Part 4

“Grouping,” is the name of the familiar arrangement by which collieries or works within a given area are charged equal rates, and are thus enabled to compete on equal terms. In fixing the rates for traffic carried long distances, grouping stations far apart is carried out to some extent. For instance, the rates for tin plates from South Wales and Monmouthshire to Liverpool are the same from the works between Carmarthen on the west, and Monmouth on the east, the distances varying from 160 to 206 miles. So, too, the rates between Scotland and places in England, south of and inclusive of Yorkshire, are divided into groups--22 in the former, and 39 in the latter. Though the practice is not of the first importance to railway companies, it is not without value to them. If “grouping” were prohibited, and the nearest collieries or works could supply all the coal or goods which were required, railway companies might, in some cases, earn as much net profit on the traffic carried as if grouping were adopted. No doubt, however, if the nearest collieries or works charged the public enhanced prices, or if they could not supply the commodities to the extent required by the public, the railway companies would suffer. They would lose not only the traffic which they might have carried, but they would also suffer from the lessened prosperity of districts in which they had an indirect as well as a direct interest.

The chief sufferers, however, from the giving up of “grouping” would be the public; they distinctly gain by the practice, though producers near great towns or sea-ports may lose the benefit of “geographical position.” Collieries and works which are “grouped” are enabled to contribute to the available supply. They enter markets from which they would be otherwise shut out; the extent of the trade is thereby increased; the price paid by the consumer may be lessened. In fact, many traders admit, tacitly at least, the value of the practice.

Its legality has lately been called in question. It has been supposed to be prohibited by the decision of the Railway Commissioners in the case of the _Denaby Main Colliery Company_ v. _Manchester, Sheffield, and Lincolnshire Railway Company_, which came before them in January, 1880. The complaint was that the rates and tolls charged to the owners of the Denaby Main Colliery, for the conveyance of coal, both by railway and canal were an undue prejudice and disadvantage to themselves and undue preference to the others within the meaning of Section 2 of the Railway and Canal Traffic Act, 1854. The railway rates from the Denaby Main Colliery to Keadby, which is 25 miles, and to Grimsby, which is 56 miles, were 2s. 1½d. and 3s. 1d. per ton respectively. Similar rates were charged from the other collieries in the same group, although the distances between Keadby and Grimsby and the Denaby Main Colliery were 15 miles less than the most distant of the other collieries in the group. For all coal passing to certain places to the eastward, the Denaby Main Colliery was grouped with 48 other collieries in the same district. But, except in certain cases, the collieries were not grouped for coal going to the west; on traffic sent to places in that direction Denaby had to pay according to its geographical position. With regard to some portion of their traffic to the west, the Denaby Main Colliery had special rates. The decision of the Railway Commissioners, which has not been reversed, was that this particular grouping system did subject the proprietors of the Denaby Main Colliery to undue and unreasonable prejudice and disadvantage. But their decision was probably upon the facts, not upon the law; and their finding really was that the group was too large, and that the Denaby Main Colliery ought to be taken out of it. The same question was to some extent discussed in the House of Lords in the _Denaby Main Colliery Company Limited_ v. _Manchester, Sheffield and Lincolnshire Railway Company_ (L.R. 11, A.C. p. 97); and the observations of the learned law lords do not confirm the opinion that grouping is _per se_ illegal.[21] If the contrary were the case--if all such arrangements were necessarily illegal--the result would be somewhat serious to trade.

[21] “I think that even if it were distinctly found that the differences in the charges actually made were so disproportioned to the differences in the cost as to be undue and unreasonable, it would not impose an obligation to charge equally.”--Lord Blackburn, p. 122.

A few particulars as to grouping on the Continent may be mentioned. It will be found that it has been adopted there for the same reasons as led to it here.

In Germany and Holland grouping is recognised. There, as has been previously mentioned, mileage rates is the principle on which the tariffs are based, and the State practically controls the rates. But some exceptional tariffs for coal and coke are not calculated upon the distance from the place of origin to the station of destination. Sending stations in certain cases, and sea-ports in others, are formed into groups. In Germany, for instance, the sending stations included in the exceptional tariff with Bremen, Hamburg, and other ports in the North of Germany, are divided into seven groups. The first three embrace all the stations in the Right Rhenish district where coal mines exist. Group 1 contains about fifteen stations from 6 to 24 kilometres distant from each other, in a total distance of 245 kilometres to Bremen and 359 kilometres to Hamburg. Group 2 contains about thirty-five stations from 1 to 19 kilometres distant, and Group 3 seven stations at distances varying from 1 to 13 kilometres. The total distances to Bremen and Hamburg are 271 and 385 kilometres respectively. For all stations in the same group there is one tariff, which is for one fixed consignment per week:--

Group 1 ... ... 49 marks per ton. ” 2 ... ... 50 ” ” ” 3 ... ... 51 ” ”

If there are two fixed consignments sent regularly every week for one year, a reduction is made of one mark for every 10 tons, and for

3 Consignments weekly a reduction of 2 marks for every 10 tons. 4 ” ” ” 3 ” ” 5 ” ” ” 4 ” ” 6 ” ” ” 5 ” ”

The coal stations of the Rhine Province and Westphalia are also grouped for Dutch, Belgian and French traffic. In the two last cases, however, the differences of distance are very slight. For Dutch traffic the differences of distance between the stations in Group 1 vary from 1 to 16 kilometres in a total distance of 218 kilometres, in Group 2 from 3 to 20 in a total distance of 233 kilometres, and in Group 3 from 1 to 33 in 265 kilometres.

The grouping of the ports in the North of Germany, shows a much greater difference in favour of certain ports. For instance, the same rates are charged from the coal stations to Bremen as to Hamburg, although the former is 114 kilometres (71 miles) further; the distance from Dortmund to Bremen being 237 kilometres (147 miles), and to Hamburg 351 kilometres (218 miles.) The same rates are also charged to the following ports as to Bremen, which is distant from the various coal stations from 221 to 271 kilometres:--

Kilometres. Miles.

Bremerhafen 66 41 beyond Bremen. Geestemünde 62 38½ ” ” Harburg 103 64 ” ” Hittfeld 94 58 ” ” Nordenhamm 40 25 ” ”

Thus the “grouping” which is permitted, and indeed actually carried out, by the German authorities, exceeds in degree anything of the kind known on the railways in this country.

In France also, “grouping” of ports is sanctioned with a view to promote competition. The special import and export rates from Dunkirk, Calais, and Boulogne to Paris, which are equal in amount, notwithstanding the differences in distance, may be taken as an example:--

Dunkirk to Paris, 304 Kilometres. Calais ” ” 296 ” Boulogne ” ” 252 ”

SECTION VII.

DIFFERENTIAL RATES ON THE CONTINENT.

In France, Belgium, and Germany, there are fewer ports competing with railways or with each other than in Great Britain. In each of those countries the principle of mileage rates has been nominally, and, to a large extent, in practice adopted. But in all of them causes similar to those which have here created so-called differential rates have been in operation. In each of them the fact of competition by water is recognised as a reason for charging reduced or special rates; such rates for export or import traffic exist, although the special rates for the latter traffic are fewer than for the former; and there are also special transit rates[22]. All these rates have been established after much consideration. Writing of the discussion of the subject in the Corps Legislatif in 1863, M. Aucoc observes in his well-known work, “Since that solemn discussion, the principle of differential tariffs has been placed beyond question.” He adds: “It may be well to mention also that, in the numerous judicial works on the working of railways, not only the legality, but the necessity and equity of conditional and differential rates have been almost unanimously recognised.”[23]

[22] See _décret_ of April 26, 1862, quoted by M. A. de Foville in _La Transformation des moyens de Transport_ p. 68.

[23] The following are some of the opinions of French statesmen and economists on the subject:--“_Dans ma conviction le tarif différentiel est à la fois juste, conforme aux vèritables intérêts économiques et nécessaires à la concurrence._” M. ROUHER.

“_Les industries de transport par eau, par terre ou par chemin de fer ne vivent et ne prospèrent que par les tarifs différentiels. C’est en différenciant sagement leurs tarifs qu’elle attirent les marchandises et les voyageurs._” M. LEGRAND, _sous-secrétaire d’état au Ministère des travaux publics_:

“_L’expérience a démontré aux compagnies la nécessité de superposer au tarif réglementaire de nombreux tarifs à prix reduits.^{***} Il a été reconnu que ceux là mêmes qui se plaignaient, le plus vivement des tarifs différentiels en recueillaient indirectement le bénéfice. Ce sont, en effet, ces tarifs qui fournissent au trafic des grandes compagnies les masses de marchandises les plus considérables, et ce sont ces masses qui rendent possible la réduction, au profit de tous, des tarifs généraux._” M. DE FOVILLE. _La Transformation des moyens de Transport_ pp. 66, 67.

In a report to the French Chamber of Deputies by a Railway Commission in 1880, the Commissioners approved of special tariffs, and added: “We are even inclined to suggest the development of traffic of this nature, the importance of which is not at all in proportion to the natural advantages which France derives from her geographical position and her numerous ports.” _Appendix 31 to Report from the Select Committee on Railways (Rates and Fares), 1882, Vol. II._

Take first the special rates in France. Wheat may be imported either _viâ_ Marseilles, or _viâ_ Rouen and the Seine to Paris, the distance from Marseilles being 863 kilometres, and from Rouen 134 kilometres. To compete with the sea and the Rouen route, the Paris, Lyons, and Mediterranean Railway Company charges for imported goods, special rates between Marseilles and Paris. These rates have been complained of as encouraging foreign trade. The answer, however, is that if not conveyed _viâ_ Marseilles such goods might be conveyed _viâ_ Rouen and the Seine to Paris. The general tariff rates on the French lines are based upon a uniform charge per kilometre, irrespective of any special requirements of the locality. In order, however, to remedy the disadvantages arising from such a system, and to meet the various circumstances and requirements of particular trades, numerous special tariffs are adopted with the sanction of the Minister of Public Works. These special rates are not, as is sometimes supposed, fixed upon any regular or uniform basis. Some are adopted for the purpose of developing a new, or increasing an existing trade which may be subjected to competition from other districts; others are established to meet competition by sea, canal, or otherwise. Under some circumstances reduced rates are arrived at by adopting computed instead of actual distances; the former being sometimes based on the distance by a shorter route either by rail, road or sea. But in some cases an arbitrary distance is adopted.

The French railway companies have special import and export rates for numerous articles in their classifications which are lower than the ordinary class rates to the port town, and occasionally lower than the class rates from intermediate stations; in which case the special import and export rates may apply. The following table is a comparison of a few import and export rates with the ordinary class rates. The latter, it should be observed, are, in some instances, based on computed, and not on actual, distances.

DUNKIRK AND PARIS.

+------------------------------------------ | ACTUAL DISTANCE, 304 KILOMETRES. | COMPUTED DISTANCE, 267 KILOMETRES. +------+------+------+------+------+------- CLASSES | 1 | 2 | 3 | 4 | 5 | 6 | | | | | | | f. c.| f. c.| f. c.| f. c.| f. c.| f. c. Ordinary Class Rates | 42·55| 36·55| 31·20| 25·85| 20·50| 12·35 | | | | | | Import and Export Rates[24]| 30·00| 26·00| 23·00| 20·00|{18·00| 12·00 | | | | |{15·00| ---------------------------+------+------+------+------+------+-------

[24] Until recently, the classification of imported and exported goods, in force on the Northern of France Railway, was composed of six classes. A new tariff is now in force, the rates for such traffic varying from frs. 8 to frs. 30 per 1000 kilogrammes.

For the purpose of comparison, the rates charged for imported and exported goods are shewn under the respective classes in which the same articles are generally included when charged at the ordinary class rates.

CALAIS AND PARIS.

+------------------------------------------ | ACTUAL DISTANCE, 296 KILOMETRES. | COMPUTED DISTANCE, 267 KILOMETRES. +------+------+------+------+------+------- CLASSES | 1 | 2 | 3 | 4 | 5 | 6 | | | | | | | f. c.| f. c.| f. c.| f. c.| f. c.| f. c. Ordinary Class Rates | 42·55| 36·55| 31·20| 25·85| 20·50| 12·35 | | | | | | Import and Export Rates | 30·00| 26·00| 23·00| 20·00|{18·00| 12·00 | | | | |{15·00| --------------------------+------+------+------+------+------+-------

BOULOGNE AND PARIS.

+------------------------------------------ | ACTUAL DISTANCE, 252 KILOMETRES. | COMPUTED DISTANCE, 252 KILOMETRES. +------+------+------+------+------+------- CLASSES | 1 | 2 | 3 | 4 | 5 | 6 | | | | | | | f. c.| f. c.| f. c.| f. c.| f. c.| f. c. Ordinary Class Rates | 40·30| 34·75| 29·75| 24·65| 19·60| 11·80 | | | | | | Import and Export Rates | 30·00| 26·00| 23·00| 20·00|{18·00| 12·00 | | | | |{15·00| --------------------------+------+------+------+------+------+-------

DIEPPE AND PARIS.

+------------------------------------------ | ACTUAL DISTANCE, 166 KILOMETRES. | COMPUTED DISTANCE, 166 KILOMETRES. +------+------+------+------+------+------- CLASSES | 1 | 2 | 3 | 4 | 5 | 6 | | | | | | | f. c.| f. c.| f. c.| f. c.| f. c.| f. c. Ordinary Class Rates | 28·05| 24·75| 21·40| 18·10| 14·80| 9·80 | | | | | | Import and Export Rates | 25·00| 19·00| 14·50|{10·75| 9·00| 7·00 | | | |{10·00| | --------------------------+------+------+------+------+------+-------

In some instances the special rates apply both ways, _i.e._, for import or export goods. But many of the export rates for certain articles are lower than the import rates; for instance, the rate for Cereals from Paris to Dieppe for export is frs. 7·50, while the import rate from Dieppe to Paris is frs. 9.

In addition to special rates for export and import goods there are also special tariffs for _transit_ goods subject to special conditions which appear anomalous, and have given rise to complaints. The following is an illustration:--Both Roubaix and Rouen are spinning centres, and Epinal is a weaving centre. The rate for a 5-ton load of Yarn from

Kilometres. fr. cts. Roubaix to Epinal 462 is 47·60. Rouen to ” 537 ” 57·40. Antwerp to ” 467 ” 37·0.

The rate for Yarn from Dieppe to Bâle, a distance of 716 Kilometres, is 47 frs. 30 cts. The explanation of these apparent anomalies is that the rates from Roubaix and Rouen to Epinal are based on the local ordinary tariffs; that the rate from Antwerp to Epinal is a special import rate; whereas the rate from Dieppe to Bâle is a still lower special tariff for transit goods. The following is an example of transit or through rates from a town in Italy to a port in France. The proportions of the receipts accruing to each Company and the rates charged for goods carried locally between the respective points are shown. It will be seen that the local rates from the frontier to Paris are in excess of the charges from Milan to Paris.

| | | A. | B. | | | D |-------------+-------------+-------------- | | i |Through Rates|Through Rates| | | s | for lots of |for lots of 5| | | t |100 kilos and| tons and |Ordinary Local | | a | above | above |Rates between From. | To. | n |-------------+-------------|the respective | | c | In the proportions due to | points. | | e | each distance. | | | |---------------------------+-------------- | |km.| 1st | 2nd | 1st | 2nd | 1st | 2nd | | |class.|class.|class.|class.|class.|class. ----------------|--------+---+------+------+------+------+------+------- | | |f. c. |f. c. |f. c. |f. c. |f. c. |f. c. Milan |Modane |238| 22.14| 18.42| 22.14| 18.42| 40.89| 36.03 Modane |Frontier| 12| 1.15| 0.95| 1.15| 0.95| 2.90| 2.50 Frontier |Paris |672| 68.10| 57.25| 53.50| 46.55| 94.20| 81.00 | |---|------|------|------|------| | | |922| 91.39| 76.62| 76.79| 65.92| | | | | | | | | | Ceinture Railway| -- | 15| 3.10| 3.10| 3.10| 3.10| 3.10| 3.10 Paris |Havre |226| 23.05| 19.60| 17.55| 15.35| 32.00| 28.00 Terminal charges| -- |...| ...| ...| ...| ...| 1.90| 1.90 -----------------------------+------+------+------+------+------+------- Totals per 1,000|Kilos 1163|117.54| 99.32| 97.44| 84.37|174.99|152.53 -------------------------------------------------------------------------

A.--The proportions accruing to the French Companies for lots under 5 tons remain the same for traffic from all the Italian stations named in the Tariff.

B.--The French Railway proportions for lots of 5 tons and above vary according to the distance of the Italian town from the frontier, as will be seen from the examples below:--

Goods from Cormons to Havre. 1st class. 2nd class. P.L.M. 38.60 35.25 Ouest 8.45 7.80

Oulx to Havre. 1st class. 2nd class. P.L.M. 72.75 62.40 Ouest 15.05 13.05

In respect of traffic for intermediate places, the French railway companies may make higher charges than the rates for _transit_ traffic carried over the same portion of railway beyond those places. But they may be required to charge the same sums for traffic to or from any intermediate place as they charge for import or for export traffic carried beyond.

In Belgium, also, differential rates are charged between certain places for export and for local consumption. The following are a few illustrations:--

+----------+-------+------------+------------ | | | | FOR | | | FOR EXPORT | LOCAL USE. | From | To |------------+------------ | | |10 ton lots.|10 ton lots. | | | per ton. | per ton. --------------------+----------+-------+------------+------------ Coal |Mons |Antwerp|Frs. 2·91 | 4·62 |Jemappes | ” | 3·04 | 4·67 |Charleroi | ” | 2·81 | 4·58 |Fountaine | | | | l’Evêque | ” | 2·81 | 4·58 | | | | Bar Iron and Girders|Liége | ” | 4·70 | 6·65 |Charleroi | ” | 4·57 | 6·39 |Marchienne| ” | 4·54 | 6·33 | | | | | | | per 1000 kilogrammes. Window Glass |Charleroi | ” | 6·30 | 8·28 --------------------+----------+-------+------------+------------

Neither private companies nor the State railways are permitted to make concessions of any kind, or to depart from the official tariff in favour of any particular firm or carrier. All general or special tariffs must be approved by the Minister, and published in the official paper, the “Moniteur.”

On the Prussian railways the maximum rates shewn in the tariff are actually charged. But exceptions are made where trade requirements, competition, and other similar circumstances appear to necessitate a departure from the official rates. It is not considered that railway companies are, in general, bound to adjust anomalies in the carriage charged for traffic arising in different districts, for one and the same destination, by reducing the rates from the more distant sending station. But for the sake of uniformity the rates are so adjusted if, for any reason, exceptional rates from any particular district have been adopted, and if they are lower than from intermediate stations nearer by rail to the same destination.