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diff --git a/old/53222-0.txt b/old/53222-0.txt deleted file mode 100644 index dc1e930..0000000 --- a/old/53222-0.txt +++ /dev/null @@ -1,3203 +0,0 @@ -Project Gutenberg's Royal Railways with Uniform Rates, by Whately C. Arnold - -This eBook is for the use of anyone anywhere in the United States and most -other parts of the world at no cost and with almost no restrictions -whatsoever. You may copy it, give it away or re-use it under the terms of -the Project Gutenberg License included with this eBook or online at -www.gutenberg.org. If you are not located in the United States, you'll have -to check the laws of the country where you are located before using this ebook. - - - -Title: Royal Railways with Uniform Rates - A proposal for amalgamation of Railways with the General - Post Office and adoption of uniform fares and rates for - any distance - -Author: Whately C. Arnold - -Release Date: October 6, 2016 [EBook #53222] - -Language: English - -Character set encoding: UTF-8 - -*** START OF THIS PROJECT GUTENBERG EBOOK ROYAL RAILWAYS WITH UNIFORM RATES *** - - - - -Produced by MWS, Adrian Mastronardi, The Philatelic Digital -Library Project at http://www.tpdlp.net and the Online -Distributed Proofreading Team at http://www.pgdp.net (This -file was produced from images generously made available -by The Internet Archive/American Libraries.) - - - - - - - - - - - A RAILWAY REVOLUTION! - - [Illustration] - - ROYAL RAILWAYS - - FARES & RATES - FOR ANY DISTANCE. - - LOCAL TRAINS ONE PENNY - MAIN LINE ” ONE SHILLING - SLOW GOODS average } 1s. 6d. - FAST ” per ton } 10s. - - A business proposition for Shareholders - and the Nation. - - _Sixpence Nett._ - - SIMPKIN, MARSHALL, HAMILTON, KENT & CO., LTD., - LONDON - - - - - ROYAL RAILWAYS - with Uniform Rates - - _by_ - WHATELY C. ARNOLD, LL.B. LOND. - - _A PROPOSAL - for amalgamation of Railways with the - General Post Office and adoption of - uniform fares and rates for any distance._ - - LONDON: SIMPKIN, MARSHALL, - HAMILTON, KENT & CO., LTD - 1914 - - - - -_Preface._ - - -This pamphlet has been printed and published with the assistance of -friends who share my opinion that the scheme proposed will solve the -railway problem--now at an acute stage. - -A rough outline of the Scheme has been submitted to Sir Charles -Cameron, Bart. (on whose initiative sixpenny telegrams were adopted), -and while reserving his opinion as to the advantages of State ownership -and the difficulties of purchase, he has been good enough to write -that this scheme is the boldest and best reasoned plea for the -Nationalisation of Railways that he has come across. - -The scheme has also been submitted to, among others, Mr. Emil Davies, -Chairman of the Railway Nationalisation Society, to Mr. L. G. Chiozza -Money, M.P., and to Mr. Philip Snowden, M.P., all of whom have -expressed their approval subject to the figures and estimates being -correct. These figures and estimates are based on the Official Board of -Trade returns for Railways of 1911 and 1912. - -I also had the temerity to submit my draft to Mr. W. M. Acworth, the -well-known Railway expert, who very courteously gave me his views -generally, although refraining from any detailed criticism. I deal -with his remarks at the end of Chapter IV., but may here mention that -Mr. Acworth called my attention to an article by himself on Railways -in “Palgrave’s Encyclopædia of Political Economy” published in 1899. -In such article he referred to a suggestion which had then been made -for uniform fares on the Postal system, and he dismissed the idea in a -sentence as impracticable, because no one would pay for a short journey -as much as 8d., then the average fare for the whole country. - -It is therefore evident that the principle of a flat rate is not novel; -yet I can find no reference in any books or pamphlets on railways to -any practical scheme for carrying it into effect. Apparently it has -been assumed that there can be only one uniform rate, equivalent to the -average rate, and that therefore the proposal is quite impossible. The -simple expedient of dividing the traffic into the two kinds of “Fast” -and “Slow,” on the analogy of the Postal rate of one penny for letters -and sixpence for telegrams, overcomes this difficulty. The scheme is -in effect an extension to the Railway System of the principle upon -which the existing Postal System is founded, and therefore involves -Nationalisation. - -As submitted to the above-named gentlemen, the draft did not include -my remarks on the principles which in my opinion should govern all -National and Municipal Trading, and which are now contained in Chapter -IV. The attention of both opponents and advocates of Nationalisation -is particularly called to these principles, which I have not found -elsewhere, but which as laid down are believed to be absolutely sound, -and of the highest importance, as removing most, if not all, of the -objections of opponents, while retaining all the advantages claimed by -advocates of National and Municipal Trading. - -I do not pretend to be a railway expert, and have only been able to -devote the small leisure time available from an exacting business to -putting into writing the thoughts which have exercised my mind for many -years past. But the well-known expert, Mr. Edwin A. Pratt, who is a -strong opponent of Railway Nationalisation, admits in one of his books -that “the greatest advances made by the Post Office have been due to -the persistence of outside and far-seeing reformers, rather than to the -Postal Officials themselves.” This admission and the conviction that -the further advance now proposed is based upon sound principles and -undisputed facts, encourages me to submit my scheme with confidence to -the consideration of experts and the public. - - W. C. A. - - 37, NORFOLK STREET, - STRAND, LONDON, W.C. - - DECEMBER, 1913. - - - - -SYNOPSIS OF CONTENTS - - - PROPOSED UNIFORM FARES AND RATES: - - =Passenger Fares=: Any Distance, so far as train travels. - - _Main Lines_: =First Class 5/-=, =Third Class 1/-=. - _Local Lines_: ” =6d.= ” =1d.= - - =Goods Rates=: Any Distance. - - _Fast Service_: =Average 10/- per ton=. - _Slow Service_: ” =1/6= ” - - =Introduction.= Page 15. - -The Royal Mail.--Letters carried for same price any distance. Why -not passengers and goods? Object of pamphlet to prove that this is -financially possible with small uniform fares and rates mentioned. A -Business Proposition for Nation and Shareholders. - - CHAPTER I. - =The Scheme.= Page 17. - -=All Railways= to be purchased by State and amalgamated with General -Post Office. Trains of two kinds only, viz.:-- - - (1) =Main Line Trains=, _i.e._, non-stop for at least 30 miles. - - (2) =Local Trains=, _i.e._, all trains other than Main Line. - -=Passenger tickets= vary according to above fares only--no reference -to stations or distance. =Goods rates=, payable by stamps vary only -according to weight or size of goods, whether carried in bulk, in open -or closed trucks, or with special packing, but irrespective of any -other difference in nature or value of goods, or of distance, as now -with parcel post. - -=All Railway Stations to be Post Offices.= All Post Offices to sell -Railway Tickets, and, where required, to be Railway Receiving Offices. -=Steamers= to be regarded as trains. - - CHAPTER II. - =Advantages of Scheme.= Page 20. - -1. =Cheapness= and regularity of transport. - -2. =Economy= of service;--by unification of railways;--abolition -of Railway Clearing House, of expenses of varying rates and fares, -of multiplication of receiving offices, stations, &c.,--and by -amalgamation with Post Office;--all railway land and buildings -available for Government purposes--Postal, Civil, Military and Naval. - -3. =Progressive increase always follows= adoption of small uniform -fares (_e.g._, in Post Office); hence progressive increase of -revenue available for working expenses, purchase money, extensions, -improvements, and adoption of new safety appliances. - - CHAPTER III. - =Principles of Scheme.= Page 27. - -=Present system= founded on two principles, both mistaken and -illogical, viz.:--(=1=) According to distance travelled. (=2=) -According to “what the traffic will bear.” - -(1) Although cost of building 200 miles, and hauling train that -distance is more than for two miles, yet because regular train service -required for whole distance, say, A to Z and back, passing intermediate -places, therefore cost of travelling from A to B, or to N, identical -with A to Z. For goods, cost of loading and unloading twice only, -whether sent from A to B, or A to Z. - -(2) Cost of hauling ton of coal exactly same as of bricks, sand, loaded -van, in open truck, yet now different rates for each, according to -“what the traffic will bear.” - -=True principle= advocated by Sir Rowland Hill in Penny Post--whole -country suffers by neglect or expense of transport to distant parts, -and gains by including small districts with same rates as populous -parts. - -=For a flat rate, three rules necessary.= - - (_a_) Must not exceed lowest in use prior to adoption. - - (_b_) Increased traffic resulting must produce at least same - net revenue. - - (_c_) Variations of rate to be according to speed, not distance. - -Hence: - - (_a_) =1d.= now lowest fare, fixed for Local Lines. - - =1s.= now lowest fare, (_e.g._, 2s. 6d. return London - to Brighton) fixed for Main Lines. - - =1s. 6d.= per ton fixed for goods train or slow - service, as the present average for minerals, and - allowing present lowest rate for goods in open - trucks, rising to, say, 6d. per cwt. (10s. per ton) - for small consignments, in covered trucks. - - =10s.= per ton, now lowest “per passenger train” - (_e.g._, 6d. per cwt. for returned empties) fixed for - fast service. - - (_b_) The increased traffic dealt with under “Finance.” - - (_c_) The two rates suggested for fast and slow trains solve - the difficulty hitherto felt of charging lowest fare of - 1d. as uniform fare--the 1s. fare and 10s. goods rate - being double the present averages. - - CHAPTER IV. - =OBJECTIONS TO THE SCHEME.= - - =1.--State Ownership.= Page 33. - -Writers for and against--All assume that on Nationalisation, system -followed of charging according to distance, and to “what traffic will -bear”--Fundamental differences between State Monopoly and Private -Monopoly--Evils of applying profits of State monopolies in reductions -of taxation--Strikes. - -Four rules to be observed on Nationalisation:-- - - 1. Natural monopolies only to be taken over. - - 2. When taken over, only to be worked for benefit of community - and not for profit. - - 3. Competition of private enterprises not to be prohibited. - - 4. Monopoly to be worked by Department of State responsible to - Parliament. - -=Chief grounds of objection to State ownership=-- - -(1) Difficulty of Government in dealing with conflicting interests of -traders and general public. (2) Difficulty of Railway servants (being -also voters) using political pressure to obtain better wages, against -interests of traders and general public. Both of these objections -removed if scheme (which avoids all preferential or differential rates -or treatment) adopted with above four rules. - -Other grounds of objection, _e.g._, want of competition, officialism, -&c., apply equally to present Company system, but may be remedied if -owned by State. Suggested remedies:--Railway Council to deal with -all matters of administration; Railway Courts to deal with questions -of compensation, labour disputes, &c. Railways and Post Office being -Department of State with Cabinet Minister at head subject to vote of -censure in Parliament, provides better security for public than private -Companies or Railway Trust. - - =2.--General Objections.= Page 43. - -=Fear of Losses=-- - -All existing staffs required for increased traffic--therefore no loss -to them. - -Traders, like newspapers more than make up for any losses by economy in -rates and fares and increased circulation. - -Mr. Acworth’s objections to “average” rates considered. - - CHAPTER V. - =Finance of Scheme.= Page 45. - -=Present averages= per annum in round figures taken from Board of Trade -returns 1911 and 1912:-- - - Receipts from Passengers £45,000,000 - ” ” Goods per passenger train 10,000,000 - ” ” Goods Train Traffic 64,000,000 - ” (Miscellaneous) 10,000,000 - -------------- - Gross Revenue £129,000,000 - Working Expenses 81,000,000 - -------------- - Net Receipts £48,000,000 - ============== - Total Paid-up Capital and Debentures £1,400,000,000 - - Net receipts show average income of 3½ per cent. - - * * * * * - - Total passenger journeys (of which 10 per - cent. were 1st and 2nd class) 1,620,000,000 - - =Average fare for each journey only 6½d.= - - * * * * * - - Total tonnage of goods:-- - - Estimate per passenger trains 20,000,000 - - Actual per goods trains 524,000,000 - ------------ - 544,000,000 - - * * * * * - - Average rates per goods train:-- - - Minerals only 1s. 6d. per ton - General Merchandise 6s. ” - Both together 2s. 4d. ” - -=Estimate under proposed scheme=:-- Page 48. - -=I. Passengers.=--Assuming Main Line passenger journeys are -300,000,000, _i.e._, under 20 per cent. of the total passenger journeys. - - 300,000,000 at 1s. = £15,000,000 - add 30,000,000 at 4s. for 1st class = 6,000,000 - 1,320,000,000 at 1d. = 5,500,000 - add 132,000,000 at 5d. for 1st class = 2,750,000 - ------------- ----------- - Present No. 1,620,000,000 will produce £29,250,000 - -Increased number of Main Line passengers required to make up deficiency:-- - - 250,000,000 at 1s £12,500,000 - add 25,000,000 at 4s. extra 5,000,000 - ---------- £17,500,000 - ----------- - Estimated total £46,750,000 - -This is £1,750,000 more than the present gross revenue from passengers -and requires an increase of 250,000,000 = 15 per cent. on the total -present number of passenger journeys. - -=II. Goods.= - - Total tonnage by goods train as now, - viz., 524,000,000, at 1s. 6d £39,300,000 - - Ditto per passenger train, 20,000,000 - at 10s 10,000,000 - - Live Stock, as now 1,500,000 - ----------- - £50,800,000 - - Increased tonnage required to make up - present revenue, 48,000,000 tons at 10s. 24,000,000 - ----------- - £74,800,000 - =========== - -which is £800,000 more than present total receipts from goods per -passenger and goods trains, and requires an increase of under 10 per -cent. in tonnage. - -=Reasons for anticipating increase=:-- - - =(_a_) Of Passengers.= Long distance journeys now restricted - by expense.--Through tickets now counted as one journey will, - under new scheme, be sometimes two or three, _e.g._, London to - Londonderry would be three tickets--Every single journey taken, - usually means also return journey home. - - =(_b_) Of Goods.= Example of Post Office--Before Penny Post, - average price per letter 7d., and letters carried 76,000,000. - After Penny Post, first year number doubled; in twenty years, - increased by eight times; about doubled every twenty years - since. Before three letters per head of population, now 72 per - head. Goods now sent by road motors will, with cheaper rates, - go by rail--perishable articles, now not sent at all by fast - train owing to expense, will be sent when rates cheaper. - - CHAPTER VI. - =Working Expenses.= Page 53. - -=If increase= of traffic no more than above, increase of working -expenses negligible, apart from economies made by unification. Expense -of carrying 200 passengers no more than 20. If increase of traffic -more, then revenue increases, but working expenses only by about 50 -per cent., as expenses of permanent way, stations, signal boxes, and -establishment charges but little affected. Expenses of Post Office and -Railways to be lumped together. - - CHAPTER VII. - =Terms of Purchase.= Page 56. - - =Present total market price= of all - Railway Stock and shares about £1,350,000,000 - Debentures and Loans ” 350,000,000 - -------------- - Total about £1,700,000,000 - -=Estimate of annual sum= required according to precedent of purchase -of the East Indian Railway Company, namely, by annuities for 73 years, -equal to 4¼ per cent. per annum on market value, plus liability for -Loans and Debentures with interest at 3 per cent. - - 4¼ per cent. on £1,350,000,000 £57,375,000 - - 3 ” ” 350,000,000 10,800,000 - ----------- - Total annual sum required for purchase £68,175,000 - -=Revenue available as per= above estimates:-- - - Passengers £46,750,000 - Goods 74,800,000 - Miscellaneous, as now 10,000,000 - ------------ - £131,550,000 - - Less Working Expenses, with - say, increase of £4,000,000 85,000,000 - ------------ - Net revenue available £46,550,000 - ----------- - Balance required for purchase £21,625,000 - - would be provided by following further increase of traffic, viz. - - 100,000,000 passengers at 1s. £5,000,000 - - 10,000,000 ” ” 4s. 2,000,000 - - 30,000,000 tons ” 10s. 15,000,000 - ----------- - £22,000,000 - =========== - -This further traffic brings total increase of traffic to:-- - - 350,000,000 passengers = about 21 per cent. - 78,000,000 tons of goods = about 15 per cent. - -Essential to purchase all Railways at same date--Railway Stock to be -converted into Government Stock--Price to be fixed by average of market -price of Stocks for three years prior to introduction of Bill. - - CHAPTER VIII. - =Conclusion.= Page 62. - -Interested parties not prejudiced--Staff now employed in services -to be discarded will be required for increased traffic--Facility of -transport will increase trade, and open new markets, not only here -but abroad--Foreign countries would adopt reform as they did Postal -system--Advantages of inter-communication with Foreign Nations. - - - - - ROYAL RAILWAYS - with Uniform Rates. - - - - -INTRODUCTION. - - -=The Royal Mail!= What scenes and memories are conjured up by these -words! In the olden days, the Royal Mail coaches--in these modern days, -the well-known scarlet Mail carts and motor vans arriving at all the -larger railway stations from which the mail trains, always the fastest, -convey the mails to every quarter of the United Kingdom, and over the -whole world. - -It is now a commonplace to post in the nearest pillar-box a batch of -letters, some to addresses in the same town, others to provincial -towns and villages, to Scotland, Ireland and far distant Colonies, -each of them being conveyed to their destination, near or far, for -the modest sum of one penny, by the speediest mode of locomotion -that steam and electricity can provide. In order that travellers may -have the advantage of that speed and regularity which is a feature -of the Royal Mail, passengers and goods have always been carried by -the Mail--formerly by the coach, now by the train. But whereas the -mails are carried at the same price for any distance, the charges for -passengers, and for goods which exceed the regulation size and weight -permitted for the “Parcels Post,” vary according to the distance -travelled, and as to goods also according to their nature or quality, -with the result that for the greater part of our population long -journeys are luxuries which can only be undertaken in cases of life -and death, and not always then; the rates for carriage of goods by -fast train are mostly prohibitive, and even by goods train for long -distances are so great as to seriously restrict the traffic. - -If mail trains can carry mails, with parcels up to 7 lbs. in weight at -the same price for any distance, why cannot all trains carry passengers -and goods of any size and weight at the same price for any distance? -The answer is that they can, and it is the object of this pamphlet to -prove not only that it is possible financially, but that, with the -small uniform fares and rates indicated on the title page, sufficient -revenue can be obtained to pay working expenses, and provide the sum -required to purchase the whole of the existing railway undertakings at -their full market price, or such a price as willing vendors would be -ready to accept. - -This, then, is “=A Business Proposition=” for all concerned; in other -words, the magnificent net-work of railways in the United Kingdom, with -all that is included in their undertakings, may be acquired by the -nation at such a price as will make it worth the while of the present -Companies and their shareholders to sell, and as the result to give the -nation the benefit of speedy and efficient transport at the nominal -fares and rates mentioned. It will, indeed, be a “Revolution,” but one -of the most beneficial that can befall a nation. - -The Royal Mail is an institution of which the nation is justly proud. -How much more will it be so of an institution which will include the -Royal Mail, namely, =Royal Railways=. - - - - -CHAPTER I. - -THE SCHEME. - - -This is the scheme proposed:-- - -The whole of the existing undertakings of all the Railway Companies in -the United Kingdom of Great Britain and Ireland will be acquired by -purchase on some such terms as are set out at the end of this pamphlet -and vested in the Government. The whole system will be amalgamated -with the General Post Office and form one of the Departments of State, -of which the Postmaster-General for the time being will be the head, -and probably adopt the style of “Minister of Transport,” who will be a -Member of the Cabinet. =It will be expressly enacted that any profit -made by the combined services shall be used only for increasing their -efficiency, for payment of purchase money, or in reduction of fares -and rates charged for the services, and in no case for general revenue -of the country. There shall also be no prohibition of competition by -private enterprise.=[1] - -All passenger trains will be regarded as consisting of two kinds, -namely:-- - - (1) =Main Line Trains=, by which will be meant express trains - running on the Main trunk lines between, and only stopping at, - important towns. - -A ticket for =one shilling= will entitle the holder to enter any Main -Line train at any station, and to travel in it to any other station at -which it stops, and a ticket for =five shillings= will entitle him to -travel first class in such trains. - - (2) =Local Trains=, by which will be meant all trains, - other than Main Line trains as defined above, including all - Metropolitan, Suburban and Branch Line trains throughout the - Kingdom, as well as trains on Main lines which stop at all - stations. - -A ticket for =one penny= will entitle the holder to enter any Local -train at any station, and to travel in it to any other station at which -it stops, and a ticket for =sixpence= will entitle him to travel first -class in such train if that accommodation is provided. - -=Steamers= which form part of the railway undertakings will also be -regarded as of two kinds, according to whether they form part of a -Main Line, _e.g._, the Irish Packets or the Cross Channel steamers, in -which case admission to them will be 1s. or 5s., according to class, or -simply as part of a Branch line, _e.g._, the Isle of Wight steamers, to -which admission would be 1d. or 6d. according to class. - -In the case of Main Line trains and steamers, additional fixed charges -(the same for any distance) will be made for the use of refreshment -cars, sleeping cars, State cabins, reserved seats and any other special -services. - -In the case of Local trains, and possibly Main Line trains, =Season -Tickets= may be issued, in each case available for any Main Line train -or Local train as the case may be. For Local trains the following rates -are suggested, viz.:-- - - 3rd class 1s. per week, 4s. per month, £2 per annum. - 1st class 2s. 6d. ” 10s. ” £5 ” ” - -=Passenger Tickets= will not be issued to or from any particular -stations, but like postage stamps will vary only according to the fares -and special charges for the time being in force. The four denominations -of 5s., 1s., 6d. and 1d. will, of course, be required, and 4s. and 5d. -tickets could also be issued to make up the first class fares with the -1s. and 1d. tickets. - -These tickets will be sold not only at every railway station, but also -at every Post Office and in automatic machines. Every railway station -will be, or will contain, a Post Office, with all postal, telegraphic -and telephonic facilities, and every Post Office will sell not only -passenger tickets but also railway stamps for parcels, goods and live -stock. - -=Goods traffic= will also consist of two services only, namely:-- - - (1) =Fast Service=, corresponding with the present service “per - passenger train,” the charge for which will be an average of - =ten shillings per ton for any distance=. - - (2) =Slow Service=, corresponding with the present service “per - goods train,” the charge for which will be an average of =one - shilling and sixpence per ton for any distance=. - -For both these services stamps will be issued of various denominations, -and applied in manner now in use for the Parcels Post, with any -necessary modification; for instance, the stamps might be affixed to -consignment notes in the case of goods in bulk, or other suitable -arrangements might be made for large quantities of goods. - -For the _slow_ goods traffic a regular service of goods trains will -be organised so that at every town or village in the United Kingdom -served by rail there may be at least one delivery and one collection -daily, more populous places, of course, having more frequent services. - -For the _fast_ goods traffic a similar regular service will be -organised, and in cases where the traffic will warrant it special fast -goods trains will be run; otherwise the goods will be carried by the -passenger trains. - -In course of time provision should be made for all trunk lines to have -at least two double lines of rails, upon one of which fast trains -for passengers and goods will run at uniform speeds, and at regular -intervals, and upon the other the local trains and slow goods trains, -also at uniform speed and at regular intervals. - -The present complicated system of differential rates, which vary not -only according to distance but also according to the nature, quality -and value of goods, and involving different rates, amounting in number -literally to millions, would be swept away, the only variations in -rates being in respect of such obvious matters as weight, size, whether -carried in bulk or in packages, in open trucks or closed, whether -requiring special care or labour in packing or otherwise. The average -rates proposed would, it is believed, admit of a uniform rate for any -distance for minerals and other goods carried in bulk in open trucks, -of no more than the lowest rate now in force, by charging higher rates -for goods requiring closed trucks and more labour in handling, still -higher rates for goods of abnormal size or weight, and higher rates -still for single small parcels, on account of greater proportionate -expense of handling. For the small single parcels the rate might be -for slow service as much as 6d. for any weight up to 1cwt. (equal to -10s. per ton), and for fast service say 1s., or possibly more, for any -weight up to 1cwt., the weight being graduated downwards for parcels -of greater weight as are the rates now in force for letter and parcels -post. The goods traffic would be in effect an extension of the present -parcels post, the present rates for which would probably be capable of -very substantial reduction. - -These figures are put forward by way of suggestion only, and the -question of terminal charges and fees for loading and unloading may -have to be taken into account. Numerous details must necessarily be -gone into in fixing an average uniform rate, and it is very likely -that considerable modifications may be found necessary. Any such -modifications, however, must be based upon the three rules set out on -page 30 in order that the scheme may effect its object. - - -FOOTNOTES - -[1] For reasons of these modifications of the present practice in -National and Municipal Trading see Chapter IV., pp. 33-41. - - - - -CHAPTER II. - -ADVANTAGES OF THE SCHEME. - - -If this scheme is practicable financially (and one object of this -pamphlet is to prove that this is so), then it seems almost superfluous -to point out the great advantages of its adoption. - -It has been well said that “=transport is the life-blood of a nation=.” -If circulation is impeded or restricted the whole country must suffer, -and, conversely, if all obstructions and restrictions are removed the -whole country must benefit. This scheme will, in effect, remove the -principal obstruction to free circulation of passengers and goods, -namely, expense. Cheapness of transport is “twice blessed; it blesseth -him that gives and him that takes”--in other words, it enables the -producer, whether agriculturist, manufacturer or merchant, to increase -his market for goods, and enables the consumer who requires those goods -to purchase at a lower price. It is common knowledge that agriculture -in particular in this country is hampered and restricted by heavy -charges for freight.[2] Under our present system the carriage of -goods from abroad to London is cheaper than from the Midlands, and -the foreigner has a great preference (so far as freight is concerned) -over our own farmers. Fruit and fish is often thrown away on account -of the cost of carriage being more than the value of the goods. On the -other hand, the price of food and every commodity has been gradually -increasing. With the removal of this obstruction of expense of carriage -there must be an increase in the supply of goods, and increased supply -means lower prices. - -As to passenger traffic, traders will appreciate the great benefit of -nominal fares for themselves and their commercial travellers. So also -will the greater part of the population, namely, those of very moderate -means who are now prevented, solely on account of expense, from -travelling any considerable distance, either on business or pleasure, -or from visiting friends and relatives. - -These are some of the general advantages attending cheapness of -transport, but it may be as well to point out in detail some of the -very substantial economies and other special advantages to be obtained -by adopting the proposed scheme. - - -1. ECONOMICAL ADVANTAGES. - -A few examples of the waste attending the present system, both of money -and time will illustrate some of these advantages. - -=In the Strand, London=, within a few yards of each other, are the -following premises:-- - - No. 168, Strand.--The Strand Station of the Piccadilly and - Finsbury Park Tube Railway. - - No. 170, Strand.--Great Western Railway Receiving Office. - - No. 173-4, Strand.--East Strand Post Office. - - No. 179, Strand.--Great Northern Railway Receiving Office. - - No. 4, Norfolk Street, Strand, almost adjoining No. 179, - Strand.--Inland Revenue Office. - - No. 183, Strand.--Midland Railway and London and North Western - Railway Receiving Office. - -Within sight, at the other end of Norfolk Street, is the Temple Station -District Railway, and at 6, Catherine Street, about the same distance -from the other side of the Strand, is a Labour Exchange. - -It is assumed that the rents of shops in the Strand would average -about £500 per annum. Under the proposed scheme, the whole of the -business transacted at the above eight premises could, with greater -convenience, be carried on at the two railway stations, possibly with -some extensions, but with a saving not only of rent but also of rates, -taxes and other outgoings. - -=At Bexhill-on-Sea=, with a population of only about 15,500, there -are two large railway stations, one belonging to the South Eastern & -Chatham Railway Company, the other to the London, Brighton & South -Coast Railway Company, and situate about a mile apart. Half a mile -from each is the Head Post Office, within a few doors from one of -the stations is a branch Post Office, and within a small radius are -Government offices for Inland Revenue and other purposes. - -Letters posted at a pillar box outside the station are collected -there, taken to the Head Post Office for sorting, then returned with -others to the railway for the Mail train leaving the same station. The -majority of the passengers are for London, and go by the two different -routes, but the fares are identical, and the time occupied is about the -same, no advantage being gained by the public through the so-called -competition. - -If both stations were amalgamated one staff only would be required, -there would be ample room on the premises to accommodate the Head Post -Office with sorting rooms, etc. (the branch office now near the station -would not be required), and there would be plenty of room also for the -Government Offices. In addition to the saving of expense, there would -also be the great convenience and saving of time in the transport of, -and dealing with, mails, passengers and goods. - -These two examples with many others have come under my personal -observation, and they may be multiplied ten thousand times throughout -the United Kingdom. Where is there a railway station, whether a great -London terminus, or small provincial station, where postal facilities -are available; while just outside rents are paid, in some cases very -heavy ones, for other premises, to and from which the mails have to be -conveyed? - -Other examples of waste under the present system, although not so -apparent to the public, are well-known to the railway expert, and -involve much greater expenditure of time and money. - -I refer in particular to the =waste of rolling stock=, especially of -goods wagons, occasioned by the multiplicity of goods stations, the -transfer of rolling stock to and from the lines of different railway -companies, the shunting of trains, and the large number of road vans -used by the various companies. In London alone there are 74 goods -stations, used for goods only, and 700 goods trains per day travel -between these 74 stations, doing nothing but transferring goods from -one of these stations to another! Goods consigned to one warehouse in -London from places on, say, seven different railway companies’ lines -are sent by seven different vans, one belonging to each company. Under -my proposed scheme one or two central goods stations of large area -would not only suffice, but would provide a far more efficient and -speedy transport service, and yet with the nominal rates referred to. - -Under the present system goods trains, having been unloaded, must be -returned in order to clear the line, so that it is not uncommon to -find goods trains belonging to the various companies returning empty -for long distances on each line, on the G. W. R. as far as Bristol, on -the S. W. R. to Basingstoke, on the G. C. R. to Banbury, and so on. -It has been estimated that of the 1,400,000 goods wagons now on the -railways of the United Kingdom, no more than 3 per cent. are actually -in effective use at one time, the remaining 97 per cent. being either -stationary or running empty![3] One reason for this, no doubt, is the -use of merely hand labour for loading and unloading. - -With a view to avoiding this waste the New Transport Company, Limited -was registered in 1908, for the purpose of introducing new and -ingenious machinery, invented by Mr. A. W. Gattie and Mr. A. G. Seaman, -for handling goods, including the adoption of movable “containers” on -trucks and wagons, and a scheme for a “Goods Clearing House” occupying -a site of about 30 acres, in Clerkenwell, to be connected by rail with -all the lines coming to London. - -It is, of course, necessary, in order to carry so important a scheme -into effect to negotiate with all the various railway companies -interested, as well as to obtain an Act of Parliament. Besides this, -a large amount of capital is required for the acquisition of the -site, the construction of the connecting lines, installation of the -machinery, etc. - -Notwithstanding the large cost, estimated by Mr. Edgar Harper, F.S.S., -late Statistical Officer of the London County Council, at £14,000,000, -he shows that such a system would more than pay for itself in a year by -the economies in transport which it would effect directly or indirectly. - -No estimate, however, is given, nor probably can be given by anyone, of -the time that will be occupied in carrying such a scheme into effect, -so long as this present system of numerous companies and conflicting -interests continues. Five years have already gone by since the Company -was registered. - -If, however, the scheme of nationalisation and amalgamation with the -Post Office be adopted, there should be no difficulty in providing as -part of such scheme for the system and machinery of the New Transport -Company already referred to, not only in London but in every other -traffic centre. It might also be possible to avoid the expense of -acquiring a new site for a “Goods Clearing House” by utilising some -portion of the large area occupied by the three large termini and -approaches thereto of King’s Cross, St. Pancras and Euston. - -There will then be no conflicting interests, no multiplicity of -companies, and no difficulty in raising the necessary capital for -establishing the system, and what is still more important, no -difficulty, as will be shown hereafter under the heading of “Finance,” -in producing the necessary revenue to repay the capital and interest, -by reason of the progressively increasing traffic which will result -from the adoption of the small uniform average rates advocated. - -The following, then, are some of the very substantial economies which -will be effected by my scheme:-- - -=I. Expenditure which would be entirely abolished=:-- - - (_a_) The Railway Clearing House, the sole object of which - is to apportion receipts and payments between the various - companies, about 217 in number, and requiring for its work a - large and expensive staff, not only of clerks, but also of - inspectors at every junction, and a large establishment at - Seymour Street, Euston. - - (_b_) The separate Boards of Directors, officers, and clerical - staff of all the separate companies. - - (_c_) The legal and parliamentary expenses incurred in disputes - between the various companies, and in opposing rival companies’ - new lines. - - (_d_) Advertisements by rival companies of their own routes. - -=II. Expenditure and waste which would be diminished=:-- - - =1. By reason of unification of systems.= - - (_a_) Competing receiving offices and their staffs would be - reduced to one in each locality. - - (_b_) Rolling stock, which is now often idle because owned - by different companies, could be used solely according to - the requirements of the traffic. - - (_c_) Competing trains now running on different lines at - the same time between London and other large towns could be - run at different times with largely increased numbers of - passengers at same cost. - - (_d_) Adjoining stations belonging to competing companies - would be amalgamated. - - =2. By reason of the adoption of uniform rates and fares.= - - (_a_) The abolition of the elaborate book-keeping and - staffs needful for the present complicated system of - passengers’ fares and goods rates, especially the latter, - with the waste not only of expense but also of time. - - (_b_) The saving of the expense of printing and advertising - various priced tickets and fare tables, also of the large - staff of booking clerks, inspectors and others. - - (_c_) The saving of the legal expenses now incurred by the - Railway and Canal Commission Court in appeals and disputes - between the companies and traders as to rates, etc. - - =3. By reason of the amalgamation of railways with the Post Office.= - - (_a_) The rent and expenses of numerous Post Offices in - the neighbourhood of railway stations would be saved, all - stations being used for postal purposes. - - (_b_) All postal sorting and other offices could be situate - on railway premises in or near the stations, and besides - thus saving the rent would be in closer touch with the - railway. - - (_c_) The whole of the railway tracks would be available - without rent for laying of telegraph and telephone wires, - either over or underground. - - (_d_) Surplus land of the railways, in particular where - adjoining to stations, would be available for other - Government purposes, such as Inland Revenue Offices, Labour - Exchanges, Military, Naval or Civil Service purposes, - Police Stations, Fire Stations, County Courts, Police - Courts, Land Courts, as well as Courts for dealing with - questions arising out of the railways themselves. - - -2. GENERAL ADVANTAGES. - -Unification enables each part of the country to have as good a -service of trains as every other part, notwithstanding differences of -population and resources. The Companies now operating on the South -Coast cannot provide so good a service as the Northern Companies owing -to the lack of the great mining and industrial centres which are served -by the latter. - -One of the most conspicuous examples of this is =Ireland=. A Royal -Commission was sitting for many years on the question of Irish -railways, and ultimately reported in favour of State acquisition. Even -this, it is clear, would not entirely solve the difficulty, which -arises from the natural causes of being an island with (compared to the -rest of Great Britain) a small population, mostly agricultural. If, -however, the Irish railways were amalgamated with all the others of -the United Kingdom under the proposed scheme the problem is solved. In -the estimate given in considering the finance of the scheme the Irish -railways are included. - -The conversion of the railway system into Government property will, -apart from the question of economy already referred to, provide a most -important advantage to the State. For example, the War Office can make -use of the railway system, not only for the purposes of transport, but -for the erection on surplus land throughout the country of barracks, -stores, and other buildings, for wireless telegraph stations and for -aviation purposes. The Admiralty will have the use of the great docks -and wharves now owned by railways. The Civil Service will also find -ample space for additional office accommodation, often in the most -convenient spots both in town and country. - -Still more important even than these advantages is the fact that by the -removal of all money restrictions from transport, not only an immediate -but a =progressive increase of traffic= will result. That this will be -so is shown hereafter when considering the question of the finance of -the scheme, but it is referred to here as one of the most important -advantages of the scheme, apart from the benefits to the nation already -referred to of free circulation of passengers and goods. - -In the first place, the increase of traffic will require in all -probability the whole of the staff now employed, who would otherwise -be thrown out of employment by reason of the economies referred to -above. It will be noticed that in the estimates given under the -heading of “Finance of the Scheme” no decrease, but on the contrary, -a slight increase has been estimated for in the working expenses, -notwithstanding the enormous saving to be anticipated by the abolition -and reduction of wasteful expenditure under the present system. My -reason for so doing is partly to err on the side of caution in the -estimates, but also to provide for the probability of having to retain -the whole of the existing staff, and possibly increasing their wages -and reducing their hours of labour. Most of the economies referred to -must necessarily be effected gradually; for instance, the clerical -staffs of the various railway companies and of the Railway Clearing -House would be required for some considerable time in the process -of winding-up, and by the time this is finished the traffic will -have still further increased and their work will then be required in -the more necessary departments of, say, the Goods Clearing Houses -throughout the country. - -Secondly, the progressive increase of traffic will produce a -corresponding increase of revenue which will be available for -extensions and additions, for electrification of lines, and other -improvements in means of transport, and ultimately even in still -further reduction in charges, but last and by no means least in the -adoption of appliances and inventions for the safety of life and limb -both of passengers and railway servants. - -Unlike the present companies, the Government will have no difficulty -in raising the capital required for any such purposes, and in relying -upon the inevitable increase of traffic, as now is the case of the Post -Office, for repayment. - -Take the case of automatic couplings. These were invented 40 years -ago[4] and their adoption has been urged on the companies ever since, -not only on the merciful ground of saving life and limb, but also on -the financial ground of saving waste of time in shunting; but the -initial expense of fitting these to every truck and carriage has been -too much for the directors of the Companies to risk. - -Many inventions for automatic signalling, instantaneous brakes, and -other life-saving appliances have been from time to time submitted to -railway companies, but the initial expense of installation throughout -the many miles of railway of each company has been so great that one -hardly wonders at the hesitation of directors in laying out money -belonging to the shareholders, especially when, notwithstanding a small -normal increase of traffic, the working expenses have increased to a -greater degree. - - -FOOTNOTES - -[2] See “The Rural Problem,” by H. D. Harben (Constable & Co., 1913, -2s. 6d.). Mr. Balfour Browne, K.C., also, in addressing the London -Chamber of Commerce, February, 1897, said, “I am not exaggerating when -I say that the Agricultural question … is nothing else but a question -of Railway Rates.” - -[3] Lecture by A. W. Gattie, at London School of Economics, 11th March, -1913. - -[4] “Mammon’s Victims,” by T. A. Brocklebank, published by C. W. -Daniel, 1911--Price 6d. - - - - -CHAPTER III. - -THE PRINCIPLES UPON WHICH THE SCHEME IS BASED. - - -At first sight it seems preposterous that the fare =from London to -Glasgow should be only one shilling=, the same as from London to -Brighton, or that the fare of one penny from Mansion House to Victoria -should be the same as from Victoria to Croydon. To a railway expert it -will doubtless appear still more preposterous that the rate for a ton -of iron-ore should be the same as for a ton of manufactured iron, and -that the rate for general merchandise should be as low as 1s. 6d. per -ton for any distance; and yet it is now considered a matter of course -that the rate of 1d. for 4 ozs. for a letter from London to Londonderry -should be the same as from one part of London to another, or 3d. for 1 -lb. should be the rate by parcel post for any distance great or small, -and irrespective of what the contents of the parcel may be. - -The system of charging for transport =according to distance=, which is -still in force throughout the civilised world, except in the Postal -Service, appears to me to be =founded on a wrong principle=. It has -no doubt been adopted on the assumption that the greater the cost of -production the greater should be the charge, and, therefore, that as it -costs more to build 100 miles of railway than one mile, and takes more -coal or electric current to haul a train for 100 miles than for one -mile, it is necessary to charge more for the longer distance. Even the -Post Office still clings to the same idea, in charging higher rates for -the telephone trunk service according to distance, although the charges -for telegrams are the same for any distance! It is significant that -whereas the net profits from railways remain more or less stationary, -that of the Post Office with uniform rates continually increases, and -that the telephone system with charges according to distance is so far -the least satisfactory branch of the Post Office. - -It is no doubt a general rule that the price of an article depends upon -the cost of production, but when dealing with transport the analogy -fails. In the case of a national system of railways the provision of -a regular service of trains to and from all parts of the country is -a necessity. Such a service requires that trains must run at stated -intervals advertised beforehand from one terminus to another, say from -A to Z, with various stopping places between those points, which may -be represented by other letters of the alphabet. The cost of running -each train will be the same, whether it contains 20 passengers or 200, -whether some or all of the passengers alight from or board the train at -any intermediate station or at either terminus. Therefore, the actual -cost of carrying a passenger from A to Z is not, in fact, more than -from A to B, or from M to Z. - -The same consideration applies to goods with even greater force. With -goods the cost of handling them has to be considered, as well as the -cost of haulage. If goods are sent from A to B only they must be -handled twice, and this is no more than if they are sent from A to Z, -assuming there is no need for change of trucks. - -In the case of goods under the present system there is a further -principle acted upon, which is still more obviously a wrong one, -_viz._, what is known as charging =according to “what the traffic -will bear.”= This term is well known to all railway experts, and is a -convenient way of explaining the reasons governing the various rates -under the present system. For instance, if too high a rate is charged -for goods of comparatively small value, traders prefer to send by -the cheaper modes, namely, by sea or by road, and in many cases it -would not be worth while to send at all, whereas in the case of an -article like silk or bullion of considerable value the extra cost of -carriage even at a high rate would not add appreciably to the price. -Therefore, the railway companies are compelled to make lower charges -for low-priced goods, otherwise they would lose the traffic altogether. -Accordingly there are such anomalies as a higher rate for the carriage -of manufactured iron than of iron-ore for the same distance, although -the cost of trucks, of haulage, and of handling may be identical. -Again, the rate for carriage of meat from the Midlands to London is -greater than that from Liverpool to London, partly on account of the -competition of the sea, and partly on account of the large consignments -of foreign meat. Again, the rate for the carriage of bricks from -one part of London to another is greater than from Peterborough to -London, because Peterborough is in a brick-producing district. These -inconsistencies and anomalies are intensified by the necessity of the -goods having to be carried over the lines of several different railway -companies, all of whom must receive some profit out of the carriage of -the goods, in addition to the actual cost. - -It is quite clear that the actual cost of haulage for the same distance -of say a ton of coal is no more than that of a ton of bricks or of -manufactured iron, or of sand, or of a pantechnicon full of furniture, -all of which can be carried in open trucks, yet the rates for all these -various goods, even for the same distance, differ widely from each -other under the present system, and differ again not only according to -distance but actually according to the different towns between which -the service is rendered. Many examples of the present anomalies are -strikingly shown by Mr. Emil Davies in his book, “The Case for Railway -Nationalisation,”[5] which should be read by all interested in the -subject. - -Now assume that the whole of the various existing railways are -amalgamated; that Main line trains both for goods and passengers run -at regular intervals to and from the principal towns; that Local -trains run from station to station and on branch lines also at regular -intervals, connecting at junctions with Main line trains; that just as -there are now regular times for delivery and collections of letters -and parcels by post, varying in number according to the population of -each locality, so there are regular collections and deliveries of goods -to and from every town and village in the United Kingdom; and that a -uniform rate, no more than, or even less than, the smallest rate now -charged, is all that has to be paid. It is true that with such a system -at many of the smaller places the actual expense of collection and -delivery may, indeed, be “more than the traffic would bear,” certainly -much more than the Directors of a railway company would feel warranted -in risking under the present system with their necessarily limited -area, but when these smaller places are part of such a system as is -here described, extending to every town in the United Kingdom, then the -whole becomes self-supporting, and there is no advantage in charging, -either according to distance, or according to “what the traffic will -bear.” - -Every little village Post Office in the United Kingdom is an -object-lesson to us. Here we have all the resources of civilisation, -letter and parcel post, telegraph, telephone, savings bank, money -orders, all provided at exactly the same rate as in the largest Cities -of the Empire. Although the actual expense of each village Post Office -taken by itself is out of all proportion to the population of the -district, the combination of all of them in one national unified system -enables these remote villages to benefit, not only with no financial -loss to the nation, but actually with a handsome net profit which has -actually contributed to the general revenue of the nation. This was not -contemplated when the Penny Post was established, and is a practice -which, in my view, is a great mistake, as explained in Chapter IV. - -The same principle has been applied to the ordinary roads of the -country, which are now open free of charge to the whole population, -although many of this generation can still remember the restrictions of -the old toll-gates. - -It is only applying the same principle to the nation which applies -to the human body. “The body is not one member, but many.… Whether -one member suffers, all the members suffer with it, or one member be -honoured, all the members rejoice with it.” - -If from any cause, such as a flood or other physical disturbance -a small industrial or agricultural district were cut off from all -communication with the rest of the Country, it is not only that -district but also the whole of the Country which suffers loss, namely, -the loss of trade with that district. And if by reason of high rates -the remote towns, villages, and districts, as well as those nearer -to great centres, are prevented from obtaining an outlet for their -produce, the whole Country suffers. The converse is equally true: -as soon as free circulation of passengers and goods is provided, -the prosperity of the whole Country as well as of each district is -increased. - -This, then, is the principle upon which the scheme of uniform fares -and rates is founded, as opposed to the existing system of charging -according to distance and according to “what the traffic will bear.” -There remains, however, to be considered the principle upon which the -particular uniform fares and rates mentioned on the title page have -been suggested for the proposed scheme. These have not been selected -at haphazard, but in accordance with three rules which, I believe, are -founded upon a sound principle, namely:-- - - =(1) That any flat rate to be successful must not exceed the - minimum rate in force prior to the adoption of the scheme=; - - =(2) That there should result from the change a sufficient - increase of traffic to produce at least the same net revenue as - before=; - - =(3) That in a system of transport the fares and rates should - vary, not according to distance travelled, but according to - speed of service.= - -In accordance with these rules I take =for Passenger Traffic= first -the present minimum railway fare now charged, that is, 1d. for short -distances of one mile or under. If the flat rate were fixed at say -2d., or, indeed, any sum over 1d., passengers who now pay that sum -would have to pay at least double the existing fare; this would, of -course, render the whole scheme impracticable. On the other hand, under -a flat rate of 1d. throughout the whole country the receipts would -not be sufficient to produce the present revenue unless and until the -number of passengers carried should increase by as much as six or seven -times. That this is so is clear when it is remembered that the =present -average railway fare for the whole of the United Kingdom= (allowing -for season ticket holders), =is 6½d.= In other words, if all the -passengers now travelling would pay 6½d. for every journey, both for -short ones, as from Mansion House to Charing Cross, and long ones, as -from London to Londonderry, then the same gross revenue from passengers -would be obtained as now; or, on the other hand, if a flat rate of 1d. -any distance were fixed, and the number of passenger journeys were -increased by six-and-a-half times as a result of this great reduction, -then, again, the same gross revenue would be obtained. The first of -these alternatives is, of course, impracticable, and the second one is -certainly not likely to be attained for some time to come, and even -then account would have to be taken of the additional working expenses -occasioned by so large an increase of traffic. It is on account of -these difficulties that any system of uniform fares has hitherto been -regarded as impracticable. - -The solution of this problem was suggested to me by the practice of -the Post Office of charging 3d. for express delivery, and 6d. for a -telegram. Here we have the third rule before referred to of charging -according to speed of service. Applying this to railways, and again -searching for the lowest fares now charged for fast Main line trains, -it will be observed that these are the regular cheap excursion fares of -2s. 6d. from London to Brighton or Southend and back, which amounts to -1s. 3d. each way. It is true that these are exceptionally cheap fares. -Return tickets only are issued at this price, available by certain -trains only, but on the principle already laid down that the flat -rate must not exceed the lowest, this forms the basis of the proposed -uniform fare of 1s. for Main line trains. Although this uniform fare -is so exceptionally low, it is still nearly double the present average -fare, and it is precisely on the Main line trains that increase of -traffic (now restricted by expense) is sure to take place. These facts -(as will appear in the chapter, “Finance of the Scheme”) enable me to -estimate the increase of passenger traffic required to make up the -present gross revenue at only 15 per cent. of the present number of -passengers carried. - -=For goods traffic= the uniform rates suggested have been ascertained -in accordance with the same rules. It is more difficult to ascertain -the present minimum owing to the enormous complication of goods rates. - -Under the present system, goods are divided into eight different -classes according to the rate charged, and a maximum rate is fixed by -law for each class. In the lowest of these classes the rates vary from -one penny and a fraction up to 4d. per ton per mile for any distance -up to 20 miles, and smaller proportionate rates for distances over 20 -miles. But although these are the greatest amounts that the companies -may charge for this class of goods, they do make special rates of -considerably lower amounts for special kinds of goods. It is estimated -that five-sevenths of all the goods carried are charged according to -special rates not included in the eight classes mentioned. - -The Board of Trade returns give the totals of two classes of goods -only, namely, “minerals,” of which 410 million tons are carried, and -“general merchandise,” of which only 116 million tons are carried. -These returns are possibly misleading as, although derived from returns -made by the several companies themselves, it may be that those returns -include the same goods sent over different lines. - -For the purposes of my estimates, however, I have assumed that the -Board of Trade returns are correct, and if they are so, the average -charge for “minerals” is now about 1s. 6d. per ton, and for “general -merchandise” about 6s. per ton. Taking the two classes of goods traffic -together, as representing what under my scheme will be the “slow goods -traffic,” =the average is only 2s. 4d. per ton=. - -The average rate of 1s. 6d. per ton has been suggested for the slow -service because it is believed that this average will allow of a rate -for all goods in open trucks as small as the lowest rate now charged -for minerals for short distances, the average being maintained by -higher rates chargeable for other kinds of goods as already described. -If the actual tonnage of goods carried is really less than that -mentioned in the official returns (it cannot be more), it may be found -necessary to fix a somewhat higher uniform rate, and the estimates may -be affected to a certain degree. The figures, especially those relating -to goods traffic, are put forward by way of suggestion only, and there -should be no difficulty in ascertaining a uniform rate in accordance -with the rules already stated. - -It is believed that any difficulty in this respect will be solved by -the large accession of traffic by Fast service, which, as with Main -line passengers, is sure to follow the adoption of the scheme. - -The average rate for “fast” service has been obtained by ascertaining -the lowest rate now charged for goods carried “per passenger train.” -This appears to be the rate for returned empties for any distance up -to 25 miles, namely, 6d. per cwt. (equals 10s. per ton). There is -also a charge of £1 for a load not exceeding 2 1/2 tons on carriage -trucks attached to a passenger train for a distance of 40 miles, and -thereafter at 6d. a mile. It is evident that an average of 10s. per ton -would allow of a still smaller rate than that amount for goods carried -in bulk and in large consignments. - - -FOOTNOTES - -[5] “The Case for Railway Nationalisation” by Emil Davies, published by -Collins, 1913--Price 1s. - - - - -CHAPTER IV. - -OBJECTIONS TO THE SCHEME. - - -I now propose to consider objections which may be raised to the -proposed scheme. - -I anticipate opposition from those who object to all forms of =State -Ownership= or State Management. - -The late Lord Avebury was one of the most prominent opponents of -nationalisation, and his views are set out in his book “On Municipal -and National Trading.”[6] - -Mr. Edwin A. Pratt has written several books on the subject and has -recently collected all the arguments up to date against State Ownership -in his book, “The Case against Railway Nationalisation,”[7] In this -book examples are given of the experience of foreign countries and the -Colonies where railways have been taken over by the State. - -Other writers who have advocated the retention of our present system, -and are quoted with approval by Lord Avebury, are the following:-- - - Messrs. G. Foxwell and T. C. Farrer (now Lord Farrer), in - “Express Trains, English and Foreign.” (1889); - - Mr. W. M. Acworth, in “The Railways and the Traders”; - - Mr. H. R. Meyer, in “Government Regulation of Railway Rates,” - and in “Railway Rates”; - - and Lord Farrer and Mr. Giffin, in “The State in its Relation - to Trade.” - -On the other side, the following, among other advocates of railway -nationalisation have shown the great advantages to be anticipated by -such a measure, and have given very cogent answers to the objections of -the opponents, namely:-- - - Mr. William Cunningham, “Railway Nationalisation.” (Published - by himself at Dunfermline, 1906, 2s. 6d.); - - Mr. Clement Edwards, M.P., “Railway Nationalisation.” (Methuen - & Co., 1907, 2s. 6d.); - - and Mr. Emil Davies in several books, including his latest, - already referred to, “The Case for Railway Nationalisation.” - (Collins, 1913, 1s.) - -But in all these books, and in other books and articles, both for and -against nationalisation, it has been assumed that if, and when, the -railways are acquired by the State, the same system will obtain as now, -and as obtains in the case of all the foreign countries and colonies -referred to, namely, =to charge according to distance and according to -“what the traffic will bear,” and with the primary object of making the -most profit=. - -With very great deference to all these distinguished writers, it -appears to me that they have one and all overlooked the fundamental -principles which should be acted upon by a State or a Municipality -first in deciding whether or not to acquire a monopoly, and secondly, -in the administration of it when acquired. These principles depend upon -=the fundamental difference between the objects in view, and actuating -a Company or individual on the one hand and a Nation or Municipality -on the other in acquiring a monopoly=. In the former case the =sole -object= is that of =pecuniary gain or profit=; in the latter the =sole -object= is, or ought to be, the =benefit of the community=. It may -be said that these are not respectively the sole objects, but only -the =primary objects=. My reply is that in the case of the company it -is the duty of the directors, as trustees for the shareholders, to -so carry on the business in question as to produce the most profit, -irrespective of any benefit to the community, or, indeed, to any -persons other than the shareholders. Railway companies, it is true, -provide the benefit of transport, and various advantages held out by -the companies as inducements to use their particular lines, but these -are, of course, solely offered with the view of increasing the profits. -Other advantages for the comfort, safety and benefit of the public -are provided under compulsion from the Government, as a condition -of the grant of privileges and compulsory powers conferred upon the -companies, without which the railways could not have been made. I refer -to such matters as rules and regulations for the safety and benefit of -the public; workmen’s trains; maximum fares and rates allowed to be -charged; provision for at least one train a day at all stations, etc. - -Conversely, in the case of a Nation or Municipality taking over a -monopoly, it is the duty of the Government Department or Town Council -to so carry on the business as to render the most efficient service, -at the lowest cost consistent with efficiency, with paying for the -cost of acquisition and with paying the working expenses. Advocates -of nationalisation urge that profits should be applied in reduction -of taxation, and suggest that this is in itself one of the benefits -to be derived therefrom. Opponents always assume that national and -municipal trading must be carried on with a view to profit, and some -even ridicule the idea that any trading concern can be successfully -carried on unless with this view and with a resulting profit. -Acrimonious discussions have taken place as to whether profits which -have been claimed by advocates of municipal trading to have been made -by tramways, gas, water and electricity works, are only paper profits -as alleged by the opponents. In Lord Avebury’s book already referred -to,[8] one whole chapter, headed “Loss and Profit,” treats of the -question whether municipal enterprises have been profitable or not, -and he adduces many examples to prove that in most cases the alleged -profits are imaginary. - -It has, in fact, been the practice universally to apply profits made -out of municipal trading in this Country in reduction of rates, and -in foreign Countries, where railways are owned by the State, their -revenues are made use of either as general revenue or, as in Prussia, -for social or educational purposes, which would otherwise be provided -for by direct taxation. The only instance of national trading in -this Country is the General Post Office, and I think it is correct -to say that the original intention when Penny Post was established -was to so carry it on that working expenses only should be covered -by the revenue. In practice, the gross revenue is entered with other -items of revenue in the National Accounts, and the gross expenditure -with other items of general and non-productive expenditure, with the -result that the net profits of the Post Office, in effect, become a -source of general revenue, and are therefore applied in reduction of -general taxation. Until recent years this net profit has not been -considerable, but last year it was as much as £5,000,000. Having regard -to the continual and progressive increase in postal business, and the -acquisition of the whole telephone system, there is every prospect of -still further increase in net profits. What will be the result of a -continuance of this practice of applying net profits of Municipal and -National trading towards reduction of rates and taxes? It has not, so -far, had any very serious result, simply on account of the fact that -such net profits have not yet been of a very startling amount. But if -these profits should increase, will not the result be the very evils -which are the natural consequence of a private monopoly? - -Once the principle is admitted that profits from such trading shall go -in relief of taxation, the service will, and must, be worked more or -less with the primary object of making as much profit as possible, with -the inevitable result that the service in question will be starved for -the sake of the profits. This has actually happened in the case of the -Prussian State Railways, the one State Railway which has so far made -the greatest net profit. - -In addition to this difficulty there are others inherent in State or -Municipal trading, if the principle of making profits be admitted, and -if profits are actually made. In such a case the Chancellor of the -Exchequer will be expected to budget for further profits, the general -public will expect improvements in the service, traders will expect -that the charges to them should be reduced, and the workers will expect -that their wages should be increased. - -This view is not a new one. It has been advocated in respect of the -Post Office for many years by such well-known postal reformers as Lord -Eversley (formerly Mr. Shaw Lefevre), and Sir Henniker Heaton, Bart. -The latter, I believe, has several times moved resolutions in the House -of Commons for the express purpose of having the postal profit applied -to the use of the Post Office itself, instead of to general revenue. - -It is well known that “=strikes=” are more likely to arise in a period -of trade prosperity. It is the natural result of the workers seeing -large profits made out of their industry, if they should have no -benefit, by increase of wages, by sharing in such profits or otherwise. -It makes but little difference to the workers that those profits go to -ratepayers, instead of to shareholders, more especially as they usually -inhabit houses let on weekly inclusive rentals, and are exempt from -income-tax, so that they do not directly pay either rates or taxes. If, -on the other hand, the profits are devoted to improving the efficiency -of the service or cheapening the charges, then, not only are there no -profits to excite the cupidity of various sections of the community, -but the workers do, in fact, benefit by themselves and their families, -as well as the whole of the public for whom the services are worked. No -strike is ever successful which does not gain general public support, -and even under existing conditions there is much less likelihood of -strikes in the case of Civil Servants or postal or municipal employees, -partly on account of the better wages paid, the certainty of continuing -in employment except for misconduct, and the prospects of a pension, -but still more on account of the practical certainty that public -support would not be given to a strike which interferes with one of the -most important of the public services.[9] - -Another evil of ignoring the difference in principle of a public -monopoly and a private monopoly has been the practice of applying to -public monopolies the practice which all private monopolies endeavour -to achieve (and properly so as their sole object is profit), namely, -to put down all possible competition. If the principle I advocate, -namely, that the =sole object of a public monopoly is the benefit of -the community=, then if some improvement in the service, the subject of -such monopoly, shall be invented, which is proved to be practicable, -the public should have the benefit of such improvement, and, =instead -of a prohibition of such private enterprise every encouragement should -be given= to it. - -In our Navy, when new inventions are found which increase its -efficiency, no time or money is lost in adopting them, even at the -expense of discarding comparatively modern men-of-war or appliances. -The risk to the nation of not doing so is too great to allow -considerations of expense to stand in the way. - -But what has happened in the case of so important a commercial matter -as the Telephone? The Post Office are authorised by Act of Parliament -to forbid any competition, a provision evidently enacted under the -impression that a public monopoly must have Statutory protection -against competition, which a private monopoly always seeks to obtain, -but has to pay for. Having this monopoly, and having purchased the -telegraphs, the Post Office from the first regarded telephones with -the utmost jealousy, because it seemed likely to interfere with its -“Profits”! Lord Avebury quotes from “The Times” of 13th June, 1884, as -follows:--[10] - - “… the action of the Post Office has been so directed as to - throw every possible difficulty in the way of the development - of the telephone, and of its constant employment by the - public. We say advisedly, ‘every possible difficulty,’ because - the regulations under which licences have been granted to - the telephone companies are in many respects as completely - prohibitory as an absolute refusal of them.” “… the effects of - this claim are nearly as disastrous to the Country as to the - inventors and owners of the instruments.” - -When it is remembered that the Post Office insisted on being paid -one-tenth, not of the profits, but of the gross receipts, the wonder -is that our telephone system is not more backward than it is. Lord -Avebury, of course, uses this and other instances, such as the -opposition of municipalities owning tramway and gas undertakings, -to tramway extensions in adjoining districts, and licences to motor -omnibuses and also to the introduction of electricity for lighting -and power, as an argument against nationalisation and municipal -trading.[11] That these constitute a strong argument against public -monopolies being worked for profit, I readily admit, but they do not -weaken the argument that all such concerns which must, in their very -nature, be incapable of effective competition, should be taken over -by the community, and be worked solely for its benefit. What possible -chance is there of competition in a telephone system? It is, of course, -an essential element to its success that each subscriber should be able -to communicate with every other one. How, then, can it ever have been -imagined that there could be any effective competition between rival -systems? And yet competition was actually attempted between various -municipalities and the National Telephone Company, and afterwards the -Post Office itself was authorised to “compete” with that Company. - -The ultimate purchase by the State was, of course, a foregone -conclusion, but at what expense of both time and money has this at -length been effected! The complaints which have been made since -the completion of this purchase are evidently the result, not of -nationalisation, but of the mistaken practice followed in a fruitless -attempt at making or retaining so-called “profits” of the telegraph -system, by at first putting “every possible difficulty” in the way of -telephones, then attempting to compete with them, and then waiting a -number of years before completing the purchase, with the result of -being compelled to take over a large number of obsolete plant and -instruments, and linking them up with a new system, thus producing a -state of confusion and useless expenditure of time and money, which -could all have been avoided by purchase of the patents and patent -rights more than 30 years ago. - -It is only right to say that Lord Avebury was still of opinion in 1907 -that the resolution of the Government to buy up the National Telephone -Company was “an extraordinary and most unfortunate policy.”[12] - -Mr. Hanbury, who was the Minister mainly responsible in 1906 for the -purchase of the telephones, had evidently changed his opinion since -1889, when, in answer to a deputation in favour of purchasing the -telephones, he said, according to a report quoted by Lord Avebury from -“The Times”:-- - - “If the telephone service was cast upon the Post Office it - would be to the detriment of both the postal and telegraph - services. Then, again, it would increase enormously the - Government staff. He need only appeal to the Members of - Parliament present to say whether they would like to have the - weekly appeals for increase of wages from those State servants - still further extended.” - -Here we have exactly one of the arguments which is now being used -against railway nationalisation, and by the very Minister who, 17 years -after, did the very thing he had clearly condemned. - -I admit the argument would hold good if the restriction be not imposed -by an inflexible rule that there should be no attempt to work the -concern, whether Post Office, telephone, railway or other monopoly for -purposes of profit. - -I have already referred to the mistake the Post Office are making in -following the example of the private monopolist, the National Telephone -Company, in charging for telephones according to distance, although -between the very same towns in which different rates are charged the -same department charges 6d. only for telegrams! This can only be with -the strange, yet futile, intention of making more profit without -regard to the benefit of the community. If the same rate were charged -for Trunk calls as for local calls, many more provincial and country -people would subscribe, and the wires being already laid and exchanges -established, the additional expense would be but small. - -It would seem, indeed, that the search after profits in the case of -Government or municipal monopolies is as futile as the search by people -after happiness, personified by Maeterlinck as “The Blue Bird,” and -that when the only object is to benefit the community, the profits -come, as does happiness, when the only object is that of benefiting -other people. - -Now, in considering the principle here laid down, it appears to me -that there are four rules which should be observed when a nation or -municipality undertakes anything in the nature of a trading concern:-- - - 1. Only such concerns should be taken over as are, and must be, - =in the very nature of things, a monopoly=, or, in other words, - are not susceptible of effective competition. - - 2. Any such concern taken over should be worked with =the sole - object in view of benefiting the community= and, therefore, - the charges made should be so adjusted as to pay for the - acquisition of the concern and for working expenses, and any - surplus from time to time applied, only in improving the - efficiency of the undertaking, or in reducing the charges made. - - 3. In the event of any invention or improvement being made, - and proved to be commercially successful, whereby the benefit - to the community can be increased, and provided the concern - remains in its nature a monopoly, such improvements should - be taken over and worked by the State or municipality, and - meantime =there should be no prohibition of any private - enterprise carried on in competition= apparent or real. - - 4. All such concerns, whether national or municipal, should be - worked or directed by one or more Department of State, having - at its head a Minister, who should be a Member of the Cabinet, - and =responsible to the House of Commons, and as such liable to - a vote of censure for any abuse or want of efficiency in the - concern=. - -As to Rule No. 1, there appears sometimes to be a very thin line -between what is, and is not, susceptible of effective competition. As -a general rule, =any concern which involves a right or easement over -land, must be in the nature of a monopoly=. Thus the supply of gas, -water and electricity, all of which must be conveyed by pipes or wires -into houses, are in the nature of a monopoly, but the fittings used in -the houses are not, but are susceptible of very efficient competition, -both as to workmanship, manufacture and design. All roads, including -railroads and tramways, are, and must be, in the nature of a monopoly, -but the manufacture of materials and rolling stock, the catering of -hotels, forming part of the railway undertakings, or in the trains -themselves, or in railway steamers, are all the subject of effective -competition and should, therefore, be put up for competition with -special supervision and restrictions against abuse of the privileges -obtained by competition on Government property. - -Now, I would ask any unprejudiced reader who has studied the writings -of the eminent authors already quoted, and other opponents of -nationalisation, to read those books again with these four rules in -his mind, and consider whether all the objections so forcibly brought -forward against nationalisation would not be very nearly, if not -completely, answered, if such nationalisation were carried out with -strict adherence to these rules. - -I venture to think that Lord Avebury himself would have admitted the -force of this contention. It would, at least, answer the question he -puts more than once, “Where, indeed, is it (municipal and national -trading) to stop? Is it to stop at all?… It is sometimes said that the -line should be drawn at necessaries. But if so, to light, gas, water -and tramways, we should have to add bread, meat, fire insurance, … -etc., while many would also add tobacco, tea and beer.”[13] - -In effect, the whole of the objections to State ownership, as will -appear from a perusal of the various books referred to above, and the -arguments of other opponents, are all comprised under three heads, -namely, according to the relationship of the State:-- - - 1. With traders. - - 2. With railway servants. - - 3. With the general public, especially on such matters as - officialism and inefficiency, owing to want of competition, bad - administration, and interference with private enterprise. - -The first of the two objections referred to is that the Government -would be in the great difficulty of having to meet the conflicting -interests of traders and merchants on the one hand, and the general -public on the other, with continual disputes as to the claims of -various parties, and possible attempts to bring influence to bear on -the Government and Members of Parliament. This objection was raised -by the Prime Minister recently in reply to a deputation supporting -railway nationalisation. The difficulty has been found in countries -where railways are State owned, and would, I admit, be a most serious -objection, if, after nationalisation, the railways should be worked on -the same principle as now, namely, with the object of making the most -profit possible, and charging according to “what the traffic will bear.” - -The objection, however, disappears if the proposed rules are adhered -to, especially when, as in the proposed scheme, fares and rates are -fixed irrespective of distance, locality, class of traders or goods, -and in which, therefore, no question of preference or, indeed, of any -conflicting interests can arise. - -As to the second heading, affecting the relationship of the State with -the railway servants. It is suggested that the railway servants (who -would, on nationalisation, become Civil servants) could use their -voting powers to exact undue privileges for themselves which they -cannot now obtain, and that serious abuses might arise owing to the -great political power exercised by a large increase in the number of -voters who are also Civil servants. - -This does not appear to me so formidable an objection as the first, but -it is quite possible that a large united body of Civil servants might -have power to so influence the Government as to extract higher wages -or less hours, if they discovered that by their exertions a very large -profit was derived by the railway system. - -Some writers have gone so far as to suggest that all persons employed -by Government should be disfranchised. Others suggest that special -representatives of Government officials should be returned to -Parliament. Others that all such officials should take the same oath -of allegiance as soldiers, and, in short, become subject to military -discipline. In two articles appearing recently in the “Westminster -Gazette,” under the title of “Unrest in the Railway World, by an -Expert,”[14] it is suggested that “unless some discipline of the -military kind were introduced” (in the event of nationalisation), -“there would be no available methods of dealing with a national strike -of railwaymen, other than to concede to their demands.” The question -of “Strikes” has already been dealt with above (page 36). As to the -political difficulty, although it is true that the number of Civil -servants would be greatly increased (and it has been estimated that -the total number of postal and railway servants who would have the -vote might be as many as 600,000), it must be remembered, as pointed -out by Mr. Emil Davies, that this number is spread over the whole -Country, and the percentages in each district, compared to the whole -number of voters, would not be a large one, except in railway centres -like Crewe, where they already have a preponderance of votes. In any -case, the same considerations which, as above mentioned, would be -likely to prevent strikes, would operate equally in the region of -politics if the four rules mentioned are adhered to, especially under -the proposed scheme, carried on with the primary object of the public -benefit. Exactly the same conditions would obtain as with the Post -Office now. - -Other grounds of objection to State ownership are:-- - - =1. The fear of inefficiency owing to lack of competition.= - - =2. The fear of difficulty in obtaining redress for loss or - injury from a Government Department.= - - =3. The fear of officialism.= - -=As to competition=, it is now generally admitted that there is no -effective competition on railways.[15] In most parts of the country -there never has been any competition, as one company only is available. -In others, where more than one company operates, working arrangements -have been made not only as to the fares and rates but also as to time -of trains, thus precluding any effective competition. In the very -nature of things no competition can be effective in a system of railway -transit. - -As to the questions of =officialism= and =difficulties of obtaining -redress=, can anyone suggest that these are less in the case of private -companies, responsible to no one but themselves, than in the case -of a Government Department with a Cabinet Minister at the head who -is responsible to Parliament? A vote of censure is one of the most -powerful weapons in Constitutional countries against any serious abuse -in a Government Department. - -Mr. Edwin A. Pratt, in his book before referred to, cannot but -admit the cogency of the argument in favour of the amalgamation and -unification of the railways, but urges that this should be accomplished -by the amalgamation of the whole of the existing railways into =a Trust -or Traffic Board=. The answer to this is that when once constituted, -even though appointed by Parliament, such a Board =is responsible to no -one but itself=, and, however eminent may be the directors or managers, -the want of ultimate responsibility inevitably and unconsciously leads -to abuses. =Can any instance be adduced of the successful working of -any such large Trust or Board?= On the other hand, instances are well -known to the contrary. One of these was the notorious Metropolitan -Board of Works. And is it certain that the Metropolitan Water Board and -the Port of London Authority, both of which are constituted on similar -lines, will answer all the expectations which were formed of them? - -There are, of course, difficulties inherent in the administration -of a great Government Department, but, as already hinted, various -remedies may be suggested for many of these difficulties. For instance, -there might be elected =a Railway Council= or Standing Committee in -Parliament, consisting of representatives of several large districts -of the United Kingdom, and of which the “Minister of Transport” would -be, ex-officio, the President. In the first instance possibly some of -the present directors of railway companies, many of whom are already -in Parliament, could be members of this Council. Any proposals for -improvements, extensions or alterations in the services of the railway -or Post Office would be submitted to and decided upon by this Council -or Committee, subject to an appeal to Parliament on questions of -principle or finance. This would be one means of obviating an objection -found in some countries where the railways are owned by the State, -namely, the continual trivial complaints made in Parliament about the -railways. - -A further suggestion is that a =special Railway Court= should be -established in London with branches in every important centre, and -presided over by competent arbitrators to determine and adjudicate upon -claims against the Department for personal injuries to passengers and -servants, or for loss of or damage to goods, or by reason of delay, -any one accident, involving a large number of claims, being dealt with -by the same Court instead of being, as now, the subject of innumerable -actions at law in the ordinary Courts. This Railway Court might also be -useful in settling disputes between the Government and the men. - - -OTHER OBJECTIONS. - -Apart from the objection to State ownership there are no doubt many -who are now deriving income from railways who will fear that their -interests may be prejudiced by the proposed change. Fortunately -=there can be but very few who will be thus prejudiced=. As to the -existing staffs, such as booking clerks and the Railway Clearing House -staff, whose services would no longer be required in those particular -departments, there ought to be more than sufficient vacancies for these -in other but more necessary branches of the railway service, especially -in view of the increased traffic which is sure to arise. - -=Many traders= who may at first sight consider that their profits would -suffer if the scheme is adopted =will find= on further consideration -=that the benefits= they will have by the proposed scheme =will be -greater= than any loss they could possibly sustain. To take one -instance. =Newspaper proprietors= may consider that upon railways -being nationalised they would lose the benefit of the extensive and -remunerative advertisements they now receive from competing railway -companies. So far from there being any loss, there will be profits, -partly by the official announcements which the Department will cause -to be inserted in all newspapers of time tables, rates, etc., but -even more so by the enormous saving in the carriage of paper and of -the newspapers, in travelling expenses of special correspondents -and others, and by the additional profits arising from increased -circulation which is sure to follow upon the increased facility and -cheapness of distribution. - -Mr. W. M. Acworth, the well-known railway expert, to whom I submitted -a rough draft of this pamphlet, was kind enough, while refraining from -any detailed criticism, to call my attention to what he considered a -difficulty in my proposals. He says: - - “The fundamental objection to a scheme of average fares and - rates is that people whose fares and goods rates are ‘averaged - up’ will, so far as possible, cease to use the trains; those - whose fares and rates are ‘averaged down’ will increase - enormously, with a corresponding increase in working expenses. - Have you appreciated that under your scheme a passenger from - London to Glasgow would, in fact, in most cases pay, not - 1s., but 3d. or 4d., by taking local tickets from London to - Birmingham, Birmingham to Crewe, etc?” - -And he instances the Hungarian zone system, which has completely broken -down, as a case in point. - -My answer to this is, first, that according to my scheme there is -no “averaging up;” the flat fares are all “averaged down” to the -minimum. Secondly, while welcoming the admission that the effect of -“averaging down” is to increase the traffic “enormously,” I am sure -that Mr. Acworth himself does not mean that the working expenses will -increase in anything like the same proportion. He has himself pointed -out in an article on railways[16] that the train cost of carrying 200 -passengers and 10 passengers is practically the same. Further reasons -for this fact are given under the heading of “Working Expenses” in this -pamphlet. Thirdly, while admitting that under my scheme a passenger -might, by taking three local trains which stop at all stations travel -from London to Glasgow for 3d., I can hardly imagine that any but the -smallest percentage of travellers would endeavour to save 9d. by taking -a journey in which they would spend sixteen hours and have two changes -at least, instead of travelling the same distance by one train, in -eight hours, for 1s. As to the zone system, the whole advantage of the -flat rate or uniform fare is lost by the difficulty of passing from one -zone to the other. - - -FOOTNOTES - -[6] “On Municipal and National Trading” by The Rt. Hon. Lord Avebury. -Published by Macmillan & Co., 1907. Price 2/6. - -[7] “The Case Against Railway Nationalisation” by Edwin A. Pratt. -Published by Collins, 1913. Price 1/-. - -[8] “On Municipal and National Trading,” pp. 56-92. - -[9] While this pamphlet has been in the Press, there has been a strike -of the Leeds Municipal workers, and the threat of a strike in the Post -Office. It will be interesting to see whether the considerations above -mentioned under existing conditions will be borne out, and still more -if when the causes are ascertained, it can be proved that had the -principles here advocated been carried out in practice, there would -have been no strike, nor any threat of one. - -[10] On Municipal and National Trading, p. 109. - -[11] Ibid, Chapter VII. - -[12] On Municipal and National Trading, p. 107. - -[13] “On Municipal and National Trading,” page 10. - -[14] “Westminster Gazette” of December 2nd, 1913. - -[15] See “The Railways of Great Britain” by Lord Monkswell. (Smith, -Elder & Co., 1913. Price 6/-). A most interesting book, published -since this pamphlet was written.--Lord Monkswell is not an advocate -of nationalisation, but apparently has an open mind.--He admits that -England is now only served by five groups of railways, and that there -is no effective competition. - -[16] In Palgrave’s “Encyclopædia of Political Economy,” Vol. III. -(1899), Article on Railways, signed W.M.A. - - - - -CHAPTER V. - -FINANCE OF THE SCHEME. - - -The final and most important criticism of the scheme will be on the -matter of finance. - -The question is, can a sufficient revenue be obtained from the small -uniform fares and rates proposed, after providing for working expenses, -to pay not only interest on the purchase money but the purchase money -itself? - -It is a curious coincidence that in the year 1838, before Penny Postage -was instituted, the average amount received for every chargeable letter -was 7d. and a fraction--the actual average railway fare now paid by -every passenger (excluding season tickets). - -The number of letters carried during the first complete year after the -uniform rate of 1d. was adopted was more than doubled. Notwithstanding -this the deficiency in net revenue was about £2,000,000, and the -deficiency was made good out of general revenue, this being well worth -while owing to the great benefit to the nation of Penny Postage. - -In the case of railways, however, the amount involved is so large that -no Government could be expected to give any consideration to a proposal -which would involve making good so large a deficiency as would be -occasioned by the reduction to a flat rate of 1d. As will be gathered -from the remarks made when dealing with the principles of the scheme, -this difficulty is now overcome by dividing the traffic on railways, -both of passengers and goods, into two kinds of service, namely, Fast -and Slow. It will be found that by this means =no greater percentages -of increase of traffic will be required to produce the same gross -revenue as at present than 15 per cent. of passenger traffic and 10 per -cent. of goods traffic=. It will also be shown that if the increase of -traffic should not exceed this estimate the additional working expenses -will be so small that they would be more than met by the economies -effected by unification. If these propositions prove to be true, then -there will be no deficiency to be provided for. - -It is necessary in order to prove this to set out the figures of the -present receipts and expenses, and an estimate of the same under the -proposed new scheme. - - -PRESENT FIGURES. - -The following are in round sums the average figures for the two years -1911 and 1912, based on the Railway Returns published by the Board of -Trade annually under the Regulations of Railways Act, 1871:-- - - =(_a_) Passenger traffic receipts.= - - Season ticket holders £5,000,000 - Other passengers 40,000,000 - ----------- - Total from passengers only 45,000,000 - Mails and goods by passenger trains 10,000,000 - ----------- - Total from passenger traffic 55,000,000 - - =(_b_) Goods traffic receipts.= - - Minerals £30,000,000 - General merchandise 32,500,000 - Livestock 1,500,000 - ----------- - 64,000,000 - - =(_c_) Miscellaneous receipts.= - - Steamboats, docks, etc. 5,000,000 - Hotels, rents, etc. 5,000,000 - ----------- - 10,000,000 - ----------- - Grand Total £129,000,000 - - =Expenditure.= - - Maintenance of ways, - works, stations, docks, - etc. 18,000,000 - - Traffic expenses 23,000,000 - - Locomotive and rolling - stock expenses 28,000,000 - - General charges, rates - and taxes 12,000,000 - ----------- - 81,000,000 - ----------- - =Net receipts= £48,000,000 - =========== - - =Total number of passenger journeys=, including - season ticket holders (assuming that each - annual ticket represents 200 double journeys - per annum only), about 1,620,000,000 - - Of this total there were first or second class - passengers about 160,000,000 - - That is, about 10% of the total number carried. - -=The average fare for every journey is therefore 6½d.= - -In other words, if every passenger paid for every single journey, long -or short, the sum of 6½d., then the gross receipts from passengers -would be about the same amount as is now received. - - =Total tonnage of goods= per goods train: - - Minerals Tons 410,000,000 - - The receipts as above for these represent - =an average of 1/6 per ton.= - - General Merchandise Tons 114,000,000 - - The receipts for these as above represent - =an average of 6/- per ton.= - ----------- - - Total tonnage per Goods Train Tons 524,000,000 - =========== - -The total receipts for the two kinds of merchandise together =show an -average of 2s. 4d. per ton.= - -Note that the total tonnage of minerals carried is about four times -that of general merchandise. - -The total tonnage may be less than the above, owing to overlapping of -the various companies, but for the purpose of my estimates I am taking -these official figures. - - -ESTIMATES UNDER PROPOSED SCHEME. - - -(_a_) As to passenger traffic. - -There is, of course, no official return as to the proportions of Main -line and Local passenger traffic, but it is clear that the percentage -of small fares must be very great. Assume that this is over 80 per -cent., then there would be in round figures about 300,000,000 (that is -under 20 per cent.) of Main line passenger journeys, and assuming that -the number of first class passengers will be only 10 per cent. (the -above average percentage of first and second class passengers), then -the revenue from the existing number of passengers under the new scheme -would be as follows:-- - - =Main Line= 300,000,000 at 1/- equals £15,000,000 - of whom 30,000,000 at an - additional 4/- for First - Class equals 6,000,000 - - =Local= 1,320,000,000 at 1d. equals 5,500,000 - of whom 132,000,000 at an - additional 5d. for First - Class equals 2,750,000 - ----------- ----------- - =Present No.= 1,620,000,000 will produce £29,250,000 - =========== - -as against the present total of £45,000,000, or a deficiency of about -£16,000,000 per annum, assuming there should be no increase in the -existing traffic. This seems an appalling deficiency, but “Wait and -See!” - -It is quite clear that there would be a very large increase of traffic, -more particularly of the long distance or Main line passengers, as -under the existing system the fares for short distances up to 12 -or even 20 miles are sufficiently low to remove practically all -restrictions. In the case of long distances, however, there is this -double restriction for passengers--namely, the time occupied and the -high price of the fares. If the latter restriction is removed a very -large increase of traffic is sure to result, not only for purposes of -pleasure but also for business and trade purposes. The Local traffic -will also increase partly by reason of the increased number of long -distance passengers requiring the use of the Local lines (both suburban -and small branch lines), and partly by the reduction to 1d. of many of -the present suburban fares. In order, however, to be on the safe side -in the estimate, I propose to take no account of any increase in Local -passengers and to reckon only the increase required in the number of -Main line passenger journeys. It will then be found that 250,000,000 -more Main line passengers will provide for the above large yearly -deficiency, as follows:-- - - 250,000,000 at 1/- £12,500,000 - Add 25,000,000 at 4/- for First Class 5,000,000 - ----------- - £17,500,000 - =========== - -This will bring the gross receipts from passengers to £46,750,000, with -=an increase of about 15 per cent. only= on the present total number of -passengers carried, and £1,750,000 more revenue. - -The criticism may be made, however, that this number is nearly double -the existing number of long distance passengers. Will such an increase -be realised? - -From a consideration of the following reasons it is submitted that not -only will it be so, but that in point of fact a much larger increase -may reasonably be anticipated. - - 1. No account as to passenger traffic has been taken of the - normal increase in the number of passengers which has continued - to increase regularly with the increase of population. - - 2. Under the proposed scheme the uniform fares are for _as far - as the train travels only_, so that a journey say from London - to Londonderry will involve at least three 1s. tickets, one - to Holyhead, a second from Holyhead to Dublin, and a third - from Dublin to Londonderry, whereas under the present system - one through ticket would be purchased and would appear in the - official returns as one journey only. - - 3. In practice nearly every single journey undertaken means - _a return journey home_, so that an increase of 250,000,000 - more passenger journeys does not involve a greater increase in - the movement of the population than is represented by, say, - 150,000,000 passengers. - - 4. If the number of passengers carried by the railways is - compared with the population it may be noted that the total - number of passengers carried last year in the Tube and Suburban - Railways of London, with a population of between six and seven - millions, was about 500,000,000 in addition to about the same - number carried by omnibuses, and a further similar number by - tramways. A similar proportion of railway passengers to the - population of the United Kingdom of nearly 50 millions would - be over 4,000,000,000 per annum, so that an actual total - of 1,850,000,000 would undoubtedly be much less than may - reasonably be anticipated. - - 5. It is not only the increased number of people who would - travel to and from all parts of the country who now cannot - or will not do so on account of the expense, but also the - increase in the number of journeys undertaken by existing - travellers. Parents living in remote parts of the country - whose children work in large towns and who, on account of high - fares, cannot visit each other, business men and commercial - travellers who will multiply their long distance journeys for - business purposes if they can do for 2s. what now costs 10 or - 20 times as much, are a few among many classes who will swell - the number. It will be remembered that by far the greater - proportion of the population are those in receipt of an income - of less than £3 per week to whom any fares of 10s. or over are - prohibitive except in extreme cases. - -Let me give one very homely illustration which has come under -my notice. A domestic servant in London had a serious illness, -necessitating an operation at one of the hospitals. Her parents lived -in humble circumstances in a Cornish village. The mother came to London -and had to pay £2 for a return ticket. Her daughter had to remain about -two months in the hospital while the mother had to return home without -being able to afford the luxury of another return journey to London. -But during the whole of that time trains were going to and from the -same place every day and night with plenty of room for the old lady, -who could, of course, have been carried any number of times without any -appreciable cost to the company. - -Now, suppose the uniform fare of 1s. each way had come into operation, -she or some other member of the family would, no doubt, have come up -at least once a week, and instead of one return ticket which cost £2, -and would be included in the Board of Trade returns as two passenger -journeys, the family would have only paid 16s. for the eight double -journeys, the extra cost to the Government would be nil and the -increase in the number of passenger journeys would be 14. - -It is not unusual to see long distance trains arrive in London with not -more than 15 or 20 passengers. - - -(_b_) As to goods traffic. - -For the purposes of the estimates of goods traffic there must be -added to existing total receipts from goods train traffic the amount -included in the official returns under the head of “passenger traffic” -of £10,000,000 received for mails, luggage, and other goods carried -by passenger trains, making the total revenue for goods at present of -£74,000,000. There is no official Return as to the tonnage of goods -carried by passenger trains, but assuming that the present average -rate for goods carried by passenger trains is £2 per ton, this would -represent a further tonnage, irrespective of passengers’ luggage, of -20,000,000 tons. - -The figures under the new scheme, if there should be no increase in the -tonnage carried, and assuming that goods by fast service should be no -more than the amount now estimated per passenger train, would thus be -as follows:-- - - By slow service 524,000,000 tons at 1/6 £39,300,000 - By fast service 20,000,000 ” ” 10/- 10,000,000 - Live Stock, as now 1,500,000 - ----------- - £50,800,000 - Thus showing a deficiency of about 23,200,000 - ----------- - as against the present total of £74,000,000 - =========== - -Following the analogy of the passenger traffic, I will only estimate -for an increased traffic by fast trains, and for this purpose there -will be required:-- - - 48,000,000 tons, which at 10s. equals £24,000,000, and will - bring the total to £800,000 more than the present total - receipts from goods, by both passenger and goods trains. - -This increased tonnage it will be seen is =an increase of under 10 per -cent.= on the present total of 550,000,000 tons. It is probable that -with a reduction of freight per fast train to the uniform rate of 10s. -per ton, a considerable proportion of existing goods train traffic -would be transferred to fast trains, so that the same figure might be -arrived at with much less increase in tonnage. This fact may also be -taken into account when adjusting any mistake in the official figures -of the total tonnage carried. - -As in the case of passenger traffic, this percentage is surely not only -a reasonable estimate, but one which may reasonably be anticipated, -and, further, the increase will be progressive. - -The following among other reasons may be adduced:-- - - 1. The =example of the Post Office= is the best precedent that - can be given of the result of the adoption of a minimum uniform - rate. In the year before the introduction of Penny Post the - number of letters per head of population was only three. This - number is now 72, irrespective of postcards and parcels, and it - is still increasing. The number of letters carried in 1838 was - 70,000,000. In the first complete year after the Penny Post was - established this number was doubled. In 1863 it had multiplied - by eight times, and since then it has been doubled in about - every period of 20 years. - - 2. The large amount of =goods sent now by road=, especially - in recent years by motors and steam tractors on account not - only of the heavy railway rates but also the cost of loading - and unloading, would with uniform rates be sent by rail. In - this connection it may be mentioned that a very considerable - increase of carriage by trolley trucks of loaded carts and - pantechnicons, or of the “containers” advocated by the New - Transport Company, Limited, thus avoiding both shunting and - the double expense of packing and unpacking, may reasonably be - anticipated. - - 3. A still greater increase in fast train traffic may be - expected in =perishable articles=, such as fruit, fish, milk - and dairy produce. The so-called reduced rates now in force - for instance for carriage of fresh fruit vary from 1s. 6d. per - cwt. (equals £1 10s. per ton), from Hampshire to London up to - as much as 8s. per cwt. (equals £8 per ton), from Hampshire to - Scotland, these rates being “reduced” on account of the large - amount of fruit (strawberries), requiring in the season special - trains carrying nothing but fruit. The rates for the same goods - from other parts where the quantity is not so considerable are - in some cases more than double, so that the farmers cannot - afford to send the goods. The rates for fish are similar, and - the same considerations apply, so that very little is consigned - to town except from fishing centres like Grimsby where large - quantities are available. - - 4. =With a regular service= from every station, village - stations as well as the large towns, and =similar to the - present postal service=, in fact forming an extension to all - goods of the present Parcels Post service, no one can doubt - that the total increase will be considerably more than the 10 - per cent. estimated for. - - - - -CHAPTER VI. - -WORKING EXPENSES. - - -Most critics will contend that the increased traffic will lead to an -enormous increase of working expenses. - -In the first place allowance must be made for the several economies in -management occasioned by the amalgamation of the whole railway systems -in one and with the Post Office as already mentioned, and of which the -following is a brief list, viz.:-- - -Abolition of, - - (_a_) The Clearing House, - - (_b_) Separate boards of directors and clerical staffs, - - (_c_) Legal and Parliamentary expenses, - - (_d_) Advertisements, - - (_e_) Book-keeping, printing and booking clerks now required - for differential fares and rates. - -Economies by avoiding, - - (_a_) Competing Receiving Offices, Post Offices or stations in - same localities, - - (_b_) Competing trains, - - (_c_) The waste of rolling stock now occasioned by the - ownership of different companies, instead of being used - according to the requirements of traffic. - -The latter has already been referred to in Chapter II. A further proof -of a practical nature was given by Mr. Oliver Bury, the retiring -General Manager of the Great Northern Railway in 1912, who then said -that after the working arrangement with the Great Central Railway had -been entered into, although there had been an increase of 4,000,000 -tons of merchandise carried, this additional traffic had actually been -worked with a decrease in the goods train mileage of 1,000,000. - -Apart from all these economies, =the working expenses cannot increase -proportionately with the increase of traffic=. Most of the long -distance passenger trains now running, except on special occasions -or holiday time, could easily hold twice the number of passengers -with but little, if any, appreciable increase in the cost of haulage. -It must be remembered that a sufficiently powerful locomotive and -sufficient coal must be provided for every passenger train, on the -assumption that it will be full, whether it leaves with a full -complement of passengers or not. Therefore, even though the number -of passengers now carried were to be doubled in the case of all Main -line trains very little increase in the working expenses would result, -certainly not so much as the saving effected by the various economies -mentioned. So far as goods traffic is concerned, an increase of 10 per -cent. only, as estimated in the tonnage would certainly not cause any -great increase in the expenditure. If, on the other hand, the increase -of traffic should be very much more than the percentages mentioned -(as may very likely be the case), then the revenue derived will be -more than sufficient to provide whatever additional working expenses -there may be. The expenses of the important items (which constitute -probably 50 per cent. of working expenses) of permanent ways, stations, -signal boxes, and general establishment charges would not be seriously -affected by increase of traffic, only the rolling stock, coal, and part -of the staff. - -In addition to these economies, and others set out more fully in -Chapter II., there will also be great economy in the working expenses -of the Post Office itself, including the telegraph and telephone -services. The actual effect of the amalgamation of the two services of -railways and Post Office on the total working expenses of the combined -services cannot be estimated with any degree of accuracy, but there -can be no doubt that it will result in large economies. The working -expenses of both, must, of course, be lumped together. No advantage can -possibly be gained by attempting to separate the expenses of various -branches of one State Department. This has actually been attempted in -the case of the telegraph service, one of the numerous branches of -the Post Office. It has been continually asserted that this service -has been, and is being, carried on at a loss, especially since the -introduction of the sixpenny rate. This assertion has always been an -enigma to me, for how any proper apportionment of the working expenses -of over 20,000 Post Offices throughout the United Kingdom can be made, -in order to ascertain what proportion is to be attributed to the -telegraph service alone, passes comprehension! - -That this impossible task has been attempted, and apparently carried -out to the satisfaction of some persons in authority, does not prove -that the alleged loss has actually been made, but only that a large -amount of time and expense has been lost in elaborate and costly -calculations, which can be of no possible advantage to the service or -the Country! It is to be hoped that this attempt will not be continued -with the telephone service. - -If, and when, the scheme proposed in this pamphlet for combining -railways with the General Post Office is carried into effect, I trust -that no such expensive and useless task will be attempted as to -endeavour to ascertain what proportions respectively of the expenses -of running the Royal Railways are to be attributed to carrying His -Majesty’s Mails on the one hand, or His Majesty’s subjects and their -goods on the other! - -It is quite evident that on the two services being combined a portion -of the present working expenses of the Post Office, namely, those which -now consist of amounts paid to the Railway Companies for carriage of -mails, for rents of telegraph and telephone wires, and other services -rendered, will be swallowed up in the general working expenses, just as -the gross receipts of the Post Office will swell the total revenue of -the combined services. - -For the purposes, however, of ascertaining what increase of traffic -will be required to produce (_a_) the same net revenue as under the -present system of railways, and (_b_) a sufficient revenue to purchase -the present system, I have taken no account of the decrease of Postal -expenses nor of the normal increase of the Postal Revenue. I also -am assuming that notwithstanding all the economies referred to, the -working expenses of railways will remain the same, or even increase, -owing to higher prices of goods and materials and higher wages, to the -round sum of £85,000,000. - -It will thus be apparent that ample margin has been allowed for any -increase in working expenses that is likely to take place, and that -allowance has been made for the whole of the existing staffs to be -retained, whether now employed in services which may then be discarded -or not. - -P.S.--While revising the final proofs of this pamphlet during the -Christmas Holidays, I have noticed in the “Daily Telegraph,” of 24th -December, 1913, a long letter signed “G.P.O.,” referring to an article -in the same well-known newspaper of the previous day. The letter is -printed in prominent type under the following heading:-- - -“PREHISTORIC METHODS OF POST OFFICE FINANCE--TELEGRAPH SERVICE ‘LOSS.’” - -The correspondent, who evidently has expert knowledge of the subject, -refers to the “alleged great loss” of the telegraph service as “a -polite fiction.” - -His letter completely confirms the views expressed above as to the -folly of attempting to apportion expenses of one branch of the service, -and he places the cost of the accounts at “hundreds of thousands of -pounds a year!” - - - - -CHAPTER VII. - -TERMS OF PURCHASE. - - -If the railway system be purchased by the nation it will be in -contemplation as =a business proposition= to repay the capital expended -in the purchase, and this means, therefore, that if this scheme is -a practicable one =the shareholders and stockholders of the present -companies will be able to receive back their capital=, although, under -existing conditions, this appears absolutely hopeless. It is therefore -now proposed to consider upon what terms the railways can be purchased -and how the purchase money can be provided. - -1. By the Railway Act of 1844 the Government is empowered to purchase -every railway company formed after that date. The price fixed is the -equivalent of 25 years’ purchase of the average annual divisible -profits for three years before such purchase, subject to the proviso -that any company whose divisible profits are less than 10 per cent. -on its capital is at liberty to have the terms of purchase fixed by -arbitration. At the date of this Act most of the Trunk lines, to the -extent of about 2,300 miles had already been constructed and are not -therefore subject to the provisions of this Act, but as the total -length of lines open in 1911 was 23,417 miles, it will be observed that -the Act applies to 90 per cent. of the whole railway system. - -Notwithstanding this, there are undoubted difficulties in estimating -the actual purchase price, having regard to the fact that the majority -of the smaller companies, including the modern Tube Railways with -their large prospective profits, and probably the whole of the Irish -railways, pay less than 10 per cent. and would, therefore, be entitled -to arbitration. - -There is, however, another precedent, viz., (2) The Indian State -Railways, which have been actually purchased by the Government from the -private companies by whom they were owned. - -The dates and terms of purchase of these railways are included in an -official return of railways acquired by the Government. This return -was issued by the Board of Trade in 1908, pursuant to an order of the -House of Commons.[17] In India the railway undertakings of 16 separate -companies were acquired by the State between the years 1868 and 1906. -Of these companies six were purchased at a price mutually agreed upon -between the Government and the companies, these being small companies, -and the purchase moneys varying from £30,000 to £300,000. Three -companies were acquired at a purchase price equal to the share capital. -The remaining seven companies were purchased for a sum equal to the -value of the shares calculated at the mean market price during the -three years preceding the date on which notice of purchase was given. -In addition to payment of the purchase price the Government assumed -the liabilities of the company in respect of debentures and debenture -stock. Four of these companies (the larger ones) were, under an option -reserved by the contracts, paid by annuities spread over 73 or 74 -years. One of these, the East Indian Company, was purchased in 1879 at -the price, calculated on the above basis, of £32,750,000, payable by an -annuity of £1,473,750 for the term of 73 years from 1880. This amounts -exactly to 4¼ per cent. on the purchase money, and will cease to be -payable after the year 1953. - -In addition to this annuity, interest is paid on the debentures and -loans amounting altogether to about £16,500,000, the interest whereon -is about £500,000 or a little over 3 per cent. - -If the Act of 1844 were now applicable to the whole of the companies in -the United Kingdom, and if we assume that by the time when the option -to purchase is exercised the net profits of £48,000,000 in 1911 shall -have risen to £50,000,000, the purchase money would be 25 times that -sum, viz., £1,250,000,000. - -This sum is really slightly more than the total paid-up capital of the -railways after allowing for “watered” stock. - -The following were the figures in 1911:-- - - Ordinary Stock £493,484,151 - Preference and Guaranteed Stock 473,073,163 - Loans and Debentures 357,461,047 - ------------ - =Total paid-up Capital= £1,324,018,361 - ============== - -There is included in this total, stock to the nominal value of -£198,000,000, or approximately 15 per cent., which represents nominal -additions made on consolidations and divisions of stock, and commonly -known as “watered” stock. - -It will be noticed that the present net revenue of £48,000,000 only -represents an average of about 3½ per cent. on this total paid-up -capital. The total paid-up capital in the returns recently published -for 1912 is £1,334,963,518. - -The Railway Nationalisation Society has prepared heads of a Bill in -Parliament, providing that the price to be paid for the whole of the -railways shall be calculated on the basis of the Act of 1844. No doubt -this would be opposed by holders of railway stocks and shares, having -regard to the fact that the result might be in effect to merely return -the capital, no account being taken of profits. If the purchase of the -railways is to be considered as “a business proposition” it will be -necessary to look fairly at both sides of the question, and endeavour -if possible to arrange terms which will not prove an injustice to the -present owners, and at the same time will be such as can be provided -for out of the ordinary revenue of the railways without financial loss -to the nation. - -It must be remembered that shareholders or their predecessors invested -their money with the reasonable and proper expectation of having an -adequate return for it. No doubt they put down their capital with the -primary, possibly the sole, object of benefiting themselves, but the -fact remains that their capital has been the means of providing the -splendid net-work of British Railways now available for the nation to -purchase. - -On the other hand, railway stock and shareholders must recognise that -their position under the present system is by no means an enviable one. -Many of them have for years been in receipt of no dividend whatever. -In no case has there been any attempt at repayment of capital moneys, -nor does there seem any prospect of it. The average net annual receipts -now earned by the whole of the companies is only a fraction over 3½ per -cent., and this percentage (which is less than before the year 1870) -has for the last few years been practically stationary. The working -expenses have been increasing to such an extent by reason of the -increase of wages and price of materials that last year the companies -decided on an all-round increase in fares and rates. According to the -latest returns this has already been to a large extent counteracted by -a decrease in traffic. - -If, therefore, an offer were made by the Government to purchase the -whole of the railways upon similar terms to those on which the East -Indian Railway was acquired, namely for a sum equal to the mean market -price of the shares during the three years preceding the year in which -the Act to acquire the railways is introduced, it is submitted that -there could be no effective opposition to the proposal. In effect this -would mean a purchase at a price which is the value the public to-day -put upon each line of railway. The only practical difficulty of this -proposal will be to ascertain the market value of the shares of some of -the smaller companies, many of which are held by the larger companies. - -In order, however, to avoid under-estimating the amount required, I -suggest for the purposes of my argument that the Government and the -companies mutually agree on a total sum of £1,350,000,000 as the -purchase price of all the undertakings of the companies, subject to -the existing liabilities for loans and debenture stock, now amounting -to £357,500,000, which would be assumed by the Government. This would -make a total in round figures of £1,700,000,000, or nearly £400,000,000 -more than the total of the ordinary preference and guaranteed stock. -Surely this would be an outside figure. Indeed, it might be suggested -that the nation would be paying an excessive amount. - -Mr. E. A. Pratt gives various estimates of what the purchase -price would probably be.[18] These vary from £1,052,000,000 up to -£1,769,847,000, an estimate of “The Railway News,” confirmed by the -“Financier and Bullionist,” of September 7th, 1912. “The Financial -News” in 1912 suggested £1,941,865,000 in 2½ per cent. Stock in order -to yield the present annual income of £48,546,000. - -Taking the precedent of the East Indian Railway as a mode of payment -and without making any allowance for better terms of interest which the -Imperial Government might well obtain, it will be seen that the annual -amount required to provide a purchase money of £1,350,000,000 and meet -the above liabilities would be as follows:-- - -Annuities at the rate of:-- - - 4¼ per cent. on £1,350,000,000 £57,375,000 - Interest at 3 per cent. on Debentures of £360,000,000 10,800,000 - ----------- - Total £68,175,000 - =========== - -According to the estimates set out in Chapter V. (if no further -increase of traffic is secured than is required for producing the -present revenue), there would be available toward this annual sum -required for purchase the following:-- - - Passengers 46,750,000 - Goods 74,800,000 - Miscellaneous, as now 10,000,000 - ------------ - Total £131,550,000 - Deduct for working expenses, as above 85,000,000 - ------------ - Net revenue £46,550,000 - This shows a deficiency to be made good of 21,625,000 - ------------ - In order to make up the annual sum of £68,175,000 - ============ - -This annual amount could be provided by the following further increase -in passenger and goods traffic respectively, viz.:-- - - 100,000,000 passengers at 1/- £5,000,000 - 10,000,000 ” ” 4/- 2,000,000 - 30,000,000 tons ” 10/- 15,000,000 - ---------- - Total £22,000,000 - ========== - -In these estimates no account has been taken of the increased revenue -of the Post Office, nor the increase in Local passengers and slow goods -traffic respectively, which is sure to be realised, and the receipts -for which would probably cover any increase in working expenditure. It -will be noticed that if the above increase should be obtained the total -estimated increase of passengers over the present totals would be as -follows:-- - - Passengers 350,000,000 or about 21% - Goods 78,000,000 or about 15% - -It is, of course, not essential to the success of the scheme that -the whole of the increase here estimated should be obtained in the -first year after nationalisation has been carried out, although it is -considered that even in that short period, according to all precedents, -so small a percentage of profits may fairly be anticipated. It would -probably be necessary for the Government to raise a temporary loan -for initiating the scheme, but in any case it appears essential that -the purchase of the whole of the existing undertakings of the United -Kingdom should be completed as =at one and the same date=. - -Other advocates of railway nationalisation suggest that the purchase -should be carried out gradually, and this course has been followed by -other nations. It is, however, of the very essence of the scheme here -proposed that every part of the country shall have the benefit of the -uniform fares and rates, and this would be impracticable unless the -whole system be taken over by the Government at one time. - -The proposal that the price should be fixed by taking the mean price -of stocks for the three years preceding the year in which the Act -should be passed, is in order to avoid the market changes which might -be caused by anticipation of purchase by the State. It is suggested -that whatever price is taken as the basis of the purchase money, such -price should include everything, so that the whole undertaking would be -taken over without the necessity for any valuation of stock and plant, -a prolific cause of so much trouble and expense, as in the case of the -purchase of the National Telephone Company. - -It may be said that the figures of the railway systems are so vast -that it would be impracticable to cope with them in one transaction. -Enormous as the figures must necessarily be, the principle is exactly -the same as in other financial transactions. Just as the Government -acquired the undertaking of the National Telephone Company by purchase, -which took effect on one day, so can this much larger transaction, -or series of transactions, be carried out. It is assumed that the -existing shares and stocks of railway companies would be converted into -Government Stock, all necessary apportionments being made up to a date -to be named in the Act of Parliament authorising the acquisition of the -railways. Upon such date the completion of the whole transaction will -be deemed to be effected. - - -FOOTNOTES - -[17] This was on the initiation of Mr. Chiozza Money, M.P. - -[18] In “The Case against Nationalisation,” page 186. - - - - -CHAPTER VIII. - -CONCLUSION. - - -All reforms meet with opposition, mainly from persons whose interests -may be prejudiced by the proposed change--also in many cases by -experts. As to the latter, one remembers the story of the expert who, -when the first proposal was made to cross the Atlantic by steam, wrote -a pamphlet conclusively proving, to his own satisfaction, that it was -a scientific impossibility to construct a steamer capable of carrying -sufficient coal to do the journey! One of the first steamers to cross -the Atlantic carried a consignment of such pamphlets! - -As to the former, as has already been pointed out in considering -objections to the scheme, there is but a very small section whose -interests need be prejudiced. Even those few who might suffer loss by -the reform will recognise that the increased facilities of transport, -with accompanying decrease of expense, will inevitably result in a -great increase in and expansion of trade, by reason of the opening up -of markets which have hitherto been practically inaccessible. - -Nor is there any reason why this opening up of new markets should -be confined to the United Kingdom, for if other nations find that a -system of small uniform fares and rates is not only practicable but -remunerative here, they will surely follow our example, as in the case -of Penny Postage, and the day will not be far distant, after the system -has once been adopted in this country, when it will be possible to -travel all over Europe at the cost of a few shillings, and to transmit -and receive goods at correspondingly low rates. - -It is impossible to foresee all the social and political as well as -financial effects which may be produced by such a revolution. The -advantages of travel, which have hitherto been restricted to the -wealthy, will be thrown open to all, whatever their means. - -Another important result may be anticipated and hoped for, namely, that -the intermingling of the people of the various races and nations will -tend to remove the prejudices, misconceptions and misrepresentations -which have so often produced disastrous wars in the past. - -Should this be so, it may be that the reform here proposed will bring -nations nearer to the desired haven of Peace. - - - - - _A QUESTION - for to-day and to-morrow_ - - The Case for - LAND - NATIONALISATION - - BY JOSEPH HYDER - - (_Secretary to the Land Nationalisation Society_). - - It deals with every aspect of the land question in a - thorough and comprehensive manner. - - Full of facts, figures and cases which every land - reformer ought to know. It gives numerous illustrations - of the abuses which spring from treating land as private - property. - - =2s. 6d. net.= - - - - - -End of the Project Gutenberg EBook of Royal Railways with Uniform Rates, by -Whately C. 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