Part 10

Chapter 103,700 wordsPublic domain

[53] In the Report of May 3, 1882, made by Sir H. Barron to the then Minister for Foreign Affairs (Earl Granville) (part 4 of the “Reports by Her Majesty’s Secretaries of Embassy and Legation on Manufactures, Commerce, &c.,”) on the subject of the Belgian Budget, the former stated that “The 5 years from 1876 each closed with a deficit rising in 1881 to 6¼ million francs (£250,000), the main explanation being the ever-increasing burden thrown on the Treasury by the extension of the railway, which undertaking has ceased to cover its charges and completely disturbed the financial equilibrium of the State. The first lines constructed and worked by the State, being great trunk lines, gave every year an increasing return which enriched the Treasury. To these were first added conceded lines, which had to be purchased from companies at high prices; then secondary lines, whose traffic was unremunerative. After many previous experiments, the accounts of the railway have been since 1878 drawn up on a new and presumedly more accurate principle. The Treasury is now considered as the bankers of the railway; it is assumed that all funds advanced by the former are chargeable with an interest of 4 per cent., and repayable within ninety years. According to this new method of book-keeping, it appears that the railway contributed largely to the revenue until 1872 inclusively, but that since that year it has, on the contrary, entailed an annual loss. Thus, the deficit of 1881 is for the greater part (4,861,725 fr.) due to the insufficiency of the railway revenue. Fortunately Belgium has a resource at hand.”

“The Minister of Finance in the debate on the Budget of Public Works, points to that resource in the following pregnant words: It is proved that the railway fails to cover its charges by about five millions (£200,000). We are informed that this year the deficiency may be seven millions; in 1883, possibly even ten millions. What will it be in 1884? No one knows, but the progression is ascending. Must we follow it without counting the cost? Must we raise the tariffs or throw on the Treasury the burden caused by the insufficiency of the railway receipts? _Either the railway must be worked on a principle which shall allow it to cover its charges or the taxpayers must make up the difference._”

He further added that in his report of 1876 he recommended “_a raising of the tariff_.” Sir H. Barron goes on to state “_that the inferior productiveness of the Belgian Railway was due to the inadequate tariff, which, for passengers and merchandise, was much lower than those prevailing in the rest of Europe_.” He further remarks, however, that “notwithstanding all this _it has been held_ that the experiment is a great success, and bears evidence in favour of State ownership, because, as the railway is worked in the interest of trade, &c., it is considered that the benefit thus indirectly accruing to the public at large, is greater than that which might be realised by aiming at a commercial profit for the direct and immediate benefit of the taxpayers.”

The construction of railways in Belgium has, no doubt, developed the commerce and industry of the country to a remarkable extent. It was stated by Sir Bernhard Samuelson (page 9 of Report) that the receipts of railways had increased from £1,815,000 in 1870 to £4,880,000 in 1883, or 168 per cent.; but he omitted to point out that the length of the railways had increased by more than 250 per cent.

See the observation of M. Leon Say as to the tendency to reduce railway tariffs to an unremunerative point when the State is the owner.--_Le Rachat des Chemins de Fer, Journal des Economistes, 1881, p. 343._

In Holland also, the railways are owned to a large extent by the State, to which belong 797 miles out of a total of 1,617 miles. The State does not, as in Germany or Belgium, work its own lines. It leases them upon certain conditions to companies, viz., to a Company for working the State railways and to the Holland Company. The companies provide the rolling stock and staff, and maintain the line; but they do not execute “works of art” or repairs arising from circumstances over which they have no control, such, for instance, as war, inundations, landslips, &c. Materials for the execution of works have to be conveyed at a very low rate. All rates must be submitted to the Minister of Public Works for his approval; and the mails must be carried free. From the gross receipts are made deductions at the rate of £67 per mile of single, and £134 per mile of double line per annum, which serve as a fund to cover repairs. Eighty per cent. of the remainder is retained by the company. The balance of the receipts belongs to the State. If, however, the company’s percentage, plus the deductions, do not amount to £644 per mile, the gross receipts are so apportioned as to yield that amount. If the net profit of the company exceeds 4½ per cent. upon their capital, the surplus up to 5 per cent. is divided equally between the State and the company; and any further surplus, is distributed in the proportion of four-fifths to the State and one-fifth to the company. The total capital expenditure on the Dutch State Railways to the 30th June, 1885, was:--

On lines worked by the Company for working the State Railways £15,958,328 ” ” Holland Company 3,477,914 ----------- £19,436,242 ===========

The amount received in respect of dividend or interest for the year from both working companies was £158,170 or about ·81 per cent on the capital involved.

There is a remarkable difference in the cost of construction of English and Continental lines--a fact of which Sir B. Samuelson takes no adequate account when he says “the average cost of construction has been considerably less in the case of German railways than in that of our own.” Without citing many figures on the point, it may be stated that at the end of 1884 the amount of capital expended in the construction of railways in the United Kingdom was £801,464,367, or £42,486 per mile of line opened; and in England and Wales alone £665,055,879, or £49,854 per mile. If the rates for carriage of goods and passengers were based solely on cost per mile, those in force in the United Kingdom and England and Wales respectively would exceed the rates of other countries to the extent shown in the following table:--

Not only has the construction of the railways in this country been more costly, but private companies have accomplished a task which has not yet been fulfilled in some Continental countries, even with all the aid of the State, and which, if ever fully carried out, must entail further liabilities upon the Governments of those countries. In England private companies have not only made trunk lines, but, to a degree unknown abroad, they have constructed branch lines, penetrating into sparsely-peopled districts of the country, yielding little traffic, and necessarily involving heavy working expenses and loss of interest. Official figures show that private enterprise has hitherto given one mile of railway to every

6·41 square miles in the United Kingdom, 4·36 ” ” England and Wales, as compared with 10·42 ” ” France, 9·38 ” ” Germany,[54] 4·2 ” ” Belgium, 7·82 ” ” Holland.

It further appears from official statistics that the capital outlay for every 1,000 inhabitants has been

£22,287 in the United Kingdom. 24,512 ” England and Wales, 13,977 ” France, 10,593 ” Germany, 11,365 ” Belgium, 7,252 ” Holland.

[54] NOTE.--The figures relating to the capital, revenue and working expenses of the German Railways have been taken from the “Statistische Nachrichten von den Eisenbahnen des Vereins Deutscher Eisenbahn-Verwaltungen,” which differ in some respects from those contained in statements obtained after going to press from the Department of the German State Railways; the latter giving the revenue for the working year 1884-5 as £50,735,165, the expenses as £29,057,889, or 57·27 per cent. of the receipts. The balance would yield a return of 4·51 per cent.

SECTION XIII.

WORKING OF ENGLISH AND CONTINENTAL RAILWAYS--COMPARATIVE FACILITIES AFFORDED BY THEM.

So much for the strikingly different modes in which the English and continental railways have been constructed; the one system a history of unaided private enterprise, the other a history of a policy pursued by great States with the resources of Imperial Exchequers, and with English experience as a guide. Had railways in this country received the same assistance as foreign lines, the cost and working expenses being the same, the demand that the former should have rates as low as the latter would not be unreasonable. But a comparison of the facilities afforded here and on the Continent to trades and production will not be unfavourable to the English companies. It will be seen that, in the words of the late Professor Stanley Jevons, “Taking all circumstances into account, England and Wales are better supplied with railways than any other country in the world,” whether we have regard to extent or efficiency.

In the first place, it is well known that the time occupied in the conveyance of goods is less in this country than on foreign railways. In France, for instance, the time allowed by the orders of the Minister of Public Works, before forwarding for the purpose of loading, is one day; for the transit of goods over a distance of 93 miles, there is another clear day--making two days; and for a distance of 170 miles, three days, exclusive of the time necessary for collection and delivery. In other words, traffic delivered at a station on a Monday, must be at the disposal of the consignee on the Thursday morning following at any station within 150 kilometres (93 miles) distant from the sending station. If the goods have to be “delivered to domicile”--that is, at the consignee’s residence or place of business--the time allowed by the tariff for delivery is one day--that is, in the case supposed, they must be “delivered to domicile” during the Thursday. No doubt, goods requiring speedy transit can be forwarded by _grande vitesse_ (ordinary passenger train), a service which is equivalent in respect of speed to a large portion of the goods trains in England. But the rates charged for conveyance by _grande vitesse_ in France are about three times as much as the highest class rate by goods train.

In Germany, the general regulations prescribe the maximum time for delivery of goods as follows: for “_Eilgut_” (goods carried by passenger train), one day for loading and forwarding, and one day for every 300 kilometres (186 miles) or part thereof. For “_Frachtgut_” (goods train traffic), two days may be taken for loading and forwarding, and for the first 100 kilometres (62 miles) one day; for every part of each subsequent 200 kilometres (124 miles) one day. The time of transit is assumed to commence at midnight following the date of the stamp on the consignment note.

In Holland, the time allowed for “express goods” before forwarding is 24 hours, and for conveyance for each 186 miles or part thereof, another 24 hours.[55] For general goods the time allowed before forwarding is 48 hours and for the conveyance, 48 hours for each 186 miles or part thereof. As in Belgium, the time allowed for transport commences at midnight following the stamping of the consignment note.

[55] For further particulars see Appendix III.

In Belgium all goods carried under the conditions of tariff No. 3[56] (which applies to consignments exceeding 4 cwt. in weight) are due at the receiving station three full days after delivery of the goods to the company. This does not apply if there is a glut of traffic; and another full day is allowed if the railway company deliver by cart.

[56] For particulars see Appendix III.

Goods may by law be kept in some of the countries which have been mentioned for two days before being despatched; two clear days are allowed for 186 miles or part thereof; and when rapid transit is required, as in case of express goods, the rates are much higher than those charged by goods train. In this country, on the other hand, goods are, as a rule, forwarded on the day or during the night of the day on which they are brought to the station; and between important places within 200 miles, goods are usually delivered the following day. As a matter of general practice, the maximum time allowed abroad is not fully occupied; but it is recognised by law. This advantage which the foreign railways possess implies others, which can only be fully appreciated by persons practically acquainted with the mystery of railways. The ample time allowed before forwarding and in transit permits of considerable economy in the use of wagons. Opportunities are afforded for making full wagon and full train loads. This circumstance, too, reduces train mileage. A further consequence is the diminution of claims for compensation and in other items of expense. The speed of the trains being slow, and the time allowed in transit being great, larger loads are practicable.

Liability for compensation for delay or damage in transit is another element to be taken into consideration in any comparison of rates. In Belgium and Holland, where rates are especially low, the liability to pay compensation is very limited. Belgian railway companies are not responsible in the case of goods carried under the conditions of tariff No. 2, unless specially insured, for a delay of one day after the time allowed for delivery, or in the case of goods carried under tariff No. 3 (all consignments above 4 cwts.), for a delay of two days after the time allowed for delivery. Their responsibility for delay in excess of these times is, moreover, limited to one-tenth of the carriage for every day’s delay. Goods are considered to be lost if not delivered after the expiration of fifteen days. For loss or damage to merchandise, carried by goods train, the companies are responsible only to the extent of 75 cents. per kilogramme (3½d. per lb.). The responsibility of the companies in Holland, for delay to ordinary goods beyond 24 hours, after the time allowed for delivery, is, up to 72 hours, limited to one-fourth, up to 8 days one-third, and beyond that period one-half of the freight. For whole or partial loss the maximum liability is £2 10s. per cwt. To enable the public to recover, either in the case of delay or loss, the full value of goods, they must be insured at specified rates. These particulars show the advantages of foreign railways in this respect; the difference may be made still clearer by citing a few figures as to the working of this system of legal limitation of liability in Belgium and Holland and of the virtually unlimited liability in force in this country. In Belgium the amount paid for compensation for delay or damage to merchandise traffic carried on the State railways in the year 1884 was £7,772, or ·25 per cent. on a revenue of £3,088,109, and on the Dutch Rhenish Railway it was £274, or ·16 per cent., on a revenue of £173,079. In the United Kingdom the amount was £202,400, or, ·54 per cent., and in England and Wales £17,140, or, ·55 per cent., on a revenue from merchandise and mineral traffic of £37,670,592 and £31,973,011 respectively. Of these last amounts £15,528,656 and £13,398,433 were in respect of minerals on which no compensation is, in practice, payable.[57]

[57] In Germany and France the law as regards liability is practically the same as in this country.

The rates for merchandise in Holland and Belgium are the lowest of any of the countries. Independently of the construction of the lines being cheaper, the wages paid to servants less, and the State being the principal proprietors, natural causes favour this. From the flatness of those countries and their consequently having exceptionally level railroads, the average loads far exceed what can be carried in the United Kingdom. In Holland 450 to upwards of 500 tons are the usual train loads. Even on the Northern Railway of France an average load of 400 to 450 tons is common. Owing to the gradients of the lines and the speed of the trains, such weights are rarely carried in this country. The consequence of the paying load being less is, of course, that the working expenses are proportionately greater.

Branch lines in this country have, as has been already stated, been carried into sparsely populated districts to an extent unknown in France, Germany, Belgium or Holland, and the English railways afford greater facilities by reason of a larger proportion of the lines being double.

The following table shows the state of things in 1884:--

+-----------------+-----------------+-----------------+---------- | | Double Line. | Single Line. | Year.| |--------+--------+--------+--------+ Total | | Length.| Per | Length.| Per | mileage. | | |Centage.| |Centage.| -----+-----------------+--------+--------+--------+--------+---------- 1884 |United Kingdom | 10,239 | 54·28 | 8,625 | 45·72 | 18,864 1884 |England and Wales| 8,504 | 63·75 | 4,836 | 36·25 | 13,340 1884 |France | 7,470 | 38·84 | 11,765 | 61·16 | 19,235 1884 |Germany | 6,724 | 29·74 | 15,887 | 70·26 | 22,611 1884 |Holland[58] | 435 | 26·90 | 1,182 | 73·10 | 1,617 1884 |Belgium | 943 | 34·80 | 1,768 | 65·20 | 2,711 -----------------------+--------+--------+--------+--------+----------

It is well known that train service in this country is much more frequent than in any other country. How great is the difference will be seen by comparing the average number of train miles run per mile of railway, per square mile of country, and per 1,000 people.

TRAIN MILES.[59]

----+------------------+---------------+--------+------+--------------- | | PER MILE | PER SQUARE | PER 1,000 | | OF RAILWAY. | MILE. | PEOPLE. YEAR| +---------------+-------+-------+-------+------- | |Pssngr.| Goods.|Pssngr.| Goods.|Pssngr.| Goods ----+------------------+-------+-------+-------+-------+-------+------- 1884| United Kingdom | 7,588 | 6,715 | 1,185 | 1,048 | 3,981 | 3,523 1884| England and Wales| 9,114 | 7,991 | 2,090 | 1,832 | 4,481 | 3,929 1884| France | 4,644 | 2,792 | 415 | 250 | 2,222 | 1,336 1884| Germany | 3,997 | 2,610 | 426 | 278 | 1,971 | 1,287 1884| Holland | 4,941 | 1,752 | 600 | 213 | 1,773 | 629 1884| Belgium | 4,819 | 4,783 | 1,149 | 1,140 | 2,258 | 2,241 ----+------------------+-------+-------+-------+-------+-------+------

[58] Including 90 miles on German and Belgian Frontier.

[59] The mixed train mileage introduces a disturbing element, but the calculations have been made as accurately as possible.

In comparing the results of the working of the German and English railways, Sir B. Samuelson states in the report already quoted, that “The proportion of net to gross receipts is not unfavourable to the German lines.” He adds that “it is all the more remarkable when it is considered that the tariffs for both passengers and goods are much lower; the cost of materials, generally speaking, higher; and that large sums are in Germany defrayed out of revenue, which would here be charged to capital.”[60] The meaning, apparently, of these observations is that railways in this country ought to be worked more cheaply than in Germany; that passenger fares and merchandise rates are lower in that country, that nevertheless the receipts are satisfactory; that the rates for goods should be here reduced; and that, thereby, better results would ensue. Let us put these statements to the test of figures,[61] and, first, as to cost of working, no doubt a material element in the comparison of rates. For the year 1884 the gross receipts of all the railways in the United Kingdom and in England and Wales respectively amounted to--

+------------+------------ | UNITED | ENGLAND AND RECEIPTS. | KINGDOM. | WALES. -------------------+------------+------------ | £ | £ Coaching | 30,030,450 | 25,584,196 Goods and Minerals | 37,670,592 | 31,973,011 Miscellaneous | 2,821,601 | 2,541,804 +------------+------------ Total | 70,522,643 | 60,099,011 -------------------+------------+------------

[60] See page 5 of Sir B. Samuelson’s report. It is not known to what the observation as to charges to capital can refer. The larger (if not all) companies in this country charge to revenue portions of the cost of improvements to stations, sidings, &c., which might strictly be charged to capital. In the published returns of the working of German railways, there is nothing to show to what extent, if any, the cost of new works is charged to capital.

[61] The number of passengers, or tons of goods are not reliable for the purpose of comparison, inasmuch as a passenger or a ton of goods carried over two railways appears as two passengers or two tons, and therefore after various lines are amalgamated, the returns may show an apparent decrease when in fact there may have been an actual increase in traffic.

United England and Kingdom. Wales. The working expenses to £37,217,197, £31,732,486 or 52·77 and 52·80 per cent. respectively; and the net receipts to £33,305,446, £28,366,525,.

The gross receipts yielded an average of--

+-------------------+-------------------- | UNITED KINGDOM. | ENGLAND AND WALES. ------------------+---------+---------+---------+---------- | |Per Train| |Per Train |Per Mile.| Mile. |Per Mile.| Mile. ------------------+---------+---------+---------+---------- | £ | s. d. | £ | s. d. Coaching Receipts | 1,592 | 4 2 | 1,918 | 4 2½ Goods and Minerals| 1,997 | 5 11 | 2,397 | 6 0 ------------------+---------+---------+---------+-----------

The gross receipts of all the French railways, except the small local lines, for the same year amounted to:--

Coaching £16,214,240 Goods and Minerals 24,743,480 Miscellaneous (about) 960,000 ----------- 41,917,720

The expenses to 56·45 per cent. of the receipts 23,662,160 ----------- and the net receipts to £18,255,560

The results of the working of the French railways for the year may be briefly shown thus:--