per cent, of the gross 
 receipts is no doubt a fairly accurate one on the under- 
 standing that it is for long distances over ordinary 
 gradients.^ But the engine load in this instance must, 
 as we have seen, be calculated at certainly not more 
 than one-fourth of the average. Further, from the fact of 
 the run being so short, the day's work of an engine must 
 
 > This was Mr. Findlay's esti- York Central at -54, and the 
 mate before the Committee of Pennsylvania at -47. We shall see 
 1881, and corresponds with con- lateron that, owing to the low class 
 siderableaccuracy with the Ameri- of the traffic and the great length 
 can figures. The Erie Company, of lead on American lines, a com- 
 for instance, estimates working parison of their freight train ex- 
 expenses of freight trains at "44 of penses with our coal train expenses 
 one cent per ton-mile, the New is not an unreasonable one.
 
 128 SOME EXTORTIONATE RATES cii. vi. 
 
 be brought down from 120 to not more than 50 miles. 
 Probably therefore it would be a conservative esti- 
 mate to put down working expenses at only 75 per 
 cent. And on this basis 96,000 tons of coal per 
 week, or 160 loaded trains per diem, would need to 
 be sent over the line to pay the capitalists who built 
 it a reasonable return for their money. In fact our 
 analysis comes to this, that no one can afford to build 
 a line for short distance traffic at any rate at all like 
 a halfpenny per ton per mile, unless there is a cer- 
 tainty that the line will get as much traffic as it can 
 carry, and be able to work that traffic in the most 
 economical manner in full train-loads. 
 
 On the \\-hole, however, there is but little dis- 
 content with local rates for low class articles. A 
 somewhat remarkable instance of this fact is afforded 
 by evidence given in reference to Sheffield. Few 
 towns have been harder pressed of late years. More 
 than one famous undertaking has found itself com- 
 pelled by the cost of carriage to move its works, for 
 articles such as rails at least, from Sheffield to the 
 sea-coast. Why this step was taken it is easy to 
 understand. Other countries have begun to catch up 
 England in the manufacture of the coarser and heavier 
 kinds of ironwork, on which a few shillings more or less 
 in carriage will make all the difference between getting 
 and losing a contract. Then Nature, and not the rail- 
 ways, is responsible for the fact that the iron mines of 
 Cleveland and West Cumberland, which are near the 
 sea, have been found of late years to be very suitable 
 for the manufacture of steel. Further, the adoption 
 of the principle of compounding in marine engines
 
 cii. VI. A FRACTIONAL I'KRCENTAGE I 29 
 
 has, for the present at least, decisively given back to 
 sea-transport the accustomed advantage over land- 
 carriage in point of cheapness of which the invention of 
 rail\va\'s seemed for a time almost to have deprived it. 
 
 But, \vhate\'er be the reason, the effect on the 
 trade at Sheffield was equally serious. And yet the 
 goods manager of the Manchester, Sheffield, and 
 Lincolnshire Railway was able to tell the Commit- 
 tee of 1 88 1 that, in spite of advertisements issued by 
 the Railways' Rates and Charges Committee of the 
 Chamber of Commerce, and the Railway Freighters' 
 Protection Society, inviting complaints with the 
 object of bringing them before the Parliamentary 
 Committee, " Throughout the whole of the Sheffield 
 district there has not been a single complaint of a 
 single overcharge upon anything in connection with 
 the Sheffield Railway either over the railways or 
 over the canals." 
 
 The most serious complaints — those which have 
 been most frequently and persistently pressed upon 
 the public notice, have come from persons engaged 
 in industries to which the cost of carriage can never 
 be a matter of more than secondary importance. 
 This can, I think, be readily shown. The rate — 10/. 
 per ton — for bullion from London to Liverpool was 
 quoted some time back. It may safely be taken as 
 representing a standard of charge unknowm in the 
 case of any other less precious commodities. Yet 
 as a tax upon the article transported it represents but 
 one hundredth part of i per cent, of its value. For 
 articles of ordinary trade, we may say that 50^". per 
 ton from door to door, from the docks in London to 
 
 K
 
 I30 SOME EXTORTIONATE RATES ch. vi. 
 
 the warehouse in Yorkshire, or vice versa, is certainly 
 a good deal above the average charge. Now 50^". 
 equals 600 pence, and, therefore, a 50i". rate per ton is 
 in other words a rate of t/t/j^) > or, say, | of a penny on 
 every pound weight conveyed. 
 
 Consider at what rate this charge works out to 
 the consumer. Is it not a percentage of the total 
 sum which he pays so small as to be scarcely 
 noticeable .'' Take tea, for instance, sold in the 
 North of England at 2s. per lb. The railway charge 
 on this amounts to little over i per cent, of the retail 
 price. Is the Yorkshireman soft-headed enough to 
 believe that, if the railway carried his tea gratis, 
 he would get the very slightest concession in price 
 from his friend the grocer .'' Or turn it the other 
 way round : the Bradford goods which go up to 
 London to pay for the tea are worth on the average 
 certainly not less than 2s. 6d. per lb., and out of this 
 the railway claims once more f of one penny, or less 
 than I per cent. Is this a rate which is likely to 
 stifle trade? If it were cut down by one half would 
 the manufacturer be likely to raise his wages ? 
 
 But we are often told — though the reasons for a 
 statement which on the face of it is questionable are 
 never produced — that it is not fair to calculate per- 
 centages on retail cost : we must consider the weight 
 of the burden laid upon the wholesale dealer. Let us 
 do so, therefore, and imagine a London commission 
 merchant engaged in the Bradford trade and turning 
 over, say, 1 50,000/. per annum. This, at 2s. 6d. per 
 lb. once more (and though some of his goods may be 
 worth a little less, the finer qualities will be worth ten
 
 en. vr. THE CASE OF URADrORD I3I 
 
 times as much), would imply that he sold 536 tons per 
 annum. Suppose that half of it comes to London at 
 the local rate of 43^. 4d. and half at the export rate 
 of 3 Si'., his total expenditure, therefore, on railway- 
 carriage and cartage is a little over 1,000/. a year. 
 Now imagine an all-round reduction of los. per ton in 
 these rates — and the chairman of the Railway Com- 
 mittee of the Bradford Chamber of Commerce declared 
 in 1 88 1 that such a reduction would bring salvation to 
 a rapidly perishing industry — the London merchant 
 would save 26S/. per annwn, that is, assuming that he 
 kept the whole of the gain to himself. 
 
 But — in the witness-box at least — no trader ever 
 desires to act as anything more than a conduit pipe 
 through which the whole benefit of cheap rates may 
 flow uninterruptedly to the consuming public. We 
 must not, therefore, imagine a reduction so trifling as a 
 mere \os. — even though it be sufficient to sweep away 
 almost the whole of the railway profit — for \os. per ton, 
 when reduced to the price per yard, is an amount too 
 fractional to be represented in English currency. Let 
 us adopt the doctrine and the language of the gen- 
 tleman from Berwick, and without " caring a 
 
 whether it pays the railway company or not," let us 
 imagine the goods brought to London gratis. In that 
 case there will be 1,000/., or 960,000 farthings, to 
 divide among the purchasers of 1,200,000 yards of 
 woollens— taking a yard as roughly weighing a pound. 
 Not a farthing a yard, unfortunately, so, pending the 
 adoption of a decimal system, it really seems as 
 though, if the consumer is to be benefited, it would be 
 necessary to call upon the altruistic merchant to con- 
 
 K 2
 
 132 SOME EXTORTIONATE RATES ch. vi. 
 
 tribute 240,000 farthings more from his own exiguous 
 profits. What matter though railway shareholders 
 and merchants be ruined, so long as the consumer can 
 effect a total economy of three farthings on the cost 
 of a pair of trousers ? 
 
 Take another instance, that of the Lancashire 
 cotton trade. Manchester has fully persuaded itself 
 that the cotton rates are extortionate, and, largely in 
 consequence of that belief, has invested some eight 
 millions sterling in the construction of its new 
 Canal.- Let us see what these rates are, as testified 
 by Mr. Harrison, Mayor of Blackburn, and himself a 
 cotton spinner, before the Committee of 188 1. Cotton, 
 he tells us, is first carried from Liverpool to Oldham ; 
 there it is spun into yarn, and thence it goes to 
 Manchester for sale ; then from Manchester to Black- 
 burn to be woven ; back to Manchester to be sold and 
 packed for export. Sometimes the cloth, after being 
 sold in Manchester, is sent out again to Bolton or 
 the neighbourhood to be bleached, or even to Lan- 
 arkshire to be calendered, before finally returning to 
 Manchester for the third time to be packed. 
 
 Now, the fact that the trade is conducted in this 
 manner is fair evidence that the railway rates are not 
 
 '^ As a mere spectator, one is advantages of an inland situation 
 bound to wish all success to the will be brought more forcibly home 
 bold endeavour of the Lancashire than ever to the minds of the in- 
 men to place themselves on the habitants of, say, Birmingham, 
 sea, and so in a position to dictate when they see, as they must see 
 rates to the railways. If they — railways being commercial con- 
 succeed, they will only have done cerns, and exposed to commercial 
 for the railway shareholders of to- competition — the companies rais- 
 day what the original railways did ing their Birmingham rates still 
 to the canal proprietors of 1830 higher, in order to recover some 
 and 1S40. But one remark is not jiortion of their loss in Lanca- 
 out of place, that the natural dis- shire.
 
 CH. VI. MIGRATORY COTTON 1 35 
 
 much to complain of. If they were, is it conceivable 
 that Lancashire could afford to play battledore and 
 shuttlecock with its cotton in this fashion ? Would 
 not Oldham weave as well as spin, or would not 
 Bolton and Blackburn arrest the bales on their pas- 
 sage from Liverpool and refuse to let them go till 
 the whole of the processes of manufacture had been 
 completely carried out ? Is it not evident that, if 
 the cost of carriage were a point as vital as we are 
 told it is, the Manchester capitalists would forego the 
 trifling advantage which they gain by this local dis- 
 tribution of the trade, and the trifling further advan- 
 tage which they gain by buying their yarn or their 
 cloth in bulk instead of from sample, in return for the 
 immense saving which they would effect in the cost of 
 carriage? So, at least, one would have imagined if 
 Mr. Harrison had not also told us how fractional the 
 cost of all these numerous journeys — averaging nine 
 times on and off a cart, and five times on and off a 
 railway truck— is when compared with the total value 
 of the product. His figures broadly give 60/. for a ton 
 of raw cotton, 21/. for labour, 64s. \d. for railway rates, 
 as the expenses of placing on board ship in London a 
 ton of cotton cloth valued at 100/.^ 
 
 There is no need to labour this point further. Let 
 
 ' There has been a reduction in lieve that to the cotton-spinner, in 
 the cotton-rates since these figures whose expenses, as we have seen, 
 were given, but too small to affect transportation occupies but a very 
 a rough calculation like the one small place, any practicable re- 
 in the text. Indeed, though six- duction of rate can have any effect 
 pences and ninepences per ton no which will be visible in his balance 
 doubt make a serious difference to sheet, however great be the sub- 
 railway companies, whose sole jective effect produced on his 
 business is the sale of transporta- imagination, 
 tion facilities, it is difficult to be-
 
 1 34 SOME EXTORTIONATE RATES ch. vi. 
 
 any one remember that a charge of one penny /^er lb. 
 would mean a rate of over 9/. per ton, let him 
 realise that it is only an infinitesimal fraction of the 
 total traffic which pays a rate as high as one-third of 
 this amount, or 60s. per ton, that the average amount 
 paid to the railway is much more like 6s. per ton, and 
 he will be able to see for himself that, with the 
 exception of fuel, and in a much less degree of flour, 
 there is no single necessary of life whose cost is at all 
 largely due to railway charges, while when we come 
 to articles, whether they be produce or merchandise, 
 grapes or salmon, Nottingham lace-curtains or Brad- 
 ford woollens, whose value is reckoned by shillings 
 per lb., the charge for conveyance shrinks into absolute 
 insignificance. 
 
 There is, however, one article in reference to which 
 we have heard so much of extortionate railway charges, 
 that it is perhaps as well to examine the case in some- 
 what more detail. That article is fish. There are four 
 main sources of supply for Billingsgate market — as far, 
 that is, as it is served by railway. Herrings come chiefly 
 by the Great Eastern from Yarmouth and Lowestoft ; 
 mackerel by the Great Western either from Cornwall 
 or from Milford ; trawl and line fish, such as cod, 
 haddock, and whiting, from Grimsby via the Great 
 Northern or the Midland, and lastly salmon, either 
 from Ireland or from Scotland. Now let us see what 
 the railway rates are. Roughly they may be put down 
 as follows : — 
 
 Herrings from Yarmouth, 10 lbs. for i penny. 
 
 Mackerel from Cornwall, 3 lbs. for i penny. 
 
 Live cod from Grimsby, 4 lbs. for i penny. 
 
 Salmon from Wick, Stornoway, or Ireland, 2 lbs. for i penny.
 
 CH. VI. WHY FISH IS DEAR I35 
 
 It is not worth while, in face of these figures, whose 
 accuracy can easily be tested, to enter into arith- 
 metical calculations to prove that, whatever Fish 
 Traders' Associations may assert to the contrary, 
 the railway charge for carriage is not the reason for 
 the preposterous price of fish in the London shops. 
 
 Any one who chooses to go into the matter for 
 himself, who will go to the fishing ports and see the 
 barbarous arrangements in force there, and then on 
 his way back look in at Billingsgate about six or 
 seven in the morning, will have no difficulty in under- 
 standing why fish is dear. He will see on the one 
 hand everything done that can be done to load the 
 producers with unnecessary expense. Fish out of 
 condition, undersized, broken perhaps by the tread of 
 heavy fishing boots, covered with dirt from a filthy 
 quay — fish which, to start with, was only fit to be sent 
 to a manure factory — is packed in one box with good 
 sound fish, and the whole is hurried off to London 
 and sold in a lump together. Then at Billingsgate 
 the fish supply for five millions of people is all brought 
 to a market whose area would be insufficient for 
 the supply of Leicester or Nottingham, where the 
 idea of a new-comer being able to get a footing either 
 as buyer or salesman is physically out of the question. 
 
 There may not be — gentlemen who ought to be 
 in a position to know assert that there is not — any 
 such thing as a Billingsgate Fish Ring. But one 
 thing is certain, that, if there is not, the Billingsgate 
 salesmen have unaccountably neglected— or perhaps 
 one should say, with singular public spirit have 
 refused — to avail themselves of their unequalled
 
 136 SOME EXTORTIONATE RATES ch. vr. 
 
 opportunities of setting on foot such an organisation. 
 Here, however, I would venture to repeat a sugges- 
 tion that I made some years ago, to the effect that 
 the Fish Traders' Association should be invited to 
 analyse the cost of a ton of fish sold by retail. Take 
 mackerel for instance, sold at 6d. each fish, weighing 
 say I lb. : the retail buyer pays 56/. per ton, out of 
 which the extortionate railway company takes, 
 allowing for weight of packages, &c., certainly not 
 more than 5/. How is the remaining 51/. divided? If 
 it be true, as the fish-traders assure us, probably with 
 perfect accuracy, that the fisherman does not get as 
 large a share of the price as the railway company's 
 charges amount to, there must be left a sum of 46/. 
 per ton to be shared amongst the various middlemen. 
 Is this an ideally just division? And is it not con- 
 ceivable that the fisherman's dinner ought to be added 
 to by the sacrifice, not of the ewe-lamb — the 5/. of the 
 railway company — but of a portion of the well-fed 
 flock from the rich pastures of Billingsgate ? 
 
 Perhaps the same Association would at the same 
 time answer a further question. Last mackerel season 
 the railway rate from Cornwall was reduced lOi'. per 
 ton, which meant to the company a loss of 14 per cent, 
 of their gross receipts, and of fully 28 per cent, of their 
 net profit from the traffic. Has the price of mackerel 
 to the public been reduced one iota? Have the 
 fishermen sold their fish to better profit in conse- 
 quence .'' Or has a single new boat been put on, or 
 a single new hand been attracted into the business, 
 either in Mount's Bay or at St. Ives ? And, if not, 
 into whose pocket has the \os. per ton reduction 
 cone ?
 
 en. VI. THE CURERS' TROFITS 1 37 
 
 Buried in the Appendix to the Report of the Select 
 Committee of 1882 there is a letter from a gentleman 
 named l^arclay, which undertakes to answer the ques- 
 tion as to the distribution of the price paid for fish, as 
 far as the Montrose cod fishery is concerned. This is 
 the substance of it : The wholesale Billingsgate price 
 is i^d. per lb. Bcfoix leaving Billingsgate tJie tliree- 
 lialf penny pound of fish stands at sevenpcnce. Out of 
 the \\d. the railway takes vrf^/., the fish curer takes 
 \\d., and \^d. are left for the fishermen who " own 
 and man their own boats." To the prime cost of the 
 fish, delivered at the quay, the curer thus adds 95 per 
 cent, as his own gross profit. Out of this he has to 
 provide boxes, to pack the fish, to pay the fishermen 
 a bounty of 14/. per boat for the season of seven 
 months, and to pay carriage across London oi ^-^^d.per 
 lb. The total amount of these expenses is, says Mr. 
 Barclay, " very small." He continues : " Parliament 
 is urged to compel the railways to carry at one-third 
 {is. 2)d. per cwt.) less, and thereby to increase the 
 curer's profit of 95 per cent, to about 115 per cent, 
 that they (the curers) may be enabled to bend a 
 bigger stream of cod-fish at iW. perlb. upon London. 
 The plain inference of this being that London, in 
 offering only 95 per cent, is outbid by other markets. 
 An ordinarily accepted wholesale profit is 10 per 
 cent. ; if the article dealt in is risky, it may reach 
 20 per cent. Comment on this is superfluous." Mr. 
 Barclay probably overstated his case, but at least he 
 gave definite figures, which, if inaccurate, should be 
 capable of statistical disproof. It would be well if 
 Fish Traders' Associations, before next they come 
 forward to abuse the extortionate railways, would
 
 138 SOME EXTORTIONATE RATES ch. vi. 
 
 produce positive evidence where the money paid by 
 the public for fish does actually go to. 
 
 Perhaps, however, enough has been said to show 
 that, from the point of view of the consumer, rates are 
 not extortionate, that in other words the influence 
 which they exercise in enhancing the price which he 
 pays for commodities is almost invisible. There is, 
 however, another point often taken, which may be 
 fairly put in the following form : " If a ton of coals 
 can be profitably carried a mile for a halfpenny, is 
 not a rate for fish of ^a\, or six times as much, on the 
 face of it unjustifiable ? " It may, on the contrary, be 
 answered without much hesitation that the coal is the 
 more profitable traffic of the two. A train load of 
 coal probably averages not less than 250 tons, a fish 
 " special" probably does not average 25. Further, 
 coal is a steady and unvarying business. Nothing 
 is so uncertain as fish. Sometimes, as for instance 
 in the North of Scotland, an engine and train may 
 be sent lOO miles to meet an expected catch offish 
 that never comes to port at all. 
 
 When it does come, one day's catch may be ten 
 times as big as the next. At Milford, for example, 
 the weight of fish landed on seven successive days, a 
 short time before the writer last visited the place, was 
 634, 596, 351, 27, 45, 14, 436 tons. Take another in- 
 stance, which was given in evidence before the Board 
 of Trade tribunal. On December 9, 1 889, the amount 
 of fish sent up to Paddington from Cornwall was 14 
 tons. Three days later there were 43 tons, then next 
 day 216 tons, and the day following the amount 
 dropped again to 39 tons. Docs it need any argu-
 
 CH. VI. WORKING THE FISH TRAFFIC 1 39 
 
 ment to prove that a traffic so variable as this must 
 be exceptionally expensive to work ? The pier or 
 station accommodation, the supply of engines and 
 trucks, the staff of men engaged to load them, all must 
 be sufficient to cope with the maxinium traffic ; and 
 yet in the course of a season, which itself only lasts a 
 third of the year, that maxijimni amount occurs per- 
 haps half a dozen times. Then, when the fish gets to 
 Paddington, lOO vans are required to hurry it down 
 to Billingsgate, and these vans must be hired at a 
 fancy price wherever they can be obtained. 
 
 Further, the coal jogs up to London at a steady 
 1 5 miles an hour, at times when the line is not w^anted 
 for other traffic. The fish " special," as it flies past at 
 thrice the speed, leaves behind it in every siding along 
 its path coal trains, goods trains, sometimes even pas- 
 senger trains, with their engines — worth 5^-. an hour 
 apiece at the lowest computation — idly blowing off 
 steam, till such time as they are allowed to resume 
 their interrupted journey. It is safe to say that, if 
 the railway manager did as the theorist bids him ; if 
 he ascertained — that is, estimated — the exact cost of 
 working the fish traffic, and then added the proper 
 percentage of profit in order to fix the rate, a much 
 larger proportion of the fish landed would be sent to 
 the manure factory than goes at present, even in the 
 imagination of the Fish Traders' Association. 
 
 Here are some further calculations, which, if the 
 subject has not been worn threadbare in the pre- 
 ceding pages, should not be \A'ithout interest. Four 
 years back, in July 1886, Mrs. Barnett, of St. Jude's, 
 Whitechapel, published in the " National Review "
 
 I40 SOME EXTORTIONATE RATES ch. vi. 
 
 some specimen diets of a labourer's family, consisting 
 of man, wife, and eight children, in the East End. 
 They are given below in the tables marked I, II, III. 
 I have imagined the family to live one-third of the 
 year on each of three diets, and have taken out the 
 total weight of food so consumed. Then, after trans- 
 ferring the family from Whitcchapel to Birmingham, 
 as the point furthest inland, and where the cost of 
 railway carriage is likely therefore to be on the whole 
 the heaviest, I have calculated, on the basis of the 
 rates actually in force from the point from which the 
 food of each kind would most naturally come, the 
 total railway charge on the food of these ten persons 
 for the entire twelvemonth.^ The result, which will 
 be found in table B, shows that the family uses some- 
 thing over two tons of food, that its cost is just under 
 43/., and that the proportion of this due to railway car- 
 riage is 37^. I i-g^d., or 4*44 per cent. In other words, 
 if the railway shareholders would forego the whole 
 of their income, each member of the family might 
 conceivably save is. iid. per aiinuvi \ if some bene- 
 ficent fairy would in addition work the lines for 
 nothing, the saving would amount to no less than 
 3J-. \od. It should of course be remembered that this 
 is an extreme case. If arrowroot were substituted for 
 oatmeal, asparagus for onions, and salmon for herrings, 
 while the gross charge for carriage would be increased, 
 the percentage of cost of carriage to the total retail 
 price of the article would be very much less than 4^ 
 per cent. 
 
 * The railway rates will be found given wilh greater fulness in the 
 Appendix at the end of this book.
 
 SOME TVriCAL MENUS 
 
 141 
 
 Food 
 
 X. a 
 
 
 
 Weight for 
 twelve months 
 
 ■a 
 
 V 
 
 0. 
 
 Cost per 
 year 
 
 
 ■^ 
 
 6 
 
 
 
 U 
 
 
 
 Breakfast — Oatmeal Porridge 
 
 lbs. 
 
 tons cwt. cirs. lbs 
 
 d. 
 
 £ s. 
 
 d. 
 
 Oatmeal 
 
 Il- 
 
 122 I I I2| 
 
 2h 
 
 I 5 
 
 5 
 
 Tinned milk . 
 Treacle 
 
 I 0- pts. 
 
 i 
 
 122 
 
 122 
 
 One hundred and 
 eighty three pints 
 
 2 5 
 
 
 15 
 15 
 
 3 
 3 
 
 Dijincr — Irish Stew 
 
 
 
 
 
 
 
 Meat .... 
 
 II 
 
 122 
 
 I I I2i 
 
 8 
 
 4 I 
 
 4 
 
 Potatoes 
 
 4 
 
 122 
 
 4 I 12 
 
 2\ 
 
 I 5 
 
 5 
 
 Onions 
 
 li 
 
 122 
 
 I I I2i 
 
 l' 
 
 10 
 
 2 
 
 Carrots 
 
 A few, 
 
 s^yif 
 
 Ibs. 
 
 122 
 
 I I 12^ 
 
 I 
 
 10 
 
 2 
 
 Rice .... 
 
 h 
 
 122 
 
 2 5 
 
 I 
 
 10 
 
 2 
 
 Bread .... 
 
 ^k 
 
 122 
 
 I 2 15 
 
 2\ 
 
 I 2 
 
 io| 
 
 Tea — Bread a7id Coffee 
 
 
 
 
 
 
 
 Bread .... 
 
 i\ 
 
 122 
 
 2 2 25 
 
 3f 
 
 I 18 
 
 ^ 
 
 Coffee .... 
 Tinned Milk 
 
 2 3, oz. 
 
 4" pts. 
 
 122 
 122 
 
 19 
 
 One hundred and 
 eighty three pints 
 
 % 
 
 I S 
 15 
 
 5 
 3 
 
 II 
 
 Breakfast — Bread and Cocoa 
 
 Bread .... 
 Cocoa .... 
 Tinned Milk 
 
 Sugar .... 
 
 ■ Lentil Sozip, Toasted 
 Cheese 
 
 Diiiner- 
 
 Lentils , 
 Cheese 
 Bread , 
 
 Tea — Rice Pudding 
 Bread 
 
 Rice 
 Tinned milk. 
 
 Sugar . 
 Bread . 
 
 a7id 
 
 .^' 
 
 122 
 
 \\ oz. 
 
 122 
 
 ipt. 
 
 122 
 
 2 OZ. 
 
 122 
 
 U 
 
 122 
 
 I 
 
 122 
 
 \\ 
 
 122 
 
 3 
 
 122 
 
 l^ pts. 
 
 122 
 
 2 OZ. 
 
 122 
 
 \h 
 
 122 
 
 2 2 25 
 \\\ 
 
 One hundred and 
 twenty two pints 
 
 IS 
 
 I 2 15 
 
 I o 10 
 
 I 2 15 
 
 3 1\ 
 
 One hundred and 
 eighty three pints 
 
 15 
 I 2 15 
 
 u 
 
 ^\ 
 
 I 18 
 15 
 
 10 
 
 I 10 6 
 
 4 I 4 
 I 2 10^ 
 
 15 3 
 15 3 
 
 2 6\ 
 
 2 lOi
 
 142 
 
 SOME EXTORTIONATE RATES 
 
 III 
 
 
 u 
 
 ^ 
 
 
 
 
 
 
 0. 
 
 a 
 
 
 •a 
 
 
 
 Food 
 
 
 
 Weight for 
 twelve months 
 
 a. 
 
 Cost per 
 year 
 
 
 f5 
 
 ^ 
 
 
 
 U 
 
 
 
 Breakfast — Hominy, Ulilk, 
 
 
 
 
 
 
 
 Siigar 
 
 lbs. 
 
 
 tons cwt. qrs. lbs. 
 
 rf. 
 
 £ 
 
 ^. d. 
 
 Hominy 
 
 li 
 
 121 
 
 I 2 I3I 
 
 J 
 
 
 7 6| 
 
 Tinned milk 
 
 3^ Pts. 
 
 121 
 
 Three hundred 
 
 and ninety-three 
 
 and a quarter 
 
 pints 
 
 3.^ 
 
 I 
 
 12 gi 
 
 Sugar .... 
 
 6 oz. 
 
 121 
 
 I 17 
 
 I 
 
 
 10 I 
 
 Dimier — Potato Soup, and 
 
 
 
 
 
 
 
 Apple and Sago Ptidding 
 
 
 
 
 
 
 
 Potatoes 
 
 5 
 
 121 
 
 5 I 17 
 
 32 
 
 I 
 
 15 3^ 
 
 Tinned milk 
 
 \\ pts. 
 
 121 
 
 One hundred and 
 
 eighty-one and 
 
 a half pints 
 
 i^ 
 
 
 15 I2 
 
 Rice .... 
 
 3 oz- 
 
 121 
 
 23 
 
 3 
 
 4 
 
 
 7 6f 
 
 Dripping 
 
 3 oz- 
 
 121 
 
 23 
 
 n 
 
 
 15 li 
 
 Apples 
 
 2| 
 
 121 
 
 2 2 22| 
 
 I'k 
 
 I 
 
 17 9f 
 
 Sago .... 
 
 6 oz. 
 
 121 
 
 I 17^ 
 
 :5 
 4 
 
 
 7 6f 
 
 Sugar .... 
 
 6 oz. 
 
 121 
 
 I 17 
 
 1 
 
 
 10 I 
 
 Tea — Fish and Bread 
 
 
 
 
 
 
 
 Fish .... 
 
 ^\ 
 
 121 
 
 2 2 22J- 
 
 n 
 
 3 
 
 15 71 
 
 Bread .... 
 
 2 
 
 121 
 
 2 18" 
 
 3 
 
 I 
 
 10 3 
 
 Tinned milk 
 
 \\ pts. 
 
 121 
 
 One hundred and 
 
 eighty-one and 
 
 a half pints 
 
 li 
 
 
 15 U 
 
 Sugar . 
 
 3 oz. 
 
 121 
 
 22i 
 
 i 
 
 
 5 o| 
 
 Total . 
 
 — 
 
 — 
 
 2 I 2 25 
 
 — 
 
 I4T 
 
 19 ij 
 
 In face of these facts, which can hardly be disputed, 
 remembering too that the market salesman, whose 
 capital outlay consists of the purchase of a desk, a 
 hammer, and a note-book, charges a commission, 
 usually of 5 and sometimes rising as high as 10 per 
 cent., merely for selling the goods, while the gross 
 profits of the retail dealer certainly do not average 
 less than thrice this latter figure, the English railway
 
 STECLMEN RATES FOR FOOD 
 
 143 
 
 rail- 
 riage 
 parti- 
 eight 
 
 vO Tl- ro M Cn CI 
 
 rf C\ " 
 
 1- ON i-H f^ PI r^ 
 
 r^ pj 
 
 uo 
 
 
 *^ 7^ r^ y-lvO r<-) "-) W-) 
 
 Cn r^ y^ 
 
 PI ^ ^O'-p Tf -H 
 
 PI r~^ 
 
 On 
 
 
 rt ttj ^ 
 
 ■^ 0\ "H M M r~^ 
 
 bob 
 
 b '1 cJo ly-i U-) M 
 
 PO 10 
 
 »-< 
 
 
 •" "•£ '■ 
 
 
 '-' 
 
 '-' 
 
 
 " 
 
 
 ° n" c-^ 
 
 "^ M t-^ 1-1 U-) 
 
 -. N 
 
 PI ui HI ro 
 
 HH 
 
 t~^ 
 
 
 <-^ § 5 G 
 
 
 
 
 
 CO 
 
 
 
 
 ^ 
 
 
 
 
 
 
 
 
 
 
 
 
 00c ■r; 
 
 
 
 c 
 
 
 
 
 
 e 
 
 00 c c s 
 
 c j:: 
 
 oca 
 
 c 
 
 
 
 -'-'i^-^o 1 
 
 C^ G 
 
 ■^"2 >> £- 
 
 
 1 
 
 
 1 
 
 L, ^> C 1> t- ^ J-f 
 
 
 ."^^ ^ ?i fi 1 
 
 s > 
 
 ' 
 
 
 
 .i .:; rt -^ rt 
 
 • ^ c .:3 
 
 u i: rt --^ 
 
 .i 
 
 
 
 
 J K-1 X J hJ ,-) 'r^ 
 
 Ji-J W 
 
 hJ < X H_l ^ K-1 
 
 1-1 h4 
 
 
 
 
 „ 
 
 13 
 
 tn <u 
 
 w 
 
 
 
 i2 c/5 
 
 ^ S 
 
 
 
 Wl 
 
 rt 
 
 
 
 
 ^ 
 
 -^ 
 
 ^ 
 
 
 
 
 — 
 
 — tn 
 
 PI •"* 
 
 
 
 
 5 
 
 S 
 
 'I- 
 
 1 -5 
 
 
 Q 
 
 ^ ,^ 2 
 
 
 
 rt 
 
 
 G 
 
 aj 
 
 aj 
 
 a, 
 It- 
 
 
 
 J2 ^ r^ j: 
 
 ■g coed c! 
 
 t-H ^ 
 
 '^ c 
 
 " r2Xp^- 
 
 „:/3 p) '^ *^ '-' 
 
 .2.S 
 
 1 
 
 ^ 
 W- 
 
 Railway rf 
 
 <-; ^ '-i' <-? ^rj S 
 
 g v: b -^- S S S 
 
 rt 
 
 
 
 
 2 C "N 13 
 
 ^0 " 06 '^'^ '* 
 
 3 <-i i^ "o <-i <-; t-J 
 
 CJo 
 
 
 
 
 r^r- « <N <^ ^ tf; 
 
 " ro 
 
 P» I-" 00 P) 00 
 
 t~. 
 
 
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 ►-. PO w M P) PI 
 
 M 1-1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 ^ 
 
 "^ "g\ -i C-1 Tj- ro u-i M tv. 
 
 c-i- 
 
 --lfNM(^??I-1'^'^ 
 
 
 rti-ji 
 
 rt 
 
 8 s ^ 
 
 VO ^ 
 
 P) li^OO i-i " 
 
 PO 
 
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 ^^•w rt 
 
 
 
 
 
 
 
 £ ^ >. 
 
 ■ r^iOO " u-ii/-. ir^u-) 
 
 l^O « 
 
 >J^ P) tr^ZO 
 
 PI t^ 
 
 C\ 
 
 
 
 0^ "^ 
 
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 1- Tf 
 
 ►H ro 11 U-) 
 
 I-H 
 
 PJ 
 >* 
 
 B 
 
 c 
 
 
 i/)^i-j ^-1 -Hi-i H-i 
 
 -1-, -r. 
 
 _i-,^-i „!,, "a = 
 
 -I'M 
 
 
 4j 
 
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 (~0 "^ r< 
 
 p) P) M r^ t^_^ ?i g 
 
 PI iri 
 
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 .IN HH M 1-1 i-i r4 PI 
 
 W M M 
 
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 Oh 
 
 &N N " C< 
 
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 ««P0Pl«5>,g«;«PJ 
 
 PI 
 
 
 
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 H-l IH k-l 
 
 h^ i-H On t-t u > '^ 
 
 Cl< i-i 
 
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 £h g C <u cc .:r~ 
 
 
 
 0) 
 
 
 
 
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 Sii 
 
 J .2^'
 
 144 SOME EXTORTIONATE RATES ch. vi. 
 
 manager may be forgiven if he sometimes feels 
 inclined to sympathise with Mr. Fink, who on one 
 occasion frankly stated the issue before a committee 
 of the United States Senate in the following words : 
 " The shipper is never satisfied as long as he has to 
 pay anything. You will find this the case here and 
 all over the world. The shipper's business is to get 
 the rates down as low as possible, and to get as much 
 service as possible for the least money. The middle- 
 men, the merchants and shippers, stand between the 
 railroads and consumers, and whatever deduction in 
 charges the railroads make the middleman generally 
 puts in his own pocket. . . . That is the reason why 
 he is so interested in getting the rates down. He 
 generally represents himself, however, as doing it for 
 the benefit of the people, when it is really for the 
 benefit of himself The people at large are generally 
 satisfied with the transportation rates, and have reason 
 to be so. . . . But some of these middlemen go 
 before the working people and talk of the exactions 
 of the railroads. . . . The middlemen that produce 
 nothing are the men who arouse dissatisfaction among 
 the working men by telling them that the railroad 
 companies are their enemies, and are ruining them, 
 and are taxing them to death, while the fact is that 
 the railroads have been instrumental in supplying the 
 labouring men with cheap food." 
 
 The truth is that the Traders' Associations are in a 
 dilemma. Either they can charge the public with the 
 cost of railway carriage, or they cannot. If they can, 
 they are not hurt, and have no reason to cry out. If 
 they cannot, the public have no special interest in the
 
 cii. VI. THE INTEREST OF THE TUBLIC 145 
 
 contest, and can stand by and see fair play between 
 the two contending parties. But when asked to give 
 sympathy to one side or the other, they can pause to 
 remember that the middlemen, too numerous as they 
 doubtless are, are yet a much smaller proportion 
 of the inhabitants of the country than the railway 
 shareholders, and that if one side or other must go to 
 the wall, the public can do without the middleman 
 very much better than they can without the thrifty 
 investor.
 
 146 
 
 CHAPTER VII 
 
 COMPETITION AND COMBINATION 
 
 " Where combination is possible competition is 
 impossible." Such was the famous aphorism of 
 Robert Stephenson in the early days of railroads. 
 Since that time it has gone the round of two con- 
 tinents. Here in England more particularly its ab- 
 solute truth has been not infrequently accepted 
 without question by hasty observers who have taken 
 it for granted that, as combination has in fact been 
 possible, competition must therefore have ceased to 
 exist. We have been assured accordingly on all hands 
 that it has actually so ceased, in spite of the fact that 
 we can see with our own eyes that it is as active and 
 as likely to live at the present moment as it was 
 a quarter of a century back. Even men as clear- 
 sighted as those who formed the Joint Committee of 
 the two Houses on the Amalgamation projects of 
 1872 — probably one of the very strongest committees 
 that ever sat in this country, for ten out of the twelve 
 members either were or have since become Cabinet 
 Ministers, while the eleventh was Lord Rcdesdale — 
 did not rise entirely superior to the popular impression. 
 In their report occur the following passages : " The
 
 CH. VII. THE GLADSTONE AWARD 1 47 
 
 direct action of competition by which in ordinary 
 cases the price of articles to the consumer is reduced 
 to such a point as will afford a fair profit to the pro- 
 ducer and no more, does not exist and cannot be 
 
 relied on in the case of railways There is little 
 
 real competition in point of charges between railway 
 companies, and its continuance cannot be relied upon ; 
 there is at the present time considerable competition 
 in point of facilities, but security for its permanence 
 is uncertain. . . . Competition cannot be relied on 
 to secure proper service and -a fair price." 
 
 Now what are the facts ? Companies have com- 
 bined and do combine every day ; but for all that they 
 have competed, do compete, and, as far as we can see 
 at present, are likely to continue to compete to the end 
 of the chapter. Will any Lancashire trader go into 
 the witness-box and declare that the Lancashire and 
 Yorkshire and the North Western never make any 
 attempt to get hold of each other's traffic .'' And yet 
 all the world knows that, from a time whereof the 
 memory of man runneth not to the contrary, these 
 two companies have agreed to divide the traffic at 
 competitive points. Was there ever a time when the 
 East Coast and West Coast routes to the North re- 
 nounced competition ? Yet one of the most famous 
 agreements in railway history is that under which 
 the two systems accepted the award of Mr. Gladstone 
 as to the proportion of receipts which should be 
 allotted to each. Was the " Race to Edinburgh " of 
 two years back merely a bouquet of fireworks let off 
 by enthusiastic locomotive superintendents, or had 
 the desire of the North Western and the Caledonian
 
 148 COMPETITION AND COMBINATION en. tii. 
 
 to get hold of a larger share of the Edinburgh traffic 
 anything to do with the occurrence ? 
 
 Take one more instance, perhaps still more familiar 
 to the public. The much discussed Continental Agree- 
 ment between the South Eastern and the Chatham 
 and Dover, which settles the proportion in which the 
 two companies are to share the receipts for all traffic 
 to the Continent passing over their lines through any 
 out-port between Margate and Hastings, is solemnly 
 scheduled to an Act of Parliament, and has been 
 judicially considered by every court in the country 
 up to and including the House of Lords. Yet is it 
 not matter of common knowledge that the South 
 Eastern and the Chatham each fight their hardest to 
 divert the stream of traffic from the rival line ? We 
 have taken instances from passenger traffic, as likely 
 to be most familiar to the ordinary reader ; but every 
 trader knows that the exact same thing takes place 
 with goods. In fact, a common count in the indict- 
 ment against the railway companies is found in the 
 fact that they fight too much, and that, w^hichever 
 wins, the public is always called upon to pay the 
 stakes. In face of this, is it not absurd to continue 
 to quote Robert Stephenson's saying as proof of the 
 fact that the companies, instead of competing, combine 
 against the public ? 
 
 Of course there is a sense, and a most important 
 sense, in which the saying is practically true. Thr 
 English companies do combine to maintain rates, a 
 is done by competing railroads — those which an 
 State property just as much as those which are ii 
 private hands — all over the continent of Europe, anc
 
 CH. VII. THE WELSH RATE WAR 1 49 
 
 as not only American railway managers but the 
 American public fondly hope to see happen in 
 America in some more fortunate, if still far distant 
 future. It is true the English companies are not 
 always successful ; a new company may sometimes 
 appear upon the scene, and upset the harmony of the 
 old agreement. The opening of the Midland route 
 to Scotland, for instance, implied a large reduction 
 on the fares for the whole of the through traffic. 
 Only last year the opening of the new Barry Railway 
 and Dock brought down the rates charged upon the 
 South Wales coal trade — a matter of 15,000,000 tons 
 per annum — by something like 25 per cent. 
 
 Still on the whole there can be no question that 
 English railways maintain rates with a steadiness 
 which is regarded by the only other nation living as 
 we do under a competitive railway system — a system, 
 that is, in which the bulk of the traffic is competitive, 
 and not as on the Continent only small portions here 
 and there — with the highest admiration. This may 
 seem on the face of it to be almost a paradox. At 
 first sight one is naturally inclined to imagine that 
 a system under which the rates on two competitive 
 lines are driven down as though by a Dutch auction, 
 must be eminently desirable in the interests of the 
 consumer. Sir Bernhard Samuelson, for instance, 
 was evidently of this opinion, when, as a member of 
 the Committee of 1 881, he asked Mr. Findlay : 
 " What would be the effect if, instead of competing 
 as to speed and agreeing as to rates, the railway 
 companies were to adopt the opposite course of 
 agreeing as to speed and competing as to rates .'' "
 
 I50 COMPETITION AND COMBINATION cii. vii. 
 
 It might be possible to answer the question by 
 asking the interrogator what would happen if the 
 consulting physicians of London, instead of charging 
 the guinea fixed by the Royal College, were each to 
 advertise in the morning papers a reduction upon their 
 neighbour's tariff of yesterday. Or, again, what would 
 happen, say, in the engineering trade, if the Amalga- 
 mated Society withdrew its scale of wages altogether, 
 and left each workman, according as he happened to 
 be more esurient and impecunious than his mates, to 
 underbid the rest. Or we might ask him what did 
 happen in the London docks not so long ago, when 
 there was practically no fixed scale of wages, and 
 hungry men fought like wild beasts to wrest work from 
 orje another. In this case his reply would probably 
 be that public dissatisfaction was justified in putting 
 an end to a system which was bad for the employers, 
 bad for the employed, and bad for the public whom 
 they both served ; as any system which refuses to 
 give an honest day's wage for an honest day's work 
 must always be bad. 
 
 But instead of dealing with analogies, which 
 must always be more or less liable to mislead, it 
 would perhaps be more profitable to invite Sir 
 Bernhard to consider the actual teachings of railway 
 history on this subject. We have not, as has been 
 said, much experience of rate-wars in England of late 
 years. But from earlier history we can see some- 
 thing of their obvious results. It might be very con- 
 venient, for example, to the inhabitants of Glasgow 
 to be carried to Edinburgh for sixpence ; but the 
 passenger who was charged as many shillings by the
 
 CH. vii. LOCAL AND THROUGH FARES 151 
 
 same train from an intermediate station, and refused 
 redress by the Court of Session, was probably far 
 from satisfied of the equity of the system ; and 
 similar anomalies, it is evident, must always recur in 
 similar circumstances. For if a railway reduces its 
 rates to competitive points, it may be implicitly 
 trusted to maintain its local fares at their former 
 height, even if it does not attempt to raise them still 
 higher in order to recoup itself for the profit lost on 
 the competitive business. Take another instance : 
 
 Twenty years back there was a fight between the 
 Midland and the Great Northern over the South 
 Yorkshire coal traffic, and rates fell in the course of 
 a few days to something like half their normal figure. 
 That the two companies lost goes without saying ; 
 but whether anybody gained is problematical. The 
 South Yorkshire coal-owner could hardly do so. His 
 output was fixed ; his contracts probably made 
 some time in advance ; he dare not expand his 
 undertaking to meet a state of affairs which might 
 be altered any day, and which he knew for certain 
 would not be permanent. Supposing that he had 
 ventured to do so, when peace was re-established 
 and rates restored to their former level, he would 
 have been left face to face with an increase of ex- 
 penditure to obtain an increased output for which 
 there was no market whatever available. Mean- 
 while, the collieries of Derbyshire, of Staffordshire, 
 of Durham, and of Wigan, all of which are competi- 
 tors in the London market, would have been utterly 
 disorganised. 
 
 To imagine that the London consumers gained
 
 152 COMPETITION AND COMBINATION ch. vii. 
 
 anything like the amount which the raihvays lost 
 is almost absurd ; a sudden and temporary reduc- 
 tion of price never reaches the consumer. Even 
 the coal-merchant, who unquestionably would put 
 additional profit into his pocket to start with, would 
 do it at the price of having the whole of his 
 business arrangements upset. A, who was selling 
 coal that he had brought into London while the rate 
 was 7^., would evidently be in a very different posi- 
 tion from B, who had replenished his stock at a ^s. 
 rate, while C, who had waited till the rate had fallen 
 to ^s. 6d., would be in a position to laugh at both of 
 them. But none of the three would dare to live 
 more than a hand-to-mouth existence, or to renew 
 his stock till he saw what course events were going 
 to take. 
 
 But there is no need to go to ancient history for 
 our examples. Competition in rates is going on 
 under our eyes at the present moment in America, 
 and it may safely be said that, though the railways 
 like it little, the general public likes it even less. No 
 one, the present writer least of all, can wish to deny 
 the merits of American railway management. But 
 the demerits are at least equally patent ; and if there 
 is one cause more than another that is responsible for 
 them, it is that the American railways, for reasons 
 on which it would now be too long to enter, fail to 
 keep their frequently renewed agreements to main- 
 tain rates. Hence has ensued wholesale bankruptcy 
 of companies, with enormous loss to innocent share- 
 holders ; reckless discrimination between local rates 
 and competing rates ; flagrant dishonesty in prefer-
 
 cu. VII. AMERICAN DISCRIMINATIONS 1 53 
 
 enccs given to big traders over smaller rivals ; secret 
 rebates and discounts which have sapped the very 
 foundations of commercial morality ; and uncertainty 
 which has made what should have been legitimate 
 trading often little better than mere Stock Exchange 
 gambling. This is strong language, so it is perhaps 
 as well to produce some evidence to justify it. As 
 for the bankruptcy of companies, let this one fact 
 suffice. Between Chicago and Cairo, a distance of 
 367 miles, there are twenty-two railway companies 
 whose lines cross that of the Illinois Central. Eigh- 
 teen out of the twenty-two have passed into the hands 
 of a receiver since the year 1 874. 
 
 As for rates, take these instances. From Chicago 
 to New York, 1 5 cents ; to Pittsburg, which is half the 
 distance, 25 cents. From the same point to Kan 
 kakce, 56 miles, 16 cents; to Mattoon, 172 miles, 
 10 cents. Cotton from Memphis to New Orleans, 450 
 miles, I dollar per bale ; from Winona to the same 
 city, 275 miles, travelling possibly in the same train 
 with the Memphis bales, 3'2 5 dollars. At times in 
 America it has been no unusual thing for freight to 
 be invoiced to a competitive point, and thence sent 
 back again for a considerable distance over the route 
 by which it has come, for the sake of economy. 
 
 Of personal preferences, take the following, proved 
 before the Hepburn Committee of the New York 
 State Legislature by the production of the books of the 
 companies concerned. Five firms at Binghamton and 
 the same number at Elmira had special rates varying 
 from five-ninths to one-third of the published tariff 
 At Utica three drapery firms had rates of 9 cents and
 
 154 COMPETITION AND COMBINATION ch. vn. 
 
 a fourth a rate of lo cents for traffic which was taken 
 for the outside public at 2i3, 26, and 22 cents, accord- 
 ing to its class. Five firms in the grocery business in 
 Syracuse also paid a 10 cent rate, while the published 
 charges varied from 18 to 2i7 cents. At this latter 
 town in one instance it was proved that a special rate 
 existed which was literally one-fifth of the amount in 
 the published tariff. 
 
 No one needs to be told that the meaning of 
 rates such as these is that the man who fails to get 
 them is driven out of the business, as no economies 
 or energy on his part can possibly enable him to 
 sell at the same price as his favoured rival. It 
 would be bad enough if these rates were given and 
 entered in the ordinary manner on the customer's 
 invoice. But in fact all kinds of deliberate decep- 
 tion have been resorted to in order to keep them 
 secret. At one time a consignment note acknow- 
 ledges the receipt of seventy barrels of flour ; sixty- 
 five only are shipped, and the railway company pays 
 damages for the loss of the five non-existent barrels. 
 At another time the cashier of an important firm is 
 made a nominal agent for the railway company, and 
 under the name of commission to him an enormous 
 rebate is allowed for all the business his employers 
 send over the line. Or, again, the goods are paid for 
 at the published rate, and after the transaction is 
 complete an agreed rebate is paid over in cash to the 
 freighter and no receipt taken. Or, once more, the 
 railway company purchases from a favoured trader its 
 supplies of the goods in which he deals at a fancy 
 price.
 
 CH. VII. PERSONAL PREFERENCES 1 55 
 
 Within the last few months a chief official of 
 one of the great railways and a prominent Chicago 
 merchant have been sent to prison by the United 
 States Court for refusing to give evidence as to trans- 
 actions of this nature, on the ground that they were 
 not prepared to incriminate themselves. Writing 
 only a week or two back, the American " Railroad 
 Gazette " referred to this matter of corrupt bargains 
 between railroad officials and traders, and after 
 pointing out that the officials were not alone to 
 blame, added : " Should the roads use the evidence 
 in their possession, in many cases it would carry con- 
 sternation into the ranks of the shippers." 
 
 In England, on the other hand, a committee 
 largely hostile to the companies sits for two sessions, 
 examines scores of hostile witnesses, and ends by 
 reporting : " No witnesses have appeared to complain 
 of preferences given to individuals as acts of private 
 favour or partiality." It is undeniable that agreements 
 have been made between English companies to keep 
 rates up ; that the fights between American companies 
 have brought rates down ; and that on the whole it is 
 better to have low rates than high ones. But, for 
 all that, if the merits of English and American 
 railway management could be balanced against one 
 another before an impartial tribunal, it is not the 
 English railways which would need to be afraid of 
 the decision. 
 
 Last and worst of the results of the system of 
 competition in rates which Sir Bcrnhard desires to 
 see introduced into England, American experience 
 entitles us to place uncertainty. An English trader
 
 156 COMPETITION AND COMBINATION en. vii. 
 
 would as soon think of asking what was the premium 
 on sovereigns as compared with Bank of England 
 notes, as of inquiring how much the railway rate has 
 risen or fallen since his last shipment. In America 
 rates var}' from day to day as wildly as the price of 
 fish fluctuates at Billingsgate. Not so many years 
 back, in the course of a single week there were four 
 different published rates from Chicago to New York> 
 at 6, 8, 10, and 12 cents respectively ; and it may be 
 added that the highest of them represented about half 
 the out-of-pocket cost of doing the business. The 
 present writer was talking a short time back to a 
 linen merchant in a large way of business in New 
 York. The merchant mentioned that, a day or two 
 before the McKinley Bill came into force he had 
 been compelled to set to and pack his goods himself. 
 The writer innocently asked why speed was of such 
 extreme importance, once the goods had passed the 
 New York Custom House. " Oh, you see," was the 
 reply, " a rate in America is only good for the day it 
 is made, and if my customers wire me to forward a 
 consignment, and I don't send it till next day, and 
 the railway rate has been raised in the interval, 
 they would expect me to be responsible for the 
 difference." 
 
 Witness after witness before the Hepburn Com- 
 mittee told the same talc : " Every shipment," said 
 one merchant, " is a special rate ; we don't know what 
 we have to pay to-day or to-morrow." Asked by a 
 member of the Committee, " Do you pay no attention 
 to the schedule .'' " he replied, " I don't think I ever 
 saw a schedule. I don't know anything about them ;
 
 cu. VII. WILD FLUCTUATIONS 1 57 
 
 they arc like the weather, I presume." Here is an- 
 other trader's evidence : — 
 
 Q. In every instance when you ship from the West do you make a 
 special contract ? 
 
 A. Always. 
 
 Q. You never confine yourself to schedule rates ? 
 
 A. Vie know nothing about them ; I never saw a schedule rate ; I 
 know nothing about that. 
 
 Q. How long have you been in business ? 
 
 A. Twenty years, more or less. 
 
 Q. And during those twenty years you have never known anything 
 of schedule rates ? 
 
 A. I have been in this country since 1S66, and have never known 
 anything of schedule rates, and never saw a schedule rate. 
 
 It is perhaps superfluous to ask the Enghsh 
 trader whether he thinks a system such as this 
 would be an improvement on our own. English 
 observers have seen the marvellous cheapness of 
 American railways, they have failed to notice the 
 price at which this benefit has been obtained. The 
 Americans themselves know better. One could fill 
 pages with extracts from American utterances to 
 the effect that what they want is not cheapness but 
 reasonable rates, combined with equality, publicity, 
 and permanence. A few quotations, however, it is 
 worth while to give. Mr. Cole, a former President of 
 the New York Produce Exchange, used these words 
 before the Hepburn Committee : " I am not speaking 
 in any way antagonistic to a railroad or to a rail- 
 road interest, I think their interests are identical, I 
 only hope to see a fixed rate brought about. I think 
 they are bringing their goods low enough. The 
 average merchant would be willing to pay a larger 
 rate than he is paying to-day." " Steadiness and
 
 158 COMPETITION AND COMBINATION cu. vii. 
 
 reasonable permanence in the prices of transportation 
 services," writes Mr. Dabney,' formerly Chairman of 
 the Committee on Railways and Internal Navigation 
 in the Legislature of Virginia, " are the chief essentials 
 of success in any legitimate business in which trans- 
 portation by rail constitutes a considerable element ; 
 steady rates are far more desirable^ than much cheaper 
 but Diore uncertain rates." 
 
 Here is another quotation, which I take at second- 
 hand from Mr. Jeans : " Producers and consumers are 
 more interested in having rates for transportation 
 ujiiforvi, steady, and reliable, than in having them low} " 
 The Inter-State Commerce Commission, in its first 
 report, after describing in scathing terms the existing 
 system, and pointing out the difficulty of putting an 
 end to it, summarises as follows the public opinion 
 which compelled the passage of the Act to which the 
 Commission owes its existence : " Nevertheless it was 
 a common observation, even among those who might 
 hope for special favours, that a system of rates open 
 to all and fair as between localities would be far 
 preferable to a system of special contracts into which 
 so large a personal element entered or was commonly 
 supposed to enter. Permanence of rates was also 
 seen to be of very high importance to every man 
 engaging in business enterprises, since without it 
 business contracts were lottery ventures. It was 
 also perceived that the absolute sum of the money 
 
 ' Tlie P^ihlic Regidation of of the railways, but of the public 
 
 Railways. By W. D. Dabney. interest. 
 
 Putnam's Sons, New York, 1889. - The Relation of Railways to 
 
 P. 177. An excellent little book, theStatc. By W. P, Shinn. P. 11. 
 ■written from the point of view not
 
 en. VII. STEADINESS V. CHEAPNESS 1 59 
 
 charges exacted for transportation, if not clearly beyond 
 the bounds of reason, was of hiferior importance in 
 comparison with the obtaining of rates that sJiould be 
 open, equal, relatively just as betiveeji places, and as 
 steady as in the nature of tilings zvas practicable^ ^ 
 
 Nor are the railway men themselves behind the 
 outside public in the eagerness of their yearning 
 after the exact condition of things which exists in 
 England, with which, however, we here are dissatisfied. 
 " The element of stability of rates," says the " Railway 
 Review " of December last, " is promised as a feature of 
 the new agreement ; a feature as important as th 
 absence of discrimination, and which when lacking is 
 equally destructive to the interests of the commercial 
 world as is the other when present. It is of little 
 value to A to know that B pays the same rate as 
 himself unless he is also assured that C will pay the 
 same to-morrow." Here is an extract from the report 
 of the Illinois Central Railroad for the year 1S90: 
 " Your directors feel satisfied that competition among 
 Western Railways, which has heretofore been almost 
 entirely on the line of reduction of rates, is coming to 
 be, as in Great Britain and Eastern States, one of 
 adequacy and frequency of service, and that in such 
 a struggle success lies in furnishing the best service." 
 
 Mr. Fink's writings are filled from end to end 
 with the same idea. Here are one or two extracts : 
 " By guaranteeing the separate existence of a grea 
 
 ^ If this be true in America with the consideration apply with ten- 
 
 an average haul of 127 miles, and fold force here to our traffic, which 
 
 where the vast proportion of the is largely in valuable merchandise 
 
 traffic is in commodities of as little over a distance which can hardly 
 
 value as wheat and iron, inus taot average more than 25 miles?
 
 l6o COMPETITION AND COMBINATION ch. vii. 
 
 number of competing roads, and preventing their 
 consolidation under a single management, the spirit 
 of competition is necessarily kept alive. But it is 
 not to be exercised hereafter by paying rebates to 
 shippers, and by trying to take underhand advantage 
 of each other, but by endeavouring to improve and 
 increase the facilities of transportation, and thereby 
 retain or increase the claims of each road upon public 
 patronage." Here again : "It is much more impor- 
 tant that the rates should be steady and permanent, 
 that merchants should be able to calculate with some 
 degree of certainty as to what would be the rates of 
 transportation at all seasons of the year, than that 
 they should be excessively low at one time and cor- 
 respondingly high at another, and that no one at any 
 time can know what they will be the next hour." 
 
 " These railroad wars," he says again, " are most 
 injurious to all interests, and the shippers understand 
 this well enough. They are most satisfied when they 
 have uniform rates and when these rates are per- 
 manently maintained. Although, strange to say, 
 while they want uniform rates permanently main- 
 tained, they also want competition between the rail- 
 roads—that is to say, they want the railroads to 
 underbid each other. It is clear that they cannot 
 have both peace and war between the railroads at the 
 same time." " Steady and fixed rates," the quotation 
 is this time from a document put forth by the Direc- 
 tors representing the United Sates Government on 
 the Board of the Union Pacific, " even though they are 
 high, are much more conducive to a healthy and 
 prosperous condition than the unsettled and fluctu-
 
 cii. VII. THE WASTEFULNESS OF COMPETITION iGl 
 
 atlng rates, however low, which arc bror.ght about by 
 the competition of railroads." 
 
 But enough of America, though it has been worth 
 while dealing at some length with American experi- 
 ence in order to show that there are two sides to most 
 questions ; that, when a German official writer declares 
 the "primary requisites of a goods-tariff" to be not 
 cheapness, but " fixity, intelligibilit}-, and unrestrained 
 publicity of every rate," he is not speaking without 
 ample justification ; ^ and that, if Sir Rernhard 
 Samuelson got his way and the English railway 
 companies took to competitive rate-cutting, the gain 
 to the English trader would be very far from unmixed. 
 
 There are not a few critics, however, who take a 
 different line. They sec that rate-cutting is impos- 
 sible as a permanent policy, but they maintain that 
 the existing competition in facilities costs the trader 
 more than the facilities are worth to him, and that 
 it is in the public interest that competition should be 
 put an end to altogether. The railways, say they — 
 the point, for instance, is strongly urged in the Report 
 to the Lancashire and Cheshire Conference — agree 
 not to cut rates, but as they are, in Irish phrase, 
 spoiling for a fight, they cannot resist the temptation 
 to spend a shilling in order to rob their neighbours of 
 three pennyworth of traffic ; and in the long run the 
 public, which has no control over the rates, is called 
 on to pay the entire fifteen pence. The statement is 
 not only plausible, but undoubtedly has in it a con- 
 siderable element of truth. It has been mournfully 
 acknowledged, for example, over and over again, 
 
 * Archiv fiir Eisenhahnivcscn, March and April 1S50, p. 275. 
 
 M
 
 1 62 COMPETITION AND COMI'.INATION cii. vii. 
 
 by railway men themselves, that the competition in 
 express trains between, say, London and Manchester 
 or Manchester and Liverpool, is extravagant. A 
 third of the number of trains could carry the whole 
 of the traffic, and even then give a service sufficiently 
 frequent to deprive the public of any right to grumble.'"' 
 
 Or, again, it is said, goods trains are run at high 
 speeds, in other words with light loads, and therefore 
 at increased expense ; and the trader who would be 
 equally well satisfied if his goods arrived a week later, 
 has to pay the extra cost of the speed which is caused 
 largely, not by the real necessities of the trade, but by 
 the desire of each company to surpass its rival. Or, 
 once more, a railway company establishes a new 
 goods station in the heart of the business portion of 
 some great city where land is at a fancy price, and 
 the traffic of the company as a whole has to pay for 
 the expenditure. Small blame to the trader, for 
 whom the old station on the outskirts was equally 
 convenient, if he feels aggrieved that expense is 
 incurred from which he can receive no benefit, 
 while indirectly he must be called upon to pay his 
 fraction of it. The answer, however, to be made on 
 behalf of the railways is, as I conceive, the following : 
 
 As for competition, there can be no question that it 
 is wasteful. On a toiijours Ics dcfauts de scs giia/itcs, 
 and if human beings were angels the waste of compe- 
 
 * The present writer must cdii- breaking the eggs. As well com- 
 
 fess to scant sympathy with these plain of Nature herself, whose 
 
 lamentations. To demand simulta- tornadoes, while they sweep away 
 
 neously the advantages both of the stagnant and fever-laden mias- 
 
 monopoly and competition is to ma, are apt to be reckless of snap- 
 
 ex])cct to make omelettes without ping trees and unroofing houses.
 
 CH. vii. STAGNATION IN ITS ABSENCE 1 63 
 
 tition might be at once eliminated, and each man left 
 to do his best because it was his duty and pleasure 
 to do so. Mankind, however, have not reached this 
 point yet — at least in the railway world — and universal 
 experience shows that, failing competition, railway 
 facilities improve but slowly, and even in some cases 
 actually deteriorate. Readers of Mr. Farrer's book on 
 European expresses ^' will remember how remarkably 
 his statistics bear out this conclusion. ]Mr. Farrer 
 shows how in Germany the express services had 
 actually in some cases retrograded between 1875 and 
 1888 ; how the best of the trains then existing were 
 relics of the free competition of an earlier date ; how 
 in France, at Bordeaux, in the Auvcrgne, at the Swiss 
 frontier, wherever in short two competitive routes 
 came in contact, the service had improved enormously ; 
 how, on the other hand, the wealthy and powerful Paris 
 and Lyons Railway had treated Marseilles and 
 Toulon, Cannes, Nice, and Monte Carlo, with absolute 
 neglect, while by the opening of the St. Gothard route 
 even the Paris and Lyons itself had been forced into 
 giving a creditable service through the MontCcnis to 
 Italy. 
 
 Mr. I'oxwell's portion of the work, \\hich deals 
 with English expresses, when compared with his 
 book of five years earlier on the same subject, shows 
 what may be called the reverse side of the German 
 picture. The best trains of 1883 made but a poor 
 showing beside the best trains of 1888. Hardly a 
 single town of importance throughout the British 
 
 * Express Trains, Etii^Iish and Foreign. By E. Foxwell and T. C. 
 Farrer. London : Smith, Elder, & Co., 1SS9. 
 
 M 2
 
 164 COMPETITION AND COMBINATION cii. vii. 
 
 Isles is as far from London nowadays — for distance 
 is to be reckoned not in miles but in hours — as was 
 the case at the earlier period. Not only are the 
 trains faster, but there are more of them, the accom- 
 modation for passengers of all classes is remarkably 
 improved, and the proportion of expresses which still 
 exclude third-class passengers has now become more 
 infinitesimal than ever. As far as passenger services 
 at least are concerned, it is impossible to question 
 that competition in England giv-es better results than 
 State regulation gives in France or State ownership 
 in Germany. The comparison cannot be so easily 
 made in the case of goods, but there seems no a priori 
 reason why here too the same rule should not apply, 
 nor would it be easy to show a posteriori that in fact 
 it does not ; but of Continental goods services we 
 must speak later on. 
 
 Meanwhile, this point deserves notice here. Italy 
 has had more experience of different methods of 
 railway management than any other country on 
 the face of the globe. It has tried State owner- 
 ship and private ownership ; it has tried allotting 
 a district to a company as in France ; and it has 
 held an investigation into the whole subject un- 
 paralleled both in its extent and minuteness. It 
 has laid under contribution the railway experience 
 gathered in the course of fifty years by every nation 
 in the world, and the conclusion to which Ital}^ came 
 in 1885 may be expressed as follows: "State 
 management is more costly than private manage- 
 ment, the State is more likely to tax industry than to 
 foster it. Private management, therefore, must be
 
 (.ir. Yii. TIIF. ITALIAN VERDICT 165 
 
 accepted, and the on!}' force powerful enough to at 
 once restrain and stiniuhite private management is 
 competition." Acting on these principles, the Italian 
 Government, having first got all the railways of the 
 peninsula into its own hand, has divided them out 
 between two great companies, operating, the one 
 along the I{!ast Coast, the other along the West, but 
 meeting and competing at all the main points, at 
 Milan and Florence, at Rom.c and at Naples. And 
 though this s}'stem has only been in force for about 
 five years, its effect in improving the Italian services 
 has already been all that its originators could have 
 reasonably hoped for. 
 
 One might be content, therefore, to rest the case 
 for the English system of railway management on 
 this point alone ; that efficiency and progress cannot 
 be secured under any system of monopoly, whether 
 that monopol}' be in the hands of the State or of 
 private companies ; that competition, therefore, is 
 necessary to prevent stagnation. Now competition 
 may take the form of rate-cutting or of improvement 
 in facilities. The former, if American experience 
 goes for an}-thing, is a two-edged weapon, with the 
 .sharper edge turned against the interests of the public. 
 We are shut up, therefore, to the latter form, and if 
 we are told that it is wasteful that two trains should 
 run each earning 5^". a mile, when one might just as 
 vrcll carry all the passengers and earn the whole los., 
 leaving a substantial balance of profit to be applied in 
 reduction of charges elsewhere, we reply that Con- 
 tinental experience shows that what would in fact 
 happen would be that the one train would be so bad
 
 l66 COMPETITION AND COMBINATION en. vii. 
 
 and so inconvenient that only 4 j-. worth of passengers 
 would travel at all. 
 
 But there is a further answer than this. In one 
 sense it is no doubt true that the public pays for 
 both trains, that is to say, that, if the public ceased 
 to pay for therri, the accommodation would be with- 
 drawn ; but it is also true — and the truth is proved 
 by the experience, not only of the Continent, but of 
 districts in these islands where no competition exists 
 — that if the second train were withdrawn, the public 
 would pay precisely as much for the remaining one 
 as at present it pays for both. Look at examples in 
 the case of other competing enterprises. The pro- 
 prietor of a restaurant, let us say, spends 50,000/. in 
 marble and gilding, and unquestionably he does so 
 in the hope of recouping the expenditure out of the 
 mutton chops of the public : but for all that, do we 
 in fact find that in the marble halls a mutton chop is 
 any dearer or any worse than in the dingy old coffee- 
 house across the way ? 
 
 Or, again, take two fairly comparable articles of 
 trade, such as coffee and cocoa. One hardly ever sees 
 an advertisement of coffee. The cocoa manufacturers 
 must spend tens of thousands a year in advertising. 
 Theoretically, the public ought to get its coffee either 
 better or cheaper because this wasteful expenditure is 
 not incurred. Does it do so as a fact ? Do any of 
 us believe that, if coffee were advertised with the 
 ingenuity and persistency which is displa}'ed in the 
 case of soap, either the quality would be reduced or 
 the price to the consumer would be advanced .'* Are 
 Ave not morally certain that the cost of advertising
 
 cii. VII. ALTERNATIVE ROUTES 167 
 
 would in fact come, either out of the profit of the 
 vendors, or else out of the economies effected by 
 the better methods of manufacture or of distribution 
 which are the natural results of increase of competi- 
 tion ? And if this be, as it is commonly accepted as 
 being, the universal law in ordinary business, why 
 should we doubt that it applies even when the busi- 
 ness is on a scale as large as that of the North 
 Western or the Midland Railway ? 
 
 One ma)' carry the case, however, one stage- 
 further, and deny that any of the competitive expen- 
 diture of railway companies is in fact a pure economic 
 loss like money spent in advertising. Take this very 
 question of rival express trains for instance. Before 
 the Midland built its new line to London, Scotland 
 and Yorkshire and Lancashire were already in pos- 
 session of an adequate express service. The new 
 Midland expresses were, we are told, simply so much 
 waste. Is this so ? VVhatj then, about the inter- 
 mediate stations ? Compare, for example, the Bed- 
 ford of to-day, which is within an hour of London, 
 with what it was when passengers crawled round 
 by Hitchin or Bletchley. Whatever gentlemen who 
 manipulate figures in their studies may think, the 
 inhabitants of Chatham and Canterbury cannot be 
 expected to admit that there is no need for a route 
 competing with the South Eastern to Dover, nor 
 those of Salisbury and North Devon to confess 
 that a second series of expresses to Plymouth is a 
 superfluity. 
 
 The same point may be made a propos of the mul- 
 tiplication of stations. It is preposterous, we arc told,
 
 l68 COMTETITION AND COTVIBIXATIOX ch. vii. 
 
 that the South Eastern, with a route 67 miles long, 
 should compete for traffic from Reading to London, 
 when there is a direct route to Paddington whose 
 length is only 36 miles. Whether, however, the 
 Dcptford Tramway Compan}', for instance, would be 
 as well pleased to have its hay delivered at Paddington 
 as close to its door at Bricklayers' Arms, is another 
 question. It is true, no doubt, that it would have 
 to put up with the Paddington delivery if our rail- 
 wa}'s were organised on the P^rench or German 
 system, but could it fairly be expected to accept the 
 change as an improvement ? 
 
 Take another instance, of which a good deal was 
 made before the Board of Trade tribunal last }'ear, 
 that namely of receiving houses. Of late years, urged 
 on, doubtless, by the force of competition, our rail- 
 wa}'s have established in the great towns, in London 
 more especially, a series of receiving houses where 
 goods and parcels are taken in, and which practically 
 act as subsidiary stations. Some of them are esta- 
 blished in situations where the rent is enormous. 
 Surely, it is said, the public should not be called on 
 to pay for this extravagance, which is little better than 
 a form of advertising. Or, again, a company builds 
 warehouses adjoining its stations, and, provided it can 
 thereby induce traders to send traffic over its line, it 
 is not over punctual in demanding a proper ware- 
 house rent. Or, again, it establishes a depot for flour, 
 say, or Bradford woollens, v\here without charge, or 
 for a merely nominal one, it keeps on hand two or 
 three weeks' stock for its customers. Surely, it is 
 urged once more, the general public who lia\'e no
 
 cir. vn. THE BUSINESS AS A WHOLE 169 
 
 wish to avail themselves of these facilities ought not 
 to be made to pay for those who do. 
 
 The answer once more is that business is busi- 
 ness. The railway company is only a great shop- 
 keeper, and though, considering the scale on which 
 its shopkeeping is done, no one can dispute the right 
 of the public and the law courts to supervise the 
 operations in a way that is neither possible nor desir- 
 able with a private enterprise, the principles v/hich 
 must be applied to both arc the same. A shop- 
 keeper must adapt the course of his business to the 
 demands of his customers as a whole. He cannot 
 make a reduction to one because the brightness of 
 the plate-glass front had no attraction to him, to 
 another because he carries off his parcel under his arm 
 instead of leaving it to be delivered by the shop-cart. 
 The result of any such attempt would, it is easy to 
 see, be that the complexity in organisation and 
 account-keeping would be so great as to absorb any 
 reduction which the less exacting customer might 
 otherwise be entitled to. 
 
 But a more serious charge than those last men- 
 tioned is to the following effect : The whole S}'stem 
 of English goods management is wasteful and extra- 
 vagant. In their mad race to outstrip each other in 
 accommodation the companies postpone the collection 
 of goods till the latest possible hour of the evening, 
 load them up by the use of expensive machinery in 
 the minimum of time, and then hurry away the 
 waggons two-thirds empty, in trains only half the 
 length of what the engine could take, in order that 
 they may deliver the goods next morning in Leeds,
 
 1/0 COMPETITIOX AND COMBINATION en. vii. 
 
 say, or Liverpool, ten minutes or a quarter of an hour 
 earlier than the rival line can promise. That such is 
 the English system there is no denying. That com- 
 pared with the leisurely Continental methods, of which 
 more anon, it is an expensive system, there is no 
 doubt whatever. Whether, however, it is wasteful 
 depends entirely on whether the accommodation af- 
 forded is worth the price paid for it. On this point 
 it is almost impossible for an outsider to judge. 
 
 That speed is of very great importance in many 
 branches of business may be taken as proved by the 
 fact that our rapid English services have not been 
 volunteered by the railways, but forced upon them by 
 the demands of the traders ; by the fact that a con- 
 siderable proportion of Continental traffic pays the 
 grande vitesse rates, which are never less than double 
 the ordinary ones, for a service which even then is 
 much slower than ours ; by the fact that the proportion 
 of business correspondence transacted by telegram is 
 rapidly increasing, and that notoriously it is becoming 
 less and less common for merchants and shopkeepers 
 to keep large stocks on hand. But in the nature of 
 things precise information on the subject is unattain- 
 able. Next, however, to precise information, the best 
 evidence that one can have is the opinion of those who 
 from their position and training are best qualified to 
 judge, and the writer accordingly has taken steps to 
 ascertain the opinion of five firms of the first rank as 
 warehousemen in the city of London. Here is in 
 brief substance what they one and all report : 
 
 " It is of the very utmost importance that goods 
 should be delivered the day after they are handed to
 
 CH. VII. THE NECESSITY OF SPEED 171 
 
 the railway company, or in the case of Scotland the 
 next day but one. We have become so accustomed 
 to this prompt delivery that promises are made to 
 customers who call and to those in the country, that 
 goods sold from sample shall be delivered the follow- 
 ing or the second day, as the case may be, and the 
 customers rely on this being done. To go back to 
 slower methods would entirely upset the trade, and 
 cannot for a moment be thought of In innumerable 
 instances our country customers order goods by wire, 
 and if we have not got them in stock, we wire forward 
 to the manufacturer. Ordering by telegram has very 
 much increased of late years, especially since the in- 
 troduction of sixpenny messages.'^ In consequence 
 of telegrams and quick trains consignments are very 
 much smaller than in years gone by. We could not 
 contemplate for a moment the introduction of the 
 slower Continental method of transit, even though it 
 might enable the railways to reduce the rates. It 
 is altogether out of the question." 
 
 It should be noted, however, that one firm is of 
 opinion that perhaps 25 or 30 per cent, of its consign- 
 ments are not of special importance, and might with- 
 out inconvenience be sent at a slower rate. On which 
 
 ^ As illustrating the practical traders, from Sir Bcrnhard Samuel- 
 influence of railway rates on the son downward, think it right to 
 cost of manufactured goods, it is compare English charges for goods 
 worth noting that the man who carried from London to Leeds be- 
 orders a roll of cloth, weighing tween Monday night and Tuesday 
 say I cwt. , from Bradford by tele- morning with French or German 
 gram instead of by letter pays (yd. charges for goods carried from 
 per cwt., or \os. per ton, extra to Paris to Calais, or from Crefeld to 
 save one day's delay. And ap- Bremen, in the sufficient interval 
 parently the time is worth the which elapses between ]Monday 
 money. But for all that, English and Friday.
 
 172 
 
 COMPETITION AND COMBINATION 
 
 t'nc obxinus comment is once more that a business 
 must be managed as a whole. If four men want 
 all their [:^oods carried full speed, and the fifth wants 
 three-quarters of them so carried, there is no !^^ain 
 cither in economy or convenience in orf^anisin<j a slow 
 service for the benefit of only a fraction of the traffic. 
 Two of the firms abo\-e mentioned expressed their 
 opinion on another point, that nameh' of the railway 
 depots. It was neccssar)', they said, that such depots 
 should exist somewhere. Either the railway company 
 must provide them, and ch;irge for it in the rate, or 
 else they must enlarge their own premises and pay 
 for the accommodation in the form of rent.^ 
 
 Here is another instance of \\'hat traders are ready 
 to pay for speed when it is cntirch' optional with 
 them to do so. From a printed tariff of the rates 
 in force between Berlin and London I take the 
 following : — • 
 
 Time on journey Charges per loo kilognamme^ (say 2 cwt.) j. d. 
 
 6 to 7 days, S'iiik,i:;iit (ordinary goods train) . .86 
 
 4 to 5 ,, mixed express . . . . . 14 o 
 
 3 ,, Eili^iit (fast goods) . . . . 37 2 
 
 2 ,, Conn'r'^iif (expiess) . . . . 74 4 
 
 I am informed by one of the largest firms of 
 Continental carriers that a considerable percentage of 
 
 " Here is an actual instance of 
 how business is done, wliicli 
 ]ia]5pened at tiie time the writer 
 was inquiring into the matter. On 
 Thursday, November 13, a cus- 
 tomer wished to I'jurchase twelve 
 
 j)ieces of stuff from Messrs. • 
 
 & Co. , warehousemen. The latter 
 had the class of material in stock, 
 but it was slightly finer, and conse- 
 quently .■',(''. ayard toodear. Messrs. 
 
 &Co. accordingly wired to the 
 
 manufacturer in Fife, who had the 
 
 exact article in stock, and promised 
 their customer delivery on Satur- 
 day, the 15th. The goods were duly 
 sent off, but went astray and were 
 not delivered in London till the 
 Monday. Meanwhile, thecustomer 
 had claimed delivery on the Satur- 
 day, and had been supplied with 
 the better class article at the price 
 of the coarser quality, and then the 
 railway company was called upon 
 by the warehousemen to jiay the 
 difference.
 
 cii. VII. WHAT FUREKiXKKS PAY TOR STEED 173 
 
 the total traffic pays the " mixed express " rate, and 
 that not a Httle comes even at the 74^. 4^'. rate. 
 Further, that Berhn would be able to command a 
 much larger share of our millinery trade than it 
 does at present if it were not handicapped by the 
 great difference in the time in which goods can be 
 obtained from Paris. 
 
 Here are two other instances of the wa)' in which 
 English trade is actually conducted, which have 
 happened at different times to come under the 
 writer's own notice, and which seem to be germane 
 to the present question. I imderstand that even in 
 a city like Dublin tailors have ceased to keep a stock 
 of cloth, and only show patterns. A customer comes 
 into the shop in Grafton Street and chooses the stuff 
 for a coat or a pair of trousers. The tailor wires to 
 London for the two or three yards required. The parcel 
 is immediately sent to the nearest North Western 
 receiving house, leaves luiston at 6.30 the same 
 evening, and next morning the Dublin tailor sets to 
 work to cut out the garment. Again, I was told in 
 Aberdeen that it was no uncommon thing for a 
 number of errand boys to await at the station the 
 arrival of the night mail from London in order to get 
 their parcels to the shop half an hour earlier than 
 would be the case if they waited for the company 
 to deliver.^ 
 
 In face of facts like these, it is surely nonsense 
 to claim that the railways would be acting in the 
 public interest if they adopted slower but more 
 
 " This was when tlic mail aid not get in till 9.55 A.M. Xo doubt the 
 accelerations of last summer may have made a ditference.
 
 174 COMPETITION AND COMBINATION en. vii. 
 
 economical methods of working. The whole question 
 of facilities versus low rates might fairly be put like 
 this. The North Western or the Midland can raise 
 monc}- at a fraction over 3 per cent. The trader 
 expects 10 or 15 percent, on his capital. Accord- 
 ingly he keeps down his warehouse accommodation 
 and his stock to the lowest possible figure, and by 
 the help of the elaborate and costly organisation of 
 the companies, turns over his capital many more 
 times in the course of the year than is possible to his 
 rival in France or Germany, who is shut down to the 
 possibly cheap but certainly nasty accommodation 
 afforded by Continental railways. 
 
 The truth is, the more we can bring ourselves to 
 realise that a railway company is only a shopkeeper 
 on a large scale, anxious to make the best profit it 
 can on the solitary article in which it deals, transpor- 
 tation, and desirous like every other shopkeeper to 
 give better value to the public for its money than the 
 rival shopkeeper in the next street — the more we can 
 bring ourselves to realise this, the less shall we be 
 inclined to lay down for the railway company a priori 
 rules how it ought to conduct its business. If our 
 grocer moves into larger and more expensive pre- 
 mises, if he adds new departments of trade, or opens 
 branch establishments in another part of the town, 
 we take it for granted that lie knows his own busi- 
 ness best. He has opportunities which no outsider 
 can have of feeling the public pulse. 
 
 So, too, if a railway accelerates its trains and in- 
 creases their number, if it opens new stations and sets 
 up receiving houses and inquiry offices at every street
 
 CH. VII. WHAT FACILITIES ARE WORTH I75 
 
 corner, if it warehouses g-oods for nothinc^, and sends a 
 van, with a horse, a man and a boy, half across London 
 to deHver a single trunk, we may safely assume that 
 it does so because it believes that by so doing it is 
 ministering to the public convenience and so indirectly 
 increasing its own custom. We may assume, too, 
 that, though one man may object to one facility being 
 given and another to another, in each case because he 
 does not expect to be in a position to take advantage 
 of it himself, the railway manager, who, through his 
 innumerable agents scattered all over the country, is 
 in constant contact with every class of his customers, 
 is — not of course an infallible judge, but the best judge 
 that can be found in this fallible world, as to whether 
 any particular facilities are wanted or not. And by 
 " wanted " we must understand " such as the public 
 is prepared to pay for directly or indirectly at the 
 price they cost." But this brings us back once more 
 to the point whether the price which the British 
 public pays for the unquestionable facilities it enjoys 
 is not excessive, a matter on which we shall be better 
 qualified to pronounce when we have drawn a few- 
 comparisons with the Continental and American rail- 
 way systems.
 
 1/6 Cii. vni. 
 
 CHAPTER VIII 
 
 CONTINENTAL RATES 
 
 The warmest admirer of English railways would find 
 it difficult to express his admiration of the statistical 
 information which they furnish. Professor Hadley, 
 for instance, a critic certainly by no means unfavour- 
 able, complains of the " secrecy of English railroad 
 accounts," which makes it impossible to tell whether 
 the companies have or have not for years past been 
 paying dividends out of capital. That, however, is 
 not our point here. We are here concerned with the 
 fact that the refusal of English companies to furnish 
 statistics on the same basis as those given in almost 
 every country in the world makes it impossible to 
 institute a comparison between the average cost of 
 carriage — either the gross cost to the public or the 
 net cost to the railway — in P^ngland and in foreign 
 countries. In England, as elsewhere, it is possible to 
 obtain figures giving the gross number of passengers 
 and of tons of goods carried, and also the number 
 of miles the trains have run, and the expenses which 
 have been incurred in working the traffic. From 
 these three sets of figures we can ascertain, by simple 
 processes of di\ision, how much the English com-
 
 CH. VIII. MISSING STATISTICS 1 77 
 
 pany has recch'cd, how much it has spent, and what 
 therefore is its percentage of profit per train-mile. 
 
 But there our knowledge stops. Now, this infor- 
 mation, indispensable though it is to the railway 
 manager himself, as the barometer to show whether 
 the prosperity of the undertaking is increasing or 
 diminishing, is perfectl}- valueless to the outside 
 public. The trader knows nothing, and cares nothing, 
 about train-miles. His interest is to know what it 
 costs the company, and what the company charges, 
 on the average, per ton. Out of England, accord- 
 ingly, calculations to this effect are almost always 
 made. A record is kept of the distance each consign- 
 ment is moved, and the number of tons carried is 
 multiplied by the number of miles which they travel. 
 The result is to give the number of ton-miles. For 
 instance, lOO ton-miles may mean i ton conveyed 
 100 miles, or lOO tons conveyed i mile, or any other 
 possible combination of these two factors. Now, it is 
 evident that, once we obtain the number of ton-miles, 
 knowing as we do already the gross receipts of the 
 goods traffic, we have only to do a simple division sum 
 to ascertain the average charge per ton per mile. 
 Again, knowing as we do the gross number of tons 
 conve\'ed, by dividing this sum into the gross number 
 of ton-miles, we can ascertain the average distance 
 which goods are carried. When we get these figures, 
 but not till then, we shall be in a position to compare 
 English railways with those of any other country on 
 a basis of fact, instead as at present of mere surmises. 
 
 Mr. Grierson, before the Committee of i88r, was 
 examined at considerable length as to why this infor- 
 
 N
 
 178 CONTINENTAL RATES en. viii. 
 
 mation was not given, and replied with perfect frank- 
 ness : "We used to keep it, and we gave it up. It 
 cost us a great deal of money. We kept probably as 
 elaborate statistics as were ever kept by a railway 
 company, but we could not make any use of this. . . . 
 The average sum for carrying traffic for one mile, that 
 again is perfectly useless. The figures are very inte- 
 resting, I have no doubt, but they are perfectly use- 
 less. I assure you, there is no indisposition on the 
 part of any railway compan}- to keep any statistics. 
 They would be only too glad, being the parties them- 
 selves most interested." Now, from one point of 
 view, Mr. Grierson was no doubt right. It is true that 
 the American railwa}\s — and no one will question 
 the technical ability with which American railways 
 are managed — do base all their calculations, not on 
 train-mile, but on ton-mile figures. But it is more than 
 likely that train-mile statistics are on the whole the 
 most useful for the railway manager's purpose. 
 
 There is, however, another point of view of equal 
 importance, whose existence Mr. Grierson absolutely 
 ignored. Railways are shops for the sale of trans- 
 portation, no doubt, but they are shops with, practi- 
 cally speaking, a licensed monopoly of the sale of an 
 article of public necessity, and as such the public 
 has a natural right to overhaul their accounts. This 
 in a rough way ton-mile figures would enable it to 
 do, just as the train-mile figures enable the railway 
 manager to check in a rough way the expenses and 
 the profits of his business. Professor Hadley has put 
 the whole question with his accustomed clearness : ^ 
 
 ' Railroad Transportaliou, p. 156.
 
 CH. VIII. TOX-MILE FIGURES I79 
 
 " The English companies do not furnish, or even 
 compile, ton-mileage statistics. This is no mere acci- 
 dent of practice ; it is characteristic of the principle 
 on which English railways are managed. There is a 
 fundamental difference of purpose between train-mile 
 and ton-mile statistics. The train-mile is, in a rough 
 way, the unit of railroad service — so much work done 
 by the railroad. The ton-mile (or passenger mile) 
 is, in the same rough way, the unit oi public service — 
 work done for the public. Now, the whole theory 
 of the English railroad system starts from the prin- 
 ciple that railroads are to be managed as business 
 enterprises, not as matters of public service ; hence 
 their impatient rejection of the idea that they should 
 compile a set of statistics arranged from an outside 
 point of view, but with little inside interest." 
 
 It is five years since Professor Hadley's book was 
 wa'itten, and in the interval English railway managers 
 have moved a long distance away from their former 
 untenable position, that railways are ordinary private 
 commercial undertakings. But to the height of giving 
 us ton-mile statistics they have not yet risen. Till 
 they do, any comparison between English and Conti- 
 nental railways can only be matter of guess-w'ork. 
 As the guesses, however, are usually made by writers 
 not over friendly to the English companies, perhaps 
 these latter would be wise in their own interest 
 to produce the information required. Failing their 
 action, the Board of Trade might do worse than take 
 into consideration the question of exercising its au- 
 thority under section 32 of the Railway and Canal 
 Traffic Act of 1888, and amending the returns now 
 
 N 2
 
 l80 CONTINENTAL RATES cii. viii. 
 
 required by law of the railway companies, in such a 
 fashion as to include the missing statistics. 
 
 Even in their absence there are, as has been said, 
 some writers who believe themselves in a position to 
 pronounce positively on the subject. Sir Bernhard 
 Samuelson, for instance, writes as follows : " Except 
 as to iron-ore, coal, and coke, in certain cases, and a 
 few other articles under special circumstances, the 
 rates are so much lower in the countries of the North 
 of Europe which compete with us for the trade of the 
 world, as to place our traders at a serious disadvan- 
 tage." Mr. Jeans too is able, after a series of possibly 
 more rather than less accurate guesses as to the length 
 of haul and average rate per ton per mile, to dismiss 
 the whole question with the following airy conclusion : 
 " So far as the nations of Continental liurope are 
 concerned, we have no need to go into details. Suffice 
 it to say that the average ton-mile rates in Belgium, 
 Germany, and Holland, are much under our own." - 
 
 On the other hand, Gustav Cohn writes as fol- 
 lows : " Whether the existing freight tariffs of the 
 English railways, compared with the earlier ones or 
 compared with Continental tariffs, are high or low, 
 is a question the answer to which is exceptionally 
 difficult, and is wont to be given without hesitation 
 only by those who fail to understand the difficulties.^ 
 Now, with all respect to Sir Bernhard Samuelson and 
 Mr. Jeans, we may venture to say that Gustav Cohn 
 knows a great deal more about the subject than they 
 do. He has given the best years of his life to the 
 
 - Raihvay Pn b '(,v;/.r, p. 449. 
 
 ' Die englische Eiscubahnj'0:ilik ds ■ letz'cr. z:' r. Jahrc, p. 87.
 
 cu. VIII. ENGLISH IXTUITIONISTS l8l 
 
 study of our English system. His book is, in Professor 
 Hadley's opinion, " an admirable book, probably the 
 most careful investigation of railroad problems from 
 the standpoint of political science which has anywhere 
 been made." Moreover, he is no partisan, being indeed 
 convinced that State ownership of railways will be 
 found in the long run the only possible policy. 
 
 Now, the present writer is firmly persuaded of his 
 own inability to offer even a plausible guess on this 
 subject. It is true that he did happen the other day 
 to notice that the charge for carrying a horse from 
 Berlin to Flushing is 230 shillings, while from London 
 to Perth, which is a very similar distance, it is IIIJ"., 
 and this little fact hardly seems to him to square with 
 Mr. Jeans's large theories, but beyond that fact he has 
 no wish to go. It occurred to him, however, that, a com- 
 parison of average rates over the whole country being 
 impossible, a comparison of certain selected instances 
 might not be without value. He has therefore, through 
 the kindness of a friend, himself a foreigner and con- 
 cerned all his life with the transportation business 
 both here and on the Continent, obtained the follow- 
 ing series of comparisons. Whether they are fairly 
 chosen, the reader must judge ; but from the tone in 
 which the comparisons are drawn — for the present 
 writer has done nothing to them but make mere verbal 
 alterations — it is evident that the author of them is 
 not so much impressed with the superiority of Conti- 
 nental railways as might naturally be expected in one 
 possessing such a close familiarity with them. 
 
 " London — Aberdeen. The third-class rate between 
 London and Aberdeen, a distance of 528 miles, or
 
 1 82 CONTINENTAL RATES or. viii. 
 
 850 kilometres, according to the official tables, is 
 yos. per ton, including collection and delivery. For 
 this distance the Stiickgitt (small consignment) rate 
 in Germany is 95^'. 6d., not including collection and 
 delivery, which may be considered as worth between 
 5 J. and los. per ton extra. Even if the goods are 
 of a class for which in Prussia reduced rates are in 
 force for quantities under 5 tons, the rate for this 
 distance comes to 705., not including collection and 
 delivery. If the goods are sent in quantities of 
 5 tons the net rate for 850 kilometres is 59^-., but 
 in such cases senders and consignees have to load 
 and unload the goods themselves, or, if they pre- 
 fer, they may have it done at their own risk by 
 the railway company at a cost of 5.'/. per ton at 
 each end, or in all lod., so that the actual cost of 
 transportation comes to $9^- lo^^- — P^^'^ collection 
 and delivery. Add collection and delivery charges 
 and we bring the rate up to 65^'. to yos. This 
 however is at owner's risk. If these rates were trans- 
 ferred into " company's risk" rates, according to the 
 English Clearing House scale, they would amount 
 to between y2s. and ^ys. 6d. For quantities of 10 
 tons in one truck the Prussian rate would be 53J. 2d 
 Add once more cost of loading and unloading, collec- 
 tion and delivery,and transfer to "company risk" scale, 
 and we should have a rate for lo-ton lots of between 
 65^-. 10^?'. and 80J. In other words, the Prussian rate 
 on 1 0-ton lots is higher than the English for con- 
 signments of over 500 lbs. Further, it must be 
 rcmem.bered that it is almost impossible to get 10 
 tons of ordinary goods into one of the German
 
 cii. Yiii. A SERIES OF COMTARISONS 1 83 
 
 covered waggons. It is necessary therefore, in send« 
 ing consignments of 10 tons, to use open waggons; 
 hence tarpauHns are required, and the use cf these is 
 by the German raihvays charged for separately, at a 
 rate of 4s. each for every 200 kilometres or fraction 
 thereof. Now, if the goods are to be properly pro- 
 tected, at least two tarpaulins are required, so that 
 the cost of covering between London and Aberdeen 
 will amount to 40^'., or 4^, per ton additional. Now, 
 to compare with Austrian rates ; between Vienna 
 and Brody, 848 kilometres, they are as follows : — 
 For common cotton goods, iron-ware, and other 
 articles belonging to the third class of the English 
 classification, 41' 15 florins. This is equivalent to a 
 rate of about y2s. 2d., station to station, or, allowing 
 once more for collection and delivery, ^s. to \2s. higher 
 than the English rate. For toys, leather in cases, 
 and other articles for which the English rate would 
 be the same, the Austrian rate comes to 51 '61 florins, 
 or about Soj". 6d., a difference once more of I5jr. to 
 20s. in favour of England. In the through tariff 
 between Germany and Austria, we find rates between 
 Vienna and Ems, 855 kilometres, of 89^-. and 85^-. per 
 ton — or, say, making allowances once more, 20s. to 2C)s. 
 more than the English. In France we find that, for 
 the distance of 850 kilometres between Paris and 
 Marseilles, the rate applicable to goods not specially 
 reduced is ii7'5oy2x, or 94^-. In the through tariff 
 between Paris and Germany similar figures are found : 
 for instance, between Paris and Augsburg, 855 kilo- 
 metres, the rate for goods not specially reduced is 
 Ii370/ri-., or 90^-.
 
 1 84 CONTINENTAL RATES ch. viii. 
 
 " London — Penzance ; distance 326 miles, equal to 
 525 kilometres. The ICnglish charge for third-class 
 goods is 60s. per ton, including collection and deli\'ery. 
 The German rate is ^gs. lod., station to station, for 
 quantities under 5 tons ; or, say, 64^. to 6c)S. collected 
 and delivered. For articles for which reduced rates 
 apply — iron, coal, grain, timber, t&c. — the station to 
 station rate is 44J'. for lots under 5 tons. For goods 
 in quantities of 5 tons the German rate is ^^ys. 2d., and 
 for lo-ton lots 32^'. 8^/. ; add collection and delivery, 
 loading and unloading, and for lo-ton lots the cost of 
 two tarpaulins at 12^". each, we get a rate of ^^s- 
 per ton for 5-ton lots, and 35^. nd. for lo-ton lots, 
 equal to about 4ii-. to 48.S-. collected and delivered 
 at owner's risk, or 45^^. to 60s. at company's risk. 
 In Austrian traffic the rate for the similar distance 
 between Vienna and Arad, 520 kilometres, amounts 
 to 37'90 florins, or about 66s. per ton station to 
 station. In h^'ance, between Paris and Lorient, 523 
 kilometres, the rate for articles not specially reduced 
 is 79'30/b\, or 62,s. ^d. per ton. Vox a similar dis- 
 tance between Germany and Austria, c.^<^. between 
 P^rankfort and Teplitz, the station to station rates 
 are Cjos. ^d. and 58J.". 6d. — once more, therefore, 
 higher than the l-Lngiish. Between ]3elgian and 
 German places, they are on much the same scale. 
 Between Bremen and Brussels, for instance, 519 kilo- 
 metres, the rate is 66-2^ /cs., or ^^s. station to station, 
 or, if collection and delivery be added, practicall}- the 
 same as the Fnglish rate. 
 
 " Birmingham — Fdinburgh ; distance 293 miles, or 
 471 kilometres; third-class rate 55^". per ton. The
 
 CH. viH. SlIORT-DISTAXCi: RATLS 1 85 
 
 ordinary German rate for this distance is 53J-. lod. 
 station to station, the reduced rate for virtually the 
 same distance is 39^". 'Sd. station to station, while the 
 special English rate for hardware is ^.^s. collected and 
 delivered. Between France and Germany the rate be- 
 tween Paris and Cologne, a distance of 487 kilometres, 
 \<,6\fcs. station to station — say yofrs. or 56^. per ton 
 collected and delivered. In Austria the rate for exactly 
 the same distance of 471 kilometres, from Vienna to 
 Schoenau, is 2o"8o florins, or 50X 51-/. per ton for 
 ordinary goods, 2270 florins or 39J-. gd. for hardware ; 
 both these rates, making allowance for collection 
 and deliver}', being about equal to the English ones. 
 The through rates bctw ecn Germ.any and Austria are 
 higher. Between Cassel and Aussig, for instance, 
 476 kilometres, the rate is 53^ 8^/. for ordinary traffic 
 and ^2s. \\d. for hardware, both station to station 
 only. The French rates for the distance of 473 kilo- 
 metres between Paris and Marennes is ^gfcs., equal 
 to yis. per ton. 
 
 " Feeds — Northampton. The principal traffic 
 moving is dressed leather, which is carried at a rate of 
 30.T. collected and delivered, or 25^'. station to station. 
 The distance is about 130 miles, equal to 209 kilo- 
 metres. The German rate for this distance is exactly 
 2 5 J", per ton, station to station. The French charge 
 between Paris and Le Mans, 210 kilometres, is 34/rj. 
 or 27^-. 2d., station to station. Between Dusseldorf 
 and Antv.'crp the rate is 2g-^ofcs. or 23^-. yd. 
 
 " Birmingham — Coventry. Where short distance 
 traffic exists to a certain extent — for example, between 
 Birmingham and Coventry — hardware packed is \os.
 
 1 86 CONTINENTAL RATES ch. viii. 
 
 per ton collected and delivered. The distance is about 
 1 8 miles, or 30 kilometres. The North German rate 
 amounts to 4^". ^d. per ton, station to station. The 
 French rates for the same distance amount on the 
 average to 6-5o/rjr., say 5^-. 2d., but in each case 
 collection and delivery must be added." 
 
 So much for what Continental railways charge 
 in comparison with English. This, however, is only 
 one-half of the question. It is at least equally 
 important to know how the accommodation which 
 they give in return compares with ours. On this 
 point my informant continues as follows : 
 
 " In comparing Continental rates with English 
 rates, the following points have to be considered : 
 (i) the time of delivery ; (2) the responsibility the 
 railways undertake for the delivery of the goods in 
 good condition ; (3) the accommodation and facilities 
 afforded to the public. 
 
 " I. Time of Delivery. — It is a well-known fact that 
 
 in England between the more important places, even 
 
 at a very great distance, goods are delivered within 
 
 twenty-four to forty-eight hours. On the Continent, 
 
 and especially on the German, Austrian, Dutch, and 
 
 Belgian systems, goods sent hy petite vitesse, or goods 
 
 service, are not delivered within these times. Their 
 
 times of delivery are made up as follows : 
 
 For handling at despatching station . . . . i day. 
 P'or carriage for the first lOO kilometres . . . I ,, 
 
 For every additional 200 kilometres, or part thereof .1 ,, 
 For handling at receiving station . . . . i ,, 
 
 " The day on which the goods are delivered to the 
 company is not counted, and the time of delivery is
 
 cu. viir. SMALL-SrEED TRAFFIC 1 8/ 
 
 not considered to have expired if an advice can be 
 sent to the consignee within the appointed time that 
 the goods have arrived. Taking our former exam- 
 ples, the time allowed in each case would be : 
 
 
 German 
 
 French 
 
 London to Aberdeen 
 
 . 7 days 
 
 9 days 
 
 London to Penzance 
 
 • 5 „ 
 
 7 „ 
 
 Birmingham to Edinburgh 
 
 • 5 „ 
 
 9 ,, 
 
 Leeds to Northampton . 
 
 • 4 ,, 
 
 4 „ 
 
 Birmingham to Coventry 
 
 • 3 ,, 
 
 3 5» 
 
 The day on which the goods were deUvercd to the company in each 
 case not being counted. 
 
 " If goods are delivered after the legal time, but not 
 more than three days late, the railway may be made 
 responsible to the extent of one-quarter of the charge 
 for carriage. If the goods are delayed for more than 
 three, but less than eight days, the consignee may 
 recover half the charge. If the delay exceeds eight 
 days, he may recover the whole. But he cannot 
 recover more than the amount paid for carriage, 
 unless he insures an ' interest,' so-called, in prompt 
 delivery. The charge for such insurance is, for every 
 lO marks insured, i pfennig for the first 50 kilo- 
 metres, i pfennig for the next 225 kilometres, 
 ■| pfennig for each 375 beyond. For instance, in the 
 case of a consignment to Aberdeen, with an insured 
 value of 25/. the additional charge would be is. 6d. ; 
 between London and Penzance it would be is. 
 
 " Of course, compensation is only paid when there 
 is proof of loss, and only to the extent that the loss 
 is proved. In England, when goods are not delivered 
 within a week, they are very commonly thrown on 
 the company's hands altogether, and the company
 
 lS8 COXTINEXTAL RATES en. viii. 
 
 may be thankful if b\- the sale of them it can get 
 back half the money which it has to pay to the 
 consignor. 
 
 " All the Continental rai!\va}-s, especially the 
 German ones, have a quick service called Eilgitt, or 
 grande vitcssc, the charge for which in Germany is 
 usually only tvricc the ordinary rate, but in many 
 parts of Austria, Belgium, and France, rises to as 
 much as three times \X\^ petite vitcssc rate. 
 
 " The time allowed for i^raiufc vitcssc or Eiinct 
 traffic is fixed as follows : Booking one day, and 
 for every 300 kilometres or part thereof one day. 
 The day of despatch is never counted, so that practi- 
 calh/, even for short distances, goods sent off on Mon- 
 day cannot be claimed before Wednesday night or 
 Thursday morning. It is only fair to mention that 
 the railway companies do not in practice avail them- 
 selves of the full time allowed them by law ; but in 
 many instances they do take the larger part of the 
 time allowed them, and the fact that the Eilgut 
 service is not really the quickest possible mode of 
 conveyance is proved by the fact of the existence 
 of a Cotirirgut service, that is, Eilgiit carried by 
 passenger or express trains. For this the charge is 
 twice the rate for Eilgut, at least four times, that is, 
 the ordinary tariff. Of course, goods are only con- 
 signed by CoHviigut for longer distances, and this 
 method of forwarding is very expensive ; for in- 
 stance, between London and Aberdeen the English 
 charge by passenger train is \\s. 8d. for i cwt., the 
 Coiirirgiit rate would be \()s. 6d., the French grande 
 vitcssc rate i6s. 3^/. To Penzance the English rate
 
 c'H. VIII. VERY LIMITEO LIABILITY 189 
 
 is the same as to Aberdeen ; in this case the German 
 Courirgut rate would be 1 2s., the French grandc vitcssc 
 rate gs. 5c/., but to these charges in both countries must 
 be added the cost of collection and deliver}'. Of course, 
 in England, where the goods ser\ice is so expeditious, 
 a very small proportion of goods is sent by passenger 
 train. The proportion on the Continent is much 
 larger, more especially in the case of valuable goods. 
 Besides, in consequence of the non -responsibility of 
 Continental railways for loss or damage of goods, 
 everybody is anxious to shorten the journc}-, and 
 therefore the risk of transit, as much as possible. 
 But this brings us to the second point of the liability 
 which attaches to a railway company as a carrier. 
 
 " The Continental railways, especially those of 
 Germany, Austria, and Holland, are not responsible 
 for any greater sum than 3/. per cwt., and if goods 
 are damaged, the railways pay an}^ claim, if they 
 pay at all, only on this scale. For instance, if goods 
 weighing i cwt., and worth about 30/., get damaged, 
 and the expert who is called in to arbitrate considers 
 that the damage amounts to half the value of the 
 goods, the Continental railway will pa}-, not the full 
 3/., but only 50 per cent, of that sum, viz. 30^-. If the 
 trader pleases, he can insure his goods for a higher 
 amount ; but a premium is charged for this of 2s. 
 per 1,000/. for every 150 kilometres or fraction 
 thereof For instance, for a ton of Bradford goods, 
 worth 300/., between London and Aberdeen, the 
 premium would be 35. 'jd., between London and 
 Penzance 2^. 5.'/. Further, it must be remembered 
 that, even where insurance is effected, it onl}- covers
 
 igO CONTINENTAL RATES ch. viii. 
 
 the risk while the goods are in transit on the railway. 
 The Continental railways, which only carry from 
 station to station, run no risk of damage through 
 loading and unloading on the sender's and consignee's 
 premises. 
 
 " Nor is this all. When a trader obtains a lower 
 rate for a 5 -ton or a lo-ton lot, he must undertake 
 the loading into and out of the railway truck himself. 
 It is true that the railway company will do it on 
 payment, where it suits them to do so, but even then 
 they do it at the customer's risk. And if the railway 
 company has not got convenient accommodation, or 
 does not see its way to make a profit out of the 
 transaction, it stands aside and leaves sender and 
 consignee to do their own work. For these truck- 
 load and half-truck-load goods the railway declines all 
 hability, so that the rates applied to them are practi- 
 cally like the Owners' Risk rates in England. There 
 is yet another charge which the railway is allowed 
 to make. They have the right, according to their 
 regulations, to forward certain classes of goods in 
 uncovered trucks. If the sender wishes them to go 
 in a covered waggon, he is charged an additional 10 
 per cent. But if, either because the railway has not 
 sufficient covered trucks on hand, or because those 
 which they have are not large enough to contain the 
 10 tons which they nominally carry, the trader is 
 obliged to use an open truck, he is not entitled to 
 any reduction on that account ; on the contrary, as 
 has been mentioned before, he is charged a consi- 
 derable additional sum for tarpaulins to protect his 
 goods from the weather.
 
 en. VIII. MINOR DIFFERENCES I9I 
 
 " In comparing the accommodation offered by 
 English and Continental railways respectively, the 
 following point should be considered : Continental 
 railways, even in large places, have seldom more than 
 one station — have at the utmost only two — at which 
 goods are received for despatch, or whence they must 
 be fetched by the consignee after arrival. The English 
 companies, on the other hand, in any place of im- 
 portance have a number of stations, and thus offer to 
 everybody facilities for delivering and fetching away 
 their goods. Further, the English lines afford proper 
 siding accommodation for station to station traffic. 
 On the Continental lines, such accommodation is often 
 very bad indeed, and the loading and unloading of 
 goods is interfered w^th every minute, and often 
 entirely stopped, by shunting and other work done 
 by the company for its own convenience. There is 
 another way in which the English companies meet 
 the convenience of their customers : goods collected 
 quite late in the evening are nearly always despatched 
 the same night. The Continental companies require 
 all goods to be delivered by an early hour. English 
 railways again lay themselves out to benefit their 
 customers in the matter of warehousing goods, and 
 by executing special instructions respecting delivery 
 to other warehouses, to docks, wharves, &c., without 
 extra charge — facilities which are quite unknown in 
 any other country. The Continental railway com- 
 panies make extra charges for everything they do 
 outside their regulations." 
 
 " Ten years ago,'" says Mr. Jeans, " a distinguished
 
 192 CONTINENTAL RATES cii. via. 
 
 French economist estimated the mean goods tariff 
 on British raihva)\s at 21 per cent, higher than that 
 of the French hnes ; and since then the difference 
 appears to have become still more adverse to Eng- 
 land." As we have seen alread}-, an economist, 
 however distinguished, can only estimate ; the exact 
 facts are unattainable. But let us assume that he is 
 correct. Let us assume further — in face of Mr. Scotter's 
 evidence before the Committee of 1881, that from the 
 office of the Manchester, Sheffield, and Lincolnshire 
 Compan}^ in the five years between 'jG and '81, there 
 were sent out notices of 56,942 reductions as against 
 fourteen advances, a still more questionable assump- 
 tion — let us assume that Mr. Jeans's estimate is also 
 correct, and that the French rates are nowadays 30 per 
 cent, lower than ours. To this concatenation of as- 
 sumptions it might fairly be answered : " Is that all 
 the reduction that is offered to induce traders to 
 accept a Continental instead of an English standard 
 of service } If Continental traders could send their 
 goods hy graiide vitcsse or Courirgut, which is certainly 
 not faster than the ordinary English goods service — 
 if they could get English accommodation in stations, 
 in insurance, in general readiness to oblige exchanged 
 for bundles of official red-tape, and all for an addition 
 of only 30 per cent, to their present rates — how much 
 traffic, one would like to know, would be left to go 
 under the conditions of the existing petite vitessc 
 services ? 
 
 Two more points in connection with German 
 railways should perhaps be noticed. Mention has 
 already been made of the fact that an English town
 
 cii. viu. CEKMAX RAILWAV STATIONS I93 
 
 has many more different stations than a German one. 
 It is also worth while to recollect where those sta- 
 tions are. Some fifteen or twent}' }-ears back the Great 
 Eastern Railway spent about 2,000,000/. sterling- in 
 order to bring its passengers from Bishopsgate Street 
 to Liverpool Street, half a mile or so nearer to the centre 
 of the City. Liverpool Street Station, having already 
 become too small for its traffic, is at this moment being 
 enlarged at a cost of about another 1,000,000/. sterling, 
 three-quarters of which sum goes in the purchase of 
 land. In Germany also the traffic is growing ; at 
 Frankfort, for instance, it has been necessary to build 
 a new station very much larger than the old one. 
 When it was opened a }-ear or two back, its size and 
 magnificence was trumpeted in every journal in 
 Europe. But the reporters forgot to mention that the 
 new station was half a mile further from the centre of 
 the town than the old one. Lest it should be sup- 
 posed that this case is exceptional, I will give another 
 instance. At Hildesheim, a town which, after sleep- 
 ing for centuries as soundly as Barbarossa in the 
 enchanted cavern of the Kyffhauser hard by, has in 
 the last few years awaked to new commercial life, 
 there also has been erected a splendid new station. 
 As at Frankfort, it is half a mile further from the 
 centre of the town than the old one ; the former site, 
 having been cleared and levelled, is now available 
 for sale as building allotments. 
 
 Now, if railways worked on these principles are 
 no cheaper than English lines, they most certainly 
 ought to be — cheaper at least as far as the direct 
 railway charges are concerned. For, if the law 
 
 o
 
 194 
 
 CONTINENTAL RATES 
 
 which holds elsewhere holds inside a town, that 
 wholesale carnage by railway is cheaper than retail 
 carriage in cabs and carts, it is difficult to believe that 
 the German policy, which, though possible to a State 
 monopoly, is fortunately impossible for our com- 
 petitive English companies, can be cheaper in the 
 long run. If, for example, in the case of Frankfort, 
 we were to add together the extra cost to the travel- 
 ling public, both in time and cab hire, the extra cost 
 of carting goods, the extra expenditure on the main- 
 tenance of the additional length of street, and capi- 
 talise the whole at, say, 4 per cent., it is probable we 
 should arrive at a sum representing the value of a 
 good many acres of land adjoining the old station.'* 
 Another and a more important point is this. The 
 
 * This point the English traders' 
 advocates very wisely ignore. The 
 Lancashire and Cheshire Confer- 
 ence Report, for instance, con- 
 demns in no measured terms the 
 system by which the English rail- 
 ways not only deliver goods at 
 stations in the heart of the great 
 towns, but actually expect their 
 customers to pay for this service, 
 instead of leaving the traders to 
 cart their own goods to the stations 
 in the outskirts. I have made 
 a rough estimate of what the 
 adoption of the new system would 
 mean in London. I find that the 
 northern companies bring into and 
 take out of the City something like 
 3,000 van-loads of goods per diem. 
 If the traders did their own carting 
 it would mean at the very lowest, 
 for traders' waggons would rarely 
 get full loads, even one way, 
 10,000 additional vehicles daily 
 between the City and the northern 
 
 termini. It has been calculated 
 on good authority that the total 
 number of vehicles passing through 
 the Strand in the 24 hours is only 
 12,000. This one- fact, then, is 
 surely sufficient to prove that the 
 streets from the City to King's 
 Cross and beyond would be en- 
 tirely inadequate for the enormous 
 additional traffic which would 
 have been thrown upon them had 
 the railway companies stopped 
 short to the north of the Euston 
 Road. And if the millions which 
 have been spent by the railways 
 in bringing their lines into the 
 City had been spent in street im- 
 provements, and charged on the 
 parish rates, instead of, as now, 
 being included in the railway 
 charge, would the London pul)Iic 
 have secured any great gain in 
 economy ? That they would have 
 lost in expedition and conveni- 
 ence is of course undeniable.
 
 cu. VIII. THE GERMAN TARIFF 195 
 
 published statistics of the German raihvays are very 
 far from representing the total sum which is paid for 
 railway accommodation by the public. " The traffic 
 in commodities in Germany," says Sir Bernhard 
 Samuelson, " is carried on underrates founded upon 
 intelligible principles." Let us endeavour therefore to 
 understand them. Neglecting altogether traffic in coal, 
 lime, ironstone, farm manure, and similar raw mate- 
 rials of production, and dealing only with what may 
 more properly be called merchandise — ignoring also 
 the very numerous exceptional tariffs of which we have 
 already spoken — we find that the German system 
 works as follows : — For goods carried in small quan- 
 tities [Stilckguf) there is — in addition to the charges 
 for terminals, covering, weighing, insurance, &c. — a 
 fixed rate of 2'12'^d. per ton per mile ; for loads of 
 5 tons the rate comes down to 1*283^., and for 
 loads of 10 tons to ri62</. Or, let us say, in round 
 figures, that the charge for small consignments is not 
 far short of double the charge for 5 -ton and lo-ton 
 lots. 
 
 Now, it is obvious that in the case of an ordi- 
 nary merchant or manufacturer's business, a consign- 
 ment of 5 tons, and still more of 10 tons, to a single 
 customer must be very exceptional. It was stated, 
 for example, before the Committee of 1881, that the 
 average weight of a single consignment, apparently 
 including minerals as well as goods, was only 7 cwt. 
 on the South Eastern Railway. More recently the 
 South Western has taken out the weight of all the 
 goods passing through Nine Elms Station on Friday, 
 October 4, 1889. The number of consignments of 
 
 o 2
 
 196 CONTINENTAL RATES ch. viii. 
 
 merchandise, properly so-called, was 5,798, and the 
 weight 854 tons, or, say, roughly an average of 3 
 cwt. per consignment. Probably the circumstances 
 of Germany are not so very dissimilar. 
 
 To the man then who wants to send 3 cwt, the offer 
 of a cheap rate for a consignment of 5 or 10 tons is 
 absolutely illusory. Still, the difference between the 
 St/ickgut and the truck-load rate is so enormous that 
 some attempt was bound to be made to make these latter 
 practicably available to the public. What has in fact 
 happened is this. There have sprung into existence, 
 since the introduction of the "Reform " tariff, a number 
 of forwarding agents, or Spcditcurc. Their business is 
 to collect or receive goods from the public, to make 
 them up into lots of 5 or if possible 10 tons, and then 
 hand them over to the railways for carriage. Their 
 profit consists of so much of the difference between the 
 very high Stiickgut rate and the comparatively low 
 truck-load rate, as they can persuade the public to 
 leave in their hands. Roughly speaking, it is estimated 
 that the Spediteiire do in fact succeed in retaining, not 
 of course as net profit, from a half to two-thirds. 
 
 There is no need for us here to investigate in 
 detail this highly artificial system. Still less is it 
 necessary to say one word against the Spcditcurc, 
 who have done what is in their power to bring the 
 most unnatural, however " intelligible," system of the 
 German Government into conformity with the hard 
 facts of this workaday world. But the following 
 objections are obvious at the first glance. In the 
 first place, instead of dealing direct with a railway 
 company, a large and conspicuous public body, easily
 
 ni. Yiii. THE " SI'EDITEURE I97 
 
 accessible to control by public opinion and by 
 positive statute law, the trader is at the mercy of 
 the Spcditcur, who makes his own rules, and 
 occupies no public position whatever. Secondly, 
 the system leads to enormous delay. A consign- 
 ment, for example, going, say, from Potsdam to 
 Diiren, near Cologne, would probably first be taken 
 at the Stiickgut rate back to Berlin, then be sent as 
 portion of a lO-ton load from Berlin to Cologne, 
 there once more unpacked and sent on to Diiren at 
 the Stiickgut rate, or possibly it might be detained in 
 Cologne till a 5 -ton load for Diiren had time to 
 accumulate. Instances are mentioned in which 
 freight consigned from New York to Berlin took 
 longer over the last 234 miles from Bremen than 
 over the whole of the ocean voyage thither. 
 
 Another objection, and no slight one, is the un- 
 certainty of the system. The Spediteiire have got to 
 live, and the possibilities of making up lo-ton loads 
 — of transacting their business, that is, in the most 
 economical manner — vary very considerably from 
 time to time. Accordingly, their tariffs are revised 
 from year to year. Further, they are not the same 
 necessarily in both directions. From Mannheim to 
 Berlin, for instance, the Speditciir's rate per ton is 
 42J-. ; from Berlin to Mannheim it is 55-r. 6d. 
 
 Here let us leave this matter. The main point is 
 to notice that the ton-mile statistics of the German 
 railways by no means represent the whole sum that 
 the German public has in fact to pay for railway 
 carriage ; and that the low rates for 5 and lo-ton 
 lots, which look so well on paper, are not directly
 
 198 CONTINENTAL RATES ch. viii. 
 
 available to the German public at all ; and that the 
 fraction of benefit derived from them, which in fact 
 the public does obtain, can only be obtained on con- 
 dition of paying for the maintenance of an immense 
 organization of parasites to perform functions which 
 in England are performed as a matter of course and 
 without extra charge by the railway companies as 
 part of their everyday business. 
 
 One word may, however, be added : that if any- 
 body is anxious to see the German system introduced 
 into England, it is more than possible that his wishes 
 will be gratified within the next few years. For one 
 at least of our most experienced general managers is 
 of opinion that if the maximum rates are reduced 
 any further, the railway companies will be forced to 
 abandon their present position as public carriers, and 
 to return to the status which they occupied fifty 
 years ago as carriers' carriers. Messrs. Pickford, 
 and Chaplin & Home, and their rivals, would then 
 load and unload, fetch and deliver, insure, and per- 
 form all the other functions which they once per- 
 formed in England, and which the Spcditaire now 
 perform in Germany. To obtain the necessary 
 accommodation, they would rent the goods stations of 
 the existing companies ; nor would the}^ have any 
 hesitation in paying a handsome rent for them, for, 
 whatever Traders' Conferences may say, there is a 
 good deal of traffic in England which might be made 
 to bear rates much higher than those at present in 
 force, if the inconvenient restrictions imposed on the 
 railway companies by the legislation of the last half 
 century could be quietly left on one side ; if the rail-
 
 cu. VIII. PACKED-rARCEL CARRIERS I99 
 
 way companies simply charged their statutory tolls 
 for the use of the line and the provision of locomo- 
 tive power, and the irresponsible carriers exacted 
 what terminals they pleased and adopted such clas- 
 sification as they found convenient. 
 
 It is, however, pretty safe to say that no one 
 wishes to see the Spcditeur acclimatised in England. 
 Writing a propos of the precisely similar system 
 which up to the year 1 847 maintained a struggle for 
 existence on the English lines, Professor Hunter says ;■'* 
 " The carriers tried to keep the railway companies as 
 nothing more than sub-carriers, responsible only to 
 them, and having directly no contact with the customer. 
 Such a view was not likely to commend itself either 
 to the directors or shareholders of the railway com- 
 panies ; they entertained the not unnatural fear that 
 under this arrangement, after they had borne the 
 brunt and heat of the day, in introducing at their own 
 risk a vastly improved machinery for the conveyance 
 of goods, the carriers would interpose between them 
 and the public and secure a large share of the profits 
 which might legitimately find their way into the 
 railway exchequer. . . The subject engaged the 
 closest consideration of Select Committees of the 
 House of Commons in 1839 and '40. . . . The Select 
 Committee of 1839 heard much evidence on the 
 comparative merits of these systems, and declined 
 to express any opinion until further experience was 
 obtained. The Committee of 1840, however, arrived 
 at a decided opinion. They declared against the 
 views of the carriers, and held that the railway com- 
 
 ^ Kaihray and Canal Traffic Act, 1888, pt. i., pp. 11, 12.
 
 200 CONTINENTAL RATES ch. viir. 
 
 panics should not be prohibited from collecting and 
 delivering goods at the termini." 
 
 Consequent on this decision there was a struggle 
 for a few years, followed in the course of nature by 
 the survival of the fittest, and the extinction in this 
 country — except for mere parcels traffic — of the Spedi- 
 tciir, only to reappear forty years later in Germany, 
 galvanized into life by a system which — " natural " 
 though it may be, and "intelligible " though it may 
 be — has yet embodied the mistake, common to all 
 powerful and highly organised bureaucracies, of as- 
 suming that the customers were made for the rail- 
 ways, not the railways for their customers ; which 
 lays down a cast-iron scale of rates, proper at all times 
 and seasons and places, for consignments of small 
 amounts, of five tons, and ten tons, respectively — a 
 scale whose abstract justice it evolves from the depths 
 of its own inner consciousness — and expects the public 
 to govern itself accordingly. 
 
 But probably enough has been said to show that 
 an attempt to compare the railway systems of two 
 countries merely on the basis of their printed tariffs 
 is as preposterous as though a foreigner should write 
 an essay to prove that London cab-fares are extor- 
 tionate, on the ground that, while an omnibus will 
 carry a passenger from Charing Cross to Liverpool 
 Street for a penny, the driver of a hansom expects 
 for the same distance eighteen times as much. Or, 
 as though one should argue — as indeed has actually 
 been done more than once — that the North Western 
 must be extravagantly over-capitali/xd at 53,000/. per 
 mile, seeing that the Americans can lay ten miles of
 
 cu. Mil. AUSTRALIAN TARIFFS 201 
 
 "track," as they appropriate!}' call it, across a Texan 
 prairie for the same fic^ure. It is worth while, how- 
 ever, noticing very briefly where this paper comparison 
 of tariffs would really land us. 
 
 The Cape Government Railways, for instance, 
 charge 6^/. per ton per mile for articles such as cast- 
 iron grates and kettles. On imported coal the tariff 
 is T,d. per ton-mile, while the native article is let off 
 at the reduced rate of 2Ss. 6d. for 1 80 miles, as against 
 ys. 2d. for a similar English distance. In Ceylon 
 again the average rate for the whole traffic, the vast 
 bulk of which consists of rice and similar low-class 
 commodities, is 4c/. per ton-mile. In the Argentine 
 Republic there are rates in force rising as high as 85^., 
 while in New South Wales the last report of the 
 Government Commissioners boasted that the highest 
 rates had been brought down from gd. to yd. The 
 Australian coal rates were referred to at some length 
 before the Committee of 1881. For distances of 150 
 miles they vary from gs. 5c/. in the case of Queensland 
 to 3ii". 3c/. in the case of South Australia, which, 
 on the other hand, responds by charging ploughshares 
 at 39.y. 6d., as against a rate of lo^s. 4d. in Queensland. 
 Is it really possible to found any serious argument on 
 such figures as these ? Would the coal merchant 
 in Queensland be justified in declaring the South 
 Australian Government three times as extortionate 
 as his own, and the South Australian manufacturer 
 of agricultural instruments in maintaining that the 
 proportionate extortion was accurately stated, only 
 that it applied the other way round ? 
 
 Or, take another instance : the Indian rates are in
 
 202 COXTIN i:\TAT. RATES cir. viii. 
 
 many instances enormously less than those obtaininj^ 
 in Europe. Shall we therefore say, with Aristotle, that 
 the deficiency which is Indian is bad, that the excess 
 which is Argentine or Australian is bad also, and that 
 the mean which is displayed in England is right and 
 proper? Shall we not rather examine the conditions 
 under which the rates appl}-, and taking for example 
 the lowest rate for passengers of, say, ^d per mile in 
 India, as against four times that amount in England, 
 go on and compare the circumstances of the two 
 countries ? And when wc do that, what shall we find ? 
 That in the one country a workman's time is worth 
 about 2('/. a day, while in the other it is worth about 
 Qc/. per hour. That the Indian, therefore, who sacri- 
 fices half a day to save three-halfpence is a gainer, 
 while the Englishman who wastes an hour to gain 
 sixpence is a loser. Then, \\ith this idea in our minds, 
 we shall compare the train services of the two coun- 
 tries, and we shall find that in India the trains run so 
 seldom and stop at so many intermediate stations, 
 that they can accumulate loads of 400 or 500 pas- 
 sengers, so returning to the railway an income of 
 something like los. per train mile; that in England, 
 on the other hand, where passengers cannot afford to 
 waste a day in waiting for a train, and where they 
 demand to be carried to their destination ^ith the 
 utmost possible speed, trains must run so often and 
 so fast — that is, stop so seldom — that an average ex- 
 press carries barely fifty passengers, has to be content 
 in other w^ords with earning only 4^-. a mile. 
 
 And if, in so simple and straightforward a matter 
 as passenger traffic, we see that how far mere paper
 
 cii. viu. PAPER COMPARISONS 203 
 
 comparisons of fares charged might lead us astray, 
 shall we not be wise if, in the immeasurably more 
 complicated and more recondite matter of goods 
 traffic, we distrust those who on mere paper com- 
 parisons of printed tariffs — and much more on com- 
 parisons of printed tariffs with surmises as to the 
 average rates charged in this country — invite us to 
 pronounce dogmatically as to the justification or 
 non-justification of the charges made by our English 
 railways ?
 
 204 
 
 CHAPTER IX 
 
 A M i: R I C A X R A T E S 
 
 '' If," says ^Ir. Jeans, in the " Nineteenth Century " for 
 September 1890, "the traffic carried on the railroads 
 of the United States in 1888 had paid the same 
 average ton-mile rates as they (sic) did twenty years 
 before, the people of that country would have been 
 charged for the transportation of the products of 
 their fields, factories, and mines, about 192,000,000/. 
 sterling more than they actually did pay in that year." 
 An equally valuable and veracious comparison 
 would show that, if the 800,000,000 passengers whom 
 the railways of the United Kingdom carried in the 
 same )-ear had been called on to pay the fourpence a 
 mile which they would have paid to the old stage- 
 coaches, instead of the one penny per mile with 
 which the railway companies were content, the ICnglish 
 people would have been charged for their transporta- 
 tion about 80,000,000/. sterling more than they actually 
 did pay in that year. Needless to say, however, that 
 — imposing as the long row of figures may look, and 
 accurate from an arithmetical point of view though the 
 multiplication sum. may be — the one calculation and 
 the other arc equalh' de\oid of practical value. The 
 English railways have not remitted this vast tribute
 
 CH. IX. IMAGINATIVE STATISTICS 20$ 
 
 of 80,000,000/. per amniui, for the simple reason 
 that at stage-coach rates the passengers would have 
 stopped at home. So, too, in the case of the United 
 States. The Western farmer has had a hard enough 
 struggle to make both ends meet even with the 
 present rates of carriage. Had the railway rates 
 remained what they were in the days when the West 
 was first opened up after the Civil War, the buffalo 
 would still be roaming over the wheat-fields of Iowa 
 and Wisconsin. 
 
 But, to drop imaginative statistics and to come to 
 plain and literal fact, it is undeniable that at the 
 present mom.ent the average rate per ton per mile for 
 the carriage of goods in the United States — including 
 under the term " goods " not only coal and wheat but 
 furniture and millinery — is in round figures something 
 like one halfpenny. Mr. Jeans gives it at '91 cent for 
 1888. The Statistical Bureau of the Inter-State Com- 
 merce Commission puts it at rooi for 1888 and '922 
 for 1889. If we add to this, as we ought to do to 
 make the comparison a fair one, the receipts of the 
 express companies and the carting agencies, we shall 
 probably not do more than bring up the -922 to an 
 even cent. 
 
 Now, as has already been said, no accurate com- 
 parison with these figures is possible in the case of 
 the English railways, because the necessary statis- 
 tics are not in existence. W^e know that in round 
 figures 300,000,000 tons were carried at a cost of 
 40,000,000/. sterling — at an average cost, that is, of 
 2s.'^d. per ton. Supposing the average distance travelled 
 ■ to have been twenty miles, this would be roughly
 
 206 AMERICAN RATES en. ix. 
 
 equivalent to iW. per ton-mile ; or, supposing the dis- 
 tance to have been thirty-two miles, it would be equi- 
 valent to one penny. Probably the truth is that the 
 distance was nearer the shorter than the longer figure. 
 If we say that English traffic paid on an average i^d. 
 per ton per mile — that is, a good deal more than double 
 the American average — our guess will probably be as 
 near the truth as it is possible to go. The fifty or 
 sixty per cent, reduction which the American rail- 
 ways have achieved is therefore without doubt a feat 
 of which they have ever)^ right to be proud. Let us 
 realise what it means. 
 
 One commonly sees in the City intelligence of the 
 newspapers the information that the Chicago rate has 
 been cut to i6 or i8 cents, or again has been restored 
 to 25 cents. This is to say, in other words, that 100 lb. 
 of wheat is carried from Chicago to New York, a 
 distance of between 900 and 1,000 miles, for 25 cents 
 or in English figures 22^-. Gd. per ton.' Now, the 
 Chicago rate to New York is the basis on which the 
 whole of the through tariffs over the larger part of the 
 United States depend : for example, when the rate 
 from Chicago to New York for wheat is 25 cents, it 
 is 23 cents to Philadelphia, 22 cents to Baltimore, and 
 20 cents to Albany, and as the New York rate moves 
 down, all these other rates move down proportion- 
 ately with it. Then again other towns and distri- 
 buting centres in the West are charged fixed pro- 
 portions of the Chicago rate. Taking the Chicago 
 standard as 100, St. Louis pays 12 per cent, more, 
 
 ' Per "gross" ton, that is, of 2,240 lbs. The ordinary American 
 reckoning is 2,000 lbs. only to the ton.
 
 CH. IX. THE CHICAGO RATES 20/ 
 
 Cincinnati 1 3 per cent. less. We may say therefore 
 that, while the trade of the country as a whole is 
 carried at ^d. per ton per mile, or roughly the Eng- 
 lish price for coal in full train-loads, the grain traffic 
 on the through routes between the great producing 
 and distributing centres is carried at a price of some- 
 thing between a farthing and a third of a penny. 
 
 Further, it must be acknowledged that, unlike 
 Continental rates, which need when compared with 
 English ones to have additions made to them for 
 terminals, for loading and unloading, for sheeting, 
 for weighing, for checking, &c., &c., these American 
 rates are inclusive. It is true they do not include — ■ 
 and the exception is of course a very important one 
 — collection and delivery.- In the case also of rough 
 freight, such as firewood or paving-stone, and also 
 sometimes in the case of perishable produce, the rail- 
 way does not undertake to load and unload. Moreover^ 
 a considerable proportion of the trafific is carried only 
 at owner's risk ; not as with us in the alternative, but 
 the " release," as it is called, of the company is made 
 a sine qua non. But the whole of the services ren- 
 dered by the company, \\'hatever they be, arc covered 
 by the inclusive rate quoted in the tariff The 
 22s. 6d., for instance, from Chicago to New York 
 includes sending the railway truck alongside the 
 elevator in Chicago and delivering the wheat in 
 lighters alongside the steamer in New York harbour. 
 
 - There are, I am informed, included in the rate — Baltimore, 
 
 three places in the States, two of Washington, and Watkins Glen ; 
 
 them important, and one most un- the reason in each case being 
 
 important, where collection or different, but of a purely local 
 
 delivery, as the case may be, is nature.
 
 208 AMERICAN RATES cir. ix. 
 
 Sucli being the rates which the American rail- 
 ways have perforce to be satisfied with, the question 
 which naturally occurs to an En!;i!shman is, I low- 
 do thc\' live ? l^adly enough, it must be confessed, 
 seeing that the profit on railwa\- inxestments is 
 steadily but not slowly diminishing year by year, 
 and that in the last year for which statistics are 
 available the average rate of interest paid by the 
 United States railways was on ordinary stock tqi 
 per cent., on preference stock 2'ii, while on the 
 xvhole capital invested, both in stock and bonds, 
 it was onh^ 3"io. Of the stock, nearly two-thirds 
 paid no di\idend whatever, while more than 18 per 
 cent, even of the bonds were in default. And this, be 
 it remembered, in a country where the a\crage rate 
 of interest on investments of other kinds is at least 
 half as high again as is the case with us.-' 
 
 Still, though the shareholders may not be to be 
 congratulated on the results of their enterprise, the 
 American railways do continue to live — to pay, that 
 is, their working expenses and their fixed charges — 
 even at this extraordinarily low tariff Further, it 
 
 * It has often I'ccn asserted, and Adams, tlic statistician to the 
 
 is commonly, 1 think, believed in Inter-State Commerce Commis- 
 
 this country, that American rail- sion, probably the most competent 
 
 way stock is mainly "water." authority in that country on the 
 
 llncjuestionably there is a very jioint, professes himself unable to 
 
 large amount of stock in existence make even a plausible guess, 
 
 not representing hard cash put Meanwhile, this at least is certain, 
 
 into the line ; on the other hand, that if we apply the only practical 
 
 hundreds of millions of dollars, test, the price for which they 
 
 which were honestly invested, have could be replaced, the railways 
 
 been wiped out under foreclosures of the United States are worth 
 
 and reconstruction schemes. to-day far more than their capital 
 
 "Which of these two items is the value.- 
 larger no man can say. Professor
 
 CH. IX. THE farmers' ALLIANCE 209 
 
 may be said that a few exceptionally favourably 
 situated lines — the Pennsylvania, and the New 
 York Central, with its allied companies, are the 
 most conspicuous instances — succeed in living very 
 comfortably. What is more, even in the West, 
 where the normal condition of the railways is chronic 
 bankruptcy, certain old-established lines, such as the 
 Illinois Central and the Chicago and Alton, still con- 
 tinue to pay good dividends. How much longer 
 they will continue to do so, depends on two con- 
 siderations : the first, whether the inexhaustible cre- 
 dulity, the inextinguishable ardour for investment 
 of the British capitalist, will continue to multiply in- 
 definitely competitors for whom there is no traffic 
 actual or potential available for some time to come ;"* 
 the second, how far the profound dissatisfaction of the 
 Western farmer is likely to push a policy of confisca- 
 tion. For it is one of the most striking features of 
 current American history that in the New England 
 States, where the rates are practically almost as high 
 as in England, and where dividends are satisfactory, 
 the railway companies are very fairly popular. In the 
 West, on the other hand, where the rates are so low 
 that the public practically gets its service merely at 
 the price of working expenses, a politician out of 
 place, bidding for popular support, can find — not before 
 a town rabble, but before an audience of sober, God- 
 
 * There is, of course, this to be for the next few years, provided 
 
 said for the capitalist : the States he can gain and hold possession of 
 
 are developing so fa.^t that a line the strategic points — if there are 
 
 which is bankrupt to-day may be any still left unoccupied — on the 
 
 a " bonanza " to its proprietors in natural lines of communication of 
 
 ten years' time. A man may be wise the great West, 
 to deliberately forego a dividend
 
 2IO AMERICAN RATES ch. ix. 
 
 fearing farmers, wliose fathers were in all probability 
 New England Puritans — no more attractive topic than 
 proposals for the further spoliation of those " vampire 
 foreigners," those " robber barons," the railway com- 
 panies.'^ 
 
 But the point of interest to us here is not so much 
 the proiit which the American railway shareholders 
 secure for themselves, as how they manage to carry 
 on their services at all at the price they receive. To 
 answer the question within any reasonable limits of 
 space is a task of the utmost difficulty. " On account 
 of the great extent of territory," says Professor 
 Adams,** through which the railways run, and the 
 great variety of conditions, both social and industrial, 
 to which their business must be adjusted .... an 
 average taken for any class of facts reported for all 
 the railways of the United States has but little mean- 
 ing. It is typical of nothing in the sense that it is a 
 measure with which corresponding facts for individual 
 cases may be compared." This very average of one 
 halfpenny per mile, for instance, is made up out of 
 an average charge of one farthing on the New York, 
 Chicago, and St. Louis, and twenty-one 'pence on the 
 Pittsburg and Castle Shannon. But then the former 
 line is 523 miles long and carries 800,000,000 tons 
 one mile ; the latter is 9 miles long and carries 95,000. 
 
 * The last report, for instance, Jay Gould, there is, on the other 
 
 of the Railroad Comniissioners for hand, not a single Texan line 
 
 the vState of Connecticut gives which pays a dividend, and only 
 
 the average ton-mile earnings as half of them are able to meet their 
 
 1*69 cents, while on seven out of bonded indebtedness. 
 
 the ten lines it is over 2 cents, " Statistical Report of the Inter- 
 
 and the average dividend as with- State Coiuincrce Covnnission for 
 
 in a fraction of 5 percent. Accord- 1889, p. 38. 
 ing to a recent statement of Mr.
 
 CH. IX. DIFFICULTIES OF COMPARISON 211 
 
 Between these two extreme points there are all possible 
 variations. There are roads earning 5^., iO(^., and i^d. 
 per ton per mile. Quite considerable systems even have 
 a high average rate. On the Connecticut River line, 
 for instance, it is 273 cents, on the Denver and Rio 
 Grande 2*2 cents, and on the Long Island Railway, 
 where the great bulk of the traffic is in coal and 
 building materials, ygi cents. But the enormous 
 volume of the long-distance trunk-line traffic swamps 
 these totals and brings down the average for the 
 entire country to, as has been said, one halfpenny. 
 
 It might therefore fairly be urged that, though an 
 English railway expert may learn very much from 
 American experience, the task of comparing Ame- 
 rican railways with English is one which implies 
 such an amount of detailed description, such a mass 
 of exceptions and qualifications and explanations, 
 that it cannot profitably be attempted by a layman 
 writing for laymen at all. If any one could accomplish 
 it satisfactorily, it would be Professor Hadley. And 
 yet Professor Hadley writes: ^ "Any attempt at com- 
 parison of freight charges would be long, technical, 
 and unsatisfactory. On high-class freight it is alto- 
 gether impossible, because the English rates for such 
 goods include collection and delivery. No one can tell 
 how much we should allow for cartage, or whether 
 we should take American freight rates or express 
 rates as our standard of comparison. An extremely 
 rough estimate, not making allowance for any of the 
 disadvantages to which English railroads are subject* 
 would indicate that their charges per ton-mile on all 
 
 ' Railroad Transportation, p. 158. 
 
 P 2
 
 212 AMERICAN RATES cir. ix. 
 
 traffic average from 50 to 75 per cent, higher than 
 ours." Still, perhaps a few pages devoted to the 
 subject should enable us to achieve, if not positive, at 
 least negative results ; and, considering the number 
 of English critics who ignore such trifles as cost of 
 cartage altogether, even that will be something. We 
 can hardly do better than begin with an analogy. 
 
 j\Iost people know the American hotel system^ 
 if not by personal experience, at least by description. 
 For a sum of iSs. or i/. a day, a visitor to Washing- 
 ton or Chicago is made free of the house. Within 
 wide limits, he has his meals when he pleases, and 
 takes his choice of any or all dishes on the memi, 
 which comprises all the delicacies of the season. 
 From the oysters at the beginning of his dinner to 
 the grapes and peaches at the end, everything is 
 served absolutely without stint. Extra charges for 
 baths or lights, for coffee after lunch or after dinner, 
 are practically unknown. In fact, in a country where 
 wages and rent are very much higher than is the case 
 in England, life at an hotel is a great deal cheaper. 
 On the other hand, if one goes to an hotel organised 
 on the European principle, one pays for one's room 
 much the same as in the other case one pays for 
 everything, while the prices for each individual 
 article of food arc such as would make the expe- 
 rienced boulevardier, accustomed to the charges of 
 Bignon or the Cafe Riche, stare and gasp. 
 
 The truth is that the plastic American intellect 
 has introduced the wholesale principle into regions 
 where the slower-witted nations of P^urope have 
 never thought of api)k!..^ !!;. The factor)- life of
 
 CH. IX. THE WHOLESALE SECRET 213 
 
 England is new ; and our manufacturers fully ap- 
 preciate the economies to be effected by turning out 
 pins by the million gross, cotton yarn by the mil- 
 lion pounds, and steel rails by the tens of thousands 
 ■of tons. But the Americans have applied the principle 
 to businesses which have existed since the dawn of 
 civilization. Their hotel-keeping is wholesale ; their 
 farming is wholesale ; and, most of all, their trans- 
 portation system is wholesale. The English farmer 
 still looks upon the railway train as only a slightly 
 magnified carrier's cart, and persists in sending his 
 basket of eggs or his hamper of vegetables to market, 
 as his grandfather did when George III. was king. 
 The American farmer does his business in car-loads. 
 How far the new departure is due to the volun- 
 tary action of freighters themselves, how much to 
 pressure put upon them by the railroad, no one can 
 tell. But the result is to-day that the Pennsylvania 
 Railroad, a company with probably a larger local and 
 short-distance traffic than any other railroad in the 
 States, reports that 80 per cent, of its business is done 
 in car-loads, that is, in minimum quantities of ten 
 tons. No doubt the introduction of this system has 
 been rendered easier in America by the fact that the 
 English companies inherited an old-established busi- 
 ness in a settled and thickly populated country, while 
 in America the railroads went first, and the popula- 
 tion and the business only followed after them. 
 Still, in the older parts of the country there was a 
 certain amount of vis inertia; to be overcome. A 
 gentleman, for instance, now high up in the service of 
 the Pennsylvania Railroad, told the present writer a
 
 214 AMERICAN RATES ch. ix. 
 
 month or two back that he occupied a position as 
 local freight agent when the rapid diminution of 
 rates forced his company to realise that they could 
 no longer afYbrd to go on hauling the small old- 
 fashioned cars. It was his business to break the 
 news to the farmers in his district. They were in 
 despair. It was impossible, they said, for one man to 
 furnish the loading for a ten or twelve-ton truck. He 
 put it to them that the way out of the difficulty was 
 to be found in combination. Let three or four of 
 them agree together to order in a truck of coals or to 
 load out on a certain day a car-load of produce, and 
 then they could share amongst them the fruits of this 
 economy. In a very short time the farmers fell into 
 the new system, and all trouble on the subject was at 
 an end. 
 
 And to-day, while the English farmer and 
 market gardener goes on in the retail methods of his 
 ancestors, selling his fruit by the sieve and half- 
 sieve, his celery by the basket, and his peas by the 
 bag, his American rival deals in the same commodi- 
 ties by the car-load. There lies before me, for in- 
 stance, as I write, a list of the strawberries sent up 
 last summer in the course of a fortnight from Swan- 
 wick in Hampshire to London. So extravagant was 
 the method of packing and loading adopted, that it 
 required 1 1 trucks to convey 5 tons of strawberries, 
 or an average of a little over 9 cwt. per truck. One 
 day there were 24 packages, weighing 10 cwt. amongst 
 them ; a day or two after there were 52 packages to 
 carry less than one-quarter of the weight. The 
 growers, no doubt, grumbled at the rate, which works
 
 cu. IX. CAR-LOADS OF EGGS 21 5 
 
 out at exactly 3^. per ton-mile ; but the railway com- 
 pany, which received a gross return of under los. per 
 truck for a total journey of nearly 180 miles (for of 
 course the trucks would have had to go down empty), 
 had at least an equally good right to grumble. 
 
 When an American railway deals with a traffic 
 of this kind, it either charges a car-load rate and 
 leaves the shipper to get in as many tons as he 
 can, or else it charges a rate per 100 lbs., which is 
 very much higher than anything to which we are 
 accustomed on this side of the Atlantic. But, in 
 truth, the American public has learnt its lesson. Our 
 railways waste their time with fractions of hundred- 
 weights. If the Lancashire and Cheshire Conference 
 got its way, they would be required, if I mistake not, 
 to work out fractions of a penny. The American 
 railways fix a minimum charge of is., and a minimum 
 weight of 100 lbs. 
 
 In fact, as has been said, the real American unit 
 is the car-load, or say 10 tons. Butter, eggs, vege- 
 tables, are all forwarded in this manner. Either the 
 grower produces sufficient of the single article to 
 furnish a car-load himself, or, if he cannot do this, 
 he sells to the dealer at the local centre, who makes 
 up a car-load from the contributions of the neigh- 
 bourhood. If this too is impossible, as in the case of 
 a commodity like eggs it well maybe, the local dealer 
 in his turn sells to a travelling agent, who comes 
 along the line and stops his car at four or five diffe- 
 rent points, and so makes up the full load amongst 
 them. Much the same in its effect is the Chicago 
 system of grading wheat. Once a farmer's wheat
 
 2l6 AMERICAN RATES cu. ix. 
 
 reaches Chicago, its identity is lost. He gets from the 
 broker, not a receipt for his wheat, but a certificate for 
 so many bushels of " number 2 spring," or " number 
 I Turkish red winter," and the whole of the grain of 
 the same quality being then mixed together in the 
 elevators, all expense of identification and possible 
 small consignments is avoided. 
 
 The same principle might be carried through 
 innumerable instances. Mr. Grierson, for instance, 
 told the Committee of i88i that the chairs his 
 company brought up, presumably from Wycombe, 
 occupied 827 cubic feet to the ton weight.^ Chairs 
 also come into New York by the tens of thousands 
 from the great Michigan factories, but no chair is 
 ever to be seen in the railway freight-sheds. There 
 are bundles upon bundles of backs and seats, of legs 
 and staves, which as soon as they get to New York 
 will become chairs ; but the finished article is no- 
 where to be found. So too with wooden pails for 
 stable or domestic use. A glance at the American 
 classification explains the reason. Chairs " set up," 
 in less than car-loads, pay 2^ times first-class rate. 
 Chairs completely " knocked down " — that is, in 
 pieces — if in car-loads, pay fourth-class rate. The 
 difference, that is, is that in the former case the rail- 
 way charge would be, from say Lansing, 178 cents, and 
 in the latter case 33 cents per 100 lbs. carried. Or, 
 take another instance — they can be found by dozens 
 by any one who will look through the classification 
 
 * On the ordinary shipowner's marked, would pay as for a weight 
 principle of 40 cubic feet to the of 20 tons. 
 ton, these chairs, it should be re-
 
 CH. IX. CHEESE LOOSE NOT TAKEN 21/ 
 
 for himself. There is a demand, let us say, for 
 stovepipes at Croton Falls, 48 miles from New York. 
 If a private individual thinks proper to order his 
 stovepipe ready finished direct from New York, 
 he will pay 38 cents for every loolbs. If, on the 
 other hand, the local ironmonger will order a car- 
 load, cut into shape but not riveted up, so that it 
 will lie close, and a reasonable weight can be got 
 into a car, the freight per 100 lbs. comes to only 
 10 cents. 
 
 If, however, the public declines to take a hint, 
 and to send its commodities the way the railway 
 washes, then the company puts its foot down 
 peremptorily. Our own Chambers of Agriculture 
 complained bitterly the other day that, while their 
 cheese went in the third-class, cheese " packed 
 in hampers, boxes, casks or cases," that is to say, 
 practically the American article, was charged at a 
 lower rate. In vain the railway representatives ex- 
 plained that they could fill a truck to the top with 
 cheese in boxes, while for many months of the year 
 the English cheese, which is sent loose, is so soft that 
 it sometimes breaks to pieces by its own weight, and 
 that it is as a rule impossible to put one layer on 
 top of another. Nothing would satisfy the farmers. 
 They were convinced that the railways made the 
 difference from their instinctive desire to " favour the 
 foreigner." It was of course inconceivable that the 
 farmers should follow the suggestion of the railway 
 managers, and, abandoning the traditional m.ethods 
 of their great-grandfathers, pack their cheese in 
 boxes just as if they were mere Yankees. Now let
 
 21 8 AMERICAN RATES en. ix. 
 
 US glance at tlic classification in use throughout the 
 Western States, and we shall find the whole question 
 decided in four words, " cheese loose not taken." 
 The same note is to be found against statuary- 
 marble. Had the position been the same in Eng- 
 land, the House of Lords would have been spared 
 the decision of the interesting case of Peek v. the 
 North Staffordshire, and the question, whether con- 
 ditions exempting a company from liabilities must 
 be reasonable, might have remained until this day 
 undecided. 
 
 But enough has probably been said to show that, 
 both by the railways and by their customers, every 
 effort is put forward to manage the transportation of 
 the country on wholesale principles. Whether the 
 English railways would be wise in facing the unpopu- 
 larity which they would inevitably incur, if they en 
 deavoured to persuade or force their customers into 
 adopting similar methods in this country, is a question 
 which it is almost impossible to decide. That economy 
 might be thereby effected is obvious. Whether the 
 game would be worth the candle is another matter. 
 After all, one does like to order one's own dinner 
 sometimes, and even if Bignon's be dearer than a 
 dinner at an hotel run on the American system, it is 
 a great deal nicer. With us, the cost of carriage is 
 in any case but a small matter. With i^mcrican dis- 
 tances it is a case of life or death ; and just as the 
 working man, to whom a new pair of boots is a serious 
 affair, has to be content with a ready-made pair at 
 1 5^., while his richer neighbour cheerfully pays three 
 times as much for a pair, hand-sewn and shaped on
 
 CH. IX. DRAWBACK OF AMERICAN SYSTEM 219 
 
 his own last in Bond Street, so the English mer- 
 chant may be well advised in having his own small 
 consignment called for at his own door, at the hour 
 he pleases to name, and delivered next morning as 
 punctually as the letters at his customer's warehouse 
 in Manchester. But in reason let him not claim to be 
 given the retail service at the price of the wholesale 
 one. 
 
 Nor is the fact that a customer must adapt his 
 arrangements to the convenience of the railroads, 
 instead of the railroads studying the convenience of 
 each individual customer, the only disadvantage of 
 the American system. In the nature of things, the 
 wayside stations can never do anything but a retail 
 business, and the American roads have consequently 
 yielded to a natural instinct and neglected local busi- 
 ness in favour of the large towns. And from the 
 point of view of national interest, a system which de- 
 velops the towns at the expense of the country can 
 scarcely be admired. Roadside stations, in our sense 
 of the word, are in America almost non-existent. 
 On the main line of the Pennsylvania, on the great 
 highway between New York and Philadelphia, one 
 passes through station after station that consists of 
 nothing better than a rough board shed, and where 
 accommodation for goods seems to be absolutely non- 
 existent. Enquire how the goods service of these 
 places is carried on, and one learns that, once in the 
 day, there comes what is known as a "way-freight" 
 train, and the conductor and his brakesman turn out 
 on the roadside what consignments they may have, 
 to wait till the consignee thinks proper to fetch them.
 
 220 AMERICAN RATES cu. ix. 
 
 Supposing it should be raining and the consignee not 
 in attendance, the goods will probably be taken on to 
 the next important station, and brought back thence 
 the next fine day — a system which might lead to 
 considerable delay in, say, Lanarkshire or Lancashire. 
 Nor is any time for delivery guaranteed, and in 
 actual practice goods for non-competitive points are 
 usually kept back till the company can get something 
 like a profitable load. If local stations want a quick 
 and reliable service, they must send by " express ; " 
 and the express rates may be anything up to six 
 times the ordinary freight rate.^ In rates, too, the 
 short distance traffic suffers severely. Cotton, for 
 example, carried into New Orleans from points not 
 more than 200 miles distant, is made to pay a rate of 
 between H and 2 dollars per bale, or say '^2s. per 
 ton ; ' while from Cairo to New York, which is six times 
 the distance, the freight is a good deal less. Or, again, 
 for the 1,000 miles from New York to Chicago, the 
 rate for drapery goods is about Gys. 6c/.; but it costs 
 on an average 2'6s. per ton to distribute them from 
 Chicago to points fifty miles distant. If a Penzance 
 draper were to wish to send a ton of goods to a cus- 
 tomer at Wick, he would assuredly be charged a good 
 deal more than Gys. 6d. for the service ; but, on the 
 •other hand, if a draper at Bedford was charged 28.y. 
 from London, //;/.9, say, an additional c)s. for cartage 
 and delivery, he would not be much mollified by being 
 
 " A fuller account of the Ame- or Oldham, a similar distance, 
 
 rican "express" system will be the rate is 25.S-. jier ton, inclusive 
 
 found in the Note at the end of of collection in London end de- 
 
 this chapter. livery in Manchester. 
 
 ' From London to Manchester
 
 CH. IX. ORIENTAL DESPOTISMS 221 
 
 told that he ought to Hve in a great trade centre and 
 do his business in car-loads.^ 
 
 The truth is that the American companies have 
 been left to develop their traffic on purely competitive 
 business principles, with an unfettered freedom of 
 which we in England have no idea. An Oriental 
 despot, a Baber or an Aurungzebe, did not make 
 and unmake cities with more absolute and irresistible 
 power than an American railway king. Few cam- 
 paigns in history have been more momentous than 
 the great " Rate War," fought by the New York 
 Central under Vanderbilt, and the Erie under 
 Jewett, to protect the ocean trade of New York 
 against the encroachments of Baltimore and Phila- 
 delphia. But those wars could only have been carried 
 on — and even now they are not altogether things of 
 the past — on condition that the local stations furnished 
 the sinews of war. Chicago possibly gained by sending 
 its wheat to the seaboard at Js. a ton ; but the interme- 
 diate points, which simultaneously were paying perhaps 
 five or six times as much, unquestionably suffered. 
 We are often told that the American railways have 
 ruined the English farmer ; people forget that they 
 have ruined the American farmer also. Between 
 1870 and 1880, in spite of an increased area of two 
 million acres under cultivation, agricultural land in 
 the State of New York alone depreciated in value to 
 the extent of 45,000,000/. sterling. And all this while 
 the American people looked on and did nothing — it 
 cannot be said they made no attempt — to stop it. 
 
 ' The Bedford rate for drapery is actually 2\s, 8d., or 25^., according 
 to class, inclusive of collection and deliver)'.
 
 222 AMERICAN RATES en. ix. 
 
 In England for nearly half a century the railways 
 have been restrained by law from giving free play to 
 competition. Let us take some instances and see what 
 this means. From Buffalo on Lake Erie, just above 
 the point where the Lake narrows into the Niagara 
 River, to Chicago, a distance of 500 miles, there used 
 to be a great trade in coal by water. The bulk of 
 that coal now goes by land. The change, so the 
 writer was informed, came about as follows : Chi- 
 cago sends eastward to New York on the average 
 three tons of freight for every ton that New York 
 sends back ; in other words, a vast number of 
 cars, especially at the season when the grain crop 
 is moving, go west empty. The manager of one 
 of the lines came to the conclusion that almost 
 any price for a back load was better than nothing, 
 and accordingly offered to take coal for the 500 miles 
 at a dollar a ton, or say 4.S. 8d^ His neighbours 
 declared the action madness. The rate was scarcely 
 half a farthing per ton-mile. But he persisted, being 
 satisfied that it more than covered the difference be- 
 tween the cost of hauling an empty waggon and a full 
 one. For it should be observed that American farmers 
 cannot afford to be particular, and make no diffi- 
 culties if coal is loaded in wheat-cars and stock-cars. 
 
 The idea took. Railways could be depended 
 upon, while a ship might be wind or weather-bound, 
 or blocked getting through the Detroit River. Further, 
 the railways had sidings into every works. The ships 
 could only deliver on the quays, and there was further 
 
 r ' It should be remembered that the American ton is only 2,000 lbs., as 
 against the English 2,240 lbs.
 
 CH. IX. THE LAW OF UNDUE PREFERENCE 223 
 
 expense and breakage in getting the coal to its 
 destination. So gradually the railway traffic grew at 
 the expense of the water carriage ; then the railway 
 ventured to advance the rate, and nowadays it succeeds 
 in obtaining 2 dollars a ton, which, as American 
 through rates go, is quite a tolerable price. Now, 
 under the existing lav/ it is practically impossible for 
 an English railway to attempt to develop a similar 
 business. If, for example, the Midland were to give 
 an exceptionally low rate for coke from Sheffield to 
 Barrow, in order to get a return load for the trucks 
 that bring the haematite " pig " into Yorkshire, it 
 might find itself called upon to reduce scores and 
 hundreds of other rates, on the ground that it was 
 givng Barrow an undue preference. Parliament and 
 the Courts have always been more careful to protect 
 individuals against undue competition, than to benefit 
 the public by reducing the general average of charge. 
 Take for instance the well-known case of Budd v. 
 the London and North Western Railway. The plain- 
 tiff had works 12 miles out of Swansea on the North 
 Western line to Liverpool. He was charged to the 
 latter place a rate admittedly fair in itself, but lower 
 than the rate past his works from Swansea. The 
 company pleaded that they would have been only 
 too glad to charge the Swansea traders more, but 
 that, if they raised the rate, the Swansea traffic would 
 go by sea. It was held, however, that the Swansea 
 traders were unduly preferred to Mr. Budd, and the 
 rate was disallowed. Or, take another and more 
 recent instance. The representatives of the grain 
 trade in Liverpool complained a short time back to
 
 224 AMERICAN RATES ch. ix. 
 
 the Railway Commission that they failed to get their 
 fair share of the business of Birmingham, owing to the 
 low rates which were given from Cardiff to that town. 
 The company's reply once more was that the Cardiff 
 rates were controlled by the water competition of the 
 Severn and the Birmingham and Gloucester Canal. 
 But the excuse was disallowed, and the result of the 
 action has been that, sooner than lower the rate from 
 Liverpool, on which of course an enormous amount 
 of money depends, the North Western has abandoned 
 the comparatively unimportant Cardiff trade alto- 
 gether.'' Now compare this with a recent decision 
 of the American Inter-State Commerce Commission. 
 Messrs. King & Co., traders, situated at Readville> 
 eight miles from Boston on the road to New York, 
 complained that, while the railways were carrying 
 flour from New York to Boston for 9 cents, from 
 New York to Readville the rate was 18 cents. The 
 Commission refused to interfere, holding that the 
 local rate was not unreasonable in itself, and that, as 
 the circumstances and conditions of the two cases 
 were not substantially similar, the provisions of the 
 Inter-State Commerce Act did not apply. The fol- 
 
 ■• The rate of 85. 4a'.and Ss. lod., rates ; (3) the North Western has 
 
 including delivery, has been can- been compelled to give up a certain 
 
 celled, and a rate of 12s. 6d., sta- amount of traffic on which it pre- 
 
 tion to station, substituted. Pre- sumably earned some profit, even 
 
 sumably the Cardiff traffic con- though a small one ; (4) the 
 
 tinues to go at the old rates by traders for whom the North Wcst- 
 
 the other routes. The net results ernstations at Cardiff and Birming- 
 
 of the action may therefore be ham were more convenient than 
 
 summarized as follows: (i) Liver- those of the other companies, have 
 
 pool gains nothing ; (2) railway been compelled to incur the in- 
 
 companies have been notified to convenience and expense of going 
 
 be very careful how they reduce elsewhere.
 
 CH. IX. WATER COMPETITION 22$ 
 
 lowing extract from their judgment is worth quo- 
 tation : 
 
 "The Commission has repeatedly held that, where 
 the competition of an independent water line, not 
 subject to the provisions of the Act to Regulate 
 Commerce, is actual with that of a rail-carrier for 
 traffic at a point reached by it, and for traffic important 
 in amount, that then the rail-carrier, if necessary to 
 meet such competition, may lower its rates at that 
 point without doing so at other points on its line at 
 which no such competition exists, and at which other 
 points the rail-carrier could not so reduce its rates 
 without a large loss of revenue." After citing 
 previous decisions, the judgment goes on to say : 
 " A full discussion of the rule and grounds upon 
 which it rests will be found in these decisions, and 
 it is unnecessary to repeat it at length here. The 
 principle found running through them all is that, the 
 statute in express terms having provided that the 
 circumstances and conditions must be substantially 
 similar in the performance of each service in the 
 longer as in the shorter haul, that the existence of 
 such competition as above stated at one point, between 
 a carrier subject to the law and one that is not sub- 
 ject to the law, creates at that point circumstances 
 and conditions which are substantially dissimilar, in 
 the service performed by the rail-carrier, to those 
 existing on other points of its line where no such 
 competition exists. That in such a case the railway 
 carrier is not obliged to go out of the business at a 
 point where such competition with an independent 
 water-line prevails, leaving the water-line a monopoly 
 
 Q
 
 226 AMERICAN RATES ca. ix. 
 
 of that business ; nor is the rail-carrier, on the other 
 hand, compelled to lower its rates at other points 
 along the line, where no such competition is found, to 
 the standard of the rate it is compelled to make to 
 meet the competition of the water-line at the point 
 where such competition does exist ; but the rail-carrier 
 may lower its rates at the point at which it has to 
 encounter such competition, and in lowering them 
 may make such just and reasonable rates, in view of 
 all the circumstances and conditions surrounding its 
 business, as will enable it to meet the competition of 
 the independent water-line at that point." 
 
 Now, needless to say, the present w-riter has no 
 intention of arguing that in Budd's case, or the Cardiff 
 case, the law was wrongly interpreted. Nor would 
 he venture to assert that the Inter-State Commerce 
 Act, which practically was founded on our English 
 Acts — the clauses of which relating to undue prefer- 
 ence it repeats almost I'crbatitn — really gives the 
 American Commission the power to sanction discre- 
 pancies of rates as startling as those in the Readville 
 case. He would not even go so far as to express a 
 positive opinion that the American decision was 
 better for the public interest than the English one. 
 
 It is evident that a system which gives to Boston 
 not only the advantage of low water-rates, but also 
 the benefit of rail-carriage on almost identical terms 
 — for the railway rate of 9 cents was made in com- 
 petition with a steamer rate of 8i cents — tends 
 greatly to enhance the natural advantages of Boston's 
 geographical position. Now, to swell the great towns 
 at the expense of the smaller ones is in itself a disad-
 
 CH, IX. A QUESTION WITH TWO SIDES 22/ 
 
 vantage. Further, as long as the fixing of rates has 
 to be left in the hands of fallible, possibly even not 
 entirely disinterested, mortals, a system which so 
 largely ignores cost of service as an element in fixing a 
 rate — which recognises so fully the right of a railway 
 company to sell its services for precisely what they 
 will fetch — such a system cannot but give rise to the 
 possibility of abuses, and, at least till such time as 
 every citizen becomes a philosopher and a political 
 economist, to the certainty of discontent. 
 
 The point is that we should recognise that the 
 question has two sides. The Germans have endea- 
 voured to introduce a cast-iron system, eliminating 
 competitive rates altogether. The Americans, on the 
 other hand, have given free play to competition. In 
 England we have taken a position midway between 
 the two. It will not be denied that in return the 
 Americans obtain their transportation on terms very 
 much lower than the Germans ; nor can it, I think, 
 fairly be disputed that — when quality of service is 
 taken into account — in price too the English rail- 
 ways occupy the intermediate position. Every time 
 we yield to German ideas, and move away from the 
 American principle of giving competition full swing, 
 every time wc cancel a rate such as that from Cardiff — 
 and there have been scores of such rates cancelled as 
 the result of direct decisions, and hundreds upon hun- 
 dreds withdrawn or never given as an indirect result — 
 we may do justice between two competitors, whether 
 they be individual traders or rival towns, but wc 
 unquestionably raise the general average of English 
 rates.
 
 228 AMERICAN RATES ch. ix. 
 
 But to come back to the American railways. 
 There arc, of course, many other reasons why their 
 work is done so cheaply. It needs no argument, for 
 instance, to show that the percentage of the total 
 cost, due to the provision of station accommodation 
 and the cost of handling at either end, must be 
 greater, where the traffic goes, as it does in England, 
 for an average distance of perhaps 25 miles, than in 
 America, where the average length of haul is 127 
 miles. How serious a matter terminal cost is, 
 American railway men know, even if the English 
 trader does not. To give one instance : as between 
 the companies themselves — for the outside public has 
 nothing to do with the arrangement — 5 cents per loo 
 lbs. for terminal services at New York are allowed 
 before the rest of the rate is apportioned on a mileage 
 basis. In other words, the railways which bring the 
 vvfheat half-way from Chicago are content to acknow- 
 ledge that the terminal service in New York is worth 
 as much as the haulage for 250 miles. 
 
 " We calculate," said one of the best known rail- 
 way men in the States to the present writer, only a 
 few weeks back, " that it does not make any practical 
 difference to us, once we have incurred the heavy ter- 
 minal expense at New York, whether we haul a whole 
 train 100 miles, or haul half of it 50 miles, and then go 
 on with half a load." " With the constant cheapening 
 of movement expenses," wrote the " Railroad Gazette " 
 in October last, "charges for terminal handling form 
 every year a larger portion than the whole." " You will 
 note," said President Roberts, at the last meeting of the 
 Pennsylvania Railroad Company — the greatest cor-
 
 CH. IX. TERMINAL EXPENSES 229 
 
 poration, not only of the United States but of the 
 world — " that the rates per ton per mile on the Main 
 Line have now been reduced to about 6 mills (-6 of a 
 cent) ; that the cost of transportation on the Main 
 Line has been reduced to about 4 mills ; and that 
 on the United Railroads of New Jersey the cost of 
 moving traffic between Philadelphia and New York 
 is over i cent, as against 4 mills on the Main 
 Line. This indicates the great expense attending the 
 management of a line located between two large cities 
 like New York and Philadelphia, and which has 
 entailed upon it the maintenance of expensive termi- 
 nals in such cities, and the cost of handling the traffic 
 thereat, a matter that is not generally understood by 
 the public. I think I am not wrong in stating that 
 every ton of merchandise secured in Philadelphia to 
 be transported westward has to be hauled 70 miles, 
 before the revenue received therefrom equals the 
 actual cost of handling in Philadelphia." The English 
 reader scarcely needs to have drawn for him the 
 moral that, with an average haul of 25 miles, the 
 English railway cannot afford to forego altogether 
 a charge for terminals of a still more expensive 
 character. 
 
 Another important point in making a compa- 
 rison is to be found in the actual haulage itself As 
 we have already seen, in dealing with Sir Alfred 
 Hickman's claim that a rate which was fair for 50 
 miles might be taken as the basis of a rate for 5 
 miles, short distance traffic is always much more 
 costly to work than long. Engines cover 5 miles an 
 hour instead of 1 8. A truck that has travelled from
 
 230 AMERICAN RATES en. ix. 
 
 Liverpool to Oldham takes just as long to unload, 
 and has to wait just as long before it can be sent 
 back, as one which has come through from Minnea- 
 polis or Kansas City to New York. In other words, 
 the one may be on the average earning revenue 
 for two hours out of every five, and the others for two 
 hours out of every hundred. 
 
 Here is another point. Every manager knows 
 that the greater the difference between the speed of 
 his fastest and slowest train, the less is the carrying 
 capacity of his line. The Metropolitan, for example, 
 can work seventeen trains an hour over the same pair 
 of metals, at 12 miles an hour; the North Western 
 can send three expresses from Euston to Crewe 
 within ten minutes ; but when it comes to one train 
 at 12 miles an hour and another at 50, the results are 
 very different. With a traffic such as exists in 
 England, with coal trains at 12 miles an hour, goods 
 at 18, fast goods and stopping passenger trains at 25, 
 and express trains at 50 miles an hour, all mixed 
 up together in something like equal proportions, it 
 needs very careful management to get in an average, 
 not of seventeen, but of five trains an hour. Now, in 
 America, as a rule, the line is almost wholly given 
 up to freight. The New York Central thinks itself 
 entitled to boast itself " America's greatest railroad," 
 on the ground that eight expresses depart daily from 
 New York to the north and west. There arc some- 
 thing like 30 from Euston to Rugby. In other 
 words, one pair of rails in America can be made to 
 carry a much larger volume of traffic than is 
 possible here.
 
 CH. IX. CORN AND "HOG PRODUCTS" 23 1 
 
 Another difference may be found in the fact that 
 the percentage of mixed goods to the total is very 
 much larger in England than in America. On the 
 Erie line, for instance, which returns 6,700,000 tons 
 of merchandise carried as against 9,580,000 tons of 
 coal, merchandise proper was less than half a million 
 tons. The balance is made up of grain and flour, 
 lumber, iron-ore, building materials, and 215,000 tons 
 of live-stock. In a word, the English railways carry 
 manufactured articles for half the civilized world ; the 
 American surplus over consumption is in corn and 
 " hog-products." 
 
 Now, manufactured articles go as a rule in 
 comparatively small, raw produce in comparatively 
 large, quantities. How immense is the difference in 
 point of economy between the two systems, it is 
 difficult for any one without actual practical expe- 
 rience to imagine ; there, however, are some figures 
 " found as facts " in a recent judgment of the Inter- 
 State Commerce Commission : " The cost of loadincr 
 
 o 
 
 1,769 cars, of which six per cent, was car-load freight, 
 at Duane Street, New York, was shown to be 62*1 
 cents per ton. At Dock No. 6, Jersey City, the 
 cost of loading miscellaneous freight was 58'3 cents 
 per ton. At Dock No. 5, Jersey City, the cost of 
 loading car-load freight . . . was 16-3 cents per ton. 
 On this basis the cost of loading miscellaneous 
 freight is from 42 to 46 cents per ton [say 2s. per 
 English ton] greater than loading car-load freight. 
 The relative cost of unloading and delivering car- 
 load and less than car-load freight at Chicago was 
 shown to be 23 cents a ton for less than car-loads,
 
 232 AMERICAN RATES en. ix. 
 
 and 9 cents per ton for car-loads. . . . With reference 
 to transportation alone, exclusive of loading and 
 unloading, the following results appeared. The 
 general average of car-load shipments was, from the 
 tables in evidence, nearly 15 tons for car-loads and 
 about 5"8 tons for less than car-loads, or miscellaneous 
 
 freight The cost of hauling the freight would 
 
 be in the first case 0*276 cents per ton per mile, and 
 
 in the latter 0*47 1 cents per ton per mile 
 
 The average difference in earnings per car, from an 
 average load of car-load freight, and an average load 
 of less-than-car-load freight, is iiot far front 100 per 
 cent." 
 
 Again, nothing is so expensive as to keep abreast 
 of a demand which at one time of the year is twice 
 what it is at another. An English railway is ex- 
 pected to handle all the traffic offered it, however 
 great, there and then ; in America the customers^ 
 even of a line like the Pennsylvania, take it as a 
 matter of course that the railway will be unable, in 
 the autumn at least, to give them all the accommo- 
 dation they ask for. "It is a fact," says the last 
 report of the Erie Company, " that for the larger part 
 of the year the trunk lines have been unable to 
 furnish equipment to move the tonnage offered." ^ 
 
 Then again comes in the system of working. 
 With lines immeasurably more crowded and more 
 cut up with junctions and sidings, in a climate in 
 which for months of the }'car dense fogs are of 
 
 * I have quoted so mvicli from in the past, it is recognised to-day 
 
 the Erie Company that it is per- as being one of the most efficiently 
 
 haps as well to say that, whatever managed railroads in the States, 
 may have been its financial offences
 
 CH. IX. THE TRICE OF SAFETY 235 
 
 almost weekly occurrence, the English railway 
 companies arc able to boast that their traffic is 
 carried on at one-third of the risk, whether for 
 passengers or employes, which is incurred in 
 America, according to American figures. But this 
 result has not been achieved without expenditure. 
 The cost of establishing and maintaining the block 
 system alone would go far towards furnishing the 
 entire " maintenance " expenditure of an American 
 railway. If we added the money spent on ballast 
 which shall not subside, and bridges which shall not 
 break down under an advancing train, it would more 
 than do so. Not that the English public is con- 
 tented even now. " It seems to me," so wrote a 
 month or two back, a propos of the Taunton accident, 
 a correspondent of an engineering journal, " that 
 whatever difficulties may occur, and at whatever cost 
 it may entail to the railway companies, the public,, 
 and possibly in the end the legislature, will not rest 
 satisfied until all the railways have their lines 
 signalled, interlocked, and worked in such a manner 
 that accidents such as those that have occurred during 
 the last week will be impossible." Be it so. The rail- 
 ways have no need to complain as long as the public 
 will understand that the excess cost, incurred in the 
 further protection of its skin, must come in the long 
 run out of its own pocket. 
 
 There is another point, perhaps of even greater 
 importance than any of those hitherto referred to. 
 In the United States, " when railroads began to be 
 built " — I quote once more from the first report of the 
 Inter-State Commerce Commission — " the demand for
 
 234 AMERICAN RATES ch. ix. 
 
 participation in their benefits went up from every 
 city and hamlet in the land, and the public was impa- 
 tient at any obstacles to their free construction, and 
 of any doubts that might be suggested as to the sub- 
 stantial benefit to flow from any possible line that 
 might be built. . . . For a long time, the promoter 
 of a railway was looked upon as a public benefactor, 
 and laws were passed under which municipal bodies 
 were allowed to give public money or loan public 
 credit in aid of his schemes, on an assumption that 
 almost any road would prove reasonably remunera- 
 tive, but that in any event the indirect advantages 
 which the public would reap must more than com- 
 pensate for the expenditure." Now, in England this 
 state of things has never existed. From the earliest 
 time, railways have had to encounter the fiercest 
 opposition from vested interests. Carriers and stage- 
 coach proprietors banded together against them ; one 
 
 duke saw in "those d d railways" mischief to his 
 
 favourite canals ; another to his still more beloved 
 fox-covers. Engineers were hunted off the ground 
 with sticks and stones ; their lines were bidden with 
 contumely to beware of touching the sacred limits of 
 Lichfield, or Worcester, of Eton, or Oxford. 
 
 It is not only the costs which the English railways 
 incurred in their early days, for which their customers 
 are at the present time paying the bill ; it is not only 
 that the capital account of the American railroads 
 has been kept down by the amount of those early 
 subsidies, while the present shareholders have many 
 millions of acres of land still left to sell ; but the same 
 spirit which prompted, and the same legislation which
 
 en. IX. THE COST OF LAND 235 
 
 permitted, Lord Petre to levy blackmail on the old 
 Eastern Counties to the tune of 100,000/. has survived 
 in England from that day to this. The present writer 
 was discussing with the general manager of one of 
 our great lines a short time back the prospects of a 
 proposed branch in one of the most out-of-the-way 
 portions of the kingdom. " What price do you allow 
 for land ? " he asked. "It would not be safe," was the 
 reply, " to calculate on anything less than 500/. per 
 acre." The price is something more than a willing 
 purchaser pays as a rule for moor-land to a willing 
 vendor, and 10 acres of land to the mile of line at 
 500/. per acre would account, to start with, for a 
 capital sufficient to lay and equip a mile of railway in 
 the Western States. 
 
 Here are two companion pictures from very 
 recent history, to show the different points of view 
 in the two countries. The London public claim, 
 whether rightly or wrongly is here beside the ques- 
 tion, that their railway accommodation at this moment 
 is deficient. A new railway, the Manchester, Shef- 
 field, and Lincolnshire, is anxious to come in and 
 supply the demand. The London County Council 
 has resolved to petition Parliament not to pass the 
 bill, except on terms that the company shall pay 
 to the local authority compensation for closing its 
 streets, and give an equivalent of open space else- 
 where for the gardens which may be built over. 
 Now, considering that the only property the local 
 authority has in the streets is the right of user for pur- 
 poses of traffic, and that carriages and carts will have 
 no reason to circulate within the precincts of the pro-
 
 236 AMERICAN RATES cn. ix. 
 
 posed station, that on the other hand the local authority 
 will be relieved of its present expenditure for main- 
 tenance ; considering further that the only gardens 
 proposed to be taken are those which are attached to 
 private houses — this is surely what the Americans 
 would term " a large order." For all that, it is typical 
 of the attitude of Englishmen, whether in their pri- 
 vate or public capacity, to every line which is pro- 
 moted ; and yet we wonder that the competition of 
 new railways does not result in the lowering of the 
 prices. 
 
 Now turn to the companion picture. One of the 
 greatest railway centres in the States, the point at 
 which traffic leaves the Great Lakes to go eastward 
 either by rail or the Erie Canal, is the City of 
 Buffalo. There are the lines of ten different com- 
 panies within its precincts already. Needless to say, 
 they all cross the streets " at grade." Application 
 was made by an eleventh, the Rome, Watertown, and 
 Ogdensburg, last December, to be admitted in the 
 same fashion. The matter was referred to a special 
 committee of the municipality. Evidence was given 
 by prominent citizens that the new railway would 
 be a convenience. Then counsel for the company 
 summed up. It was true, he said, that Buffalo had 
 a good deal of railway accommodation already- 
 There were 642 miles of track within the city boun- 
 daries as it was. Level crossings were certainly a 
 nuisance, and it was undeniable that, if this new one 
 were sanctioned, accidents would occur from time to 
 time. But, he continued, it was impossible for the 
 railway to come in on any other terms. The citizens
 
 CH. IX. THE PUBLIC ATTITUDE 2t^J 
 
 must either take the Hne with its acknowledged dis- 
 advantages, or go without it altogether. Their city- 
 had grown and flourished in the past because of its 
 raihvay facilities. Were they prepared to take the 
 responsibility of checking its grow^th ? They were 
 not, and the application was unanimously granted. 
 
 The British public may depend upon it, that it is 
 upon radical distinctions like these, and not upon com- 
 parative trifles such as the size of the trucks in which 
 the traffic is carried, that the difference between English 
 and American charges depends.*^ The particular fad of 
 big bogie-trucks has, however, been pushed with such 
 pertinacity in England of late that it is worth while to 
 say a word or two on the subject, and to mention in 
 the first place more particularly that the " tubular- 
 frame car," whose merits have been so loudly trumpeted 
 here, is, prophet-like, not much honoured in its own 
 country. The present waiter can claim to have walked, 
 within the last few months, through some miles of 
 freight-yards, and he never was fortunate enough to 
 catch sight of a single tubular-framed car. He ques- 
 tioned several railw^ay officials on the subject. " Yes, 
 they had heard of them," was the effect of the answers ; 
 " believed they had been tried, but people did not seem 
 
 ^ The statement that the size The problem for an English 
 of the truck is a "comparative manager is how to make up any- 
 trifle " may seem inconsistent thing like a full load for the 
 -with what was said on p. 214 as present engines. His colleague 
 to the Pennsylvania Railroad in the States is occupied in 
 being compelled to adopt big designing engines and rolling- 
 cars for the sake of economy. stock to enable him to increase 
 But in America cost of haulage is still further the enormous weight 
 a very much larger item of the of his existing trains, 
 total expenditure than with us.
 
 238 AMERICAN RATES en. ix. 
 
 to like them, and certainly they had not come into 
 general use." 
 
 But on the broader question whether English 
 goods managers would be wise to use American 
 wholesale machinery for doing English retail work, 
 there is more to say. " Had I your traffic," said the 
 chief goods manager of one of the trunk lines to the 
 present writer, " I should use your trucks." " It seems 
 to me," said a well-known railway engineer, " that all 
 this talk about light loading does not come to much. 
 One of your small trucks weighs 5 tons and carries 
 2 tons of general freight ; with us a lo-ton car as a 
 rule takes about 4 tons. Nor is there any economy 
 in first cost. Our cars cost about 140/. to start with, 
 and even then the wood is so green that you can 
 almost see the water oozing out of it, and they only 
 last about twelve years." On the other hand, an 
 American gentleman has been good enough to give 
 evidence on the matter before the Board of Trade 
 tribunal, and to read a paper before the Institute of 
 Mechanical Engineers, and his conclusions are very 
 different. " I have claimed," he writes in " The 
 Engineer," on November 28, " and now assert that 
 fully Oyj^ per cent, can be saved in the working ex- 
 penses of British railways, by discarding four-wheeled 
 rigid waggons and adopting a proper bogie-truck." 
 
 This sounds startling. Let us see what it means. 
 The working expenses of British railways amounted 
 in 1889 to 30 jc/. per train-mile. A reduction of 6y^ 
 per cent, would bring them down to lOd^. Now, 
 according to the Board of Trade Returns, general 
 charges — expenses, that is, of administration, directors.
 
 11. IX. A RIDICULOUS EXAGGERATION 239 
 
 secretary's staff, and so forth — Government duty, com- 
 pensation, legal, Parliamentary, and miscellaneous 
 expenses, amounted to something over ^.^d. The 
 shape of the goods trucks coulci hardly produce any 
 effect on reducing these items. We are left, therefore, 
 with a sum of 5f a'., to cover an expenditure which under 
 our present antediluvian methods amounts to 2^. 4^., so 
 that the reduction is really not one of 6y per cent, but 
 of something like 78 per cent. Let us admit that the 
 new trucks run so easily that locomotives would be a 
 superfluity even for passenger trains, that they glide 
 so smoothly over the ground that the road would 
 never wear out, and that the bridges would never need 
 repainting or repointing, and of course that they 
 themselves are imperishable — even so we should only 
 save about i6hd., and we have got to effect an economy 
 of 20(^. It really looks as though, in some mysterious 
 manner, the company which was bold enough to in- 
 troduce tubular-framed trucks would find its passengers 
 ready to carry their own portmanteaux, and the con- 
 signees of its goods ready to make out their own 
 invoices and carry the price direct to the company's 
 bankers. 
 
 But, in fact, such statements, though they do 
 well enough for a text on which to hang a sermon 
 preached to a sympathetic Chamber of Commerce, on 
 the exorbitance of the English railway charges, are 
 hardly worthy of serious refutation. The real ques- 
 tion, stripped of rhetorical exaggerations, is this : big 
 . bogie-trucks being impossible for ordinary everyday 
 traffic, is there a sufficient quantity of wholesale traffic 
 to make it worth while to complicate matters by
 
 240 AMERICAN RATES ch. ix. 
 
 having two different sets of goods-trucks in use simul- 
 taneously and to incur the expense of altering existing 
 terminal accommodation to suit the new s}\stem ? The 
 present writer confesses to the opinion that it is quite 
 worth while making an experiment on a sufficiently 
 large scale, say with the shipping coal traffic of Cardiff 
 or Newcastle. At the same time the question is so 
 largely one of detailed calculation — " what capital 
 outlay would be required, and what economy in loco- 
 motive expenses might possibly be secured in return?" 
 — that it is quite impossible for an outsider to speak 
 with any confidence on the subject. Perhaps it will 
 be of more general interest if we conclude this chapter 
 with a few comparisons between rates charged in Eng- 
 land and America for traffic of a similar character and 
 under as far as may be analogous circumstances. 
 
 Let it be frankly confessed that in one sense the 
 rates which follow cannot be asserted to be typical 
 of American rates. As has been said already, the 
 average American rate is ^d. per ton per mile, and if 
 the rates given below appear to be, as they in fact 
 are, a great deal higher than this, there must of 
 necessity be an equal number of other rates so much 
 lower than the hi as to redress the balance. Still, 
 it is, I believe, fair to say that they do show the rates 
 which in America are thought reasonable, where traffic 
 is either in small quantities, or for short distances 
 or expensive to handle, or, it may be, merely able 
 without difficulty to bear a high rate, and where, too 
 the standard of charge is not kept down by the im- 
 possibility of making too sharp a distinction — as is 
 the case on the main trunk lines — between the rates
 
 CH. IX. COAL AND MILK RATES 24 1 
 
 for local traffic and those in force between the great 
 centres of the East and West. Here, any way, are 
 rates actually in force. If they prove nothing else, 
 they at least prove this, that it is as easy to produce 
 figures to show the moderation of English charges, 
 as it is to find others to convict them of being 
 excessive and extortionate. 
 
 The coal rate from Wilkcsbarre in the anthracite 
 coalfield to Philadelphia, 105 miles, is ys.;' to New 
 York, I 50 miles, the charge is the same. From Pan- 
 tyffynon, also an anthracite district, to Birkenhead, 
 153 miles, the charge is 6s. ^d.\ but, as this does not 
 include waggons, while the American rate docs, it may 
 fairly be said that the two are identical. But there 
 are many rates in England lower than the Philadelphia 
 rate: for instance, Bedworth to London, 107 miles, 
 for 6j-. including waggons ; or Wigan to Coventry, 106 
 miles, for 6s. ^d. Take another article, milk. The 
 charge into London on the Northern lines ranges 
 from ^d. per gallon under 20 miles, to \\d. for over 
 50. Into New York the rate is uniform for any dis- 
 tance, and amounts to 32 cents per can of ten gallons 
 on the New^ York, Ontario and Western, and to 35 cents 
 on the New York, New Haven, and Hartford. In other 
 words, the American farmer is charged a minimum 
 rate of \^d. and \^d. per gallon in the two cases re- 
 spectively, with the additional disadvantage that he 
 must pay full rates even if his cans are half empty. 
 
 Take another instance. The tariff for drapery 
 
 ' If the Board of Trade held down this rate to $s. lo\ci. as a 
 sway in the United States, its new maximum. 
 Provisional Orders would bring 
 
 R
 
 242 AMERICAN RATES ch. ix. 
 
 and other goods of the same class out of Chicago for 
 a distance of 50 miles works out as equal to 285. <jd. 
 per ton. From Manchester to Lancaster the distance 
 is 5 I miles, and the rate of 20s. includes collection and 
 delivery. If we compare similar distances out of 
 London and out of New York, we shall find some 
 remarkable contrasts between Bedford, which is on 
 the Haarlem branch of the New York Central, 40 
 miles out, and Leighton, which is distant 39|- miles 
 from Euston. For instance, carrots are i \s. in the 
 former case as against 5.V. in the latter ; hay and 
 straw in America i8j. 5^/., in England 6^. Zd., 
 \os. \od., and I2i'. (bd., according to quantity and 
 method of packing. The American farmer pays 
 \?)S. ^d. to send in his beef and mutton, and i6s. yd. to 
 send his pork at his own risk. The English company 
 charges 20s., which includes not only the risk but 
 collection and delivery. For butter the American 
 pays, according to method of packing, from i6s. yd. to 
 2)6s.\od. The highest English rate is 26s. Sd., while 
 the lowest is lOi". less, and in every instance the Eng- 
 lish company takes the risk and does the carting at 
 both ends in addition. 
 
 We have heard a good deal in England about 
 the extortionate rates which are killing the fruit trade. 
 The American rates appear to be higher in almost 
 every case. Here is one comparison. Kirkwood to 
 Jersey City, 141 miles: peaches in less than car-loads, 
 owners' risk 55^. 2^., "company's risk S2s. lod.'^ In 
 
 ** The present writer laughed asked whetlicr anyone had ever 
 when he was given a rate lor seen a car-load. The answer was 
 peaches in less than car-loads, anel that a single company had carried
 
 cir. IX. RATES IX THE SOUTH 243 
 
 England raspberries and strawberries from Wisbech 
 to ManchcsLer, 142 miles, owners' risk 40^'., company's 
 risk 47jr. 6d.\ Stanbridgeford to Manchester, 147 miles, 
 plums and gooseberries, at company's risk 2C)S. 2d. The 
 American rates are quoted as by special fast train, 
 the English by goods train ; but of course the English 
 service delivers first thing next morning, and the 
 American fast train cannot do more. An ordinary 
 American goods train would be liable to take a 
 couple of days. The American rates exclude both 
 loading and unloading. The English include not only 
 these services but collection and delivery as well. 
 
 In the case of fish, the English rates look lower, 
 but it is perhaps not quite fair to compare them, as 
 the special English rates are usually given only for 
 large consignments, while the Americans quote theirs 
 per barrel or per box. Here, for curiosity's sake, is 
 what the Americans would call a rate for medium 
 distance : Oranges, Callahan to Washington, 827 
 miles, 57^". 6d. per ton ; London to Wick, 754 miles, 
 6oji"., but at company's risk, and including collection 
 and delivery.^ 
 
 One more comparison of a different kind. The 
 class rates throughout the district governed by the 
 Southern Classification — broadly speaking, the whole 
 of the country east of the Mississippi, and south 
 of the latitude of W^ashington — were given the other 
 day in a judgment of the Inter-State Commerce Com- 
 
 9,000 " straight" car-loads (say 8 a carrier's cart, 
 tons each) from a single district ^ The detailed comparisons 
 
 in a single season. One more from which these few illustrations 
 
 instance of the fact that the are extracted will be found given 
 
 Americans have laid to heart the at length in the Appendi.x. 
 doctrine that a railway train is \v.X 
 
 R 2
 
 244 AMERICAN RATES cu. ix. 
 
 mission, as averaging something like the following 
 scale : 
 
 Louisville to Scliiia, 490 miles. 
 
 Class I . . . SSj. I Class 3 . . . 70.V. Class 5 . . . 47,1-. 
 ,, 2 . . . 83.V. ! ,, 4 . . . 57a-. ■ ,, 6 . . . 37,v. 
 
 Below let us put some luiglish rates for com- 
 parison, noting that the numbers in the two countries 
 run in opposite directions. 
 
 London to Blair Alholc, 4S9 miles. 
 
 Class 5 . I26.f. 8r/. I Class 3 . . 73.?. 4</. ' Class i . . 43.^^ 4r/'. 
 ,, 4 . I05.f. o</. I ,, 2 . . 55\. 0(/. I Special Class . 35.V. 
 
 In making the above comparison, wc must remem- 
 ber that all the English rates are at the company's 
 risk, and all except the last include collection and 
 delivery. In the American case, on the other hand, 
 not merely are many articles only taken at owner's 
 risk, but also light or valuable goods are sometimes 
 charged up to four times the 1st class rate. Further, 
 as will be seen more fully later on, a very much 
 larger proportion of the American traffic is charged 
 under the higher classes than is the case with us. 
 
 On the whole, I believe that a fair statement of 
 the case as regards rates — leaving questions of ac- 
 commodation out of consideration — would be some- 
 what as follows : The average American rate, being 
 charged mainly on wholesale consignments of cheap 
 goods for immense distances, is immeasurably lower 
 than ours. On the trunk lines to the West the whole 
 of the rates are kept down, by the operation of the 
 " long and short haul " clause, and the public feeling 
 which gave rise to it, to a level whicli, though by no 
 means so low as that of the through rates, is yet much
 
 til. IX. THE " KXPRE.SS SYSTEM 245 
 
 lower than that prcvaiHni^ in thi.s country. But when 
 it comes to the traffic on branch Hnes, in what may 
 be called local distributive service, or to the traffic in 
 perishables, which can hardly be brought into com- 
 parison with wheat and tinned meats, or to parts of 
 the country where the influence of the wholesale 
 through traffic is but little felt, the rates are at least 
 up to the English standard ; while for traffic of the 
 more valuable descriptions they are without question 
 very considerably higher. 
 
 NOTE ON THE "EXPRESS" SYSTEM 
 
 A word or two as to the American "express" business may 
 not be out of place, as the position of aftairs is sometimes mis- 
 understood in this country. Professor Hunter, M.P., for instance, 
 after enlarging on the advantages of any system which " restricts 
 the evils of monopoly within the narrowest bounds," writes 
 (" Railway and Canal Traffic Act of 1888," p. 10) : " The traffic in 
 light goods requiring rapid transit has fallen into the hands of the 
 parcels express companies. No feature in the American rail- 
 way system gives such universal satisfaction. It is found more 
 profitable by the railway companies to leave this branch of 
 business entirely in the hands of the express companies. Only 
 recently the Erie Railway Company gave up their attempt to do 
 ' express ' business, and contracted with one of the companies 
 to take over their stock at a fair valuation, and pay 40 per cent, 
 of the gross earnings. This figure compares favourably with 
 the sum of 55 per cent, paid by the British Post Office to the 
 railways in this country." Now, in the first place, it is impossible 
 to compare the 40 per cent, of gross receipts handed over by the 
 express company to the Erie with the 55 per cent, paid by our 
 Post Office to the English railways. The express companies 
 furnish their own cars, send their own servants in charge of their 
 freight, do their own loading and unloading, and, in the large 
 towns at least, provide their own station accommodation. If our 
 Post Office gets all this supplied to it for a mere 15 per cent., it 
 surely cannot have made such a very bad bargain. One might
 
 24(3 AMERICAN RATES ch. ix, 
 
 add a hesitating doubt whether the argument, that 45 per cent. 
 of the gross receipts is insufficient to pay for a portion of the 
 terminal accommodation and services, is very appropriate in the 
 mouth of one who sometimes appears to consider them as such 
 small trifles that the railway companies ought to be able to throw 
 them in gratis, in return for a rate that was fixed originally as 
 the ])ayment for the mere mileage services. 
 
 Further, the bargain made by the Erie Company is only one 
 among many hundreds, and a company with a route to the West, 
 whose inferiority is acknowledged, could scarcely expect to make 
 as good terms as would naturally be obtained by the Pennsylvania 
 or the New York Central. In fact, some of the companies do 
 not make a pei'ccntage division at all. The Chicago, Burling- 
 ton, and Quincy, for instance, receives from the express com- 
 pany operating over its lines a gross sum equal to the estimated 
 receipts for the total weight carried if charged at the highest 
 class rate. Other companies either do their express business 
 themselves or employ a mere paper organisation — themselves 
 under another name — to do it. 
 
 " But," says Professor Hunter, " no feature in the American 
 system gives such universal satisfaction." This statement, too, 
 is questioned by those who should know. According to the 
 Inter-State Commerce Commission's first annual report, pub- 
 lished and reprinted in England as a Parliamentary paper only 
 a few months before the date of Professor Hunter's book, and 
 freely quoted by Professor Hunter himself on other points, 
 " the complaint of excessive charges upon express traffic has 
 been common."' Certainly not without reason, if, as I am in- 
 formed by the senior partner of one of the largest international 
 forwarding agencies in the States, the express rates may be taken 
 to be on the average something more than double the highest 
 rates of the ordinary freight tariff. For it must be remembered 
 that the express business has reached in America enormous di- 
 mensions, and deals with much more than mere parcels. Accord- 
 ing to the Statistical Report for 18S9, the railway share of the 
 business reached 4,000,00c/. sterling, which would imply that the 
 public paid, if the Erie bargain be a representative one, not less 
 than 10,000,000/. Now, the whole of this vast business is quite 
 uncontrolled by law. The express companies are under no obli- 
 gation to puljlish their tariffs. They may, and apparently do,
 
 cii. IX. THE OBJECTION TO " SIDE SHOWS " 247 
 
 charge different customers different prices for the same services. 
 They may practically refuse to give any service at all to a small 
 place where they see no prospect of making a profit. In fact, 
 if a man at a wayside station in ^Massachusetts wishes to send 
 a present to a friend, say, in Georgia, he will probably find it 
 absolutely impossible to know beforehand what will have to be 
 paid for carriage, or perhaps even to book his parcel through to 
 its destination at all. 
 
 There is another and more serious objection — an objection 
 which it must be admitted could hardly apply in this country, 
 where the personal honesty of railway officials is not usually called 
 in question. It is commonly believed in America that the rail- 
 way companies have in some cases made corrupt bargains, giving 
 the express companies the cream of the business which should 
 properly belong" to their own shareholders. The Inter-State Com- 
 merce Commission has pressed this point with great earnestness 
 on the attention of Congress. In its first report occurs this pas- 
 sage : " No clear line of distinction exists between the express 
 business and some branches of what is exclusively railroad 
 service ; and the express business may easily be enlarged at the 
 expense of the other. Those roads which now do their express 
 business through a nominal corporation might hand over to this 
 shadow of their corporate existence the dressed meat or live 
 stock business, or the fruit transportation, or any other business 
 in respect to which speed was specially important ; and they 
 might continue this process of paring off their proper functions 
 as carriers until they should be ittle more than the owners of 
 the lines of road over which other organizations should be the 
 carriers of freight, and on terms by themselves arbitrarily deter- 
 mined." 
 
 Now, it is evident that a system which encourages the manage- 
 ment of a railway to gWe inferior accommodation to traffic in 
 perishable commodities, in order to compel the consignor, as in 
 an instance quoted by the Commission, to pay the express rates, 
 which are four times as high, is not a system conceived in the 
 interest of the public. Accordingly the Commission looks for- 
 ward to the abolition of this " side-show system," as the Ame- 
 ricans call it — a system which, it is worth noting, has been 
 deliberately refused admission on the Canadian Pacific — and in 
 its third report it declares that the law under which it acts " con-
 
 248 AMERICAN RATES cii. ix. 
 
 templates that the carriers [i.e. the railway companies] shall free 
 themselves from burdens that diminish their capacity for cheaper 
 and better service to the public. An enumeration of these in- 
 cludes adjunct properties of doubtful value, owned or 
 
 invested in by managers, service for express companies, and 
 others that might be named." 
 
 However, the whirligig of time brings its revenges, and 
 should this system, spite of the universal satisfaction which it 
 has given, be abolished in America, Professor Hunter may con- 
 sole himself with the prospect of its re-introduction here. Only 
 let the English companies be a little more squeezed, and it is 
 quite possible that, as has been said already, they may try 
 experiments in the desired direction — may retire, that is, from 
 their present position as carriers for the public, and reverting 
 to their original position as toll-takers for the use of their road, 
 and job-masters letting out locomotive engines on hire, may 
 leave the private firms to exact from the public for terminal 
 services such charges as they think proper. And if those firms, 
 as in the instance at Bristol quoted by Mr. Grierson to the Com- 
 mittee of 1881, make to persons in trade a charge of lod?'., and 
 to private customers charges for the same service varying be- 
 tween 2s. and 2^. 6^., as compared with a railway rate of is. 2d. 
 charged equally to all, no doubt the trader will be abundantly 
 content. Whether the public at large, who after all arc more 
 numerous and more important than the traders, will have an 
 equally good reason to be so, is another matter.
 
 249 
 
 chaptI':r X 
 
 WHY ENGLISH RATES ARE HIGH 
 
 Why English rates arc high — why, that is, the steady 
 increase in the volume of traffic over English lines 
 has not been accompanied by any corresponding 
 decrease in the amount charged for conveyance, such 
 as has unquestionably taken place in the United 
 States — has practically been explained in the prece- 
 ding chapters, At this stage, however, it is perhaps 
 worth while to gather up all these loose ends of 
 argument into a connected story. And, in the first 
 place, we may point out that a considerable propor- 
 tion of the statements made as to the high charges in 
 England, in comparison with those customary in other 
 countries, simply rest on a misapprehension of the 
 actual facts. For instance, an English rate which 
 includes collection and delivery is compared on all 
 fours with a Continental or American rate which 
 includes neither. Or, if the fact is noticed, some 
 absurdly inadequate allowance of two or three shil- 
 lings for cartage at both ends is deducted, and then 
 the comparison is made with the figures so obtained. 
 Then, again, Continental rates, where the railway 
 obligation to pay for damage or loss is very stringently 
 limited, are compared, not, as thc\' ought to be, with
 
 250 \VIIY ENGLISH RATES ARE HIGH ch. x. 
 
 English Owners' Risk rates, but with rates which in- 
 clude the insurance of goods to their full value. Or, 
 once more, the English special rates are ignored. To 
 take an instance. Iron for ship-building from Lan- 
 arkshire to Barrow is set down, not at los. lod. per 
 ton, the price at which it is really carried, but at 20s., 
 the price which, according to its classification, it would 
 pay for the distance in question, supposing that there 
 were no special rate in force. 
 
 When all the misunderstandings under these 
 various heads arc put right, the comparison with 
 foreign countries comes out by no means so unfavour- 
 ably for our railways, as it is usual for the traders* 
 advocates to assert. But, though this may be true 
 enough as far as it goes, an Englishman who has 
 been proud to think that the railways of his own 
 country, instead of humbly following the lead, could 
 be held up as an example to the rest of the world, 
 and has been satisfied to know that, in the opinion 
 of competent foreign observers, this claim on their 
 behalf was not unfounded, can hardly be contented 
 with excuses and apologies. What he demands, and 
 rightly demands, is, not that they should do almost 
 as well, but that they should do a good deal better. 
 Such a critic therefore will naturally enquire. How is 
 it that the English companies are not able to point 
 to reductions throughout the entire range of their 
 business, " plain for all folks to sec," such as those 
 which have distinguished the American railways ? 
 To this very reasonable question an answer must 
 be attempted in the pages w^hich follow. 
 
 It is common to speak as though the high range
 
 CH. X. GROSS AND NET PROFIT 25 I 
 
 of charges on the Enghsh raihvays were due directly 
 to their enormous capital expenditure. This, how- 
 ever, as was suggested in an earlier chapter, cannot 
 be admitted to be correct. As has been pointed out, 
 no manager in fixing a rate ever takes into considera- 
 tion what his line has cost. The question with him 
 is — ignoring for the present the relation between the 
 rates for one place and another, and confining our- 
 selves solely to an individual rate looked at per sc — 
 how shall he obtain the largest amount of net revenue. 
 At i\d. per mile, let us sa}-, he is carrying 100 tons of 
 merchandise. Supposing he reduces the rate to 2d.^ 
 and in consequence gets 200 tons to carry, evidently 
 he has made a bad bargain for himself Supposing 
 the traffic rises to 400 tons, we should be safe in as- 
 .suming that he has increased his net profit. Sa}-, 
 however, that it only increases to 300, whether 300 
 tons at 2d. pay him better than 100 tons at A^d. is a 
 question which cannot be answered till we know how 
 much it costs him to do his new business. 
 
 If, as is the case over the greater part of the 
 United States railroads, there is plenty of room on 
 the line, and the actual cost for haulage represents 
 almost the whole of the additional expenditure, 
 the bargain is without question a good one. If, 
 on the other hand, the line is so full already that 
 new business can only be taken by increasing the 
 accommodation — that is, by expending fresh capital, 
 as is very largely the case in England — then it is 
 quite possible that the reduction of rate was from the 
 railway point of view a mistaken policy. 
 
 But whether the manager reduces his rate, or
 
 252 WHY EXCI.ISII RATES ARE HIGH cir. x. 
 
 whether he maintains it at the old figure, in either 
 case the governinij consideration in his mind is, not 
 what his hnc cost to build per mile, but how best net 
 receipts can be made to increase in a greater ratio 
 than expenditure. Once this principle is firmly fixed 
 in our minds, we shall see why it is that special rates 
 exist ; wh}' pigs of lead and ingots of copper are 
 charged a much higher rate than pigs of iron ; or 
 why, again, one rate is charged from Manchester 
 to Southampton on cotton goods for export, and 
 another and ver}- different one on the identical wares 
 for home consumption. There i5, let us sa}', a lime- 
 stone quarry in the village of A, and its output is 
 carried by train to the farmers within a radius of 20 
 miles at a rate of something like i-i-ir/. per mile. One 
 day the pit is bought by an ironmaster, 20 miles 
 off, for the use of his blast furnaces. He applies 
 to the railway for a special rate, and gets one of, say, 
 IS. 6d. a ton. Now, why .' For this reason : the 
 demand of the farmers for limestone was strictly 
 limited ; had they been given it gratis they would 
 only have used a certain number of tons to the acre. 
 In other words, no possible reduction of rate, as long 
 as the limestone was used merely for agricultural 
 purposes, could possibly have stimulated consumption 
 to such an extent as to recoup the railway for the 
 loss it incurred. For blast-furnaces, on the other 
 hand, the demand is practically unlimited. At 2s. a 
 ton it is possible that the ironmaster would use 3,000 
 tons a week ; at \s. 6d. 6,000 ; while a reduction to 
 \s. yi. might increase the consumption to 10,000, or 
 even 12,000 tons. It is for the goods manager to
 
 en. X. WHEN NOT TO REDUCE 253 
 
 judge, in view of all the circumstances of the case, 
 whether the best bargain for him is to carry 3,000 
 tons at 2s., or 6,000 at is. 6d., or 10,000 at \s. yt 
 But, except in the case where he would have to spend 
 additional capital to accommodate the larger traffic, 
 we may take it for granted that he will come to the 
 same decision, whether his line has cost him 10,000/., 
 or 20,000/., or 50,000/ per mile. 
 
 Take, again, the case of iron and copper. There 
 is no doubt a possibility of copper being stolen in 
 transit, which scarcely exists in the case of pig-iron, 
 and to this extent the working expenses in the case 
 of copper are fractionally higher. But, broadly speak- 
 ing, the difference between the rates for the two 
 articles rests on the fact that the possible expansion 
 of the iron trade, owing to a reduction in the charge 
 for carriage — which is a considerable item of the 
 whole cost of so cheap an article — is very large, while 
 possible increase in the copper trade, in consequence 
 of a similar reduction, is very small. We have seen 
 already one instance of this. The Great Western re- 
 duces the rate for fish from Cornwall 15 per cent. The 
 reduction is absolutely dead loss, for the reason that, 
 being too small, as compared with the retail price of 
 the article, to produce any impression on that price? 
 it fails to stimulate production and consumption one 
 iota. 
 
 Now take the third of the instances we have 
 given. The Manchester warehousman has absolute 
 command of the local calico trade of Southampton 
 already. A reduction of rate which should enable a 
 55. dress to be sold for 4.s-. i \\d. — or, perhaps, in view
 
 254 ^'^'^^^' ENGLISH RATES ARE HIGH ch. x. 
 
 of the fondness of the female mind for farthhigs, it 
 would be better to say, enable a 4^-. i i^tf. dress to be 
 sold for 4s. I i^d. — would not lead to the consumption 
 of a single additional yard. But with the export 
 trade it is not so. A difference of 205. per ton may 
 iust turn the scale in favour of Lancashire against 
 Bombay, or enable our manufacturers to face the new 
 duty in some foreign market. It is a choice for the 
 railway companies between taking the export trade 
 at 2 5 jr. or losing it altogether at 45.y., and of the two 
 they prefer the former alternative. But the cost per 
 mile of line travelled over has nothing to do with 
 cither the one rate or the other. 
 
 There is, however, one sense, and that a most 
 important one, in which the cost of line affects the 
 rates charged for the use of it. The North Western 
 route from London to Birmingham and ]\Ianchester 
 and Liverpool is very nearly half a century old. But 
 the line, as Locke and Stephenson left it, is a very 
 different thing from the line as it exists to-da}-. 
 Millions upon millions have been spent in the interval 
 upon terminal accommodation in the different towns, 
 millions more upon the railway itself, which then 
 consisted of two, but now practically of four lines 
 throughout the entire length, with sufficient accommo- 
 dation in sidings to form at least one other pair of 
 lines for the whole distance. Now, this new accommo- 
 dation was not provided till the company had carefully 
 counted the cost. Among the many obligations im- 
 posed, both by legislation and public opinion, upon 
 linglish railway companies, that of providing new 
 capital gratis has not }-et been included. V.'c may
 
 CH. X. THE LIMIT OF CAPACITY 255 
 
 therefore assume that, in adding to its accommodation 
 — and the same thing of course apphes to the other 
 companies that have gone into the London-Liverpool 
 business since the Grand Junction days — the London 
 and North Western balanced against one another its 
 new capital outlay and its probable new receipts. 
 Now, for reasons given in the last chapter — of which 
 cost of land and the expensive standard of construction 
 demanded by English public opinion arc the chief — 
 no English main line is likely to be doubled under 
 50,000/. a mile. In other words, no English main 
 line can earn a 5 per cent, dividend unless it can 
 secure a gross revenue of 5,000/. a mile per annum 
 and retain one-half of that sum as its net profit. 
 
 Further, as we saw at some length in reference to 
 Sir Alfred Hickman's claim that a halfpenny per mile 
 should be taken as a normal standard for traffic in 
 coal and minerals, no line can hold beyond a certain 
 quantity of traffic. What that quantity is, depends on 
 the conditions under which it is carried. In America, 
 for instance, with enormously heavy loads moving con- 
 tinuously for long distances at a slow speed, it is pro- 
 bably, reckoned in tons per mile, several times as great 
 as in England, with small miscellaneous loads moving 
 at the utmost possible speed between a considerable 
 number of local points. But whether it be large or 
 small, the limit always exists. Now, in America it is 
 an admitted fact that no company can live which has 
 nothing to depend on but the farthing-a-mile through 
 traffic. The profit is so fractional that the line cannot 
 hold enough of it to pay interest on the capital required 
 for construction. In England, with lines, say, three
 
 256 WHY EXCLLSII RATES ARE HIGH cii. x. 
 
 times as costly, new construction, whether by the.old- 
 cstabh'shcd companies or by their younger rivals, must 
 have come to an end long ere this, unless the com- 
 panies had been able to count on obtaining a generally 
 high average of rate ; and if the railway companies 
 were to hold their hand for a single twelvemonth, to 
 cease their habitual expenditure of 15,000,000/. to 
 20,000,000/. per annum in adding to their existing 
 accommodation, the trade of the country would receive 
 a blow whose effect all the patent medicines of 
 reduced maxima and improved classifications would 
 scarcely avail to alleviate, much less to cure. 
 
 It is worth notice, how^ever, that, even in this 
 country, there may be circumstances under which a 
 company, charging rates practically on a level with the 
 American average, can be exuberantly prosperous. 
 Within the last two years a new route, some 26 miles 
 in length, has been opened from the Rhondda Valley 
 coalfield to the Bristol Channel at Barry Island. 
 The money spent on the line does not appear to be 
 separated from the money spent on the dock, but we 
 should probably be safe to say that the railway has not 
 cost less than 40,000/ a mile. The passenger traffic 
 is a bagatelle ; the goods chiefly pit-wood on its 
 way to the collieries. The coal is carried — short 
 though the distance be — at a fraction over \d. per 
 ton per mile, a price which has to cover the cost of 
 returning the waggons empty. Yet the Barr}^ Com- 
 pany has just declared a dividend of 10 per cent., and 
 its shares stand at over lOO per cent, premium. But 
 here, be it observed, we have practically the American 
 condition of affairs. There are no 50-mile an hour
 
 CH. X. RETAIL BRANCHES 257 
 
 expresses, no fish specials, no fast goods trains to 
 interfere with the steady rhythmical motion of the 
 coal-trains, as they glide from midnight to midnight, 
 week in week out, down from the head of the Rhondda 
 Valley to the level of the sea. 
 
 But, it may be said, agricultural branches do not 
 cost anything like 50,000/. per mile. True, no doubt ; 
 but, on the other hand, an agricultural branch can 
 never be filled to anything like its full capacity. It 
 could accommodate comfortably, say, 200 trains a 
 day. The traffic can only half fill some ten or a 
 dozen. Nor can any reduction of rates create new 
 traffic. You may carry wheat for nothing, you may 
 even pay the farmers to send it, but that will not 
 enable them to grow six quarters to the acre instead 
 of five. Then, again, the trade of an agricultural 
 branch must always be retail. A train at the best of 
 times consists perhaps of only thirty trucks with only 
 two tons apiece, but in the agricultural districts the 
 thirty trucks come down to eight, and the two tons 
 per waggon to 1 2 or 15 cwt. Putting together, there- 
 fore, the two facts, that the capital expenditure has 
 to be charged against a comparatively small turn- 
 over, and that the working expenses are exceptionally 
 heavy in proportion to the gross receipts, we arrive 
 at the result that, high as the charges may be on the 
 main line, they need to be still higher on a local 
 branch. 
 
 It is of course fairly arguable that the local lines 
 in England ought never to have cost the money they 
 have. They have been built double when single lines 
 might have sufficed, and in every way their construc- 
 
 s
 
 258 WIIV ENGLISH RATES ARE HIGH ch. x. 
 
 tion has been on an unnecessarily expensive scale. 
 This is no doubt strictly true, but the public, not the 
 railway companies, must take the responsibility for 
 the fact. No one, for example, could recommend 
 that a railway company should buy only sufficient 
 land for a single line, and run the risk of being 
 obliged ten years later again to face the verdict of 
 the British jury, as to the proper sum which it ought 
 to pay the adjacent landowner for land required for 
 widening, once its value had been enhanced three or 
 four-fold by its proximity to the railway. Or, again, 
 no one can say that a bridge, every quarter of a mile 
 or so, is essential for the accommodation of the sheep 
 and cows that inhabit the district ; but if it is cheaper 
 to build a bridge than to pay the preposterous price 
 demanded as compensation for severance, it surely 
 cannot be extravagant of the railway company to 
 build it. 
 
 So, too, in the matter of working expenses. A 
 railway man in any other country would consider it 
 reckless extravagance to put down our elaborate 
 English apparatus for signalling and interlocking, or 
 to pay the wages of a signalman to look after a dozen 
 trains in twenty-four hours. But here the public have 
 thought proper to insist on block-working, and they 
 cannot in reason expect to insure their lives without 
 being prepared to pay the price of the policy. Or, 
 again, the goods service of these lines could perfectly 
 well be done by a few trucks attached to the ordinary 
 passenger trains. But mixed trains are understood 
 in this country to be dangerous, and the Board of 
 Trade has just finally legislated them out of existence.
 
 CH. X. FRIGHTENING A^YAY CAPITAL 259 
 
 Is it fair — or, what is more to the purpose, is it prac- 
 tically possible that, in the long run, in a country 
 where new railway expenditure is wanted at the 
 rate of 50,000/. every working day, the cost of the 
 change should come entirely out of the pockets of 
 existing shareholders ? Parliament, we all know, is 
 omnipotent ; and Parliament can compel existing 
 lines to reduce their charges, and to increase their 
 working expenses simultaneously. But what Parlia- 
 ment cannot do, is to compel the investment of fresh 
 capital in British railways ; and till it can do the 
 latter, it would perhaps be wise, in the public interest, 
 not to attempt the former. 
 
 But to leave the agricultural lines, which after all 
 carry but a fraction of the total traffic — which, more- 
 over, only get their service at existing rates, because 
 the great companies, to which they mainly belong, 
 can afford to look upon them as feeders of the main 
 line traffic, and so to credit them with a considerable 
 amount of revenue which is never actually earned 
 over their rails — and to come to the important traffic 
 of the great cities and the manufacturing districts. 
 We here find collected together all the conditions 
 which tend to make railway service expensive. There 
 is a congestion of traffic of a most miscellaneous 
 character, the distances are short, the service is re- 
 quired to be performed at the most frequent possible 
 intervals, and at the utmost possible speed. It is all 
 very well to talk about waiting to make up a full 
 train-load ; but theoretical calculations of the indis- 
 putable economies to be thereby effected will not 
 avail to turn aside the reproaches of the customers 
 
 s 2
 
 260 WHY ENGLISH RATES ARE HIGH en. x. 
 
 whose goods are delayed a couple of hours beyond 
 their accustomed time. It is all very well to talk 
 about the extravagance of working coal up to London 
 in trains of thirty trucks at i6 miles an hour, when, 
 if the speed were cut down to lo or 12 miles, it might 
 be possible to take forty-five trucks. The appreciation 
 of elementary principles of railway working contained 
 in the criticism is deserving of all praise ; but the 
 practical railway man must be allowed to recollect 
 that, if he adopts the advice of his academical adviser, 
 either the goods trains and the passenger trains must 
 mark time behind the economically conducted coal 
 train all along the line, or else that this latter will 
 need to spend a still larger proportion of its working 
 day in refuge sidings than it devotes to that unre- 
 munerative occupation already. 
 
 Another point may perhaps here be noticed. 
 Railway service must, as has been insisted on already, 
 be looked upon as a whole. Admitting, for the sake 
 of argument, that goods rates are what they were 
 twenty years back, abandoning the attempt to 
 prove, what could only be proved by elaborate and 
 detailed comparisons, that consignors get a much 
 better service for the same money than they got 
 twenty years ago, let us see what has happened 
 during the same period in the case of passenger 
 traffic. No human being will surely compare the 
 purchasing power of a shilling in passenger trans- 
 portation at the earlier and at the later period. The 
 Royal Commission of 1867 drew special attention to 
 the neglect of the third-class passenger of England as 
 compared with his liberal treatment in ]5elgium and
 
 CH. X. PASSENGER REDUCTIONS 26 f 
 
 Holland, in France and Germany. First and second- 
 class accommodation, they admitted, left little to 
 complain of ; but nothing, or almost nothing, had 
 been done for the third-class passenger. " It is 
 obvious that the working classes do not obtain that 
 benefit from railway communication by the ordinary 
 trains of the companies which a railway is so well 
 calculated to afford."^ The scene shifts to 1891, and 
 the man who to-day should attempt to argue that, 
 in accommodation, in speed, in frequency of service, 
 the third-class passenger is as well treated on the 
 Continent as he is in England, would only succeed 
 in making himself ridiculous. 
 
 Even the oft-repeated assertion that fares have not 
 been reduced is largely inaccurate. As for first and 
 second-class passengers, not only have express fares 
 disappeared, but also throughout almost the whole of 
 England north of the Thames there have been very 
 substantial reductions in the ordinary fares ; to say 
 nothing of the millions upon millions of season-ticket 
 journeys, which in ever-increasing numbers are made in 
 first and second-class carriages at less than third-class 
 fares. For the third-class passenger the penny still 
 remains the normal standard. But indirectly that 
 standard has been largely reduced in many ways. 
 In the North, third-class season-tickets are now 
 usually issued. Near London, there are three hundred 
 trains a day conveying workmen at fares ranging 
 downwards to '0<^d. per mile. Then again at holiday 
 times — the only time practically when the wage- 
 earners can afford to leave their work — there are 
 
 ' Report, p. Ixi.
 
 262 WIIV ENGLISH RATES ARE HIGH ch. x. 
 
 excursion trains at fares averaging certainly not more 
 than h^. a mile, while to all the places with a constant 
 holiday traffic there are cheap tickets available the 
 entire summer through. The workman, for instance, 
 who goes down to Brighton from London, spends not 
 Ss. 4d. on his return ticket, but ^s. To Ramsgate his 
 fare is not i^s., but 8^., or if he goes for the day he 
 can bring it down to S^- J ^^^ so on throughout the 
 length and breadth of the country. To Glasgow and 
 back, 800 miles, a man can book every week for 2^s., 
 for three-eighths of a penny per mile, that is. He can 
 book to Inverness and back, 1,200 miles, for 60s. — his 
 ticket being available by every train, and giving him 
 the right to break his journey at every point of 
 interest on the way. 
 
 In face of facts like these, it is nonsense to say 
 that English third-class fares have not been reduced ; 
 and to say that they have been reduced is, in other 
 words, to admit that the railway companies have 
 been ready to share their increased profits, whenever 
 obtained, with their customers. For it should be 
 remembered that, vastly as the passenger traffic 
 has increased, it has steadily become less and less 
 profitable to the companies themselves A train, 
 which twenty years ago earned on the average 5.$-. and 
 cost 2s. 4d., nowadays is probably earning only 
 4s. 6d., while the cost in the interval has risen to 
 2s. 6d. Year by year, in fact, a railway company, like 
 every other capitalist, has to subsist on a narrower 
 margin of profit.- 
 
 - Mr. Grierson gave the Com- figures on this point in reference 
 mittee of 1881 some remarkable to the Great Western. Below are
 
 CH. X. NEGLECTED ADVICE 263 
 
 It is not a little remarkable, in looking back over 
 the series of reports of committees and commissions 
 on railway questions, to observe that while the recom- 
 mendations which told against the railways have 
 largely been carried into effect, those which would 
 have enured to their benefit have been almost abso- 
 lutely ignored. In his minority report, as a member 
 of the Royal Commission of 1867, Sir Rowland Hill 
 points out that, "while, in common with the 
 owners of other public vehicles, railway companies 
 are taxed by the State, their lines, unlike the old 
 roads, are heavily rated by every parish they 
 traverse ; so that in some rural districts a railway 
 company, though perhaps on the one hand relieving 
 the parish of much pauperism by giving profitable 
 employment to the peasantry, and on the other hand 
 lightening the rates by increasing the value of the 
 property on which they are levied, is yet made to 
 defray in a direct form half the parochial expendi- 
 ture. In fine, railway companies have been made to 
 feel, in the severest manner, that the justice which 
 society observes towards individuals is seldom main- 
 reproduced the most important of 
 them. 
 
 These figures, by the way, fur- 
 nish an awkward commentary on 
 the oft-repeated assertion that rates 
 have not appreciably fallen since 
 the first beginning of railways. 
 Will any human being seriously 
 assert that the engines of forty 
 years ago took nearly three times 
 the paying load that is hauled now- 
 adays V And, if not, how explain 
 the reduction in train-mile earn- 
 ings, except by admitting that the 
 rates have V.-een reduced ? 
 
 Percentage 
 
 of 
 
 'cuor 
 
 king 
 
 expenses 
 
 
 to gross receipts. 
 
 
 1844 
 
 
 
 
 33 per cent. 
 
 1S50 
 
 
 
 
 3^^ 
 
 ,, 
 
 
 i860 
 
 
 
 
 44 
 
 )> 
 
 
 1870 
 
 
 
 
 46 
 
 j» 
 
 
 1880 
 
 
 
 
 52 
 
 )> 
 
 
 Re 
 
 ceip 
 
 ts} 
 
 'jcr t 
 
 ■ain- 
 
 iniL 
 
 
 
 Pas 
 
 sens 
 
 ers, 
 
 S:c. 
 
 Goods, &c 
 
 
 J 
 
 d 
 
 
 
 ^. 
 
 d. 
 
 1850 
 
 • 7 
 
 
 ;-94 
 
 
 14 
 
 11-32 
 
 i860 
 
 • 4 
 
 
 r23 
 
 
 8 
 
 2 
 
 1870 
 
 • 4 
 
 t 
 
 3 -20 
 
 
 5 
 
 5-68 
 
 1880 
 
 • A 
 
 U 
 
 3-14 
 
 
 5 
 
 4-45
 
 264 ^v^v ENGLISH rates are high ch. x. 
 
 tained towards a corporation — a loss distributed 
 amongst many being too often regarded as, in effect, 
 no loss at all." And again elsewhere he declares 
 that the tax on railway travelling is an impost so 
 obviously objectionable that it is scarcely needful to 
 say that it should be removed as soon as the public 
 revenue can afford to forego it. 
 
 It is also scarcely needful to say that Sir Rowland 
 Hill's recommendation has not been followed. Horse 
 taxes have been abolished, carriage taxes lightened, 
 the proposed van-tax has, amidst the execration of the 
 traders — for even the most crushed of worms w^ill turn 
 at last — vanished into limbo. But the Government 
 tax on railways lives on and shows every sign of con- 
 tinuing to live. As for local rates, in the great towns at 
 least, they are likely to increase, for omnibuses are 
 becoming increasingly popular, and, though omnibus 
 companies pay nothing towards repairing the roads, 
 they can do a good deal towards wearing them out. 
 Last year, according to the Board of Trade Returns, 
 the total sum paid by one company, the South 
 Eastern, for rates, taxes, and Government duty, 
 amounted to one-eighth of its total expenditure. In 
 the case of the London and Brighton Railway it was 
 one-ninth. For all the railways of the United King- 
 dom it averaged one-fifteenth. 
 
 Again, Sir Rowland Hill points out that " it is 
 notorious that under the present system exorbitant 
 prices often have to be paid through fear either of Par- 
 liamentary opposition or of partial awards of juries. 
 ... In the purchase of land for railway purposes the 
 amount actually paid is often several times the ante-
 
 CH. X. BETTERMENT ANIJ COMPENSATION 265 
 
 cedent value." After recommending that a general 
 law should be enacted giving railways power to con- 
 struct new lines, subject to proper Government control, 
 without obtaining a special Act, he goes on to say : 
 " It would be for the Legislature to consider whether 
 in respect of lines constructed by authority of Govern- 
 ment solely for the general welfare, it would not be 
 just, while carefully respecting all legal rights, to con- 
 sider in the assessment of compensation what set-off 
 against the value of the land required should be 
 allowed for increased value given by the line to the 
 rest of the estate." Needless to say, once more, that 
 the principle of " betterment " has not yet found its 
 way into English law. If, and when, it does come, it 
 is not likely that it will be applied for the benefit of 
 railway companies. 
 
 There was another recommendation in the Report 
 of the Commission, this time signed by all but two of 
 their number. It ran as follows : " We recommend 
 that the liability of the railway companies be limited 
 within a maximum amount of compensation for each 
 class of fares. . . . Further, that claims for compensa- 
 tion should not be permitted unless within a certain 
 period." Needless to say, this recommendation too 
 is not yet carried out, though some restriction of this 
 nature is practically given effect to in every other 
 country. In America, for example, it is coming to 
 be almost settled law that ^S'S.ooo is the maximum 
 amount recoverable in case of fatal injury. Here, on 
 the other hand, a London physician in a well-known 
 case obtained a verdict for 7,000/., which being set 
 aside on the ground that the damages were illusory,
 
 266 WHY ENGLISH RATES ARE HIGH cii. x. 
 
 in a second action he secured 15,000/. as compen- 
 sation. 
 
 What this means, at least to the smaller and 
 weaker companies, may be judged by two instances. 
 The Great Northern of Ireland is still carrying over 
 money from revenue to meet claims arising out of 
 the Armagh accident in the early summer of 1889, 
 though its shareholders ever since have had to forego 
 one-third of the income which they would otherwise 
 have received. But even this is as nothing to what 
 has happened to a much smaller company — the Cork 
 and Macroom — which met with a bad accident 
 some eight years back, and has never been able to 
 resume the payment of dividends since. Once more, 
 it may be right that the British juryman should give 
 full scope to his feelings of compassion for everyone 
 who has been injured, as well as for a certain number 
 who have not been injured, in a railway accident, 
 under the impression that the impersonal company 
 can afford to pay ; but reasoning men will not forget 
 that, in the long run and over a series of years, the 
 whole of the compensation, p/us probably a certain 
 percentage for additional risk, has to come out of the 
 pockets of the customers of the line. 
 
 But enough probably has been said to show why 
 it is true in a sense that English rates are high. It 
 is worth while to notice very briefly whether they 
 are, as it is often asserted, too high. Of this various 
 tests might be taken. It might be said — it was said 
 three or four years back — that English trade was 
 slowly, very slowly, bleeding to death. In face of 
 the remarkable expansion of business which began
 
 CH. X. UNSTRANGLED CANALS 26/ 
 
 in the early autumn of 1889, such a statement will 
 scarcely be repeated to-da\-. Of course one may be 
 told that, though English trade is still growing, that 
 of Germany, of the States, is growing much faster. 
 True, doubtless ; but the fact that a child of a year 
 old grows faster than a lad of twenty, is scarcely 
 evidence to prove that the latter is ill-fed. 
 
 There is another barometer which might be used. 
 We hear much about the way railway companies have 
 strangled canals, and it is in consequence, we are told> 
 of this strangulation process that the railways have 
 been able to maintain their rates at the present figure. 
 There are, however, not a few canals still left un- 
 strangled. There is one, for instance, between the 
 not unimportant points of Liverpool and Manchester, 
 It is known as the Bridgewater Canal, and is now 
 the property of the Manchester Ship Canal Com- 
 pany. It carries a great deal of traffic, and pays a 
 good dividend. Yet so far is it from attempting or 
 desiring to reduce the rates which are killing the 
 Manchester merchant, that it actually joins hands 
 with the railway companies in an agreement to main- 
 tain the existing rates. Is it not obvious that, if the 
 Bridgewater Canal could carry Lancashire traffic 
 under Lancashire conditions at any important reduc- 
 tion in price, its own interest would lead it to desert 
 the railway alliance and to cut rates to a point at which 
 the railways would be forced to abandon the compe- 
 tition ? There is another canal between the not less 
 important points of Birmingham and London. Does 
 the canal compete seriously for Birmingham traffic ? 
 — and, if not, why not ? Can it really be that the
 
 268 WHY ENGLISH RATES ARE HIGH en. x. 
 
 Birmingham traders arc not quite inclined to take 
 themselves seriously ; that they are not quite sure 
 whether they care to have their goods on the road 
 a fortnight, and then delivered, not in the heart of 
 London, but somewhere up near the Highgate Arch- 
 way, even though they should save a few shillings per 
 ton over the business ? It surely cannot be that the 
 railway rates have drained South Staffordshire so 
 dry, that all the capitalists in the ]51ack Country 
 together cannot raise among them the few paltry 
 millions which are necessary to buy up the Grand 
 Junction Canal and its tributaries, and put the system 
 into something like a reasonable state of efficiency.^ 
 
 Though canals may not be able to hold their own 
 with railwa\'s on equal terms, it is j^et quite conceiv- 
 able that, leaving considerations of abstract justice 
 aside, it might be worth while — if not for private 
 commercial companies, then for the State or for local 
 authorities, to run canals, even though not at a profit, 
 in competition with the railways, with the deliberate 
 object of reducing the charges on the latter. This is 
 practically what is done by the French Government, 
 and also by the Government of the State of New 
 York, both of which maintain their canals free of toll 
 at the expense of the public revenue. In France, 
 where the State also guarantees the dividends of the 
 
 ^ Of course the Manchester Ship will be cheaper then than it is now. 
 
 Canal stands on a different foot- The point in the text is merely that, 
 
 ing altogether. If ocean vessels under normal English conditions, 
 
 can be brought to Manchester barge-canals cannot hold their own 
 
 almost as easily and as cheaply as with railways, not because they 
 
 into the docks of Liverpool, un- are strangled, but for the simple 
 
 questionably carriage from New reason that the sacrificeof efficiency 
 
 York or Savannah to Manchester isgreaterthan the gain in economy.
 
 CH. X. THE ERIE CANAL 269 
 
 companies, the Government is therefore in the un- 
 fortunate position of competing with itself; but in 
 America the Erie Canal was deliberately freed from 
 tolls a few years back, because, as long as tolls were 
 charged, it could not compete for traffic with the pri- 
 vate railway companies. The " Railroad Gazette," the 
 other day, had some elaborate calculations which 
 appeared to show that, if to the charge for water- 
 carriage from Chicago to New York there was added 
 a proportionate share of the cost of maintenance of 
 the Erie Canal, the total would amount to quite as 
 much, if not something more than the railway rate. 
 In other words, an American railway can hold its 
 own, even in matter of cost, with any water-carriage 
 short of that in full-sized steamers. Germany, too, 
 has spent of late, and is still spending, a vast amount 
 of money on inland water-communications. Accord- 
 ing to a recent statement of Professor Hadley's, there 
 is no need to spend the money at all, for the Ger- 
 man railways could afford to give the accommoda- 
 tion at the same price, were they not hide-bound by 
 the restrictions of their mileage tariff 
 
 All three countries, however, are alike in this, 
 that they are spending and have spent large sums of 
 public money in order to reduce the cost of transpor- 
 tation. When the British public begin to do the 
 same, they will occupy a position logically more ten- 
 able than that which they are in at present, " In 
 England," said M. Waddington's Committee in their 
 famous report to the French Chamber, " where this 
 .system of liberty and commercial competition is 
 largely in vogue, it is right that the railway com-
 
 270 WHY ENGLISH RATES ARE HIGH ch. x. 
 
 panics, who have received nothing, and from whom 
 nothing is demanded by the State " — " viaisnous avons 
 cJiaugd tout ce/a" M. Waddington wrote in 1880 — 
 " and who may be considered only as belonging to 
 the category of private merchants and manufacturers, 
 should have greater freedom in dealing with their 
 traffic and tariffs than is enjoyed in this country." 
 
 There is another form of competition which ought, 
 one would think, to temper the rigours of English 
 railway tariffs, that, namely, of traffic by sea. Now, it 
 is not a little remarkable how small a portion of the 
 places with potential sea competition actually have it 
 in reality. In numerous instances it has been tried 
 and failed. Take once more those extortionate fish- 
 rates. Steamers have been tried from Penzance, both 
 for fish and for new potatoes and early vegetables ; 
 but not, it is understood, with over much success. 
 They have been tried in competition with Oban and 
 Strome Ferry during the season of the West Highland 
 herring fishery. It is not the railways which have 
 come off worse out of the fray. Again, Mr. Taylor, 
 a Swansea grocer, who was greatly distressed that 
 the prohibitive railway charge for blacking imposed 
 too heavy a burden on his customers, told the Com- 
 mittee of 1 88 1 that there had been a steamer from 
 Tondon to Swansea, but that it had ceased to run. 
 Presumably its owners found the traffic unremune- 
 rative. In other words, the railway rates between 
 London and Swansea, taking into account the quality 
 of the service rendered, were lower than a steamer 
 could afford permanently to take in return for traffic 
 of a miscellaneous and fluctuatincr character. It is
 
 CH. X. LIVERPOOL AND ITS PLATEWAYS 2/1 
 
 necessary to lay stress on this latter point, because 
 the trader so frequently ignores the fact that the 
 expenses connected with a retail distributive traffic 
 are very different from those belonging to the hand- 
 ling of what the Americans would term " straight " 
 car-loads or ship-loads. Another instance may per- 
 haps be quoted to show that the railway rates are not 
 too high, in the sense that they do not strangle trade. 
 During the recent Scotch strike, it was reported more 
 than once that the steamers had taken away from 
 Edinburgh to London cargoes that would naturally 
 have gone by rail. But, if anywhere, surely between 
 the Forth and the Thames steamers ought to be able 
 to beat out of the field the competition of the railway 
 companies, their rates being what we are told they 
 are. But, in fact, vastly as the introduction of triple- 
 expansion engines has reduced the cost of steam-ship 
 working — an economy which has as yet no parallel in 
 railway practice — it is not asserted that steam-ship 
 communication is gaining on the railways throughout 
 the United Kingdom. If it docs not do so, if at 
 most of the ports where competition might exist, it 
 is in fact at the present moment non-existent, where 
 is the evidence that the railway rates are too high ? 
 
 A word more about Lancashire. When the Ship 
 Canal scheme was first seriously mooted, Liverpool 
 started in opposition a fantastic project for a system 
 of plateways along the roads radiating from Liver- 
 pool to the manufacturing centres, over whose smooth 
 iron surface vans were to be hauled with the mini- 
 mum of friction. The plateways have not yet been 
 constructed, have not indeed been so much as com-
 
 272 WHY ENGLISH RATES ARE HIGH ch. x. 
 
 menced. " Why not ? " one is fain to ask, if it be 
 true that the railway charges arc kept up to their 
 present level, not because the service is enormously 
 costly, but simply by the fact that the existing 
 companies have a monopoly of the only means of 
 communication. Again, it has been brought forward 
 as an argument against the railways that in the imme- 
 diate neighbourhood of Manchester, from points such 
 as Stockport and Oldham, traders often cart direct, 
 instead of entrusting their goods to the railway com- 
 pany. The point, in fact, tells exactly the other way. 
 It confirms what the railway managers are always 
 saying, that the increased cost of terminal handling 
 and terminal accommodation more than counter- 
 balances any economies which have been effected in 
 actual haulage. Where the distance is short, and 
 where the article carried is such that a considerable 
 amount of handling is required, cartage throughout, 
 which saves two handlings, must always remain 
 cheaper. Coal, say, can be transferred at 2d. a ton ; 
 it may cost 2s. to deal with cotton. Add another 6d. 
 for actual conveyance, and we get to an actual out-of- 
 pocket cost of 45. 6c/., which is evidently more than 
 the carter need charge for adding six miles to a 
 journey already undertaken. 
 
 The moral of our story should then be plain. 
 That English rates are high because the service given 
 is an expensive one, and one which can only be pro- 
 vided over a line constructed at great initial cost. 
 That, whether we look at the return to the share- 
 holders, or at the cost for which similar service is pro- 
 vided elsewhere ; whether we have regard to the fact
 
 cu. X. THE AMERICAN OUTLOOK 273 
 
 that English trade has steadily grown and increased 
 under them, or to the fact that no serious competition 
 by water-carriage is attempted, there is no evidence 
 to prove that English rates are too high. Before, 
 however, leaving the subject, it is worth while revert- 
 ing for a moment to the contemporary history of the 
 United States. We shall find, if I mistake not, that 
 the conditions which have made English railway rates 
 what they are, are even now rapidly developing them- 
 selves on the other side of the Atlantic. 
 
 " Let the country make the railroads, and the rail- 
 roads will make the country," was the well-known 
 saying of George Stephenson. And true though it may 
 have been in the case of England, it applied with ten- 
 fold force to the United States. Here the railways 
 came into towns already rich and prosperous, and 
 had to buy land for their stations and works at 
 building prices. In America the railway men were 
 pioneers, and camped out, one might almost say, at 
 their depots in the backwoods or on the prairies till 
 the town grew up round them. In this fact, coupled 
 v/ith the remarkable difference of the point of view of 
 the legislation of the two countries in reference to 
 the appropriation of land for railway purposes — the 
 United States looking at the matter from the point 
 of view of the public, whose interest is to get the line 
 as cheaply as possible, England from the point of view 
 of the existing owner, whose rights are to be hedged 
 round with all possible safeguards — is to be found the 
 main cause of the comparatively inexpensive nature 
 of American railways. 
 
 This state of things, however, has practically come 
 
 T
 
 274 ^^'11^' ENGLISH RATES ARE HIGH ch. x. 
 
 to an end. In New York, or, to speak more accu- 
 rately, in Jersey City, on the other bank of the Hudson 
 — for, with the exception of the New York Central, 
 the railway companies do not enter New York City 
 at all — in Philadelphia, in Chicago, in all the great 
 cities, in fact, the railwaj-s have outgrown, or at least 
 are now on the point of outgrowing, their original 
 accommodation. They are being forced to face the 
 fact that to enlarge their stations and goods-yards 
 they have got to buy, if not property actually 
 covered with houses, at least building-land at 
 building prices, and the prospect is by no means a 
 cheerful one. As has been pointed out, an expensive 
 line literally cannot hold at ^d. per ton-mile a suffi- 
 cient quantity of traffic to pay interest on its capital. 
 And yet the money has to be spent, for unless there 
 is accommodation for receiving and getting rid of 
 the traffic at the terminal points, the line in between 
 those points will remain half empty. More than one 
 of the American railways therefore is in the unfortu- 
 nate position that it is forced to spend, say, 5,000,000 
 dollars on two or three miles of line, on which it can 
 never hope to earn interest at more than i per cent, 
 because, if it refuses to face the outlay, 200 or 300 
 other miles, whose total capital amounts perhaps to 
 30,000,000 dollars, will remain unproductive. 
 
 Then, again, the Americans have to confront the 
 problem of bringing their existing accommodation 
 up to the standard, not of course of English, but 
 of Continental lines. The American public have 
 not yet risen to the height of demanding masonry 
 bridges for the use of their sheep and cattle, or even
 
 CH. X. BACKWOODS ACCOMMODATION 2/5 
 
 masonry platforms for their own use, but they are 
 very strongly of opinion that it is time trains ceased 
 to run down the middle of crowded streets in town. 
 English readers, perhaps, scarcely realize what the 
 Americans have hitherto had to put up with in this 
 respect. Let me give two instances. The writer 
 happened the other day to time an express on the 
 main-line of the Pennsylvania Railroad, within thirty 
 miles of New York. The speied, in passing through 
 the streets and squares of the not inconsiderable 
 town of Rahwa}-, was between 62 and 6^ miles an 
 hour. There was, it is true, a fence to keep the 
 public off the track. It consisted of a single iron rail 
 of about the height and about the strength of a 
 croquet hoop. Or, again, half a dozen of the principal 
 railways of the country have their termini alongside 
 in Jersey City, with their rails running down to the 
 Hudson at right angles to the river's course. There 
 are passenger trains dashing in and out every 
 moment, and shunting engines moving hither and 
 thither, tolling their great bells, in bewildering confu- 
 sion. And through all this the foot traffic and cart and 
 carriage traffic of Jersey City, with a population of 
 some 200,000 persons, has to find its way as best it 
 can on the level. According to a statement in one 
 of the New York papers, the Pennsylvania Railroad 
 alone lias two trains a minute across and through the 
 streets oi this unfortunate town ; but, by dint of 
 maintaining four flagmen constantly on guard, it 
 succeeded in keeping the fatal accidents during the 
 whole twelve months of 1890 down to only 20. 
 
 Now, as has been said, there is a very strong feeling 
 
 T 2
 
 276 WHY ENGLISH RATES ARE HIGH cu. x. 
 
 growing up that it is time this state of things came to 
 an end, and, in fact, at this moment the Pennsylvania 
 Railroad is elevating its passenger tracks at this 
 point. But, to carry out the same process on all the 
 lines in all the towns, will mean an expenditure of 
 enormous magnitude. It is true that in the States 
 the Government, or the municipalit}-, or both, are 
 accustomed to contribute sometimes a half — as 
 was done, for instance, when the New York Central 
 depressed its tracks into the depot on Forty-second 
 Street — more usually one-third of the expense incurred 
 with this object. But, even so, the railway share of 
 the cost will be a very serious matter.' Then again 
 the block system is being adopted in some form or 
 other by most of the leading companies, and what the 
 cost of the block .s}'stem is, English railway managers 
 know only too well. 
 
 Nowhere is the congestion of traffic worse than in 
 New York itself Goods and passenger accommodation 
 are alike overtaxed even now, and there is both in 
 goods and passengers a steady and rapid increase of 
 local traffic, which requires just as much room at the 
 terminus as through traffic, though it unfortunately 
 
 '' Here is one instance. The long to give here is practically 
 
 New York, New Haven, and unassailable, the New York and 
 
 Hartford Railroad, probably the New Haven declines to incur this 
 
 wealthiest railway company in the expense, and proposes to abandon 
 
 St.ites, wants at this moment to its existing station and go round 
 
 fiuadruple its tracks through the outside the town. But no com- 
 
 small town of Bridgeport, in Con- petitive company in the States 
 
 necticut. It can only get leave could venture to move to alesscon- 
 
 to do this on condition of sinking venicnt station, and no company, 
 
 its tracks below the roads. The whether competitive or not, would 
 
 total cost of the operation is esti- dare to make such a suggestion in 
 
 mated at 1,200,000/., and having England. 
 a monopoly, which for reasons too
 
 cir. X. THE BLOCKADE OF FREIGHT 2// 
 
 docs not, like the latter, pay large mileage rates by 
 which the terminal cost can be diluted. Passengers, 
 too, arc becoming more exacting, and it is thought 
 that tunnels under the Hudson, with termini in New 
 York City itself, will, before many years are out, have 
 to replace the present system of depositing passengers 
 in Jersey City, and leaving them to cross the river in 
 ferry-boats. Then, again, the arrangements for the 
 collection and delivery of goods are very far from 
 satisfactory. As has been said, this work is not 
 undertaken by the railway companies, and the private 
 firms who do the business make enormous charges ; 
 three and four shillings for fetching or delivering a 
 single case is something like the usual scale. 
 
 Nor can it be denied that the charges are justifiably 
 high, for to deliver a mixed load at a New York freight- 
 shed is often a matter of many hours. A man may 
 wait for a long while before he can get a receipt for 
 the first consignment he hands in, and then be told 
 that the next lot is for a different station and must be 
 taken to a different door ; and so the whole weary 
 work of waiting has to be begun over again. One of 
 the great cartage firms declares that not unfrequently 
 the horses are taken out of their carts and sent away 
 to work elsewhere, a watchman being left in charge of 
 the goods till the company is able to take delivery. 
 More than one of the great companies has been 
 seriously considering the propriety of undertaking the 
 work of cartage and delivery itself, not with any idea 
 of making a direct profit out of the business, but 
 simply in order to be able, by better organisation, to
 
 2/8 WHY ENGLISH RATES ARE HIGH ch. x. 
 
 Utilise more fully the enormously expensive terminal 
 accommodation in New York. 
 
 Then again the demand for more rapid transporta- 
 tion of goods is rising on all hands, with consequent 
 serious increase of movement expenses. On the New 
 York Central, for instance, there are now about fourteen 
 fast freight ivams per dicvi, ^^•h^ch arc limited to some- 
 thing like half an ordinary load, and run on the 
 passenger tracks at a speed of 20 miles an hour. This 
 same company reported a year back that it had 
 succeeded in increasing the average load of its freight 
 trains from i86 to 226 tons by paying more attention 
 to securing full loads for each car. On this the 
 "Railroad Gazette"'' commented as follows: "It 
 would seem as though economy of train-loads had 
 been secured at the sacrifice of considerations of 
 business policy. It is often a short-sighted measure 
 to save money by reducing facilities. It may do for 
 a year or two, but it works badly in the long run." 
 
 In the Erie Report for 1890 will be found this 
 passage : " The competition in service has increased 
 the cost of operation largely in excess of the advantages 
 gained. Not many years ago, the average speed of 
 freight trains rarely exceeded 10 miles per hour. Now, 
 upon your road, they run at the average rate of 25 
 miles per hour. At that time the engines hauling 
 freight trains weighed 30 tons, now they weigh 60 
 tons. The rails in the track weighed 56 pounds to 
 
 '•> I have quoted so often from which unfortunately does not exist 
 
 \\ic Railroad Gazet/e that it may here, a journal written by, and for, 
 
 as well be said that the Gazette is exjierts in railway traffic nianage- 
 
 an accepted authority in its own ment. 
 country, being a paper of a kind
 
 en. X. INCREASE OF SPEED 279 
 
 the yard. Now your company puts in steel rails 
 weighing 80 pounds. . . . The tons of freight per 
 train have decreased from 265 tons to 249 tons, or 
 6"04 per cent. This was brought about by a faster 
 movement of freight trains generally. On account 
 of the more active competition existing among the 
 trunk lines in the movement of merchandise, this fast 
 train movement has reduced the tonnage per mile, 
 and consequently the earnings. The results for the 
 year show a reduction in the net earning per freight 
 train-mile of I4'93 per cent." The same thing is 
 happening in the neighbourhood not only of New 
 York, but of Chicago. " The speed of trains," says 
 the Illinois Central Report, " has been increased con- 
 sequent on the demands of traffic and competition 
 thereby reducing the size of trains, and making the 
 expense per car heavier." Another of the leading 
 Western roads — the Chicago, Burlington and Quincy 
 — put out for the first time in June last a working time- 
 table for fast freight, both through and local traffic, 
 all over its system. 
 
 The truth is that, not only American railway 
 managers, but the American public at large, are 
 beginning to realize to what disastrous results for all 
 interests concerned the adoption of Sir Bernhard 
 Samuelson's advice to compete in rates must lead. 
 Those best qualified to judge evidently believe that 
 rates have practically touched bottom, that the com- 
 petition of the future — to quote the Illinois Central 
 Report once more — " is coming to be, as in Great 
 Britain, one of adequacy and frequency of service,"
 
 280 WHY ENGLISH RATES ARE HIGH cii. x. 
 
 and that the tendency of rates in the future is more 
 likely than not to be in an upward direction. 
 
 It should be added, in conclusion, that even now 
 the competition in facilities has become very keen. 
 A single company, the Erie, delivers to customers at 
 no less than 'J'^^ points in New York and its vicinity. 
 The competition in passenger traffic is conducted 
 with a reckless disregard for economy, far beyond 
 anything which this country can show, even in cases 
 such as the oft quoted "25 expresses from London 
 to Manchester." In England, Professor Hunter 
 complains that competition has " led to some practices 
 that are bad for the railway shareholders and of 
 doubtful utility to the trader. ... It has given rise 
 to an army of touts or agents, whose services are of 
 no value to the trading community, and in other ways 
 it has led to a costly and unprofitable mode of con- 
 veying traffic." In this respect unquestionably the 
 Americans are sinners above all who dwell in the 
 United Kingdom. Their army of touts and can- 
 vassers would almost suffice to man all the posts in 
 the English railway service. Their houses of call for 
 the sale of passenger tickets and for general informa- 
 tion are in every street. The Pennsylvania has four, 
 and the Baltimore and Ohio seven, in Broadway alone. 
 One of the most valuable sites probably in the world — 
 the point where Broadway cuts Fifth Avenue on the 
 south side of Madison Square — is occupied by a ticket 
 agency of the Erie Company. In one sense, no doubt, 
 this competitive system of conducting traffic is costly 
 and unprofitable. The touts and canvassers are not 
 engaged in direct production. But a tree should be
 
 CH. X. AN OBJECT LESSON 28 1 
 
 known by its fruits, and the competitive system in 
 America, though theoretically it may charge the 
 trading community for services which are of no value to 
 them, has unquestionably rendered to that community 
 services at a price which would be thought impossible 
 under a system such as State-purchase or guaranteed 
 monopoly must naturally produce, where the railway 
 official lies contentedly on his back, and waits until 
 the traffic drops into his mouth.*^ 
 
 ^ Londoners have had, within General Omnibus Company caps 
 
 the last few years, an excellent it with a second service the follow- 
 
 object-lesson as to the so-called ing week. Yet the old company 
 
 wastefulness of competition. Since still maintains its accustomed 10 
 
 the London Road Car Company per cent. , while its younger com- 
 
 started, there has been an enormous petitor has just declared a dividend 
 
 reduction in fares simultaneously at the rate of 7^. The truth is, 
 
 with an immense improvement in that competition within reasonable 
 
 accommodation. Further, just limits, so far from being wasteful, 
 
 like the rival companies between is a public benefactor. It makes 
 
 London and Manchester, and New two blades of grass grow where 
 
 York and Chicago, when the Road one grew before, and a single 
 
 Car Company establishes a line of blade affords adequate sustenance 
 
 omnibuses along a new route, the for either competitor.
 
 282 
 
 PART III 
 THE PROBLEM FOR PARLIAMENT 
 
 CHAPTER XI 
 
 THE TRADERS' DEMANDS 
 
 Having considered the general principles which 
 underlie the fixing of railway rates ; having further 
 discussed, as far as limitation of space allowed, the 
 application of those principles, both here and in 
 foreign countries ; having seen, too, in outline, the 
 broad features of difference between the railways of 
 the United Kingdom, on the one hand, and those of 
 the Continent and the United States on the other, 
 we are now in a position to pass judgment on the 
 detailed proposals for the reform of our English 
 system, put forward on behalf of the traders of this 
 country. At the outset it is impossible not to express 
 regret at the inaccurate version of the Parliamentaiy 
 history of this question which is given in the Report 
 published under the authority of the united Lanca- 
 shire and Cheshire, Devon and Cornwall, and Irish 
 Traders' Conferences. Nothing can be gained in the 
 long run by inaccurate statements of fact. It is, of 
 course, entirely within the rights of an advocate to 
 place his opponent's case in the least favourable
 
 CH. XI. QUESTIONABLE ADVOCACY 283 
 
 light. When, therefore, the Report in question makes 
 the following statement : " It was before this Com- 
 mittee" [that, namely, of the House of Commons in 
 1853] " that the Great Western Railway first enunci- 
 ated the doctrine, which they still maintain, that the 
 only limit to their charges should be the amount 
 which the traffic can bear. Their view is that they 
 would allow the merchant or manufacturer to retain 
 a small profit upon the business he is carrying on ; 
 anything earned beyond what his capital would give 
 him if invested in Consols should belong to the rail- 
 way company which undertook the carriage of his 
 materials " — when the Report makes a statement such 
 as this, no one has a right to object. It is merely a 
 rhetorical exaggeration of what is, when stripped of 
 the rhetoric, nothing more than an obvious truism, 
 that the principle of charging what the traffic will 
 bear, if pressed to the point w^here it becomes practi- 
 cally equivalent to " charging what the traffic will not 
 bear," may be made the excuse for rates which in 
 practice prove to be extortionate or even confis- 
 catory. 
 
 But an advocate who, when professing to quote 
 from an affidavit, should omit qualifications here, and 
 soften down inconvenient phrases there, while allow- 
 ing; the Court all the time to believe that he was 
 reading verbatim et literativi — such an advocate would 
 rightly be held to have allowed his zeal for his 
 client to get the better of his respect for the obliga- 
 tions which he owed to an honourable profession ; 
 and this is really almost what has been done in the 
 Report presented to the Lancashire and Cheshire
 
 284 THE traders' demands cir. xi. 
 
 Conference. It is emphatically not true that, as 
 stated on page 153 of the Report, " complaints of the 
 abuse of the power entrusted to the companies, and 
 protests against the powers exerted by them .... 
 have been endorsed by every Parliamentary Com- 
 mittee which has enquired into them, from 1846 to 
 1888 inclusive." 
 
 On the contrary, the railway companies may 
 fairly claim that, if any impartial person will com- 
 pare the long series of reports of railway committees 
 with the reports of enquiries into the administra- 
 tion of different departments of the public service, 
 the private companies will be found to come much 
 better out of the comparison than the Government 
 departments. Charges of abuse and extortion have 
 been made by the hundred ; but, when sifted in 
 the calm atmosphere of a Parliamentary committee- 
 room, they have usually left behind them what in 
 proportion to their bulk may be considered but a 
 microscopic residuum of fact. The sum and substance 
 of the whole series of Parliamentary Reports might be 
 much more nearly given in a single line from the 
 concluding paragraph of the latest Report of all, that 
 of the House of Commons' Committee of 1882 : 
 " Your Committee report that on the whole of the 
 evidence they acquit the railway companies of any 
 grave dereliction of their duty to the public." 
 
 If the Lancashire and Cheshire Conference desire 
 to have before them an accurate summar}' of the 
 Parliamentary history of this question from the 
 earliest period, it is a pity their Report did not go 
 back two years behind 1846. For in the year 1844
 
 CH. XI. THE COMMITTEE OF '44 285 
 
 there was a very famous Committee, which, under the 
 guidance of Mr. Gladstone, as President of the Board 
 of Trade, and Mr. Samuel Laing, now Chairman of 
 the Brighton Railway, as Secretary of the Railway 
 Department, went very carefully into the whole 
 question of railway legislation. One result of their 
 deliberations was the " Cheap Trains Act " of the same 
 year, which not only gave third-class passengers the 
 right to be carried at a speed of at least 12 miles an 
 hour by one train per diem, but provided that under 
 certain circumstances the State might purchase the 
 railways ; and, further, that when railway profits 
 reached 10 per cent., the Treasury might revise the 
 rates so as to reduce the dividend to that fig-ure. 
 Such revision, however, was to be accompanied by a 
 guarantee on the part of the Crown, that the revised 
 rates should produce a dividend to the company of 
 10 per cent, for the 21 years thereafter succeeding. 
 Perhap?, however, we had better say as little as pos- 
 sible about this legislative precedent, as it might be 
 inconvenient to the Lancashire and Cheshire Confer- 
 ence, 
 
 Let us confine ourselves to the Report and recom- 
 mendations of the Committee. It reported that the 
 complaint of monopoly urged against railways was 
 an indication of the benefits they had conferred on 
 the country, as it was not by force of special privileges 
 granted to them, but by superior accommodation 
 and cheapness, that they had acquired the command 
 of travelling in their district. The Committee went 
 on to say that, as it was desirable enterprise should 
 be encouraged to go on and provide further railway
 
 286 THE TRADERS' DEMANDS cii. xi. 
 
 facilities, Parliament should " take no step which 
 would induce so much as a reasonable suspicion of its 
 good faith with regard to the integrity of privileges 
 already granted, because one of the elements of 
 encouragement to future undertakings was just and 
 equitable dealing with those already established." 
 It should be added, as it might possibly be thought 
 to tell in the other direction, that the Committee con- 
 tinued : " At the same time, nothing in the nature 
 of a vested interest (by which the Committee mean 
 an interest and claim over and above positive enact- 
 ments for some restraint of the general principles 
 in favour of the party) ought to be recognised by 
 Parliament as attaching to existing railways." This 
 passage, however, it is almost needless to point out, 
 efers, not to a revision of existing powers of charge, 
 but to a guarantee against the competition of new 
 lines. 
 
 Now let us come to the Report of 1 846. According 
 to the Lancashire and Cheshire Conference Report, 
 " the specific suggestion made " [by the Committee 
 in that year] " was that the lowest existing rates then 
 charged should be taken to form the future maximum." 
 Referring, however, to the Report itself, we find that 
 the specific suggestion is in the following v.'ords : 
 " That in all instances in which railway companies 
 propose to take powers of amalgamation, the rates 
 and tolls of the amalgamated company should be 
 subjected to revision." The Report, however, goes on 
 to say that competition has hitherto prevented com- 
 panies from charging their maximum rates and tolls, 
 but that " if a system of amalgamation is to be
 
 CH. XI. THE COMMITTEE OF '46 287 
 
 extensively adopted, the latter inducement to low 
 charges will be materially diminished, if not alto- 
 gether done away with." The Committee therefore 
 feels that maxima may be required in the future for 
 public protection, and thinks that Select Committees, 
 in passing Amalgamation Bills, ought to " exercise 
 much care in the adjustment and substitution of a 
 maximum rate " for the amalgamated company. 
 " It ought," says the Committee, " always to be borne 
 in mind that the effect of an amalgamation is to 
 diminish the expense of working and managing 
 railways, and thereby to enable the proprietors to 
 secure a greater profit on their existing traffic. And, 
 in this view of the case, it might be taken as a general 
 rule, subject to special exceptions, that the maximum 
 of rates and tolls combined ought not to exceed the 
 lowest rates which have been previously demanded and 
 received by the respective companies." 
 
 Now, it is not very easy to put a perfectly satis- 
 factory interpretation on this last clause, the wording 
 of which is by no means free from ambiguity. At 
 first sight the present writer was inclined to believe that 
 the words " demanded and received by the respective 
 companies " meant " demanded and received from 
 Parliament as maximum rates " — not '• demanded and 
 received from the public as actual charges." In other 
 words, that the recommendation of the Committee of 
 1846 was, not that of the Lancashire and Cheshire 
 Conference : " take the lowest competitive rate actually 
 charged and stereotype that as the maximum of the 
 whole line," but " where two companies are amal- 
 gamating, take as the standard for the maxima of
 
 288 THE traders' demands ch. XI, 
 
 the new company the lower of the two scales of 
 maxima enacted for the old company " — needless 
 to say, a very different proposition. 
 
 Certainly antecedent probability is in favour of 
 such an interpretation. In the words of Mr. Justice 
 Wills's most recent judgment, in the case of Sowerby 
 1'. The Great Northern Railway Company : " Al- 
 though it is very much the fashion in the present 
 day to think that, if any sufficient number of people 
 want the property and services and work of other 
 people without paying for them, they ought to 
 have it, yet I do not think that in 1850 that had 
 become so pronounced a view on the part of the 
 Legislature." But there is more than this. The Report 
 of 1846 was before the Royal Commission of 1867, 
 and this latter body describes its recommendation as 
 being simply : " That in all instances in which the 
 railway companies propose to take powers of amal- 
 gamation, the rates and tolls of the amalgamated 
 companies should be subjected to revision." It 
 was again before the Joint Committee of 1872, 
 which summarizes its recommendation in the words: 
 «' That in general the new maximum should not 
 exceed the lowest maximum of any of the amalga- 
 mating companies." It seemed almost impossible to 
 suppose that 44 years ago a Parliamentary Committee 
 committed itself to what to us in 1891 looks like a 
 policy of simple confiscation, and recommended that 
 " the lowest existing rates then charged should be 
 taken to form the future maximum." 
 
 Further consideration, however, has convinced 
 me that the Committee did really mean to recommend
 
 en. XI. THE i'RICE OF AMALGAMATION 2S9 
 
 that the lowest existing charges should form the basis 
 of the new statutory maxima, but that this was, under 
 the circumstances, a perfectly natural and reasonable 
 proposal. Let us see what these circumstances were. 
 The time was 1846, when the railway mania was at 
 its height, when the great lines were paying dividends 
 of 10 and 12 per cent., and railway shares were 
 looked upon as inexhaustible gold mines. When 
 companies in this condition of exuberant prosperity 
 came to Parliament to ask permission to increase 
 their net revenues by being allowed to secure the 
 economies which amalgamation promised — and when 
 it took three companies to carry a passenger to 
 Brighton, and four to carry him to Dover, those eco- 
 nomies were not inconsiderable — it w^as only right 
 and proper that Parliament on behalf of the public 
 should ask for a qitid pro quo. And this quid pro quo 
 would naturally take the form of a reduction of the 
 maximum powers to the point which, roughly speak- 
 ing, had been shown by experience to be amply 
 remunerative. There was no question in 1846 of 
 bringing down local rates to the level of competitive 
 through rates, for these latter had hardly begun to 
 come into existence. The classification was still that 
 of the original Acts ; special rates, export rates, and 
 the like, were as yet unknown ; practically speaking, 
 the charges were still fixed on a simple mileage basis. 
 In fact, the sense of the recommendation of the Com- 
 mittee of 1846 is fairly represented to our modern 
 ideas by the words in which the Joint Committee of 
 1872 summarises it: "That in general the new 
 
 U
 
 290 THE TRADERS DEMANDS ch. xr. 
 
 maximum should not exceed the lowest maximum of 
 any of the amalgamating companies." 
 
 The next Parliamentary Committee referred to in 
 the Lancashire and Cheshire Report is that of 1853. 
 *' The Report," so it is summarised on page 1 1 of the 
 Lancashire and Cheshire document, " estimated that 
 the unnecessary Parliamentary expenses hitherto 
 incurred by the companies in opposing rival schemes 
 amounted to no less than 70,000,000/. This was an 
 expenditure barren of results to the public and one 
 not due to be recouped by the imposition of higher 
 rates and fares. As regards the contention that 
 powers are irrevocable, it is to be noted that the 
 Committee considered that (su') the principle hereto- 
 fore established at law — that an Act of Parliament 
 constitutes an engagement between the promoters 
 on the one side and the public on the other — a 
 principle deserving of more consideration than it had 
 hitherto obtained as a guide to future legislation." 
 It is only necessary to place in juxtaposition to this 
 remarkable paraphrase the precise words of the 
 Parliamentary Committee's Report itself 
 
 They are as follows : " Your Committee consider 
 that the principle heretofore established at law, that 
 an Act of Parliament constitutes an engagement 
 between the promoters on the one side and the public 
 on the other, is a principle deserving of mort consider- 
 ation than it has hitherto obtained as a guide to future 
 legislation. This principle, rightly understood, conveys 
 to the promoters no right that their privileges shall be 
 exclusively maintained when they cease to be consis- 
 tent with the general advantage ; but it does imply
 
 cii. XI. THE BENEFICENT SHAREHOLDER 29I 
 
 that having been authorised by the Legislature to 
 construct expensive works for pubhc use, the resources 
 from which their just remuneration was to spring 
 shall not be taken away upon any other than clear 
 grounds of public policy. The observance of such a 
 principle is valuable to the public as well as to share- 
 holders, since it is of importance to the whole com- 
 munity to develop by every judicious means those 
 communications on which the freedom and facility 
 of trade, and the safety and convenience of personal 
 locomotion, now depend, and therefore to ensure, to 
 a reasonable extent, the stability of the property so 
 invested." 
 
 And again : " A most competent witness ^ has 
 estimated the loss of money to the railway share- 
 •holders, unnecessarily incurred in obtaining Parlia- 
 mentary authority for mid in constructing the railways 
 now in existence, and in opposing rival schemes, at 
 70,000,000/. ; and though it may, perhaps, be con- 
 sidered that this is a high estimate, when taken in 
 regard to the lines actually made, it is no sufficient 
 measure of the loss which has been really sustained, 
 since many are constructed which probably are not 
 laid out in the way best calculated to promote the 
 general convenience, and so to develop the greatest 
 amount of traffic. On the other hand, it is difficult to 
 estimate 4Jie amount of benefit which is derived to the 
 public even from raihvays zvhich are 7iot remunerative 
 to the shareholders, by the facilities which are afforded 
 for transit, and by the saving of capital which arises 
 
 ' The witness was Mr. Samuel Laing, now Chairman of the 
 Brighton Railway.
 
 292 THE TRADERS DEMANDS cir. xi. 
 
 from the shortening of time required for the trans- 
 mission of goods, and the diminished necessity for 
 holding considerable sums locked up in the stocks of 
 tradesmen." 
 
 The Lancashire and Cheshire history proceeds as 
 follows: "In 1863 it was reported to Parliament that 
 the companies were ignoring their duties as trustees 
 of the highways, and making them entirely subser- 
 vient to their own profit. It was urged that it was 
 the duty of the executive Government to become the 
 guardian of the general interest, and to take measures 
 to compel the railway companies to fulfil faithfully 
 the public duties they have undertaken." Who made 
 this report we arc not informed. In the absence of 
 such information, it being impossible to find any other 
 evidence of the existence of a report of 1863 at all, 
 we shall perhaps be right in assuming that 1863 is a 
 misprint for 1853, the more so as a reference to the 
 Fifth Report of the Committee of this latter year 
 seems to furnish sentences on which the Lancashire 
 and Cheshire paraphrase might conceivably be 
 founded. These passages are as follows : " In some 
 cases this union of railways and canals has been 
 effected at the instance of the railway companies, for 
 the obvious purpose of removing a competitor, and 
 obtaining a monopoly of the means of transit. . . . 
 In other cases the union appears to have been effected 
 in the following manner : When a railway company 
 has proposed to construct a railway in a district here- 
 tofore served by water-carriage, the shareholders of 
 the canal have possessed sufficient influence to compel 
 the railway company to buy off their opposition by
 
 cii. XI. THE co^:^]ITT^:L•: of 53 293 
 
 amalgamating them on favourable terms witli the 
 raihva)\ In cases of this kind the difficulty of pro- 
 viding a remedy against abuse is greatly increased 
 by the hardship which the railway company will 
 allege to be inflicted upon them, if Parliament, having 
 first compelled them to enter into a losing partnership 
 with the canal, afterwards prohibits them from turning 
 the two schemes conjointly to the utmost advantage 
 in their power. . . . There is another class of cases 
 in which the railway companies appear sometimes to 
 exercise arbitrary and illegal powers to the prejudice 
 of persons engaged in trade, namely, where they evade 
 that provision of the law which requires them to exact 
 no more than equal charges under the same circum- 
 stances. Complaints from persons engaged in coal 
 and other mineral traffic have been urged before your 
 Committee, to the effect that special favour is shown 
 to particular classes of traffic to the prejudice of 
 others, and in such cases, as some difference of circum- 
 stances can, of course, always be alleged, it is often a 
 difficult question to decide whether that allegation 
 can or cannot be sustained." 
 
 It is, perhaps, hardly necessary to add that the 
 Lancashire and Cheshire Conference, and not the 
 Parliamentary Committee of 1853, is responsible for 
 the remarkable simile of " trustees of the public high- 
 ways," as applied to railway companies. Trustees, 
 the legal horn-books tell us, are permitted under no 
 circumstances to make a profit out of their trust, and 
 whatever may be the opinion of Lancashire and 
 Cheshire traders in the year 1891, it is certain that 
 a Parliamentary Committee in 1853 had no idea of
 
 294 THE TRADERS DEMANDS en. xi. 
 
 calling upon a commercial undertaking to render its 
 services to the public gratuitously. On the other 
 point of the interference of the Executive Government, 
 the words of the Report are as follows : " Your Com- 
 mittee think it would be possible in certain cases, 
 where the general convenience of a district was in 
 question, to raise the dispute between the public and 
 the companies in such a shape as that the interposition 
 of the Railway Department " [of the Board of Trade] 
 " might be effectually exercised. . . , Since, however, 
 this control, when actually applied, must be arbitrary 
 in its nature and free from all technical fetters, and 
 since the exercise of it will always affect the pecuniary 
 interest of the company against which it is directed, 
 your Committee feel that the occasion on which it 
 should be exercised must be carefully defined. The 
 constitution of the Executive Government, affording 
 no means of enquiry in presence of the Bar or of the 
 public, is unfavourable for the determination of such 
 questions, and your Committee recommend that the 
 fact of wrong having been done by the company 
 should first be substantiated before a public tribunal." 
 The Report to the Lancashire and Cheshire Con- 
 ference further proceeds: "In 1867 the Committee 
 reports strongly on the undefined additional charges, 
 levied under the head of terminals, and advise that 
 the charges made to a trader should be based upon 
 the cost of the services actually rendered to him. 
 Another recommendation was that, whenever a rail- 
 way company sought additional powers, the Board of 
 Trade should be careful to obtain an equivalent in the 
 reduction of the Company's maximum rate powers."
 
 CH. XI. THE ROVAL CU.M MISSION 295 
 
 In this paragraph the word '•' Committee " is an 
 obvious mistake. The Report of 1867 is that of the 
 famous Royal Commission appointed in 1865, of 
 which the Duke of Devonshire was chairman, which 
 made a most exhaustive enquiry, not into petty details 
 such as those with which the time of the Committees 
 of 1 88 1 and 1882 was so largely occupied, but into 
 the great principles underlying all railway manage- 
 ment, and whose opinions have been deservedly 
 treated as of the utmost weight from that day to this. 
 What the Commission said on the question of terminals 
 we shall see presently. Let us here notice only the 
 other two clauses of the Lancashire and Cheshire 
 summary of its Report. The Commission advised 
 nothing so ridiculous as " that the charges made to 
 the trader should be based upon the cost of the 
 services actually rendered to him." On the contrary, 
 it devotes a large amount of space to exposing the 
 foolishness of those who believe in the possibility of 
 basing rates simply on cost of service. It is worth 
 while quoting two or three passages to show what the 
 Commission really did think on this matter : 
 
 " The power of granting special rates permits a 
 development of trade which would not otherwise 
 exist, and it is abundantly evident that a large portion 
 of the trade of the country at the present time has 
 been created by, and is continued on the faith of 
 special rates. The conditions under which such rates 
 are granted are so numerous that no special law could 
 be framed to regulate them. It has indeed been 
 suggested that it should be left to a Government 
 board or other tribunal to arbitrate in cases where
 
 296 THE traders' DEMAaLS cii. xi. 
 
 the traders asked for reduced rates and the railway 
 companies refused them ; but it must be recollected 
 that the companies are entitled to derive a benefit 
 from the rates assured to them by Parliament, and the 
 course suggested would be tantamount to transferring 
 this benefit from the companies themselves to indi- 
 vidual traders, in order to add to the profits of their 
 business, established with a full knowledge of the 
 system of railway rates. ... It is worthy of notice 
 that under the Traffic Act the Court of Common 
 Pleas has distinctly recognised the right of a company 
 to charge unequal rates. . . . 
 
 "It has further been alleged against the system 
 which permits of unequal rates that, in cases of traffic 
 of the same nature carried on from two districts to a 
 common market, the rates have been so favourable to 
 one district as to shut out the other. Without enter- 
 ing into the question whether a uniform rate over the 
 whole country would not operate effectually to shut 
 out all the traffic now carried to distant markets, it is 
 evident that there can be no mean course between 
 allowing the railway companies to charge what rates 
 they think expedient within a maximum limit, and 
 requiring that a rate proportioned to distance, or at 
 least an equal rate for equal distances, shall be 
 adopted. ... It is clear that the interest of the 
 railway companies is intimately wrapped up in the 
 prosperity of the districts which they serve. It is 
 possible that railway companies may not always take 
 enlightened views in managing their traffic ; but even 
 in this case the public obtains the fulfilment of the 
 conditions upon which it has deemed it proper to
 
 CH. XI. FREEDOM IX THE BOUNDS OF LAW 297 
 
 concede the right of constructing the railway for the 
 conveyance of passengers and goods, within the pre- 
 scribed Hmit as to tolls and charges. . . . 
 
 " An important complaint has been made that the 
 system of special rates opens the door to injustice 
 between traders in the same district, if not to favour- 
 itism of individuals. It is, however, due to the railway 
 companies to state that, whatever may have been the 
 transactions of the companies at the commencement 
 of railway enterprise, it is now generally regarded by 
 them as impolitic to grant any preference tending to 
 favour individual traders, and some managers dis- 
 approve of the transmission of large quantities of 
 goods on more favourable terms than smaller quanti- 
 ties. The witnesses examined before us concur in 
 the expression of their belief that there is no dis- 
 position on the part of the railway companies to 
 afford personal preference for the special profit of 
 individual traders ; but that the distinctions in rates 
 made by the railway companies are based upon 
 considerations affecting the profit and interest of the 
 railway companies themselves. . . . For the several 
 reasons we have stated, we do not consider that it 
 would be expedient, even if it were practicable, to 
 adopt any legislation which would abolish the freedom 
 railway companies enjoy, of charging what sum they 
 deem expedient, within their maximum rates when 
 properly defined, limited as that freedom is by the 
 conditions of the Traffic Act." 
 
 Possibly, howevcrj the phrase in the Lancashire 
 and Cheshire Report, as to the " charges made to a 
 trader," may be intended only to refer to charges
 
 298 THE traders' demands ch. xi. 
 
 made under the head of terminal expenses. There 
 is a recommendation on this point in the Commission's 
 report. The exact words are : " Each trader should 
 be entitled to have a rate fixed according to the ser- 
 vice to be rendered to him " — a very different thing, 
 be it noted, from, " based upon the cost of the services 
 actually rendered," as the Commission goes on to 
 point out that the rate they propose to have fixed for 
 each portion of the terminal accommodation and 
 service is to be, not necessarily an actual charging 
 rate, but only a maximum. The third recommendation 
 was, according to the Lancashire and Cheshire version, 
 that, "whenever a railway company sought ar^uitional 
 powers the Board of Trade should be careful lo obtain 
 an equivalent in a reduction of the company's 
 maximum rates powers." The exact words of the 
 Committee, however, are : " When a railway company 
 comes forward for additional powers, Parliament 
 should take that opportunity of revising the maximum 
 rates of conveyance, as it may appear reasonable." 
 That in the year 1867 revision of a reasonable kind 
 was not necessarily considered the same thing as re- 
 duction, may be proved — if it need proof — from a 
 later paragraph, in which, after recommending that 
 the Clearing House classification should be enacted 
 by Parliament in substitution for the imperfect classi- 
 fications of the old Acts, the Commission goes on to 
 say that, " existing railway companies, in whose Acts 
 of Parliament the classification is essentially different 
 to the Clearing House classification, should apply for 
 short Acts of Parliament to arrange their existing 
 maximum tolls as nearly as possible to meet the new
 
 en. XI. THE COMMITTEE OF 72 299 
 
 classification. It would still be competent for com- 
 panies to vary their charges within the limits of the 
 maximum prescribed by the special Acts." 
 
 The Joint Committee of 1872, according to the 
 Lancashire and Cheshire history, "was heavily 
 weighted with railway interest, and reported on the 
 whole rather in favour of the railway companies." It 
 is perhaps worth while to mention the names of these 
 unjust judges ; they are as follows : For the Lords : 
 Lord Salisbury, Lord Ripon, Lord Cowper, Lord 
 Derby, Lord Redesdale, Lord Belper. For the 
 Commons : Lord Carlingford, then Mr. Chichester 
 Fortescue, who acted as chairman, Mr., now Lord, 
 Cross, Mr. Childers, Mr. Cave, Mr. Dodson, now Lord 
 Monk Bretton, Mr. Ward Hunt. It must, however, 
 be acknowledged that, as far as this Committee is 
 concerned, the accuracy of the Lancashire and 
 Cheshire version of its Report is, by comparison at 
 least, remarkable. A trifling correction must still be 
 made. According to the Lancashire and Cheshire 
 document, " The Committee are not surprised that 
 the conduct of the company should have given rise 
 to discontent and suspicion. . . . And they warn 
 them that a continuance of their policy of con- 
 cealment and favouritism may become dangerous to 
 them." The words of the Committee's report, after 
 pointing out that the companies have declined to give 
 the public information as to rates and charges which 
 it has a right to obtain, are as follows : " It is not 
 surprising that there should be discontent and sus- 
 picion, even t/io?igh tJicrc may be no real ground for it, 
 and if the companies should become rich and pros-
 
 300 THE TRADERS DEMANDS cii. xi. 
 
 perous this discontent and suspicion may well be 
 aggravated to such an extent as to become dangerous 
 to them." 
 
 The last paragraph of the Lancashire and Cheshire 
 Report with which we need deal is as follows : " The 
 Committee of 1 88 1-2 found that many complaints 
 of excessive and unfair charges were well founded, 
 and the Committee of 1888 advised the Irish railways 
 that the high rates charged by them constituted an 
 injury to themselves as well as to the public." Now 
 with the Irish Report of 1888 — the Report, once more, 
 not of a Committee, but of a Royal Commission — 
 the present writer does not propose to deal here ; 
 and this for two reasons. In the first place, this re- 
 futation is already over-long, though it was perhaps 
 worth while to deal thoroughly with the statements 
 on a single page of the Conference Report, in order 
 to show how much reliance can be placed on the other 
 statements of apparent fact, scattered over the 158 
 folio pages of a document which must be taken 
 as the authoritative version of the traders' case ; 
 and, secondly, though the Irish railways could 
 doubtless say a good deal in their own defence — 
 though in particular they could urge, as everyone 
 with any personal familiarity with them knows, that 
 they have done much in the last two or three years 
 to meet the public requirements — the present writer? 
 for one, is half inclined to think that it was a mistake 
 from the outset to imagine that the competitive com- 
 mercial system of railway management, which was 
 suitable for Great Britain, was naturally adapted for 
 transplantation across the Channel. It may quite
 
 CH. XI. THE COMMITTEE OK 'Sz 30I 
 
 well be that the Irish pubHc have foiled to make their 
 weight felt in the management of Irish raihvays ; but 
 from that fact, if it be a fact, surely no one will argue 
 that the traders of Great Britain have had any 
 difficulty in making their voices heard with quite 
 sufficient loudness. 
 
 But as to the Committee of 1882, we must once 
 more cite the precise words they used : " It is obvious 
 that some of the present difficulties arise from want of 
 knowledge. Some charges which appear j>n';,'icz fade 
 to be unequal and unjust turn out on explanation 
 to be fair and reasonable. . . . Your Committee think 
 that many of these diflcrential charges afford sub- 
 stantial ground for complaint. But they do not 
 consider it necessary to express an opinion as to 
 how far these differential charges constitute undue 
 preferences, because that is a point which the proper 
 tribunal has full power to determine, and each case 
 must be considered on its merits. ... It may be 
 assumed that some of the inequalities of charges 
 complained of are to the advantage rather than to the 
 disadvantage of the public. Where there is an undue 
 preference the law now gives a remedy. A preference 
 to be illegal and to furnish a reasonable course of 
 complaint must be unjust. It is not unjust so long 
 as it is the natural result of fair competition, and 
 so long as equal rates are given for like services 
 under like circumstances and for like quantities of 
 merchandise. . . . No witnesses have appeared to 
 complain of preferences given to individuals b}' rail- 
 way companies as acts of private favour or partiality. 
 . . . Your Committee, in conclusion, report that, on
 
 303 THE TRADERS DEMANDS en. xi. 
 
 the whole of the evidence, they acquit the raihvay 
 companies of any grave derehction of their duty to 
 the pubHc." 
 
 Here, then, we may be content to leave ancient 
 history and to come to modern facts. Of the points 
 which were raised before the Board of Trade tribunal 
 last year, and are likely to be contested once more 
 ere many weeks are out, before a Parliamentary 
 Committee at Westminster, there arc four of sufficient 
 importance to be dealt with separately. They are 
 as follows : terminals, classification, maximum rates, 
 and exceptional rates for full train-loads. On the 
 first two of these four subjects it may be said that, in 
 principle at least, the Board of Trade decision has 
 been in favour of the railways ; on the two latter 
 points it has adopted the views put forward by their 
 opponents. 
 
 The history of terminal charges is a striking 
 instance how long a disputed question may remain 
 open in this country before it is finally disposed of by 
 legislative authority. At least as long ago as 1861 
 the matter was definitely brought to the attention 
 of Parliament. The railway companies pointed out 
 that their maxima had been fixed to cover the rates 
 for conveyance from station to station only, as the 
 early legislation had contemplated a state of things 
 in which trucks would be loaded and unloaded, in 
 premises not belonging to the railway company, and 
 by persons not in their employ. With the full approval 
 of the authorities of both Houses of Parliament, a 
 model clause was drafted, enacting that " it shall be
 
 en. xr. THE IIISTORV OF TERMINALS 303 
 
 lawful for the company, acting as carriers, to make a 
 reasonable terminal charge for the accommodation 
 afforded, and service rendered by them in respect to 
 any goods or minerals, other than the actual con- 
 veyance thereof along the railways." 
 
 This clause found its way into a single Act, an 
 unimportant Irish one, and then there arose a violent 
 agitation in the coal-trade, whose members were 
 afraid that, if the companies got power, as it was 
 proposed they should, to charge C)d. as a terminal at 
 each end on coal, they would certainly exercise it. 
 The clause was withdrawn by the promoters, but from 
 that day to this Parliament and the public have 
 been " affected with notice," as the equity lawyers 
 put it, that the railways did not consider that anything 
 more than conveyance of goods from point to point was 
 required to be given by them in return for their 
 maximum rate. 
 
 The Commission of 1867 considered the matter at 
 great length. After going through the history it sums 
 up as follows : " It would thus appear that, although 
 there is great diversity in the clauses of this nature, 
 Parliament now considers that the maximum rate 
 should as a rule cover all the cost of conveyance and 
 use of railways and sidings for receipt of trucks ready 
 laden, but not the cost of loading, covering, or un- 
 loading. Thus, if a railway company provides special 
 means for facilitating loading, covering, and unloading, 
 or allow goods to remain in the station beyond a 
 reasonable time, they would apparently, under their 
 powers, and the intent of Parliament, be enabled to 
 charge for such services. But, whatever Parliament
 
 304 TPIE traders' demands • en. xi. 
 
 may have intended, railway companies seem to have 
 generally interpreted their Acts of Parliament as 
 authorising them to make additional charges for the 
 expense of constructing sidings as well as of working 
 them." 
 
 The Commissioners were practical men, and they 
 realised the disadvantage of this anomalous state of 
 things, under which the legal right of the company 
 to make charges, of whose practical propriety they 
 were fully satisfied, depended upon the interpreta- 
 tion w^hich might happen to be put upon the clause of 
 an obsolete Act referring to a bygone condition of 
 affairs. They thought, like the Chairmen of Com- 
 mittees in 1 86 1, that it was time Parliament put the 
 whole matter on a clear and unmistakable basis. 
 " If," they say, "the company had to provide con- 
 veniences for the carts coming to the station to load 
 or unload the trucks, and some service had to be per- 
 formed or expense incurred by the companies in 
 addition to the transit of the goods, we see no reason 
 why the trader who requires this additional service 
 should not pay an additional charge. . . . We there- 
 fore recommend that terminal charges should be 
 defined to be charges for all services rendered by the 
 railway company beyond con\eyancc from station to 
 station." 
 
 The Joint Committee of 1872 took the conclusions 
 and recommendations of the Royal Commission for 
 granted. The only recommendation they made on 
 their own account under this head was that the com- 
 panies should be bound on demand to dissect their 
 total rate so as to distinguish between mileage charge
 
 CH. XI. STATION TERMINALS 305 
 
 and terminals. The Committee of 1881 and 1882 
 Avent once more at enormous length into the whole 
 question. After hearing evidence on the subject from 
 the railway managers on the one side and from repre- 
 sentatives of the traders on the other, they called in 
 Sir Thomas Farrer, as the representative of the views 
 of the Board of Trade, and this is what he told them : 
 " I give no opinion upon the legal question ; it is 
 clear that the Acts of Parliament differ in their terms ; 
 but as a matter of equity and practice and of deci- 
 sions by committees and commissions, and looking 
 at the whole history of the case, I cannot doubt that 
 it is an equitable thing that the railway companies 
 should charge for what we call ' station terminals,' 
 that is, for the use of stations and fixed appliances at 
 stations. . . . My opinion is, that the railway com- 
 panies ought distinctly to have the power to charge 
 something which would compensate them for the 
 enormous expense which they have been at in their 
 stations. . . . Act upon Act has been passed with 
 either a common clause or a special clause in it under 
 which the companies have taken terminals, and on no 
 occasion has Parliament put into an Act anything 
 refusing to the companies, power of taking those 
 terminals. Now, if there had been a very strong 
 feeling against them, if it had been the intention that 
 they should not charge terminals, I think Parliament 
 would not have been content with a vague clause, but 
 would have said distinctly that the company should 
 do these station services for their mileage rates ; but 
 that has never been said, that I am aware." And 
 once again : " The fact that these terminal charges 
 
 X
 
 306 THE traders' demands or. XT. 
 
 have never during the whole of this period been 
 decided to be illegal, is a very strong argument in 
 favour of their legality." 
 
 As the result of all the evidence, the Committee 
 appear to have thought that, while it was very evident 
 that the companies had a statutory right to charge 
 for services rendered in loading and unloading, it was 
 questionable whether a charge for the use of stations 
 could be justified except under a few special Acts. 
 They appreciated, however, the fact that all the 
 companies were really, from a practical point of view, 
 in a similar position. They saw, too, the absurdity 
 of the situation, in which a railway company, which 
 loaded its trucks by hand at the cost of i^. a ton^ 
 could charge that shilling, while another company* 
 which had provided hydraulic machinery, and so 
 enabled the work to be done for 6d., might have to 
 pay the 6d. out of its own pocket ; and accordingly 
 they once more recommended that " the right of the 
 railway companies to charge for station terminals 
 should be recognised by Parliament." And now at 
 length the Railway and Canal Traffic Act of 1888 
 may be considered to have definitely sanctioned them 
 in the following words, referring to the manner in 
 which new schedules of rates are to be drawn up by 
 the company and settled by the Board of Trade ; 
 " In the determination of the terminal charges of 
 any railway company, regard shall be had only to 
 the expenditure reasonably necessary to provide the 
 accommodation in respect of which such charges arc 
 made." 
 
 The legal history of the question need not detain
 
 cu. XI. HALLS CASE 307 
 
 US for many moments. Fully to appreciate it, it 
 would be necessary to go into intricate questions of 
 decisions, now by the Court of Common Pleas, and 
 again by the Railway Commission, and of appeals 
 from the decision of this latter court, now by way of 
 statement of a special case, and again by way of 
 application for a writ of prohibition to the Queen's 
 Bench Division of the High Court. But this labour 
 would evidently be profitless, for more than one 
 reason. In the first place, we may expect that, in 
 tlie course of the current session, a new Act of 
 Parliament will finally be passed making the whole of 
 the legal learning on the question obsolete. And in 
 the second place, the legal decisions could only turn 
 on the construction of special Acts of Parliament ; 
 and though the position is in all cases identical in 
 practice, the Acts of the different companies vary 
 widely. This much alone need be stated here. The 
 Railway Commission took a somewhat restricted view 
 of the rights of the companies to charge for station 
 accommodation. At length, in the year 1 885, the well- 
 known case of Hall v. The London, Brighton and 
 South Coast Railway, which had been decided by 
 the Railway Commission in favour of the plaintiff, 
 was reviewed before the Queen's Bench Division of 
 the High Court. 
 
 Under its Act the Company had the power to 
 make an extra charge for " services incidental to 
 the duty or business of a carrier." The question 
 practically was what that phrase included. The 
 judgment of the Court was to the following effect : 
 " Our answer is, that the providing of station
 
 308 THE traders' DEMANDS cii. xi. 
 
 accommodation and work of the general nature indi- 
 cated to us by the Railway Commissioners" [t'.c. 
 weighing, packing, cartage, watching, labelling, and 
 use of sidings] " appear to us to be capable of falling 
 under the definition of ' services incidental to the duty 
 or business of a carrier,' and prima facie to do so." 
 Since the decision in Hall's case, the question has 
 again been raised more than once. According to the 
 traders, the railway companies were so surprised at 
 their success that they have not ventured to contest 
 the matter again, and have settled two County Court 
 actions on terms of paying back with costs the sum 
 alleged to be overcharged. The railway lawyers, on 
 he other hand, say that the traders had an opportunity, 
 which for technical reasons was not available to them 
 in Hall's case, of obtaining the decision, not only of 
 the Queen's Bench Division but of the Court of Appeal 
 and the House of Lords, in the contem.porary case of 
 Kempson v. The Great Western Railwa}', and that 
 the}'- did not dare to do so. 
 
 What is more to the point, however, is the fact 
 that in February last the whole question was raised 
 once more before the Railway Commission, now 
 presided over by Mr. Justice Wills, the judge who in 
 the case of Hall v. The Brighton Railway delivered 
 the leading judgment of the Queen's Bench. The 
 terminal clause under discussion was identical 
 with that in Hall's case, and it is only necessary to 
 quote half a dozen lines from Mr. Justice Wills's 
 judgment : " I think that this case on this point is 
 practically governed b>' the case of Hall i'. The 
 Brighton Railway Compan\', and I go further and
 
 cii. XI. SOWKRBV'S CASK 309 
 
 say that, if I had heard of it for the first time to-day, 
 I should myself have arrived without hesitation at 
 the conclusion which I have now indicated." 
 
 It should, however, be added that Mr. Price — the 
 Commissioner who is, in the words of the Act of 
 1873, " of experience in raihvay business " — delivered 
 judgment to the following effect : " With respect 
 to the point of the allowance made to railway 
 companies in consideration of their performing the 
 duty of carriers, I am decidedly of opinion now that 
 they are fairly entitled to receive remuneration for 
 station accommodation. That may seem to be incon- 
 sistent with the fact that I concurred in the judgment 
 in Hall's case, which refused remuneration for station 
 accommodation ; but my difficulty was not at all as 
 to what was the intention of Parliament, but the 
 language of the proviso itself did not seem to me to 
 be capable of being so construed as to let in the 
 station itself ... It seemed to me that this charge 
 could only be authorised in respect to some parti- 
 cular service performed, but not in respect of providing 
 the place, yard, warehouse, siding, or whatever it may 
 be. ... I always have believed that Parliament did 
 intend to grant something for the use of stations 
 at the time it gave the right and power to railway 
 companies to become carriers themselves." Mr. 
 Price went on to say that the Superior Court having 
 decided that the provision of station accommodation 
 might be included under the phrase, " performing 
 services," he had " no further difficulty in coming to 
 the conclusion that additional remuneration should 
 be given to railway companies in consideration of
 
 3IO THE TRADERS DEMANDS cii. xi. 
 
 their performing duties which they have only been 
 called upon to perform since they became carriers." 
 
 On this, Mr. Justice Wills added the following : 
 " I may say with regard to the matter that ]\Ir. Com- 
 missioner Price has just referred to, namely, as to 
 whether the words ' services performed ' would include 
 the provision of station accommodation, I do not 
 think that in the Queen's Bench Division, when that 
 matter was under consideration, any of us had any 
 doubt that those words were quite capable of extend- 
 ing to that. To give a man a roof over his head is 
 as much performing him a service as giving him 
 a dinner." Here, then, the law now stands. Sowerby's 
 case is, it is understood, to be taken to the Court of 
 Appeal ; provided, that is, it can be got there in 
 time to influence the decision of Parliament on the 
 Provisional Orders which the Board of Trade have 
 drawn up, in which a charge for station terminals is 
 definitely fixed. 
 
 Ikit it is high time to inquire what the Board of 
 Trade's Provisional Order proposes. Broadly, it 
 authorises a station terminal of J^d. per ton at each 
 end for coal, ironstone, and manure ; 6d. or is., 
 as the case may be, for other consignments which 
 go in truck-loads ; and is. 6d. in the case of ordi- 
 nary merchandise traffic. In addition it sanctions 
 service terminals, rising according to class, from 
 8^/. to 45., and divided under four heads of loading, 
 unloading, covering, and uncovering, with a maximum 
 fixed for each of the four. Beyond this, once more, 
 come extra services, of which the collection and 
 delivery of goods is much the most important, for
 
 CH. XI. DISSECTION OF TERMINALS 3 II 
 
 which the companies are still left to make "such 
 charge as is reasonable," with a provision that in case 
 of dispute the Board of Trade may arbitrate. 
 
 The principle, therefore, of terminal charges in 
 addition to the maximum mileage rate is fully 
 admitted. The only question is as to the amount. 
 Now at the outset one fact is obvious. If a maximum 
 for each individual service is to be fixed separately, 
 the total of all these maxima is bound in common 
 justice to be higher than where a single maximum is 
 fixed for the whole of the services lumped together. 
 If words have any meaning, a maximum charge 
 means, not the average, but the highest possible 
 charge. In other words, the maximum must be so 
 placed as to leave, above the average standard, room 
 for exceptionally high charges under certain circum- 
 stances, to balance exceptionally low charges under 
 certain others. Maximum powers are not actual 
 charges. The charges as a whole must be made up 
 by averaging each individual charge from the highest 
 to the lowest ; and if the new maximum line is so 
 drawn as to cut off the tops of the highest charges, 
 these latter must of course henceforward be reduced. 
 Now there is no question that if a company, for 
 example, loads a ton of furniture in London, and 
 unloads it again, say, at Hatfield, its actual costs out 
 of pocket for the terminal services amount to more 
 than 4s. This, however, is the maximum which 
 the Board of Trade proposes to allow for the service. 
 It is impossible to suppose that the Board of Trade 
 consider heads of families changing their residences 
 to have a claim on railway shareholders for chari-
 
 312 THE TRADERS DE:\rANDS ch. xr. 
 
 table contributions towards the expenses of removal. 
 We must therefore assume that the railway company 
 is expected to make up its loss on the furniture by 
 an extra profit on goods which are less expensive to 
 handle. Is this reasonable .-' Are not the high-class 
 goods — those whose weight is small in proportion to 
 their bulk and value — precisely those which are best 
 able to pay their own expenses in full .-' Is it fair 
 that they should call upon bales of cotton, or carpets 
 and other easily handled goods for a grant-in-aid ? 
 But this is what must in effect be done, if maxima, 
 such as have been fixed by the Board of Trade, are 
 in fact enacted by Parliament. 
 
 The truth is, as we shall see more fully when we 
 come to consider the new maximum schedules of rates 
 themselves, the attempt to make maxima into actual 
 charging schedules must always break down. The 
 only logical position of a maximum is sufficiently above 
 the highest point actually and justifiably reached in 
 practice to leave a margin for contingencies that are 
 reasonably possible. Anything short of this means 
 that the public authority, while refusing to accept the 
 responsibility of fixing actual individual rates, asserts 
 in general terms that some of the rates fixed by a 
 railway company are excessive, merely on the ground 
 that other rates, in circumstances which at the first 
 glance seem similar, arc lower ; and then goes on to 
 call upon the railway company to remove burdens 
 from the shoulders which the company believes best 
 able to bear them on to other shoulders which the 
 company considers less able to do so. 
 
 It must of course be franklv admitted that, if
 
 CH. XI. TWO INCONSISTENT POLICIES 313 
 
 terminals were fixed on a scale such as is here advo- 
 cated, they could be of little or no use in ordinary 
 cases in protecting individual members of the public 
 against possible extortion — whether wilful or only 
 stupid, is here beside the question — on the part of the 
 companies. If maxima were fixed at a point high 
 enough to clear the tops of the highest legitimate 
 rates, unquestionably they would be so high that 
 between the lowest competitive rate and the Parlia- 
 mentary limit there might be that " margin of 100 
 per cent." which so offends Sir John Harwood ; un- 
 questionably traders would still be compelled — to 
 adopt the words of another of their prominent cham- 
 pions — to " sue for reductions of rate in forma 
 pauperis" instead of securing them by statutory 
 enactment. That, however, is unfortunately unavoid- 
 able in this world. The omnipotence of Parliament 
 does not extend to enabling the British public to 
 secure simultaneously the advantages of freedom and 
 those of State control. The question for decision is, 
 Which of the two inconsistent policies offers the 
 greater prospect of advantage ? 
 
 The present writer, for one, is convinced that the 
 railway history of this country and the United States 
 on the one hand, and of the Continent on the other, 
 proves that on the whole the advantages of freedom 
 are greater than the advantages of State control. But 
 let us suppose that this opinion is wrong, let us admit 
 that the English railways have so abused their free- 
 dom that it is necessary they should be subjected to 
 a more stringent control. Then at least let the public 
 realise that the result must be, that B will be levelled
 
 314 THE TRADERS DEMANDS cn. xi. 
 
 Up to A, not that A will be levelled down to B ; 
 that the highest rates, hitherto imposed upon traffic 
 which could bear it best, will in future be reduced, 
 and the reduction spread, here a little and there a 
 little, over a large field of traffic that can bear it less 
 well ; that, broadly speaking, the general average of 
 rates will be raised and not reduced. But then, when 
 the public, profoundly disappointed at the result of 
 this new process of State regulation from which so 
 much benefit was expected — benefit which was to be 
 put into one man's pocket without being taken out of 
 the pocket of any of his neighbours — when the public 
 goes one stage farther, and demands, as it in all pro- 
 bability will do before many years are out, that the 
 railways shall be taken over by the State altogether, 
 let it be remembered that the authors of this revolu- 
 tion were really those who, while professing their 
 inability to fix actual rates, have yet in practice 
 insisted on fixing a great many, at the same time 
 washing their hands of all the responsibility for the 
 results. 
 
 In truth, if ever there was a time when an attempt 
 to cut down the charges for terminals was inappro- 
 priate, that time is the present. If we look to 
 America, we see it admitted that the terminal service 
 in New York rendered to a ton of corn passed 
 through an elevator at the minimum of cost, is worth 
 as much as the haulage over 250 miles of road ; we 
 see that for the 90 miles between New York and 
 Bhiladclphia the rates are two-fifths of those charged 
 for the 900 miles between New York and Chicago ; 
 we find the President of the Pennsylvania Railway
 
 CH. XI. THE RISE IX STATION EXPENSES 315 
 
 asserting that the rate received for a haul of 70 miles 
 out of Philadtlphia does no more than cover the cost 
 of handling in that city. We can read the opinion of 
 the leading American professional journal, to the 
 effect that, " with the constant cheapening of move- 
 ment expenses, charges for terminal handling form 
 every year a larger portion of the whole." 
 
 We find, further, that disinterested American 
 critics fully appreciate the force of the English 
 companies' claim. Professor Hadle)', writing on the 
 question before the decision in the case of Hall v. 
 The Brighton Railway, uses these words : " While 
 the train expenses per ton moved have decreased 
 enormously, the station expenses have on the whole 
 risen ; in some cases they have risen enormously. . . . 
 The law, as it stands, seems to favour the shipper ; 
 but it also seems likely that the railroads can justify 
 their action " [in charging station terminals] " on 
 equitable business principles. If so, business princi- 
 ples are likely to prove mightier than a half-obsolete 
 regulation in a charter." We know too the position 
 of our English lines at this moment. There is hardly 
 one whose goods stations, in the great towns at least, 
 are not too small already for the work they have to 
 do. What importance the English merchant attaches 
 to speed we have already seen. And if the speed, 
 which has characterised the English goods service in 
 the past, is to be maintained, it means the expenditure 
 ere long of millions of capital on new space and new 
 machinery, and of thousands of pounds of income on 
 the payment of additional hands. Yet this is the
 
 3l6 THE traders' demands en. XI. 
 
 time chosen to forbid the companies to charge, in not 
 a few cases, their actual out-of-pocket costs. 
 
 It is not as if an Act of Parliament were the only 
 protection which the public enjoyed. They have two 
 other and practically far more efficient protections 
 already. As has been pointed out in an earlier 
 chapter, there is the traffic which cannot, and there is 
 the traffic which will not, pay the full rate, whether 
 that rate be charged under the name of mileage or 
 terminal. From half to three-quarters of the total 
 traffic of the country is carried at special rates 
 already — rates which, as a rule, are far below what 
 the railway companies will still be authorised to 
 charge for mileage alone. To the whole of this 
 traffic maximum terminals can offer no protection. 
 Then, again, there is the short-distance traffic, which, 
 if full terminals were charged, would simply go by 
 road. As we have seen, the German Government, 
 having pledged itself to an unnatural uniformity of 
 terminal charge, was in practice compelled to fix that 
 charge at a point which did not pay expenses, and to 
 recoup itself afterwards by increasing the mileage 
 rate, as on any other terms it would ha\e lost the 
 short distance traffic altogether. 
 
 When, therefore, for example, the Lancashire and 
 Cheshire Conference tells a long and doleful tale of 
 a farmer in the outskirts of Manchester, who might 
 conceivably find himself called upon to pay a terminal 
 of ^s. on 2 tons of turnips, the answer is simply, that 
 the protection to the farmer is not an Act of Parlia- 
 ment, but an adjacent turnpike. It is conceivable 
 that the accommodation rendered to the farmer,
 
 CK. xr. THE PROTECTION OP^ THE TURXPHvE 317 
 
 including full interest on capital, and out-of-pocket 
 expenses for labour, may amount to something like 
 the sum of 5^-. ; but the railways cannot possibly 
 attempt to charge it. Their limit upwards is the sum 
 which the service they render is worth to the farmer, 
 and downwards their actual additional expenses for 
 dealing with this additional piece of traffic. The real 
 question for them is \\'hether they can afford to touch 
 the traffic at all at the price which the flirmer will 
 consent to pay ; and that is a question which turns 
 mainly on the point whether or no they have got a 
 sufficient supply of better-paying traffic to utilise their 
 station accommodation to its full capacity. 
 
 There is another point which is strongly pressed 
 in the Lancashire and Cheshire Report, namely, that 
 the companies provide terminal accommodation which 
 is not needed, and then debit the traders with the 
 interest on their wasted capital. To this, once more, 
 the answer is, that the business of a railway must be 
 looked at as a whole. If a railway company, for 
 example, buys the land for its stations on favourable 
 terms, or if, on the other hand, it lays out its 
 money in the most unbusinesslike manner, in each 
 case its income depends upon what the public as a 
 whole is prepared to pay for the accommodation that 
 is provided. If, on the whole, its stations are well 
 placed and the land well bought, it may expect a 
 satisfactory return for its outlay ; if not, not. But to' 
 claim that A, whose convenience leads him to use a 
 cheap station, is to be given his terminal accommo- 
 dation at a low rate, and that B, whose station 
 happens to be dear, is to pay five times as much, is
 
 3l8 Tin: traders' DE.MANDS ch. xi. 
 
 simply to .sa\- that no new station is ever to be pro- 
 vided in any town. For it is obvious that, till the 
 public learn to use a new station, its working 
 expenses, per ton dealt with, must necessarily be 
 heavy ; and then, putting the point the other way 
 round, if the public is to be called on to pay these 
 heavy Avorking expenses in full, it will never begin to 
 patronize the new station. 
 
 One can only repeat once more the old hotel simile. 
 A member of the Lancashire and Cheshire Conference, 
 let us say, goes down to Bournemouth for a few days 
 holiday. The landlord of the hotel, whose customers 
 are mainly invalids, has gone to great expense in 
 building a winter-garden as a promenade for his 
 guests in rough weather, and his charges are accord- 
 ingly on a high scale. Our Lancashire friend, how- 
 ever, is in robust health, and prefers to battle against 
 the east wind on the cliff. The landlord has, he 
 thinks, made a mistake ; winter-gardens are not 
 wanted ; he must refuse to pay his bill unless a 
 handsome rebate is given him ; let those who want 
 the winter-garden pay an extra lOi". every time they 
 enter it. Would such a contention hold water for a 
 moment ? '^ 
 
 - On p. 49 of the Lancashire ton. Upon this the Lancashire 
 
 and Cheshire Report, there is an and Cheshire Report jioints out 
 
 amusing misunderstanding. At that there are about 720 stations 
 
 the recent Board of Trade inquiry, on the London and North Western, 
 
 the North Western put in figures If therefore these 18 stations are 
 
 showing the actual expenditure representative, " then the total 
 
 during the year 1887 for terminal amount receivable at these 18 sta- 
 
 purposes at 18 of their stations, tions multiplied by YiJ' should show 
 
 which were described by the com- the total amount of terminals re- 
 
 pany as being typical. The cost ceivable under the new proposals. 
 
 worked out to 470,017/., being at ... The annual cost, that is, 
 
 the average rate of 3^. 23a'. per would amount to 18,800,680/.,
 
 CH. XI. 
 
 A GIGANTIC mare's NEST 
 
 319 
 
 But let us leave terminals, and come to another 
 point, which was much pressed before the recent 
 Board of Trade inquiry, that of classification. It 
 would perhaps be kind to say as little as possible 
 about the constructive proposals of the traders under 
 this head. There was a suggestion put forward for a 
 brand-new classification, to contain 40 classes, more 
 
 while at present the total revenue 
 of the company from merchandise 
 traffic, conveyance and terminals 
 together, yields less than 
 4,000,000/." The Report tri- 
 umphantly adds, "It is obvious 
 therefore that, if these stations are 
 representative at all, they are so 
 only in a small degree." It is 
 surely obvious also that the Con- 
 ference has discovered a mare's 
 nest. The North Western officials 
 never claimed that Broad Street 
 and Camden were typical of Pinner 
 in reference to the quantity of goods 
 dealt with,nor that Waterloo Street, 
 Liverpool, was typical of Speke or 
 Halebank. What they did claim 
 was that the 18 stations given, in- 
 cluding some of the largest, some 
 of the smallest, and some middle- 
 sized, gave a fair idea of the work 
 of the system as a whole, and 
 enabled the average cost per ton 
 to be estimated for the entire line. 
 On this basis it would appear as 
 though interest on the cost of 
 terminal accommodation at 5 per 
 cent., plus terminal expenses for 
 wages, &c., would amount on the 
 8,000,000 tons of merchandise 
 carried to, in round figures, 
 2,600,000/., or, allowing for the 
 casein which the goods came off or 
 went on to another line, and so only 
 one terminal service was rendered, 
 say, 2,250,000/. It may perhaps 
 be said that this is inconceivable, 
 considerincr that the whole c:oods 
 
 revenue was a good deal under 
 4,000,000/. For my own part, I 
 fail to see any impossibility in the 
 matter. No figures, as far as I 
 am aware, have ever been pub- 
 lished to show the capital cost of 
 the stations as distinguished from 
 the share of the cost of the running 
 lines fairly attributable to goods, 
 or the expenditure out of income 
 on station work as distinguished 
 from train movement ; but, for my 
 own part, I should be surprised 
 if the former were not found to 
 exceed the latter. What these 
 figures do show unquestionably is 
 that the maximum terminal allow- 
 ances of the Provisional Order are 
 insufficient. But that everyone 
 must have known beforehand. 
 Their only possible justification is 
 the historical one that it has been the 
 custom to attribute the great bulk 
 of the charge to the mileage rate ; 
 and that, therefore, in order not 
 to break too violently with the 
 past, and also not to make too 
 sharp a contrast between the 
 treatment of merchandise upon 
 the one hand, and on the other of 
 passengers who have never paid 
 terminals, and minerals, where 
 the terminal is only a small portion 
 of the cost, the mileage rate has 
 been left so far above the actual 
 movement expenses as to afford 
 compensation for the inadequacy 
 of the terminal maximum.
 
 320 THE traders' demands ch. XI. 
 
 or less. Lord Balfour and Mr. Courtc'nay Boyle did 
 not take very much notice of the suggestion, and 
 it was not pressed. Its main interest is perhaps as 
 showing that the traders' grievances are not quite as 
 urgent as they are claimed to be. For this much at 
 least is certain, that, whether the plan suggested be a 
 good one or a bad — and if railways were likely to be 
 introduced to com.pete with the canals in Mars, it is 
 quite possible that it might be a good one — the 
 necessary work of rearranging, not merely the classi- 
 fication itself and the eight classes of goods depen- 
 dent on it, but the hundred million special rates — 
 which could not be left untouched if the classification 
 were i-evolutionized — with the subsequent necessity of 
 passing through both Houses of Parliament Acts to 
 reconstruct the maximum scale of rates to fit the 
 new classification, would render it impossible to 
 bring the Railway and Canal Traffic Act of 1888 
 into practical operation till, at the very earliest, the 
 dawn of the twentieth century. 
 
 But the traders had another string to their bow. 
 In flat contradiction to the plain words of the Act 
 of Parliament, they insisted that the new classification, 
 which the Act required to be drawn up in substitution 
 for the rudimentary classifications contained in the 
 original Acts of Parliament, should be permanently 
 binding upon the railways, as fixing a standard which 
 they not only could not advance, but wliich they were 
 likewise to be forbidden to lower. Their reason was 
 explained to be, that so the power of the companies 
 to make arbitrary rates would be curbed. And so 
 far they were no doubt correct. But, as has been
 
 cii. XI. THE t'AST-IRON CLASSIl'ICATIOX 321 
 
 pointed out more than once already, even a trader 
 cannot both eat his cake and have it. Fixed rates 
 mean high rates, and the only possible way to obtain 
 low rates is to leave to somebody an arbitrary power 
 of reduction. This somebody may be a State official, 
 if the State will take possession of the railway. That, 
 if railways are allowed to continue as private com- 
 mercial enterprises, it cannot be a State official, but 
 must be a servant of the trading corporation, has 
 been accepted either as proved, or as too self-evident 
 to need demonstration, by every Parliamentary 
 Committee which has ever considered the question. 
 
 The belief that a fixed and permanent classification 
 — " cast-iron," as it came to be called before the Board 
 of Trade tribunal — is possible, seems to show singular 
 ignorance of the railway experience of other countries. 
 Even in Germany, where, if anywhere, simplicity and 
 fixity are accounted of more importance than cheap- 
 ness, no attempt has been made to maintain a cast-iron 
 classification. On the contrary, in a recent number of 
 the Archiv fiir EiscnbaJunvcscn, the official organ of 
 the Prussian Minister of Public Works, it is expressly 
 stated that concessions of lower rates have been 
 generally given by reducing articles from one class of 
 the classification to a lower one. As for America, 
 the Intcr-State Commerce Commission speaks out on 
 the subject in no uncertain sound. In its first Report 
 the Commission declares : " Conditions change from 
 month to month ; the classification cannot be per- 
 manently the same, but must be subject to modification 
 on the same grounds on which it was originally made." 
 Again, in a case usually known as the " Car-loads and 
 
 Y
 
 322 THE TRADKRS' Di:MANr)S cii. \i. 
 
 Lcss-than-Car-loads Case/' decided in March 1890, 
 the Commissioners laid down that : " A general rule 
 that shall be equitable to all is exceedingly desirable, 
 but in the conflicts of interests is difficult, if not 
 impossible, to apply, and in the frequently changing 
 conditions of commerce, no rule of classification or 
 rates can liavc an assurance of permanent or absolute 
 equity. Classification is not yet an applied science 
 founded on correct principles and governed by just 
 and consistent laws. It is still in process of growth and 
 development, and the best traffic experts are required 
 to elaborate a system. . . . Except for the rigid 
 methods of Classification Committees and the lack of 
 lawful authorit}', more rapid and more numerous 
 improvements would doubtless be made." 
 
 So much for the cast-iron classification which the 
 traders \\anted. Now for what the Board of Trade 
 Provisional Order proposes to give them. It will be, 
 it is understood, a maximum classification, above 
 which the companies cannot go, but from which they 
 may move dowmwarcls as far as they please. It must be 
 confessed that, for some time to come, they are hardly 
 likely to make any great strides in the latter direction. 
 The English Clearing House Classification has long 
 been a \ crv^ low one. A \er)' small portion of the 
 traffic is in the two highest classes. Mr. Grierson's 
 book points out that common paint, for instance, is 
 placed b\- three of the great Erench companies in the 
 highest class. In the ICnglish Classification it is in the 
 lowest but one. h'our l-^-ench companies put " china 
 in casks or crates" in the highest class, two more in 
 the highest but one; the ICnglish railway's, on the
 
 CH. XI. AN AMERICAN CONTRAST 323 
 
 other hand, put it in the lowest but one. The French 
 Classification, in fact, is based on the idea that every 
 article not specially reduced is to be charged in the 
 highest class. 
 
 The contrast, however, with America is still more 
 startling. That contrast- can be best shown by an 
 illustration. Mr. Gricrson worked out for the Com- 
 mittee of 1 881 the percentage of traffic in the different 
 classes dealt with in the course of a week at ninety 
 Great Western stations. It was as follows : 
 
 Class 5 . . 2-52 [ Class 3. . . 14-94 I Class i . . 46-88 
 „ 4 • • 6-76 I ,, 2 . . . 28-94 I 
 
 Quite recently the Great Northern has worked 
 out some similar figures, giving, however, this time, 
 not only the percentage of tonnage in each class, but 
 also the percentage of earnings attributable to it : 
 
 
 Percentage 
 of ton- 
 
 Percentage 
 of earn- 
 
 
 Percentage 
 of ton- 
 
 Percentage 
 of earn- 
 
 Class 5 . 
 
 nage. 
 
 • • 3i 
 
 ings in £ 
 sterling. 
 
 • . 7h 
 
 Class 2 . 
 
 nage. 
 
 • • 3o\ 
 
 • . 34! 
 
 ings in ;5 
 sterling. 
 
 ,, 4 • 
 
 • • n 
 
 . . I2i 
 
 „ I . 
 
 . . 21 
 
 „ 3- 
 
 . • 23J 
 
 . . 29 
 
 
 
 
 Now compare this state of things with that in 
 America, it being premised that in America, as on 
 the Continent, the classes run in the opposite way 
 to ours, and that consequently their first class is the 
 highest, corresponding to our fifth. Out of about 
 4,000 descriptions in the Official Classification, the 
 percentage in the different classes is as follows : 
 
 Class I 
 
 • 24-59 
 
 Class 3 . . 
 
 . 16-94 
 
 Class 5 . 
 
 . 22-13 
 
 ,, 2 . 
 
 . I2-II 
 
 ,, 4- • 
 
 • 19-41 
 
 „ 6 . 
 
 . 4-82 
 
 It .should be added that of the 1,000 descriptions set 
 down as in the hicrhest class a considerable number
 
 324 THE TRADERS' DEMANDS en. xi. 
 
 pay not merely first-class rate, but li, 2, 3, and even 
 4 times that rate ; so that though the lowest class of 
 article pays only los. between New York and Phila- 
 delphia, which we should consider a fairly low rate 
 for 90 miles for merchandise, the highest class pays 
 g2s., which we should look upon as something abso- 
 lutely inconceivable. And let it not be supposed 
 that traffic does not really go at these high rates. 
 The following table shows the percentage of tonnage 
 of the different classes passing in one month from 
 New York to Chicago : 
 
 Class I . . . 22-2 I Class 3 . . . i2-8 I Class 5 . . . 7-8 
 ,, 2 ... 6-9 1 ,, 4 ... 13 I ,, t. . . . 37-3 
 
 This being the state of affairs, the Board of Trade 
 intervenes. And what does it do .'' Taking as a 
 basis for its work the Clearing House Classification, 
 it makes sweeping reductions with no corresponding 
 advances. For example, it brings down the bulk of 
 the heavy iron trade, plates, girders, and so forth, one 
 class, and the light iron manufactures of Birmingham 
 one class also. Broadly speaking, the new statutory 
 classification of the Provisional Orders is markedly 
 below the actual working classification which has 
 been in use hitherto. Once more, that is to say, the 
 statutory maxima are fixed lower than the existing 
 charges. 
 
 Assuming, therefore — which, in so many words at 
 least, is not denied — that the railway companies have 
 a right to receive from their undertaking their present 
 not extortionate profit of 4^ per cent., we are face to 
 face with this position of things, that terminal charges 
 have been reduced — not probabl}' below, or at least
 
 CH. XI. WHERE IS THE MARGIN? 325 
 
 much below the average cost, but below the figure 
 which covers the cost of the more expensive traffic. 
 The railways have certainly got no margin there. The 
 classification likewise has been brought down to a point 
 considerably below that at present enforced for charg- 
 ing purposes. Not only is there no margin there, but 
 the new classification of itself will imply a reduction 
 of rates. Surely, if the balance is to be held fairly 
 between the railways, which naturally first consider at 
 what price they can afford to give their services, and 
 the traders, who, equally naturally, are seeking to 
 obtain those services at the lowest possible price, the 
 Board of Trade might be expected at least to give 
 the companies, in return for reductions under the 
 head of terminals and classification, a substantial 
 margin of powers in the shape of mileage charges. 
 What it has actually done we shall see in the next 
 chapter.
 
 326 
 
 CHAPTER XII 
 
 THE BOARD OF TRADE PROVISIONAL ORDERS 
 
 Before coming to the important question of new 
 maximum rates, it will be well to say a word or two 
 on a principle which the Board of Trade proposes to 
 introduce generally into English railway practice — - 
 that, namely, of reduced rates for train-loads of 
 minerals. In one way it may seem a small matter. 
 Traders as a rule do not send a train-load, unless it be, 
 perhaps, of coal for shipment in Durham or South 
 Wales. Still, not only is the principle one of import- 
 ance, but, in view of the immense advantage the 
 Provisional Order proposes to confer on the man who 
 does send them, it is likely that train-loads will be 
 much more frequent in the future. 
 
 At the outset one thing is obvious. Hitherto, 
 except in the few cases where special rebates for 
 large quantities may still be in force as the result 
 of agreements made in the early days of railways, the 
 company has obtained any advantage of economy 
 which there may be in dealing with full loads, and 
 pro tanto it has been in a position to give better terms 
 to the small man. If in the future the economy is to 
 enure to the benefit, not of the railway company, but 
 of the wholesale dealer himself, it is evidently only
 
 KX XIIIILi) .\l.Ji.)lAN'lLLL.M ITI' 
 
 327 
 
 fair that the company should be allowed u> raise 
 proportionately the price for the retail business ; 
 otherwise it is simpi)' a case of " heads you win, tails 
 we lose." ' 
 
 This, however, the ]^oard of Trade h.i^ b\' no 
 means done. The\- have reduced the coal rates in 
 various parts of the countr\-, for lots under 10 tons, to 
 a point below the charges which arc being" made at 
 present, and have provided a further reduction for 
 lots of 10 tons, and yet another for train-lo:i'Js of 250 
 tons. Let us see how the new departure is likely to 
 work out in a particular instance. The raic in force 
 
 • An amusing instance of liow 
 it is possible to misunderstand tliis 
 somewhat obvious fact will be 
 found in Professor Hunter's book 
 on railway rates (p. 97) : " It 
 would appear as if, excluding the 
 mineral class, the average load of 
 an 8- or lo-ton waggon did not ex- 
 ceed 2 tons. Such a margin affords 
 an opportunity of giving a rate not 
 less remunerative to the company 
 than the rates now charged, but 
 which, measured by the ton, 
 would only be a fraction of 
 the present rates. Thus, if the 
 average rate of the goods is 21/. 
 per ton per mile, and only two 
 tons are carried, the earnings are 
 4^. per truck. If /\d. were fixed 
 for the truck-rate, a trader who 
 could load up to 8 tons would 
 have the rate reduced from 2(/. to 
 ^r/. per ton per mile. Even if the 
 truck-rate were made6r/. ]ier mile, 
 the trader would still then get iiis 
 goods carried at '^t/. per ton per 
 mile instead of 2(/." Surely one 
 moment's consideration will show 
 Mr. Hunter that the existing 
 average of 2 tons is made up of 
 
 one waggon at 3^ tons, and another- 
 waggon at 10 cwt. If the 3^ tons 
 are to be got into a truck at a 
 truck-load rate, indej)cndently of 
 weight, the railway comj.any must 
 either go mto bp.nkru])tcy, or in- 
 crease very largely the charges 
 which it at present levies on the 
 small consignments. 1 n one word, 
 ex iiihilo nihil fU. The conces- 
 sion to the larger trader cannot 
 fall from heaven, and therefore 
 must come either <mt of the 
 pocket of the railway company 
 or out of that of his small com- 
 petitor. There is no third alter- 
 native ; for if the railway com- 
 l^anies could load their trucks 
 heavier while maintaining their 
 existing standard of service, we 
 may l)e sure that they wiiuld have 
 done so in their own interest ere 
 now. The point is one of sucli 
 importance,- and of s<> elementary 
 a nature, that it is constantly pre- 
 sent to the mind, not only of rail- 
 way managers, but <«f every fore- 
 man of a goods-shed nil over the 
 country.
 
 328 THE PROVISIONAL ORDERS cii. xii. 
 
 at this moment for coal from Wigan to London is 
 ys. 2d. per ton. The Provisional Order prescribes 
 Js. ()d. as the maximum for lo-ton consignments, and 
 6s. ?>d. for train-loads. No one, therefore, can fairly 
 blame the North Western if it increases the lo-ton 
 rate in order to balance its loss on the train-loads. 
 Even supposing it does not do so, there is a diff- 
 erence of sixpence per ton in the cost of carriage 
 to the big man as compared with his smaller rival. 
 
 Now here, as it seems to me, the Board of Trade is 
 in a dilemma. Either the profits of the coal trade are 
 so enormous that in spite of this sixpcnce-a-ton handi- 
 cap the little man can still continue to hold his own — 
 in which case, surely, the trader has small right to sue 
 in forma pauperis for compulsory contributions out of 
 the pocket of the 4j per cent, railway shareholder — or 
 else — which is much more probably the case — the 
 difference in rate, which amounts to something like 7 
 or 8 per cent, of the average value of the coal at the 
 pit's mouth, \\\\\ enable the big man who can deal in 
 train-loads to drive the small master out of the trade 
 altogether. That the London public will get even 
 the most fractional share of the sixpence is a doctrine 
 doubtless very full of comfort, but one which, in face 
 of their recent experience as to the abolition of the 
 coal-dues, not of 6d. but of \s. \d., they can hardly be 
 expected to treat seriously. 
 
 The small men having been successfully put out 
 of the way, the next stage, obviously, is an agreement 
 among the few big traders left to keep up prices. 
 For is it not an axiom — it is certainly quoted against 
 the railway companies as though it were — that where
 
 en. xir. THE TRAIN-LOAD CLAUSE 329 
 
 combination is possible competition is impossible ? 
 Moreover, precedents have been set ver}' recently? 
 not only elsewhere but in this country, by the Salt 
 Union, the Steel Rail Union, and numbers more. 
 And salt-rings and their like, be it remembered, have 
 no maximum rates fixed for them by Act of Parlia- 
 ment, and arc not subject to be taken before the 
 Railway Commission if they treat any one of their 
 customers a shade better or a fraction worse than his 
 neighbours. Ilad the author of the disastrous train- 
 load clause - — disastrous for the public interest at least, 
 for it is very questionable whether in the long run it 
 will injure the railways, who will get a good deal of 
 their " marshalling " done gratis — known what train- 
 load rates have led to in America, it is tolerably 
 certain no attempt would have been made to 
 introduce them here. 
 
 The exact case of what were practically train- 
 load rates for coal came before the United States 
 Inter-State Commerce Commission shortly after its 
 appointment. A railway company had given a 
 customer, in consideration of a guarantee to consign 
 not less than 30,000 tons per anmivi — which, be it 
 observed, is only 5 train-loads of 250 tons per fort- 
 night—a rebate of 5*:/. per ton ; and this is what 
 the Commission said in its judgment : " A discrimin- 
 ation, such as the offer and its acceptance by one or 
 more dealers would create, must have a necessary 
 tendency to destroy the business of small dealers. 
 Under the evidence in the case, it appears almost 
 
 * Sir Bernhard Samuelson appears to be entitled to claim this 
 distinction.
 
 330 THE PROVISIOXAL ORDERS ch. xu. 
 
 certain that this destruction must result, the margin 
 for profit on wholesale dealings in coal being very 
 small. The discrimination is therefore necessarily 
 unjust within the meaning of the law. It cannot be 
 supported by the circumstance that the offer is open 
 to all ; although made to all it is not possible that all 
 should accept. ... A railroad company has no right 
 by any discrimination not grounded in reason to put 
 any single dealer, whether a large dealer or a small 
 dealer, to an}* such destructi\e disadvantage." 
 
 In speaking like this, an American speaks from 
 practical experience. Most Englishmen have heard 
 of the Standard Oil Company, probably the largest 
 and best-organised monopoly in the world, which 
 dictates the price of petroleum not only in the 
 United States but throughout the length and breadth 
 of the habitable globe from Hammcrfest to Sydney. 
 But the Americans know how the Standard Oil Com- 
 pany attained its present position. It began by obtain- 
 ing rebates from the railway companies on the ground 
 of the magnitude of the traffic it consigned. But it 
 ended before very long in compelling the railway 
 companies to pay it a rebate, not only on all the 
 traffic which they carried for the Standard, but also 
 on all the traffic which they carried for its competitors. 
 The exact same thing happened in the cattle trade 
 from Chicago to the Atlantic Coast. It was proved 
 before the Hepburn Committee of New York State that 
 a single firm received from the railways, not only an 
 advantage in freight equal to an ordinary business 
 profit on all the live-stock that it could ship, but an in- 
 come from all the business that its rivals could transact.
 
 eii. xn. THE THIN END OF THE WEDGE 331 
 
 No doubt it may be answered that these rebates 
 were secret, and not, as is here proposed, pubHc and 
 statutory. This is of course true, and it is true also 
 that the honesty of railway management is not so 
 far above suspicion in America as is fortunately the 
 case here. But for all that, if anyone wishes to see 
 personal discriminations introduced into this country, 
 the best possible way of effecting his object is to 
 persuade the Legislature itself to introduce the thin 
 edge of the wedge. If a railway company of its own 
 motion were to propose to give advantages to its big 
 customers in consideration of the wholesale character 
 of their dealings, there might be something to be said, 
 though even then the State would be abundantly 
 justified in interfering as the guardian of the public 
 interest ; but for the State deliberately to throw in 
 its weight as a providence on the side of the big 
 battalions, in order to help a great capitalist stamp 
 out the opposition of his smaller rivals, who even 
 now are competing at quite sufficient disadvantages 
 — this is surely a proposal which needs only to be 
 understood by the House of Commons in order to 
 ensure its prompt and definite rejection. 
 
 But after all, as was said above, the question of 
 train-load rates is but a small matter by the side of 
 the new schedules of maximum rates. As this is a 
 question of vital importance to the entire countr}-, 
 involving as it does not only the interests of the 
 railway companies, with their 870,000,000/. of capital, 
 and their 400,000 shareholders, who, to quote George 
 Stephenson once more, have made the railways which
 
 332 THE PROVISIONAL ORDERS cii. xii. 
 
 have made the country, but the interests of every 
 customer — in other words, of every inhabitant of the 
 British Isles — it will be necessary for us to deal with 
 the subject at some length. 
 
 " Every careful student of the question," says 
 Professor Hadley in the book from which we have 
 already so often quoted,^ "from Morrison in 1836 
 down to the Committees of 1872 and 1882, has come 
 to the conclusion that fixed maxima are of next to no 
 use in preventing extortion." In an earlier chapter 
 of his work, dealing with railroad legislation in the 
 United States, Professor Hadley tells the story of the 
 attempts which have been made to fix maximum 
 rates ab extra in America. Commissions appointed 
 by the Legislatures have, he says, " been fairly 
 successful in fixing rates in some of the Southern 
 States." " It is a little hard," he writes, " to say just 
 what has enabled them to succeed. One thing is, that 
 the rates in general are so high as to leave them a 
 wide margin above operating expenses in which to 
 make their changes. . . . The South Carolina legis- 
 tion of 1883 was fully as stringent as that of Georgia ; 
 but some of its strictest provisions were repealed 
 after one year's trial. The legislation of Alabama 
 has never gone quite so far as that of Georgia. In 
 Tennessee a recent adverse decision of the courts has 
 deprived the enactment of much of its force. In 
 Georgia itself a reaction against excessive regulation 
 seems to be in progress." 
 
 But more interesting and more instructive is the 
 
 ' Railroad Transportation, chap ix., on " English Railroad Legisla- 
 tion," p. 178.
 
 oil. XII. URANGER RATE EL\I\G 333 
 
 history of the Western States and the Granger Laws. 
 The Legislature of Wisconsin "fixed, by the so-called 
 * Potter Law,' the rates on different classes of roads 
 at figures which proved quite unremunerative. The 
 railroads made vain attempts to contest these regula- 
 tions in the courts. They were defeated again and 
 again, and finally, in 1 877, the Supreme Court of the 
 United States sustained the constitutionality of the 
 Granger Laws. But a more powerful force than the 
 authority of the courts was working against the 
 Granger system of regulation. The laws of trade 
 could not be violated with impunity. The law 
 reducing railroad rates to the basis which competitive 
 points enjoyed left nothing to pay fixed charges. In 
 the second }-ear of its operation, no Wisconsin road 
 paid a dividend, only four paid interest on their bonds. 
 Railroad construction had come to a standstill. Even 
 the facilities on existing roads could not be kept up. 
 Foreign capital refused to invest in Wisconsin ; the 
 development of the State was sharply checked ; the 
 very men who had most favoured the law found them- 
 selves heavy losers. These points were plain to 
 everyone. They formed the theme of the Governor's 
 message at the beginning of 1876. The very men 
 Avho passed the law in 1874 hurriedly repealed it after 
 two years' trial. In other States, the laws either were 
 repealed, as in Iowa, or were sparingly and cautiously 
 enforced. By the time the Supreme Court published 
 the Granger decisions the fight had been settled, not 
 by constitutional limitations but by industrial ones." 
 
 The reason why maxima fixed for railway com- 
 panies ab extra can escape being largely injurious,
 
 334 "T^I^ PROVISIONAL ORDERS ch. xii. 
 
 only on condition of being so high as to be practically- 
 inoperative, is fully explained by Professor Hadlcy, 
 and has been dealt with also in the earlier chapters 
 of the present work. Briefly, it may be put as 
 follows : No rate, practically speaking, is high per se. 
 The Liverpool bullion rate, for instance, of which we 
 have already spoken, is immeasurably lower than the 
 rate at which the Bank of England could send bullion 
 to Liverpool by any other means than railway carriage. 
 ]^xtortion, where it exists, is not absolute but merely 
 relative. The new Provisional Order, let us say, fixes 
 5^. 6d. as the maximum for coal to London from 
 Derbyshire, and Js. 6d. as the maximum from 
 Lancashire or the West Riding. But supposing the 
 railway companies were to reduce the actual rate from 
 Lancashire to 6s. 6d., and bring down the Derbyshire 
 rate to 3^'. 6d., they would simply put an absolute stop 
 to the entire trade from Lancashire to London. Rela- 
 tively to the Derbyshire rate, the Wigan rate would 
 have become extortionate, yet the railway companies 
 would have actually made a reduction of ij". below 
 their powers. Obviously, in a case like this, the 
 protection of fixed maxima is utterly illusory. 
 
 l^ut there is more than this. There are, as we 
 have seen, two classes of traffic. There is the traffic 
 A\hich only may, and there is the traffic which must, 
 use the railways. Three-fifths of the traffic of the 
 United Kingdom has, according to the Report of 
 1 872, its maximum fixed, not by Act of Parliament, 
 but by the laws of nature and the fact that Great 
 Britain is an island. This portion not only needs no 
 protection, but is actually in most cases paying less
 
 cii. XII. AVIIERE TO I'UT TIIK .^[AXIMU^r 335 
 
 than what in the abstract might be called its fair rates 
 alread}-. Yet the companies cannot raise these rates. 
 To do so would be only to drive the traffic to the 
 alternative route, and to sacrifice the half-loaf, which 
 they at present obtain. As for the remaining two- 
 fifths, a great deal of it is low-class traffic, which, once 
 more, would stop at home altogether, if it v/ere called 
 upon to pay full rates, and a good deal of the rest is 
 local distributive traffic on small branch lines, which, 
 as we ha\c seen already, is never asked even now to 
 pay at the rate which it would have to pay, if the 
 companies tried to make the earnings of the branch 
 compensate for its expenses. 
 
 We are shut down therefore to this dilemma : 
 either the maximum must be fixed so high as to be 
 practically protective to almost nobody, for the railway 
 companies find it in their own interest in nine cases 
 out of ten to go below it, or else it is brought down to 
 the point where it cuts off the tops of charges actually 
 made for services which not unfrcqucnth;, even on 
 cost-of-service principles, are worth more than is 
 charged for them. In other words, a rail\^•ay company 
 estimates that a service to A costs it— allowing for 
 movement expenses, fixed charges, and a full share 
 of interest on capital — say, i/. It calculates, however, 
 that, as A cannot afford to ])ay the whole i/., every- 
 body's interest will be served b}- reducing the charge 
 to I 5^". Then the State steps in and says, " Xo. You 
 perform what looks like the same service to other 
 people for ys. 6d. The charge shall, therefore, be 
 only 12.S-. 6d. You may either go without the 2^-. Gd. 
 altogether, or get it out of the pockets of B, C, and D."
 
 336 THE PROVISIONAL ORDERS ch. xii. 
 
 Professor Hadlcy's view as to the impracticability 
 of statutory maxima is, it may be broadly said, 
 universally held by all competent railway authorities 
 in America. Here is what Mr. Hudson, the author of 
 '* The Railways and the Republic," an able book, by 
 one who has carefully studied the subject, writes : * 
 " The first crude step towards legislative regulation 
 took the form of fixing by law a maximum limit for 
 rates. It was imagined that the railways, if restricted 
 to a moderate maximum, must adjust all their rates 
 with substantial equity, and that thus both extortion 
 and discrimination would be held in check. Experi- 
 ence fully refutes this idea. ICffective discriminations 
 are always possible within the limits of an\- maximum 
 rates that would allow the railway to earn its interest 
 and dividend charges. Not only will a legal maximum 
 of freight rates fail to prevent discriminations, but no 
 legislative ability can frame a tariff of rates without in- 
 equality and injustice to the railways, especially in inter- 
 State " [/.('. practically long-distance] " commerce. 
 
 " Any rate which would be just to the trunk lines of 
 the Central States would be destructive to expensive 
 railways reaching the mines of Colorado or California. 
 Rates which the mines in the Rocky Mountains or 
 Sierra Nevada can pay, and must i)ay if railroads are 
 
 * The Raihvays and the Re- forms introduced under present 
 ftchlic. By James F. Hudson. 3rd conditions, that he jiroposes that 
 ■edition. Ilarper Bros., New Vork, the railway companies shall be for- 
 1889. P. 339. Mr. Hudson is, it bidden by law to act as carriers, 
 may be said, no advocate of laisser and compelled to revert to their 
 faire, like Professor Hadley. On original position as mere toll- 
 thc contrary, he is so fiTcely op- takers, owning lines which any 
 jiosed to the present state of rail- member of the public or any trans- 
 way management in America, and portation agency can use on pay- 
 so hopeless of seeing any real re- ment of a fixed toll.
 
 CK. xii. AMERICAN OriNION 337 
 
 to be built for them, would amount to confiscation if 
 applied to the coal mines in Pennsylvania, or the 
 grain of Iowa and Nebraska. The schedule which 
 would be just for a railway at one time would be 
 unjust at another. The branch line through a new 
 country must collect higher rates at first, than when 
 it has developed the productive powers of the region. 
 The varying conditions which ma)' properly influence 
 rates are innumerable. It is a hopeless task to adjust 
 the schedules to suit all circumstances, and it is futile 
 to expect an adequate reform of railway abuses by 
 such means. 
 
 " The uselessncss of attempts to establish equit- 
 able rates by law appears in the fact that every such 
 schedule which has been in existence for ten years is 
 now obsolete, being far above the rates now fixed by 
 the railways. This progressive reduction of the cost 
 of transportation has been cited as showing that all 
 regulation of the railways is unnecessary. It is far 
 from proving this ; but it does prove that attempts 
 to prescribe rates by law are unnecessary and futile. 
 The laws of trade can bring about whatever cheapen- 
 ing of the cost of transportation competition and 
 economy will produce. The province of legislation 
 is to ensure the free, universal and regular operation 
 of these laws, so that the benefit shall be equitably 
 distributed among all interests and localities, and not 
 monopolised by a few, while others bear the burden. 
 When this aim is secured, and artificial interference 
 with these laws is removed, the question whether rates 
 are low enough or not can safely be left to them." 
 
 But Professor Hadlcy's assertion was not referring 
 
 z
 
 338 THE PROVISIONAL ORDERS ch. xh. 
 
 to American, but to English, opinion. Let us sec 
 what the careful students of the question have said 
 in this countr}^, and for convenience sake, let us keep 
 separate the two points, whether fixed maxima are 
 likely to afford protection to the public, and how far 
 they maybe considered fair to the railway. In 1872 
 Mr. Rawcliffe testified before the Joint Committee 
 that " a railway compain- can perpetrate almost any 
 kind of injustice under and within the limits of what 
 are called maximum rates." In the report of Sir 
 Henr\' Tyler — then Captain Tyler, and Inspecting 
 Officer of the Board of Trade — which is printed in 
 the Appendix to the Committee's Proceedings, there 
 is this passage : " The attempt to limit rates and 
 fares by the principle of fixing maxima has almost 
 always failed in practice, and is almost always likely 
 to fail, for the simple reason that the Parliamentary 
 Committees, and authorities by whom such limits 
 are decided, cannot do otherwise than allow some 
 margin between the actual probable rate, as far as 
 they can forecast it, and the maximum rate, and 
 cannot foresee the contingencies of competition, of 
 increasing quantities, of facilities or economy of 
 working, or of alteration of commercial conditions, 
 which may occur in the course of \-ears, after such 
 limits have been arranged by them." " I attach," said 
 Sir Thomas Farrer, " very little value to the maximum 
 rates fixed by Parliament." 
 
 The Committee's decision on the question is 
 this : " Independently of the question of vested in- 
 terest in the companies, it is to be observed that legal 
 maximum rates afford little real protection to the
 
 €11. xii. A I'OWKR OF CONFISCATION 339 
 
 public, since they arc always fixed so hig'li tliat it is, 
 or becomes sooner or later, the interest of ihc com- 
 panies to carry at lower rates." The CommiLtce goes 
 on to point out that the chief complaints rdc.' not to 
 the class rates for the retail traffic, but to the special 
 rates for the wholesale trade between great centres, 
 and that these rates could not possibl}- be affected by 
 any revision of maxima, and then, dealing with a 
 proposal for periodical revision, goes on to s;u- : 
 
 "The companies will, if experience is aii\- guide, 
 constantly for their own sakes charge less tlum their 
 legal maxima. Is this revision to take effect on their 
 legal maxima, or on the actual rates as they voluntarily 
 reduce them ? If the former, its results v-.ill be small. 
 If the latter, it would be difficult to effect, and may 
 bear hardly on the companies in stercot\-ping a 
 temporary or experimental reduction." Then, after 
 just noticing that an effectual revision of rates 
 could only be made, if there were, which the 
 Committee has sho\\n there is not, a standai'd of cost- 
 of-service on which rates could be based, the Report 
 goes on to say : " A still more serious question with 
 respect to periodical revision is the question, On what 
 principle is it to be performed, and by whoni ? If it 
 is to be purch' arbitrar}-, if no rule is to be l.iid dov\-n 
 to guide the revisers, the power of re\ ision will 
 amount to a power to confiscate the property of the 
 companies. It is not likely that rarliamcnt would 
 attempt to exercise any such power itself, still less 
 that it would confer such a power on any subordinate 
 authorit)'." 
 
 Nine years elapsed, and then the cjucstion was 
 
 r, 2
 
 340 THE TROVISIOXAL ORDERS en. xii. 
 
 taken into consideration once more. Before the Com- 
 mittee of 1 88 1, Mr. Baxter, who was not only a threat 
 railway lawyer and Parliamentary agent, but a colliery 
 proprietor, was asked, " Do you think that with the 
 present rates it would be safe for Parliament to cut 
 out the maximum rates altogether, and let the railway 
 companies charge what the}- like ? " Mr. Baxter 
 replied, " I think it would be quite safe to abolish all 
 statutory rates whatever on railways and let them 
 charge what they can. The competition is so perfect 
 throughout the country, and the pressure on the part 
 of the traders is so great, and the system so mature, 
 that I think you might safely supersede all rates in 
 Acts of Parliament, and give to the railway com- 
 panies an absolute power of charging." 
 
 Mr. Baxter's point as to the maturity of the system 
 making superfluous precautions on which so much 
 stress was laid in the early days of railwa}'s, receives 
 confirmation from a somewhat unexpected quarter. 
 On page 19 of his book on railway rates, Professor 
 Hunter writes : " If there had existed in the infancy 
 of our railway system a tribunal of experts, capable 
 from time to time of forming a sound opinion on the 
 reasonableness of the charges of the railway company, 
 much might be said against establishing the hard and 
 fast line of a maximum rate and in favour of permit- 
 ting railway companies to fix their own charges. A 
 maximum toll for the use of a canal was a not inade- 
 quate measure of the value of the service for which it 
 was paid. The toll was in fact an aliquot part of a 
 true rent, based on the assumption that a given 
 tonnage would in the course of a year pass over the
 
 cH. xii. A I'kKMISS AND ITS CONCLUSION 34I 
 
 canal ; but the circumstances that determine the cost 
 of carrying; goods, and influence the remuneration of 
 the carrier, are so varied and complicated that it is 
 impossible to avoid making" the maximum toll too 
 high or too low, or indeed frequently both at the 
 same time." 
 
 After pointing out that the United States Con- 
 gress had made no attempt to fix maximum rates 
 but "simpi}' enacted the common law," providing, 
 however, " a commission of experts," to apply the 
 doctrines of reasonable charges and unjust pre- 
 ferences to any state of facts as it might arise, the 
 Professor goes on to say, not, as might perhaps have 
 been expected, that now that we have got a commis- 
 sion of experts also, we shall do well to follow the 
 example of the United States, but, on the other hand, 
 to make the following observation : " The Traffic 
 Act, 1888, contains an important section providing for 
 the revision, under the superintendence of the Board 
 of Trade, of the classification of goods and of all 
 maximum rates. The traders, if they do not watch 
 closely the proceedings about to be initiated, may find 
 out that they will lose much and gain little by the 
 symmetry and uniformity which are to take the place 
 of the chaos of the old special Acts." 
 
 But we are getting on too fast. Let us go back 
 and sec what the recent Parliamentary Committees 
 have said on the other branch of the subject, namely, 
 the rights of the companies. No one questions that 
 maximum rates may, for a time at least, if only they 
 are fixed low enough, afford a most efficient protec- 
 tion to the pockets of the railway customers. If, for
 
 342 THE PKOVISinXAT, OKDKRS tir. xii. 
 
 example. Parliament were to enact that every exist- 
 ing fare and rate charged at the present moment 
 throughoiii the liritish Isles should be cut down by 
 one-hali", unqucstionabl}' jmssengers and freighters 
 A\ould >a\(- money in the interwil which elapsed 
 before ilu- companies ^vcnt into bankruptcy, and a 
 special sc.--;ion of Parliament was summoned to repeal 
 the Act. I'he question rather is whether any limit 
 can be fixed which shall be simultaneously fair to the 
 companies — that is, be, broadly speaking and in the 
 long run, in the public interest — and also be of prac- 
 tical uliliiy as affording a protection to the public in 
 general against the possibility of extortionate charges. 
 3^y"extorii()nate " charges we must understand charges 
 such as a commission of experts, with all the facts of 
 the case before them, and acting as arbiters between 
 the public and the railwa}"s, would ha\"e no hesitation 
 in disallow ing. 
 
 On this point wc may call two witnesses, neither 
 of whom w ill be suspected of any undue partialit}- 
 for the railw.ay companies. Before the Committee of 
 1 88 1, Si'- Bernhard Samuelson put to Professor 
 Hunter the following question : " You stated that 
 there would be some difficult}- in obtaining unifor- 
 mity of classification on account of the differences of 
 classification existing in the Acts of different railway 
 companies, and }-ou stated that that might be an 
 objection to the adoption of the Railway Clearing 
 House Classification as a universal rule." The answer 
 ■was: "Yes, I consider that the existing classifica- 
 tion is to be looked upon in the light of a contract. 
 Uniform if \- would be a very desirable thing, but )'ou
 
 CH. XII. THE TERMS OF THE CONTRACT 343 
 
 can hardly ask for uniformity at the expense of the 
 terms of the contract you have made." " With 
 whom .' " asked Sir Edward Watkin ; to \\hich Pro- 
 fessor Hunter replied : " I consider the rate clauses 
 are a contract between the public and the railways, 
 and that we cannot, for the sake of uniformity, ask 
 the railway companies to suffer by any change that 
 will be made in the classification." Professor Hunter 
 went on to say that of course it was true that every 
 private Act contained a clause subjecting the com- 
 pany to all future Acts dealing with railways, but that 
 still he was of opinion " that it would require an 
 extremely strong case to justify interference." 
 
 To the same effect was the testimony of Mr. Balfour 
 Browne, who at that time had only recently resigned 
 his office as Registrar of the Railway Commission, 
 before the Committee of 1882. " I think," he said, 
 " that the railway companies took their Acts upon 
 the condition of being allowed to charge those rates, 
 whatever they are, and that nobody ought to be 
 allowed to say. We will resile from that Parliamentary 
 contract. Therefore I would allow the railway com- 
 panies to go on charging their authorised rates." 
 
 What were the conclusions of the Committee of 
 1872 we have already seen. But Professor Hadley 
 is scarcely as accurate as usual in asserting that the 
 Committee of 1882 acknowledged that fixed maxima 
 were of next to no use. On the contrary, the Com- 
 mittee declares itself " of opinion that it is essential 
 to the protection of the public that a maximum 
 rate should be fixed in all cases," and that in " all 
 cases of bills for authorising. new lines of railway, or
 
 344 THE rROVISIONAL ORDERS cu..xii. 
 
 extending the powers of existing companies, the 
 attention of the Committees on such bills should be 
 specially tlircctcd by some public authority to the 
 rates and fares, either authorised by such bills, or in 
 the case of existing companies in previous Acts, and 
 that such Committees should have power to alter, 
 modify, and regulate such rates and fares in the 
 interest of the public, and with due regard to the 
 interests of existing companies." That the Com- 
 mittee, however, never contemplated any such revision 
 of maxima as is contained in the new Board of Trade 
 Provisional Orders, is ob\ious. Its two recommen- 
 dations are, " Your Committee cannot recommend 
 any new legislative interference to the purpose of 
 enforcing upon railway companies equality of charge ;" 
 and again, " Your Committee are further of opinion 
 that the multiplicity of special Acts dealing with 
 rates or charges on the same railway is a great evil, 
 and that railway companies should be required to 
 consolidate their special Acts in so far as they affect 
 rates or charges imposed upon the traders." 
 
 It may be added, that in Mr. Barclay's draft Report 
 there was this clause : " Your Committee do not offer 
 any definite recommendation for improving the classifi 
 tion of traffic or for readjustment of rates, but if there 
 existed any department of State whose duty it was 
 to care for the interests of trade and agriculture, that 
 department might consider and develop the sugges- 
 tions indicated, and, with the co-operation of the 
 railway companies, would doubtless succeed in pro- 
 ducing a much simpler and more etiuitablc s}stem of 
 rating than now exists." Mr. Barcla}-, needless to
 
 CH. XII. POWERS FOR POWERS 345 
 
 say, was the leader on that Committee of the opposi- 
 tion to the principles professed and the practice 
 pursued by the English railway management. If 
 any member on that Committee had ever dreamed of 
 using a revision of maximum rates as machinery for 
 the reduction of existing charges, of which no\\-ord of 
 complaint has ever been heard, that member would 
 probably have been Mr. Barclay. But he made no 
 such suggestion ; and when he proposed that the 
 existing railway companies should co-opcratc with 
 the Board of Trade in the revision of their own rates, 
 it is safe to say that he did not contemplate placing 
 them in the position of sheep, and honouring them 
 with an invitation to participate in a shearers' festival. 
 The world, however, has moved rapidly since 
 1882. Public opinion has gone some distance in the 
 direction of compulsory socialism, and some shrewd 
 observers think that they can already see the pen- 
 dulum beginning to turn for a backward swing. But 
 be that as it ma}-. Meanwhile we will go on with 
 our history. In 1885, acting upon the suggestion 
 of the Committee's Report, the railway companies 
 introduced bills to codify their existing powers. 
 Whether the\- really proposed nothing more than this, 
 or whether they surreptitiously seized the opportunity 
 to endeavour to increase their powers, no man can tell. 
 Some people may think that a power to charge 8d. 
 per ton per mile for coal or iron-stone for an}' distance 
 is not a power of any great practical value, and that 
 its surrender would be dearly bought by a right to 
 increase the charges upon short distance merchandise 
 traffic by a single farthing per mile. The present
 
 346 THE PROVISIONAL ORDERS cii. xii. 
 
 writer has no wish to discuss the question, being 
 firmly persuaded that an equitable exchange cf powers 
 for powers is a practical impossibility. What the bills 
 of 1885 might have done, would have been to show, 
 in a simple and summary form, the total charging 
 ])owers of the companies, and so to secure, as a 
 defence against exorbitant charges, in some degree at 
 least, what is probably on the whole the best protec- 
 tion — publicity, with its natural consequence of po- 
 tential competition. But whatever the abortive bills 
 of 1885 did, they assuredly did not offer, and were 
 not intended to offer, any prospect of an immediate 
 reduction of actual rates ; and, as might not unnatur- 
 ally have been expected at a period of unexampled 
 depression of trade, they disappeared in face of the 
 outcry raised by the traders' representatives. 
 
 Then the successive Governments took the matter 
 up. Finally, in 1888, the Railway and Canal Traffic 
 Bill came down from the Lords to the Commons, 
 containing the following clause : " The Board of 
 Trade shall determine . . . the schedule of maximum 
 rates and charges . . . which it would in the opinion 
 of the Board of Trade be just and reasonable to sub- 
 stitute for the existing maximum rates and charges 
 of the railway company, as upon the whole equivalent 
 to such maximum rates and charges," &;c. The 
 Commons refused to accept this basis of revision, and 
 left it to the Board of Trade to fix such charges as it 
 might think just and reasonable. Tabula rasa was to 
 be made of the past, and the Board was to act at its 
 own discretion, unguided by precedent and unfet- 
 tered by instructions. If ever a public department
 
 CH. XII. AX IMl'OS.Sir.LK SITUATION 347 
 
 was placed in an unjust and unreasonable position, 
 that department was the Board of Trade by the Act 
 of 1888. Parliament had done that which a Parlia- 
 mentary Committee of sixteen years before had pro- 
 nounced inconceivable, and had conferred on a subor- 
 dinate authorit)-, \\ith no "rule laid do\\ n to guide the 
 revisers," a power of revision " purely arbitrary," and 
 ''amounting;' to a power to confiscate the property of 
 the companies." 
 
 Why any Minister ever permitted his depart- 
 ment to be placed in so absolutch' impossible a 
 situation, it is difficult to conceive. Of course the 
 Board of Trade decision, as announced in the Reports 
 of Lord I^alfour and Mr. Courtenay Boyle, and 
 as subsequently amended in the Provisional Orders, 
 as the result of a number of r.r parte statements, 
 which the other side has practically had no oppor- 
 tunity to challenge or to controvert — of course the 
 Board of Trade decision has pleased nobody. Under 
 ordinary circumstances, the fact that neither litigant 
 is satisfied with the decision may be taken as fair 
 evidence both of the wisdom and impartiality of the 
 judge. But here, when a cause is tried in which every 
 inhabitant of the country has an interest, both on the 
 side of the railways and on that of their opponents — 
 though \\ith some the interest is larger on the one 
 side, and with others on the other — if no one is 
 satisfied, one is apt to think that the task had been 
 better declined at the beginning. 
 
 There is no need to devote a single moment to 
 the wearisome inquiry before the Board of Trade 
 tribunal last }'ear. It sufficed to add two cubic feet
 
 348 TIIK PROVISIONAL ORDERS cit. xrr. 
 
 of printed matter to the literature of the subject, and 
 to demonstrate to all who attended it the impartiality 
 and the ability of the officers who presided. If it 
 were a case of arbitrating; as to the reasonableness or 
 unreasonableness of a particular rate, the railway 
 company and the complainant concerned might both 
 be well satisfied to leave the question to the arbitra- 
 tion of Lord Balfour and Mr. Courtcnay Bo}lc. But 
 when it was a question of fixing maximum rates over 
 the entire kingdom ; of drawing a line, which should 
 be a protection to the public, and )xt not trench 
 on the just rights of the railway companies ; of 
 regulating, not merely the few hundreds of rates 
 which were brought to the cognisance of the tribunal 
 but the scores of millions of other rates of ^\■hich no 
 word was said — the arbitrators failed for the simple 
 reason that success was impossible at the outset. That 
 they failed so little is a sufficient title to the admira- 
 tion of an}' one who can appreciate the difficult}- of 
 the task that was laid upon them. 
 
 At the outset they were confronted with the diffi- 
 culty that absolutely nc^ principle had been laid down 
 by Parliament for their guidance. They were told to 
 assume that the whole series of schedules laid down 
 by the wisdom of Parliament, in the long scries of 
 special Railwa}' Acts from 1824 to 1888, were worth- 
 less, and that was all. The litigants, on the other 
 hand, knew what they wanted. The railway com- 
 panies claimed that their present not excessive 
 income should be preserved intact. 'Jhat income, they 
 said, could best be raised undrr the existing s}'stem 
 of rates, each of which practicall}- had been fixed by
 
 CH. XII. REASOXAULE VAKLVTIOXS 349 
 
 half a century's experience of the higgling of the 
 market. Let the Board of Trade draw its new 
 maximum lines sufficiently far above the tops of 
 existing rates to leave a margin of, say, 15 per cent, 
 for possible rise in the price of materials and labour,'' 
 they would be content. 
 
 The traders' view, on the other hand, is given in the 
 Lancashire and Cheshire Report in the following 
 terms : '' The actual rates for cotton, when averaged » 
 worked out to a mean of \'6gd. per ton per mile, and 
 the maximum rate proposed by the traders was 2d. 
 Now, the amount of loss which the company would 
 have to endure, if called upon to submit to this rate 
 of 2d., depends entirely upon the amount of variation 
 in the existing rates. If the limits of variation are 
 very wide apart, doubtless the adoption of a mean, 
 even with a substantial margin added, might result in 
 some loss. If the existing limits of variation arc not 
 excessive, a reasonable margin should cover them. 
 Putting the argument into the shape of figures, the 
 two cases might perhaps be taken to be clearly repre- 
 sented as follows : On the supposition that actual 
 conveyance charges for a given distance had been 
 found to vary between 80 pence and 120 pence, the 
 mean would be 100 pence, and if the maximum were 
 then fixed at 120 pence, such an adjustment need 
 invoke no alteration in existing practice. This is 
 the case of reasonable variation of existing charges. 
 
 " Suppose, however, that the mean of 100 pence, 
 
 * Within the last year this pos- as wages are concerned, the rise is 
 
 sible rise has become a very obvious — we may be glad to think — per- 
 
 certainty. Nor is there any reason- nianent. 
 able ground to doubt that, as far
 
 350 TlIK rkOVISIONAL ORDERS cii. xir. 
 
 with its maximum of 120 pence, were deduced from 
 rates \-ar}-ing from 60 pence to 140 pence : in this in- 
 stance certainly all rates over 1 20 pence would be liable 
 to reduction. So far from haxini^" an}- hesitation in pro- 
 posing this, the traders say that their main object in 
 demanding revised rates is to obtain this very reduc- 
 tion. They claini that the Act of 188.S gi\-es it them ; 
 and they say that, if it docs not, it is indeed the 
 nullit}' which the railway companies represent it to 
 be ; and if so, they propose to renew their exertions, 
 and not to cease until Tarliament has granted them 
 the protection they ask, and has found means of 
 drafting an Act which shall clearly express their (st'c) 
 intention so to do." The railway reply was in the 
 first place to ask for the reference to the section of 
 the Act which meant reduction, and secondly to point 
 out that, so far from a \ariation from 60 jDcnce to 
 140 pence being excessive, the fact was that in all 
 probabilit}' the lower rate was, under the circum- 
 stances in which it was charged, the more profitable 
 of the two. 
 
 The Report of the Board of Trade tribunal bears 
 traces of the difficulty of reconciling these two dia- 
 metrically opposite positions. Here is a clause giving 
 to the railways absolutely ever}-thing the\- ought to 
 ask : " The railway companies ha\c built up a 
 traffic remunerative to themselves at rates generally 
 speaking much lower than those at present authorised 
 by Parliament, and consequcnth' we believe that it is 
 equitable to make a reduction in their present jjowers, 
 and to fix rates, based to a great extent on existing 
 rates, but with a reasonable margin of profit for i)os-
 
 CH. XII. NOMINAL MARGINS 351 
 
 sible changes of circumstances injuriously affecting 
 the cost of, or the returns from, the carriage of mer- 
 chandise by railway." Such is the Report, but when 
 we come to the schedules by which it is accompanied, 
 we find that the best calculation the railways can 
 make is to the effect that not only has the margin 
 disappeared, but that in very many instances the 
 existing revenue is markedly diminished. 
 
 Of course there are nominal margins in all direc- 
 tions. For example, there is nothing to prevent the 
 companies charging the full local rate of 40.^". on 
 cotton goods sent from Manchester for shipment in 
 London. But then the Board of Trade certainly does 
 not need to be told that, if the railway companies 
 tried in practice to charge this 40^'., some of the 
 London vessels would be sent round to Liverpool to 
 complete their loading there, while in other cases the 
 cottons would come, not from Lancashire at all, but 
 through Havre or Antwerp from Continental fac- 
 tories. 
 
 The explanation of the schedules is perhaps to be 
 found rather in what we may call the traders' section of 
 the Report. Two pages after the passage already 
 cited we read as follows : " The railway companies 
 have urged persistently and strongly that the future 
 maxima ought to be so fixed as to result in no loss 
 of revenue to the company. If by this is meant that 
 the future maxima should be such as to cover all 
 existing rates, we are unable to agree with the pro- 
 position. To what extent there is justification for 
 the very wide differences which exist in actual rates, 
 we are not called upon to pronounce. But it is
 
 352 
 
 THE PROVISIONAL ORDERS 
 
 material to a just settlement of powers of charge that 
 it suits the companies, in a large number of instances, 
 to conduct traffic at rates much lower than those 
 authorised in their present Acts, or in the schedules 
 attached hereto.*' 
 
 " If maxima were to be fixed at rates high enough 
 to cover present non-competitive charges, the traders 
 who rely solely on a particular railway would be 
 without the Parliamentary protection which they 
 claim, and as we believe reasonabl}' claim. In 
 
 * One would have fancied that, 
 if there was one question more 
 than another on which the Board 
 of Trade tribunal was bound to 
 make up its mind, it was, whether 
 there is, or is not, justification of 
 the very wide differences which 
 exist in actual rates. Not, of 
 course, in detail in each individual 
 case, but broadly, as shown in 
 typical illustrations. If, for ex- 
 ample, the railway companies can 
 prove, as they claim to be able to 
 prove, that, say, 6d. per ton per 
 mile is only a tolerably remune- 
 rative rate in hilly and sparsely 
 populated districts, it is surely 
 not only unreasonable, but also 
 unjust, to fix the maximum rate at 
 5(/. , because it suits the company 
 elsewhere to charge only 2d. In 
 fact, the Board of Trade arbitra- 
 tors would have done well to have 
 studied Mr. Eink's figures. His 
 conclusions will bear rejietition : 
 " Under ordinary conditions the 
 cost per ton-mile in some cases 
 may not exceed one- seventh of a 
 cent, and in others may be as high 
 as 73 cents per ton-mile on the 
 .same road. A mere knowleilge of 
 the average cost per ton mile of 
 all the expenditure during a whole 
 
 year's operations is of no value 
 whatever in determining the cost 
 of transporting any particular class 
 of freight, as no freight is ever 
 transported under the average con- 
 dition under which the whole 
 year's business is transacted." 
 .Surely the Board of Trade have 
 no right to say broadly that Corn- 
 wall, for instance, is to have all 
 its business done at less than 
 average margin above cost, and 
 may call upon Bristol and Birming- 
 ham and Cardiff to make up the 
 Great Western ilividend. If the 
 railway company thinks it can get 
 more net profit out of Cornwall 
 by lowering the rates, by all means 
 let it do so. But consideration of 
 what the traffic will or will not 
 bear is no business of a State 
 official, who is merely called upor» 
 to fix, not actual charges, but 
 maximum rates. Or, rather, it 
 may of course be his business, but 
 only on one condition — that the 
 State, namely, is prepared, as the 
 guardian of the general interest, 
 to make up to the private company 
 the difference, if any, between 
 what the traffic can bear, and what 
 the company can reasonably afford 
 to take for carrying it.
 
 CH. XII. DIPLOMATIC AMBIGUITIKS 353 
 
 determining:^ the figures in the schedule, we have had 
 regard to the highness of the present non-competi- 
 tive rates, and on the other hand to the fact that the 
 companies will probably have to rely more on 
 increase in traffic than on the raising of their non- 
 competitive rates to recoup themselves from any loss 
 they may sustain by deprivation of the right to 
 charge such specially high rates as are now in some 
 instances enforced." The diplomatic ambiguity of 
 this passage sufifices to protect it from detailed criti- 
 cism, but it would hardly be an unfair paraphrase to 
 say that it comes to this : " We do not know whether 
 the highest existing charges are too high or not. 
 There are certainly some others much lower, so we 
 think they must be. Anyway, we propose to cut them 
 down, as otherwise the traders will declare that we 
 have done nothing for them. We ought to add that 
 we know that the argument that the companies can 
 recoup themselves elsewhere is fallacious, because the 
 traffic elsewhere will not bear an increase. No doubt, 
 however, a reduction of the rate on tea of los. per 
 ton, or say one-twentieth of a penny per pound, will 
 so largely stimulate the consumption of that article 
 in Cornwall as to recoup the Great Western before 
 the half-year is out for any momentary loss of 
 revenue. No doubt also, the companies, whose 
 existing lines are all quite full already, will be able, 
 once the traffic is charged at lower rates, to find room 
 for more of it." 
 
 But it is ungracious to insist too strongly on the 
 fact that a position which was impossible from the 
 outset, has been proved in practice to be untenable. 
 
 A A
 
 354 THE PROVISIONAL ORDERS ch. xii. 
 
 To have so largely succeeded as in fact they have, is 
 a sufficient testimony to the infinite pains which the 
 Board of Trade arbitrators took in sifting the vast 
 mass of evidence laid before them at the public 
 hearing. Whether, however, as much can be said for 
 the alterations which the Board of Trade has thought 
 proper to introduce since the public inquiry was 
 closed, is another question. The rates, for example, 
 for traffic in the third class, were fixed in August last 
 at a very low point. The reason influencing the 
 decision was understood to be the protection of the 
 hardware interest, whose goods were in that class, 
 and which was not only important, but very ably 
 represented at the public inquiry. The Provisional 
 Orders, however, which have just appeared, have 
 removed hardware from the third class down into the 
 second ; but the third-class rates are left as before. 
 
 Another point. Articles carried in class B, such 
 as bricks, building-stone, pig iron, &c., have hitherto 
 been required to be sent in minimum quantities of 
 4 tons, the obvious reason being that, as they are 
 sent loose, and therefore require a waggon to them- 
 selves, the railway companies have a right to be 
 guaranteed a reasonable minimum load. The mini- 
 mum has now been brought down to 2 tons. In 
 other words, the railway earnings per waggon are 
 liable to be divided by two, for it may be presumed 
 that the President of the Board of Trade does not 
 propose that coprolites, creosote, and brewers'-grains 
 — to take three articles which stand next each other in 
 this class of the revised classification — shall travel 
 cheek-by-jowl in the same railway waggon.
 
 
 6.7. 
 
 per ton. 
 
 . is. 
 
 o</. 
 
 ,, 
 
 . IS. 
 
 3.'/. 
 
 » 
 
 lows 
 
 
 
 
 S'/- 
 
 per ton. 
 
 
 6c/. 
 
 ,, 
 
 
 9J. 
 
 ,, 
 
 . is. 
 
 od. 
 
 ,, 
 
 . is. 
 
 3'/- 
 
 j> 
 
 CH. XII. WAGGOX-HIRE RATES 355 
 
 One point more. The draft schedules fixed for 
 the use of trucks the following charges : 
 
 Eor distances not exceeding 50 miles 
 
 Between 50 and 150 miles 
 
 Over 150 miles .... 
 
 The revised version reads as follows 
 
 For distances not exceeding 25 miles 
 25 to 50 miles .... 
 50 to 75 miles . . . . 
 
 75 to 150 miles .... 
 Exceeding 150 miles 
 
 Now, it is quite safe to say that the modification 
 (which one company calculates means to it a loss of 
 16,000/. a year net revenue) could never have been 
 made except by an official in an office, not in 
 contact with the actual facts of railway working. 
 Assuming 6d. to be a reasonable charge for distances 
 from 25 to 50 miles, T,d. for distances under 25 miles 
 is on the face of it ridiculous. It is not in travelling 
 that waggons spend their time, but in waiting at their 
 destination to be loaded, or unloaded, or reloaded. 
 A waggon, sent down to the coal-tips at Cardiff or 
 Hartlepool, is hardly likely to do a second trip in the 
 day, however short the distance, and it may quite 
 w'ell take its turn once in the 24 hours, ev^en for 
 distances exceeding 50 miles. In this case 6d. per 
 ton might conceivably be an excessive charge. A 
 waggon, on the other hand, sent to a local consumer 
 half a dozen miles away from the colliery, is likely to 
 take a week before it gets back into work again, as 
 the customer is allowed a minimum of four days for 
 unloading.
 
 356 THE TROVISIONAL ORDERS en. xii. 
 
 The Board of Trade proposes to fix 2s. per week, 
 therefore, as the maximum charge for the hire of a 
 waggon, whose value cannot possibly be estimated at 
 less than lo/. /rr amnini, that is, 4^-. per week. A 
 mileage basis of charge is unscientific enough in any 
 case, and the Amicricans are at this moment endeavour- 
 ing to introduce a charge by time in its place, but to cut 
 up a line into lengths of twenty-five miles, and to divide 
 the shilling into silver threepences to correspond, is 
 an act that could only be accomplished by the official 
 intelligence, whose natural instinct is to call upon the 
 facts to square with his a priori theories, instead of 
 endeavouring to modify his theories to fit the facts. 
 
 These of course are small matters, but when it 
 is a matter of 1 6,000/. here, and 40,000/. there, and so 
 on all through the different classes, the cumulative 
 effect is by no means trifling. The main interest, 
 however, of these illustrations is simply as showing 
 whether a Government department can in fact fix 
 rates more equitably from a Tondon office — in other 
 words, whether it can raise the necessary revenue to 
 induce capital to invest in railway enterprises with 
 less friction and less injustice than is caused under 
 the present system, under which rates are fixed by the 
 representatives of the capitalists, who are in constant 
 contact with the practical conduct of their customers' 
 business. 
 
 It is as well to make this point quite clear. The 
 present writer has no wish to argue the question 
 from an abstract point of view. Indeed, for his own 
 part, he is quite unable to adopt the high Tory view 
 of Professor Hunter, or to admit that the Railway
 
 cir. XII. A QUESTION OF EXPKDIENCV 357 
 
 Acts of half a century back arc a contract between 
 the public and the railway, binding to all time on the 
 former, unless they are released by the consent of 
 the latter. Such a view seems to him absolutely 
 untenable, except on principles which would forbid 
 the Government to interfere with endowments left, 
 say, to the Universities in the fifteenth century. 
 For, in railway matters, 1840 is really as far off as 
 the Middle Ages. Even so, the point is scarcely ot 
 practical importance, for no railway company can 
 exist for five years without coming to Parliament for 
 fresh powers, and when Parliament is asked to grant 
 powers, it can surely make what terms it thinks 
 proper, as to the concessions which the railways 
 shall give in return. The only point urged here will 
 be that on mere grounds of expediency it is, not only 
 not in the interests of the railway companies, but also 
 not in the interests of the railway customers, whether 
 they call themselves traders, or whether they be 
 merely members of the consuming public, that the 
 proposed Provisional Orders of the Board of Trade 
 shall be sanctioned. 
 
 The case may, I think, be stated as follows : The 
 companies are not making excessive profits. On the 
 contrary, they are earning very much less than in- 
 vestors who simultaneously have put their money into 
 other certainly not more speculative undertakings, 
 such as gas, and water, and tramway, and omnibus 
 companies. It is true that, in an exceptionally 
 prosperous year, 70,000,000/. of capital nominally 
 received over 7 per cent. On the other hand, nearly 
 60,000,000/. received no dividend whatever, and the
 
 358 THE TROVISIONAL ORDERS cii. xn. 
 
 one fact must be fairly written off against the other. 
 Taking it all in all, railway capital returns less than 
 4^ per cent, of income. It is impossible therefore to 
 argue that railway shareholders are doing better than 
 they can reasonably expect, and that their dividends 
 are so large that a small slice cut off them will never 
 be missed. On the contrary, it may safely be asserted 
 that a compulsory reduction of dividend resulting 
 from a compulsory reduction of net revenue will 
 scare capital out of the business, and produce a fall 
 in the value of railway stocks out of all proportion to 
 the actual money loss incurred. 
 
 Now, anyone with any practical knowledge of rail- 
 way working must know that the growing trade of 
 the country cannot be accommodated without a steady 
 increase in railway capital expenditure. Certainly 
 that is the universal experience of railway managers, 
 who know only too well that the delightful theory 
 about closing capital accounts is likely to remain a 
 theory, at least till the time when English trade 
 becomes stationary, and then begins to decline. 
 The natural effect of the proposed Provisional Orders 
 will be that the railway companies will shrink from 
 new works, for which the capital cannot be raised any 
 longer on the easy terms to which they have hitherto 
 been accustomed. And if the great lines hold their 
 hands for five years to come, the traffic, if it continues 
 to increase at its present rate, will be brought to a 
 standstill, at least under the conditions of accom- 
 modation which are at present given ; and the loss to 
 the public by the curtailment of the facilities must be
 
 CH. XII. EXTRAVAGANT ASSERTIONS 359 
 
 immensely greater than anything which they can gain 
 by the cheapening of rates. 
 
 But it is said the Engh'sh raihvays are extrava- 
 gantly worked. If pressure is put on the companies, 
 they will learn to economise in working expenses. 
 We have been told this times without number by 
 gentlemen such as Professor Hunter, and Mr. Jeans, 
 and Sir Alfred Hickman, none of whom can claim to 
 be considered as experts on questions of traffic man- 
 agement. We have been told so also by Mr. Jefferds 
 and Mr. Dorsey, who would perhaps make this claim. 
 But their statements are so extravagant as scarcely 
 to need refutation. Certainly, practical railway men 
 in America show no signs of an inclination to treat 
 seriously assertions such as that the introduction of 
 American methods into England would effect an 
 economy of two-thirds of the total English expendi- 
 ture. Perhaps after we have seen that of the expen- 
 diture of an English railway three-fourths goes for 
 charges which are incurred almost on the same scale, 
 whether the traffic is moved over the line or not, and 
 that only one-fourth can properly be allocated to 
 movement charges at all, we may be forgiven if we 
 decline to treat them seriously also. 
 
 If Englishmen want to know what competent 
 American critics really do think, they may be referred 
 to the " Railroad Gazette," which, having no axe of 
 its own to grind, and not being " interested in the 
 construction of waggons on the American principle," 
 writes as follows : " It is the relative shortness of the 
 haul — calculated at iii miles on the average in 
 America as against under 40 in England — which
 
 360 THE PROVISIONAL ORDERS ch. xir. 
 
 gives English railroads the appeara?ice of cJiarging- 
 such high rates for freight. . . . This fact, together 
 with the services assumed by English roads in the 
 way of cartage, and the high speed at which many 
 of their freight trains are necessarily run, is sufficient 
 to explain the high rates prevailing on English rail- 
 roads." 
 
 If then the reduction of receipts cannot be com- 
 pensated for by reduction of expenditure, we are face 
 to face with the fact that the shareholders' pockets 
 must pay the bill. And let it not be supposed that^ 
 when we speak of shareholders, the bloated capitalists 
 who own North Western Stock at 180, or North 
 Eastern Consols at 160, are mainly in question. To 
 a considerable extent, the great lines can protect 
 themselves. They are spread over so great an area 
 of country, and have their eggs in so many baskets, 
 that it is probable that, to some extent at least, they 
 will be able sooner or later to recoup themselves for 
 their loss by charging the public more, or accom- 
 modating them less, elsewhere. If the lines to the 
 North, for example, were to enter into an agreement 
 to give no fresh passenger facilities, not to put on 
 new trains as the new traffic came to them, but to 
 let their expresses, which now carry perhaps 60 pas- 
 sengers, gradually fill up till each came to have an 
 average of 90 to 100; if they were to adopt the 
 French method of making passengers come when it 
 suits the company to run the train, instead of running 
 the train when it suits the passengers to come, they 
 would steadily improve their net receipts without add- 
 ing one farthing to their existing outla)-. The point
 
 CH. XII. A TLEA FOR THE WEAK 36 1 
 
 IS that it is not in the pubHc interest that they should 
 be pressed to do so. 
 
 It is not the great companies which most need 
 protection. " It is quite clear," says the Inter-State 
 Commerce Commission, on a somewhat similar ques- 
 tion, " that the more powerful corporations of the 
 country, controlling the largest traffic, and operating 
 on the chief lines of trade through the most thickly 
 settled districts, can conform to the statutory rule with 
 much more ease, and with much less apparent danger 
 of loss of income, than can the weaker line whose 
 business is comparatively light and perhaps admits of 
 no dividend, and the pressure of whose fixed charges 
 imposes a constant struggle to avoid bankruptcy." 
 
 But we are told that the companies will be com- 
 pensated by the increase of traffic consequent on the 
 reduction of charges. Indeed, there arc words in the 
 Report of Lord Balfour and Mr. Courtenay Boyle which 
 might almost lead one to suppose them to be lending 
 their authority to this view. To refute it, it is really 
 almost sufficient to state that the reduction amounts to 
 something like li per cent, spread over an enormous 
 number of items, many of them of considerable value, 
 and carried only for short distances. One-and-a-half 
 per cent, is of course a serious matter enough when it is 
 taken out of the 1 5 per cent, of gross revenue which 
 alone is available for the payment of dividend on ordi- 
 nary shares. But, frittered away in driblets of a few 
 pence here and a few shillings there, it is absolutely in- 
 conceivable that any customer will feel the benefit of it. 
 Had the companies been left to reduce rates to an 
 equivalent amount, by taking substantial percentages
 
 362 THE PROVISIONAL ORDERS cii. xii. 
 
 off such portions of their traffic as they thought could 
 bear the charges least, no doubt some effect might 
 have been produced, and of course, in so far as the 
 Board of Trade reductions are on the rates for coal 
 and iron-stone and the like, this criticism does not 
 apply. But in any case the reduction is immediate 
 and certain, the compensating increase remote and 
 problematical, and in the interval the ordinary share- 
 holders may whistle for their money. 
 
 A still more remarkable justification for the Pro- 
 visional Orders has been heard from the mouth of 
 the President of the Board of Trade himself. The 
 railway managers pressed upon him that he was 
 reducing their existing revenue, and he replied by 
 asking whether they could not recoup themselves by 
 imposing higher charges elsewhere. Was ever a 
 reasoning being placed by force of circumstances in a 
 more unfortunate position of amusing illogicality ? 
 Put into plain English, the President's position is 
 this : " You have exercised your powers of charging 
 so unsatisfactorily, that I propose to interfere at 
 certain points and do the work for you. At the same 
 time I leave your hands unfettered at the points where 
 I have not interfered. Work your wicked will there. 
 Of course any increase of charge you may place on 
 the shoulders of these latter must be an imposition, 
 because you acknowledged them to be less able to 
 bear a high charge than other places whose charges I 
 have already reduced as excessive ; but that cannot 
 be helped. I cannot take the responsibility of fixing 
 your rates. So I must continue to leave the matter 
 in your hands, being content to think that, on paper
 
 en. XII. SYMMETRY ON PAPER 363 
 
 at any rate, your charges will look more reasonable, 
 as my action has tended to narrow somewhat the gap 
 between the lowest charges and the highest " 
 
 In truth, it is no reflection on the ability of the 
 Board of Trade officials to say that their position is 
 absolutely indefensible. They have reduced rates, 
 nobody knows why. It might have been thought 
 that a rate of which no human being had ever com- 
 plained, a rate at which the traffic had grown and 
 prospered, had proved itself a fair rate by the best of 
 all possible evidence, that of experience, and yet the 
 Board of Trade has reduced such rates in hundreds of 
 instances. When we ask why, we get no answer. It 
 is not because the rate is too far in excess of the cost 
 of the service, for we are told expressly that the 
 Board of Trade does not know, and does not care to 
 know, what that cost is. Can it really be simply in 
 order that the figures may move in symmetrical pro- 
 cession across the columns of a printed table? Is it 
 once more the official mind, which has always been 
 persuaded that, if facts refuse to square with theories, 
 so much the w^orse for the facts. 
 
 But if the Board of Trade does not know^ why the 
 new rates are fixed, at least the railway officials do 
 know why they maintained their old ones. Ask a 
 goods-manager the explanation of some apparently 
 anomalous rate, and he will not unfrequently go into 
 a history almost as voluminous as that of some great 
 international negotiation. He will tell you how there 
 were deputations from traders, followed by report 
 from the local goods agent, then by references to 
 agents in other districts in order to gauge the effect
 
 364 THE PROVISIONAL ORDERS ch. xii. 
 
 on their relative position, and then to the solicitor to 
 know the legal bearings of the question ; how then 
 once more the matter was taken up with the traders 
 complaining, and finally how a compromise was 
 agreed upon, which, though it did not concede every- 
 thing that was asked, at least left the customers of 
 the company substantially satisfied. But all this pro- 
 cess of reasoning, of negotiation, of attention to indi- 
 vidual interests, of adaptation, as far as may be, of 
 means to ends, is to be set aside in favour of a system 
 by which a Government department is to fix rates 
 in an office with a sheet of paper and a ruler, and yet 
 at the same time be free to disclaim all responsibility 
 for its handiwork. 
 
 One word more. The fiercest advocate of the 
 traders' claims will scarcely deny that rates have 
 steadily, even if slowly, moved downwards ; that over 
 a series of years, that is, the public get more and 
 more accommodation all round for the same money. 
 With the regime inaugurated by the Provisional 
 Orders, this era may be taken to have definitely 
 closed. The companies have been solemnly warned. 
 " Never reduce rates. Each reduction that you make 
 will be taken as a precedent against you in the 
 future." On the Joint Committee of 1872, Lord 
 Salisbury put to Sir Thomas Farrer a question 
 a propos of this very proposal to reduce maximum 
 rates : " Would there not be a danger arising from 
 giving companies the impression that, if in practice 
 they reduce their rates, Parliament will soon make it 
 the practice to reduce the maximum rates allowed to 
 them ? " Sir Thomas replied : " Of course it might
 
 CH. XII. THE GREAT EASTERN 365 
 
 have the effect of frii^htening them, and preventing 
 them from reducing, but I rather think that they 
 only reduce when it is to their interest to do so. On 
 the whole, I attach very little value to the maximum 
 rates fixed by Parliament." 
 
 Lord Salisbury and the Secretary of the Board 
 of Trade were of course discussing a proposal to 
 reduce margins. A proposal to fix maxima at a 
 point where not only the margin but a portion of the 
 existing rate disappears, is a very different matter. 
 Had that been within the range of practical politics 
 in 1872, we may be very sure what Sir Thomas 
 Farrer's answer would have been. Of course a company 
 only reduces a rate when it is its interest to do so, 
 but if an interested reduction to A is made a precedent 
 for compulsory reduction to B, because on paper the 
 circumstances of the two places or trades are identical, 
 the interest of the company will be in the opposite 
 direction. But the mention of Lord Salisbury 
 naturally suggests a reference to the company which 
 he was the first to drag out of the slough of despond 
 of its early years. That the Great Eastern of late 
 years has deserved well of the public, few will be found 
 to deny. Even the very Fish Traders' Association 
 declared that they had nothing to say against the 
 Great Eastern rates. It is matter of common know- 
 ledge that they have been cut down by wholesale all 
 over the line. Nor has the company given to the 
 traders of its superfluity. On the contrary, only last 
 year for the first time did it attain to the magnificent 
 dividend of 3 per cent. 
 
 The Great Eastern management, however, was
 
 366 THE PROVISIONAL ORDERS ch. xii. 
 
 perfectly frank. It made its reductions in its own 
 interest. " Our district," said its representatives, " is 
 hard hit by the agricultural depression. We will reduce 
 our rates, and do what we can to lighten the burdens 
 on our customers, the farmers. When agriculture 
 recovers, they will not object if we put the rates up 
 again, and claim a share of their gains as we shall 
 have shared their losses." But what has in fact 
 happened ? The Board of Trade ruler has drawn its 
 line across the tops of the existing charges, cutting 
 off not a few of them at a point which implies to a 
 struggling company a loss which it can ill afford, and 
 making any serious increase in charge impossible in 
 the future. With this object-lesson before its eyes, 
 is any railway company likely hereafter to be so short- 
 sighted as to go in for a policy of reduction in view 
 of its own immediate interests ? Will not rates be 
 kept up all over the country with far more uniformity 
 than has ever existed in the past? Hitherto the 
 companies have agreed as a rule to maintain rates ; 
 have agreed every now and then to reduce them. 
 Henceforward, in all agreements there will be a blank 
 uniformity. 
 
 Whether the existing competition in facilities will 
 continue in full force as at present, remains to be 
 seen. It is more probable that facilities, too, will be 
 gradually but steadily diminished, and a policy of 
 cheese-paring and stagnation take the place of one of 
 expansion and encouragement to trade. If this be 
 so, the traders and the public will have lost tenfold 
 more than they can ever dream of gaining by petty 
 and nagging reductions of existing rates. No one
 
 CH. XII. AN UNSETTLING SETTLEMENT -"^dy 
 
 who knows what a hindrance to real business this 
 long protracted duel between the companies and 
 the traders has been — for it has lasted now almost 
 without intermission for a decade —can doubt that it 
 is in the public interest that the question should be 
 settled. But the present writer is so firmly persuaded 
 that the present settlement can settle nothing, that 
 the traders who have gained trifling reductions will 
 still be dissatisfied, and that the other traders, on 
 to whose shoulders the companies will attempt to 
 transfer some portion of their loss, will be tenfold 
 more so, that for his own part, if Parliament cannot 
 satisfactorily amend the Provisional Orders, he would 
 be thankful to see them rejected altogether, and the 
 question left open for settlement hereafter, and 
 possibly under more favourable auspices.
 
 369 
 
 APPENDICES 
 
 APPENDIX A (sec p. 140). 
 
 Railway Rates for Provisions to Birmingham. 
 
 
 Three places from which 
 
 Rate 
 
 
 Description 
 of provisions 
 
 principally received at 
 Birmingham 
 
 per 
 ton 
 
 Condition of rate 
 
 
 
 s. 
 
 </. 
 
 
 
 f Coventry . . . 
 
 lO 
 
 
 
 Collected and delivered 
 
 Apples . . 
 
 - Leamington . . 
 
 lO 
 
 
 
 >> II 
 
 
 V Ludlow .... 
 
 15 
 
 
 
 1 1 11 
 
 Apples . . 
 
 I Liverpool . . . 
 
 17 
 
 6 
 
 Delivered in Birmingham 
 
 1 London .... 
 
 20 
 
 
 
 Collected and delivered 
 
 Bread . . . 
 
 Not received by rail 
 
 way 
 
 
 
 (Flour) . . 
 
 Liverpool . 
 
 II 
 
 3 
 
 4 tons collected and delivered 
 
 
 Sandy . . . . ) 
 
 
 8 
 
 j Station to station, 2 tons 
 
 Carrots . . 
 
 Gamlingay . . . [ 
 
 I £ 
 
 t packed, 3 tons loose 
 
 
 Potton .... 
 
 10 
 
 
 
 Station to station, 4-ton lots 
 
 
 ( Derby .... 
 
 13 
 
 4 
 
 Collected and delivered 
 
 Cheese . . 
 
 J Rugeley .... 
 
 12 
 
 6 
 
 1. 1. 
 
 
 
 
 j Collected and delivered, 
 t owner's risk 
 
 
 I Tutbury .... 
 
 13 
 
 4 
 
 Cheese . . 
 
 ! London .... 
 
 22 
 
 6 
 
 Collected and delivered 
 
 1 Liverpool . . . 
 
 20 
 
 10 
 
 Delivered in Birmingham 
 
 Cocoa . . . 
 
 London .... 
 
 22 
 
 6 
 
 Collected and delivered 
 
 
 ( London .... 
 
 22 
 
 6 
 
 II II 
 
 Coffee . . . 
 
 - Liverpool . . . 
 
 20 
 
 10 
 
 Delivered in Birmingham 
 
 
 ^ Market Harboro' . 
 
 18 
 
 4 
 
 Collected and delivered 
 
 Dripping . 
 
 Not received by rail 
 
 way 
 
 
 
 Fish— 
 
 
 
 
 j Collected and delivered, 
 
 Herrings (salt 
 sprinkled or 
 fresh) . . 
 
 /■Aberdeen . . . 
 
 55 
 
 
 
 t owner's risk 
 
 "j Lowestoft . . . ) 
 
 
 8 
 
 J Station to station, owner's 
 
 (Yarmouth . . . t 
 
 41 
 
 1 risk, minimum i cwt. 
 
 Herrings in 
 brine . . . 
 
 } Hull 
 
 25 
 
 
 
 ( Collected and delivered, 
 ( owner's risk 
 
 Kippers . . 
 
 J Lowestoft ... 1 
 ' Yarmouth . . .1 
 
 36 
 
 8 
 
 ( Station to station, owner's 
 
 t risk, minimum i cwt. 
 
 B B
 
 0/' 
 
 APPENDICES 
 
 Railway Rates i-or Provisions to Birmingham— <■(?«;'. 
 
 
 Three places from which 
 
 Rate 
 
 
 Description 
 of provisions 
 
 principally received at 
 Birmingham 
 
 per 
 ton 
 
 Condition of rate 
 
 Mackerel . . 
 
 Fleetwood . 
 
 s. 
 
 24 
 
 2 
 
 Collected and delivered 
 
 Hominy 
 (grain) . . 
 
 j Liverpool . . . 
 
 II 
 
 3 
 
 1 Collected and delivered, 
 I 4 tons 
 
 Lentils . . 
 
 London .... 
 
 19 
 
 2 
 
 Collected and delivered 
 
 
 London .... 
 
 40 
 
 
 
 ■ • 
 
 Meat . . . 
 
 - Birkenhead . . . 
 V Liverpool . . . 
 
 30 
 
 
 
 (Delivered in Birmingham, 
 ' lo-cwt. lots and upwards 
 
 
 37 
 
 6 
 
 J Delivered in Birmingham, 
 I smaller quantities 
 
 
 (■Alford .... 
 
 30 
 
 10 
 
 4-ton loads, station to station 
 
 Oatmeal . . 
 
 J Annan .... 
 (Carlisle .... 
 
 22 
 27 
 
 6 
 6 
 
 6 
 
 j Collected and delivered, 
 
 ^ small quantities 
 
 ( Station to station, i ton and 
 
 
 Leighton . . . -j 
 
 12 
 
 1 under 2 tons 
 
 J Station to station, 2 tons 
 
 1 packed, 3 tons loose 
 
 
 i 
 
 10 
 
 
 
 Onions . . 
 
 Bedford .... 
 Biggleswade . . , 
 
 II 
 
 8 
 
 (Station to station, 2 tons 
 I packed, 3 tons loose 
 (Station to station, i ton and 
 I under 2 tons 
 
 
 15 
 
 
 
 
 
 8 
 
 ( Station to station, 2 tons 
 
 
 
 II 
 
 I packed, 3 tons loose 
 
 
 V 
 
 10 
 
 
 
 Station to station, 4-ton lots 
 
 
 , Cardiff .... 
 
 10 
 
 
 
 2-ton lots 
 ( Delivered in Birmingham, 
 
 Onions . . 
 
 Liverpool . . . 
 
 14 
 
 2 
 
 ^ 2-ton lots 
 
 
 Goole .... 
 
 17 
 
 6 
 
 Station to station, 2-ton lots 
 
 
 I Grimsby. . . . 
 
 15 
 
 
 
 ,, ,, 4-ton lots 
 
 
 ' Newport S alop ( 
 
 6 
 7 
 
 8 
 6 
 
 ,, ,, 2-ton lots 
 
 Potatoes (old) 
 
 J Gamlingay ■ • . 1 
 Sandy .... J 
 
 II 
 
 8 
 
 f .. ,, 2 tons 
 I packed, 3 tons loose 
 
 
 
 ' Potton .... 
 
 10 
 
 
 
 Station to station, 4-ton lots 
 
 
 / Liverpool . . . 
 j London .... 
 
 18 
 
 9 
 
 Collected and delivered 
 
 Rice . . . 
 
 19 
 X5 
 
 2 
 6 
 
 ( ,, ,, 2-ton 
 I lots 
 
 Sago . . . 
 
 1 Liverpool . . . 
 1 London .... 
 
 20 
 
 10 
 
 Delivered in Birmingham 
 
 22 
 
 6 
 
 Collected and delivered 
 
 Sugar (in 
 cases, casks, 
 
 / London .... 
 
 20 
 
 
 
 >• 
 
 1 Liverpool . . . 
 j Greenock 
 
 17 
 25 
 
 6 
 
 
 Delivered in Birmingham 
 Collected and delivered 
 
 or bags) . . 
 
 I Hull 
 
 20 
 
 
 
 .. 
 
 
 ; Goole .... 
 
 25 
 
 
 
 II It 
 
 rinneJ milk! 
 
 •1 London .... 
 
 28 
 
 4 
 
 If II 
 
 
 ' Middlewich . . 
 
 18 
 
 4 
 
 II II 
 
 Treacle . . 
 
 1 London .... 
 < Liverpool . . . 
 
 22 
 
 17 
 
 6 
 6 
 
 Delivered in B r ningham
 
 APPENDICES 
 
 1>7*- 
 
 Rates in America. 
 
 Anthracite 
 Coal per ton 
 .f. d. 
 Wilkesbarre to Philadelphia, 
 105 miles (C"ompany's wag- 
 gons) 70 
 
 Wilkesbarre to New York, 150 
 
 miles (Company's waggons) 7 o 
 
 APPENDIX B. (see p. 243). 
 
 COMTARISON Iip:T\VEEN ENGLISH AND AMERICAN RATES. 
 
 [I am indebted for the American rates to the courtesy of the officials of 
 the several lines, and they have been supplemented by the corresponding 
 English rates in the rate-office at Euston.J 
 
 Rates in England. 
 
 Anthracite 
 Coal per ton 
 ^. d. 
 Pantyffynon to Oakengates, 
 
 112 miles (Owner's waggons) 6 4 
 
 Pantyffynon to Birkenhead, 153 
 
 miles (Owner's waggons) . 6 4 
 
 The wagon hire would be ()d. to 
 xs. per ton, which would bring 
 our rate to the same practi- 
 cally as the American rate. 
 
 There are also rates for coal as 
 follows : 
 
 Bedworth to London, 107 miles, 
 
 (Poplar), (Owner's waggons) 5 3 
 Waggon hire <^d. 
 
 Tamworth to London, 1 15 miles 
 
 (Poplar), (Owner's waggons) 5 7 
 Waggon hire Qif. 
 
 1 Wigan to Birmingham, 90 
 miles (Owner's waggons) . 4 3 
 
 1 Wigan to Coventry (Counden 
 Road), 106 miles (Owner's 
 waggons) 57 
 
 1 Wigan to London, 201 miles 
 
 (Poplar), (Owner's waggons) 7 2 
 
 ' We do not find waggonsfor conveying 
 coal in this district, but the charge would 
 probably be from Cjd. to is. per ton. 
 
 MILK. 
 
 On the New York, Ontario and 
 Western Railway, milk is carried 
 into New York, distances of from 
 56 to 244 miles, at an uniform rate 
 of 32 cents per can of 40 quarts, or 
 I 'bod. per gallon. 
 
 On the New York, New Haven, and 
 Hartford, the rate for any distance 
 is 35 cents ps can or i^d. per 
 gallon. 
 
 The scale of charges generally in 
 operation for milk on the London 
 and North Western Railway gives 
 for distances over 50 miles \\d. per 
 gallon, at Owner's risk. 
 Their complete scale is as follows, 
 viz. : 
 
 Per 
 imperiaf Minimum 
 
 gallon charge 
 
 Up to 20 miles id. . . gd. 
 20 to 50 . . id. . . IS. 
 Above 50 . . i^d. . . is. 
 Station to station, Owner's risk. 
 B B 2
 
 372 
 
 ArPENDICES 
 
 DRAPERY. 
 
 Rates in America. 
 
 Rates ix England. 
 
 Per ton 
 J. d. 
 Chicago, Burlington, and 
 Quincy Railway, 50 miles, 
 31 cents, per 100 lbs. ... 28 6 
 
 Manchester and Lancaster, 51 
 miles, 20J'. per ton, collected 
 and delivered in lots over 500 
 lbs 
 
 Per ton 
 s. d. 
 
 FRUIT. 
 
 By special fast trains, station to 
 station, excuisiveo/ lo.iding and un- 
 loading. 
 
 Kirkwood to Wilmington, 17 
 miles. Peaches less than 
 car-loads. 
 
 14 cents per 100 lbs. 
 
 (Owner's risk) . . . . 12 n 
 21 cents per 100 lbs. 
 
 (Company's risk) . . . 19 4 
 Wyoming to Wilmington, 51 
 miles. Peaches less than car- 
 loads. 
 
 28 cents per 100 lbs. 
 
 (Owner's risk) . . . . 25 9 
 42 cents per 100 lbs. 
 
 (Company's risk) . . . 38 8 
 Wyoming to Philadelphia, 87 
 miles. Peaches less than 
 car-loads. 
 
 35 cents per 100 lbs. 
 
 (Owner's risk) . . . . 32 2 
 52^ cents per 100 lbs. 
 
 (Company's risk) . . . 48 4 
 Cambridge to Wilmington, 
 117 miles. Peaches less than 
 car-loads. 
 47 cents per 100 lbs. 
 
 (Owner's risk) . . . • 43 3 
 705 cents per 100 lbs. 
 
 (Company's risk) . . . 64 10 
 
 Kirkwood to Jersey City, 141 
 miles. Peaches less than car- 
 loads. 
 
 60 cents per 100 lbs. 
 
 (Owner's risk) . . . . 55 2 
 90 cents per 100 lbs. 
 
 (Company's risk) . . . 82 10 
 
 By oi-dinary goods trains including 
 loading and unloading, also collec- 
 tion and delivery, unless otherwise 
 stated. 
 
 Rickmansworth to London, 19 
 miles. Plums, currants, and 
 gooseberries in lo-cwt. lots. 
 
 (Company's risk) . . 12 6 
 
 Broxton to Manchester, 46 
 miles. Gooseberries and 
 plums in io-c\vt. lots. 
 
 Delivered in Manchester 
 (Company's risk) . . 
 
 Craven .•\rms to Manchester, 
 83 miles. Gooseberries and 
 plums in lo-cwt. lots. 
 
 (Company's risk) . . 21 8 
 
 Hereford to Manchester, 115 
 miles. Gooseberries and 
 plums in lo-cwt. lots. 
 
 (Company's risk) . . 24 
 
 Evesham to Manchester, 118 
 miles. Fruit in lo-cu t. lots. 
 (Company's risk) . 
 Wisbech to Manchester, 142 
 miles. Raspberries and Straw- 
 berries in lots over 500 lbs. 
 (Owner's risk) . . . 
 (Company's risk) . . 
 
 23 4 
 
 .Stanbridgeford to Manchester, 
 147 miles. Ripe fruit inclu- 
 ding plums and gooseberries 
 in lo-cwt. lots. 
 
 (Comjiany's risk) . . 29
 
 APPENDICES 
 
 373 
 
 FRUIT— fonf. 
 
 Rates in America. 
 
 to Philadelphia, 
 Peaches less than 
 
 Per ton 
 
 Cambridge 
 153 miles, 
 car-loads. 
 
 57 cents per 100 lbs. 
 
 (Owner's risk) .... 52 
 85^ cents per 100 lbs. 
 (Company's risk) ... 78 
 
 Delmar to Jersey City, 221 
 miles. Peaches less than 
 car-loads. 
 
 80 cents per 100 lbs. 
 (Owner's risk) , • ■ • 73 
 
 Cambridge to Jersey City, 241 
 miles. Peaches less than car- 
 loads. 
 
 85 cents per 100 lbs. 
 (Owner's risk) .... 78 
 
 Rates in England. 
 
 Per ton 
 i-. </. 
 Tring to Manchester, 152 
 miles. Cherries in lots over 
 500 lbs. (Company's risk) . 40 o 
 
 By passenger train, incbiding loading 
 and unloading ; also delivery. 
 
 Swanley to Manchester, 201 
 miles. Strawberries in 10- 
 cwt. lots. (Owner's risk) . 70 c 
 
 Orpington to Manchester, 203 
 miles. Strawberries in 10- 
 cwt. lots. (Owner's risk) . 70 o 
 
 Halstead to Manchester, 206 
 miles. Strawberries in 10- 
 cwt. lots. (Owner's risk) . 70 o 
 
 Sevenoaks to Manchester, 209 
 miles. Strawberries in 10- 
 cwt. lots. (Owner's risk) . 70 o 
 
 Rainham to Manchester, 222 
 miles. Cherries in lo-cwt. 
 lots. (Owner's risk) . . . 70 o 
 
 Sittingbourne to Manchester, 
 228 miles. Cherries in 10- 
 cwt. lots. (Owner's risk) . 70 o 
 
 Faversham to Manchester, 235 
 miles. Cherries in lo-cwt. 
 lots. (Owner's risk) . . . 70 o 
 
 Selling to Manchester, 239 
 miles. Cherries in lo-cwt. 
 lots. (Owner's risk) . . . 70 o 
 
 FISH. 
 
 Elizabeth City to Wilmington, 
 274 miles. F'ish, fresh. 
 I dollar 54 cents per box 
 
 or barrel of 300 lbs. . 
 
 80 cents per h box of 160 
 
 lbs. ..'..... 
 
 50 cents per ^ box of 80 
 
 lbs 
 
 Tynemouth to London, 279 
 miles. Fresh fish (crabs, 
 fresh cod, ling, haddocks, 
 whiting, halibut, skate, 
 mackerel, plaice, coal fish, 
 gurnets, eels, flounders) and 
 fresh herrings. 
 
 Station to station, Owner's 
 risk, 3-ton loads, by 
 passenger or special fish 
 train 40 o
 
 374 
 
 APPENDICES 
 
 FISH— ry«/. 
 
 Rates in America. 
 
 Per ton 
 J-. d. 
 Edenton to Philadelphia, 338 
 miles. Fish, fresh. 
 
 I dollar 79 cents per bo.x 
 
 or barrel of 300 lbs. . . 54 1 1 
 90 cents per \ bo.f of i6o 
 
 lbs 51 9 
 
 50 cents per \ box of 80 
 
 lbs 57 6 
 
 Elizabeth City to Trenton, 342 
 miles. Fish, fresh. 
 
 I dollar 54 cents per box 
 
 or barrel of 300 lbs. . . 47 
 80 cents per \ box of 160 
 
 lbs 46 
 
 50 cents per \ box of 80 
 lbs 57 
 
 Edenton to Trenton, 370 miles. 
 Fish, fresh. 
 
 I dollar 79 cents per box 
 
 or barrel of 300 lbs. . . 54 11 
 90 cents per ;'; box of 160 
 
 lbs. " . . " . . . . 51 9 
 50 cents per \ box of 80 
 lbs 57 6 
 
 R.VTES IN E.XGLAND. 
 
 Per ton 
 s. d. 
 Berwick to London, 338 miles. 
 Fresh herrings. 
 Station to station, Owner's 
 risk, 3-ton loads, by 
 
 goods train 40 o 
 
 Fresh herrings and sjirats, 
 crabs, fresh cod, ling, had- 
 docks, whiting, halibut, 
 skate, mackerel, plaice, coal 
 fish, gurnets, eels, flounders. 
 Station to station. Owner's 
 risk, 3-ton loads, by pas- 
 sengeror special fish train 45 o 
 Burnmouth to London, 343 
 miles. Fresh herrings and 
 sprats, crabs, fresh cod, ling, 
 haddocks, whiting, halibut, 
 skate, mackerel, plaice, coal 
 fish, gurnets, eels, flounders. 
 Station to station. Owner's 
 risk, 3-ton loads, by 
 passenger or special fish 
 
 train 45 o 
 
 Drem to London, 377 miles. 
 
 Fresh herrings and sprats, 
 
 crabs, fresh cod, ling, 
 
 haddocks, whiting, halibut, 
 
 skate, mackerel, plaice, coal 
 
 fish, gurnets, eels, flounders. 
 
 Station to station. Owner's 
 
 risk, 3-ton loads, by 
 
 passenger or special fish 
 
 train 50 o 
 
 POTATOES. 
 
 ■Washington and Tarboro, 254 
 miles. 
 
 Potatoes, 41 cents per 
 
 barrel of 180 lbs. 
 
 (Owner's risk) .... 
 
 Potatoes, I dollar 23 cents 
 
 per barrel of 180 lbs. 
 
 (Company's risk) . 
 
 Pliiladclphia and Morehead 
 
 City, 526 miles. 
 
 Potatoes, 65J cents per 
 barrel of 180 lbs. 
 (Owner's risk) .... 
 Potatoes, 1 dollar 96.^ 
 cents per barrel of 180 
 lbs. (Company's risk) .100 
 
 62 10 
 
 33 
 
 Potton and Swansea, 260 
 miles. Valley and London, 
 259 miles. 
 
 Potatoes, old, 4-ton lots 
 (Company's risk) . . . 19 
 
 London and Aberdeen, 539 
 miles. 
 
 Potatoes, old, 4-ton lots 
 
 (Company's risk) . . . 30
 
 APPENDICES 
 
 375 
 
 POTATOES— f(7«A 
 
 Rates in America. 
 
 Per ton 
 J. d. 
 Wilmington and Ncwbern, 454 
 miles. 
 
 Potatoes, 555 cents per 
 barrel of 180 lbs. 
 (Owner's risk) . . . . 28 4 
 Potatoes, I dollar 66g 
 cents per barrel of 180 
 lbs. (Company's risk) . 85 i 
 
 R.VTES IN England. 
 
 Per ton 
 J. d. 
 London and Perth, 449 miles. 
 Potatoes, old, 4-ton lots 
 
 (Company's risk) . . . 27 6 
 
 APPLES. 
 
 Washington and Tarboro, 254 
 miles. 
 
 Apples, 41 cents per barrel 
 of 180 lbs. (Owner's 
 
 risk) 
 
 Apples, I dollar 23 cents 
 per barrel of 180 lbs. 
 (Company's risk) . . . 
 
 62 
 
 Liverpool and Glasgow, 220 
 miles. 
 
 Apples in lots over 500 lbs. 
 including cartage in 
 Scotland (Company's 
 risk) 
 
 Liverpool and Dundee, 292 
 miles. 
 
 Apples in lots over 500 
 lbs. including cartage in 
 Scotland (Company's 
 risk) 23 
 
 TOIVL^TOES. 
 
 Washington and Tarboro, 254 
 miles. 
 
 Tomatoes, 41 ^ cents per 
 
 barrel of 150 lbs. 
 
 (Owner's risk) .... 
 Tomatoes, 20^ cents per 
 
 bushel box of 50 lbs. 
 
 (Owner's risk) .... 
 Tomatoes, i dollar 24^ 
 
 cents per barrel of 150 
 
 lbs. (Company's risk) . 
 Tomatoes, 61 j cents per 
 
 bushel box of 50 lbs. 
 
 (Company's risk) . . .113 
 
 37 9 
 
 76 4 
 
 Liverpool and Glasgow, 220 
 miles. 
 
 Tomatoes in cases in lots 
 over 5CX3 lbs., including 
 cartage in Glasgow 
 (Clompany's risk) . . 
 
 18 4 
 
 ORANGES 
 
 Callahan to Washington, 827 
 miles. 50 cents per box of 
 80 lbs. (Owner's risk) ... 57 
 
 London to Wick, 754 miles. 
 Collected and delivered 
 (Company's risk) . . . . 6o
 
 1>7<^ 
 
 APPENDICES 
 
 MISCELLAXEOUS LOCAL RATES. 
 
 Rates in America. 
 
 New York and Bedford, 
 40 miles. 
 
 
 Class 
 
 Pate 
 
 
 in less 
 than 
 
 per ton 
 mini- 
 
 scription 
 
 car- 
 load 
 quan- 
 tities 
 
 mum 
 charge 
 
 25 
 
 cents 
 
 Grain in sacks, 10 cents 
 
 per 100 lbs 5 92 
 
 Potatoes (Owner's risk) 
 
 12 cents per 100 lbs. . 4 ir o 
 Carrots, parsnips and 
 
 turnips (Owner's risk) 
 
 12 cents per 100 lbs. . 4 no 
 
 Ale and porter in wood 
 
 (Owner's risk, fer- 
 menting, freezing, or 
 
 leakage) actual weight 
 
 15 cents per 100 lbs. . 3 13 10 
 Hay pressed in bales 
 
 (Owner's risk, fire and 
 
 water) 20 cents per 
 
 100 lbs I 18 c; 
 
 Straw pressed in bales 
 (Owner's risk, fire and 
 water) 20 cents per 
 100 lbs 
 
 Fruit green, not otlier- 
 
 wise specified 
 
 (Owner's risk) 20 cents 
 
 per ICO lbs i 185 
 
 Paper-hangings in bun- 
 dles (Owner's risk 
 
 chafing) 18 cents per 
 
 100 lbs 2 167 
 
 Paper-hangings in boxes 
 
 20 cents per 100 lbs. . i 185 
 
 R.\TEs IN England. 
 
 London and Leighton, 39 miles 
 28 chains. 
 
 Description 
 
 Class 
 
 Rate 
 per ton 
 in lots 
 over 
 500 lbs. 
 unless 
 other- 
 wise 
 stated 
 s. d. 
 
 Grain in sacks, 4-ton 
 
 lots Special 5 
 
 Potatoes, old, 4-ton lots 
 
 (Company's risk) . . do. 5 
 Carrots, turnips and 
 
 parsnips for cattle 
 
 feeding, 5-ton lots 
 
 (Company's risk) . . do. 5 
 Ale and porter in casks, 
 
 2-ton lots (Company's 
 
 risk) I 
 
 Hay, hydraulic or ma- 
 chine pressed, mini- 
 mum charge as for 2^ 
 tons per waggon 
 (Company's risk) . .Special 6 
 
 Hay (Owner's risk, mini- 
 mum) 30 cwt. per 
 Nsaggon 2 10 
 
 Straw, hydraulic or ma- 
 chine pressed, mini- 
 mum charge as for ih 
 tons per waggon 
 (Company's risk) . .Special 6 
 
 Straw (Owner's risk, 
 minimum) 20 cwt. per 
 waggon . . . . . 3 12 
 
 Ripe fruit (Company's 
 risk) 3 1 16 
 
 10 
 
 Paper-hangings (Com- 
 pany's risk) . . . . 
 
 2 1 16 8 
 
 ' This rate includes collection and de- 
 livery within unual limits.
 
 APPENDICES 
 
 377 
 
 MISCELLANEOUS LOCAL RATES— con/. 
 
 Rates in America. 
 
 New York and Bedford, 
 40 miles. 
 
 Description 
 
 Class 
 in less 
 
 than 
 car- 
 load 
 quan- 
 tities 
 
 Rate 
 per ton 
 mini- 
 mum 
 charge 
 25 
 cents 
 
 i-. d. 
 
 Meats, dressed fresh, of 
 
 all kinds at Owner's 
 
 risk and prepaid, 20 
 
 cents per 100 lbs. . . i 185 
 Beef, lamb, mutton, 
 
 venison, pork louis 
 
 and pork cut in pieces 
 
 (other than dressed, 
 
 hogs whole) 20 cents 
 
 per 100 lbs I 185 
 
 Hogs, dressed, whole, 
 
 18 cents per 100 lbs. .2167 
 Tea (Owner's risk, sift- 
 ing) 20 cents per 100 
 
 lbs I 18 5 
 
 Butter in wood, 18 cents 
 
 per 100 lbs 2 167 
 
 Butter in cans or pails, 
 
 packed in cases, 
 
 18 cents per 100 lbs. . 2 16 7 
 Butter in crocks or jars 
 
 securely packed in 
 
 cases (Owner's risk, 
 
 breakage) 20 cents per 
 
 100 lbs I 185 
 
 Butter in crocks and 
 
 in covered baskets 
 
 (Owner's risk), 40 
 
 cents per 100 lbs. . . 'Dr 36 10 
 Chairs, bamboo, rattan, 
 
 reed or willow, 80 
 
 cents per 100 lbs. . . 4ti 73 7 
 Furniture, bamboo, 
 
 rattan, reed or willow, 
 
 80 cents per 100 lbs. . 4ti 73 7 
 Book racks, bamboo, 
 
 crated or boxed, 80 
 
 cents per 100 lbs. . . 4ti 73 7 
 Cribs, bamboo, crated 
 
 or bo.xed, 80 cents per 
 
 100 lbs 4ti 73 7 i 
 
 ' D I means double first-class rate. 4ti 
 means four times first-class rate, and so on. I 
 
 Rates in England. 
 
 London and Leighton, 39 miles 
 28 chains. 
 
 Description 
 
 Class 
 
 Meat, fresh (Company's 
 risk) 
 
 Rate 
 per ton 
 in lots 
 over 
 500 lbs. 
 unless 
 other- 
 wise 
 stated 
 s. d. 
 
 2 20 o 
 
 3 2 18 4 
 
 2 16 8 
 
 Tea (Company's risk) 
 
 Butter in casks or boxes, 
 or in tubs or cools 
 with wooden lids . . 
 
 Butter in crocks, in 
 wood, or in crocks 
 when jiacked with 
 straw in baskets . 
 
 Butter in crocks . 
 
 Butter in baskets, flats 
 or hampers, or in tubs 
 or cools without lids 
 (Company's risk) . . 
 
 Furniture 5 - 26 8 
 
 ■ 18 4 
 -'26 8 
 
 " This rate includes collection and de- 
 livery- within usual limits.
 
 378 
 
 APPENDICES 
 
 MISCELLANEOUS LOCAL RATES— coni. 
 
 Rates in America. 
 
 A't'io York and Bedford, 
 40 miles. 
 
 Class Rate 
 in less per ton 
 than mini- 
 Description car- mum 
 load charge 
 quan- 25 
 tities cents 
 J. d. 
 Music stands, bamboo, 
 
 crated or boxed, 80 
 
 cents per 100 lbs. . . '411 73 7 
 Sofas or tSte-i-tetes, 
 
 bamboo, crated or 
 
 bo.xed, 80 cents per 
 
 100 lbs 4ti 73 7 
 
 Stands, tables, towel 
 
 racks, bamboo, crated 
 
 or boxed, 80 cents per 
 
 100 lbs 4ti 73 7 
 
 Baskets in cases, 60 
 
 cents per 100 lbs. . . 3ti 55 2 
 Baskets in bales, crates 
 
 or hampers, not nested 
 
 in bundles, 80 cents 
 
 per 100 lbs 4ti 73 7 
 
 Baskets not otherwise 
 
 specified, nested in 
 
 bundles, 40 cents per 
 
 100 lbs Di 36 10 
 
 Baskets over-handled in 
 
 bundles, with ends 
 
 placed in each other, 
 
 80 cents per 100 lbs. . 4ti 73 7 
 Baskets over-handled, 
 
 covers, and handles 
 
 taken off and packed 
 
 separately, and the 
 
 baskets nested in 
 
 bundles, 40 cents per 
 
 100 lbs Di 36 10 
 
 Stave, splint, rattan or 
 
 willow nested in bun- 
 dles, or crates, 30 cents 
 
 ix;r 100 lbs i^ 27 7 
 
 Animals stuffed in boxes 
 
 (released) 60 cents per 
 
 100 lbs 3tr 55 2 
 
 ' Di means double first-class rate. 41 1 
 means four times first-class rate, and so on. 
 
 Rates in England. 
 
 London end LeightoK, 39 miles 
 28 chains. 
 
 Rate 
 
 per ton 
 
 in lots 
 
 over 
 
 Description Class 500 lbs. 
 
 unless 
 
 therwise 
 
 stated 
 
 J. d. 
 
 Furniture 5 -26 8 
 
 5 =26 8 
 
 with 
 
 exceptions 
 
 at 
 
 lower 
 
 rates 
 
 Animals stuffed in cases 
 (Company's risk) . . 
 
 226 8 
 
 " This rate includes collection and 
 delivery within usual limits. 
 
 Spottisvjoode b' Co. Printers, New-street Square, London.
 
 WORKS BY MR. ACWORTH. 
 
 4th Edition, with 50 Illustrations. 8vo. 14^-. 
 THE RAILWAYS OF ENGLAND. By W. M. Acworth. 
 
 NORTH WESTERN. 
 
 MIDLAND. 
 
 GRE.^T NORTHERN. 
 
 MANCHESTER, SHEFFIELD, 
 
 LINCOLN. 
 NORTH EASTERN. 
 
 SOUTH WESTERN. 
 GREAT WESTERN. 
 GREAT EASTERN. 
 BRir.HTON & SOUTH COAST. 
 CHATHAM & DOVER. 
 SOUTH EASTERN. 
 
 'Really a most read.able volume. The writer has seized on the points most likely to 
 interest his readers.' — Spectator. 
 
 ' For indefatigable search after the truth about our railroad system, for picturesque 
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 and for the travelling public' — Guardian. 
 
 With a Map of the Scottish Railway System. Crown 8vo. 55. 
 
 THE RAILWAYS OF SCOTLAND. Their present posi- 
 tion, with a glance of their past, and a forecast of their future. 
 By W. M. Acworth. 
 
 ' Mr. Acworth's "Scottish Railways" forms an interesting and valuable supplement 
 to the earlier work on English lines ; interesting alike to the general reader, the traveller, 
 and the fortunate or luckless holder of railway stock. In some respects there is a marked 
 difference between railways north and south of the Border. The network of iron rails 
 displayed on the map of England represents the invention, enterprise, and energy of a 
 long generation ; the Scotch system, in plan if not in execution, was the project of a 
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 than one-fifth of our railway mileage. While England, however, is strewn with the 
 wrecks of wretched little companies, shattered to pieces in a vain attempt to compete 
 with overpowering rivals, in .Scotland there is not a single independent company paying 
 no dividend.' — St. James's Gazette. 
 
 THE AMERICAN RAILWAYS. 
 
 THE RAILWAYS OF AMERICA. Their Construction, 
 
 Development, Management, and Appliances. By Various 
 Writers. With an Introduction by Thomas M. Coolev. 
 Chairman of the Inter-State Commerce Commission. With 200 
 Illustrations. Royal 8vo. 31s. 6</. 
 
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 here a necessary one, and that 450 pages, even of the most imperial of octavos, is not too 
 large a space in which to rise to the height of so great an argument. Nor is the 
 impression upon our minds produced by this book one of mere size. On the contrary, 
 as we turn over its pages, or even as we glance through the headings of its difTerent 
 chapters, we are struck with the diversity of the interests involved. In conclusion, we 
 might say to those who are likely to visit the States that they would be wise to read 
 this book, for by so doing they will give a new interest to long railway journeys which 
 might otherwise be monotonous. To those who will stop at home we would say that 
 they are yet more bound to read it, for it would be hard to find another work which gives 
 so good an account of what may fairly be said to be the most important industry of the 
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 JOHN MURRAY, Albemarle Street.
 
 THK GREAT METROPOLIS. 
 
 Now ready. 3 toIs. Medium 8vo. £t, 3j'. 
 
 LONDON: PAST AND PRESENT. 
 
 ITS HISTORY, ASSOCIATIONS, AND TRADITIONS. 
 By HENRY B. ^WHEATLEY, F.S.A. 
 
 BASED ON CUNNINGHAM'S HANDBOOK. 
 Library Edition, on Laid Paper. 
 
 ' Vertue had taken much pains to ascertain the ancient extent of London, and the 
 site of its several large edifices at various periods. Among his paoers I find many traces 
 relating to this matter. Such a subject, extended by historic illustraiions, would be 
 very amusing.' — Horace Walpole ( 'Anecdotes of Painting ' ). 
 
 'There is a French book called "Anecdotes des Rues de Paris." I had begun a 
 similar book, "Anecdotes of the Streets of London." I intended, in imitation of the 
 i'rench original, to have pointed out the streets and houses where any remarkable event 
 had happened ; but I found ihe labour would be too great in collecting materials from 
 various sources, and abandoned the design, after having written about ten or twelve 
 pages.' — Horace Walpole ( ' Walpoliana ' ). 
 
 *^* Critical Opinions on ihe Original Work. 
 
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 streets, squares, and public buildings. That it is such a guide is certain, and the best 
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 this work with its laborious research, scrupulous exactness, alphabetical arrangement, 
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 It will remain a lasting record of the past and present condition of our huge metropolis." — 
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 well-considered, well-digested, thoroughly well-informed book.' — The Examiner. 
 
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 JOHN MURRAY, Albemarle Street.
 
 ' The old Lord Treasurer Burleigh, if anyone came to the Lords of 
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 Henry Peacham, 1622. 
 
 ENGLAND AND ^^^ALES. 
 
 Now ready, Neiv and Revised Edition (1890). One Volume, with Map. 
 
 Post 8vO. I2J. 
 
 MURRAY'S 
 
 HANDBOOK FOR TRAVELLERS 
 IN ENGLAND AND WALES. 
 
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 UNIVERSITY OF CALIFORNIA. LOS ANGELES 
 
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