Part 18

If the mode of fixing rates adopted in France, Holland, Belgium and Germany--systems which differ from each other--are suited to those countries they would be inapplicable here. In practice they have to be modified. In Holland, for instance, the theory is mileage rates, but the greater portion of the traffic conveyed by railways is, in fact, carried on under special contracts wholly inconsistent with the principle upon which the railway rate system is nominally based, which, if imitated in this country, would afford continuous occupation for the Railway Commissioners.

The main complaint against the English companies is that they so charge differential rates as to encourage foreign competition. The effect of these rates is apt to be overestimated or misunderstood. The benefits which the manufacturers derive from the low export rates--based upon exactly the same principle--are entirely ignored. It may be a matter of doubt whether it has been prudent on the part of railway companies to consent to some of the import rates complained of. Indeed, this doubt may be entertained, even if there is no substantial grievance, and it may be desirable that Parliament or the Board of Trade should institute an inquiry into the subject, which affects not only the interests of railway companies, agriculturists, and manufacturers, but also those of consumers, steamboat proprietors, merchants, and sea-ports.

No system of rates can be suggested, much less adopted, which would satisfy the desires of all traders. When the recommendation of the Railway Rates Committee is carried out--when one uniform classification is adopted over all the railways, and the maximum rate clauses of the Companies are consolidated and revised on the basis of their existing powers--any difficulty in ascertaining whether the charges are within the companies’ powers will be removed. The reasonableness of the charges for terminal services will be determined by the Railway Commissioners.

Instead of the many scales of tolls now in force on all large systems of railways--due to their being built up of originally independent lines--one or at most two scales of tolls will govern the entire systems of companies. By this process a great improvement will be effected. Many of the anomalies in the rates will be removed. But it is to be hoped, in the interest of the trade of the country as a whole, that no legislation affecting railways, while preserving the existing provisions against undue preference, will interfere with the right of the companies to charge, within their maxima, differential rates such as the traffic will fairly bear; a power which has enabled them to meet the requirements of producers and consumers in varying circumstances.

These observations have not been written with a view to prove that there is no scope for criticism in the management of railways in this country, but are made with every desire to comprehend and appreciate all reasonable objections. They do not pretend to solve all difficulties of the railway problem; but they may, at least, show the serious dangers which would arise if some of the crude and popular proposals often put forward were adopted, and may aid in arriving at a safe and equitable settlement.

APPENDIX I.

COMPARISON BETWEEN ENGLISH AND FOREIGN RATES.

The figures and facts which have been stated prove that, as a rule, no fair, or even useful, comparison can be made between rates per ton per mile on railways in England, and those charged on railways in continental countries. A multitude of circumstances--original cost of construction, difference in gradients, nature of services performed, speed in transit, limited liability of foreign companies, opportunities for getting full loads, immunity from taxation--must all be taken into account before a just comparison can be established.

But even assuming due regard is not given to these striking differences the inference to the extent drawn by Sir B. Samuelson is not accurate; the rates on the Continent are not universally lower. Sir B. Samuelson’s report contains many errors of detail; and some of them are worth noting, because they are frequently repeated. Comparisons throughout have been made without due regard to the conditions attaching to the rates, or the different circumstances under which the traffic is carried. We give a few instances of the errors; errors, it may be observed, not merely in calculation but in the very bases of the comparison.

An effort has been made to reduce the English rates (which include collection and delivery) to station to station rates, with the object of comparing them with similar rates in other countries. But many of the deductions are inaccurate and misleading. Instead of adding to the continental station to station rates the charges for cartage, which in Brussels is 4s. per ton, and in other Belgian towns about 2s. 5d. at each end, Sir B. Samuelson has apparently made arbitrary deductions of sums varying from 3d. and 4d. to 1s. and 2s. per ton for cartage from British rates. These are manifestly insufficient deductions. It is impossible that services could be performed for such sums, especially in London. We cite a few illustrations of this class of errors.

For IRON WIRE packed from Birmingham to London the rate is shown as 24s. 4d. per ton; the actual rate is 28s. 4d. per ton, including collection and delivery. Apparently 4s. per ton has been deducted for cartage at both ends; that is _merely 2s. per ton_ for cartage in London, although the cost of delivery in such a city as Brussels would be 4s. per ton.

Similar remarks apply to the rates for unpacked iron wire from Birmingham to London and Manchester, which have been treated in the same way.

COTTON GOODS from Manchester to Oxford.--The rate shewn on page 32 is 42s. per ton, station to station; the correct rate, including collection and delivery, being 42s. 6d. per ton, so that 6d. per ton, _or 3d. per ton only at each end_, has been apparently allowed for collection and delivery.

WOOLLEN, WORSTED AND STUFF GOODS from Bradford (Yorks) to Norwich.--The rate shown on page 32 is 41s. per ton, station to station, while the correct rate, including collection and delivery, is 41s. 8d. per ton; 8d. per ton being apparently allowed in this case for the two services of collection and delivery.

GENERAL MACHINERY from Leeds to Newcastle.--The export rate is 12s. 6d. per ton, including both collection and delivery, but 11s. 6d. is shewn on page 33 of report; that is, 1s. per ton only has been deducted for the two services of collection and delivery.[113]

[113] Some difficulty has been experienced in checking the rates contained in Sir B. Samuelson’s report owing to the distances not being given, and from the name of the district being used instead of the names of the places between which the rates are shewn. For instance, although the South Wales Coalfields extend over a very large area, a rate of 7s. 3d. per ton for coke is referred to as from “South Wales to Darlaston,” on page 24 of the report; and in like manner on pages 27 and 28 the rates for pig iron are given as from “Cleveland and Northamptonshire.”

These errors make many of the comparisons valueless.

A still graver error has been repeatedly committed. Notwithstanding the remark (page 19) that the cost of collection and delivery has been deducted, Sir B. Samuelson has in numerous cases assumed British rates, which include either collection or delivery, and in some cases both those services, to be station to station rates, and compared them as such with station to station rates on the foreign lines. Here are a few examples of this class of mistakes.

GENERAL MACHINERY.--Leeds to Hull, the export rate of 12s. 6d. per ton is shown on page 33 as station to station, whereas it includes both collection and delivery.

Though all the following rates for BUTTER include collection and delivery, they are shewn on pages 38 and 39 as station to station, viz.:--

s. d. Hull to Manchester 21 8 per ton. ” Birmingham 21 8 ” ” Leeds 13 4 ” Newcastle to Manchester 23 4 ” ” Birmingham 21 8 ” ” Leeds 14 2 ”

An unfortunate omission may be mentioned. In some cases there are alternative rates on the English railways, _i.e._, a higher rate when the company undertakes the risk of conveyance, and a lower rate when the risk is borne by the owner. In no single instance has Sir B. Samuelson taken in his comparisons the lower owner’s risk rate chargeable at the option of the consignor. Yet in Holland, for instance, the goods are carried practically at the risk of the owner. On some goods no compensation for damage or delay is payable, while on the others the compensation is limited, in some cases, to simply a return of a portion, or, at the utmost, the whole of the freight. We give a few examples of this class of errors.

The rate for iron wire packed from Birmingham to London is shown on page 29 as 24s. 4d. per ton station to station; there is no reference to the fact that there is an owner’s risk rate of 19s. 2d. per ton, collected and delivered.

In like manner the rates for agricultural implements shown in the first column of the following table are given on pages 33 & 34 of the report, although there are the special rates shown in the other columns, all notice of which has been omitted.

AGRICULTURAL MACHINES. ------------------+--------------+-------------------------------------- | | SPECIAL RATES. | +------------+---------+--------------- | Rates |Agricultural| Machines| Machines FROM TO | per ton in | Engines, | in cases|not in cases at |report reduced| Steam | and iron| owner’s risk | to station to| Ploughs, | harrows | collected and | station. |&c., station|collected| delivered. | | to station.| and | | | |delivered| ------------------+--------------+------------+---------+--------------- | per ton. | per ton. | per ton.| per ton. Banbury London | 26/2 to 32/- | 14/8 | 24/2 | 25/- to 29/7 ” Lynn | 28/8 ” 34/6 | 19/8 | 26/8 | 27/1 ” 32/1 ” Shrewsbury| 25/4 ” 30/4 | 16/2 | 23/4 | 24/2 ” 28/4 | | [114]| [115]| [116] ” Liverpool | 35/4 ” 43/8 | 28/6 | 31/8 | 32/6 ” 39/7 ” Bridgwater| 34/6 ” 40/4 | 24/- | 29/2 | 31/3 ” 36/8 Bedford London | 18/8 ” 22/- | 11/- | 17/6 | 18/4 ” 21/3 ------------------+--------------+------------+---------+---------------

[114] Collection in Banbury, and delivery alongside ship in Liverpool in 10 ton lots.

[115] Collection in Banbury, and delivery alongside ship in Liverpool in 10 ton lots.

[116] Collection in Banbury, and delivery alongside ship in Liverpool in 10 ton lots.

These are not the only misleading omissions; it is incumbent to mention others not less important.

In Holland bulky articles pay double the fast goods or ordinary goods rates, or as for a minimum truckload of 5,000 or 10,000 kilogrammes respectively. An actual instance of a consignment from Rotterdam to Munich will illustrate the system:--2 machines and 7 packages of appurtenances, the actual weight of which was 6,762 kilogrammes (6 tons 13 cwt.) were charged as for 10,000 kilogrammes (9 tons 16 cwt. 3 qrs.) under the conditions of special tariff No. 3. This special rate is ignored.

In almost every instance, Sir B. Samuelson has taken the lowest rates in Germany, Belgium and Holland, which are applicable only to full truckloads of 5 and 10 tons, and in some cases, viz., Belgium, to a minimum weight of 8 cwt. These he has used for the purpose of comparison with English rates for any quantities over 500 lbs.

The rate for hardware from Birmingham to Newcastle for export--206 miles--is 27s. 6d. per ton, including collection and delivery, but it is shewn as 25s. 6d. per ton, station to station, overlooking the special owner’s risk rate of 25s. per ton, which also includes collection and delivery. The German rate for the same distance (331 kilometres) is incorrectly given as 18s. 7d. per ton; the lowest station to station rate is 19s. per ton for full truckloads of not less than 5 tons, the rate for smaller quantities, including collection and delivery, being 45s. 2d. per ton.

In Belgium again, the station to station rate of 18s. 11d. per ton (which should be 19s. 4d.) is for a minimum of 8 cwt., the rate, including collection and delivery for the same minimum, being 24s. 3d. per ton.

The Dutch station to station rate of 14s. 10d. per ton (which should be 15s. 7d.) is for full truck loads of not less than 5 tons, the rate, including collection and delivery for any quantities, being 30s. 4d. per ton.

In the German tariff the rate is 2·15d. per ton per mile for goods of every description in lots of less than 5 tons, with a lower tariff divided into six classes for goods in full truckloads of 5 and 10 tons. The latter have been compared with the rates on English railways applicable to consignment of 500 lbs. and over, or of 2 tons. The higher foreign tariff for such traffic, in like circumstances, is not shown. To arrive at a proper comparison, the English rate should, in many instances, have been compared with the rates charged for “_Eilgut_” (or fast goods service) on the continental lines. Of course, the general public in Holland and Germany cannot avail themselves of the rates for 5 and 10 ton lots. They must deal with carriers or forwarding agents, who perform many of the services included in the rates on English railways, and who fill up, or partially fill up, truckloads. The agents who pay the railway transit charges are free to make their own charges to the public without limitation. What would be instructive--what, however, is not supplied--would be a comparison between what is actually paid in England, and what the majority of the public pay in Germany; it is of little interest to know _what the carriers or forwarding agents pay_ to the railway companies. The comparison, such as it is, does not show the rate of conveyance per ton, because the carriers have to pay as for five or ten tons, even if that quantity is not in a wagon. They must make charges to the public beyond the ordinary profits to cover deficiencies in the loads per wagon, as well as for all the services performed by them.[117]

In some instances, Sir B. Samuelson has not included in the foreign rates the charge for loading and unloading. Bar-iron is a case in point. In every other case he has omitted to include in those rates the charges for weighing, counting, labelling, booking, use of cranes, and advice of arrival of goods--all of which are authorised additional charges beyond the tariff rates. In this country, as is well known, such services are included in the collected and delivered railway rates.[118]

[117] The observation made in the report that the higher rates in Germany are avoided by the intervention of forwarding agents, who collect from small consignees, and make up the minimum load, charging somewhat higher rates than for 5 or 10 ton lots, shows that it was seen that, although the comparison of British rates is made with them, the general public cannot obtain the advantage of the low rates, because of the heavy minimum quantities.

[118] The following are the charges authorised to be made for such services in addition to the mileage rate and terminals in Germany, Holland, and Belgium:--

+---------------------+------------------+-------------- | GERMANY. | HOLLAND. | BELGIUM. ---------------+---------------------+------------------+-------------- {| 1·2d. per 20 pieces.| | {| 1s. 0d. per truck | | Counting {| minimum. | 0·2d. per packge.| 1d. per ton. {| 3s. 0d. per truck | | {| maximum. | | | | | {| Stückgut 0·6d. per | | {| 2 cwt. | | Weighing {| Wagon Loads 0·48d. | from 0·2d. to | 5d. per ton. {| per 2 cwt. if each | 0·6d. per 2 cwt. | {| piece is weighed | | {| separately; 1s.0d. | | {| per truck. | | | | | Booking | ... | ... | 2d. per con- | | | signment. | | | Labelling | 0·6d. per piece. | 0·6d. per packge.| 2d. | | | Stamping | ... | 1·2d. each note. | ... | | | Use of Cranes | 0·36d. per 2 cwt. | 10d. to 1s. 8d. | 3d. per ton. | 9d. minimum. | per ton. | | | | Advice of Goods| About ½d. | 1d. | 1d. | | | Tarpaulins | 2s. 0d. each. | 2s. 8d. each. | 1s. 7d. each. | | | Disinfecting | 1s. per truck. | 1s. per truck. | 1s. per truck ---------------+---------------------+------------------+--------------

Such are some examples of the errors vitiating the comparison. We have by no means exhausted them; they might be greatly multiplied. It is not intended to suggest that Sir B. Samuelson has been more inaccurate than other critics. On the contrary, his report, notwithstanding its inaccuracies, shows that a considerable amount of labour has been expended in endeavouring to obtain the information. It is a favourable specimen of such criticisms, and for this reason it is deserving of notice. It is, of course, difficult for any person, even when practically acquainted with railway business, to appreciate the practical effect of the different conditions under which traffic is carried on Foreign and English railways. It is not surprising that Sir B. Samuelson has evidently not become fully acquainted with all the conditions of carriage, or that he has omitted to give them their proper value in the tables which he has prepared. Unfortunately, owing to the omissions, the conclusions which he draws are, in some cases, erroneous, and in others misleading.

APPENDIX II.

COMPARISON OF RAILWAY RECEIPTS FROM MERCHANDISE AND MINERAL TRAFFIC.

It may be useful to enquire how far it is true that the heavy trades of coal and iron, or the general trade of the country, are being “slowly, but surely killed by high rates and tolls,” or otherwise. That trade in all countries is subject to fluctuation is undoubted, and the causes are many and various. The conveyance of minerals and goods upon the railways of the United Kingdom is one test. Let us take periods of three years:--

RAILWAY RECEIPTS IN UNITED KINGDOM. Average per Year. Years. For minerals. General merchandise.

1875 to 1877 £13,560,096 £18,922,238 1878 ” 1880 13,891,326 19,181,927 1881 ” 1883 15,742,615 20,801,075 { 2 years } 1884 & 1885{ of } 15,387,443 20,631,066 {depression}

According to the test of railway receipts for conveyance of minerals and goods, the killing process seems very slow indeed, and it is not even sure, because in 1885 the railway receipts for minerals were in some instances reduced. The average receipts for minerals were about 2¼ per cent. less on the average of the past two years as compared with those of the previous three years. In the case of goods traffic this percentage was only 0·82 per cent. But, as against the above average receipts for 1884 and 1885, let us place the average for the preceding nine years. For minerals, £14,398,012; for goods, £19,635,080, which shows an increased receipt on the average of the past two years--on minerals of £989,431; on goods of £995,986. Certainly these results are the reverse of decay in traffic or trade.

Another and better test is the tonnage of minerals and goods conveyed on the railways of the United Kingdom for the like period.

Years. Minerals. Goods. Tons. Tons. 1875 to 1877, average 141,910,505 64,094,565 1878 ” 1880 ” 152,528,097 65,548,450 1881 ” 1883 ” 182,310,041 74,204,559 1884 ” 1885 ” 183,696,151 74,612,020

This test contradicts the theory of decaying trade in an unmistakable manner, but it may be urged that these averages are insufficient to show the great depression in 1885. The fact is, that in 1885 there was a larger tonnage of minerals conveyed than in any year, with the exception of 1883, and a larger tonnage of goods than in any year except 1882, 1883 and 1884.

But a third test, that of production, may be applied. In 1884, the quantity of coal raised in the United Kingdom

was 160,758,000 tons. and in 1885 159,351,000 ” ----------------- Decrease 1,407,000 tons. or about ·88 per cent. In 1884 the tonnage of iron ore raised was 16,138,000 tons, And Iron Ore imported 2,730,800 ” ----------------- 18,868,800 tons.

In 1885, 15,418,000 tons of Iron Ore were raised Add 2,822,600 ” imported. ---------- 18,240,600 ” being a decrease of 628,200 tons, or a decrease of 3·33 per cent. In 1883, the quantity of pig iron produced in Great Britain was 8,529,000 tons. ” 1884 7,812,000 ” ” 1885 7,415,000 ”

The fact is, that 1883 was an exceptional year. The tonnage of minerals conveyed by railway in 1883 was 8,075,101 tons greater than in 1882, 13,451,612 tons greater than in 1881, and 23,815,308 tons greater than in 1880.

And in like manner the tonnage of general merchandise conveyed in 1883 was 2,192,034 tons in excess of 1882, 5,886,356 tons in excess of 1881, and 7,262,031 tons in excess of the tonnage of 1880.

The production of pig iron is not a real test, inasmuch as large stocks accumulate at certain periods, and the ratio of production is lessened in order to reduce the quantity in stock.

No doubt depression of trade may arise from lower prices. The years 1876 and 1877 were probably those during which the highest possible prices ruled for coal, iron, &c. What were the quantities conveyed by railway?

Minerals. Merchandise. Tons. Tons. In 1875 137,087,713 62,981,938 ” 1876 141,779,393 64,185,671 ” 1877 146,864,410 65,116,085 ” 1880 165,670,304 69,635,325 ” 1883 189,485,612 76,897,356 ” 1885 183,776,745 73,511,709