ACO 768 RAILWAY NATIONALIZATION RAILWAY NATIONALIZATION BY CLEMENT X EDWARDS, M.P. OF THK MIDDLE TEMPLE, BARRISTER-AT-LAW AUTHOR OF 'THE CRY OF THE CHILDREN," "TRADE UNIONS AND THE LAW," ETC. ETC. WITH A PREFACE BY THE RT. HON. SIR CHARLES W. DILKE, BART, M.P. SECOND EDITION, REVISED METHUEN & CO. 36 ESSEX STREET W.C. LONDON First Published . . . November l8yj Second Edition, Revised . March 7907 UNIVERSITY OF SOUTHERN CALIFORNIA LIBRARY CONTENTS CHAPTER PACK PREFACE ...... vii AUTHOR'S NOTE ..... ix I. INTRODUCTION ..... I II. THE RISE OF STATE CONTROL ... 8 III. THE WASTES OF MANIFOLD OWNERSHIP . . 2O IV. THE BREAKDOWN OF COMPETITION . . 30 V. THE KILLING OF CANAL COMPETITION . . 43 VI. THE BITTER CRY OF THE TRADERS . . 52 VII. THE BLIGHT ON AGRICULTURE . . .68 VIII. THE PLAINT OF THE PASSENGERS . . 79 ix. WORKMEN'S TRAINS AND CROWDED CITIES . 92 X. CONDITIONS OF RAILWAY EMPLOYMENT . . 108 XI. THE WOES OF IRELAND . . . .121 XII. IS PRIVATE OWNERSHIP HOPELESS? . .132 XIII. STATE RAILWAYS IN PRACTICE IN EUROPE . 153 XIV. STATE RAILWAYS IN PRACTICE IN AUSTRALIA . 169 XV. THE ZONE SYSTEM AND REDUCED FARES . 179 XVI. SOME OBJECTIONS TO STATE OWNERSHIP CON- SIDERED . . . . .192 XVII. THE FINANCIAL ASPECTS . . . 207 XVIII. CONCLUSION . . . . .213 v PREFACE TO FIRST EDITION EVER since a date even earlier than that at which Bentham's editor, Sir John Bowring, called meetings to advocate the State Purchase of Railways, I have favoured the reform which Mr. Clement Edwards with much force urges, but have feared so great is the power of the Companies in Parliament that we should be made to pay for it too high a price. The author of Railway Nationalization seems not only to have proved his theoretic case, but to have partly met my doubts or practical objections. Agreeing as I do with most of what he has written, except, indeed, as to that growth of cities which we cannot prevent, and which Melbourne, Sydney, Adelaide, and Perth show to be no unmixed evil, I am happy to do aught I can to help him to readers, who, however, will be drawn to him by his subject and by his vigour, without this little prefatory note. CHARLES W. DILKE AUTHOR'S NOTE TO SECOND EDITION SOME ten years ago I contributed a series of articles on "Railway Nationalization" to the columns of the Weekly Times and Echo. By the kindness of the editor, Mr. E. J. Kibblewhite, I was permitted to issue those articles, with some alterations, in book form. The first edition of that book was exhausted some months ago, and in view of the recent great quickening of interest in the problem of our railways I perhaps need make no apology for issuing a second edition. In eight years we have witnessed a considerable number of changes, chiefly local, in our forms of locomotion. Electric trams and light railways have appeared in many parts of the country. The motor car and the motor bus have become familiar sights, but with these and other changes little has happened to substantially modify the character of the problem discussed in the following pages. The great grievances of the farmers, the traders, and the travelling public remain practi- cally as they were in 1898. The hopelessness of the com- munity getting the maximum of advantage out of the present railway system is as palpable now as ever. Probably the most potent change of all has been in the mental attitude of the country towards the problem. Opinion in favour of State-ownership has spread with striking rapidity among all sections of the community. The royal commissions to inquire into the public ownership of canals in the United Kingdom and the State acquisition of the railways in Ireland are the best evidence of this growth of opinion. x AUTHOR'S NOTE TO SECOND EDITION I have done nothing to modify the arguments of the first edition in the present issue, and I have not found it necessary to seriously alter the illustrations of those arguments, but what I have attempted to do is to bring the essential figures of the problem as nearly up to date as trustworthy material will allow me to do. I can only express the hope that my modest contribution may be found useful in directing opinion towards what I deem to be a wise solution of a problem so largely and so intimately interwoven with the future prosperity and welfare of our country. Here and there it may perhaps seem to readers that I have used language which implies reflection upon either the honesty or the capacity of the present managements. Let it therefore be said at once, that in the present railway directorates and staff I frankly recognize a body of men who are conspicuous for their zeal, their efficiency, and their general "high tone." The whole criticism of the following pages is aimed at the features inherent in the existing system, and with a lively sense of the enormous difficulties in the way of its undertakers. Indeed it is chiefly because I regard the obstacles to greater efficiency, and cheaper facilities, as inevitable concomitants of the system of private monopolies, that I put forth the plea for State-ownership. It need scarcely be said that what follows does not pretend to the category of literature, but only seeks to serve the adjunc- tive purpose of a simple hand-book to a workaday movement. It has therefore been thought better to use the exact words of recognized authorities rather than to rehabilitate their opinions in language of my own. Hence there are more quotations than there would have been had my purpose been different. C. E. Temple 17 th January 1907 " I have been very much impressed since I came to the Board of Trade with the great and growing discontent with the whole railway system. This is a great contrast to the feeling in Germany, where the traders consider that the railway system gives the greatest possible satisfaction." Rt. Hon. D. LLOYD-GEORGE President of the Board of Trade iy& December 1906 . " That this Chamber is of opinion that the time has arrived when the question of the whole relation- ship between the railway companies and the trading and agricultural community should be fully inquired into, with a view to legislation which shall remove those conditions of railway rates and contracts which now press so onerously upon the trade of this country." North Staffordshire Chamber of Commerce xii RAILWAY NATIONALIZATION CHAPTER I INTRODUCTION STATE-OWNERSHIP of railways in the United Kingdom was settled in principle more than half a century ago. In 1844, upon the introduction of Mr. Gladstone, an Act of Parliament was passed definitely providing for the compulsory acquisition of the railway system by the State at any time, in the discretion of Parliament, after twenty-one years from that date. And in all subsequent railway legislation, the possible ultimate posses- sion of the system by the State has been steadily kept in view, by every new Railway Act being made subject to the measure of 1844. So that there is no need to weary readers with a pre- liminary discussion as to whether railway ownership and admin- istration come within the proper sphere of State functions. In different parts of the world at the present time there are three clearly defined railway systems in operation. They are (i) railways owned by the State and managed by the State for the convenience of the community; (2) owned by the State and leased to Companies for private profit and management ; and (3) privately owned and run for private profit and advan- tage, but subject to a certain amount of State control. Great Britain and the United States share the distinction of being the only two countries where the dual system of private ownership and State control is exclusively in operation. The amount of State control here is considerably greater than across the Atlantic. But it has been a haphazard growth of many years, rather than the mature product of a carefully-thought-out policy. a RAILWAY NATIONALIZATION Indeed the whole theory underlying railway legislation has un- dergone a complete and fundamental change since the Stockton and Darlington Act was passed in 1823. This change, how- ever, has been gradual, and has been induced by the repeated and revolutionary departures of the Railway Companies from the original conception of their function. From being the mere providers of an iron road, upon which, for a consideration, anybody was permitted to haul or to carry, the Companies have become the sole hauliers, and practically the sole carriers, col- lectors, and delivery agents. Thus while under the original order of things the public had the protection of competition to prevent extortionate rates upon each system, now that the Com- panies perform all the functions, they have no protection beyond what they can get from Government interference, unless indeed they and their customers are both upon the seaboard. In fact the Railway Companies have possessed a power to levy taxes probably more exacting and more effective than that enjoyed by any crowned monarch of England. As John Stuart Mill says "The charge made for services which cannot be dispensed with, is in substance quite as much compulsory taxation as if imposed by law. . . . This applies to the case of a road, a canal, or a railway. These are always in a great degree practical monopolies, and a Government which concedes such monopoly unreservedly to a private company does much the same thing as if it allowed an individual or an association to levy any tax they choose, for their benefit, on all the malt produced in the country, or on all the cotton imported into it." l The rates and charges which Railway Companies may legally make for the different services have for many years been theoretically limited by law. But as the legal maximum has usually been put at a fanciful figure based on the old Carriers' Acts, it has frequently served to intimidate customers into passive obedience rather than to protect them from excessive charges. It is true that under the most recent legislation the Companies are not permitted to " jump up " rates from the " actual " to their legal maximum, unless they can show the Railway Commission that the proposed alteration is reasonable. But this admirable provision is virtually a dead letter in practice, for the cost and consequences of challenging the 1 Principles of Political Economy (People's Ed. 1872), p. 581. INTRODUCTION 3 alleged reasonableness of a rate in face of all the elaborate legal machinery and expert evidence which the associated Companies have at their disposal, are prospects which cow the boldest litigants, and from which even merchant princes not unnaturally shrink. The payment of high rates per se is, how- ever, by no means the greatest grievance which our farmers and traders are called upon to bear. A matter that comes home to them with greater force is the preferential treatment which is extended to their foreign competitors. They are daily presented with the spectacle of meat from America, dairy produce from Denmark, fruit and vegetables from France, and manufactured goods from Belgium and Germany being con- veyed upon the English markets at a cost of carriage that is often a half and not infrequently less than a third of what they themselves are charged to get there. Then turning to the travelling public, we find that they have to pay fares enormously in excess of those charged on the Continent in some cases five and six times as much. And though on some of the great northern lines they have little to complain of in the matter of comfort, accommodation, and speed, this happy state of things is by no means as general as it might be. Especially does this apply to the third-class passenger. Source of greatest profit though railway authori- ties freely admit him to be, yet with some managements he is apparently the subject of least regard. Open cushionless carriages with dim yellow lights are still deemed good enough for him on some of the southern systems ; and this is not the worst. Many of the Companies running into London still object to provide proper accommodation for workmen. Even those Companies who make a point of catering for the " sons of toil " do not consider that it is any scandal to have eighty passengers crowded into carriages provided for fifty. Nor can the conditions of employment which prevail among the railway workers be deemed as nearly satisfactory. The hours are still too long and the pay too scanty, while several Companies have made themselves conspicuous by denying their workmen the right to combine. With these broad facts before us, we may ask whether the community are likely to get the highest efficiency with the lowest charges of which the railway system is capable under 4 RAILWAY NATIONALIZATION the present dual system? I think not. It may be freely admitted, that under private enterprise there is probably a larger network of railways than would have been the case had their construction and development been left from the beginning to State initiative. But this must not be regarded as an entirely unmixed advantage. In the belief that effective com- petition was being secured by multiplied roads, when it had been killed on the individual line, schemes have been sanctioned by Parliament which would never have been entertained had the results been clearly foreseen. As Robert Stephenson told a Royal Commission, " where combination is practicable competition is impracticable," and the effect of a new railroad being built to compete with an old system, has usually been to saddle the community with the burden of paying interest upon two capitals where one was ample for the traffic. Moreover, under the present system many districts have been neglected and remained undeveloped, because the prospect of an immediate return has not been sufficiently apparent to tempt the investment of the necessary capital. The Railway Companies frankly admit that to-day there is practically no competition between them either in rates or fares. These are rigidly fixed by Associations of Managers, and one Company cannot reduce without the consent of the others. The Companies claim, however, that the public get the benefit of an effective competition in facilities. No doubt this is partially true in the matter of passenger accommodation upon the northern-going expresses, but upon most other lines, and almost entirely in respect of goods traffic, the phrase is more euphonious than correct. In the case of goods traffic, at least, competition in facilities means a multiplication of wastes for which the traders and the consumers have to pay. It embraces the zealous regiments of canvassers who wait upon customers, the erection of a large number of handsome ware- houses in the same town which it can only be expected to partially utilize, the provision of large surplus teams of horses and drays by each Company " to meet emergencies," and the running of three or four short half-filled trains from the same place to the same place, at the same time, instead of one heavy and fully-loaded train. INTRODUCTION 5 The leakages in this direction are simply enormous. But you must add to them the expenses of the several hundred directorates, with all their attendant paraphernalia ; the running of many passenger trains but fractionally filled by several Companies where one would suffice ; the movement of nearly as many empty as full goods trains, so as to escape the demurrage charged for remaining upon a neighbour's line more than three days ; the huge expenses of promotion and litigation. All this waste falls as an extra burden upon the customers in higher rates and larger fares. No doubt if the process of amalgamation among the Com- panies were completed, many of these leakages would be arrested. But such a remedy from the public standpoint would be nearly as great as the disease. The present combina- tions of railway interests are dangerous enough, but for the whole of our 23,000 miles of railway, with its half-million shareholders, i* s l t 100,000,000 capital, its revenue of ^105,000,000, and its army of half-a-million workers, to be welded together into one vast legally constituted corporation, subject to the absolute dictatorship of a single Board, would indeed be to fulfil the prophecy of Sir H. W. Tyler, the chief railway inspector, that " if the State does not soon manage the rail- ways, the railways will manage the State." 1 It is quite obvious that the community cannot look for any substantial redress of grievances of maximum efficiency and minimum charges under the existing order of things. For several years past the average rate of interest has been rather less than 4 per cent, which is not deemed by present public opinion as an excessive return on capital. And it may be safely assumed, that neither would directors tolerate, nor would the Railway Commission be likely to regard as " reasonable," an attempt to reduce rates to a point which would cause an immediate and sweeping reduction in this rate of interest ; and a far-sighted policy of present reductions for future recoupment by consequent increased traffic is one which is not likely to emanate spontaneously from the directorates, who shrink in alarm from doing anything which adversely affects the existing market price of shares. This is the one single direction 1 Journal of Royal Statistical Society, 1873 : debate on State Purchase of Railways. 6 RAILWAY NATIONALIZATION probably in which the scattered shareholders exercise an effective control. But in the national interests of agriculture, commerce, and industry, a substantial alteration must be made. The increasing pressure of foreign competition, and the gradual replacement of British goods and produce in both the home and neutral markets, with those of foreign make and growth, give emphasis to the pressing need. Some people may hide their nervous- ness by a copious indulgence in the optimism of selected statistics on the one side, while on the other we shall always have that active body of panic-stricken zealots who are pre- pared to seek a remedy in the reversion of the Free Trade policy. What we want is a calm and dispassionate facing of the facts. And here it is of grave significance that the two European countries Germany and Belgium who are most seriously menacing us in the neutral markets, and even finding a con- siderable lodgment in the home market, possess the two best organized systems of State railways in the world, upon which they carry goods at less than half and often a third of what the English railways charge. That this is the entire cause of their increasing ability to compete effectively with us no one would for a moment seriously contend. It is, however, a great factor probably the greatest and is fortunately for us one capable of remedy. But Germany and Belgium, while they are the two countries where the system of State railways have been most completely organized and developed, are not the only countries where they have been successfully instituted. Far from it. Besides being in operation in nearly the whole of Europe, they are in use in India, in South Africa, and in our Australian Colonies, where the experience is of special significance, for this reason. The opponents of State ownership are constrained to admit its great success in certain of the Continental countries, but on the principle of " I du believe in Freedom's cause Ez fur away ez Payris is," they attempt to discount it by attributing it to the greater genius for State administration possessed by the Continental than by the Anglo-Saxon races. Now the Australian and INTRODUCTION 7 Indian and South African systems are administered by Anglo- Saxons, and with success. On the whole the experience of State-ownership of railways when tried side by side with private ownership and that is the true basis of comparison shows that charges for services are much less, the management is more economical, and there is a practical immunity from those grave ills and anomalies under which we suffer in the United Kingdom. CHAPTER II THE RISE OF STATE CONTROL THE present power of control exercised by the State over the railways of the United Kingdom is the outcome of seventy years' legislation. With no general recognition of the possible develop- ment of the railway system, and with the doctrine of laisser faire beginning to dominate the political mind, it is scarcely a matter for surprise that Parliament left the young Railway Companies almost free from legislative restrictions. It is true that Thomas Gray, with keen prophetic vision, clearly foresaw the extent of the locomotive revolution, and urged the Government to at once take the reins of the "Iron Horse." 1 But naturally, being a prophet, he was deemed mad, and his advice, as is usual under such circumstances, was studiously ignored. 2 Nor can the assumption that competition, then regarded as such an effective regulator of the ordinary commercial relations, would prove an ample means of pro- tection to the traders from the Railway Companies be deemed as altogether unreasonable. Certainly in the light of the Free Trade philosophy the character of the first railway schemes warranted this conclusion. These were based upon the ex- perience of functions performed by the canals and old iron roads. In other words, the railway promoters proposed only to provide a smooth permanent way, and to charge a toll for its use to either private traders or to the already established firms of carriers. The idea that they might become responsible for hauling was doubtless latent, but that they would take upon 1 Observations on a General Iron Railway, by Thomas Gray. 1821. a Our Iron Hoods, by F. S. Williams, 1852, pp. 16 19. 8 THE RISE OF STATE CONTROL 9 themselves the manifold duties of carriers was not even dreamt of. And to this fundamental conception, of function being limited to the mere provision of permanent roadway, must we attribute the initial misfortune of handing over to private individuals those means of transit which were destined not only to supersede the ancient highway, but to become welded into the most powerful monopoly this country has seen. Facts, however, were ever more potent than theories, and circum- stances quickly arose which compelled Parliament to initiate that long and tedious process of piecemeal legislation, having for its object the gradual correction of the initial error. The first Iron-railway or Tram-road Act was passed in 1801, authorizing the Surrey Iron Railway Company to construct a railway or tram-road for the conveyance of goods and coal between Wandsworth and Croydon. This was open to the general use of traders and carriers. Horse power was the only motive power used, and both horses and vehicles were supplied by the persons using the railway. For this use of the way the promoters were entitled to charge tolls, limited to a specific maximum rate varying from zd. per ton for manure, to 6d. for certain classes of merchandise. This Act was followed by a number of others, and in 1821 the Stockton and Darlington Railway Act was adopted, empowering the promoters to con- struct a horse tramway merely. But during the course of con- struction George Stephenson fully demonstrated the value of the locomotive, and in 1823 application was successfully made to Parliament for permission to use steam-engines stationary and locomotive. By this Act the Company were authorized to charge a maximum mileage toll, "for every coach, chariot, chaise, car, gig, landau, wagon, cart, or other carriage which shall be drawn or used on the said railways or tram-roads for the conveyance of passengers or small packages or parcels." In the case of goods traffic, the practice of the Railway Com- pany merely providing the road partially prevailed for several years. Thus in 1838, fifteen years after the Stockton and Darlington Company took powers for the use of the steam- engines, we find that " engines belonging to different parties, coach proprietors and others," were running upon the Liverpool and Manchester line ; and so far was the highway system at that time from being regarded as obsolete or impracticable, that a io RAILWAY NATIONALIZATION Select Committee of the House of Commons recommended that the right enjoyed by private persons of running their own engines and trains upon any railway should be extended to the Post-Office upon special terms. The Great Western Act of 1835 also provided "That all persons shall have free liberty to pass along and upon and to use and employ the said railway with carriages properly constructed as by this Act directed, upon payment only of such rates and tolls as shall be demanded by this said Company, not exceeding the respective rates or tolls by this Act authorized, and subject to the provision of this Act, and to the rules and regulations which shall from time to time be made by the said Company or by the said Directors, by virtue of the powers to them respectively by this Act granted." l But the notion of every man his own train-driver was one that lent special force to the natural fear which the travelling public had of patronizing the " fire-horse," as Fanny Kemble called the locomotive. And as it was the passenger and coach parcel that paid the Companies, so it was their requirements that shaped the railway policy. Safety was the first need. So it quickly became a matter of practice for the Companies to provide haulage as well as the road, and passenger carriages as well as haulage. And the necessity in many districts combined with general economical advantages to secure the almost universal adoption of the new system. 2 While, however, the road tolls had been limited to a maximum, when the Companies provided the haulage power they were per- mitted to charge a "locomotive toll " to be fixed at their own discretion. So also when the Railway Companies were given a discretionary power to "use and employ engines, and in carriages or wagons drawn or propelled thereby to convey upon the said railway all such passengers, cattle and other animals, goods, wares and merchandise articles, matters and things, as shall be offered to them for that purpose,"no specific restriction was at first placed by Parliament upon the charges they should make for this service of conveying. It was merely recited that they were subject to the common law of carriers, by which their charges had to be "reasonable" which proved in practice as dangerously vague as Wellington thought the terms of the " Holy Alliance." 1 Railway Rates and Traffic, by A. K. Butterworth, ch. i. 8 Railway Rates, by W. A. Hunter p. 7. THE RISE OF STATE CONTROL 11 Soon after 1830 it was recognized how complete was the power of monopoly possessed by each Railway Company upon its own system. In some cases this power was only partially utilized. Thus in 1839 there were three different systems in operation l 1. The system by which the Company provided the permanent way, haulage, and part of the rolling stock, but dealt only with the carriers. 2. The system by which the Companies acted both as general carriers themselves, and dealt with other carriers on their lines. 3. And the system by which the Companies were the sole carriers, providing for collection and delivery and allowing no general carriers on their lines. The respective merits of these systems were made the subject of Parliamentary inquiries in 1839-40. The carriers, who submitted a great deal of evidence, urged that the Railway Companies should be restricted by legislation to the hire of rolling stock to the carriers and the hauling of trains, and that they should be prohibited from dealing with the public direct. The Committee of 1839 hesitated to come to a definite decision, but the Committee of the following year pronounced in favour of the Railway Companies being permitted to perform all the duties of general carriers, although, funnily enough, the report states that "the investigation of this subject demonstrates beyond all doubt that Parliament was anxious to prevent Rail- way Companies from obtaining an exclusive control over the conveyance of passengers and goods along their respective lines," but, " powers were conceded to the Companies which counteracted and rendered of no avail the evident purposes of the Legislature." The alarm of the traders was great, and not unreasonably. The competition between the carriers or between the carriers and the Railway Companies over the same railway was their only guarantee against extortion, for be it remembered that, up to this time, haulage and carrying charges were quite unlimited. But now each Company became a com- plete monopolist within its own domain. 2 Thus, with the safeguards of competition gone, new legislation was at once found necessary to protect the traders. This was provided in the Act of 1841, which defined not only the maximum road 1 Rail-way Rates, by W. A. Hunter, p. n. a Butterworth. 13 RAILWAY NATIONALIZATION toll, but also a maximum toll for wagons. But these maxima, as has been constantly the case since, were much more showy than useful. Fixed at a fanciful figure, much beyond what the traffic could bear, they rather served as a sword of Damocles which the Companies held above the heads of their customers to coerce them into peacefully accepting high actual rates, than as a protection against extortion. It is worthy of note at this point, that while Parliament left the traders to the tender mercies of the common law, to risk recovering either illegal or the surplus of unreasonable charges, they provided arbitration for the settling of disputed charges for the conveyance of mails, between the Post-Office and the Railway Companies. Important steps in extending the sphere of State control were taken in 1840 and 1842, when the Railway Regulation Acts were passed, conferring upon the Board of Trade certain limited powers " for the due supervision of railways." The great railway boom began in 1844, and at once served to draw public attention to a form of competition hitherto little thought of. The competition between carriers upon the same line had been tried, and had practically collapsed. Now it was generally believed that the Companies could be " brought to their senses " by the construction of competing lines through the districts where they were enjoying a monopoly. Over- charged traders, with unabated faith in the sufficiency of the law of supply and demand, saw salvation in the prospective furious rivalry between two competing routes, even though this pet law had belied its early promise within the scope of the single railway system. Nor did the aggrieved traders lack eloquent and powerful supporters. The promoters of the pro- spective competing lines rallied to them with almost touching earnestness if indeed they did not supply them with the formula of their contention. It is true that the heads of exist- ing systems declared that it would be easy for the new and the old Companies to coalesce in the future, when the only effect would be that traders would have to provide interest upon two capitals instead of one. It is equally true that one or two recognized economists reiterated the same warning, clothed in the learned phrases of their profound science. But the latter were charitably smiled at, as well-intentioned but unpractical THE RISE OF STATE CONTROL 13 theorists, and the former were denounced as the subsidized pleaders of a threatened interest. How entirely at fault the traders were in the long run, and how fleeting and injurious was their golden remedy, we shall see later on. In the mean- time (1844) a Select Committee, presided over by Mr. Glad- stone, and appointed to inquire into the whole field of railway legislation, had definitely reported " that competition between Railway Companies is likely to do more injury to them than good to the public." But this declaration was not sufficient to arrest the flow of " competing " schemes, nor to deter Parliament from legalizing them with their indispensable sanction. And duplicated lines from, through, and to the same places appeared in many parts of the country. Some of the other conclusions of this Committee were much more respected, however, and at once bore valuable fruit. Among these were (i) That the indefinite concessions made to the earlier Com- panies had been unnecessary ; (2) that fares and rates were too high j and (3) that with regard to new lines, Parliament ought to reserve certain powers to be exercised after a given time. These were all dealt with in a Bill introduced in the same year by Mr. Gladstone, as President of the Board of Trade, and Chairman of the Committee. After a somewhat stormy passage the Bill was passed, and is now usually spoken of as the Cheap Trains Act. 1 It provided for 1. The Parliamentary penny per mile fare in at least one train a day. 2. The revision of maximum rates and charges, subject to certain conditions. 3. Power being conferred upon the Board of Trade to initiate proceedings against the Railway Companies for the infringement of the law under certain circumstances. 4. A maximum rates clause under which the Companies, if they carried and provided locomotive power as well as the road- way, were compelled to charge less than the aggregate of the separate tolls for the three services. 5. And provision for the future acquisition of the railways by the State (see Chapter XVII). In addition to this Act, the Report of the Committee also led 1 See Hansard for June 1844, 14 RAILWAY NATIONALIZATION to the Consolidated Act of 1845, which embraced two new and far-reaching provisions. The one made all special railway Acts subject to general railway statutes, and the other attempted to provide for equality of treatment. Here is the clause embody- ing the first provisions : " Nothing in this Act contained shall exempt the Company or the railway from the provisions of any general Act relating to railways or the better or more impartial audit of the accounts of Railway Companies now in force, or which may hereafter pass during this or any future session of Parliament, or from any future revision or alteration under the authority of Parliament of the maximum rates of fares and charges, or of the rates for small parcels authorized by this Act." 1 This is the Equality Clause : " And whereas it is expedient that the Company should be enabled to vary the tolls upon the railway so as to accommodate them to the circumstances of the traffic, but that such power of varying should not be used for the purpose of prejudicing or favouring particular parties, or for the purpose of collusively and unfairly creating a monoply, either in the hands of the Company or of particular parties, it shall be lawful, therefore, for the Company, subject to the provisions and limitations herein and in the Special Act contained, from time to time to alter or vary the tolls by the Special Act authorized to be taken, either upon the whole or upon any particular portion of the railway as they shall think fit ; provided that all such tolls be at all times charged equally to all persons, and after the same rate, whether per ton per mile or otherwise, in respect of all persons and of all goods or carriages of the same description, and conveyed or propelled by a like carriage or engine passing only over the same portion of the line of railway under the same circumstances ; and no reduction or advance in any such tolls shall be made either directly or indirectly in favour of or against any particular Company or person travelling upon or using the railway." 2 The traders had not to wait long before they saw how futile duplicated systems were as a protection against excessive charges. A perfect plethora of amalgamation schemes ap- peared in 1846. This led to another Select Committee to inquire into the right principles of railway legislation. Among 1 Railway Consolidation Act, 1845. THE RISE OF STATE CONTROL 15 other things they delivered a severe attack upon the theory of the maximum rate. They said one of the abuses of railway management, from which the public have suffered most in this country, is the fixing the fares and charges at too high a rate. It is proper, no doubt, that maximum fares should be fixed in all railway Acts ; but though they may be fixed with care, and may sometimes approximate to fair rates at a given time, they can never meet all future contingencies. The maximum rates are, however, almost always extravagantly high. The most perfect system in the abstract is that which regulates the fares by such scales as will produce the utmost amount of con- venience to individuals, and give the utmost possible develop- ment to the trade of the country. But while they did not pronounce in favour of prohibiting amalgamations, they emphasized the necessity of each case being exhaustively examined. They also strongly recommended the establishment of a Government Department charged with the supervision of railways and canals. So by an Act of 1846 the Railway Commission was constituted, consisting of five persons. But a further measure, seeking to confer upon it real powers, failing to pass into law in 1847, it suffered a some- what chequered career until 1851, when it was merged in the Board of Trade. It thus continued until 1874, when it was again separated, given definite powers, and has continued since. 1 In 1850 Parliament gave formal sanction to working agree- ments between "competing" Railway Companies by an Act legalizing the constitution of the Railway Clearing House, which had been voluntarily established by the Companies three years previously. The Act also conferred on the House, governed by a Board of Railway Managers, the important power of suing defaulting members. 1853 saw the dawn of a new epoch in the application of the principle of State control. " Hitherto," as Mr. Butterworth says, 2 "with few exceptions Railway Companies had been left free to conduct their business in the way that seemed best to themselves, the efforts of the Legislature being for the most part confined, in the first place, to insuring public safety, and 1 Butterworth and Hunter. * Railway Rates and Traffic, p. 21. 16 RAILWAY NATIONALIZATION in the second to preventing the abuse of the extensive powers of the Companies, by placing a limit upon their charges, and forbidding partiality. Further, those who had grievances against Railway Companies were left to assert their rights by means of the ordinary procedure before the ordinary tribunals. It is true that, as we have seen, certain powers of supervision over railways had been given to the Board of Trade ; their sanction was necessary for the opening of each new line of railway; their approval was essential to the validity of bye-laws, and in cases where a Company had exceeded or abused their powers, they were empowered to initiate legal proceedings for enforcing compliance with the law. The general policy of the Legis- lature, however, had been to refrain from interfering with the practical working of the railway system." In consequence of the anxiety prevailing among the traders at the prospect of many large amalgamations of railways in 1852, another Special Committee was appointed to consider "the principles which ought to guide the House in railway legislation." The Committee reported in 1853 that a larger meed of State interference was necessary, and declared that the " Equality Clause " needed amendment, as the necessity for a person complaining of inequality of charges, to show that different transits were effected " under the same circumstances," left the Companies a loophole for evading the duty of treating all persons alike. The recommendations of the Committee secured embodiment in the Railway and Canal Traffic Act, 1854, from which a somewhat lengthy quotation is necessary to indicate its far-reaching character "Every Railway Company, Canal Company, and Railway and Canal Company, shall according to their respective powers afford all reasonable facilities for the receiving and forwarding and delivering of traffic upon and from the several railways and canals belonging to or worked by such Companies respect- ively, and for the return of carriages, trucks, boats, and other vehicles. " And no such Company shall make or give any undue or unreasonable preference or advantage to or in favour of any particular person or Company, or any particular description of traffic, in any respect whatsoever, nor shall any such Company subject any particular person or Company, or any particular THE RISE OF STATE CONTROL 17 description of traffic, to any undue or unreasonable prejudice or disadvantage in any respect whatsoever. " And every Railway Company and Canal Company and Rail- way and Canal Company having or working railways or canals which form part of a continuous line of railway or canal, or railway and canal communication, or which have the terminus, station, or wharf of the one near the terminus, station, or wharf of the other, shall afford all due and reasonable facilities for receiving and forwarding all the traffic arriving by one of such railways or canals by the other without any unreasonable delay, and without any such preference or advantage, or prejudice or disadvantage, as aforesaid, and so that no obstruction may be offered to the public desirous of using such railways or canals, or railways and canals, as a continuous line of communication, and so that all reasonable accommodation may by means of the railways and canals of the several Companies be at all times afforded to the public in that behalf." In addition to the foregoing, the Act also specially provided for the Court of Common Pleas being used for the trial of complaints against the Railway Companies. By an Act of 1868, the customers who had paid carriage were given the right to demand an account in which the rates for each of the several services were distinguished. Another important step forward was taken in 1873. The previous year had again witnessed a great epidemic of schemes for railway amalgamations which had so alarmed the trading public, that a Joint Committee was again appointed to inquire into the question of railway legislation. The Regulation of Railways Act of 1873 was the result. This Act did several important things. It reconstituted the Railway Commission upon the basis of combining railway experience with legal knowledge ; imposed upon the Companies the duty of publish- ing their rates in books to be kept at all stations, and gave the Commission power to order the Companies to differentiate in their accounts between the charges for conveyance and terminal services; empowered the Commissioners to fix through rates as between the different Companies; gave authority to the Commissioners to determine the " reasonableness " of any ter- minal charge ; stipulated that the Railway Companies acquiring canals should keep them in working order, and referred to the c 18 RAILWAY NATIONALIZATION Commissioners the power to sanction agreements by which the Railway Companies acquired power over canal rates or traffic. A further and important recommendation of the Committee was ignored. This was that the Companies should be compelled to adopt a new and uniform classification of goods, and that this should be the classification of the Clearing House. The latitude allowed the Companies in the matter of terminal charges had long caused a good deal of sore feeling, and in 1 88 1 a Select Committee was appointed to inquire into the working of the Act of 1873, an d into the general question of rates and fares with special reference to the question of terminals. As the work of this Committee will again have to be dealt with later on, it will be sufficient to say that the result of their deliberations did not find legislative expression until 1888, when the Railway and Canal Traffic Act was passed. This Act very considerably strengthened the power of State control. It remodelled the Railway Commission, and gave it authority to hold sittings in different parts of the United Kingdom. Its jurisdiction was also very considerably extended. The most important of its new powers are as follows I. To enforce obligations imposed by special Acts. (a) Relating to traffic facilities and undue preference. () Requiring a Company to provide works for public accommodation. (c) Imposing any obligation on a Company in favour of the public or any individual. II. To enforce any statutory provisions relating to private sidings. III. To decide any question involving the legality of any charge sought to be made by a Company in relation to merchandise traffic, and to enforce payment. IV. To compel two or more Companies to co-operate in carrying out orders. V. To order traffic facilities and through rates, notwith- standing any agreement between Companies, unless the agree- ment has been confirmed by Parliament, or by the Board of Trade, or by the Commissioners themselves ; and in the case of through rates or tolls on canals, whether the agreement has been confirmed by Parliament or not. THE RISE OF STATE CONTROL 19 VI. To award damages either in addition to, or in sub- stitution for, other relief, subject to certain restrictions. VII. Upon applications for through rates, to substitute for the rate proposed any rate they deem just and reasonable. 1 It ordered a complete and compulsory revision, by all Rail- way and Canal Companies, of their maximum rates, subject to approval of the Board of Trade and of Parliament. It also gave formal sanction to terminal charges, but restricted them within maximum limits. It made the law regarding the pub- lication of rates and of "undue preference" more stringent, and extended the rights of the traders in the matter of through rates. And finally it empowered the Board of Trade under certain circumstances to act as mediators between aggrieved traders and the Companies, to obviate, if possible, the need of going before the Railway Commission or an ordinary Court of Law. By way of retaliation for reduction in certain maximum rates made during the revision provided for in the Act of 1888, the Companies made a wholesale increase in other rates. This led loan Act in 1894, giving the Railway Commission power, upon proof of their unreasonableness, to cause a return to the rates in practice before the increase. But of this we shall have to speak more fully. In the meantime several alterations had been made in the measure of State control affecting passengers. For their safety the Companies had been compelled to adopt continuous brakes, and the block and interlocking system, and the com- munication cord. For their convenience smoking compart- ments had been insisted upon, and the Companies were ordered to make the locomotives consume their own smoke. To protect their travellers from extortion the tickets have to show the fare charged, and milestones by the way have to indicate the distance travelled. And in 1884, Parliament called upon the Companies to provide workmen's trains, offering as an inducement the abolition of the passenger duty upon all such trains. 1 Railway and Canal Traffic Act, 1888. See also Butterwortn, pp. 4150. CHAPTER III THE WASTES OF MANIFOLD OWNERSHIP THE wastes of the present system, with its manifold owner- ship and multiplied managements, are enormous. Though the public do not get the advantage of a " healthy competition," they and the shareholders suffer from all the costly dis- advantages of elaborate competitive machinery. One of the most serious sources of waste is the heavy Parlia- mentary and legal expenses. In 1850 Mr. S. Laing, Chairman of the Brighton and South Coast Railway Company, stated that up to that year, this item alone had absorbed no less than ^yojOOQjOoo. 1 Writing again as recently as 1886, he declared that for the previous ten years the Companies had spent ^5,000,000, or a yearly average of half-a-million in the same way. 2 We shall certainly be under the mark if we assume a similar annual average since 1850. But taking it, we find the huge sum of ^93,500,000 has been expended by the Companies upon law and Parliamentary expenses since the advent of the railway system. This entirely leaves out of account the heavy expenses of traders and others in fighting against the Railway Companies before the Railway Commission. The Marquis of Tweeddale, Chairman of the North British Railway Company, declared that the working agreement arrived at with the Caledonian Company had effected to the former Company alone a saving of ^40,000 in Parliamentary expenses during the first half of the year 1 892.8 What are called 1 See also Report Select Committee, 1854. 1 "Our Railway System," by S. Laing, Fortnightly Review, April 1886. * National Railway s> by J. Hole, p. 125. 2O THE WASTES OF MANIFOLD OWNERSHIP 21 "legal expenses" are of course always going on, month in and month out, under the present system, but the Parliamentary expenses are chiefly wastes incidental to the preliminary stages of schemes for either additional branches or new lines, and are involved in the promotion of, and opposition to such schemes. Another grave source of waste during the initial stages of promotion is the bribes, in the shape of exorbitant prices, given to landlords for land, to buy off their opposition to proposed railways. To this is partially due the fact that customers have in England to pay interest upon capital at the rate of .45,000 a mile of railway as compared with 15,000 a mile on the Continent doubtless a logical result of our anomalous land system. 1 Mr. Joseph Locke declared some years ago that landlords had received from Railway Companies 80,000,000 more than a fair value for their land. He also pointed out that the cost of land and Parliamentary expenses per mile for several railways were as follows For Land. Parliamentary Expenses. London and South- Western 4,000 650 Great Western 6,300 l,ooo London and Birmingham ... ... 6,300 650 London and Brighton 8,000 3j Many hundreds of miles of railways have been granted by Parliament upon the assumption that they were provoking effective competition with existing routes. Although the mis- taken wisdom of this policy was clearly pointed out by Mr. Gladstone's Committee 2 more than half a century ago, and although its futility has been repeatedly demonstrated, there is still a lingering belief in its efficacy as a means of defence against extortion by the Companies, judging by one or two new Railway Acts recently passed. Mr. S. Laing puts the case exceedingly well in the article already quoted. 8 After pointing out how customers have to pay for all the wastes, he proceeds " Still more so is this the case with regard to a second line 1 Our Iron Roads, p. 30, and Railway Morals and Railway Policy ', by Herbert Spencer. 2 Select Committee on Raihvays, 1844. "Our Railway System," Fortnightly Review, April 1886. 22 RAILWAY NATIONALIZATION made to compete for traffic which one can carry. It is evident that either twice as much must be got out of the public to pay on two capitals as would have sufficed for one, or the public must have to deal with two poor Companies instead of one which was fairly prosperous." He illustrates his contention by an apt allusion to his own Company. He declares that so long as the Brighton and South Coast were alone in the field, they paid fairly well, and their clients were comparatively satisfied. But upon a competing line being promoted, the traffic had to be divided between the two, with the result that the Brighton suffered from a period of seven lean years. "During these seven years," says Mr. Laing, "we did absolutely nothing to improve accommodation, and were obliged to work with old and inferior engines and carriages. Since we again became prosperous, we have undertaken and almost completed branch lines opening up new districts, at a cost of ^2,736,000, none of which were productive in themselves, and which never could have been made except by the Company. We have spent ;i, 246,000 in improving and enlarging stations, plat- forms, signals, sidings, and other works on the existing lines ; and over ^1,500,000 in completely renovating our rolling- stock and fitting it with the Westinghouse brake and all other modern appliances for safety. The number of train-miles run, which is the measure of the accommodation afforded to the public, has been increased from 5,309,878 in 1873 to 7,948,757 in 1883, and the number of passengers conveyed from 23,280,032 to 41,296,007, of whom 35,319,752 were third- class passengers, in addition to the very large number of annual and season tickets, which has increased by 70 per cent." All of which, and much more, could have been secured without the public being compelled to provide interest upon another capital. Sir Alfred Hickman relates that when a deputation waited upon the late Chairman of the London and North- Western Railway to complain of the exorbitant rates between South Staffordshire and Liverpool, Sir Richard Moon did not deny the soft impeachment, but assured them that it was their own fault. "You have yourselves to blame. When we alone served South Staffordshire, and were the only Company carrying to Liverpool, our rates were 25 per cent, less than they are now, when you have three Companies for which you have THE WASTES OF MANIFOLD OWNERSHIP 23 to pay." 1 Nor is this a matter for the least surprise. The shareholders of the different systems are not likely to forego a return upon their capital, if the customers can possibly be squeezed by coalition to provide it out of higher rates. And the first article of their creed, "to charge what the traffic will bear, "is as elastic as it is convenient. The 25o-odd separate Boards of Directors, with their in- cidental appendages, are a luxurious superfluity. In nine cases out of ten the directors are as economically useless as they are socially ornamental. Speaking some time ago, the well- known railway solicitor, Mr. R. W. Perks, M.P., declared that "As a rule, the average English railway director knew very little about the details of his line. . . . Directors were chosen because of their Parliamentary or territorial influence, and even now some of the directorates of the English railways were crowded with titled directors, who knew little of business life and still less of the democratic requirements and rewards of the present day." Mr. Hole gives the following extract from a recent letter in the Times, referring to a certain railway and its chairman of directors "With no general manager, non-existent heads of departments, and a dummy Board of Directors, the railway is practically Mr. , or, at least, that small portion of Mr. which he is able to spare from his multifarious duties elsewhere. A proof of the exigencies of these duties is that he was frequently inaccessible to his officers for a month to- gether, and would neither read reports nor answer letters." 2 But probably the statement of the late Sir George Findlay is the most eloquent of the wastefulness of multiplied directorates. Alluding to the Irish railways, he declared that all the work done by the Irish directorates he could do alone in four days a week, and take the other two for fishing on the Shannon. 8 While, however, the duties of directors are so nominal, their fees by no means come within that cate- gory. Many of them get as much as the salary paid to the Chief of the German State Railways. A constant cause of serious leakage because of the bootless 1 State Purchase of Railways, by C. Waring (1886), p. 6l. 1 National Railways. See Report Select Committee on Irish Industry. 24 RAILWAY NATIONALIZATION nature of its work is the elaborate machinery jointly kept going by the Companies to check each other. As a change from the old order of things, when the notion of through services was in a nebulous state indeed, the Clearing House is of course an excellent example of the benefits of combination. But with a single railway system and a unified management under the State, its functions would be very largely superfluous. No one suggests its entire abolition, but what is wanted is that its splendid organization of admirably trained officials shall be productively utilized upon essential work. It is doubtless very magnificent, but scarcely sound economics, that 100 clerks should be kept hard at work in Department A to check another 100 in Department B, when the sole object of those in Department B is to merely check those in Department A. It really sounds very much like the story of that wonderful colony where the residents derived their livelihood by taking in each other's washing. The late Sir George Findlay tells us that " All over the country, at every junction of two railways, the Clearing House has number-takers stationed, who record the number and description of every vehicle that passes a junction going from one line to another." l As Mr. A. J. Williams says "The whole of its vast and complicated system will become needless as soon as all the railways are vested in the State : for there will be no longer conflicting claims to decide, disputes to refer, or cross-accounts to settle Part of the elaborate machinery of the Clearing House is devoted to the settlement of the rolling-stock account between the different Railway Companies. For this purpose the daily history of each carriage, wagon, tarpaulin, that passes off its own line on to a strange line has to be recorded There is something painfully ludicrous in this imposing array of clerks engaged in posting up the history of carriages and tarpaulins. .... The necessity for keeping such records, the adjustment of demurrage accounts at the clearing office, the inconvenience and loss caused by the want of a constant supply of wagons, would cease as soon as the ownership of the rolling-stock became one." 2 The interminable complications are another active cause of 1 The Working and Management of an English Railway (1892). * Appropriation of the Railways by the State (1868). THE WASTES OF MANIFOLD OWNERSHIP 25 preventible waste. The system seems to have been ingeniously contrived as an endless maze to absorb the time and bewilder the minds of the unfortunate customers. Every effort has apparently been made to avoid simplicity. Thus it has been authoritatively stated that there are no less than the incompre- hensible number of 250,000,000 separate railway rates for goods in existence. And Sir Bernhard Samuelson l tells us that the German State Railway Management gets into a small book of some 75 pages the whole of the rates upon its system, while the London and North-Western Railway occupies 2000 huge volumes with its own rates alone. The same dizzy complications prevail with passenger fares. 2 Where we have millions of separately printed tickets, under the zone system in Austro-Hungary they have only hundreds, if not scores. Certainly the moral and mental gains of the simplified classification of rates and fares that would come with a single State management would be nearly as great as the material economy. The prodigality of the present system shows up in a startling light, in the multiplied sets of offices, goods warehouses, and the general machinery for collecting and delivery in towns where one with a larger staff would often be ample and equally con- venient. A striking example of this is supplied by Messrs. Waghorn and Stevens in the monumental report they prepared for the Traders' Conference. 8 The traffic of Liverpool is catered for by six Railway Companies. In pursuance of the " compe- tition in facilities " (rates being the same), the Midland Railway Company erected a great receiving-house in Victoria Street at a cost of 3-y. per ton. " Each one of the other five Railway Companies forthwith proceeded to incur outlay and expense of 3^. or 4-r. per ton in providing receiving offices, or in erecting more commodious stations and warehouses, until at last they have spent the enormous amount of which they complain (some ;i 3,000,000). Out of the vast cost incurred, for every id. which the Companies have spent for the benefit of the trader i id. has been spent unproductively." This point is also empha- sized by Mr. Joseph Parsloe, who says 1 Report on Continental Goods Tariffs, made to Association of Chambers of Commerce, 1886. 8 See Chapter XV. p. 52. 26 RAILWAY NATIONALIZATION " Such a system surely involves an exhaustion of resources which cannot fail to affect public interests. At a town where there are two Companies each must of course provide a separate and expensive staff of men, horses, and drays for collecting and delivering goods, as well as a separate staff at the stations to perform the necessary duties there. It is easy to see what a vast amount of money might be saved, and how the work would be expedited in each town were the system completely centralized." l Again, we must not forget the sheer waste involved in the employment by each Company at handsome salaries of a skilful regiment of experienced canvassers and advertisement agents, whose sole function is to secure the traffic for their particular line without being able to offer any lower rates as a special advantage to prospective customers. Such labour is economic- ally thrown away ; but being so highly skilled there would be no difficulty under a proper system of utilizing it in directions that are genuinely useful and productive. Another continuous source of waste is in the running of duplicated passenger trains from the same place to the same place, at practically the same time, all only sparsely occupied. Writing to the Times upon the glaring example of the South- Eastern and the Chatham and Dover Companies, Mr. F. K. Munton says " Having been obliged to go twice a week to Dover for eighteen months at a stretch, I over and over again observed the state of things there which showed that if the two Com- panies would combine one joint train to some agreed point near London, portions being taken thence to Cannon Street and Holborn respectively, both Companies' dividends would be appreciably increased. I contend that at least for six months out of twelve two half-loaded express trains at the same hour tearing through the country from Dover to Charing Cross and Victoria (a mile or so apart from each other in London) is an unparalleled waste of power, which two Companies peacefully inclined should try to terminate." 2 Even Mr. W. M. Acworth declares that " It has been mournfully acknowledged over and over again, by railway men themselves, that the competition in express 1 Our Railways (1878). 2 January 24, 1891. THE WASTES OF MANIFOLD OWNERSHIP 27 trains say, between 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." l Lamenting the loss thus involved, the Secretary of the London and North-Western Railway gave the following example from his own Company " The number of passengers booked during two days from Euston which I believe may be taken as an average was 4,482, and for the accommodation of those passengers there were sent away trains containing seats for 13,512 pas- sengers. Then with regard to the up-traffic, on those two days 4,336 passengers arrived at Euston, and there were seats for ^SSS-" 2 The wastes in connection with the goods traffic are even greater. Under the present system, so jealous are the Com- panies of preserving a monopoly within their own districts, that goods trains and wagons have to return to the parent line within three days of their departure, whether empty or loaded, or suffer a heavy demurrage. This demurrage is so fixed that it pays the " parent " Company better to haul back empty than to wait the chance of a return cargo. The result is that there are nearly as many empty as full goods trains running. In addition to this, there are still the wastes caused by hauling three short trains, with only partially loaded wagons, from the same place to the same place by different routes, where under a unified system a single train would serve the purpose. The prevalence of the " half-load " is much more general than is usually sus- pected. Mr. Stewart, of the London and North-Western Com- pany, has stated that " The general managers will tell you that very often a wagon is sent off with a quarter of a ton, which is capable of carrying four or five tons ; I believe the general average which is sent off in a wagon is not more than one and a half to one and three-quarter tons." Mr. Grierson, the late manager of the Great Western, also admits that English mer- chandise only average about two and a half to three tons per truck, 8 while Sir George Findlay puts the average at between 1 Nineteenth Centwy. 2 Transactions of the National Association for Promotion of Social Science, 1868, p. 595. * English and Foreign Railway Rates. 28 RAILWAY NATIONALIZATION one and two tons for trucks that are constructed to carry five tons at least. 1 Commenting upon this admission, Mr. Jeans, 2 in his able work on railway economics, writes "Mr. Grierson has admitted that in England the ordinary goods truck is not filled to the extent of more than one-half its carrying capacity that instead of carrying six or seven tons, it is usual to carry only two and a half or three, and hence we find trains carrying no more than 70 to 100 tons, when they might just as well carry 250 or 300. Obviously if the rule were the other way, the train-mile receipts, instead of being only 45. lod. or 5^., should be double that figure, and as the cost of working goods traffic decreases in an almost direct ratio with the weight of the train, or rather of the live or paying load, the adoption of fuller wagon-loads would give a much higher range of re- ceipts in proportion to the ordinary working expenses." In this respect the United Kingdom is worse off than either of its chief competitors, as the following comparative table shows Average train load United States ,, Germany ,, France Belgium General average ,, United Kingdom 173 tons 132 121 9 6 70 What do the wastes of the present system, with its manifold ownership and divided management, amount to ? Only an approximate figure can, of course, be given, in the present de- fective state of railway statistics. The Secretary of the London and North- Western Railway Company and he would not be likely to err on the side of exaggeration estimated the loss at 20 per cent, of the working expenses. 4 A similar estimate has been made by the late Sir Edwin Chad wick, C.B., the eminent engineer. 6 Another railway authority, Captain Laws, manager of the Lancashire and Yorkshire line, has placed the estimate 1 The Management of an English Railway. a Railway Problems. 8 Ibid. 4 Transactions Social Science Association, 1868. 8 Journal Royal Statistical Society, 1873 (Railway Debate). THE WASTES OF MANIFOLD OWNERSHIP 29 at 24 per cent. 1 But, to be on the safe side, let us take the lower of these two and apply it to the working expenses of 1905. These amounted to ^70,000,000, and 20 per cent, of that gives us the enormous sum of practically ^14,000,000 a year, as the mere preventible wastes of the present system. 1 Journal Royal Statistical Society, 1873 (Railway Debate). CHAPTER IV THE BREAKDOWN OF COMPETITION THE competitive principle has practically ceased to operate upon our railways. Superficial appearances might possibly seem to indicate otherwise. There are still several hundred Railway Companies, with their distinct organizations, their sep- arate directorates, their duplicated services, and all the usual concomitants of competition. But in reality our railways are welded into a powerful monopoly. In fact, the present system may be fittingly described as Monopoly in the guise of Com- petition. It certainly combines all the wastes and disadvantages of elaborate competitive machinery, with all the dangers and disadvantages of private monopoly. It took a long time for the country to learn this elementary lesson nor have they fully taken it to heart yet. The Select Committee of 1872 declared that " Committees and Commissions carefully chosen have for the last thirty years clung to one form of competition or another ; it has nevertheless become more and more evident that competition must fail to do for railways what it does for ordinary trades, and no means have been devised by which competition can be permanently maintained." And further "The predominant idea in the mind of the public has been that competition, which is so powerful a regulator in most commercial affairs, would also suffice to regulate railways ; whilst, nevertheless, by a slow and gradual process of experiment, one form of competition after another has been proved to be inadequate. . . . There is little real competition between Railway Companies, and that little is dis- appearing by degrees without any possibility of maintaining it" 30 THE BREAKDOWN OF COMPETITION 31 Sir Rowland Hill of Post-Office fame was still more emphatic as to the futility of looking for effective competition between Railway Companies " All expectation of benefit to the public from competition on the respective lines has been baffled by the mere force of circumstances." * Even the chairman of the Brighton Company frankly admits that " in the case of railways we must start with the fact that they are, and always must be, monopolies." 2 While the late Sir George Findlay shows that the Companies having learned wisdom, monopoly is practically inevitable. He says " In days gone by, it cannot be denied that Railway Companies incurred great losses and sacrificed a considerable portion of their revenue by extreme competition amongst themselves, but in this matter, as in many others, they have gained wisdom by experience and profited by the uses of adversity." 8 In the chapter upon " The Rise of State Control," it has been seen that the individual Company killed the competition upon its own system by itself becoming the carrier, and by making it practically impossible for traders to avail themselves of their legal right to provide and haul their own trains. But to break down competition between themselves various methods have been adopted. The chief of these are 1. Amalgamation. 2. Subsidizing other Lines. 3. Pools. 4. Rate Conferences. The process of amalgamation has been a characteristic feature of railway development for at least half a century. Practically the whole of our present great systems are mosaics, so to speak, of small systems for which separate Parliamentary sanction was originally obtained. Thus, for example, in 1872 the North-Eastern Company was an amalgamation of thirty- seven previously distinct railways. 4 And this is typical of what has gone on throughout the country. Up to a point this amalgamation of small Companies, even in private hands, is much to be preferred upon grounds of efficiency to a large 1 See Minority Report Devonshire Railway Commission, 1865-6. a Fortnightfy Review, April 1886. 8 The Working and Management of an English Railway, p. 265. 4 Journal Royal Statistical Society, 1873 (Railway Debate). 33 RAILWAY NATIONALIZATION number of petty concerns, even in competition. And, regardless of the public interest, amalgamation is a process that circum- stances have made, and will continue to make, inevitable. The late Mr. Biddulph Martin, President of the Royal Statistical Society, said " If, therefore, we fancy that the ' struggle for life ' is as strong in Railway Companies as in those other soul- less organizations whose developments have been studied with so much interest, and look to the natural antipathy of two or more competing lines to give us an excellent service of trains, moderate tariff, and reasonable devotion to our weaknesses and comforts, we are trusting to a slender reed; the end is always the same amalgamation. The lion lies down with the lamb, and both fleece the confiding public." l In spite, however, of the repeated epidemics of amalgamation, there are still some 450 distinct Companies, of which many have their separate Board of Directors and contingent ex- penses. But of these about 260 receive subsidies 2 from and are worked by the half-dozen chief Companies. In this way Mr. Parsloe states that two-thirds of the whole railway mileage are controlled by six Companies. 3 Mr. Charles Waring has put the case somewhat differently. He states that out of 6,000 railway stations in the United Kingdom, only at 1,500 do lines controlled by more than one Company meet.* Mr. Hole declares that "about a dozen oligarchies control the traffic of the country." Amalgamation is certainly much less objectionable from the public point of view, as well as that of the shareholders, than this policy of subsidy, to receive which year by year is apparently the only raison d'etre of some Boards of Directors. And from this standpoint there is certainly something to be said for the report of a Select Committee in 1846. Speaking of the alarm created in the public mind by the great railway amalgamations then pending, they agreed that there was some reason for such alarm, but declared that amalgamation "enabled the Companies to con- duct their operations with less expense to themselves, and consequently with diminished charges to the public; it con- duces to better arrangements, and thereby increased safety * Journal Royal Statistical Society, 1873 (Railway Debate). 2 Railway Returns, 1895. 8 Our Railways. 4 State Purchase of Railways. THE BREAKDOWN OF COMPETITION 33 to life and property. It enables Companies conjointly to pro- vide increase of accommodation for the public at their terminal stations which many of them could not separately afford." l Of course when amalgamation takes place the public may or may not derive any advantage, but under the process of subsidy they are practically certain not to get much, for the necessity of keeping up the expenses of dual ownerships and partially divided managements, are pleaded as absolute bars to any considerable reduction being made in rates and charges. As an indication of the extent to which the large Companies control the small ones by means of subsidies, the case of the Great Western is instructive. The following is a list of the Companies subsidized by it, with the amounts of the subsidies in 1894 and 1895 Abbotsbury Abingdon Bala and Festiniog ... ... ... Banbury and Cheltenham Birkenhead ... Birmingham and Henley in Arden Bridport ... Buckfastleigh, Totnes and South Devon Cornwall minerals Corwen and Bala ... Devon and Somerset Didcot, Newbury and Southampton Ely Valley Forest of Dean Central Halesowen Hammersmith and City Helston Herefordshire and Gloucestershire Canal Co. Kington and Eardisley Leominster and Kington ... ... ... Llangollen and Corwen Lostwithiel and Fowey ... ... ... Dec. Dec. 1895 1894 s. d. 395 6 ii 384 804 9 5 732 5484 6 5 5367 5000 o o 5000 24,749 ii 2 24,750 317 15 9 293 2264 4 4 2181 1979 9 9 1873 9400 o 9400 2770 n 8 2719 9067 19 3 8640 4150 o o 4190 2OOO o 2000 92 9 o !23 215 o 4 218 5165 o o 5160 1314 19 II 1304 2500 o o 25OO 784 3460 2 3 3460 3062 7 3 3022 167 17 5 Carried forward .84,361 10 10 .84,060 Report Select Committee on Railway Regulation, 1846. 34 RAILWAY NATIONALIZATION Dec. Dec. 1895 1894 $".*,*. & Brought forward 84,361 10 10 84,060 Marlborough 1352 7 9 1291 Milford ... ... ... ... ... ... 733 o 2 733 Minehead 1353 19 6 1216 Nantwich and Market Drayton ... ... 3451 19 3 3452 Princetown 472 15 o 473 Ross and Monmouth 4225 o o 4225 Shrewsbury and Hereford, including Tenbury 10,275 o o 10,275 ,, and Welshpool ... ... ... 3000 o o 3000 Staines and West Drayton 1012 13 o 738 Teign Valley ... 600 o o 613 Vale of Llangollen 3195 17 5 3056 ValeofTowey ... ... 750 o o 750 Victoria Station and Pimlico 1065 o o 1065 Wenlock and Wenlock Extension 3642 16 2 3000 West Cornwall ... 20,351 i 10 20,351 West London 450 o o 450 West Somerset 3300 o o 3300 Weymouth and Portland 1125 o o 1125 Wye Valley 1915 o o 1915 146,633 o ii ,145,088 Sometimes subsidies are even given by one large Company to another to merely buy off opposition. Thus the London, Brighton and South Coast Company pay the South-Eastern a yearly subsidy of ^24, 500, not to use their running powers to Eastbourne ! 1 The wiser heads among the railway authorities have long seen the advantage of " pooling " from the shareholders' point of view. In urging the Companies to prevent dividends falling a few years ago, the late Sir George Findlay said "The Companies, if they are wise, will achieve this object by some kind of combination amongst themselves by which excessive competition may be obviated, and two or more Companies carrying between common points may be enabled to reduce their train mileage, to curtail the running of unprofitable trains, and a great deal of unnecessary expenditure, and to keep the speed of the trains within reasonable limits, so as, without lessening the accommodation offered to the public, to preserve conditions under which the business of carrying passengers may 1 "State Purchase of Railways," by C. Waring, Fortnightly Review, June 1886. THE BREAKDOWN OF COMPETITION 35 again be conducted with a fair margin of profit to those whose capital is engaged in it." 1 And he thus describes the way in which railway pools are worked 2 " In addition to the system of agreeing the rates between competing points, there is another plan which Railway Companies sometimes adopt in order to avoid the losses arising from competition, which is known as ' Percentage Division of Traffic,' and which is carried out in the following manner. Supposing that there is a certain traffic to be conveyed between two towns or districts, and that there are two or more Railway Companies, each having a route of its own by which it is enabled to compete for the traffic. An agreement is come to that the receipts derived from the whole of the traffic, carried by all routes, shall be thrown into a common fund, and that each Company shall be entitled to a certain percentage of the whole say, for example, 50 per cent, to the Company having the best route, 30 per cent, to the second, and 20 per cent, to the third. The percentages are usually adjusted on the basis of past actual carryings, but in settling the terms of the agree- ment due weight is accorded to any prospective advantages which may entitle one Company to claim a larger proportion than it has carried in the past. As an agreed allowance is fixed with due regard to the actual cost of the service, it will be perceived that there is no very great inducement for any Company to carry more than its share." Professor Hadley declares that "the agreements between rival routes have been so permanent that they are sometimes no longer felt as a restraint, so thoroughly has traffic adapted itself to their con- ditions. This is the case with many pooling arrangements. The early history of English railway pools is obscure. They first assumed importance some thirty years ago. The London and North-Western seems to have taken the lead in this policy. Its great rival, the Midland, while maintaining rates, has been less inclined to divide traffic. English rail- roads have had great advantages over ours (American) in enforcing these agreements. The courts have looked upon them with less disfavour, and statesmen with much more favour than has been the case in the United States. At 1 The Working and Management of an English Railway. 8 Ibid. p. 266. 36 RAILWAY NATIONALIZATION present they seem to be losing some of their importance ; not because they are powerless, but, as already indicated, because traffic has become so stable that they are less necessary than they were." l But the most far-reaching process by which competition has been stamped out, is that of the Rates Conference. Where Companies have not been prepared to sink their identity in amalgamation, or to have their competition bought off with subsidies, and where their conditions of traffic have not been sufficiently uniform to permit of them " pooling," they have readily resorted to the Rates Conferences to keep up charges against the public by mutual agreement. Nor do the Companies attempt to make the slightest secret about these conferences. The late Sir George Findlay thus describes them "A certain amount of healthy competition will always exist ; but the Companies now mitigate its severity by agreeing amongst themselves what the rates between competitive points shall be by all routes. The competitive rates between most places in Great Britain are, in the main, governed by two Conferences. . . . "The English and Scotch Traffic Rates Conference is composed of representatives (who are usually the chief Goods Managers) of all the Companies, both English and Scotch, who are inter- ested in the carriage of goods between places in England and places in Scotland by the various routes. " These representatives meet once a month and deal with all questions arising in connection with the making of new rates or the alterations of existing rates for competitive places between which more than one Company can carry. "The Normanton Conference, which was originally estab- lished to control the rates for a certain district of Normanton, where its meetings were formerly held, as a convenient centre, has gradually so much extended its scope that it is now composed of representatives of nearly every Company of any importance in England, and governs almost the whole of the competitive rates which are not dealt with by the English and Scotch Conference. The cross-channel rates between England and Ireland are controlled by an English and Irish Traffic Rates Conference. Besides these three, there are some minor Con- 1 Railroad Transportation, p. 159. THE BREAKDOWN OF COMPETITION 37 ferences, which have been established in connection with the traffic of particular districts but have not the importance of those which have been already alluded to." l A great deal of evidence was submitted by the traders to the Select Committees on Rates in 1881-2, showing how effective were these Conferences in depriving the public of the advant- ages of competition. But the admissions of Mr. Grierson, Manager of the Great Western Railway, are sufficiently con- clusive to obviate the need of quoting from the aggrieved traders. The following is an extract from his evidence " Q. You say there is no competition on the part of Railway Companies ? " A. There is a competition of accommodation, but they do not undercut one another in the rates. " Q. They form a ring ? "A. They arrange the rates. You will readily understand that that must be so, it could not be otherwise. " Q. It is not to the interest of the public, certainly, is it ? " A. The public could not expect anything else. If you mean that the Railway Company should carry at a loss, that certainly would not be to the interest of the public. " Q. I think you stated yesterday that the great evil that lay at the root of all the trade at present, the coal and iron trade especially, was the severe competition one with another, and that the reduction of the railway rates would not materially assist them ? " A. It is so with production. " Q. So that you have upon the one side a severe competition among the traders, but upon the part of the Railway Companies the traders have none whatever ? " A. They have this competition. The Midland Railway will do all they can to bring in coals from their districts ; the Great Northern will do the same from theirs ; the London and North- Western from theirs, and the Great Western from theirs. " Q. I am quite aware of that, but they will not alter the rates. I believe they have an agent who goes to each colliery district, and they do all they can to get the trade on their line, but that agent does not offer any reduction of rates to do that? 1 The Working and Management of an English Railway, p. 265. 38 RAILWAY NATIONALIZATION " A. The canvassers could not go to the colliery proprietor and say his Company would reduce the rates ; the rates had been arranged beforehand." x Practically free then from the regulating power of an active competition, by what principles do the Companies fix their rates ? The shortest answer would be, " By as much as they can get." Such a crude reply would scarcely however give a correct impression of the refined and scientific calculations to which the managers resort to secure the uttermost possible farthing. It would in fact only be the truth at the expense of politeness. According to the late Sir George Findlay "The rates are governed by the nature and extent of the traffic, the pressure of competition either by water, or by a rival route, or by other land carriage ; but, above all, the Companies have regard to the commercial value of the commodity, and the rate it will bear, so as to admit of its being produced and sold in a competing market with a fair margin of profit. The Companies each do their best to meet the circumstances of the trade, to develop the resources of their own particular district, and to encourage the competition of markets, primarily, no doubt, in their own interest, but nevertheless greatly to the advantage of the community. ... So long as competition does not exist, they are only discharging their duty to their shareholders in obtaining what Parliament has sanctioned as a fair rate of remuneration for the services they perform, but when a rival is in the field, they are justified in concluding that ' half a loaf is better than no bread at all ; ' although it by no means follows that their previous charges were unfair or excessive." 2 Let us examine this extraordinary statement point by point, and for the sake of simplicity let us take first the case where a single railway has a complete monopoly. Here, says Sir George, "the Companies are only discharging their duty to their shareholders in charging what Parliament has sanctioned as a fair rate of remuneration." " What Parliament has sanctioned " is the legal maximum, not as a fair rate of re- muneration under normal circumstances, but as a point beyond which the Companies cannot go under the most abnormal 1 Railway Rates and Radical Rule, by J. B. Pope. 8 The Working and Management of an English Railway, p. 264. THE BREAKDOWN OF COMPETITION 39 circumstances. The " maximum " is a survival from the old law of carriers, and though in those days, when the cost of transit was much greater than now, it might have approximated to substantial fairness, it has long ceased to be other than a legal anachronism. As we have seen in a previous chapter, the Select Committee of 1846 declared that "It is proper no doubt that maximum fares should be fixed in all Railway Acts, but though they may be fixed with care and may sometimes approximate to fair rates at a given time, they can never meet all future contingencies. . . . The maximum rates are how- ever almost always extravagantly high." It is not too much to say that if the "legal maximum rates "were universally put into operation, certain English industries would be immediately ruined. Professor Hadley says " Every careful student of the question 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." 1 And the Chair- man of the Brighton and South Coast Railway, in admitting the need for more effective State control, stated that as a security against extortion the tariff of maximum rates fixed by the Acts of the Companies "is very nugatory, for all the special traffic, comprising more than half the total tonnage, would be annihil- ated by charging the maximum rates." 2 For Sir George Find- lay, therefore, to contend that the Companies are merely discharging a duty to their shareholders in charging what Parliament has sanctioned, is to claim that on their behalf he has a right to annihilate half the trade of the country. Now let us take what Sir George Findlay euphoniously calls " competitive rates," but which he frankly admits are fixed by combination. Here the Companies claim a discretion to fix the rates according to their own sweet will. As Mr. J. Buckingham Pope has well put it, they have power to pass all the trade of the country through a sieve in which they claim the right to regulate the size of the meshes These rates they fix according to 1 . The nature and extent of the traffic. 2. The pressure of competition (a) By water. 1 Railroad Transportation, p. 178. 8 Fortnightly Review, April 1886. 40 RAILWAY NATIONALIZATION (b) By a rival railway route. (c) Or by other land carriage. 3. (Above all) the commercial value of the commodity. To really appreciate the dangers of the first claim that rates shall be fixed by the Companies according " to the nature and extent of the traffic," we must note that "the Companies each do their best ... to encourage the competition of markets." It is certainly remarkable that a country which boasts of its Free- trade policy, and puts up its hands in indignation at any pro- posal for giving State bounties to " encourage the competition of markets," should yet tolerate our railways, under Parliamentary sanction, conferring " Bounties " whensoever and wheresoever they feel inclined. As we shall see in later chapters, the effect of this policy is the creation of gross preferences with great in- jury not only to districts and trades, but to the nation as a whole. To artificially promote long-distance traffic, they bring districts that are remote into rivalry, by relatively low rates, and keep them out of adjacent markets by rates that are high. In other words, they give a bounty in one place and put an exorbitant tax on in another. But let us pursue the application of the principle a little further. "According to the nature and extent of the traffic." If a certain traffic in a district does not promise to be very large, the Companies will kill it, by the dual policy of charging it high rates and by spoiling any chance it might even then have by flooding the markets, through cheaper rates, with a similar commodity from elsewhere. Thus will the Companies spoil the markets for Kentish fruit-growers by bringing French fruit at a much less rate. And so on, as we shall see. Next we are told that rates are fixed by the pressure of competition (a) By water. (b) By a rival railway route. (c) By other land carriage. Probably Sir George Findlay was speaking prophetically of the Motor-car when he spoke of the competition by " other land carriage," for certain it is that goods rates hitherto have not been materially affected by anything of this nature, unless it is in one or two districts of Ireland. With passenger fares, especially for suburban traffic, the position has, however, been THE BREAKDOWN OF COMPETITION 41 considerably affected by electric trams within the last few years. And as to rival railway routes, we have already seen what that means, with the Rates Conferences. This leaves us with water carriage. Now we shall see in the next chapter that practically the whole of the canal competition has been killed by the Railway Companies. So that the only competition which has to be considered is that of the sea. And even this has been nullified to a large extent by the railways acquiring the docks and harbours in many places, and by working agreements with steamship companies. Still, after making all allowance for this, there is a good deal of real competition between the sea and the railways. Let us consider it then. Sir George Findlay says that " where there is a rival, the Rail- way Companies are justified in concluding that half a loaf is better than no bread at all," by which he means that to get the traffic they are justified in charging lower rates than where they have a monopoly. Are they ? If so, then of course the pre- ferential rates to foreign traders and producers are fully justi- fied. But if not, then they are grossly unjust. The case has been rightly stated by the Times. " There are no arguments within the range of human ingenu- ity that will convince a Sussex hop-grower of the equity of an arrangement by which foreign hops are brought from the other side of the Channel for less than he has to pay to get them across Surrey. . . . For nothing can shake the belief of the home producer, and in our view nothing ought to shake it, in the argument that if these low rates pay the Companies, he is shamefully overcharged, while, if they do not pay, he is still overcharged to cover the loss and bring up the average." But the most preposterous of all claims by the Companies is that they shall change according to the commercial value of the commodity, or, in the phrase most general, " what the traffic will bear" they being sole arbiters. The applica- tion of this theory has probably been productive of more mischief to the traders than any other of the many plausible theories by which the Companies regulate their relations with the public. Does " what the traffic will bear " mean all that can be got short of sending it away ? Presumably that is what is meant, for Mr. Grierson says " Producers pay what they find it worth 42 RAILWAY NATIONALIZATION while to pay ; they pay no more." l That simply corners the producer. It places him in the position of having to decide whether he will pay what may be an extortionate rate or close his works and retire from business. It compels him to go on at a loss or to stop. There is plenty of evidence, says Mr. Waring, that producers in numbers have to make this selection, and that they pay more than they can afford rather than give up the struggle. Even supposing that the Companies really did what Sir George Findlay declares they do, that is, fix the rate of a com- modity " so as to admit of its being produced and sold in a competing market with a fair margin of profit" it may then be asked by what manner of possible right have they to say what shall or shall not be a trader's profit ? The claim is as astound- ing as it is absurd. 1 See his evidence, Select Committee, 1881-2. CHAPTER V THE KILLING OF CANAL COMPETITION AN intimate part of the case against the private railway regime is the effective manner in which the Companies have contrived to kill the competition of the canals. In the lighter kinds of traffic, in which quick transport is a primary consideration, the railways had practically a monopoly from the beginning, super- seding canal, coach, and carriers' cart as soon as they made their advent, but in the transport of minerals, grain, timber, and similar traffic where speed is not the first element, the less cost of water transit gave the canals a natural advantage and made them formidable competitors. This difference in the cost between railway and water carriage is very considerable. Mr. F. R. Conder, C.E., a recognized canal authority, presented the Canal Committee of 1883 with the following interesting comparison Average cost per mile in England and Wales Canals, ^3,350 ; railways, ^46,000. Cost of maintenance of works for equal volumes of traffic On canals, less than one-fourth that on railways. Cost of conveyance of heavy material By canals, less than one-third than by railway. Economy of transport by canal 647 per cent, on working expenditure. 1 Sir Arthur Cotton declared that goods can be conveyed by water at one-tenth of the cost of conveyance by railway. 2 1 Report Select Committee on Canals, 1883, Appendix. a Paper on Inland Navigation in the United Kingdom, by Mr. Edwin Clements, at Fourth International Congress on Inland Navigation (Man- chester, 1890), p. 8. 43 44 RAILWAY NATIONALIZATION Under such circumstances, it is perhaps scarcely a matter for surprise that far-seeing railway managers set about muzzling a competition so dangerous to their own interests. And how successful they have been in their efforts is attested by the fact that out of a canal system of 3,800 miles they are masters of more than a third. There is some difference of opinion as to the exact mileage controlled by the railways. Mr. Conder gives it as 1717 miles, 1 and Mr. Edwin Clements as 1387 miles. 2 But according to the official returns there are eighty- nine navigations, with a total length of 2,609 miles, in the hands of independent authorities, and fifty-four, with a mileage of 1205 miles, in the hands of the Railway Companies. 8 This disparity is not without reason, for it proceeds from the difficulty of clearly ascertaining whether in certain cases the canals are free, or are subject to the control of the railways. But that the official figures of railway canals are considerably below the actual has been effectually shown by Mr. Edwin Clements, who points out that the Birmingham Navigation, 159 miles long, although returned as an independent canal, is practically in the hands of a Railway Company, the London and North- Western guaranteeing it a dividend of 4 per cent, in perpetuity ; and the Regent's Canal, eleven miles in length, returned also as inde- pendent, is vested in the Regent's Canal, Dock, and Railway Company. Again, the Louth Navigation, twelve miles long, and returned as independent, was, according to special returns made in 1883, leased to the Great Northern Railway Company. 4 But the mere mileage is after all a very inadequate indication of the power possessed by the Railway Companies over the canal navigation of the country, for they have not indiscriminately acquired canals wheresoever and whensoever they were obtain- able. They have had much more regard for economy and diplomacy than that. As Mr. Conder states, they have obtained their "1717 miles of canals so adroitly selected as to strangle the whole of the inland water traffic." 6 This view is amply endorsed by Mr. Spence, who, in a striking paper which he pre- sented to the Select Committee on Railway Rates, declares that of the canals purchased by the railways or otherwise taken 1 Report, Fifth International Congress Inland Navigation (Paris, 1892). a Ibid. 8 For 1889. * Fourth Navigation Congress. 8 Evidence before Canal Committee, 1883. THE KILLING OF CANAL COMPETITION 45 under their control most of them are so situated as to enable the Companies effectually to control the through traffic. 1 Nor have the methods by which the Railway Companies have secured Parliamentary sanction to their acquisition of canals been altogether admirable. Mr. Conder says that they have acquired them " by means of very questionable legality." Pro- fessor Hadley also, as a perfectly impartial student of railway economics, declares that " they have gotten possession of com- peting canals, sometimes by methods whose legality was doubt- ful." 2 Many of the canals were secured by the Railway Com- panies in days when railway competition was at least an actuality in many districts, and before, therefore, the alarm of the traders had found definite expression in Parliament." But even since legislation has been passed with the object of pre- venting canals falling into the hands of railways, several cases have arisen where actual ownership has been transferred to the Companies, and still more instances where, by evading the spirit of the law, power of control has been obtained. As an example of the former, the following evidence of Sir Benjamin Hingley, chairman of the South Staffordshire Iron-masters Association, given before the Select Committee on Railway Rates, sheds considerable light. The questions and answers have reference to the amalgamation of the Shropshire Union and Bridgewater Canals with the London and North- Western Railway Company : " Q- Upon what grounds did the Railway Companies obtain those powers from Parliament enabling them to absorb the canals ? " A. The grounds publicly stated were, that it would promote economy and enable them to carry at reduced rates. " Q. How did they support that ? did they say they would be able to work the undertaking more cheaply ? " A. That they would be able to reduce the charges and pro- mote economy and work more cheaply. " Q. Would you say that that prophecy has been falsified in the result ? " A. It has been altogether falsified as far as Staffordshire is concerned. " Q. Since the competition has disappeared, owing to this 1 Questions, pp. 472-6. * Railroad Transportation. 46 RAILWAY NATIONALIZATION amalgamation, have you been charged higher rates to and from the Midland district? "A. Yes, the rates have been gradually advanced." 1 And a striking illustration of how the law has been evaded was afforded on the same occasion by Mr. Spence, 2 who stated that " The history of the Bridgewater Company illustrates how completely the spirit of sect. 16 of the Act of 1873, which makes it illegal for Railway Companies to take over or in any way con- trol the traffic of a canal, may be evaded by the railway interest. The Company was formed by railway men at the time of the passing of that Act, and with the direct object of overcoming the difficulty it presented. Its capital was subscribed mainly by shareholders of the Midland and Manchester, Sheffield, and Lincolnshire Railway Companies. Its directors are all, or nearly all of them, railway men ; and both in the management of its tolls and its carrying department, it has throughout exhibited all the worst features of the railway policy." Mr. James Hole also asserts that a Railway Company in one case got control of the whole water communication of a district illegally and secretly, by buying the navigation in the names of its officials. 3 It is not, however, the mere acquisition of canals by the Rail- way Companies against which the public so loudly protest. It is the policy pursued after acquisition. The case against the Companies in this respect was clearly stated by the Select Com- mittee of 1 88 1-2. They said " Serious complaints have been made by traders and Canal Companies in respect to the working of canals owned by them, or of which they control the navigation. Cases have been adduced where Railway Companies, having acquired possession or control of a canal, have ceased to work it, or allowed it to fall into disrepair, or charged excessive tolls, especially in the case of through rates, and that in consequence traffic is diverted to the railways, where higher rates are exacted, to the injury of traders and the public generally. Your Committee are of opinion that these complaints are not unfounded. A Railway Company owning or controlling a canal may think it profitable 1 Q- 5496-99- 2 Q- 3 National Railways, p. 69. THE KILLING OF CANAL COMPETITION 47 to lose the revenue of the canal in the expectation of deriving a greater revenue from the railway to which it is a competitor. And where the canal forms part of a through competing route it is obviously its interest, as a general rule, to discourage through traffic. Transportation can frequently be effected more cheaply by canal navigation than by railway, particularly where the traffic consists of heavy goods of little value, or where speed is not of importance. Your Committee are therefore of opinion that it is impolitic that Railway Companies should have the con- trol, either directly or indirectly, of canal navigation ; and that where canals are Already under the control of Railway Com- panies, Parliament should endeavour to insure their use to the fullest possible extent." l Nor did the Committee err on the side of severity, for there is overwhelming evidence to show that the chief object the Companies have in acquiring canals is to kill their competition. Thus the Great Northern Railway have entered into an agreement with the Witham Navigation for 999 years, under which they pay ; 1 0,5 45 a year for the tolls and charges to be fixed at so prohibitive a rate that a yearly loss of ^755 is sustained. The same Company also give a subsidy of ,9,570 a year to the Channel of Fossdyke in return for an annual income of ^689 1 2 Again, although the major portion of the railway canals are so situated that, under proper conditions, they should show a larger traffic per mile than those belonging to independent companies, as a matter of fact, they carried in 1880, according to Mulhall, only 5,500 tons of merchandise per mile for every 10,600 conveyed by the independent navigations. 3 Mr. E. J. Lloyd, a leading canal authority, told the Committee of 1881, that the Great Western Company have practically a million of money invested in canals; they own the Kennet and Avon, the Stourbridge Extension, the Stratford-on-Avon, the Swansea, the Monmouthshire Railway and Canal, the Bridgewater and Taunton, and the Grand Western Canals. With reference to the Hereford and Gloucester, the Great Western Company pay $000 a year for it; it is a rent-charge in addition to the 1 Report, p. 13. 2 Paper by E. Clement, in Chamber of Commerce Journal, October IO, 1892. Dictionary of Statistics. 48 RAILWAY NATIONALIZATION capital. The total amount of capital invested in those canals (excluding the Monmouthshire Railway and Canal, which is a mixed amount and is not divisible) is ^633,036, and the total amount, including the Monmouthshire Railway and Canal, is ;i, 019,486, and the net revenue of the whole of that invested capital last year was ^276, and the rent-charges payable in addition were ^8,243, so that practically the Company lost .7,966 by the working of the canals. From this, he declared that the Company had spent the money upon the canals not to utilize them for the public, but to shut them up and thus bring the traffic upon the railways. 1 With the object of compelling traders to use their railways instead of the canals, the Companies persistently pursue two clearly defined policies. They either impose rates that are practically prohibitive, or they allow the canals to fall into dis- repair, even occasionally to the point of becoming derelict. Speaking of the high rates before the Committee of 1881, Mr. F. B. Grotrian, J.P., ex-President of the Hull Chamber of Commerce, declared that upon the Railway Companies acquiring several canals from Hull, they had immediately put up the rates so as to send the traffic upon the railways. As an example, he cited the case of the Don Navigation, acquired by the Manchester, Sheffield and Lincolnshire Company, who at once put the dues up to such a rate, that they amounted to a half of the freightage. 2 Sir Benjamin Hingley asserted that the effect of Parliament allowing the Railway Companies to absorb the canals, had been disastrous to the trade of South Stafford- shire. The high rates had seriously imperilled the very exist- ence of the finished iron trade, and he believed that there were grave dangers of its coming to a stop if some alterations were not made. 3 Mr. Lloyd, General Manager of the Warwick and Birmingham Canal Company, was equally emphatic. He stated that the Railway Companies were charging exorbitantly high rates upon their portion of the through canal system, so as to compel the traffic to go all the way by rail. In fact, the rates upon the same class of goods were as high, or even higher, merely upon their portion of the canals, as for all services the whole distance by railway. In his opinion there was no doubt that, unless a great reduction was made in the charges, the con- 1 Q. 10,118-22. Q. 9,706-11. 3 Q. 5,521. THE KILLING OF CANAL COMPETITION 49 tinuance of competition from South Staffordshire to London by canal would cease. 1 So anxious were the railways to secure this object, that if independent carriers set up, they either ran them off the canals or bought them off. In fact, by their coercive tactics they had compelled canal carriers to become parties to their conferences for keeping up the rates. 2 Mr. Spence also gave one or two striking examples of in- creased rates upon railway-controlled canals. Whereas, some years ago, when the canals between Manchester and Birming- ham were free, he was enabled to forward alum by water, now that the " intervening canals are under railway control, the tolls have been so levelled up, that water-carriage competition has been entirely destroyed. The carriage rates are precisely the same as those by rail, so the canals, instead of getting justice, are actually handicapped by their comparative slowness of transit." The North-Eastern Railway Company exactly doubled the rates upon the Market Weighton Canal, almost immediately after becoming its possessors. In the case of the Huddersfield, the London and North-Western Railway Company maintain the maximum rate of dues allowed by their Act, although this maximum, fixed upon the same principle as the legal maximum of railway rates, is extravagant and practically prohibitive. 3 The same Company charge a third of the total through canal rate from South Staffordshire to London, for a distance that is not a thirteenth of the whole journey. In other words, the full journey is 160 miles, and upon the Birmingham Canal which they control, and which is only a short link of 12 miles, the charge is 33 per cent, of the whole charge of transit. 4 The cases of Railway Companies permitting their canals to get into a state of disrepair are equally instructive. Mr. Lloyd stated that the southern portion of the Stratford-upon-Avon Canal, belonging to the Great Western Railway Company, had been allowed to get into such a condition that a boat would make very good progress if it made about a mile and a quarter to a mile and a half an hour, and a fully laden boat could only get down it by rubbing through the mud at the bottom at a 1 Q. 10,160. Q. 10,218-20. Q. 10,438. 4 Mr. E. Clements, in Chamber of Commerce Journal, October 10, 1892. E So RAILWAY NATIONALIZATION very slow speed. There was also the Gloucester and Hereford Canal belonging to the same Company. So defective and choked up had the Company allowed it to become, that Mr. Lloyd assured the Committee, a man had had to work exceed- ingly hard for fifteen hours to merely get along twelve miles. 1 Mr. Spence also gives a number of instances of disrepair, in the special paper he prepared for the Committee. One or two are well worth quoting. " The Bolton and Bury Canal held by the Lancashire and Yorkshire has been allowed by this Company to get into a very bad condition ; it is unsafe to navigate it at night, and is there- fore closed nightly all the year round. The canal has been closed for the last six or eight months. . . . The canal has been allowed by the Company to be undermined at one point by a neighbouring colliery ; they had powers to prevent this, but declined to avail themselves of them. It is scarcely necessary to add that the great bulk of the traffic during these stoppages is diverted from the canal to the rails of the Lancashire and Yorkshire Company." " The Sankey Canal, passing through the important manu- facturing district of South Lancashire, lying between Widnes and St. Helens, and owned since 1864 by the London and North-Western Company, has its traffic dealt with by that Committee in the following fashion : By a provision in the Act of transfer the Company were bound to prevent the silting up of the channel connecting the canal with the river Mersey ; but this requirement has been practically ignored ; a sand-bar is allowed to accumulate at the entrance to the canal, and in consequence there is no exit for loaded vessels during neap tides, that is, during a fortnight of every month. ... In con- sequence of these various obstructions the traffic upon the canal has of late years all but entirely disappeared." "The Canals and Navigations under the control of the North-Eastern Railway Company have been allowed to go lamentably out of repair. I refer to such as the Derwent, the Market Weighton, Pocklington, Driffield, and Leven Canals. Both the condition of the locks and the want of dredging have rendered them almost impassable, and then at such limited draughts as would be unprofitable to work over, even were the 1 Q. 10,162. THE KILLING OF CANAL COMPETITION 51 dues not maintained at, I believe, the very maximum allowed by their Acts." 1 The Railway and Canal Act of 1888 professed to give the traders a remedy against the Railway Companies, by enabling them to take legal proceedings for putting an end to some of the worst abuses, and by making canal rates and tolls subject to revision by the Railway Commissioners. But, owing to its cumbrous and mutilated character, this section of the Act has remained practically a dead letter. In fact, as Mr. Spence assured the Committee " To fix a reasonable scale of railway rates and one of canal tolls, and leave the canals in the hands of the Railway Companies, would be no remedy for the evil, as the Railway Companies, having only one profit on the canals as toll collectors, against two on the railway as toll collectors and carriers, would be certain to find it more profitable to divert the traffic on to the latter ; and thus obstacles of all kinds would again be thrown in the way of the canals." 2 During the last few years the practical boycott of the canals by the Railway Companies has led to such an outcry that the present Government have been induced to appoint a Royal Commission with the following terms of reference : To inquire into the canals and inland navigations of the United Kingdom and to report on (T) Their present condition and financial position. (2) The causes which have operated to prevent the carrying out of improvements by private enterprise and whether such causes are removable by legislation. (3) Facilities, improvements, and extensions desirable in order to complete a system of through communication by water between centres of commercial, industrial, or agricultural importance and between such centres and the sea. (4) The prospect of benefit to the trade of the country com- patible with a reasonable return on the probable cost. (5) The expediency of canals being made or acquired by public bodies or trusts, and the methods by which funds for the purpose could be obtained and secured, and what should be the system of control and management of such bodies or trusts. 1 Q. 10,438. CHAPTER VI THE BITTER CRY OF THE TRADERS FROM every district between John O'Groat's and Land's End, and from every industry and trade, from the getting of coal to the selling of pianos, come constant complaints against Railway Companies charging rates that are excessive, preferential, and unjust, and withholding facilities which the traders believe they have a legal right to demand. Either there is substantial ground for these complaints, or the present railway system is a grossly maligned institution. But even under the first of these alternatives there is no need to attribute to railway directorates either an undue lack of patriotism, or motives uncovered by the usual commercial code. They are elected and paid to serve the interests of their shareholders, and if these are not coin- cident with the interests of the public, then they can scarcely be blamed for the antagonism. The shortcomings will have to be looked for in the intrinsic character of the system. This is anticipating, however. We must first see what justification there really is for the complaints of the traders. Out of fifteen separate reports presented by the members of the Commission on Trade Depression in 1886, fourteen of them, while disagreeing on most things, are unanimous in citing high and preferential railway rates as one chief cause of the depression. Some do it mildly, and in the formal language of officialism. Others manifest indignation in much more expres- sive phrases. Said the Majority Report " Among the causes which are said to have aggravated the prevailing depression, scarcely any have been so persistently put forward as the difficulties connected with the transport of goods." THE BITTER CRY OF THE TRADERS 53 Upon which Sir Charles Mark Palmer observed " I think the report of the majority of the Commissioners does not give sufficient importance to the grievances of the traders at home in regard to the policy and conduct of Railway Companies in this country. I think the rates charged are in many cases so high that they are prejudicial to our productive industries, and more especially as regards agriculture. The carrying of foreign pro- duce at lower rates than those charged on home produce must seriously hurt all home industries." And Lord Dunraven and Messrs. Neville Lubbock, Farrer Ecroyd, and P. Albert Muntz, in their Minority Report, declared that among the principal causes of depression is " The advantage given by our Railway Companies to foreign producers by the conveyance of goods from the outports to the great centres of distribution at lower rates than from the seats of home production." 1 This Commission issued a circular to the Chambers of Commerce asking for opinions upon the causes of depression and suggestions for remedial measures. A large number of the replies laid emphasis upon the injury done by railway rates. The London Chamber of Commerce asked for an immediate " Revision of railway rates and fares, especially the through rates from foreign countries, which practically amount to the creation of a heavy bounty (and that by the Railway Companies) in favour of foreign producers, most detrimental to British producers, and to the agricultural interests of the country." 2 The Birmingham Chamber urged " Fresh legislation for the regulation of railways and railway rates, making minimum rates charged for foreign goods the maximum for home goods, and including the emancipation of canals from the control of the Railway Companies." 3 The North Staffordshire Chamber declared that the trade of their district had been seriously affected by " the heavy charges imposed on the transit of raw materials and goods to and from the seaboard, as compared with their foreign competitors." 4 The Sheffield Chamber asserted that their district, in its foreign trade especially, was always suffering severely from the 1 Final Report of Commission on Trade Depression, 1886. Vol. II. p. 390. VoL I. p. 77. * Vol. I. p. 107. 54 RAILWAY NATIONALIZATION high railway rates, but particularly did they feel the pressure in times of depression. 1 The Newark Chamber also asserted that the " inequalities and injustices " of the railway tariffs was a grave cause of depression. 2 While the Wolverhampton Cham- ber, after stating that " the most important circumstance affecting the trade of this district is the unfair, unequal, and excessive railway rates which are charged upon all its productions," very strongly expressed the opinion, as the result of long and deliberate thought, that no remedy short of State-ownership was likely to prove an adequate remedy. 3 But to appreciate properly the grievances of the trading public, it is necessary to look at the specific rates for the different classes of merchandise. Let us take the coal first. It is reported that when a proposal was made that the old London and Birmingham Company should carry coal, one of the directors indignantly exclaimed, " What ! carry coal ? Why, they'll be asking us to carry dung next ! " And certain it is, as Mr. Acworth tells us, that when coal trucks first passed over this line (now the London and North- Western) they were " sheeted " down that their contents might not be suspected ; and at Weedon, where coal was transferred to the railway from the barges of the Grand Junction Canal, there stood for many years a high screen erected originally to conceal the ignominious transaction from the gaze of the passing traveller. 4 But the Companies have long made up for this sad example of Ihe majestf, and to-day recognize King Coal as the twin-brother of King Midas. In fact, they are delighted, as loyal courtiers should be, to allow him the truly royal pre- rogative of providing them with a fourth of their income. In 1892, according to the Mineral Statistics, prepared by the Home Office, 181,000,000 tons of coal were raised in the United Kingdom. Of this total, we find, if we apply Mr. Mulhall's estimated proportion for 1889, that about 14,000,000 tons were consumed for colliery purposes. 6 This leaves 167,000,000 tons, and of this net total no less than 137,000,000 tons were conveyed by the Railway Companies and by the Canal Naviga- tions either actually or virtually controlled by them. That is to say, that those interested in the coal trade had to trust to the 1 Vol. II. p. 406. a Vol. I. p. 1 06. 8 Vol. I. p. 112. * The Railways of England, p. 142. B Dictionary of Statistics. THE BITTER CRY OF THE TRADERS 55 Railway Companies for the conveyance of about 80 per cent, of their net produce. What the amount of toll levied by the Companies upon this coal was there are, unfortunately, no means of ascertaining, as no separate figures are published. All we can do is to see the total charge for all minerals, and how this works out per ton, and in relation to estimated value. In 1892 the minerals raised in the United Kingdom were 290,000,000 tons; imported, 6,000,000; total, 296,000,000. The estimated value being ^95,000,000, giving an average value of 6s, $d. per ton. According to the returns of the Railway Companies, 221,000,000 tons of minerals were con- veyed by rail at a total charge of ^18,000,000, or a tonnage rate of is. i\d. that is, a charge of 25 per cent, for railway rates is made on the selling price of minerals. This amount coincides with the evidence of Mr. J. S. Jeans (before the Depression of Trade Commission) and Sir Alfred Hickman (before the Railway Rates Committee), and derived from entirely different means. This charge, then, of 25 per cent, is the tribute rendered by the community to the Railway Com- panies upon raw minerals alone. But, when we remember that included in this are all the costly minerals, the average rate per ton for coal, taking the short as well as the long distances, will be very much more than i s. 7^ i> ,> ... 43 > Germany. >, >, ... 102 ,, Belgium. Works to inland markets ... 68 ,, ,, France. Finished iron and steel works to ports ............ 79 France. 96 ,, ,, Germany. 23 ,, ,, Belgium. ... 120 ,, France. To inland markets US it Germany. 3 Belgium. And as to the system of preferential rates in the iron trades, the following table has been extracted by the Journal of the Railway and Canal Traders, from the Reports of the Select Committee on Railway Rates and Fares, and the Commission on Trade Depression : Home, Foreign, per ton. per ton. SHEET-IRON. s. d. j. d. Antwerp to Birmingham ............ 16 8 Birmingham to London ......... " ... 15 o NAILS. Antwerp to Wolverhampton vi& Harwich ... 16 4 Wolverhampton to Harwich ......... I 14 Antwerp to Birmingham vi& London ...... 16 8 Birmingham to London ............ 18 4 BRIGHT IRON WIRE. Antwerp to Birmingham ......... ... 16 8 Birmingham to London ... ... ... ... 184 GIRDERS. Antwerp to Birmingham vid Grimsby ... ... 16 8 Birmingham to Grimsby ... ... ... ... i o o Antwerp to Sheffield ...... ... ... 15 o Sheffield to Grimsby ......... ... i o o COPPER. Tyne to Manchester ...... ... ... i o o 17 6 IRON CASTINGS. West Hartlepool to Leeds ............ 16 8 11 8 Newcastle to Leeds... ... ... ... ... I o o 12 6 62 RAILWAY NATIONALIZATION The complaints of preferential rates are equally emphatic in all branches of the textile trades. In giving evidence before the Commission on Trade Depression, Mr. Samuel Andrews, Secretary of the Oldham Master Cotton Spinners Association, stated that he had gone into this question of rail- way traffic a good deal, and it seemed to him that at the time when the railways were formed, the cotton trade was looked upon as a kind of El Dorado. They made cotton pay for other commodities . . . and the consequence was that they found that cotton is perhaps the most heavily weighted, or more heavily weighted than any other commodity which is so convenient to handle. 1 And this is an extract from the evidence of Sir J. C. Lee, one of the largest cotton and general manufacturers in Lan- cashire " Have you given your attention at all to any questions con- nected with the pressure of railway charges upon goods to Manchester; that is to say, whether you find them add in any way to the depression in trade ? Yes, it costs us as much money to take our alizarine from the banks of the Thames to Manchester, as it costs us to bring it from Germany to Manchester." Again " Do you consider such difference of rates as you speak of, as between Germany and the banks of the Thames, has operated in favour or promotion of the sale of German goods in competition with your own ? Yes, undoubtedly ; they can land them here and bring them right into our own market at a less rate in fact. . . . The rate between London and Manchester for alizarine is 275. 6d. a ton. We asked the Railway Companies for a rate between London and Church it is about the same distance from London as Manchester. Their reply was 6os. per ton. The rate for freight of alizarine from Mayenne (France) by rail to Rotterdam (Holland), thence by steamer and rail to Glasgow, is 50^. per ton. The rate by rail to Glasgow is 50*. per ton ! ... It costs us as much to take our alizarine from the banks of the Thames to Manchester, as it costs us to bring it from Germany to Manchester." 2 In a return supplied by the North-Eastern Railway Company, 1 Q. 4380 et seq. 8 Q. 8084 et seq. THE BITTER CRY OF THE TRADERS 63 to an order of the House of Commons on February ist, 1887, this comparison of cotton rates is given: COTTON MANUFACTURES AND YARN. Home. Foreign. London to Liverpool per ton ... 37*. 6d. 2$ s. West Hartlepool to Leeds ,, ,, ... 25*. i6j. &/. Newcastle to ,, ... 30*. iSs. 40?. ,, ,, (Cotton yarns) 2r. 4^. I2s. 6d. The same return also showed that the rates for English and foreign woollen manufactures and yarn were Home. Foreign. Newcastle to Leeds (manufactures) per ton 30*. i8s. 4^. West Hartlepool to Leeds (yarn) ,, ,, 25*. I2j. &/. Newcastle to Leeds (yarn) ... ,, ,, 305. 12s. 6d. Mr. (now Sir) H. Mitchell, the well-known Bradford woollen merchant, told the Commission on Trade Depression that the result of the rate of carriage is that the French goods can be distributed from London at a lower rate than their own goods can ... A Roubaix (France) manufacturer can send goods to London at a lower rate than Bradford goods can be sent to London. 1 And Mr. C. E. Bousfield, a Leeds woollen manu- facturer, declared that it cost them more to bring their wool from London to Yorkshire than it did to take the wool from London to Roubaix. From London to the north of Wake- field, in Yorkshire, the rate is 32*. 6d. per ton, whereas from London to Roubaix it is a2S. 9 In the flax trade the same story of inequality prevails. Thus it was shown before the Select Committee that the flax rates were as follows Home. Foreign. s. d. s. d. Hull to Belfast f 2-ton \ ... o 18 4 Selby to Belfast ( lots j i 6 8 Hull is 30 miles further than Selby, and the Hull flax is carried past Selby. 1 Q- 3992-6 * Q. 63286577. 64 RAILWAY NATIONALIZATION And while British linen is charged i ITS. 6d. per ton from Liverpool to London, foreign linen is only charged ;i 5^. od. 1 Preferential rates constitute a very serious bounty upon foreign sugar. Mr. L. A. Martin, of Mincing Lane, writing to the Daily Chronicle, pointed out that whereas sugar from Hamburg vid Hull to Manchester is only 15$. 3, Broccoli 35*. " The estimated tonnage of Cornwall potatoes and broccoli annually sent to London and the North is 30,000 tons, so that about ^15,000 more is charged for carriage of home produce, as against foreign, in Cornwall alone." A deputation of market gardeners waiting on the President of the Board of Trade, in 1892, said that English apples from Folkestone were charged 24^. id., while the same weight from France were carried at 15^. &/. 3 Mr. Sankey pointed out to the Select Committee that while French potatoes can be sent from Boulogne (vid Folkestone) to London for 1 2S. 6d. per ton, the rate for English from Folke- stone is 15-r. per ton. 4 Mr. George Neve (Staplehurst) said that " the effect of this preferential rate for foreign and high rate for English fruit is, in the first place, to give the foreigner a bounty equivalent to los. per ton, or something like 30$. per acre over the English grower; and in the second place, by the high charge for the carriage of English fruit, to cause a great deal to be left un- picked in heavy cropping years which would be sent into the market if the charges were moderate. Such being a direct loss to the grower, the labourer who gathers it, and the consumer 1 Q- 10,550. 8 Appendix, p. 115. ' Natiotial Railways, p. 333. * Q. 7334 et seq. 74 RAILWAY NATIONALIZATION who thereby loses a plentiful supply of cheap wholesome fruit." i In the matter of dairy produce the story is the same. Mr. Rigby, Secretary of the Cheshire Chamber of Agriculture, told the Committee that while American cheese is sent from Liverpool to London for 2$s. per ton, English is charged from Wrexham or Beeston twenty or thirty miles nearer at the rate of 42^. to 455. per ton. 2 Mr. J. Coleman, a Yorkshire farmer, was asked by the Com- mission on Trade Depression if he thought the railway charges pressed very hardly upon the carriage of produce, and replied "With regard to some items very much indeed, such as manures. In some cases, I believe, they are not reduced at all ; although prices have been reduced very much the carriage has not been reduced. In Cheshire there is a most extraordi- nary fact. When I was making my inquiry in Cheshire I ascertained that the cost of conveying cheese by the London and North-Western Railway from Chelford, or one of those stations in mid-Cheshire, to London, was greater than the cost of bringing it from New York right past the very station to London ; the rate was actually less. Also, taking corn from Newcastle to Derby and other inland towns, foreign corn was conveyed at a very considerable less rate than English corn for the same quantity." 3 The Secretary of the Royal Agricultural Society 4 submitted to the Select Committee this comparative table for English and foreign butter ENGLISH. In Crocks March to London 86 miles 50^. per ton or 5-58 per mile. Lynn ,, ,, 97 55*. ,, 6'8o ,, Swaffham 113 50*. 5-30 FOREIGN. Rotterdam to London 1 86 miles 47 s. 6d. per ton or 3*06 per mile. Antwerp 206 ,, tfs. 6d. ,, ,, 276 ,, The Field* has pointed out aperies of even grosser anomalies. The rates for imported butter, cheese, bacon, lard, and wool from Southampton Dock to London, distance seventy-six miles, is 6.y. 1 Appendix, p. 157. * 52S,996 2,652,343 4,813,200 Increase Decrease 86,467 288,621 2,625,945 2,160,857 So that the first-class receipts decreased 12 per cent., and the second-class 34 per cent. ; while the third-class increased by 250 per cent. ; the total increase from all classes being 28 per cent. But it is in comparison between the net receipts from the different classes where the vast importance of the "demo- cratic third " is fully seen. In the work already quoted, Sir George Findlay gives this comparative table of net receipts upon his line for 1871 and 1888, and rightly says that its significance can hardly be exaggerated * YEAR. 1871 1888 FIRST CLASS. SECOND CLASS. THIRD CLASS. Working Expenses per cent. Net Profit per cent. Working Expenses per cent. Net Profit per cent. Working Expenses per cent. Net Profit per cent. 55*00 92-05 47-00 7'95 51-55 72-55 48-45 27-45 36-35 42-25 63-65 5775 From this it will be seen that the net profit on first-class traffic, which in 1871 was nearly half of the gross receipts, had diminished, until in the year 1888 it represented not quite 8 per cent, of the gross receipts. The profit upon second-class traffic, which in 1871 was also nearly half the gross receipts, has now, from the same causes, dwindled to little more than a quarter, while that of the third-class has only decreased by 6 per cent. 1 Railway Problems, p. 312. THE PLAINT OF THE PASSENGERS 83 Another calculation by the same eminent authority shows that the net earnings per passenger per mile, after payment of working expenses, for the two periods under comparison, were approximately as under YEAR. FIRST CLASS. SECOND CLASS. THIRD CLASS. 1871 1888 d. 8 5 12 d. 65 *34 d. 57 52 So that, under the old state of things, the first-class traffic paid best, but the second-class paid better than the third ; while under modern conditions the third-class is the most remunerative traffic, the second-class comes next, and the profit on first-class appears to be very small indeed. 1 Still more recently Sir George Findlay has stated that 2 "to obtain ,100 from first-class passengers it cost the London and North-Western Railway ^92, but from third- class only 42. Great Northern ^94, but from third-class only ^53. London, Brighton and South Coast ^76, but from third-class only ^30." And on the same occasion he submitted an able analysis of the North-Western accounts for the year 1888, made by Mr. R. Price Williams, C.E., which showed that in that year working expenses for the First class amounted to 97*0 per cent, of receipts. Second 104-44 Third 41*0 Put in another form Of the it i-$d. received in that year from each of the 51,500,000 third-class passengers, 6d. each was net profit; of the $s. received from each of the 1,915,815 first-class passengers, the profit was only i 1-3^. each ; while the 3,331,935 second- class passengers were carried at a loss of ^15,000. Thus the third-class passenger has not only provided practically all the 1 The Working and Management of an English Rail-way, p. 312. ' Paper before Society of Arts, Feb. 14, 1890. 84 RAILWAY NATIONALIZATION profit derived from passenger traffic, but he is also compelled to make up the loss involved on account of the second-class passenger. Or, to again quote Sir George Findlay "The Companies, in short, have spent and are spending large sums of money in providing the most luxurious accom- modation and every facility and convenience for the benefit of the superior classes, but they are doing this practically at their own expense, and it is really the humble and once despised third-class traveller who furnishes the sinews of war." 1 Many of the Companies have found it more profitable in fact to follow the example of the Midland in abolishing the second-class carriages. While, however, the third-class passenger has the honour of paying the piper, he has not the right of calling the tune. It is true that all Companies have seen the wisdom of providing him with many more trains than the minimum of one per day re- quired by the Act of 1844. It is equally true that most of the Companies give him the advantage of travelling by many of the express services. And it is boasted that he can have a selection from one of several alternative routes, with trains starting and arriving at practically the same time. But this is very largely, as Professor Mavor puts it, " a delusively attractive service delusively attractive because trains start at the same hour from each station, whereas the public convenience would demand that they should be so arranged as to give the maximum num- ber of opportunities for travel." 2 There are 58 trains per day from London to Manchester by six routes, 5 1 to Liverpool by five routes, and 48 to Edinburgh by two routes. The great majority of these duplicated services start from the different stations within a few minutes of each other, which is of no special advantage to the public. It would suit them much better to have half the total number of trains to Manchester, but to have them at different times by the shortest route. And a portion of the surplus might then be used for improving the services to and from other places which now suffer from a deficiency. But it would be the merest pedantry to belittle our express services to and from London 1 p. 316. * "Scottish Railway Strike," Economic Journal ', March 1891, p. 209. THE PLAINT OF THE PASSENGERS 85 and the North. They are probably on the whole the most admirable in the world in the matter of speed ; and in com- fort and internal convenience they compare favourably with those of any other country. They are provided with luxuri- ous carriages, with lavatories, and with ladies' compartments. Some have corridor-carriages and Pullman dining-saloons. The fact is, however, that the express service is to the other passenger service very much what an only son is among a family of middle-class daughters. He is the chief object of attention, and that he may shine well in the world, and shed lustre upon his family, expense is lavished upon him to the neglect of his sisters. And so with the railways. We find the advantages attending the express services are by no means universal. They are, indeed, the exception and not the rule. Speaking generally, the Times is constrained to declare that "In the matter of the comfort and convenience of the railway traveller, it is hardly too much to say that we are only just beginning to escape from the tyranny of established fact and routine. . . . The light afforded is still so scanty and so inconveniently placed that comfort in reading is al- together out of the question. On the shortcomings of the costly, cumbrous, and ludicrously inefficient method of heat- ing railway carriages by means of hot-water tins we need hardly dwell at length. The whole system is a barbarous anachronism, of which the utmost that can be said is that it is, perhaps, a little better than nothing, and that, in the event of a collision, there is no possibility of its increasing the catas- trophe by setting fire to the train. It must be obvious that in both these respects there is room for an almost indefinite amount of improvement, and no sensible man will consider that the comfort and convenience of railway travel have even begun to approach their limits until railway carriages are warmed in cold weather to a temperature conducive to health and comfort, and lighted in such a manner that a passenger of average sight can read at night without serious injury to his eyesight." 1 The condition of things upon some of the chief southern systems, and especially in their suburban traffic, is nothing short 1 June 9, 1892. 86 RAILWAY NATIONALIZATION of a scandal. Take the South-Eastern and the London, Chatham and Dover for example. " Many of their carriages," to quote Sir Francis Peek, "are hardly fit for cattle trucks, and all are dirty and generally ill kept." l A similar descrip- tion is equally applicable to the suburban thirds of the Great Eastern. Nor do most of them think it necessary to provide proper light; the Chatham and Dover being apparently satisfied if one light out of five survives in a journey from Kentish Town to Victoria. The District and Metropolitan District for a long time made a profit out of their neglect in this respect by giving their customers the option of putting a penny into a slot-lamp for the privilege of getting sufficient light to read, but the recent electrification of their lines have made this a matter of history. The deficiency of accommodation is a feature from which none of the Companies running, in London, at least, are free, although some of them are much greater sinners than others. On several of the lines, as Lord Chief Justice Russell has put it " Men, women, and children are forced into the trains in a way they would not herd sheep or bullocks." 2 The over- crowded carriages that come into Liverpool Street, Waterloo, London Bridge, Ludgate Hill, and other London termini are nothing short of disgraceful. It is no uncommon thing to see crammed into compartments registered for ten people as many as twenty and twenty-two passengers, especially on wet days, when their clothes give off an effluvia as dangerous as it is offensive. Even as this chapter was being originally written there appeared the report of an inquest upon a woman suffocated through travelling in an overcrowded Great Eastern train from Stratford to Bow, a distance of less than a mile. 3 Bus, Tram, and Steamship Companies are heavily punished for what the Railway Companies are allowed to do with perfect impunity. And, if a third-class passenger tries to escape from the packed boxes into an empty second or first- class carriage, he is fined for "defrauding the Companies." Many passenger stations are in a most unsatisfactory 1 Times, Feb. 5, 1892. 8 National Rail-ways, p. 155, 8 Daily News, April 22, 1897. THE PLAINT OF THE PASSENGERS 87 condition. A considerable number have outgrown the needs of the traffic. Especially is this the case in London, where the County Council have passed a strong resolution de- manding their overhauling and needful alterations. But strangely enough the Board of Trade have no power over the condition of a station once its original plan has been passed, and none of the Local Government Authorities have had any power as to structural conditions conferred upon them. The fearful catastrophe upon the North London Railway at Hampstead Heath Station a few years ago, when seven people lost their lives, was entirely due to the fact that the barrier was at the foot instead of the head of the long staircase. To prevent another calamity at the same place, the necessary alteration has been made there, but at scores of other stations a precisely similar accident might occur any day from the same cause. Not only are con- ditions of safety absent from many stations, however, but a still larger number are comfortless and inconvenient. Sir Francis Peek, in the letter to the Times already quoted, appeals "for help on behalf of the long-suffering resi- dents in the south of London, who day by day are exposed not only to great discomfort, but often to physical danger, through the failure of the Railway Companies to carry out the moral, if not legal obligation of supplying proper station accommodation, as well as a sufficiency of decent carriages and reasonable facilities for the convenience of the districts over which Parliament has granted them a monopoly. The three chief offenders are undoubtedly the London, Chat- ham and Dover Railway, the London and South-Western Railway, and the South-Eastern Railway. On the first, the two nearest stations to my residence supply a large and populous district, and the platforms are often crowded, yet the only stations provided are wooden sheds, put up about thirty years ago for temporary purposes." 1 There are a large number of minor causes for legitimate complaint, which are as vexatious as they are absurd. The brief limit of time for which tickets are available, the refusal to permit journeys to be broken, the objection to transferring return halfs of tickets, the refusal to treat bicycles and 1 Feb. 5, 1892. 88 RAILWAY NATIONALIZATION bassinettes as passengers' luggage, and the ridiculous charges made for them ; and the petty restrictions placed upon the issue of tickets for parties, and athletic clubs, and schools. All these and many others are really quite trivial, but they are all so needless, and yet so exasperating, that there is neither rhyme nor reason for their continuance under a properly organised railway system. Then there is the exceedingly important question of punctu- ality, which of course affects all classes. An impression prevails in some quarters that an almost ideal punctuality is practised by our Railway Companies, with certain notable exceptions. This is very far from being the case. Dealing with the Board of Trade returns for 1891, the Times declared that the punctuality " leaves much, very much, to be desired. In September, for instance, the percentage of punctuality of up trains on most lines was under 10 per cent. On the Great Northern and on the Midland it was more like 5 per cent. On the Caledonian, between Aberdeen and Edinburgh, it fell to under i per cent., a figure that is only beaten by the down trains of the Highland from Perth to Inverness, which show '77 per cent, punctual, as against 40 per cent, over 30 minutes late. Surely directors and managers should lay to heart the lesson of these figures. It can hardly be claimed that they are creditable to English railway management." 1 The following is a summary of the last returns made (1896) and which only covers the months of June, July, and August, 1895, and train-runs of more than 50 miles 2 1 Railway ( Times of Trains] Return 113, 1896. 2 Dec. 20, 1892. THE PLAINT OF THE PASSENGERS Name of Line and Terminus. Total No. of Trains. Percentage unpunctual by more than 5 minutes. June. July. August. June. July. Aug. Great Western (Paddington) 1,085 1,196 1,196 72 71 72 London and South-Western (Waterloo) ... 1,133 1,294 1,293 54 49 59 London, Brighton and South Coast (Victoria) ... 1,034 1,193 1,171 57 69 82 (London Bridge) ... 1,271 1,440 1,427 42 50 66 London, Chatham and Dover (Victoria) ... 697 795 771 41 61 57 (Holborn) ... 673 766 736 53 77 62 (St. Paul's) ... 28 3 2 30 39 53 67 South-Eastern(London Brdg. ) 854 1,078 1,038 35 44 57 (Cannon Street) ... 883 1,109 1,068 36 45 59 (Charing Cross) ... OX)2 1,132 1,090 54 59 72 But the chief count in the third-class passenger's indictment against the present system is the exceedingly high fares that are charged. Fares are as rigidly fixed by combination be- tween the Companies as the rates for goods. Lord Randolph Churchill, as a member of the Select Committee of 1881-2, asked Mr. Grierson if there was precisely the same combination for fixing fares as for fixing rates? "Yes," replied the Great Western Manager, " the fares between all competitive places are agreed." 1 The Parliamentary maximum of a penny per mile for the shortest route is made the Companies' minimum, as the following typical cases taken from the ABC Guide will show FROM LONDON TO Miles. SWANSEA. Per Great Western ......... 203$ \ ,, London and North- Western ... 278 J HEREFORD. ,, Great Western ......... I44i ,, London and North- Western ... Single Third-class Fare. S. d. 17 2 1 Q. 12,861-2. 90 RAILWAY NATIONALIZATION FROM LONDON TO DOWLAIS. Per Great Western ,, London and North-Western DUDLEY London and North-Western Great Western , LIVERPOOL. London and North-Western ,, Midland ,, Great Northern ,, Great Western MANCHESTER. ,, London and North-Western ,, Midland ,, Great Northern ,, Great Western NEWCASTLE. ,, Great Northern ,, Midland Miles. 177 \ 254! J 201 229 185 203^ GLASGOW. ,, London and North-Western ... Midland Great Northern 272 \ 297*]" South-Eastern HASTINGS. South-Eastern ......... 62 \ London, Brighton and South Coast 76 J RAMSGATE. ,, London, Chatham and Dover ... 79 \ South-Eastern ......... S6J Single Third-class Fare. s. d. 16 6 15 5i 22 7i 33 o 5 oj 6 7 Mr. Grierson assured the Committee that no Company carries at a loss, and admitted that while the Company with the longest route would probably make a profit of 10 to 20 per cent., that with the shortest would make 30 or 40 per cent., because of having a much less train mileage to run. 1 As a true disciple of the renowned Dr. Pangloss, Mr. Acworth endeavours to show that the high fares in England are all for the best in this best of all possible worlds. To be strictly accurate, what he tries to show is that passenger fares in the different countries 1 Q. 12,870-8. THE PLAINT OF THE PASSENGERS 91 vary according to the relative ability of the average wage-earner to pay them. 1 This is plausible enough as a theory, but it is not borne out by the facts, for the fares ought to vary with the wages of the workers in the respective countries. This they do not do, as the following tables show. Country. Weekly wages according to Mulhall. England 3U. od. France 2is. od. Holland 2os. od. Switzerland 2OJ. od. Belgium 20*. od. Germany l6s. od. Hungary l6s. od. Austria i6s. od. Sweden 15*. gd. Italy 15*. od. Russia i$s. od. But this is the order in which the third-class fares (or fourth- class where they exist) come out according to the Archiv fur Eisenbahnwesen Country. Pfennigs per kilometre. France 5 '42 England 5-5 Holland 4-25 Switzerland 4-16 Italy 4-07 Sweden 3-92 Hungary 3-24 Belgium 3*0 Russia 2 -8 1 Germany z'o to 4-67 Austria 2-0 But the suggestion that the railways should be allowed to charge what they think we can afford to give is as dangerous as it is absurd, and its fallacy was effectively exposed by Mr. Gladstone in 1844, when he declared that "It is no sound reason that because this country is rich it should pay Railway Companies more than necessary, or that cheap travelling should not be provided for the public. But there is no likelihood that the great experiment of the greatest possible cheapness to the public will be tried under the present system." 2 1 Nineteenth Century, September 1891. 8 Hansard, June 1844. CHAPTER IX WORKMEN'S TRAINS AND CROWDED CITIES IT might have been supposed that three classes of carriages were sufficient, even for the most insistent sticklers for the artificial barriers of class distinction, without adding a fourth in the shape of workmen's trains. But the reason for the addition is not far to seek. The demand for cheap transit for the toilers to and from their daily duties was found irresistible. How was it to be met without jeopardizing the Parliamentary maximum of a penny per mile for the third-class passenger ? That was what the Companies set themselves to solve. If the new cheap tickets were made available for the ordinary third- class train, it was clear that they could not logically resist their universal issue. So, as a compromise, the expedient was resorted to of creating the Workmen's Train. Of course the workmen's train is a constituent part of the general passenger problem, but as, under present circumstances, it is peculiarly associated with the city health and housing problem, it will be more convenient to deal with it in a separate chapter. And while it seriously affects every district with an industrial population, it is in London where its deficiences are most vitally felt. It will, therefore, be best for us to discuss the question chiefly in the light of the metropolitan needs and experiences. No feature of our modern civilization is more terrible in its results than the constant growth of our towns. Forcibly detached from the soil by the automatic operation of our bad land system, and by other economic causes, of which, as we have already seen, the action of the Railway Companies in 92 WORKMEN'S TRAINS AND CROWDED CITIES 93 conceding preferential rates for foreign to the exclusion of home produce is among the chief, there is a ceaseless flow of our rural population to the great industrial centres. Here they herd and crowd together under most injurious and unhealthy conditions, until their vitality is sapped, and if they themselves do not bear visible traces of physical degeneration their children do, in stunted growth, blanched faces, and shorter leases of life. This process is fearfully accelerated in the subsequent generations up to the fourth, when, unless replenished with fresh infusions from the country, the physical capacity to bear children practically ceases. Astounding as this may seem, it is unfortunately true that a Londoner of the fifth generation is as rare as a swallow in the City. Says Professor Alfred Marshall " The large towns, and especially London, absorb the very best blood from all the rest of England ; the most enterprising, the most highly gifted, those with the highest physique, and the strongest characters go there to find scope for their abilities. But by the time their children, and children's children have grown up without healthy play and without fresh air, there is little trace left of their original vigour. This is seen even in trades that require but little muscular strength; only a very small proportion of those artisans, to whom London owes its pre-eminence as a centre of highly-skilled work, come from parents who were born there ; and there are scarcely any whose grandparents were born there." 1 Overcrowding is one of the chief factors in bringing about this most calamitous degeneration. Long ago Dr. Farr and others pointed out that there is "a constant increase of mortality running parallel with the increase of density of population." 2 And this has been most conclusively shown by the Health and Housing Committee of the London County Council. In a report emphasizing the grave need for cheap trains, 3 they declared that the mean death-rate in different groups of districts in the metropolis, during the seven years ending 1891, is as follows 1 Principles of Economics, p. 257. * Vital Statistics, p. 173. 1 November 21, 1893. 94 RAILWAY NATIONALIZATION Mean death-rate per 1000. Districts with a density of under 40 persons per acre 40 to 80 80 to 1 20 120 to 160 over 1 60 19-04 19-24 22 '6O 23-88 County of London with a density of about 57 persons per acre ... 19-90 Mr. R. Williams, A.R.I.B.A., has supplanted these terrible figures with some that are even more terrible. He gives the following examples of close density of population and high death-rate Death-rate per 1000. Borough-road Sub-District, 2597 per acre 32-3 " Model " Dwellings, 2, 500 per acre ... 26 x> Typical Rookeries, 3,600 per acre ... ... 40-0 Contrast these with the declaration of Sir B. W. Richardson that there is no natural reason why we should not have Death-rate per 1000- A City of Health, with 25 persons per acre, and only S'O 1 8'o per thousand applied to Inner London's population of 437> I 35 i n J ^94> gives an annual death-rate of 34,745 as natural. The actual number in that year was 75,7Q5, 2 so that the unnatural deaths amounted to the awful total of 40,745 for a single year. But the rate of mortality is only a part of the evil. To quote Dr. Farr "The very conditions which diminish the numbers killed in the battle of life diminish the numbers of wounded, and as every single death by violence implies the injury or mutilation of survivors, so nearly all the zymotic diseases leave irreparable traces in the blind, the deaf, the weak in body or brain. By removing the discovered causes of death you at the same time remove conditions which prevent the progress towards perfection of the English race." 3 1 London, November 5, 1895. 2 Annual Report (1894) Medical Officer of Health, London County Council. Vital Statistics, p. 131. WORKMEN'S TRAINS AND CROWDED CITIES 95 But, as the Health Committee of the London County Council declare "There is no known method by which population can be crowded as in London without danger to health and loss of life. Additional air space is impossible within the business limits of London ; room must be sought outside, and improved means of locomotion provided. Rail- ways must, for the most part, be relied upon for conveying passengers a sufficient distance."^ The Royal Commission upon the Housing of the Working Classes came to precisely the same conclusion. The Majority Report, signed by H.R.H. the Prince of Wales, the Marquis of Salisbury, Lord Brownlow, Lord Carrington, Mr. G. J. Goschen, Sir Charles Dilke (the chairman), and others, declared that " If the railways are to be utilized for the benefit of the poorer wage-earning classes, two conditions must be satisfied First, the fares must not exceed the difference between the rent of their homes in the over-crowded districts which ought to be relieved, and the lower rents in the suburbs ; secondly, the Companies must provide carriages at these reduced fares which will bring the people to and from their work at convenient hours." 2 And in dealing with the contention of several Companies that the requirements of the Act of 1883 were somewhat inconvenient, this same Majority Report declares that " The State has interfered in this matter (of workmen's trains) in the public interest rather with reference to what the working classes can afford than to what will pay the Companies. The State assumes and exercises the right to control the price of conveyance, on account of the monopoly which the Com- panies are presumed to exercise in the conveyance of traffic." 8 It is important to bear in mind that the upgrowth of suburbs is now primarily dependent upon railway facilities. As the late Sir B. Maple said, builders and capitalists will not put up houses for the working classes in the outer suburbs until a maximum low fare supersedes the penny a mile, and it is impossible for those employed in the metropolis to reside in the outer suburbs until houses are built for them to inhabit. 4 But the health and general well-being demand not merely that 1 Report, November 21, 1893. 8 First Report, Housing of the Working Classes, 1885, c. 4402, p. 49. Ibid. p. 50. 4 London, May 2, 1895. 96 RAILWAY NATIONALIZATION the workers should be taken out of the " stifling alley, noisome den," and planted in districts free from the evil of over- crowding. They also require them to be freely distributed among other classes of the community, and in houses built upon land that possesses the first elements of sanitary fitness. Neither of these conditions are fulfilled by the present system. There was no human necessity why Greater London, in its outward growth, should not have spread its roots and branches almost entirely over high and healthy ground. But under our go-as-you-please railway policy, the growth of districts has not been determined by health considerations at all, but by railway facilities. Thus the Great Eastern Railway Company had running powers through the Essex Marshes, north of the Thames, and along the Lea Valley. Suddenly it utilized them by giving special facilities in workmen's trains. Thereupon Tottenham and West Ham spring up from small places into huge centres of industrial population, with vast estates of jerry- built boxes, having bogs for foundations, ditches for pathways, and stagnant pools for gardens. They are a veritable Garden of Eden as Martin Chuzzlewit and Mark Tapley really found it ! Partially lying below the river level (part of Tottenham is below the level of the Lea), it is painfully instructive to contrast their death-rates with other districts lying on higher ground in the outskirts of the London County, and in the ring of GREATER LONDON. Death-rate per 1000. Tottenham i8'O West Ham 16-5 Stoke Newington I3'5 Wandsworth I3'5 Hampstead io g 2 Croydon 11*8 But the evil of town growth upon marshy ground only represents a small part of the gross evils which arise from a single Company giving very special facilities for workmen's trains. Facilities in only one direction mean that there will be an undue congregation of workmen's houses there. This WORKMEN'S TRAINS AND CROWDED CITIES $7 means two things. First, it means that the cost of public education, poor law administration, and local government is much heavier, because the proportion of children requiring Board schools will be greater, the number of paupers will be larger, and the cost of local government in consequence of the jerry-builder and " field-ranger " will be more for an equal standard of public sanitation, than in either a mixed or well-to- do district. And, on the other hand, the rateable value of workmen's property will be much less. We can clearly see this effect by a comparison of rates with the same districts as before Tottenham ............ 9 8 West Ham ... ......... 10 4 Wandsworth ............ 7 4 Stoke Newington ......... 6 8 Hampstead ............ 6 to Croydon ............... 7 4 Such inequalities of rateable burdens might, of course, be very largely remedied by a generous extension of the Equalization Act. But the social evils must be met by a freer distribution of the classes, and this can only be done by cheap railway facilities being compulsory upon every line. As the Health and Housing Committee declared " If the Great Eastern Railway Company had not been induced to start their cheap service, the exodus of workmen to Enfield and other places on the Great Eastern line would not have taken place ; and if the Great Western Railway Company had but placed workmen's trains on its system twenty years ago, that Company, like the Great Eastern, would now have been carrying thousands of workmen daily to and from their work." l By the Workmen's Train Act of 1883, the passenger duty upon the Parliamentary fare of a penny per mile was abolished on condition that the Companies ran a convenient number of workmen's trains between six and eight in the morning. This condition has been ignored by practically all the Com- panies so far as the time-limit is concerned, although the Great May 8, 1894. 98 RAILWAY NATIONALIZATION Eastern run an excellent service up to a little after seven. The Housing Commission were very emphatic in their report upon this breach of agreement. " The Act of Parliament of 1883 mentioned eight o'clock in the morning as the limit of time for workmen's trains, but at present most of them are run before seven o'clock, and it is said that if the Companies were compelled to run them till eight, it would tell very hardly upon them in interfering with the clerks' traffic, which begins just then. It is therefore contended, for this reason and for others which were given in evidence, that the powers under the Act of 1883 must be exercised with great discretion. Your Majesty's Commissioners are, however, of opinion that under it a bargain was struck between the nation and the Railway Companies, the consideration for the remission of a part of the passenger duty being the provision of a certain number of workmen's trains." 1 The criticisms of the existing service may be grouped under three heads : 1. The service is inadequate. 2. The restrictions are vexatious and unnecessary. 3. The fares are too high. i. The extreme distance and number of stations to and from which workmen 's trains are run varies a good deal with the different lines. The most distant stations are To the North Enfield Town lof miles South South Croydon ilj ,, East Dartford 17 ,, ,, West Weybridge 19 ,, Taking the thirteen separate Companies we find that the number of stations and greatest distance served by workmen's trains come out as follows 2 1 See First Report, p. 50. * London County Council Report, April 1892. WORKMEN'S TRAINS AND CROWDED CITIES 99 Railway Company. No. of Stations. Most Distant. Miles. London and South- Western ... South- Eastern London, Chatham and Dover London, Brighton and South Coast ... ... ... Extra- Metropolitan. Intra- Metropolitan. i & Weybridge Dartford Penge South Croydon ... Barking Hadley Wood Enfield Town Hounslow Barracks South Tottenham... Poplar Sudbury Elammersmith ftingsbury Nessdon 19 17 7i '5 1 lOf I0| '? f 1 81 9i 29 4 5 4 20 12 15 5 4 4 7 13 20 32 3 2 2 4 44 8 16 i 19 43 36 17 20 37 7 22 36 59 13 16 5 19 47 London, Tilbury and Southend Great Northern Great Eastern Metropolitan District Midland ... ... ... ... North London ... London and North- Western ... Great Western Metropolitan From this it will be seen that the Companies who show up most unfavourably are the London and North- Western, London, Tilbury and Southend, North London, Great Western, South- Eastern, Midland, and London, Chatham and Dover. A great disparity is also shown in the number of workmen's trains run by the different Companies : l Company. No. Up-trains. No. Down-trains. London and South- Western South-Eastern ... ... ... ... 13 H I London, Chatham and Dover London, Brighton and South Coast London, Tilbury and Southend 13 H 7 17 2 7 ii Great Eastern ... ... ... ... CO 13 Metropolitan District 14 I 13 21 London and North- Western Great Western ... ... ... ... 4 6 I I Metropolitan 17 Id 1 London County Council Report > 1892. loo RAILWAY NATIONALIZATION Which shows that the service is conspicuously meagre upon the Midland, South-Eastern, London and North-Western, Great Western, and London, Tilbury and Southend. With regard to the Great Western, the London County Council report 1 " There are no workmen's trains on their main line. A special inquiry has been made as to the need for such trains, and for that purpose the following places have been visited Acton, 4^ miles from Paddington ; Ealing, 5f miles ; Castlehill, 7 miles ; Han well, 7^ miles ; and Southall, 8| miles. At all the above places the need for early trains, not only for working men, but for all classes of early business people, is urgent, and the demand, accordingly, a very pressing one. There are no trains at all, at specially reduced rates, for working men, and for the general public there is practically but one early train reaching Paddington before 8 a.m. the 7.17 a.m. from Southall. There is much local dissatisfaction at this utterly inadequate service, which is regarded by residents in the district as having acted for years past as a powerful check to its development, as compared with other parts of suburban London. . . . Dissatisfaction is frequently and publicly expressed . . . and the local authorities, it is stated, have on several occasions taken it up and urged upon the Company the urgent need for a better service, but apparently without the slightest effect. ... A police-constable at Ealing states that he has to call workmen as early as 3.30 a.m. to enable them to walk to Shepherd's Bush, a distance of about four miles, the nearest station at which they can get a work- man's train to take them to London. This also occurs at Acton and Hanwell, in the latter case the distance the men have to walk to Shepherd's Bush being stated to be about six miles." Of the London and North-Western they say " The service is a poor and complicated one, and in one respect appears to have retrograded rather than advanced since the publication of the last Board of Trade report." London, Tilbury and Southend " An inadequate and un- satisfactory service for a district so largely occupied by the poorest of the working classes." Midland " An utterly inadequate provision for such a great line as this." 1 London County Council Refort, 1892. WORKMEN'S TRAINS AND CROWDED CITIES 101 But even upon such a line as the Great Eastern, which has done so much with the workmen's train, the service is not run nearly late enough. The Act of 1883 stipulated eight o'clock, but, as we have said, none of the Companies comply with it in this respect. The result is the greatest inconvenience. Much of the work in London does not start until eight o'clock. Especially is this the case in the City, in the printing, tailoring, and lighter trades. And if the workers in these trades desire to secure the advantage of the workmen's ticket they are compelled to come up needlessly early, and wait about for some time. Where the factories and workshops do not open before 8.30 or nine, the waiting about is really a serious matter, particularly with the hundreds of girls who come up from such places as Tottenham, Edmonton, West Ham, Walthamstow, Woolwich, Wandsworth, etc. But the Com- panies have persistently refused to make any material alteration. For example, two years ago the Board of Trade endeavoured to get an extension of cheap workmen's trains up to eight o'clock in the morning for the convenience of poorly-paid women workers. Here is the unanimous way in which the Companies refused to do anything METROPOLITAN. " We are not prepared to extend the time of issue to a later hour, as our experience is, that the concession (sic) is grossly abused." GREAT EASTERN. " Directors are of opinion that the workmen's train and fare arrangements on this railway are at the present time sufficient to meet all the reasonable requirements of workmen and work- women, and they regret their inability to add to them." LONDON, TILBURY AND SOUTHEND. " Board cannot admit the alleged necessity for the provision of later cheap trains for workwomen on this Company's line." GREAT NORTHERN. "It is somewhat remarkable that, although we run a large number of workmen's trains, no such representation as that 102 RAILWAY NATIONALIZATION received by the Board of Trade has ever been made to this Company." LONDON AND SOUTH-WESTERN. " Do not find that any workwomen travelling by our work- men's trains make it a practice to remain at this station until the opening of their places of employment." NORTH LONDON. "It has been, for some years past, the practice of this Company to treat workmen and workwomen on the same foot- ing as regards tickets, which are issued by all trains up to 8 a.m." METROPOLITAN DISTRICT. " Beg to say on behalf of this Company that there is no real demand on this railway for the extension of the accommoda- tion alluded to." LONDON AND BRIGHTON. "We do not find, from particulars I have had taken, that workwomen travelling by our workmen's trains have to wait until such time as they can be admitted into their business establishments." MIDLAND. "Does not appear to be any sufficient demand for cheap tickets for workwomen by later trains than those mentioned." LONDON AND NORTH-WESTERN. " Accommodation is more than sufficient for the extremely limited traffic of this description which passes over the London and North- Western Railway." LONDON, CHATHAM AND DOVER. " Are of opinion that ample accommodation for workwomen WORKMEN'S TRAINS AND CROWDED CITIES 103 travelling by this line is given by the considerable number of cheap trains now run over our system." 1 Again, as the result of the recent dispute in the London building trades, the time of starting work in the morning has been thrown later in winter. So, to meet the convenience of its 4o,ooo-odd members, the Building Trades Federation approached the Railway Companies to get the time of work- men's trains extended to eight o'clock. I have been kindly permitted to see the replies, and, without exception, they abso- utely decline to do anything. 2. There are many harassing and unnecessary conditions attaching to the issue of workmen's tickets. The chief of these is the time-limit during which workmen may return. Except upon the Great Northern and the Brighton and South Coast lines, no workmen can return with his ticket before twelve. And even then they are frequently restricted to certain slow trains. In some cases they are compelled to give their name, address, trade and employer, as evidence that they are dona fide workmen. Several Companies insist upon workmen taking tickets to a station beyond the one required ; while two others prohibit the use of workmen's tickets at intermediate stations. Others again limit the amount of luggage a workman may take to a few pounds. And in all cases the amount of compensation recoverable for the death or total disablement of a work- man's ticket- holder is limited to ^100, although in the case of other passengers the amount is left to the discretion of juries. 3. The fares are much too high. And the most effective way of showing how high are the London workmen's train-fares will be to show them in comparison with those in operation in the chief capitals of Europe. And this we are able to do from an admirable report prepared by Mr. Reid, of the London County Council. To get at the mean London rate he gives the following table 2 : 1 Board of Trade ft eport of Correspondence, .7657 (1895). * Workmen's Trains Report, adopted April 18, 1893. 104 RAILWAY NATIONALIZATION CHEAP WORKMEN'S TICKET, Railway Company. London and South -Western South-Eastern London, Chatham and Dover ... ... London, Brighton and South Coast London, Tilbury and Southend Great Northern ... Great Eastern Metropolitan District Midland North London ... London and North-Western Great Western Metropolitan Mean cost per mile. d. 0-332 0-3SO 0-336 0-320 0-275 0-329 0-319 0-322 Mean Rate for London 0-293 0-295 0-377 0-284 0-320 And this is the comparison with the capital cities of the Continent Paris Brussels Vienna Budapest Berlin Average London Per mile. d. 0-I72 O-I27 0-I82 O-I9O 0*189 O-I72 0-320 Put in another form, the report declares that " For every I4\y. id. a London workman has to spend in travelling to and from his work, his confrere abroad has to pay in Berlin Paris Brussels Vienna Budapest London s. d. 8 4 7 7 5 7 8 o Or 78 per cent, more than the average of these five capitals of Europe." WORKMEN'S TRAINS AND CROWDED CITIES 105 After such a startling comparison, these remarks of the Housing Committee of the London County Council will not be deemed too strong "The relative position of London as would be anticipated from the most cursory examination of the foreign tables is thus an extremely unfavourable one, and fully justifies the demand for a reduction in the cost of workmen's tickets. Making every possible allowance for whatever differences may exist between the circumstances of London and those of the Continental cities referred to, it remains inexplicable on what grounds so glaring a disparity in tariffs can any longer be even excused, much less justified. " The onus of showing the necessity for charging a London workman, on the average, 78 per cent, (equivalent to 15 '6 shill- ings in the pound sterling) more than a workman on the Conti- nent has to pay, is thus forced upon the London Railway Companies, and it is difficult to conceive on what possible plea the legitimate demand for a more equitable adjustment of these charges can be resisted. " However the question may be viewed, the reasons which plead for this much-needed concession whether moral, social, or economical are irresistible ; and even the narrow, selfish interest of the shareholders may be forcibly appealed to in its favour." * Nor is there any real hope of securing an adequate service under the present system. The London County Council have secured a number of so-called concessions from the Companies by means of friendly negotiation on the one side, and as a condition of withdrawing opposition to new railway bills on the other. But there is no chance of securing a really proper service, even for London, in this way. The hopelessness of the task may be gathered from the following. A conference of London vestries, dozens of workmen's con- ferences and organizations, and all the united strength of the London County Council endeavoured to secure certain reason- able " concessions," which in the case of the London County Council were formulated as follows i. That workmen's tickets be made available for return by any train carrying third-class passengers. 1 Report, April 18, 1893. 106 RAILWAY NATIONALIZATION 2. That the issue of quarterly or monthly third-class tickets be extended to all stations within the limit of the cheap train service. 3. That the conditions as to the issue of workmen's tickets, the fares, kind of tickets supplied, and trains by which available, be published not only in the book of time-tables of each Com- pany, but be conspicuously advertised by means of posters at all stations served by workmen's trains. 4. That, except in the case of quarterly or monthly third- class tickets, all workmen's tickets to be daily ones. 5. That all third-class trains, whether on main or branch lines, arriving at the London termini up to 8 a.m., be work- men's throughout the area of the cheap train service. 6. That all third-class trains from London termini, up to 7.30 a.m., be also workmen's trains throughout the same area. 7. That when insufficent third-class accommodation is provided in a workmen's train, the holder of a workman's ticket be allowed to travel by a superior class without extra charge. 8. That the model zone system suggested in the Committee's report is one worthy of adoption, and which might fairly be made applicable to all future as well as present metropolitan railway undertakings. And this is the result, in the official language of the London County Council " We have now to report upon a communication made to the Board of Trade by Sir Henry Oakley on the part of the Companies, conveying the result of their consideration. . . We think this document must be taken as a definite declaration of the extent to which the Companies are prepared voluntarily to go, and that further arguments are not likely to advance matters. . . . On the main point Sir Henry Oakley maintains a non possumus attitude. His argument amounts to saying that the system of cheap fares on the metropolitan railways is not practicable, except on lines traversing throughout thickly populated districts" x But while the Companies were not prepared to go further voluntarily, under the pressure of recent competition with the London and Metropolitan Electric trams, the motor 1 London County Council Report, May 1894. WORKMEN'S TRAINS AND CROWDED CITIES 107 buses, and thanks to some slightly greater activity on the part of the Board of Trade, there has been a certain im- provement on the part of the more backward Companies since the foregoing was written, but it has neither been so extensive nor of such a character as to alter fundamentally the argu- ments of this chapter. CHAPTER X CONDITIONS OF RAILWAY EMPLOYMENT THE army of railway workers have little more reason to be enamoured of the present system than either the farmers, the traders, or the travelling public. For physique, for intelligence, for skill, and for character, they compare favourably with any other industrial class, and more than favourably with most. But their general conditions of employment are below the average of other workers. Though their occupation is the most dangerous but one in the country, their wages, instead of con- forming to the economic theory of higher remuneration for extra risk, rank with those of the lowest paid. Their hours of labour have been characterized by responsible statesmen as inhumanly long. They have also been frequently denied the right to combine for the amelioration of their lot. First as to wages. The Statistical Department of the Board of Trade published in 1889 and in 1900 reports upon the wages paid in the United Kingdom to railway workmen (i.e. excluding stationmasters, superintendents, managers, clerical staff, lads, etc., but including gangers and foremen). This is a summary and a comparison Received over Received between No. 4OJ. 35*- and 40^. 7,292 5,494 30^. , 35*- 10,540 25J. 2OJ. 15*. 1OS. Up T ', 25^. , 20J-. , 15^- to ioj. otal 1 08 30, 102 61,658 96,386 6,785 52 218,309 Percentage. 3 '3 2 '5 4'8 13-8 28-3 44'2 3'i O.O CONDITIONS OF RAILWAY EMPLOYMENT 109 1900 No. Received over 40*. 9,891 Received between 35*. and 405. 6,598 30J. 35*- 15,045 25^. 301. 38,441 2OS. 25*. 76,770 l$s. 2OT. IIl,o86 IOS. IS* 6,595 Up to lor. 24 Total 264,450 Percentage. 57 14-5 29-0 42 'o 2'5 o lOO'O A further analysis by Mr. Giffen shows that railway men compare most unfavourably with other industries. Annual average for all workers as shown by summary of wages census ... ... .. .. 64 Building trades ... ... .. .. 73 * Domestic servants (large householders) .. .. 68 * Merchant seamen ... ... .. .. 65 * Employes in hospitals ... .. .. 6 1 * Employes in lunatic aslyums ... .. .. 60 * Railway men ... ... .. .. 60 * Including estimated value of food and clothing where necessary. A great deal of evidence was given before the Labour Commission, when it was shown that many railway men were working for 70 hours a week for a wage of 14^. As to the Companies working their men inhumanly long hours, let the facts speak for themselves. According to a Board of Trade report of 1890, the following hours were worked in March of that year by the men on the fifteen large lines : Class of Labour. Number employed. Number of instances of men being employed for more than After being on duty 15 hrs., re- sumed with less than 8 hrs. rest. 12 hours at a time. More than 15 hours. More than 10 hou rs. Passenger guards Goods guards Drivers and firemen Signalmen 3,931 8,692 27,741 16,029 417 6,146 22,743 3,542 156 5,523 29,273 940 12 862 3,971 79 40 498 1,313 672 I io RAILWAY NATIONALIZATION And these are the terms of Mr. Channing's resolution, moved in the House of Commons on January 23rd, 1891, sup- ported by 124 to 141 members, and which resulted in the Select Committee on Hours being appointed "That, in the opinion of this House, the excessive hours of labour imposed on railway servants by the existing arrangements of the Railway Companies of the United Kingdom constitute a grave social injustice, and are a constant source of danger both to the men themselves and to the travelling public. . . ." Here are some cases taken haphazard by Messrs. Webb and Cox 1 from among the employe's of the North British Railway Company : "A. B., a fireman. Hours worked each fortnight during the last eight months: 174, 174, 156, 186, 193, 188, 193, 254, 168, 193, 190, 192, 198, 155, 167, 194. Average per day, 15^. "B. C., an engine-driver. Hours worked for two months prior to the strike, per fortnight : 202, 186, 204, 172. Average per day, 15 hours 55 minutes. "C. D., in Goods Department. On duty in week (six days) ended Saturday, 2oth December, 78 hours 50 minutes. Daily average, 13 hours 8 minutes. " D. E. (grade not stated). Hours worked in the three fort- nights preceding the strike, 198, 191, 183; at work 24 hours on December 4; shortest day, io hours. Daily average, 15 hours 53 minutes. "E. F. (grade not stated). Hours worked between 3rd November and 2oth December, with three week-days and five Sundays off, total 564 hours 47 minutes. Daily average, 14 hours 7 minutes; longest day, 23 hours. " F. F., a goods driver. ' Hours worked during the week ended 2ist December, 99 only, as I was one of the very few who resolutely refused to work without getting sufficient rest ' ! " Said Sir Michael Hicks-Beach, as Chairman of the Railway Servants' Hours of Labour Committee, in his report " The evidence given by railway servants, and by trade union representatives and others on their behalf, went generally to show that long hours were, to a large extent, systematic, and that the calculation of the hours by the week or fortnight, 1 The Eight-Hour Day. CONDITIONS OF RAILWAY EMPLOYMENT in instead of by the day, leads to the regular and systematic recurrence of hours far in excess of a fair day's work." Sir Michael then cited the following instances among others " On the Caledonian, weeks of 90 hours 5 minutes, 88 hours 50 minutes, and 91 hours 35 minutes, were worked by goods drivers and guards. " On the North British a driver and fireman worked 181 hours 40 minutes in 10 days, including days of 21 hours and 25 hours. "Another driver and fireman worked 360 hours 50 minutes in 21 days, the largest spell being 26 hours ; another driver and fireman worked a five-day week of 102 hours 15 minutes, the longest spell being 33 hours 45 minutes, and the shortest 13 hours; another 156 hours 20 minutes in nine days; weeks are still producible of 92^, 96, 98, and 99 hours of drivers and goods guards. " On the Great Western one man's average for three months was 77 hours per week. About thirty guards at Stourbridge worked weeks ranging from 70 to 90 hours 30 minutes. Specially long days were quoted on the Lancashire and York- shire Railway of 17 hours 15 minutes, 19^ hours, 21 hours, 22f hours and 2o| hours." Sir Michael gave dozens of other instances, of which the foregoing are average specimens. The Railway Servants' Hours Labour Act has checked the wholesale practice of excessive hours to some extent. In 1897, of 97 complaints under the Act, the results of 87 are given, showing successful only 22, partially successful 22, unsuccessful 22, no ground of complaint 7, under consideration 21. But, as the Railway Review says, excessive hours are still painfully prevalent. < In December 1902 6,227 men worked 15 hours 2,196 16 941 17 ,, 770 18 In March 1905 5,679 men worked 15 hours 2,117 16 892 17 Mr. Acworth goes so far as to declare that "The further clauses of the Act, empowering the Board to take the manage- U2 RAILWAY NATIONALIZATION ment of the railway out of the hands of the Company and to decide in detail how many hours an individual servant or group of servants ought to work, have been a dead letter. The Board dare not attempt to put them in force ; and in three successive reports its officials have stated their conviction that to do so would not be in the interests of the men themselves." * This is probably an exaggeration, but it shows how difficult it is to enforce proper conditions, in face of an organized opposi- tion, such as the united Railway Companies can present. Then with regard to the dangers attending railway employ- ment at present, the annual report of the General Railway Workers Union for 1893, grimly says that "the railway service may generally be termed the ' slaughter-house ' of the workers, if we take into account the percentage of accidents occurring according to the number employed." Speaking at Battersea, Mr. John Burns, M.P., said "In the eighteen years from 1874 to 1893, 12,000 men have been killed and 160,000 injured on the railways of the kingdom. In seven years 1,220 out of 14,000 shunters have been killed, and 1 1,690 injured on all our railways, which means that eighty per cent, can look forward to being killed or severely injured in seven years." 2 These statements are amply borne out by the official figures. The following are taken from the Returns published in 1906 1 Letter Weekly Times and Echo, October llth, 1896. a November igth, 1893. CONDITIONS OF RAILWAY EMPLOYMENT 113 Year. By Train Accidents. By movements of Trains Bother than Train acci- dents). Not connected with movements of Trains or Train Accidents. Total. Killed. Injured- Killed. Injured. Killed. Injured. Killed. Injured. 1885 13 Si 423 2,007 1886 4 81 404 1,913 1887 8 109 409 1.953 1888 7 93 377 2,081 1889 4 117 413 2,622 1890 12 147 460 2,946 1891 12 154 517 2,977 1892 9 92 506 2,803 1893 10 73 436 2,543 1894 6 62 453 2,637 1895 12 88 422 2,548 1896 3 153 430 3,8o6 36 10,031 469 13,990 1897 9 140 483 3>964 47 10,180 539 14,284 1898 16 no 474 4,007 32 8,709 522 12,826 1899 19 196 488 4,386 48 IO,8O9 555 15,391 1900 24 180 544 4,362 44 11,009 612 15,551 1901 8 156 483 4,058 48 io,393 539 14,607 1902 4 no 431 3,696 33 9,929 468 13,735 1903 9 146 423 3,6i3 38 10,431 470 14,190 1904 7 114 395 3,78i 32 10,640 434 14,535 1905 6 112 38i 3,661 32 10,436 419 14,209 But the real point is not the total number of accidents, but whether these accidents are preventible to any extent. And this can be seen from a comparison with one Company and another; and an historical comparison showing the number and proportion of accidents of certain kinds thirty years ago with those taking place in 1905. Let us take the last first. Unfortunately for present purposes there has been a change made by the Board of Trade in the system of compiling the statistics of the total number of accidents. But the statistics of " train " and " movement of train " accidents have been similarly compiled, so that the comparison must be made be- tween these and not the total of all classes of accidents. Here then are the comparative figures at intervals of five years from 1874 114 RAILWAY NATIONALIZATION By Movement A Proportion of Accidents by By Train of Trains, other Trains and by Movement oi Total v__ Accidents. than Train Trains to all Servants em- number Year. Accidents. ployed. of Servants employed.* Killed. Injured. Killed. Injured. Killed. Injured. 1874 46 271 742 2,544 I in 320 in 89 250,000 1879 8 118 444 1,836 i 619* 143* 28o,OOO* 1884 23 H5 523 2,204 i 634 149 346,426 1889 4 117 413 2,622 i 877 138 381,626 1894 6 62 453 2,637 i 796* 140* 38l,626 1899 19 196 488 4,386 i 917 IOI 465,112 1904 7 114 395 3,78i i 1156 119 465,112 So that while i in 320 was killed in 1874, i in 1,156 was killed in 1904, or more than three times as many thirty years ago as to-day. While the injured were twice as many in 1874 as in 1904, or i in 89, as compared with i in 119. This is conclusive proof that many accidents took place a few years ago from preventible causes which have since been removed. The proportion of accidents among certain classes of ser vants is, however, much higher than the general average ; but, like the general average, shows a broad and substantial ten- dency to reduction. The following table shows the proportion of servants em- ployed by the Railway Companies in the United Kingdom in certain occupations, killed and injured, in the years for which correct figures are available, in accidents in which the move- ment of trains and railway vehicles was concerned, excluding train accidents * The numbers employed are known accurately only for the years 1874, 1884, 1889, and 1895. The figures marked (*) are estimated for the re- spective years by the Board of Trade. CONDITIONS OF RAILWAY EMPLOYMENT 115 I"S M 10 ON N - t^ <* O O l^ "> vO TT Ci O vo ON H ro o ? ^ * -L P O vo O c O Tj- 1-1 VO VO HH ** HH *H s^ u 8 o fo vo N VO OO .5 s ^ * 1 Ml * r si oJ O vo vo ^- 10 O VO * OO N VO ON VO N g- 1 Ej II to * ? * *'< o ? cd &"* a- M o . 'Z -a || O ON O i ON O vo S* E II vO 'I- OO * *J;5 * | o c u, 0< " . K- jy o a M vo O r^ c * : ^ oo co r^ ^* ?> i- R II 00 *x 00 M ro * ^ M O . ' -a 2- o.~ O ON ^ M iO OO S 2^ 1* 2^ Class of Servants. Goods Guards and Brakesmen . . . Permanent Way Men Engine Drivers... !/) : : : T3 : 1 s s B 1 1 8 1 1 1 1 1 n6 RAILWAY NATIONALIZATION The next question is whether we have yet reached a maxi- mum of preventibility ? Certain it is that some Companies show a much higher proportion of accidents than others. This disparity the representatives of the railway workers declare is due to the fact that several Companies escape from the incen- tive to care supplied by the particular liability for each acci- dent supplied in the Employers' Liability Act, by " contracting out" their men, while others give their workmen free scope under the Act. Do facts justify this explanation? I will take the London and North-Western Railway and the Midland Companies as the two lines employing the largest number of men. The Midland allows its men complete freedom under the law, while the London and North-Western Railway con- tract them out, and, as is well known, were the chief advocates of the clause which wrecked the Liability Bill in 1893. And here is the startling result, as shown in the Board of Trade figures for eight years London and North-Western. Midland. Killed. Injured. Killed. Injured. 1888 52 547 36 85 1889 64 825 44 144 1890 74 925 51 143 1891 53 922 60 94 1892 67 762 52 124 1893 52 646 42 67 1894 62 692 4 2 117 I8 9 5 43 626 48 116 467 5,945 375 890 ] Of course the North-Western employs the largest number of men, so we will look at the figures in the light of proportions. The average staff for the eight years of the North-Western was about 60,000, and of the Midland about 50,000. The pro- portion therefore comes out thus 1 From Board of Trade Railway Accident Returns for the several years. CONDITIONS OF RAILWAY EMPLOYMENT 117 Killed and Injured. London and North- Western ... I in 9 for whole period. Midland I in 40 ,, or London and North- Western ... I in 72 per year. Midland I in 320 ,, In other words, the "contracting out" line shows nearly five times as many accidents as the "non-contracting out." For comparison, it is interesting to see that the next three largest lines (all non-contracting out) show for five years the following average yearly proportion of accidents to staff employed Great Western I in 105 North-Eastern i in 125 Great Northern I in 200 All much below the single large "contracting out" line. Taking two small Companies doing a similar traffic, the one, London, Brighton and South Coast, "contracting out," and the other, London, Chatham and Dover, " non-contracting out," we find the annual proportion of accidents to staff employed London, Brighton and South Coast I in 200 London, Chatham and Dover I in 255 A remarkable fact, as bearing upon this point, is that the London and North-Western, which shows the highest propor- tion of accidents, is the Company which most flagrantly dis- regards the recommendations of the Board of Trade as to the adoption of preventive measures. Here is an extract from the official report of the Sub-Inspectors for 1895, upon the acci- dents inquired into, and the number of recommendations made and adopted RAILWAY NATIONALIZATION Recommendations made by the Sub-Inspectors in cases into which inquiries had been held. 2 . J .3* "3 22-ii NAME OF COMPANY. S2 1 is c " iflf c E ^ ^ 111 > b "C c "J 'rl k" HQ^K! " * '35 c wT Total 23 > o.S 4>^i q t^^j? JJ w^ o^*^ fl tation. * State Punhase of Railways, p. 70. 136 RAILWAY NATIONALIZATION murmur of complaint, becomes in 1881-2 a loud growl of indignation. And, surprising as it may seem, this increase of protest is not merely due to the traders becoming familiarized with the value of agitation, but very largely mirrors the actual measure of grievance from time to time. In other words the position of the English farmer and trader was in respect of rates relatively worse fifteen years ago than it was fifty. It is true that, following the general economic tendency of the century, many railway rates have been reduced. This, however, has been by no means universal, for witness after witness before the Committee of 1881-2 testified to rates being actually lower thirty and forty years ago than at that time ! But even admitting a general reduction, the relative position was often worse in the eighties than many years ago, because in the latter case the system of preferential foreign rates had not been developed, and English traders and farmers were able to get upon the home markets, whereas latterly they have been ousted by the foreign producer and trader, thanks largely to our " railway-rate-in-aid." We have compared the condition obtaining in the eighties, rather than now, because in the meantime the position of the traders has been very seriously worsened. As was stated in Chapter II., the Act of 1888 provided for a compulsory revision of all railway rates, and a new and simpli- fied classification. And as this Act and Revision were the definite outcome of the traders' bitter complaints before the Committee of 1881-2, not unnaturally a general hope pre- vailed, that by their means substantial reductions would be made in the excessive rates, and that the system of undue preferences would receive its quietus once and for ever. It is true that Professor Hunter, with his unique experience, on the one side warned the traders that the revision might only become a delu- sion and a snare, while Mr. W. M. Acworth cynically assured them, from the other, that they stood to lose anyhow, for if their rates were reduced the Companies could withdraw an equiva- lent in facilities, and while some rates would be reduced others were certain to be increased. But with an abiding faith in Select Committees worthy of a better object the optimism of the farmers and traders was unruffled by these prophecies. So into the crucible of Revision went the dozens of millions of IS PRIVATE OWNERSHIP HOPELESS? '37 railway rates. For 130 days the inquiry lasted ; 85 days were occupied before the Board of Trade, and 45 more before the Joint Committee; 2 1 1 witnesses were examined, and 43,000 questions were asked and answered ; 4000 objections from 1500 objectors were considered, and separate tables of figures to the number of 2,256 were put in, while exhaustive legal arguments seemed more interminable than the endless string drawn from the conjuror's side. The official minutes alone run to 3,926 pages. Surely it was inevitable that out of such a labyrinth the magnificently organized Railway Companies, with their brilliant band of skilled experts, should come trium- phant ! What could the scattered traders and isolated farmers do ? Here and there Chambers of Commerce and of Agricul- ture, and special Conferences, were able to meet the Companies effectively. And splendid service was rendered by the Mansion House Association. But all their efforts combined only covered a fractional part of the whole ground. And with a Committee prepared to judge upon the merits of the case as it was pre- sented to them, and with the Chairman benevolently anxious to " split the difference," surely the result could not be other- wise than favourable to the Companies ! Finally the result came, and what it was may be gathered from independent evidence. In an analysis of the revised rates, Mr. J. W. Gray, a recognized authority upon the subject, showed that of 2,054 class-rates between Bradford and 313 other places, the result was as follows Are Are Are Increased. Reduced. Unchanged. Of 176 Rates in Class B 313 313 313 3'3 313 313 130 42 4 223 76 9 169 134 10 210 88 IS 33 173 7 III 201 i ISS IS3 5 1136 867 An equally startling analysis was worked out by the Daily News in an able article upon the results of the revision, in which they showed what the Companies were and are allowed to charge. '38 RAILWAY NATIONALIZATION The following is their comparison, the rates, of course, covering all the hundreds of articles included in each class Classes London to Liverpool Birmingham to Wolverhampton I s. d. Per ton. 2 3 S. Rugby London .. Bourne End to London Bourne End to Birmingham Selling to London s. d. 4 17 o 2 22 6 9 23 ii 4 d. s. d. s. d. Old Rate. 32 6 37 6 50 o 70 o New Rate. I 39 10 46 6 55 ii 66 o Old Rate. 92 II 8 15 O 22 O New Rate. 10 4 12 i 14 Old Rate. 2 15 IO 19 New Rate. 4 16 8 19 Old Rate. 4 34 2 40 o 50 o New Rate. 7 34 2 40 10 49 4 Old Rate. 2 16 8 21 8 27 6 New Rate. 6 19 4 22 8 26 9 Old Rate. 20 10 25 10 32 6 37 6 42 6 New Rate. 21 o 25 10 29 8 35 8 43 ii Old Rate. 7 n 9 7 12 ii 18 9 25 5 New Rate. 1. 19 o 22 7 26 6 31 8 37 o Part of this difference is accounted for by the fact that collection and delivery were not covered by the old rates. In a summary of the results prepared by Mr. Edwin Clements and issued to the members of the Mansion House Association on Railway and Canal Traffic, it was shown that upon six of the chief railways, for every two reductions made in rates there were five increases. Nearly every trade and industry was ad- versely affected by the Revision, and the unprecedented out- burst of anger from all parts of the country, when the new rates came into operation in January of 1893, has now become a landmark in commercial history. IS PRIVATE OWNERSHIP HOPELESS? 139 All branches of agriculture, already so badly hit, were severely affected. Here are some comparative rates for grain which Mr. Hole gives l Old Rate. New Rate. s. d. s. d. Sm c e aSbu^ ...} l6 8 4-ton lots... 25 2 2-ton lot, ... per ton. Diss 16 8 4 ... 22 3 2 ,, . . ,, Market Drayton 6 10 4 ,, ... 924 ,, ... ,, Bristol to Cardiff... 422,, ... 892,, ... ,, Plymouth 10 9 2 ,, ... 13 4 2 ,, ... ,, Smethwick to "\ . Ipswich ) '5 I0 4 17 o 4 .- AVerdare 10 10 4 ,, ... 15 3 2 To some of these places no 4-ton rates appear to be quoted. Mr. E. O. Greening, Managing Director of the Agricultural and Horticultural Association, stated that "of 200 rates received from the South-Eastern Railway Company in respect of over 70 stations on their line to which we send goods, a comparison with previous rates shows the following rates In 38 cases there have been reductions and in 211 cases increases. The 38 re- ductions amount to IQS. $d. all told. The 211 increases total up to 22 iys. 2d. The advances on the heaviest traffic 2- ton and 4-ton lots amount to 5^ per cent, after deducting the decreases. The advances on the rates for smaller lots of goods amount to nearly 40 per cent., and there are no decreases under this head." At a meeting of the Mansion House Association, a gentleman declared that the charges on milk had been increased by from 50 to 100 per cent., and that the increase represented a tax of j& a year on every cow whose milk was transmitted by rail. Speaking for a deputation of agriculturalists to the Board of Trade, organized by the Mark Lane Express, Mr. Baylis, of the Berkshire and Hampshire Chamber of Agriculture, declared that "In artificial manures increases had been made of is. to 4*. per ton (special rates), and that the increase, being chiefly on 2-ton lots, hit the small farmer ; a Company had made an increase on the same article of is. zd., is. 3^., and is. $d. above the maxima; on two tons of beet ics. was charged 1 National Railways, p. 332. t40 RAILWAY NATIONALIZATION instead of 3*. $d., and onions izs. 6d. against 6s. id., equal to 3 to ^4 per ton." Another member of the deputation stated that, " without the sale of straw, thousands of acres would go out of cultivation, that a difference of only is. per ton represented a depreciation of ;i 0,000 in Berks and Oxon, but the advance from Newbury to London was from 13*. $d. to 15.?., and from Hungerford from 13*. 4d. to i6s. Pressed hay from 6*. Sd. to 15$. 4^., by which the whole trade had been disorganized." The market gardeners and fruit-dealers also sent a deputation to the Board of Trade complaining of the increased charges and the intensifying of the preferential system. The traders were equally loud in their complaints. A deputa- tion of the Mansion House Association, through their President, Sir James Whitehead, told the Board of Trade that, among other things, "leather conveyed by the Midland from Bristol to London under the old rates stood at 32^. 6d. per ton, while under the new rates it stood at 44^. gd. Paper carried from Darwen to London formerly was charged 28^. ^d. per ton, and now it was charged 5 1 s. Sd. per ton. From the same place to Leicester the old rate was 22*. 6d., compared with a new rate of 34^. yd. Heavy drapery from Lancashire to the west of England had been 48*. Sd., and was now 52^. Sd. From London to Norwich iron tanks formerly cost for carriage 20^. 10^., and now cost 40*. 5^. Hitherto makers of stove grates, kitcheners, baths, and such classes of ironwork, have had breakages, which of course are considerable, returned and replaced free of carriage by Railway Companies. Now both the return and replacement are to be charged, and not even at the original rate of consignment, but at what are called ' small ' rates. The old rate for small goods that is, parcels which do not come under ' per ton ' rate, are raised about 50 per cent. For the carriage of ' smalls ' parcels, that is, not exceeding 3 cwt. in weight the old scale was suf- ficiently complicated, but the nature of the new scale may be gathered from the fact that it differentiates now nine times according to the tonnage rate between 35. ^d. and 6s. Sd., and the new table contains 216 columns or divisions as against the 48 columns in the old. "Sugar formerly enjoyed exceptional treatment in special rates, and as the most important article of imported food next to IS PRIVATE OWNERSHIP HOPELESS? 141 corn it certainly deserves similar treatment now. Nevertheless the rates have been raised to an extent equal on the whole con- sumption of the country to a burden of ^150,000 a year. In addition to this, the distributing trade of London will be seriously injured if the new rates are to be enforced. Further, and most important of all, the preferential rates in favour of the foreign refiners, which have been so long injurious to the Eng- lish trade, are not only continued, but the discrepancy is even greater than it was before. This is particularly the case on the Southern lines, where the rates from London have been very materially increased, while through rates on foreign sugars have been left untouched." The deputation represented a trade of something like 400,000 or 500,000 tons a year. The following resolutions were passed at a great Conference of Traders called by the Mansion House Association, at the Mansion House, on Jan. 30, 1893 : "That this meeting of traders and agriculturists, from all parts of the United Kingdom, is of opinion that, in view of the persistent efforts made by the Railway Companies for many years past to secure additional powers of charge, the large and general increase in rates which they have recently made (in spite of their frequent denial of any intention to do so, and immediately after obtaining such powers) has shown conclusively that the fixing of actual rates ought not to be left to their irresponsible discretion. " That, in the opinion of this meeting, the rates and charges made by a Railway Company ought to be, and were always intended by Parliament to be, reasonable ; and that (looking to the necessity for immediate action for the protection of trade and agriculture) the most effectual mode of attaining reasonable rates will be the prompt passing of an Act for so extending the powers conferred upon the Board of Trade by Section 3 1 of the Railway and Canal Traffic Act, 1888, as to give them jurisdic- tion in cases of complaint or dispute to determine what an actual rate or charge shall be." At another meeting of the same Association, a leading iron- master gave this example of revised iron rates Old Rate. New Rate. Increase Old Rate. New Rate. Increase d. t. d. per cent. s. ) worked by Companies Total Length of Railways . . { Cost of Construction . . . . < ( per Kilom. .. " \ Mile .. Distance travelled : By Locomotives .. .. ,, Passenger Trains ,, Goods ,, Mixed Passengers carried Mean journey per passenger Goods carried Mean haul per Ton . . . . Receipts : From Passengers ,. Goods Other Total .. ../ Expenses, Total / Kilom. 'Kilom. Kilom. Kilom. Miles. Marks Marks Kilom. No. Kilom. Tons* Kilom. Marks ii Marks Marks 47,228 20S 4,351 48,784 216 3,814 49,688 '59 3,975 51,964 32,270 52,814 32,797 53,822 33,423 13,457,156,000 672,858,000 258,808 20,838 530,852,000 253,626,OOO 194,743,000 53,294,000 13,827,167,000 691,358,000 261,326 21,040 562,072, ooo 268,254,000 205,957,000 55,619,000 14,180,211,000 709,011,000 262,284 2I,IlS 595,616,000 285,364,000 2l6,502,OOO 57,560,000 891,044,000 23-67 365,955,000 I00'25 957,684,000 23*49 392,205,000 TOO '69 1,020, 536,000 23-14 408,221,000 loo'go 577,341,000 1,298,343,000 152,766,000 613,186,000 1,400,058,000 I52,;02,OOO 642,100,000 1,468,302,000 160,513,000 3,028,450,000 101,423,000 2,165,846,000 108,292,000 2,270,915,000 113,546,000 1,314,574,000 65,729,000 1,360,685,000 68,034,000 1,436,324,000 71,816,000 Metric tons of 1000 kilogs. 1 Appendix A. 1 64 RAILWAY NATIONALIZATION 1902 1903 1904 Net Receipts / Marks 713,876,000 35,694,000 805,161,000 40,258,000 834,591,000 41,730,000 Percentage of Net Receipts on cost of Construction 5 '3 5-82 5'89 Gross Receipts per Kilom. . . / Marks 39,067 41,071 42,257 ,, Mile ..1 3,i45 S,'? ? 3,402 Gross Expenses per Kilom. . . / Marks 24,871 25,274 26,259 ,, Mile ..\ 2,003 2,035 2 114 Receipts per Train Kilom. run Marks 3-80 3-84 3'8o Mile d. 73 '4 74' 2 73 '4 Expenses ,, Kilom. ,, Marks 2-42 2^36 2-36 ,, Mile d. 46-8 45 '6 45*6 Receipts per Passenger Kilom. Marks 0263 '0262 0259 Receipts per Metric Ton / Kilom.* \ Marks 0352 0353 0353 Accidents : To Passengers -j Injured 75 422 73 322 74 379 p i , f Killed 455 494 565 Others t \ "Killed Injured 1,199 368 1,213 293 272 1,408 302 281 Total t { Killed Injured 843 1,989 860 1,807 2,068 NOTE. The above statement is exclusive of narrow gauge lines, with a total length of 1800 kilom. in 1900, 1893 kilom. in 1901, 1879 kilom. in 1902, 1961 kilom. in 1903, and 1995 kilom. in 1904. * Excluding military stores. t Exclusive of suicides. The State railways of Belgium have proved an unqualified success in every way in cheapness of rates, in efficiency of service, and as an investment of public monies. As Austria borrowed the Zone idea from an Englishman (Mr. Raphael Brandon) and has made such excellent use of it, so did the enlightened King of the Belgians, Leopold, for, appreciating the wisdom of Thomas Gray, he provided from the first for State railways in his little kingdom. And his foresight has been richly rewarded. While up to 1894 the State lines cost ^32,000,000 to construct, they earned a net profit of ^60,000,000, or just double their cost price. 1 And this is too the very smallest part of their gains. The Government have always treated the question of earning a profit as of quite minor 1 C. Waring. STATE RAILWAYS IN PRACTICE IN EUROPE 165 importance. The policy has been to constantly use surpluses for cheapening rates and increasing facilities. This policy was first adopted in 1856, and the effect was immediate. In the first eight years the traffic increased by 106 per cent., and the receipts by 49 per cent. From 1870 to 1883 the receipts increased by 168 per cent. Nor are the traders and farmers troubled with the practices which mar our English system. Differential rates between individuals are unknown, and the complete publicity secured by State-ownership has prevented the unfairness of secret rebates and special contracts. Says Mr. Charles Waring "The advocates of State railways are entitled to take credit for the fact, that side by side with State administration and the successive reductions of rates and fares, the country has developed a degree of material prosperity unequalled by any other nation of similar area, population, and resources in the world." 1 And Professor Hadley is equally unsparing in his eulogies, though he takes the most impartial view of State-ownership per se. He says "In judging the railroad policy of Belgium by its results, all must unite in admitting that they are in many respects extraordinarily good. What their average rates are, we have already seen. The passenger rates are lower than any- where else in the world, except perhaps on some East Indian railroads. The freight rates are much lower than anywhere else in Europe. Their classification is also excellent. They have now got matters into such shape that the schedules themselves (which go quite into details) furnish a system of rates adapted to the wants of different lines of business and of different localities." 2 " The experience obtained in Belgium of the working by the State of at least a portion of the railways existing in that country, is entirely in favour of that system. . . . Notwithstanding the superior financial result, the lines worked by the State are those kept in the best order, and the working of which gives the greatest satisfaction to the commercial world and the public in general, as regards regularity of conveyance, cheapness of transit, and the comfort of travellers. "The State not being solely guided by the prospect of 1 State Purchase of Railways, p. 24. * Railroad Transportation^ p. 2 1 6. 166 RAILWAY NATIONALIZATION financial gain, but having constantly in view the interest of the public which it represents, is in a better position than private Companies to introduce all desirable improvements, not only as regards the efficient performance of the service, but also as respects the cost of conveyance, without however altogether disregarding the increase of revenue which its operations may bring into the public treasury." x In spite, however, of low rates, the State lines still earn a handsome profit. In 1904 the gross income was ^10,428,289, while the working expenses were ^6,250,228, thus leaving a net profit of ^4, 178,06 1. 2 In addition to this, it should be borne in mind that the Belgian Government pays nothing for the conveyance of its mails, while we have to pay about a million a year to our Railway Companies. Sir H. Barren, in an official report, ventures the opinion, that "it is certain that if managed solely as a commercial enterprise, the Belgian State railways would not have proved such a stimulus of national prosperity." 3 Rather more than half the railways of Holland are in the hands of the State, or 1000 miles out of a total of 2060. The State lines cost 2 2, 1 78,000 to construct up to 1894. In 1904 the gross receipts amounted to ^4,226,000, and their work- ing expenses to ^3,548,000, leaving a net profit of ^678,000. But the Government have almost consistently pursued the policy of ignoring profit, and giving the traders the advantage in improved facilities and cheaper rates. Thus during five years the profits were 75, '49, '33, 71 and '61 respectively, while during the same period the passengers increased from 6,664,43410 11,682,144, and the goods traffic from 4,378,798 tons to 5,904,424 tons. So satisfactory has State-ownership proved, that private lines are being continually taken over by the Government. 4 The State owns in Denmark 1200 out of the 2200 miles of railways. In 1904 the gross receipts were ^1,977,000, the working expenses ^1,567,000, and the net receipts ^409,852. The State also works in connection with its rail- 1 Railway Problems, p. 464. 8 Statistical Abstract, 1896. 8 State Purchase of Railways, p. 22. * Statistical Abstract. STATE RAILWAYS IN PRACTICE IN EUROPE 167 ways a fleet of 1 1 steamers, 1 1 steam ferries, and 93 boats for ice transport. 1 About a third of the railway mileage in Sweden is in the hands of the State. In 1894 the gross receipts were ^1,297,890, and the working expenses ^880,703, leaving net receipts of 2*71 per cent, on cost of construction. 2 In Norway the State owns all but 42 miles, and in these it holds 60 per cent, of the preference shares. And in this connection an interesting object lesson arose of the difficulty of attempting to work a system of divided ownership between the State and private individuals. The Government proposed that the estimates of the Company with the 42 miles of railway should be submitted each year to the Parliament, so as to secure direct interference in its management, and assimilation in that respect to the State railways. But to this reasonable proposal the shareholders raised loud objection, on the ground that such action would be illegal and would seriously jeopardize their interest. 8 Up to the present France has done little in the direction of State-acquisition of her railways. She has, however, fully anticipated State-ownership by stipulating that all railways become automatically the property of the State at the end of ninety-nine years, and before that time at the option of the Government. But France has done much more than this. Practically the whole canal system has been acquired by the State, and so cheap and efficient has it been made that it has served as a powerful lever to keep down railway rates, and to procure a good railway service for merchandise. There is no doubt that the tendency of opinion is rapidly in the direction of State-ownership of the whole railway system. Even more detailed State regulation of the Railway Companies than ours has been quite insufficient to secure minimum rates and maximum services where the State canals do not compete. The experience in the revision of rates which we passed through in 1891-2, France passed through in 1886. As with us, some maxima were reduced below the wonted "actual," others were left intact, and others again were increased, to meet any excep- tional contingencies that might arise in the cost of service. 1 Statistical Abstract. * Ibid. 3 Board of Trade Journal, February 1893. 168 RAILWAY NATIONALIZATION And according to the report of a debate in the Chamber of Deputies furnished to the English Government, 1 the Companies did as ours did under similar circumstances. Reductions were made on the Paris- Lyons Mediterranean line to the extent of 5,000,000 francs on one set of rates, but the Company recouped by increasing others to the extent of 8,000,000 francs or made a profit of 3,000,000 francs out of the " reductions." Similarly the French Companies indulge in the luxury of preferential rates, and strangely enough, like our Companies, "all for the sake of the consumer." And in the result, the French farmers and traders are swiftly veering to the views of President Waddington when he declared that " Everywhere reforms are being made in railway tariffs ; everywhere there is an increasing objection to leaving in the hands of private enterprise, however respectable it may be, the solution of questions which exercise such weighty influence on the economical development and industrial life of a country." 2 By the Referendum some time ago the Swiss people decided definitely in favour of nationalizing their whole railway system, which has been constructed at a cost of ^55,600,000, and which earned in 1904 a profit of 3*5 per cent, on capital, and 3 '9 per cent, on cost of construction. The case of Italy has frequently been cited as an instance in which State railways have proved a failure. This is perfectly erroneous. It is true that State-ownership in Italy has not shared in the great success which has attended State-ownership in other European countries. But the State railways in Italy are much more successful than the private lines in that country. They are better managed, more cheaply managed, and yield a greater profit than the private lines. Thus Mr. Jeans shows that while the working expenses of the private lines reach the high proportion of 80*28 per cent., the State are 63-89 per cent. ; and whereas the private lines earn a dividend of only 0-82, the State lines show one of 3*29. In face of such facts, it is absurd to say that the State railways are a failure as com- pared with the private system. 8 1 C. 4725. 1886. 2 C. Waring, p. n. 8 Railway Problems, p. 62. CHAPTER XIV STATE RAILWAYS IN PRACTICE IN AUSTRALIA NEARLY the whole of the railways in our Australian Colonies are in the hands of the State, and the experience derived from their administration has for us a special significance. When we point to the striking success of the State railways in several Continental countries, we are met with the plausible criticism that State lines have beaten private lines because of the lack of self-reliance among the peoples of those countries. Thus Mr. Acworth declares that " 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 well-organized as that of Prussia, it may even be desirable." l Now the success that has attended State railways in our Australian Colonies cannot be discounted with such facility; for no one would urge that the Colonials are less self-reliant than ourselves, or that they have either a better trained or better organized bureaucracy. It would be absurd to deny that the Australian railways have been somewhat handicapped by several mistakes, but these mistakes have been the inevitable outcome of all early experi- ments. True to the peculiar genius of the Anglo-Saxon race, the Australian settlers have done with their railways precisely what they and we have done in all great undertakings. Instead of logically pursuing a policy rigidly based upon a preconceived theory, they have thrown logic and theory to the winds, and merely moved from practical experiment to practical experi- 1 Preface, Railways and the Traders. 169 170 RAILWAY NATIONALIZATION ment, with the perfectly natural result that while they have gained a great deal of valuable experience, it has occasionally been at the expense of somewhat costly blunders. Thus they recognized the need of constructing railways for the purpose of opening up undeveloped countries, and straightway they built certain railways that could not pay for some years to come. And as these railways preceded population, they had to pay the penalty of borrowing money at almost a speculative price. Hence the railroads are still handicapped by a burden- some interest. Then again, without experience in the best method of control, they rightly "erred on virtue's side," by preferring to adopt a crude method of direct democratic control, rather than run the risk of subjecting themselves to the dangers of an inflexible bureaucracy. But a few years showed that control by railway amateurs, because they were popular poli- ticians, told against efficiency, though nobody has suggested serious personal corruption. Nor have the Colonists hesitated to utilize the lessons they have learned, by removing the railways from direct political influence, without however handing them over to an undiluted bureaucracy. Their present system of control is a happy combination of administrative efficiency and democratic influence. But upon these points of over-construction and political control, the Australian railways have been subjected to the most ruthless attack by the advocates of private ownership. For example, the Hon. J. W. Fortescue, in a violent attack upon the Colonies, under the title of "The Seamy-side of Australia," 1 prophesied imminent public bankruptcy, because of the huge public debts piled up by the Colonies. He then treats as " public debts " the sum expended upon the railways, although he urges in another place that the railways should be sold to redeem these debts, which is ridiculous. They are in fact a splendid asset. Lord Carrington, for some time Governor of New South Wales, declares that the railways can at any time be sold for a price equal to the debts of the Colony. 2 And this is supported from all sides. Says the Australian Year Book for 1893 "The railways of Australia represent the assets for the 1 Nineteenth Century, April 1891. 2 Ibid. August 1891. STATE RAILWAYS IN PRACTICE IN AUSTRALIA 171 National debts of each Colony, and to-day would probably realize, if they were to be disposed of, fully the amount of the National indebtedness. // is, however, improbable that the people concerned will ever allow these great possessions to pass into private hands, believing that they should be retained to open up and develop the resources of the Colonies, and aid in the material progress of Australia" And the same authority still further declares that "the adverse criticism (as to the overweighting of Australia with railway debt) has not, however, up to the present had a shadow of justification. Let it be remembered that the money borrowed has not been sunk in undertakings which will give no return, but has been expended in works which are reproductive, yielding a direct return on the capital, and representing a greater value than what they originally cost ; for instance, the New South Wales lines, costing about 33^ millions, are estimated to be worth more than 40 millions sterling. Further, the money has been spent in developing large resources, which add to the wealth of the Colonies. It is wise to emphasize this point, as it has been overlooked to a large extent ! In Europe the National debts of the various countries have been incurred principally through the expenses of prolonged wars, and the money has gone beyond recovery ; but in these Colonies the expenditure is represented by public works, which are more valuable than the entire National debt, and pay a direct return, in some cases equal to the interest due upon the capital invested." At present the administration of the railways in most of the colonies is in the hands of Permanent Commissioners, subject only under special circumstances to the Ministry of the day, but in Victoria and New Zealand the Ministry has recently been given an extended power of supervision. With regard to new lines, a Parliamentary Committee, called the Public Works Committee, and the Railway Commissioners both have a voice in the matter. The Commissioners furnish reports as to the probable traffic on the proposed new line, and as to the prob- ability or otherwise of its proving a commercial success. The Public Works Committee then make a special and personal investigation, and decide upon the necessity, desirability, route, and commercial prudence of entertaining the proposal. And upon their decision practically depends the adoption or rejection 172 RAILWAY NATIONALIZATION of any scheme. And this system is found to work satisfactorily. Probably the most serious error committed by the Australians in their railway policy has been the adoption of a different gauge in each Colony. Whether this is to be attributed to an excess of local patriotism, or a lack of foresight in anticipating the development of the Colonies, and their ultimate need of intercommunication, the unfortunate fact remains that the gauges vary from 3 ft. 6 in. to 5 ft. 3 in. This table shows at a glance the gauges of the respective Colonies ft. in. New South Wales 4 8J Queensland ... 3 6 South Australia j Victoria 5 3 Western Australia ... 3 6 1 The effect of these differential gauges is of course that goods in going from one place to another have often to be unpacked and reloaded several times, at a large extra cost, delay, and inconvenience. But it is anticipated that ere long a uniform gauge will be adopted in all the Colonies, and already promising steps have been taken in that direction. In proportion to population Australia is the best served in railway mileage of any country in the world. Here are some comparative figures Australia ... I mile of railway to 339 population. America ... I ,, 350 ,, Germany ... ... ... I ,, ,, ,, 1800 ,, Great Britain I ,, ,, ,, 1888 But even this striking comparison gives but a very small idea of the position. When we remember how much of our railway mileage in Great Britain is confined to the crowded industrial centres, how sparsely served are our agricultural districts, and that Australia's population is mainly dependent upon agriculture, it will then be realized how much better in the matter of railways are the Australian farmers than their English confreres. Again, in the United Kingdom the capital invested in 1 Australian Year Book, 1893. STATE RAILWAYS IN PRACTICE IN AUSTRALIA 173 railways per head of population is ^22 175. 5<, whereas in Australia it is 26 i8s. ^dl The State railways pay a substantial profit. But unfortun- ately the community does not get the full advantage of this profit, owing to the high rates of interest at which the money for the earlier railways was borrowed. Though the average of these rates of interest is a little over three per cent., an average does not accurately express the position. The earlier loans for the construction of railways were raised at guaranteed interest of frequently six per cent. ; the more recent loans have been raised at less than three per cent. Under the able directorship of Mr. E. M. G. Eddy, a well- known English expert, and his fellow-commissioners, the railways of New South Wales have made great progress. Upon his appointment in 1889, Mr. Eddy corrected several of the earlier errors, and placed the administration upon a strict business basis, and in spite of some carping criticism from a certain section of politicians, he carried the Colony with him in his reforms. Contrasting the seven years (1882 to 1888), before the Commissioners were appointed, with the four years (1889 to 1892), the results showed that during the former period the net earnings did not increase ; in the latter period they augmented 56^04 per cent. The net earnings per mile open in 1885 were ^431, in 1892 ^546, and per train-mile they rose from 25. i\d. to 25. iod. And the most recent re- turns are as follows NEW SOUTH WALES. 1903- 1904- Length 3139 ... 3281 Capital cost ... 41,654,977 42,288,517 per mile 13,272 12,890 Gross revenue ... 3-314,893 3,436,413 Working expenses 2,266,299 2,258,940 Net earnings ... 1,048,594 i,i77,473 Gross earnings per train-mile 6o'8<)d. 79*30^. Expenses 47'iorf. 52-13^. Net profit 2i'79493 41.216,703 per mile 12,137 12,191 Gross earnings ... 3,046,858 3,438,141 Working expenses 2,032,087 2,022,403 Earnings per mile open 9 13 i ,020 Working expenses 609 600 Earnings per train-mile 71-09^. Expenditure 47'4i^- Net profit That the working expenses should be 64*40 per cent, is an expressive comment upon the fact that in this Colony the control is more definitely subject to ministerial influence than in either of the others. But Victoria suffers badly in its cost of management from the differential gauges which exist upon the several separate railways, and this has probably more to do with the high percentage of working expenses than the nature of the controlling authorities. It is satisfactory however to know that considerable reductions have recently been effected in the working expenses, for in 1892 they were 69^08 of earnings. The administrators have also claimed that though their working expenses are higher, the Victoria lines have been built more substantially, and therefore in the long run more economically than in the other Colonies. And independent authorities bear out this assertion. 8 Western Australia possesses one mile of railway for every 96 inhabitants, which is the greatest proportional mileage in the world. In relation to area, however, she has a very low average, only possessing one mile of railway to 2100 square miles. But with the recent rapid development of the Westralian gold-fields, these proportions are being considerably modified. 1 Handbook of Australia. 8 Ibid. 3 Australian Year Book. STATE RAILWAYS IN PRACTICE IN AUSTRALIA 177 A prominent feature of the railway policy of this Colony has been the "land-grant" system, by which private capitalists have been given large tracts of land upon their undertaking to construct the railways for their own profit. 1 The following are the figures of the State railways for 1902, 1903, and 1904. WESTERN AUSTRALIA.' 1902. 1903. 1904. Capital cost ,7,410,426 8,141,782 8,955,929 Cost per mile 5.465 5.678 5.834 Gross earnings 1,521,429 i, 553,485 1,588,084 Working expenses ... 1,256,370 1,247,873 1,179,624 The Government of Tasmania have made repeated re- ductions in their rates and fares. From 1870 to 1891, accord- ing to the Government Statistician, these reductions amounted to 82*30 in rates and 59*15 in passenger fares. In 1904 there were 462 miles of State railways open, at a cost of ^8476 per mile. The receipts were ^243,556, and the working expenses ^lyi^o. 8 The great bulk of the New Zealand State railways are only of some thirty-odd years' growth. In 1870 there were only 46 miles opened. In 1904 there were 2374 miles. The earnings were ^2,209,231, the working expenses ^1,492,900 and the profits ,716,331. In reply to the suggestion that the railways should pay a larger interest, the Government remark that in "making many of the lines, the anticipated advantage was the settlement of the country rather than direct returns from the railways them- selves." And, further, that outlay still continues on which no direct returns can at present be expected, and will even make the financial results from the existing railways less favourable. The Colonists have endeavoured to pursue the principle laid down by Mr. Charles Waring, when he says "The proper principle, no doubt, is that accounts should balance, that the railways should be self-supporting, and that the 1 Australian Year Book. 1 Handbook of Australia. * Ibid. 178 RAILWAY NATIONALIZATION profits should go in reduction of rates." 1 And they are justly proud of the result, for, to again quote the Year Book of Australia " The result of the railway system of the Colonies must be considered as very satisfactory. Already, as a whole, they pay a fair return for the capital that has been expended, while the benefits they confer in opening up new lands for settlement and development, in providing a cheap and convenient mode of transit, and generally in furthering the trade and interests of the Colonies ) are incalculable" 1 Fortnightly Review, June 1886. CHAPTER XV THE ZONE SYSTEM AND REDUCED FARES ENGLISHMEN may be pardoned if they feel a certain degree of national satisfaction in the fact that the Zone system of fares, which has made the Austrian and Hungarian State Railways famous, is a plant of British origin. Mr. Gait and Mr. Raphael Brandon, two of England's most zealous railway reformers, divide the honour of propounding to the world the idea, and to the latter M. Baross, the Hungarian Minister of Commerce, acknowledged his indebtedness when introducing the scheme into Hungary. The peculiarity of the Zone system is that fares jump instead of slope up as with us. That is to say, instead of fares varying as in England with each additional mile, under the Zone system they are only altered for every ten or fifteen miles ; and within the limits of each zone, fares are uniform. This of course means great simplification, and consequent saving of needless expenditure, which is still further secured by the avoidance of distinctively printed tickets for each station. The passenger takes his ticket for the particular zone, and it is available in any part of that zone. What this would mean in England can scarcely be realized. Take a radius of six miles from St. Paul's for example. Within this area are probably three hundred railway stations, and for every one of these stations a complete set of separately printed tickets for each of the four classes, first, second, third, and workmen's trains, without including "halves" and "seasons," and others, is required. 179 i8o RAILWAY NATIONALIZATION This means that some 650,000 distinctively printed tickets have to be provided for this area alone. If passengers were given the advantage of a through ticket for all lines the number would, on the assumption of three hundred stations, work out as follows 300 "from" tickets x 299 "to" tickets x four classes x two (return and single) = 717,600 distinctive tickets. A small tabular statement will show the complications even more effectually. Let us take the Midland suburban line to South Tottenham, with only its fourteen stations and single tickets for four classes, and this is the result n P a | e o TJ 9 _ *- Cfl a M o 2 o c H rt C g >* J3 1 "c 4) Ml 4) n .22 M = 3 t * E 2 ^ .5 a O c D UJ .y c 9 i > K o CJ E * c Moorgate 4 4 -52 Farringdon King's Cross 4 4 4 4 4 4 4 4 4 4 4 4 4 4 5 2 - 52 = 52 Camden Road 4 4 4 4 - 4 4 4 4 4 4 4 4 4 Kentish Town 4 4 4 4 4 - 4 4 4 4 4 4 4 4 = S2 Highgate Road 4 4 4 4 4 4 4 4 4 4 4 4 4 = S2 Junction Road 4 4 4 4 4 4 4 - 4 4 4 4 4 4 Holloway i\ ^ /I X ^ <\ ^ 4 _ ,1 j ^i A A C2 Hornsey Road 4 4 4 4 4 4 4 4 4 4 4 4 4 = S2 Crouch Hill 4 4 4 4 4 4 4 4 4 4 4 4 4 = S2 Harringay 4 4 4 4 4 4 4 4 4 4 4 4 4 = ,S2 St. Ann's A 4 A 4- 4- ^ d d d A /i /I 1 South Tottenham 4 4 4 4 4 4 4 4 4 4 4 4 4 = 52 Total . , 728 The inclusion of the next station, Blackhorse Lane, adds 112 more tickets, a sixteenth station will add 232, and a seven- teenth will bring the total up to 1108 ; and so on, in an ever- increasing ratio. Now under the Zone system, with the indi- vidual station ignored, where we require 1108 distinctively printed tickets, they manage with a single ticket for each class, or four in all for each zone 1 THE ZONE SYSTEM AND REDUCED FARES 181 But the Zone system derives its popularity, not so much from this simplicity, which is its great intrinsic merit, as from the fact that it was chosen by both the Hungarian and Austrian State Railway authorities as the medium through which to effect sweeping reductions in fares reductions that simply staggered the whole private railway management of Europe. Of course these reductions are no essential part of the Zone system, and could have been effected without it. The Governments chose otherwise, however, and hence in the popular mind cheap fares are indivisibly wrapped up with the Zone system. The revolutionary character of these reductions may be gathered from a brief comparative table of old and new fares on the Hungarian railways. 1 SLOW TRAINS. EXPRESS TRAINS. First Second Third First Second Third Class. Class. Class. Class. Class. Class. Buda-Pest-Kaschan * d. *. d. t. d. s. d. s. d. s- d. Old i 7 4 19 2 o 13 8 i ii 8 122 o 15 8 New o 13 4 098 068 0160 o xi 8 080 Buda-Pest-Klausenburg Old New 301 o 13 4 i 8 a 098 I O O 068 342 o 16 o I II 3 o ii 8 o 14 4 080 Buda-Pest-Cronstadt Old 3 10 a 382 I 13 4 3 17 6 3 14 6 i 18 8 New o 13 4 098 068 0160 o ii 8 080 Buda-Pest-Agram Old i 17 10 I I 10 o 19 o _ New o 13 4 098 068 0160 o ii 8 080 Buda-Pest-Fiume Old 3 i 10 368 I II O _ New ... .. ... o 13 4 098 068 0160 o ii 8 080 The zones of Austria and Hungary differ somewhat from each other. It will therefore be more convenient to glance at them separately. In Hungary, where the system was first applied, the country is divided up into fourteen zones, but in Austria there are twenty-eight zones. The fares and distances in Hungary are as follows 2 1 Foreign Office Report Com. No. II, 1891. 8 Com. No. II, 1891. 182 RAILWAY NATIONALIZATION Zone. Distance in Miles. EXPRESS TRAINS. SLOW TRAINS. First Class. Second Class. Third Class. First Class. Second Class. Third Class. s d s. d. S. d. s . d. s. d. S. d. I i to 15 .. I O O 10 o 6 O IO o 8 o 5 2 15 25 - 2 O I 8 I O i 8 i 4 O 10 3 25 34 3 o 2 6 i 6 2 6 2 O i 3 4 34 44 4 o 3 4 2 O 3 4 2 8 i 8 5 44 53 5 o 4 2 2 6 4 2 3 4 2 I 6 53 63 .. 6 o 5 o 3 o 5 o 4 o 2 6 7 63 72 .. 7 o 5 1 3 6 5 10 4 8 2 II 8 72 81 .. 8 o 6 8 4 o 6 8 5 4 3 4 9 81 91 .. 9 o 7 6 4 6 7 6 6 o 3 9 10 91 100 .. 9 10 8 4 5 o 8 4 6 8 4 2 ii 100 109 .. 10 10 9 2 5 6 9 2 7 4 4 7 12 109 125 .. II IO 10 O 6 o IO O 7 8 5 o 13 125 140 .. 14 o IO IO 7 o ii 8 8 10 5 10 H 140 upwards 16 o ii 8 8 o 13 4 9 8 6 8 But for short distances, or what is called "neighbouring traffic," there is an important modification. In regard to this, two subsidiary zones exist, numbered i and 2, and the fares from any given spot to the next station are regulated by the special tariff applied to Subsidiary Zone i, while the fares to the second station are regulated by the special tariff applied to Subsidiary Zone 2. The fares are as follows l Subsidiary Zone. First Class. Second Class. Third Class. d. d. d. I 6 3 2 2 8 4 3 The following are the fares and distances in Austria for its twenty-eight zones 2 1 Com. No. ii, 1891. 8 Ibid. THE ZONE SYSTEM AND REDUCED FARES 183 Zone. Distance in Miles. PASSENGER & MIXED TRAINS. EXPRESS. Third Class. Second Class. First Class. Third Class. Second Class. First Class. S ff s. d. S. d. s. d. S. d. S. d. I 6J 2 4 6 3 6 9 2 124 4 8 I 6 I O i 6 3 i8| 6 I I 6 9 I 6 2 3 4 25 8 i 4 2 I 2 S 10 i 8 2 6 i 3 2 6 3 9 6 40^ i i 2 2 3 3 i 74 3 3 4 101 7 So I 4 2 8 4 o 2 4 ^ 6 o 3 8 624 i 8 3 4 5 o 2 6 5 o 7 6 9 78 2 I 4 2 6 3 3 i4 6 3 9 4i IO 93l 2 6 5 o 7 6 3 9 7 6 ii 3 ii 1094 2 II S 10 8 9 4 44 8 9 13 u 12 125 3 4 6 8 IO O IO O IS o 3 13 156* 4 2 8 4 12 6 6 3 12 6 18 9 14 1874 C o IO O IS 7 6 IS 22 6 15 2l8| 5 10 ii 8 17 6 8 9 17 6 26 3 16 250 6 8 13 4 20 O 10 20 o 30 o 17 281^ 7 6 22 6 ii 3 22 6 33 9 18 3124 8 4 16 8 25 o 12 6 25 o 37 6 19 343i 9 2 18 4 27 6 13 9 27 6 41 3 20 375 IO 20 O 30 o 15 30 o 45 o 21 406* 10 10 21 8 32 6 16 3 32 6 48 9 22 4374 ii 8 23 4 35 o 17 6 35 o 52 6 23 468^ 12 6 25 o 37 6 18 9 37 6 56 3 24 500 13 4 26 8 40 o 20 O 40 o 60 o 25 531^ 14 2 28 4 42 6 21 3 42 6 63 9 26 5624 IS 30 o 45 o 22 6 45 o 67 6 27 5931 15 10 3i 8 47 6 23 9 47 6 71 3 28 625 16 8 33 4 50 o 25 o 50 o 75 o A comparison with a few typical English third-class fares will serve best to bring out the remarkable cheapness of the Austrian and Hungarian fares PARKS. From To Distance. English. Austria. Hungary. s. d. s. d. S. d. London Richmond 9l 9 6 6 Gravesend ... 24 2 O I O 1 O Brighton Si 4 24 2 6 2 6 Birmingham ... H3 9 5 5 o 6 o York 1 88 15 8 7 6 8 o Manchester ... 1834 IS Si 7 6 8 o Edinburgh ... 400 32 8 16 3 8 o Glasgow 40i4 33 o 16 3 8 o :8 4 RAILWAY NATIONALIZATION Workmen and school-children are given special cheap tickets. The Zone tariff was introduced upon the Hungarian railways on August ist, 1889, and the following figures compare the number of passengers for the twelve months after its introduc- tion with the twelve months immediately before x From August i, 1889, to July 31, 1890. From August i, Months. 1888, to July 31, Short Long Trtfol 1889. Distances. Distances. otal. August ... 592,465 613,183 1,205,648 532,227 September 637,909 599,966 1,237,875 521,761 October ... 629,833 52I,o8o 1,150,913 504,577 November 607,653 441,709 1,049,362 417,767 December 554,608 386,213 940,821 404,899 January ... 514,154 348,505 862,659 372,488 February 503,346 335,032 838,778 334,294 March 596,825 423,354 I,O2O,I79 415,972 April 681,330 538,459 1,219,789 496,721 May 728,425 506,331 1,234,756 535,436 June 739,690 514,886 1,254,576 558,945 July 842,920 598,436 1,441,356 589,758 7,629,158 5,827,154 13,456,712 5,684,845 " There was, therefore," says a Foreign Office Report, " in the first twelve months after the introduction of the Zone tariff, an increase in the number of passengers carried amounting to 7,771,867, or 1367 per cent, over the number in the preceding twelve months. The total receipts for the twelve months from the ist of August, 1889, to the 3ist of July, 1890, from passengers and luggage, were ^954,347, and for the preceding twelve months, viz., from the ist of August, 1888, to the 3ist of July, 1889, the receipts were 785,334, or an increase of .169,013 since the introduction of the Zone tariff. It is evident that the increase is maintaining itself, as the statistics from the ist August to the 3oth November, 1890, show an increase of 1,076,114 passengers carried and of ,26,040 receipts over the corresponding four months in 1889. The above figures suffi- ciently prove the financial success of the scheme? 1 Com. No. ii, 1891. 2 Ibid: THE ZONE SYSTEM AND REDUCED FARES 185 The subsequent completed years, for which I have been able to procure reports, show the following increases Year. No. of Passengers. 1890 22,890,071 1891 SS^S^OQS 1892 38,325,151! Or a 600 per cent, increase in four years, as compared with 1 1 per cent, increase in the United Kingdom during the same period ! The Zone system was adopted in Austria in June 1890, and the following figures show the number of passengers carried the year before its introduction, and the years since Year. No. of Passengers. 1889 42,582,726 1890 5 1 > ^5 I 3 1891 68,818,5x3 1892 74,945,110 1893 77,846,049 1894 102,897,8282 That is to say, where two passengers travelled in 1889, five travelled in 1894. The effect on net receipts was beneficial, for whereas in 1888, the year before the Zone was introduced, the Hungarian railways were paying 3-48 per cent., in 1892 they were paying 3^62 per cent. And whereas on the Austrian lines the profits in 1889 were 4'oi per cent., in 1894 they were 4*08 per cent. The official representatives of the British Government speak in quite enthusiastic terms about the success of the experiment. And so important is such testimony that there need be no apology for a lengthy extract from the report of Consul Faber to Lord Salisbury " Our much-vaunted ' parliamentary ' sinks into insignificance in the face of such achievements as those of M. de Baross. When it is considered that you can travel from one end of the country to the other, not by a slow ' parliamentary,' but first- class and by express, at the rate of a penny and one-third a 1 Statistical Abstract, 1896. a Ibid, 186 RAILWAY NATIONALIZATION mile, and third-class at one-half that price, and that even these low rates are further reduced by 15 or 20 per cent, by means of circular tickets ; when it is further considered that this has been achieved without a decrease in the receipts, without the necessity of large investments for rolling-stock, and that the large increase of passengers has been carried without loss to the State, it is needless to affirm that M. de Baross has every reason to feel proud of the result M. de Baross has thus offered to his countrymen the stimulus of cheapness for travelling purposes in an unprecedented degree, in order by this means to overcome their aversion, and this has been effected, as it appears, with unparalleled success, such as is likely to induce other countries to follow suit, which they can the more readily do after having profited by the experience gained by Hungary, in what was to her a leap in the dark. Cheapness, such as is offered by excursion trains in England, will not bear comparison with the scheme of M. de Baross." 1 Is it practicable to apply the Zone system, with the foregoing scale of fares, in the United Kingdom ? By this I mean, can a self-paying traffic be procured at the reduced fares ? I cer- tainly see no reason to the contrary. Mr. W. M. Acworth has endeavoured to show in one place that the Hungarian scale is impossible with us for certain reasons, which in another place he most adroitly refutes. Thus in discussing the Zone system in the Nineteenth Century, Sept. 1891, he says "It is, I believe, almost impossible to set bounds to the potential traffic between, say Liverpool and Manchester, or London and Brighton, if only the fares were low enough ; but no possible reduction of fares can develop to any great extent the traffic along country lines, for the simple reason that the people are not there to travel" But in the Nineteenth Century for December 1892, in an article on "Railway Mismanagement," he suggests the adoption of the Hungarian scale in Ireland, because it " seems to me to have many points in common with Hungary. Both countries are poor, inhabited by a scattered and backwood agricultural population little used to travel, a popula- tion, moreover, fond of horses and accustomed to make such journeys as they find necessary, anywhere at least within twenty miles of their homes, by the aid of their own or their neigh- 1 C, 6205 114. 1891. THE ZONE SYSTEM AND REDUCED FARES 187 hour's car or cart. In Hungary a reduction of local fares from about a penny to a point which may possibly be put at some- thing like a third of a penny per mile on an average, has resulted in a quite marvellous development of traffic. . . . The railways have certainly not lost, while the gain to the peasantry is undeniably enormous. Similarly, I believe that a reduction of third-class fares in Ireland from a penny to a half-penny would have an immense effect on the prosperity of the country? This is certainly a remarkable contradiction, for it seems to be beyond comprehension that a reduction in fares should be a useful thing in Ireland because of its scattered population, and a useless thing in rural England for the same reason. But without stopping to labour the point, let us take the substantial admissions of Mr. Acworth as an able opponent. He believes it is (1) Almost impossible to set bounds to the potential traffic between large towns, if the fares were low enough ; and (2) He thinks that the Hungarian scale could be successfully applied in Ireland (although he would guard against the risk of possible loss by means of a State guarantee). The first admission, however, he tries to neutralize by declaring that the English lines and stations are already filled to overflowing, and " the effect of a reduction of fares would be to intensify the existing congestion of traffic." And the final conclusion to which Mr. Acworth comes upon the matter is the somewhat lame one, that " on the whole, the Railway Companies are probably wise to let sleeping dogs lie." * But the country cannot afford to do this. Again, the late Sir George Findlay, in discussing the passenger problem, declared that " As regards long-distance traffic, it is very doubtful whether the reduction of fares, or any other concessions, tend to materially increase the volume of business ; as a rule people do not take long journeys unless they are called upon by actual necessity to do so, and in that case they will travel whatever the fare may be within reasonable limits. Of course this remark is not intended to apply, however, to the traffic between large towns and seaside and other holiday resorts, which all the Companies encourage by granting return tickets 1 Nineteenth Century, Sept. 1891. i88 RAILWAY NATIONALIZATION at low fares during the summer months, this being a case in which, by judicious concessions, a traffic is created which would not otherwise exist to anything like the same extent. ... As regards increasing the passenger traffic greatly beyond its present volume, there is probably not much to be hoped for, the country being limited in extent and the possibilities of expansion being circumscribed by the amount of the popula- tion, although it will naturally always fluctuate with the pros- perity of the country. . . . The only thing to be done in this direction is to follow out the policy which has already been adopted by most of the Companies, of granting low fares and season-ticket rates between all the large centres of population and places within a radius of about twenty miles, so as to build up a residential traffic by encouraging the people to live in the healthier suburbs instead of in the larger towns in which they pursue their avocations." l Sir George Findlay doubts whether long-distance traffic can be materially increased by a reduction in fares. Belgian experience shows conclusively that it can. A few years ago public opinion demanded a reduction in fares that were already low. No alteration was made for short distances that is, up to twenty-two miles. Provisional decreases were made in the intermediate stage between twenty-two and forty-nine miles, and large and definite reductions were made for longer dis- tances. In the last stage the first-class fare was reduced from 1*24^. to o'^6d. per mile, or on a distance of 155 miles from i6.y. to 6s. Second-class was reduced from 0-93^. to 0*32^. per mile, or from 12*. to 4-f. 2; by F. S. Williams. 200 RAILWAY NATIONALIZATION contests, is this Certain shrewd professional gentlemen cast about to see where local agitation against a Railway Company exists or can be got up, or when rival Companies may be played off against each other. They subscribe a certain sum to pay the expenses of surveyors and a Parliamentary contest, on the speculation that, if they get their Act, they will get their money back many times over, either by inducing the public to subscribe the requisite capital, or by getting the Company assailed, or some of its rivals, to take them over. Parliament assists this speculation by making the deposit on application for a Bill quite illusory. It is almost invariably found by borrowing consols from a Bank with an undertaking from the solicitors not to take the final stage of the Bill unless the deposit has been replaced or satisfactory security given for it. Thus it may and not infrequently does happen, that, after Committees of both Houses have spent weeks of valuable time in listening to counsel and witnesses, their labours are made nugatory by the withdrawal of the Bill at its final stage of third reading. In fact, what the promoters buy for cash out of pocket required for a contest is what, in the language of the Stock Exchange, is called an ' option,' to be exercised or not according to their calculation of the chances of getting back their deposit and expenses if they take their Act. And if they exercise their option and go on, the result, as I have already shown, is almost necessarily bad for the public. The fear of competition, which is a real protection, is gone, for, like the potential energy of a weight which has run down, it has done its work and is exhausted, and nothing remains but the certainty of combination, with a closer monopoly than ever, two capitals to pay instead of one, and two poor Companies instead of one prosperous one. It is to avoid these evils that I consider a control of railways in the public interest to be essential. But it must be thorough and effective, and of such a nature as to satisfy all legitimate wants, and command the respect of the interests affected." l Nor must the way in which the railways use their huge voting power in Parliament be forgotten. Addressing a half- yearly meeting of shareholders in 1880, the Chairman of the London and North- Western Railway said "As they were 1 Fortnightly Revieiv, April 1886. SOME OBJECTIONS TO STATE-OWNERSHIP 201 aware, Government and Parliament to railway people meant ill-treatment and oppression. They did not look for any good from them. On the contrary, every year they had rather increased the burdens of Railway Companies. The railway interest had hitherto borne the treatment, and been content with the British grumbler, but sooner or later they would all have to combine, and when they did, no matter what Government was in power, the interests of the share and debenture holders and people who were depending for their living on railway working, were so powerful that no Government could afford to say they would not attend to them." l This threat was certainly no idle exaggeration, for at the time the Railway Companies had no less than one hundred and fifty-eight salaried servants in Parliament. Of these, fifty-one were members of the House of Lords and one hundred and seven members of the House of Commons. Nor were the lawyers, architects, contractors, and surveyors, generally dependent upon railways for their living, included in the list of one hundred and fifty-eight. 2 It merely embraced the salaried directors. And in the last Parliament there were one hundred and forty railway directors in the two Houses. Addressing a meeting of traders, the President of the Board of Trade declared in 1893 that the railway interest in Parliament was so powerful that it was impossible for him, even in his official capacity, to do anything unless the traders and farmers of the country were solidly united at his back. To illustrate the ways in which this Parliamentary power is used, one or two examples will suffice. After the overwhelming evidence against the Companies given before the Select Com- mittee on Rates in 1881-2, their representatives upon the Committee felt that a whitewashing process was necessary. Thereupon one of their number moved this clause into the report " That on the whole of the evidence they (the Com- mittee) aquit the Companies of any grave dereliction of their duty to the public." Ten members voted for, and nine against the motion, and out of the ten, seven were railway directors 1 8 1 Railway Rates and Radical Rule, p. 280. 1 Ibid. Ibid. p. 51. 202 RAILWAY NATIONALIZATION And this extract from a speech of the Chairman of the Hull and Barnsley Railway Company speaks for itself "I did think, after the fight had been lost and won, that there was a reasonable prospect that we might have lived in amity with the North-Eastern, but the North-Eastern turned up in the House of Commons in the shape of their Chairman, and after making a very acrimonious speech, in which he charged us with everything short of actual dishonesty indeed I am not quite sure whether he did not charge us with that sheltered under the privilege of Parliament, he succeeded in throwing out the Bill. . . . The motion was seconded by Mr. Cropper, Director of the Midland Railway Company ; and I may tell you that the Manager of the Great Northern told me he had from these railway directors in the House of Commons, who were interested in such matters, no fewer than one hundred and thirty-six promises to vote against us." Upon which he proceeds " Of course that shows what the power of the railway directors is in the House. Well, I am a railway director myself, and I am in the House of Commons myself. If it is on any future occasion proposed that the votes of railway directors, or even shareholders, should not be allowed in the House of Commons on matters in which they have a distinct interest, I for one, railway director as I am, shall vote in favour of the proposition." l This extract from Sir Edwin Chadwick 2 will also explain the adverse decision of the Devonshire Commission in 1867 upon the question of putting Mr. Gladstone's Act into operation. " I confess that I was somewhat surprised at its (the Com- mission) composition, in which the mistake appears to have been made, in assuming that the interests of railway directors and others who have profited largely by the existing system, and who constitute the majority of the members of the Commission, were identical with the interests of the ordinary shareholders, who, as a class, have lost or been ruined by their management. If I had made a fortune by the system in question, or belonged to a house which had received large sums on account of it, or had derived greatly augmented values of land from it if I 1 Railway Rates and Radical Ruh t p. 51. 2 1867. Report Social Science Association,^. 594. SOME OBJECTIONS TO STATE-OWNERSHIP 203 owed my public position to it ... I should have felt that my proper position would be that of a witness, or of an advocate, rather than of a judge upon the system. Immedi- ately the composition of the Commission generally was seen, the directorates and private enterprisers were at their ease upon it, and their confidence was early confirmed by the course of its investigations. . . . Out of a committee of twenty- seven members (if one excepts the votes of those gentlemen who were on their trial) only three are responsible for the decision." Such voting of interested parties would certainly appear to be against the spirit of Parliamentary usage, if indeed it is not against the actual letter of the law, which lays it down that no Member of Parliament shall vote upon a question in which he has a direct pecuniary interest. 1 During the historic discussion upon the State Purchase of Railways, before the Royal Statistical Society in 1873, Mr. D. Chadwick, M.P., said he objected to the proceedings of railway directors who used their immense influence in Parliament to obtain legislative enactments to restrict the amount of damages for loss of life caused by their negligence. 2 Mr. Hamilton said he could not conceive that any amount of Government jobbery would equal the jobbery which had taken place in connection with railways. 8 How some of the Companies have dealt with men holding " undesirable " opinions and with witnesses before Committees, we have seen in our chapter on the condition of the railway workers; and how they have dealt with clients seeking to prevent overcharges, we have seen in our chapter on the hope- lessness of the present system. Says Mr. Waring " It may reasonably be doubted whether railway property, conferring the power involved in its possessions, backed by a compact phalanx of peers and M.P.-partners in the estate, and influencing legislation in its support, can consistently with the interest of the people be much longer left in the sole control of the Companies." 4 With this condition of things clearly in our minds, we may 1 Erskine May's Parliamentary Practice, p. 354 (5th edition). Journal Statistical Society, 1873. * Ibid. * State Purchase of Railways, p. 134. 204 RAILWAY NATIONALIZATION reasonably turn to the other side and ask whether political abuse and corruption is likely to be anything like so virulent or so dangerous with the railways under the State ? Sir George Findlay says "The Government would be invested with a large amount of patronage, not only in the appointment and promotion of the staff, but in the placing of contracts for coal and iron and other materials, in granting railway facilities, and in many other ways, and they would always be open to the accusation of making use of this patronage for political pur- poses." 1 Let us take these points in order. First then as to the danger of political influence from those dependent upon the railway service. The acquisition by the State would at once get rid of the one hundred and forty Director-Members of Parliament as definite railway-interest men. They might still continue to sit in Parliament, but it would not be as the definite representatives of an interest opposed to that of the public. Then, in the second place, such acquisition would get rid of half-a-million shareholders, the majority of whom are voters, as a potential single interest in opposition to that of the com- munity. This would leave the half-million railway workers, of all ages and grades. Of these only about 100,000 enjoy the franchise, and as they are distributed throughout the whole of the 670 separate constituencies, their influence to affect legisla- tion in a single self-interested direction would be very small indeed. Even in the half-score constituencies where their vote predominates, experience goes to show that their opinions are so divided, and their sympathies so diverse, that coalition for a single sordid object is not only not probable but scarcely practicable. The dangers in this direction are in fact very small indeed, and side by side with the removal of the danger- ous director- and shareholder-interest as a political power, hardly worth serious thought. Then with regard to the alleged danger of Governments corruptly developing a system of patronage to pitchfork their needy partisans into comfortable railway positions, this is certainly more imaginary than real. Mr. J. S. Jeans says " It has been suggested by many that the patronage that the Government of the day would possess, if they had the railways in their own hands, would be so great 1 Working and Management of an English Railway, p. 293. SOME OBJECTIONS TO STATE-OWNERSHIP 205 as to be a serious political consideration. This must cause alarm, either from the fear of the political influence to be exercised by an employer over his workmen, or of the nepotism to be exercised by putting worthless men into situations for which they are unfit. From the first of these the ballot is a more than sufficient protection ; the fear of the latter danger is imaginary. In the first place, the magnitude of the service would make it altogether a special one, in which no one would be admitted who had not served a regular apprenticeship, as in the Army or Navy, beginning with the lowest grade at an early age and gradually working upwards. The Civil Service is not usually considered to be so lucrative as to be very attractive to indigent men, and if the question of social status were ignored, the traditions of the railways would expect such hard work as to hold out no inducement to men unfit for the post to covet the position of traffic-managers or station- masters. On the whole then, it may be assumed that there is no political danger to be apprehended from this source." l The abuse of patronage is after all, as Mr. Waring says, now comparatively a thing of the past, more especially as regards the higher appointments in the gift of the State. If any one doubts it let him try, for himself, for his son, for any relation, to obtain any appointment worth having in the public service. Great must be the influence, indeed, which can force the defences of the Civil Service Commissioners or those of the examiners for the Naval and Military Service. They are strengthening their outworks and enlarging their fortress con- tinually ; and if the Railway Service ever is administered by the State, they will no doubt look upon it as " fresh fields and pastures new " for their operations. But independently of their interference in robbing patronage of its charms, there are other considerations which make railway appointments no sinecure. Among the great mass of railway employe's the work is hard and the pay light. The responsibilities and risk are not in- considerable. They must begin in the lowest positions as porters, clerks, booking-clerks in the traffic departments ; as labourers, platelayers, fitters, pupils, and apprentices in the engineering departments ; and they can only rise to the higher positions gradually, and for the most part after ample experi- 1 Railway Problems, p. 191. 206 RAILWAY NATIONALIZATION ence as they show themselves fitted for their work. That work has to be performed, much of it under the eye of the public, whether with Company management or with State management, and those who fail to perform it properly are soon found out. In a word then, all the objections against State-ownership are, under our system of Government, more fanciful than real, and the dangers that are anticipated in that direction are in reality much greater under the present system. CHAPTER XVII THE FINANCIAL ASPECTS BEFORE discussing the terms upon which the State will acquire the railways, it is exceedingly important to emphasize the fact that there will be no need to raise a single halfpenny of the purchase-money by taxation. The process will be essentially one of simple conversion. Assuming that Parlia- ment decide that the Government shall acquire the railways for the people, then upon a given day a State scrip will be substituted for the present railway share-certificate. If share- holders desire to realize in cash, all they will have to do will be to sell the Government scrip as they sell Consols to-day. So that the taxpayer need feel no alarm at the financial magnitude of the undertaking. The terms of State-acquisition are broadly fixed by the Act of I844. 1 This declares that the price payable to the Companies, if Parliament decide to take over the railways, shall be twenty-five years' purchase of the " annual divisible profits estimated on the average of the three then next pre- ceding years. " This, however, is subject to one or two impor- tant provisos. Among these is one to the effect that " if the average rate of profits for the said three years shall be less than the rate of ten pounds in the hundred, it shall be lawful for the Company, if they shall be of opinion that the said rate of twenty-five years' purchase of the said average profits is an inadequate rate of purchase of such railway, reference being had to the prospects thereof, to require that it shall be left to arbitration in case of difference, to determine what, if any, additional amount of purchase-money shall be paid to the said Clause II. so; 208 RAILWAY NATIONALIZATION Company." A second proviso exempts from the rights of com- pulsory acquisition the lines constructed prior to 1844; a third provides that this Act shall not be put into operation without the express sanction of Parliament ; and a fourth re- quires trie Companies to present exhaustive analyses of accounts for the purpose of arriving at an exact basis for arranging the terms of acquisition. What will twenty-five years' purchase mean upon the basis of the Board of Trade Railway Returns for the three years ending 1905, which are the latest official figures available ? In those years the profits upon the paying lines varied from per cent. to 10 per cent., and amounted to an average yearly sum of 42, 8 1 7,985.! In addition to this there was ^90,000,000 capital invested in lines in 1905 that did not pay anything. If we allow upon this 2 per cent, we shall have a further annual sum of ;i, 800,000. Thus Divisible Profits (Net Receipts on Paying Lines) 1903 ...... . 42,326,859 1904 ......... 42,660,741 1905 ......... 43.466,356 Average for three years = .42,817,985 Proposed allowance on Non- Paying Lines with . capital in 1 905 of ,90,000,000, at 2 per cent. = 1,800,000 44,617,985 Which at 25 years' purchase ... = 1,115,449,625 In 1905 the paid-up 2 Capital on the Railways amounted to 1,282,801,000 "Less 3 amount included in above representing nominal additions on the consolida- tions, conversion and division of stocks . ..... . 194,341,000 =1,088,460,000 26,989,625 So that in receiving twenty-five years' purchase, the share- holders would get ^26,989,625 more than the actual paid-up capital value of the railways. 1 Railway Returns for 1905. C. 3106. 2 & 3 I have quoted the exact words used in the Board of Trade Report on Share and Loan Capital, Traffic and Working Expenditure for 1895. C. 8208. THE FINANCIAL ASPECTS 209 It is possible, and perhaps probable, that under the Arbi- tration Clause this sum may be substantially increased. The right of the arbitrator to award more than twenty-five years' purchase is expressly conditioned by " reference being had to the prospects " of the railways. The prospects, however, will have to be largely determined by the tendency of recent years, and this is to a diminution in the net earning capacity of the railways. Taking intervals of five years since 1860, the percentage of net profits on capital and the working expenditure of gross income have varied as follows l 1860 1865 1870 i875 1880 1885 1890 1895 1900 1905 So far, therefore, as the prospects of the railways are indi- cated by present tendencies, there can be no reasonable ground for an arbitrator awarding much more than the very hand- some statutory allowance of twenty-five years' purchase. The late Sir George Findlay made an extraordinary suggestion. This was nothing less than that the Government should compensate the shareholders for the prospective increase in value which would be given in view of the Government acquisition ! That A should compensate B for the prospective privilege of making better use of B's property when purchased than B has been able to do, is certainly as amusing as it is amazing. These are his own words "We believe that if the principle of State- purchase were decided upon, it would ultimately have to be carried out somewhat in the following manner As regards the lines that are now earning a profit, Government should guarantee a rate of dividend, which might be taken at the average of, say, three years preceding the purchase, and this 1 Railway Returns ftr 1905. C. 3106, p. 23. Average Net Percentage of Profit. Working Expenses. 4-19 47 4'II 48 4-41 48 4 '45 54 4-38 Si 4'O2 S3 4-10 54 3-80 56 3'4i 62 3 '39 62 2io RAILWAY NATIONALIZATION would certainly not be putting too high an estimate on their prospective value, which would have a tendency to increase in view of the Government guarantee. 1 But this, however, is not likely to be seriously entertained. It has been further suggested that the basis of purchase should be the " market price " of the shares. But this proposal has probably been made in ignorance of Mr. Gladstone's Act of 1 844, which so clearly defines the terms of acquisition. Apart however from this specific bargain, which is binding between the Companies and the nation, the " market price " is an im- possible basis. It is as ephemeral as a rainbow, as fluid as the air. Variations in the weather, or a shaking of the political kaleidoscope, or any other chance circumstances, materially affect the "market price." At the moment the agitation for State-ownership took definite form, the ever-watchful Stock- Exchange operators would go to work, and up would go the market price by leaps and bounds. 2 So that while the country will loyally abide by their agreement with the railways, who secure handsome conditions under the measure of 1844, they are not likely, with their eyes open, to deliberately allow them- selves to be overreached by the habitues of the Stock Exchange. The investing shareholder will be justly treated, and so will the mere speculator. The length of lines that were exempted from compulsory purchase by the Act of 1844, as having been constructed prior to that date, amounts to 2,320 miles, out of a total railway mileage of 21, 174.3 But as they have practically all been absorbed by amalgamation since, and as amalgamation schemes have been under special Railway Acts, every one of which has been made subject to the general Act of 1844, it is doubtful whether even these early lines are not subject to the compulsory purchase clause, as well as to other portions of that Act. There is certainly strong reason for believing that they would be, for while they were also expressly exempted from the powers of compulsory revision of rates under that Act, they have since been brought under them, chiefly by their Acts of amalgama- 1 Working and Management of an English Railway, p. 290. 2 At the time of writing the estimated market value of the railways is 8 See Appendix B. THE FINANCIAL ASPECTS 211 tion. This point however is a purely legal one, and when the time comes will have to be decided by the proper tribunals. And how will the State come out of the bargain fixed for them in 1844? It is practically certain that the State Railway Stock will be gladly taken up at 2\ per cent, as a maximum. This will leave a margin of nearly i \ per cent, on the transaction. But then there are the savings to be derived from the present streams of waste, which, taking the lowest of the authoritative estimates given in Chapter III., of 20 per cent, on the working expenditure (^70,000,000 in 1905), will give us ^14,000,000. Thus The present profits (1905) = 43,466,356 Saving by unity of management = 14,000,000 57,466,356 Less annual interest of 2$ % on Govem-\ / fift , ment Railway Stock of 1,115,449,625 / = Total annual net profit = 29,580,116 What can be done with this net profit ? In the first place, goods rates and passenger fares ought to be at once reduced. These reductions will pay for themselves, of course, very shortly, by an increased traffic. But immediately, and for the first and possibly the second year, provision will have to be made for possible decreases in net receipts. The conditions of railway employment ought also to be greatly improved, and sweeping reductions in the hours of labour ought to be made, while a sinking fund may be established for securing redemption of purchase. Thus Net profits after paying interest 29,580,116 Less 20 % reduction in goods\ / ~ rates of 56,41 LOCO ... ) = ^"> 28o . 2 ,, 20 % reduction in pas-\ /- senger fares of 48, 720,000 / : Reduced hours and improved\ / ^^ Still leaving to provide for aS 25,524,200 sinking fund, if deemed I ~ advisable, and exceptional j" A4,o55.9'o contingencies J 212 RAILWAY NATIONALIZATION The recoupment from increased traffic could be used for still further reducing rates and fares, and augmenting the sinking fund to facilitate redemption of purchase, remembering always, however, that the lower the rates and fares are reduced to a certain point, the greater the traffic, and the better for the nation. CHAPTER XVIII CONCLUSION AT the risk of some repetition, it is necessary to briefly sum- marize the preceding pages, before passing to final conclusions. Chapters II. to XII. are occupied with an indictment of the present system, and from them we have seen how the wastes and leakages of several hundred managements act as a perfectly needless tax upon the trading and travelling public. We have seen that, except in the limited sphere of passenger accommoda- tion, competition between the Companies has disappeared. From the individual line it has disappeared through the Rail- way Companies becoming themselves the carriers, the collect- ing and delivery agents. Between alternative routes competi- tion has been strangled by means of amalgamations, subsidies, pools, and rate conferences. And even the once effective com- petition of the canals has been very largely annihilated through the absorption of carefully selected navigations by the Railway Companies. With this general disappearance of competition the Railway Companies have become for all practical purposes a monopoly. The Companies rigidly keep up rates and fares, nor can one Company reduce without the consent of the others. The result is that ourratesand charges are the highest in theworld. And this is not the worst. Pursuing their specious doctrine of charging what the traffic will bear, they convey foreign produce and merchandise over their lines at much less than they do those of the home producer and manufacturer, to the ruin of individuals, the serious hurt of some trades and districts, and the grave danger of the highest national interests. We have seen how costly is the whole passenger service and how deficient and incon- venient is the service upon many lines. We have seen too how 213 214 RAILWAY NATIONALIZATION grossly inadequate is the workmen's train service, and how gravely this is affecting the vital well-being of our great cities. Then the condition of railway employment is bad. Wages are low, hours are long, the accidents are prolific, and the restrictions upon freedom of action are often harsh and unjust. Turning to Ireland, we have seen how terribly handicapped is that unfortunate country by its costly, inadequate, and often grossly inefficient railway management, and by the excessive preferences extended to foreign merchandise. And what are the remedies under the present system ? General revision of rates by a Parliamentary Committee, and the redress of proved and specific grievance by the Railway Commission. We have seen the traders' experience of both these remedies for many years. We have seen that the last great revision which was expected to reduce rates generally, and only to increase possibly in particular instances, resulted, after 130 days' inquiry, in par- ticular reductions and general increases. We have seen some- thing of the operation of the Railway Commission. We have seen how traders have been victimized by the Companies, even when they received favourable verdicts. We have seen how the Companies fight every case, and how in consequence even wealthy traders are deterred from contesting alleged over- charges and illegal preferences by the huge costs involved. Particularly have we seen how, after contesting for two years the illegality of the rates increased in 1893, and being worsted, the Railway Companies declined to accept the case as a " test," with the result that every specific increased rate will have to be taken upon its merits. And this is simply impossible for the traders, for the particular case in point (Northampton) cost them between two and three thousand pounds to amend half-a- dozen rates. With nearly half-a-century's experience of Rail- way Commission and Parliamentary revision, and with the latest position worse than the first, we have, therefore, come to the conclusion that State-control is a failure so long as it has to fight the well-organized, alert and hugely wealthy organizations of the Companies, whose interests are not coincident with those of the community. Thereupon we have turned to the Continent for their ex- perience under State-ownership. What have we found ? We have found that the rates and charges upon the State lines are CONCLUSION 215 very much lower than ours. We have found that the cost of administering State lines, side by side with private lines in the same country, is considerably less, thus getting rid of the contention that State administration is more costly than private enterprise. We have found that the iniquity of giving foreign traders preferential terms does not exist. We have also seen what has been the effect of the adoption of the Zone system and the sweeping reduction in passenger fares upon the Austro- Hungarian lines. But we have not confined our attention to European ex- perience. We have turned to our Australian Colonies and seen what has been the experience of Anglo-Saxon administra- tion of State railways. And there too, in spite of one or two initial blunders, we have found great advantages attending the State-ownership of the railways. Rich and fertile lands, that admittedly would not have been opened up had the railways been left to private undertakers, have been developed by a wise and liberal State railway policy. The Colonists have pursued the " highway " theory in their railway administration, and on the whole their policy has been fully justified. As an indication of the public regard for their railways, we have seen how the Mcllwraith Government in Queensland was overwhelmed in an attempt to let in " private ownership." Then we have turned to the opponents of State-ownership and dealt with three of their chief objections. We have seen that their fear of a universal strike is really unfounded, and proceeds from a total misapprenhesion of the motives and forces which make for great labour dislocations. We have seen too that their plea of inefficiency of State administration is neither borne out by actual experience nor by the probabilities of the case, seeing that the present practical staff of the Com- panies will be as freely available under the State as under private Companies. Then with regard to their sweeping assertions about corruption and dangerous political patronage, we have seen that they are very largely groundless in view of the purity of the Post-Office administration, and the compulsory examina- tions regulating Civil Service appointments, and that the risks of corruption are in fact very much less than under the present system, because of the complete publicity which will be an essential element of State-ownership. 216 RAILWAY NATIONALIZATION Finally, we have discussed the purely financial aspects of the question, and find that the twenty-five years' purchase provided as the price of acquisition under the Act of 1844, will give the shareholders ^26, 989,625 more than the actual paid-up capital value of the railways, but will permit, after 2^ per cent, interest on the State Railway Consols, of an annual margin of some ^29,580,116 for reducing rates and fares, improving the conditions of labour, and providing for a sinking fund, and effecting great improvements. The State-ownership of railways in the United Kingdom, therefore, presents itself both as a necessity and an advantage. It is necessary, inasmuch as something must be done to lighten the transit burdens of the traders and of agriculture ; and State-ownership is the one single untried avenue through which this may be secured. Unshackled competition and private ownership plus State-control have both been exhaust- ively tried, and have failed. State-ownership alone remains. State-ownership comes, however, commended alike by ex- perience and by the financial prospects which an analysis of the statutory terms of purchase shows to exist. And in this connection it is of more than passing significance that what presents itself to-day, after three-quarters of a century of ex- perience, as a necessity, was advocated as the right policy by Thomas Gray, the Father of the Railways, before a single Railway Act had passed, and before Stephenson had con- clusively demonstrated the value of the locomotive. Gray, with quite prophetic vision, foresaw the future of the railway, and urged that at least the main lines should be constructed and retained by the State. He published a book on the sub- ject, and drew up a map of the suggested routes, which, re- markably enough, have been closely followed by the great trunk lines. But, like many another prophet, poor Gray was laughed at for his pains, where he was not denounced as a knave paid by France to circumvent the ruin of England ! l His general idea of an iron road, however, was soon " attached " by men with a faculty for finance, while he was left to die "unwept, unhonoured, and unsung," except by Chevalier Wilson, who vainly tried to get a Government pension for him. 2 1 Our Iron Roads. * The Kail-way System and its Author (1845). CONCLUSION 317 The forces making for State ownership are by no means limited to the grievances of the public. Responsible railway authorities themselves, irritated by the repeated extension of the controlling functions of the Railway Commission, have more than once declared that the State had better step in and take the full responsibilities of management by becoming actual owners. Thus Mr. Price, M.P., Chairman of the Midland Railway Company, said some time ago " If on all hands it is admitted that the public must interfere by legislation with the rights of property, whose working is so valuable to them as to be no longer private enterprise, and if finally it can be shown that legislative interference to be of any use must be arbitrary and inquisitorial, it follows that the only course left for the nation to pursue is to make legislative interference real, by being man- agers of the railways themselves that is, that the State should purchase the railways." 1 But probably the most instructive declaration of all was that of the late Mr. Grierson, the Manager of the Great Western Railway. Professor Hunter had urged before the Select Committee of 1881-2 that rates should be fixed according to the cost of service. Examined upon this proposal Mr. Grierson declared " If Parliament were of opinion that any such legislation were desirable, the proper and equit- able course to adopt would be for the Government to acquire the railways and try it themselves." 2 While Mr. Acworth, in the preface to his Railways and the Traders, after bravely assuring us "the Railway Companies have learnt the lesson of triumphant democracy," and "in every direction show their anxiety to meet and even to forestall the demands of public opinion," expresses the opinion that "popular feeling is running strongly in the direction of substituting for the old English system of legal redress for proved injuries, of Government inspection, a new system of direct State regula- tion, of constant and minute interference of a Government department." " The attempt to substitute the one system for the other, not as a part of a well-thought-out and deliberately- adopted course of policy, but by a series of haphazard and piecemeal decisions, can, I am persuaded, only lead to failure and disappointment. // will before long, in my judgment and 1 Journal Statistical Society, 1873. * Q. 12,369. I 218 RAILWAY NATIONALIZATION 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." There is already a good deal of scattered opinion expressly favourable to State-ownership. Nor is this opinion confined to any particular section of the community. Here are a few samples of commercial opinion taken from the evidence before the Select Committee of 1881-2 Mr. C. F. Clark, President of the Wolverhampton Chamber of Commerce and Hon. Secretary of the Hollow Ware and Ironfounders Association, was asked by " Mr. Monk : Do you think those things (as to rates) would be better managed if the railways were the property of the Government ? " Mr. Clark : I certainly do think so. I think that a great deal of money which is now spent in Parliamentary fights would cease to be expended ; we have to pay interest upon that money, and we should avoid what I believe is the case now, that is the double terminal charges at junctions. " Mr. Monk : Do you think that is the general opinion of the traders at Wolverhampton ? Yes, I think so. " Mr. Monk : Those opinions have been expressed in your Chamber of Commerce more or less ? Yes, they have." x Mr. Isaac Banks, Manager of the Clyde Shipping Company, and late Cork Agent for the Great Western line of steamers, and ex-Traffic Manager of the Waterford and Limerick Railway, gave the following evidence " Mr. O'Sullivan : Seeing the very expensive mode of manage- ment we have in Ireland, what would you suggest for their im- provement generally ? " Mr. Banks : It is my opinion that the lines will never be worked for the benefit of Ireland until they are taken up by the Government. I believe the same good results would follow as in the case of the postal telegraphs and the penny postage, if the Government held the reins. " Lord Randolph Churchill : You would not be against the purchase of the Irish railways by the State ? " Mr. Banks : I am very much in favour of it. I think it 1 Q. 5842-45. CONCLUSION 219 would be the very best thing that ever happened to the country. " Do you think that would be the opinion of the mercantile community generally ? The mercantile community would be all in favour of it." 1 In reply to Lord Randolph Churchill, Mr. Pirn, of Pirn Bros., Dublin, said " I think it would have been a great benefit if the State had purchased the Irish railways." 8 In reply to Sir Edward Watkin, Mr. T. A. Dickson, Com- missioner of Inland Navigation, and member of the Belfast Chamber of Commerce, said " I consider that a great political mistake, not merely com- mercial mistake, was made by the Government not taking up the whole of the railway system in Ireland and extending it." 3 Mr. Field, M.P., is devoting much time to the advocacy of State-ownership in Ireland, and on the conclusion of a lecture of his before the Conference of the Irish Dairy Farmers Association, Count Moore, amid the approving cheers of the audience, declared that for his own part he agreed with Mr. Field that nothing could be done to ameliorate the grievance of the farmers and traders without nationalizing the railways. The Trades Union Congress, with its million and a half of working-class members, have passed a resolution unanimously in favour of State-ownership. 4 Both the Amalgamated Society of Railway Servants 5 and the General Railway Workers Union have done the same. 6 And thus the Daily Chronicle (September 1 8, 1894) " Altogether the look-out is a black one, so black indeed that we are surprised that a movement is not initiated by far-seeing shareholders for persuading the State to take over their property. The railways are becoming the subject of State-control down to the minutest detail. Nothing is sacred from the Board of Trade and Mr. Gifien. Would it not be wise, before the stocks are darkened still more by shadows of coming events, to make a judicious proposal for the surrender of the lines in exchange for Consols?" 1 Q. 4887 and 51 lo- 14 and 5151-2. a Q. 8385-6. Q. 6939. 4 Annual Report, 1894. B Rail-way Review (Report, 1896, Congress). 8 Annual Report, 1897. 220 RAILWAY NATIONALIZATION The London Chamber of Commerce have issued a pamphlet by Mr. Balfour Browne, Q.C., advocating the immediate appli- cation of the State-ownership principle, because of the futility of the recent Revision and consequent litigation. Mr. Browne, however, advocates the State beginning with the poorest lines. But this will not do, for, as Professor Hadley says, "to do any- thing efficient, it (Government) must control not a few lines, but the whole system." l Moreover, as the complete acquisi- tion will be made to depend upon the financial success of the initial experiment, it would be palpably absurd for the State to handicap itself by starting with the derelict lines. And experi- ence is dead against another suggestion made a few years ago, that while the State ought to purchase the lines, they should sub-let them for working to private Companies. It means friction, and many other of the worst evils of the present system. But this is somewhat of a digression. Another evidence of the growing opinion in favour of State-ownership is the establishment of the "Railway Nationalization League," 2 which is carrying on an active agitation in favour of Mr. Gladstone's Act securing early adoption. With the great railway system in the hands of the community, and administered purely in their interest, we may confidently look for sweeping reductions in goods rates and passenger fares, and the entire abolition of the dangerous preferential system. We may expect to see British agriculture escape from the continuous gloom of depression from which it has suffered so long, and to see the fields, now silent and neglected, again occupied with their army of industrious workers. Nor will it be too much to expect, on the one side an arrest of that ceaseless flow of our rural population to the murky congestion of the towns, and on the other a healthy exodus from the crowded slums to the green fields and cultivated gardens of distant and widely-scattered suburbs. Again, with lowered railway rates, and the abolition of foreign preference, we ought to hear less of that doleful legend " Made in Germany." State- ownership will also mean, with the pressure of the growing 1 Pamphlet Series, No. 22, 1897. a The League was started in 1895. . The Secretary is Mr. W. H. Mead, 47 Victoria Street, S.W., who will be pleased to send inquirers all inform- ation. CONCLUSION 221 social conscience, shorter hours and improved conditions of employment for the overworked and underpaid railway worker. It will mean the development of neglected districts, the aboli- tion of needless wastes, and the raising of the administration of all railways to the efficiency of the systems which are best ad- ministered to-day. It will mean an end of the futile litigation before the Railway Commission ; it will free the House of Commons from the troubles and wastes of constant railway legislation, and from the presence of 120 paid servants of a single private interest. It will mean a vast improvement in our Post-Office, and an end to the absurdity of sending horse- coaches out from London to Brighton, to Chatham, to Chelms- ford, and so forth, to avoid the heavy railway charges. The State-ownership of railways carries within it then the possibilities of such great and far-reaching social benefits, that in conclusion I would express the hope that our greatest states- men and all lovers of true reform may be* enlisted in the army of its advocates, and that ere long a supreme effort may be made to carry out Mr. Gladstone's Act in the highest and best interests of the nation. APPENDIX A. WAGES, ETC., OF WORKERS ON PRUSSIAN STATE RAILWAYS. Current Number. Class of Official. Minimum Wage. Maximum Wage. House-rent Allowance. i * *. Class. 2 3 4 Members of the Railway Directories and Traffic Directors, as also Heads of Departments of the works at Essen... Members of the Traffic Offices, Inspectors of the Line, of Buildings and Machinery, and Traffic Inspectors ... Telegraph Inspectors ... ... ... ... ... ... 2IO 180 o 300 o 240 o III. III. rv 6 Auditors of Accounts at Central Offices Auditors of Booking Office Accounts 240 o 160 o 240 o 200 IV. IV. IV 8 Book-keepers and Railway Secretaries .. 105 o 180 o IV. 12 13 Draughtsmen and Clerks Ticket Collectors and Office Servants 75 50 o no o 75 IV. V. b t Ships' Captains, Class I. ... ... ... ... / 90 o 130 o IV. 16 a. Station Inspectors and Station Assistants ... \ 75 o no o IV. Telegraph Clerks 18 Foremen Shunters and Foremen of Carriage Works 60 o 80 o V. 20 Doorkeepers, Ticket Collectors, Pointsmen, Foremen 75 o Line Inspectors, Class I. ... .. ... ... 22 23 24 Line Inspectors, Telegraph Superintendents Line Watchmen, Loaders, and Night Watchmen Auditors of Station Accounts and Goods Station Super- 75 o 35 o 105 o 45 o IV. V. 2 | Station Receivers and Goods Despatchers 90 o 130 o IV. 28 c. Engineers for Electric Light Establishments ... ) 50 o 75 V. d. Bridge Toll Receivers J b Ships' Mates ... ... ... ... ... / 55 o 75 o 55 75 V. 40 o 60 o V. 105 o 180 o IV, 130 o IV So o V. 105 o 150 o IV. 36 Administrators of Stores, Class II 75 o 50 o no o 75 o IV. V. 222 APPENDIX A 223 According to the tariff of the law of May 12, 1873 (Collection of Laws, p. 209), respecting the house-rent allowances of public servants, the yearly amount of such allowances are In Places Grouped under Average for Description. A.* I. II. III. IV. V. Calcula- tion of Pension. *. * T. * t. d. For Class I. 75 60 o 45 o 36 o 30 o 30 40 2 o II. 60 45 o 36 o 30 o 27 o 27 33 o o III. 45 33 o 27 o 24 o 21 O 18 24 12 IV. 27 21 12 18 o IS o 10 16 9 14 17 7 v. 12 9 o 7 4 5 8 3 12 3 5 9 To the Group A belong, according to the Law of May 28, 1887 (Imperial Law Sheets, p. 152), the following places within the sphere of the Prussian Railway Administration : Berlin, Altona, Bremen, Frankfort-on-Main with Bockenheim and Bornheim, Hamburg. All railway servants are given retiring pensions. HOURS OF DUTY. Preliminary Observation. A regular day's work, the admissible limits of which are laid down in the following paragraphs, is understood to be the period between two entirely free spells of at least 8 hours each (or in the case of railway servants employed on trains such as guards, drivers, stokers, or brakesmen of ro or 6 hours, according as it is spent at their domicile, or away from it). During the day's work the persons in question, in accordance with the scheme of the time-tables, are actively employed, or must hold themselves ready for active employment. It includes any shorter periods of rest which may occur within such time. I. Line- Keepers. i. The regular day's work of line-keepers on sections on which only day-trains are run, or on which there is only a night service, must not, as a rule, exceed 14 hours. Only in cases where the conditions of the traffic are so simple that the line-keepers have 224 RAILWAY NATIONALIZATION repeated periods of inactivity within their workng time as, fof instance, on branch lines where very few trains are run may the day's work, including the time when the line-keepers are expected to be at their posts, although not actively employed, be exceptionally extended to 16 hours. The same holds good in cases where the regular work is interrupted by a rest of several consecutive hours. 2. On sections where there is a full day and night service the regular daily hours of labour for line-keepers must not exceed 13. This may only be exceptionally extended to 14 hours on days when a change in the train service takes place. 3. In cases where the line-keepers are unable to find lodgings near the line, the time occupied in walking to and from their posts is to be included in the day's work, II. Pointsmen, 1. The regular hours of duty of pointsmen who are not employed in signal-boxes, and whose points are on so busy a section of the line that no considerable intervals occur in their work, must not extend over more than 8 hours. 2. In other cases the regular day's work of pointsmen may amount to 12 hours, and, in cases where the local conditions of traffic admit of repeated and considerable intervals of rest, as also on days when the train service is changed, may be extended to 14 hours. In exceptional cases the day's work may be extended to 16 hours, if after 8 hours' labour an interval of at least 4 hours' complete rest can be allowed. 3. The daily hours of work of pointsmen employed in signal- boxes in places where the management of the points requires un- interrupted attention and activity, shall not exceed 8 hours. In other cases the duty in signal-boxes is subject to the conditions laid down above under paragraph 2. III. Station Officials. 1. The regular hours of out-door station work, in cases where the number of incoming and outgoing trains, or incessant shunt- ing, does not admit of sufficient periods of rest, shall not exceed 8 hours. 2. In other cases the day's work of out-door station officials may be extended to 12 hours, and on days when the train service is changed to 14 hours. In cases where the conditions of the traffic are very simple, as on branch lines where few trains are run, and where the officials have repeated and considerable periods of rest, the competent authorities may exceptionally extend the hours of APPENDIX A 125 work, including the time when the officials must be at their posts, although not actively employed, to 16 hours. 3. The service at secondary stations (Haltestellen) is regulated by the rules laid down for station officials ; that for stopping-places (Haltepunkte) according to the regulations for line-keepers. IV '.Telegraph Clerks. 1. The regular hours of duty for telegraph clerks, in cases where the train and message service is so great that it requires un- interrupted attention and activity on their part, must not exceed 8 hours. 2. In all other cases the daily hours of duty of telegraph clerks may be regulated by the rules laid down under III. 2, for station officials. V. Shunting Masters. 1. The regular hours of duty for shunting masters, in cases where the work requires their uninterrupted activity, must not exceed 10 hours. 2. In other cases the regular day's work of shunting masters may amount to 12 hours, and on days when the train service is changed to 14. VI. Rolling-Stock Inspectors. The regular day's work of rolling-stock inspectors (Wagen- meister) may extend to 12 hours, and on days when the train service is changed to 14. VII. Train Officials. 1. The hours on which train officials (drivers, stokers, guards, and brakesmen) are on duty shall be so arranged that in each month the average day's work of any one official shall not exceed ii hours. Further reductions of the hours of duty, in con- sideration of special demands made upon the men, are to be determined by the competent railway authorities, on their own responsibility, at the beginning of each season when a new time- table is issued. 2. The extension of single periods of duty on a train up to 16 hours is only permissible if considerable periods of rest are included in that time, and if the demands made upon the men are of so simple a nature that, according to the responsible opinion of the competent authority, there can be no question of over-work. Q 226 RAILWAY NATIONALIZATION In the case of drivers and stokers, the regular time spent on the engine while running the train must not exceed 10 hours. 3. After a period of 14 or 16 hours' duty on a train the men must, as a rule, be allowed a longer period of rest in their domicile, and such rest must be arranged to fall, if possible, between the hours of 7 p.m. and 7 a.m. 4. In estimating the length of the spell of duty on a train the time spent in taking over, or being relieved of duty before the departure, and after the arrival of the train, should be considered. 1 I Foreign Office Annual Series, 1893. C. 6855-109. APPENDIX B. RAILWAYS AUTHORIZED BY PARLIAMENT TO THE END OF THE SESSION OF 1843, AND WHICH ARE NOW OPEN. BlRKENHEAD MILES. MILES. Chester to Birkenhead ............ 16 Bodmin and Wadebridge ............ 14! Bristol and Exeter... ............ 75 CALEDONIAN Glasgow, Garnkirk, and Coatbridge ...... 10 Pollock and Govan ............... 2j Paisley and Greenock ............ 22 Dundee and Newtyle ............ loj Wishaw and Coltness ............ 13 Dublin and Drogheda ............... 32 Kingstown ............... 7| Dundee and Arbroath ............... 16 GLASGOW AND SOUTH-WESTERN Mainline .............. .- ... 51 Kilmarnock and Troon ............ 10 Paisley and Renfrew ............... 3 - 64 GREAT EASTERN London to Colchester ............ 51 Stratford to Newport ............ 38 Hertford to Ware ............... 5$ Yarmouth to Norwich 21 - "Si GREAT WESTERN London to Bristol ............... n8i Didcot to Oxford ............... 9! Swindon to Cheltenham ......... 48 -; 176 127 228 RAILWAY NATIONALIZATION LANCASHIRE AND YORKSHIRE- MILES. MILES. Manchester to Normanton ......... 50 Preston and Wyre ............... 20 Manchester and Bolton ............ u - ol Lancaster and Preston Junction ......... 20 Llanelly ..................... 2o London and Blackwall ............... 3 LONDON AND NORTH-WESTERN London and Birmingham ............ 112^ Grand Junction ............... 83; Liverpool and Manchester ............ 31; Manchester and Birmingham ......... 30 Chester and Crewe ............... 21; Leamington Branch ............... Blisworth and Peterborough ......... 47 Aylesbury .................. 7! Kenyon, Leigh, and Bolton and Leigh ...... g| West Landon .................. 3 North Union ...... ............ 40 St. Helen's .................. 10 - 405 LONDON AND SOUTH-WESTERN Nine Elms to Southampton ......... 78^ Bishopstoke to Gosport ............ 15! LONDON, BRIGHTON AND SOUTH COAST London to Croydon ............ 8f Croydon to Brighton ............... 42 MANCHESTER, SHEFFIELD AND LINCOLNSHIRE Manchester to Sheffield ... ......... 4 Maryport and Carlisle ............ 2 MIDLAND North Midland ............... 7; Midland Counties ............... Birmingham and Derby Junction ......... Sheffield and Rotherham ............ 7 Bristol and Gloucester ............ 3c Birmingham and Gloucester ......... Leicester and Swannington ... . ........ 16 289^ APPENDIX B 229 NORTH BRITISH- MILES. MILES. Edinburgh and Glasgow 46 Wilsontown, Morningside and Coltness 8 Edinburgh, Leith and Granton 4 Monkland 36 94 NORTH-EASTERN Brandling Junction 27^ Durham 5 and Sunderland 17^ Great North of England 48 Hull and Selby 31 Leeds 21 Newcastle and Carlisle 65^ Darlington Junciion 25$ Pontop and South Shields 24 York and North Midland 27 Newcastle and North Shields 7 Whitby and Pickering 23 WEST HARTLEPOOL Hartlepool 16 Great North of England, Clarence and Hartlepool Junction 8 Clarence 37 Stockton and Hartlepool 8 39! Preston and Longbridge 6j SCOTTISH NORTH-EASTERN Arbroath and Torgar 15 SOUTH- EASTERN Reigate to Dover 67 Canterbury to Whitstable 6 Maidstone Branch ... ... ... ... ... 9? Bricklayers' Arms Branch i| London and Greenwich 31 OOJ Stockton and Darlington, including the Bishops Auckland and Weardale Railway 69 Taff Vale 24 Ulster (Belfast to Portado\vn) 25 118 Total 2,320 l 1 From paper presented by Sir H. W. Tyler to Royal Statistical Society, 1873. INDEX A. B.C. Guide, 88 Accidents on G. W. R., 117; G. N. R., 117; L. B. & S. C. R., 117; L. C. & D. R., 117; L. & N. W., 116; M. R., 116; and contracting out, 117; preventibil- ity of, 118; statistics of, 113-117 ; at Hampstead Heath Station, 86 Acts, all Railway subject to Act of 1844, 14 Acworth, W. M., 26, 54, 90, 109, 125, 134, 135, 136, 145, 162, 169, 186, 187, 190, 217 Administration, cost of State and private, in Europe compared, 155; Anglo-Saxon, 6, 169; method of Australian State Railways, 171 Agricultural and Horticultural As- sociation, 139 ; Society, Royal, Sec. of, 70, 73, 74; Rate Act, 68 Agriculture, blight on, 68 77 ; Berkshire and Hants Chamber of, 140 ; Central Chamber of, 70, Cheshire Chamber of, 74 ; effect of preferential rates on, 68 ; and increased rates under revision, 1 39 ; illegal charges on produce, 75-6 Alizarine, preferential rates on, 62 Amalgamated Society of Railway Servants, 118; and State-owner- ship, 219 Amalgamation of Companies, 14 31 ; North-Eastern Company, 31 ; benefits of, 31 ; dangers of, 32 Amateurs, not intended to manage State railways, 197 Andrews, S., 62 Anglo - Saxon administration, 6 ; genius and State-ownership, 169 Apples, preferential rates on, 75 ; preferential Irish rates, 126 Appropriation of the Railways by the State. See Williams, A. J. Arbitration, under Gladstone's Act, 209 Archiv fur Eisenbahnwesen, 91 Australia, Year- Book of, 170, 172, 176, 177. 178, 179 Australia, South, statistics of State railways, 176 ; gauges of, 172 Australia, Western, and land grant system; differential gauges, 172, State railways, statistics of 177 Australian State Railways, 169-78 ; burden of high interest on, 170; highway theory on, 178 ; initial mistakes on, 170; in creasing value of, 171 > method of administering, 171 ; mileage to population, 172; profit on, 174 ; unjust criticisms on, 170 ; wastes of differential gauges, 171. (See also under respective Colonies. ) Austria, State railway, mileage, 154 ; comparative cost of private and State administration, 155-6 ; effect of reduced fares in, 185 ; fares, de- tails of, 91, 183 ; fares compared, English, 183 ; Zone system ex- plained, 183 BACON, preferential rates on, 74 ; Irish rates on, 124 Baedeker, 162 Banks, Issac, 124, 125, 218 Barclay,;. W., M.P., 72 Barley, preferential rates on, 71 Barren, Sir H., 165 Barross, M., 179, 185, 186 231 232 INDEX Battle of the gauges in Australia, 171 Bayliss, Mr. (Berks Chamber of Agriculture), 139 Belfast Chamber of Commerce, 218 Belgian State railways, mileage, 153, cost of administering compared with Company lines, 155-6; fares, 91 ; effect of low fares, 188 ; and mails, 165 ; policy as to rates and profits, 165-6 ; rates, iron and steel, 61 ; coal, 56-7 ; rates com- pared, 157-8 Bell, T., 72 Berks and Hants Chamber of Agri- culture, 140 Bigger, J. .,127 Birmingham navigation, 44 ; rates on canal, 49 ; Chamber of Com- merce, 55 Birmingham Daily Mail, 58 Bismarck, Prince, 159 Board of Trade and accident pre- vention, 112, 113; Conciliation Act, 1 1 8, 193 ; farmers' deputation to > J 395 Journal, 167; as media- tors, 19, 150; power of super- vision, etc., 12, 13; President on power of the Companies, 201 ; on ruinous effect of increased rates, 142, 151 ; and railway workers' long hours, 109, and wages, 108-9 > report, 1895, 79, 1904, 150; re- turns, 1896, 208, 1906, 113; and unpunctuality of trains, 87 ; and workmen's trains, 107 Bogle, W. R., 189 Boom, great railway, 1844, I2 Booth, Charles, 190 Bousfield, C. E., 63 Boyd, R. N., 127, 129 Bradshaw's Railway Manual, 201 Brandon, Raphael, 163, 179 Breach of faith, alleged Company's, H5 Bricks, Irish rates for, 124 Bridgewater Canal, 45-6 Brighton and South Coast Company, 22 ; accidents on, 117 British coal rates compared with foreign, 56-7 British Iron Trades Association, 56 ; report of deputation on German and Belgian competition, 59 Brodick, Hon. G. C., 192 Browne, Balfour, Q.C., 68, 220 Brownlow, Lord, 94 Building Trades Federation, Lon- don, 107 Burns, John, M.P., L.C.C., in Butter, Irish rates, 124 ; preferential rates, 74, 78 Butterworth, A. K., 10, 11, 15, 19 CABBAGE, preferential rates on, 78 Caine, W. S., 142 Cambrian Railway Directors at the Bar of the House, 119 Campbell-Bannerman, Sir H., 194 Canal competition, killing of, 43 ; and railways, relative cost, 43 ; of select committee of 1883, 43, 44 ; mileage controlled by railway Companies, 44 ; Regent's, 44 ; competition, effect of killing, 45-6 ; illegal acquisition by railways, 45 ; how railways have acquired, 45 ; Bridgewater, 45 ; controlled by Great Western, 47 ; rates pro- hibitive, 48 ; owned by London and North- Western Company, 45, 49 ; by Manchester, Sheffield and Lincolnshire Company, 48 ; rates, effect of excessive, 48, 49 ; Bir- mingham, rates on, 49; policy of making derelict, 49 ; Market Weighton, rates on, 49 ; Hudders- field, rates on, 49 Canals owned by North - Eastern Company, 50; State acquisition of, in France, 167 Canals, Royal Commission on, 51 Canterbury, Archbishop of, 194 Canvassers, waste of, 26 Carriers, Companies become, 9, 10, n ; relation to Companies, 10; evidence of, against Companies, IO ; law of, 10 Carrington, Lord, 95, 171 Cattle, preferential rates, 72 ; Irish INDEX 233 Cattle continued rates as compared with English, 128 ; Irish rates, 124 Chad wick, Sir E. , 28, 202 Chadwick, D., M.P., 206 Chambers of Commerce and railway rates, London, 53, 68, 142 ; and State-ownership, 220; Birming- ham, 53 ; North Staffordshire, 53 ; Sheffield, 53 ; Newark, 54 ; Wol- verhampton, 53, 218; Glasgow, 142; Hull, 158; Liverpool, 142; Swansea, 142 Chambers of Commerce, Associated, 157 Channing, F. A., M.P., resolution, 109, 119, 193 Chatterley Colliery Company, and illegal treatment of, 146 Cheap Trains Act, 79 Cheese, preferential rates, 74 Cheshire Chamber of Agriculture, 74 Churchill, Lord Randolph, 89, 219 Civil Service examinations and political patronage, 205 Clark, C. F., 216 Clearing House, Railway, establish- ment of, 1 5 Clearing House, waste of, 24 Clements, Edwin, 43, 44, 47, 49, 64, 77, 78, 138 Coal rates, 54 ; comparative, British, German, and Belgian, 56-7 ; Irish preferential rates, 122 Coal, tonnage raised and carried, Colliery owners and rates, 55 Combination, freedom of, and Lon- don and North- Western, 118 Comfort of passengers, defect in, 85 Competing lines, theory of, 12 Competition, railway, how killed, 4, 31 ; waste of, estimated total, 28 ; the breakdown of, 30 ; impossi- bility of, 30 ; of markets, theory of, 38 ; by water, 39 ; by rival railways, 40 ; with private owner- ship, failure of, 133 Complaints under Railway Traffic Act 1888, Sec. 31, 150-1 Complication in rates and fares, waste of, 24 Conciliation Act, 118 Conder, F. R., 43, 44, 45 Conditions of railway employment, 1 08 ; in Prussia, 162 Conference of Traders, Mansion House, 141 ; rates. See Rates Conferences Consolidated Act 1845, 14 Contracting out and accidents, 117 Cooper, R. A., 84 Copper, preferential rates, 61 Cork Constitution, 125, 128 Corn, Indian, Irish rates, 127 ; pre- ferential rates on, 77 Cornelius, Joshua, 77 Cornhill Magazine, 79 Cost of canals and railway carriage, relative, 43 Cost of State purchase of English railways, 208 Cotton manufactures and yarns, pre- ferential rates, 63 Cotton, preferential rates, 62 Cotton, Sir Arthur, 43 Court of Common Pleas, 17 Cox, Harold, 109 Crewe, tyranny at, 119 Crewe Chronicle, 119 Cropper, Mr. (Midland Director), 202 Crowded cities and workmen's trains, 92 Daily Chronicle, 58, 64, 66, 72, 120; and State-ownership, 219 Daily News, 85, 137 Daily Telegraph, 58 Dairy Farmers Association, Irish, 124, 128, 219 Dairy produce and preferential rates, 74 Demurrage on " empty goods," the effect of, 27 Denmark, Railways, mileage, 154; relative cost of administering State and private lines, 1 55 ; statistics of State railways, 166-7 Dennis, R., 121, 122, 126 234 INDEX Dennis, J. W., 78 Density of population and rate of mortality, 94 Depression of Trade Commission. See Trade Depression Derelict canals, particulars of, 50 ; policy of making, 49 ; railways, and proposal to at once acquire, 220 Development of the country the ob- ject of Australian State railways, 177 Devonshire Commission, 31, 126, 202 Dickson, T. A., M.P., 123, 126, 219 Dilke, Sir Chas., 95 Directors, wastes of, Boards of, 23 ; Cambrian, at Bar of House, 1 20 ; wasteful excess of Irish, 130 Don navigation, excessive rates on, 48 Drysdale, J., 77 Druce, Mr., 71 Dunraven, Lord, 53 Duplicated offices, wastes of, 25 ; passenger trains, wastes of, 26 ; passenger trains, loss by, to L. andN.-W., 27 Dutch rates, 157-8 Economic Journal, 84 Ecroyd, Farrar, 53 Eddy, E. M. G., 172 Eggs, preferential rates on, 75 Eight hours day and workmen's trains, 103 ; and Prussian railways, 162, 223. See Webb & Cox Electric Trams, 41, 106 Employers' Liability and Accidents, 1 1 6. English and Foreign Railway Rates. See Grierson English fares, 13, 89, 91, 104, 128, 174, 183 English, Hungarian and Austrian fares compared, 183 " Enlightened Self- Interest " theory, 133 Equality clause, 14, 16 Equalization of Rates Act, 97 Evening Standard, 58 Excursion traffic, easily created, 190 Exemption Clause, Act 1844, lines under, 210, 227 Experiments, inability of private Companies to make, 134 Express service, excellence of En- glish, 85 FABER, CONSUL, 184 Facilities, deficient Irish, 127 Fares, average English, Scotch and Irish, 127 ; comparative, different countries, 91 ; London and N. S. Wales compared, 1 74 ; and rates excessive, English, 13 ; and rates excessive, Irish, 125 ; low, effect of, in Belgium, 186 ; minimum unlikely under present system, 91, 191 ; reduced, under State-owner- ship, 211 ; low, and potential English traffic, 186 Farr, Dr., 93, 94 Feathers, Irish rates, 122 Field, Mr., M. P., 219 Field, The, 74 Financial aspects of State purchase, 208-9 Findlay, Sir Geo., 23, 24, 27, 28, 3i 34, 35, 37, 38, 39, 42, 80, 81, 82, 83, 84, 117, 125, 128, 129, 155, 187, 188, 189, 192, 193, 195, 196, 204, 209 First-class, decrease in traffic, 80; receipts, 81, 82; earning capacity of, 82 ; fares, 83 ; Austrian and Hungarian fares, 182-3 5 New South Wales and London, 174 Fish industry, effect of high rates on, 66; Irish rates, 124; preferential rates, 66, 67 Flax, Irish rates, 122 ; preferential rates, 63 Flour, Irish rates, 123 ; preferential rates, 72 Food, adulteration of foreign, 69 Foreign competition, 6 Foreign Office Report, on German railways, 160 ; Zone system, 181, 184 INDEX 235 Fortescue, Hon. J. W., 170 Forwood, Sir W. B. , 147 Fossdyke, Channel of, and G.N. agreement, 47 Fox, John, 122 France, canals, State-ownership of, 167; railway mileage, 154; policy, 167 ; fares, 91 ; State-ownership, growth of opinion favourable to, 1 68 ; results of revision, 168 ; rates, iron and steel, 61 ; State and private lines, comparative cost of administering, 155-6 Fruit, Irish rates, 125 Fruit and vegetable preferential rates, 73, 77, 78 Fruit growers and increased rates under revision, 140 Functions of railway promoters, change of, in early, 9 GALT, WILLIAM, 179 Gauges, wastes of differential, in Australia, 171 General Railway Workers Union, and State-ownership, 219 German State railways, benefits of, 161-2 ; cost of administering com- pared with private lines, 155, 156 ; coal rates on, 56, 57 ; difficulty of co-ordinating, 159; fares on, 91 ; Foreign Office Report on, 160 ; industrial and commercial reasons for, 1 59 ; Handelstag, 159; iron and steel rates, 61 ; management, system of, 161 ; mileage of, 154; profits of, 160 ; purchase method of, 160 ; rates, 157-8 ; rate book, simplicity of, 25 ; revenue compared with En- glish, 162 Giffen, R., 109, 220 Girders, preferential rates, 6 1 Gladstone, Rt. Hon. W. E., I, 13, 64, 79, 91, 119, 191, 202, 207, 2IO, 22O, 221 Glasgow Chamber of Commerce, 142 Glynn, P. J. O'C., 127 Goods trains, empty, wastes of running, 27 Goschen, G. J., 95 Government employe's, rarity of strikes among, 194 Grain, preferential rates, Jl Gray, J. W., 137 Gray, Thomas, 8, 164, 216 Great Northern, accidents on, 117; Channel of Fossdyke agreement, 47 ; Witham navigation agree- ment, 47 ; canals controlled by, 47 Great Western Act, 10 ; accidents, 117; canals controlled by, 47; Companies subsidized by, 33 ; re- coupmentof, byincreasedrates, 144 Greening, E. O., 139 Grierson, J., 27, 28, 37, 41, 89, 90, 125, 217 Grotrian, F. B., 48 Grove, Arnold, 130 Gurney, H., 65 HADLEY, PROFESSOR, 39, 45, 135, 148, 165, 220 Half-loads, waste of, 27 Hampstead Heath Station, accident, 87 Handbook of Australia, 175, 176, 177 Hansard, 13, 91 Harford, Edward, 194 Hay, Irish rates, 127 ; preferential rates, 72, 75 Health, a city of, 94 Health and Housing Committee, London County Council, 93, 95, 96, 104 Hickman, Sir A., 22, 55, 146, 147 Hicks-Beach, Sir M., no Highway system, 9 ; theory on Aus- tralian railways, 177 Hill, Sir Rowland, 31 Hingley, Sir Benjamin, 45, 48, 147 Hole, James, 20, 23, 32, 46, 73, 79, 86, 118, 134, 162, 175, 193 Holland, State railways, cost of ad- ministration compared with pri- vate, 155-6; mileage of, 154; policy on, 166 ; rates upon, 158-9; statistics of, 166 Hollow Ware, and Ironfounders Association, 218 236 INDEX Hood, John, dismissal of, 119 Hops, perferential rates, 70, 75 Hours of Railway Servants Act, ill; Committee, 1 10, 193 ; ex- amples of excessive, 1 10-2 House of Commons, on effect of in- creased railway rates, 142 ; num- ber of railway directors in, 201 House of Lords, number of railway directors in, 201 ; bribery of, 200 Housing of the Working - Classes Commission, 95, 97 Howard, J. & F., illegal coercion of, by railway Companies, 147 Huddersfield, canal rates on, 49 Hull & Barnsley Company, speech of chairman, 202 Hull Chamber of Commerce, 158 Hungary, State railways, mileage of, 1 54 ; fares compared with English, 91, 183 ; Zone system, details of, 181-2; fares under, 182; effect of reduced fares in, 184-5 Hunter, W. A., IO, II, 15, 75, 136, 217 ILLEGAL charges, 76, 77 Inadequate service of workmen's trains, 97 Industrial Ireland. See R. Dennis Inefficiency, alleged, under State ownership, 194 ; evidence of, in- adequate, 194 ; practical staff avail- able ta' prevent, 194; publicity, importance of, to prevent, 198 Inland navigation, International Congress on, 43, 44 Inspectors, Board of Trade recom- mendation re accidents, 118 Interest, suggested on State railway consols, 211 Intimidation of aggrieved traders by Companies, 146 ; of witnesses, 118; of workmen, 118, 142 Ireland, the woes of, 121-131 Irish Cattle Traders Association, 127 Irish Dairy Farmers Association, 124, 128, 219 Irish Industry, Select Committee on, 23 Irish railways, deficiency in facilities, 128 ; directorates, wastes of, 23 ; management of, wasteful, 130; rates and fares on, high prefer- ential, 121, 125, 126; State sub- sidies given to, 130; purchase recommended, 131 Irish Rates Conference, 36, 129 Irish rates and average purchasing power, 125 ; and road traffic, 126 Iron casting, preferential rates, 61 Iron Railway or Tramway Act, 9 Iron and steel comparative rates, 60 Iron wire, perferential rates, 61 Iron, rates, increase in, 141 Italy, State railways in, 168 ; mile- age, 154; fares, 91; comparative cost of administering, 155-6 ; more successful than private, 169 JEANS, J. S., 28, 55, 60, 80, 81, 126, 128, 155, 156, 157, 165, 168, 204 Joint Committee, 1872, 17 Jones, G. W., 81 Jones, J., dismissal of, 119 Journal of the Railway and Canal Traders, 6 1, 64, 67 KILLING of canal competition, 43 LABOUR, Commission, 109; im- proved conditions of, under State- ownership, 211. See Hours, Wages, etc. Laing, S., 20, 21, 22, 31, 148, 194, 195, 199 Lambert, Mr., 143 Land, cost of, to different Com- panies, 21 ; anomalous system, effect of, 68 Lard, preferential rates, 74 Law of supply and demand, 12 Law and Parliamentary expenses, 20 Laws, Captain, 28 Lee, Sir J. C., 62 Leeds Mercury, 58 Legal maximum, theory of, 2 Legality of charges, 18 Leopold, King, 164 INDEX 237 Life and Labour of the People. See C. Booth Linen, perferential rates, 63 Litigation, the futility of, 145 ; im- possible costliness of, to farmers and traders, 150 Liverpool and Manchester line, 9 ; Chamber of Commerce, 142 ; waste of duplicated offices in, 25 Lloyd, E. J., 47, 48, 49, 50 Locke, J., 21 Locomotive toll, 10 London, 94, 95 London, density of population in, and rate of mortality, 93, 94 ; population, potential country traffic from, 190; workmen's trains in, 93-107 London, Brighton, and South Coast, accidents on, 117 London Chamber of Commerce, 53, 68, 142 ; and State-ownership, 220 London, Chatham, and Dover, acci- dents on, 117 London County Council and work- men's trains, 87, 93, 94, 95, 97, 98, 99, 102, 105, 135 London and North-Western, acci- dents on, 116; passenger traffic, analysis of, 82 ; illegal coercion by, 147 ; loss to, by duplicated passenger trains, 27 ; threat of chairman, 200 ; victimization of men, 118, 193 Long-distance traffic and low fares, Lords, House of, bribery of, 199 Lough, T., M.P., 142 Louth navigation, 44 Lubbock, Neville, 53 MclLWRAiTH, SIR THOMAS, and overthrow of Queensland Govern- ment, 176 " Made in Germany," 221 Mails and Belgian State railways, 165 Maintenance of way, cost of State and private, in Europe, 155, 156 Manchester, Sheffield, and Lincoln- shire Company, canals owned by, 48 Mansion House Association on rail- way and canal traffic, 64, 66, 137, 138, 139, 140, 149, 151, 153 Manure, artificial, Irish rates, 122 Maple, Sir Blundell, 94 Market gardeners' deputation to the Board of Trade, 73 Market price, impossible basis of purchase 210 Market Weighton Canal, rates on, 49 Mark Lane Express, 139 Marshall, Professor A., 92 Martin, Biddulph, 32 Martin, J., 71 Martin, L. A., 64 Massey, W. A., 156 Mavor, Professor, 84, 194 Maximum mileage toll, 9, II ; legal rates, 13, 38 ; legal rates, ruinous character of, 39 May, Erskine, 202 Mead, W. A., 220 Meat, preferential rates, 70, 72, 77, 78 Medical Officer of Health, London County Council, 94 Method of State purchase proposed, 207 Midland Railway Company, acci- dents on, 116; illegal coercion by, 147 Midland Counties Timber Merchants Association, 65 Mill, John Stuart, 2 Mineral rates, average tonnage, 55 Mineral Statistics, 54 Mining Association on coal rates, 55 Mitchell, Sir H., 63 Monk, Mr., 218 Monopolies, railways essentially, 31, 193 Monopoly on single lines, how secured, n Monopoly, how railways maintain, 32 Monsell, Hon. W., 130 238 INDEX Moon, Sir R. , 22 Moore, Count, 124, 128, 219 Morning Post, 57 Mortality, rate of, and density of population, 94 Motor car, 40 Motor bus, 107 Mulhall, 47, 54, 91 Munton, F. K., 26 Muntz, P. A., 53 NAILS, preferential rates, 61 National Railways, See J. Hole Navigation, Birmingham, 44 ; Don, 48 ; Louth, 44 ; Inland, Congress on, 43, 44 Neston Colliery Company, illegal treatment of, 147 Neve, George, 73 Newark Chamber of Commerce, 54 Newcastle Chronicle, 59 Newcastle Daily Journal, 59 Newcastle Farmers' Club, 72 New South Wales, State Railways, gauge, 172 ; administration of State railways, 173 ; statistics of, 173 ; fares compared with London, 174 ; concessions to passengers, 174; reduced rates in, 174 New Zealand, State railways, statis- tics of, 177 Normanton Rates Conference, 36 North British Company, cost, etc., fighting Caledonian, 2O North-Eastern Company, amalgama- tion of, 31 ; accidents on, 117 ; and Directors' votes in Parliament, 202 Northampton rates case, cost of, 149 North Staffordshire Chamber of Commerce, 53 North Staffordshire Railway Com- pany, illegal coercion by, 146 Norway, railway mileage, 153 ; rela- tive cost of administering State and private lines, 155 Nottingham Guardian, 59 Notts and Midland Merchants and Traders Association, 146 OAKLEY, SIR HENRY, 106, 144 Objections to State-ownership, 192, 206 Officials trained, available under State, 197 Our Iron Roads. See F. S. Wil- liams Our Railways. See Parsloe Overcharges, futility of traders trying to recover, 149 Overcrowding of cities, effect of, 93 ; and workmen's trains, 86 Owners' risk rates, 67 PALMER, SIR C. M., 53 Parliament, number of railway directors in, 201 Parliamentary fare, 13, 89, 90 Parliamentary Practice. See May Parsloe, J., 25, 32 Passenger duty, 97 Passengers, treatment of, 3 ; laws affecting, 19 ; the plaint of, 76, receipts, decrease of firstand second, increase third, 81 ; traffic analysis, London and North- Western, 81 ; comparative earnings of different classes, 81 ; comfort, defect in, 85 ; stations, deficiency in, 86 ; trains, unpunctuality of, 88 ; minor griev- ances of, 89 ; fares excessive, 88, 89, 90 ; fixed between the Companies, 90 ; traffic, limitless with low fares, 186-191 ; how restricted by high fares, 183-189 Passengers, concessions to N. S. Wales, 174 Peake, J. Nash, 147 Pease, Sir J., 202 Peek, Sir Francis, 86-87 Perks, R. W., 23 Pianos, preferential rates, 65 Pigs, Irish rates, 127 ; cause of fall off in Irish sales, 129 Pim, Mr., 219 Plated goods, preferential rates, 6 .5 Political corruption, alleged, under State, 199-206 ; bribery of the House of Lords, 199 ; case of 1 88 1 Committee, 201 ; directors voting, INDEX 239 Political continued against Parliamentary usage, 203 ; directors on, 201 ; number of directors in Parliament, 201 ; most virulent under private system, 199; less danger of, under State, 204 ; promotion abuses, 199 ; Spencer, Herbert, on, 199 ; threats of Lon- don and North- Western chairman, 200 ; and comparative purity of Civil Service, 204-5 Political opinions, railway men dis- charged for, 119 Pools, how worked, 31, 35 Pope, J. Buckingham, 39, 77, 201 Pork, Irish rates, 124 Portugal Railway, mileage, 147 Post-Office, 10, 12, 198, 221 Potatoes, Irish rates, 127 ; preferen- tial, 71, 73, 78 Poultry, preferential rates on, 78 Preference, undue, 18 Preferential rates, 3 ; unreasonable, 16; injustice of, 40; and the Press, 57 ; effect on iron trade, 60, 61 ; effect on cotton trade, 62 ; on Irish railways, 121 ; (Irish) absurd effect of, 1 23 ; foreign, Southampton case, 151 ; Departmental Com- mittee on, 77. See also Rates Press and preferential rates, 57 Price, Mr., M.P., 217 Principles of Economics. See Mar- shall Private ownership. Is it hopeless ? 132 ; theories for public defence against extreme effects of, 132 Private sidings, 18 Professional agitators and their cause, 194 Profits of English railways, 211 ; under State purchase, 208 Promotion expenses, 20 Prussian State Railways, profit on, 160 ; wages and conditions of workers, 162 ; statistics of, 163 Publicity, factor in State-ownership, 198 Purchasing power and Irish rates, 125 ; and Continental fares, 90 QUEENSLAND GOVERNMENT, over- throw of, 175; State railways, gauge, 172 ; statistics of railways in, 175 ; regard for State-owner- ship in, 175 Railroad Transportation, See Had- ley Railways, authorities and State- ownership, 217 ; and canals, rela- tive cost of, 43 ; Traffic Act 1854, 16; Traffic Act 1888, 18,51, 150; Traders Association, see Mansion House Association; Commission, Devonshire, 1865, 31, 126, 202; establishment and early career of, 15 ; new powers of, 17, 18 ; Com- mission, 147 ; directors, proposal to abolish voting of, 202 ; em- ployment, conditions of, 108 ; interests, Parliamentary power, how abused, 201 Railway Servants' Hours of Labour Act, cases under, Hi ; monopoly how maintained, 33 Railway Morals and Rail-way Policy. See Herbert Spencer Railway Nationalization League, 220 Railway Problems. See Jeans Railway Review, in, 219 Rail way promotion, corruption of, 199 Railway workers, wages of, 106 ; in Prussia, 162 Railways and monopoly, 193 Rates, Belgian, 157, 158; British, complication of, 25 ; British and foreign compared, 157; coal, 54; coal, British, German, and Bel- gian, 56-7 ; and colliery owners, 55 ; conferences, 31 ; and com- mission on trade depression, 52 ; conferences, details of different, 36 ; effective character of, 37 ; Dutch, 157, 158 ; French, result of revision, 161 ; German, 157, 158; Irish, apples, 124, bacon, 124, bricks, 124, butter, 124, cattle, 124, 128, coal, 122, feathers, 122, flax, 122, 123, 125, fish, 124, flour, 123, 124, fruit, 125, Indian 240 INDEX Rates continued corn, 127, hay and straw, 127, manure, artificial, 122, pigs, 127, pork, 124, potatoes, 127, turnips, conference, 36, high, 125, ; im- possibly costly to fix before Rail- way Commission, 151 ; and charges, maximum revision of, 13 ; simplicity of (German), 25 ; iron and steel, comparative, 60 ; whole- sale, increase in, 19 ; legal maxi- mum, 38 ; mineral, average ton- nage, 55 ; Northampton case, cost of, 149 ; preferential, alizarine, 62, apples, 75, bacon, 74, butter, 74, cattle, 72, cheese, 74, copper, 61, cotton, 62, 63, dairy, 74, eggs, 75, fish, 66, 67, flax, 63, fruit and vegetable, 73, girders, 6l, glass, 64, grain, 71, hay, 72, hops, 70, 75, injustice of, 40 ; iron casting, 61, sheet-iron, 61, iron wire, 61, lard, 74, linen, 64, meat, 70, 72, nails, 61, pianos, 65, plated goods, 65, principle of fixing, 38, rates, 75, sheep, 72, sugar, 64, timber, 64, 65, woollen, 63, 74. (See W. A. Hunter.) Rates, reasonable, 19 ; reduced under State purchase, 211 ; through, 1 8 Railway Rates and Radical Rule. See J. Pope Railway Rates and Traffic. See A. K. Butterworth Reasonable facilities, 16, 18 Reduced fares and the Zone system, 85, 179 Referendum and Swiss decision to acquire railways, 163 Refreshments on German State rail- ways, 162 Regent's Canal, 44 Regulation of Railways Act 1873, 17 Reid, Mr. , and workmen's trains, 107 Revenue, earning, secondary object of State Railways, 165, 166, 167, 177, 178 Revised railway rates (analysis of), 137 ; increase in, 137 145 Revision of rates, 19; committee, 1890, 126; the farce of, 135; of rates, 1891, result of, 136; of rates committee, 1890, 127 Richardson, Sir B. W., 94 Rigby, T., 74 Rival railway competition, 40 Road toll, 9 Rollit, Sir A., 142 Roumania, railway, mileage, 154 ; relative cost of administering State and private lines, 154, 155 Rowlandson, S., 71, 72 Royal Agricultural Society, secretary of, 70, 73. 74 Rural population in London, 190 Russia, relative cost of administering State and private lines, 155 Russia, railway, mileage, 153 Russian fares, 90 St James's Gazette, 58 Salisbury, Lord, 95, 185 Samuelson, Sir Bernhard, 25, 57, 70, 157, 160, 161, 162 Savings, under State-ownership, 211 School-children, railway fares of, in Australia, 175 Scotch rates conference, 36 ; railway strike, cause of, 193. See also Mavor Second-class, abolition of, 84 ; de- crease in, 80 ; loss on, 82, 83 ; German, comfortable, 162; earning capacity of, 82, 83 ; fares, London and New South Wales, 168, Aus- trian and Hungarian, 181, 182, 183 Select Committee on hours of railway servants, 109, 1 10 ; on Irish in- dustries, 23, 126 ; on canals, 1883, 43 ; on railways and rates, 1832, 30 ; 1839-40, 9, II ; 1844, 13, 21 ; 1846, 14, 39; 1881, 18, 37, 41, 44, 45, 46, 48, 49, 50, 55, 61, 63, 65, 72, 73. 89, 121, 123, 129, 130, 136, 146, 147, 148, 217, 218, 219) 1881, abused by railway directors, 201 ; 1881, majority of railway directors voting, 201 ; 1893, re- markable report of, 143, 145 INDEX 241 Shanks, J., 129 Shareholders, speculating, effect on management of, 135 Sheep, preferential rates, 72 Sheet-iron, preferential rates, 6 1 Sheffield Chamber of Commerce, 53 Sherlock, T., 127, 129 Shorter working day and workmen's trains, 103 Simplicity of Zone system, 180 ; German rate book, 25 Social conscience, 194 Southampton case re preferential rates, 151 South-Eastern Railway, subsidy to, by Brighton and South Coast not to run to Eastbourne, 34 Spain, railway, mileage, 154 Special Committee, 1852, 16 Spence, Mr., 44, 46, 49, 50, 51 Spencer, Herbert, 21, 199 Staffordshire Sentinel, 147 Standard, 57 State administration and Anglo- Saxon genius, 169 State-ownership, more economical, 1 57 ; German history of, 1 59 ; growth of French opinion, 167 ; objections to, 192-206; financial aspect of, 206-212 ; necessity for, 216 ; advantage of, 216 ; opinions favourable to, 216-221 ; railway authorities on, 217 ; Trade Union Congress on, 219 State purchase, arbitration pro- visions, 219 ; cost of, 208 ; of Irish railways, 131 ; improved labour conditions under, 211 ; method of, 207 ; market price impossible, 210; interest on Government stock, 211 ; present profits, 209; Act, I ; provision for, 13 ; piecemeal impracticable, 220 ; reduced rates and fares under, 21 1 ; savings under, 21 1 ; terms of, under Gladstone's Act, 207 ; working expenses, 2IO State Purchase of Railways. See C. Waring State railways in Australia, 169; absurb criticisms of, 170; initial mistakes on, 170 ; increase in value of, 171 ; how administered, 171 ; wastes of differential gauges, 171 ; burden of high interest, 170; profits on, 173 State railways, Belgian, 164-5 5 colonial, 6 ; control, rise of, 8 ; control, failure of, 133 ; railways in Europe, 153 ; in European countries, relative cost of ad- ministration, 155; foreign, 6. German, profits on, 1 60; method of purchase, 160; benefits of, 161 ; system of management, l6lj re- freshments on, 162 ; second class, 162. Holland, statistics of, 166 ; success of, 166-7; policy of, 166. Italy, more successful than private, 168 ; mileage, different countries, 153-4. Prussian, profit on, 160; wages and condition of workers, 162; statistics of, 163; statistics of, in Denmark, 166 ; stock, prob- able interest on, 211 Statistical Abstract of Foreign Countries, 153, 166, 167, 185 Stevenson, Robert, 4 Stevenson, George, 9, 216 Stewart, Mr. (L. & N.-W.), 27 Stock Exchange and State purchase, 2IO Stockton and Darlington Act, 2, 9 Stratford-on-Avon canal, derelict, 49 Straw. Irish rates, 127 Strikes, alleged probability of, under State, 192 ; needless alarm of, 192-3 ; how arise, 192-3 ; rarity of, among Civil servants, 192-3 ; reasonable conditions will prevent, 192-3 ; cause of Scotch Railway and Taff Vale, 192-3 ; among professional men, 194 Subsidies, number of Companies re- ceiving, 32 ; State, to Irish rail- ways, 130 Subsidizing other lines, 31 Suburbs, modern, dependent on rail- way facilities, 95 ; need for select- 242 INDEX Suburbs contimied ing healthy sites for, 96 ; London, relative health of, 96 ; unhealthi- ness of marshes, 96 ; relative rates in, 97 ; relative mortality in, 96 Sugar, preferential rates, 64 Sullivan, Mr O., 218 Sullivan, Professor, 126 Surrey Iron Railway Company, 9 Swansea Chamber of Commerce, 142 Sweden, railway mileage, 153; rail- ways, difficulty of joint control, 167 Swedish fares, 91 Swiss fares, 91 Switzerland, railway mileage, 154; decision to acquire railways, 168 Systems, different, of railway management, I TAFF VALE railway strike, cause of, 194 Tea merchants, meeting of, 142 Terminal charges, 18 ; low German, 161 The Million on the Rail. See Tones, G. W. The Rail-ways of England. See Acworth. The Working and Management of our English Railways. See Findlay Third - class, early treatment of, 79 ; present treatment of, 84 ; defective carriages, 86 ; fatal over- crowding, 86 ; relative fares, different countries, 91 ; Austria- Hungarian, 181-92, 193 ; London and New South Wales, 174 Tickets, needless number of, 180 Timber, preferential rates, 64-5 Times, 23, 26, 41, 57, 85, 87, 88, 89, 162 Tonnage rate, average, English, Irish, and Scotch, 126 Torrington, Lord, 79 Trade depression, Commission on, 52, 55. 56, 61, 62, 63, 71, 72, 122 Trade Union Congress and State- ownership of railways, 219 Traders, the bitter cry of, 52 ; and increased rates under revision, 140; Association. See Mansion House Association Traffic facilities, 1 8 ; expenses, State and private, in Europe compared, 156 Train-load, average, different countries, 28 Train-mile receipts, 28 Turnips, Irish rates, 127 Tweeddale, Marquis of, 20 Tyler, Sir H. W., 5, 197 ULSTER Provision Curers Associa- tion, 127, 129 United States, railway system in, I University students, fares of, in Aus- tralia, 175 Unpunctuality of trains, 88, 89 Urquhart, W. , dismissal of, 119 VICTIMIZATION of railway men, 118, 119 Victoria State railways, gauge, 121 ; reduction in working expenses, 170; statistics of, 176 Vital Statistics. See Farr WADDINGTOK, PRESIDENT, 161 Wages, relative average, different countries, 91 ; of railway workers, 108 ; compared with other trades, 109 ; of Prussian railway workers, 162 Waghorn and Stevens, 25, 123, 127, 128, 129, 131 Waghorn, T., 78 Wales, H.R.H. Prince of, and workmen's trains, 95 Walsham, Sir John, 160 Walter, Major, 79 Waring, C, 23, 32, 34, 124, 125, 126, 128, 131, 135, 162, 165, 168, 172, 188, 203, 205 Wastes of canvassers, 26 ; Clearing House, 24 ; complications, 24 ; competition, total estimated, 28 ; directors, 23 ; duplicated offices, 25 ; duplicated passenger trains, INDEX 243 Wastes continued 26 ; empty goods trains, 27 ; "half-loads," 27; Irish manage- ment, 130 ; manifold ownership 5, 20 Water competition, 39 Watkin, Sir Edward, 219 Webb, Sidney, 109 Weekly Times and Echo, 83, in Wellington, Duke of, 79 Western Morning News, 66 "What the traffic will bear" theory, 38 Wheat, preferential rate, 71 Whitehead, Sir James, 140 Williams, F. S., 8, 21, 199, 216 Williams, A. J., 24 Williams, K. B., 123 Williams, R. Price, 81, 94 Wilson, Chevalier, 217 Witham navigation agreement, 47 Wolverhampton Chamber of Com- merce, 54, 219 Woollens, preferential rates, 63, 74 Workers, condition of railway, 3, 108, 109, 162 Working expenses, present English, 210 Workmen, benefits of wide dis- tribution of city, 96 Workmen's Train Act, 95, 97 ; trains, Companies unite to restrict, 100 ; and crowded cities, 92 ; mean average fare, London, 103- 4 ; fare compared, European capitals, 104 ; excessive fares, 104 ; hopelessness of improved service under present system, 106 ; inconvenience of, 98, 100 ; reason for instituting, 92, and shorter working day, 103 ; vexatious restrictions, 103 Wright, Thomas, dismissal of, 119 Year-Book of Australia. See Aus- tralian Year -Book ZONE system, application of, to Eng- land and Ireland, 186; Austrian, fares under, 183 ; Austrian, mile- age, 183 ; English origin of, 179 ; explained, 179; Hungarian, effect of reduced fares under, 184-5 ! Hungarian, fares under, 181-2 ; mileage of, 182 ; increase of passengers, 184-5 ! an( ^ reduced fares, 179-181 ; simplicity of, 25 ; and superfluous tickets, 1 80 ; why popular, 181 THE RIVERSIDE PRESS LIMITED, EDINBURGH. A CATALOGUE OF BOOKS PUBLISHED BY METHUEN AND COMPANY: LONDON 36 ESSEX STREET W.C. CONTENTS PAGE General Literature, . . . a-ao Ancient Cities, . . . ao Antiquary's Books, . . ao Arden Shakespeare, . . 90 Beginner's Books, ai Business Books, ai Byzantine Texts, ai Churchman's Bible, . . aa Churchman's Library, . . 22 Classical Translations, . aa Classics of Art, ... 33 Commercial Series, . . 33 Connoisseur's Library, . 33 Library of Devotion, . . 33 Illustrated Pocket Library of Plain and Coloured Books, 34 Junior Examination Series, 35 Junior School-Books, . . 36 Leaders of Religion, . . 26 Little Blue Books, . . 36 Little Books on Art, . . 26 PAGE Little Galleries, . . . 27 Little Guides, .... 37 Little Library, ... 37 Little Quarto Shakespeare, 29 Miniature Library, . . 39 Oxford Biographies, . . 39 School Examination Series, 39 School Histories, ... 30 Textbooks of Science, . . 30 Simplified French Texts, . 30 Standard Library, ... 30 Textbooks of Technology, . 31 Handbooks of Theology, . 31 Westminster Commentaries, 32 Fiction, 3a-37 The Shilling Novels, . . 37 Books for Boys and Girls, 39 Novels of Alexandre Dumas, 39 Methuen's Sixpenny Books, 39 FEBRUARY 1907 A CATALOGUE OF MESSRS. METHUEN'S PUBLICATIONS Colonial Editions are published of all Messrs. METHUEN'S Novels issued at a price above zs. 6d. , and similar editions are published of some works of General Literature. These are marked in the Catalogue. Colonial editions are only for circulation in the British Colonies and India. I.P.L. represents Illustrated Pocket Library. PART I. GENERAL LITERATURE Abbot (Jacob). See Little Blue Books. Abbott (J. H. M.). Author of 'Tommy Cornstalk.' AN OUTLANDER IN ENGLAND: BEING SOME IMPRESSIONSOF AN AUSTRALIAN ABROAD. Second Edition. Cr. Svo. 6s. A Colonial Edition is also published. AcatOS (M. J.). See Junior School Books. Adams (Frank). JACKSPRATT. With 24 Coloured Pictures. Super Royal \f>mo. zs. Adeney (W. P.), M.A. See Bennett and Adeney. /Eschylus. See Classical Translations. yEsop. See I.P.L. Ainsworth (W. Harrison). See I.P.L. Alderson (J. P.). MR. ASQUITH. With Portraits and Illustrations. Demy 8vo. Aldis (Janet). MADAME GEOFFRIN, HER SALON, AND HER TIMES. 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