THE RAILWAYS' CASE

By SIR RALPH WEDGWOOD*

THE immediate problem represented by the demand of the railways for a "square deal" is of inunense national importance. It is a question whether the railways are to remain for ever bound by the restrictions of a world that is dead, or are to be set free to adapt their business to modern conditions of industry. The issue involved is nothing less than the survival of the railways, and their continued efficiency, as an essential branch of transport.

The demand of the railways can be explained quite simply, yet it has been widely misrepresented. They are not asking for protection or privilege ; they are not asking for restric- tions or burdens to be imposed on road haulage ; they are not asking for financial support of any kind. They believe they can play their part successfully and efficiently as the prime element in the transport system of the country, if the country will give them an equal start with other forms of carriage. They ask nothing more.

What is meant by an equal start ? In the case of passenger transport both road and rail fares are subject to control. That is an equal start, and in that field the railways ask for no change. It is not so in the matter of goods transport. There the railways are subject to an elaborate system of control over their charges and conditions which was imposed by Parliament at a time when they were in a position of virtual monopoly—a position which has vanished for ever. Neither road hauliers nor coastwise carriers are subject to any statutory control whatsoever so far as their charges for merchandise traffic, or the conditions under which it may be carried, are concerned. The railways urge that as a matter of fair business dealing they should be given the same freedom in regard to their charges as their competitors enjoy. In a 'field of intense competition that is not merely fair dealing, it is common sense.

The controls of railway charges have been built up over a century or more. Stone by stone the structure has grown —classification, undue preference, obligation to publish, legal sanctions—until what was intended to be a sanctuary for railway users has become a prison house for railway users and railways alike. It is not only the railways which suffer ; industry suffers also, in almost equal degree. The present system makes for rigidity ; rates cannot be quoted freely to meet the day-to-day requirements of traders. It makes for over-centralisation ; a rate granted at. one end of the country may, under the law of undue preference, have to be extended to a trader at the other end of the country, and every, new rate must ai a result be referred to a• central office before it can be quoted.

The trader suffers too, in another and less obvious way. 'It is often pointed out that the railways are free to quote special or exceptional rates up to Lto per cent, below the standard or maximum charges. That is true enough. The railways have no great difficulty in reducing individual rates within that arbitrary limit, but even within that limit they have to remember that it is almost impossible ever to retrace their steps, and get the rate up again. The statutory

* Sir Ralph Wedgwood, Chief General Manager of the London and North-Eastern Railway, is Chairman of the Railway General Managers' Conference.

restrictions are of such a character that, in the ten years that have elapsed since the machinery of the Railways Act came into operation, the railways have only once applied to the Rates Tribunal for permission to increase an exceptional rate, though they have something like eighty million such rates on their books.

The adjustment of rates to commercial needs will present a very different problem under the conditions which the railways are asking should be legalised. The railways will be able to give an elasticity to their business contacts with their customers which has never hitherto been attainable.

There is every likelihood that rate quotation can to a great extent be decentralised, so that local officers will exercise an authority which in the past it has been impossible to delegate to them. Moreover, the railways will be encouraged to experiment much more freely with reduced rates because of the knowledge that, if an experiment should prove unsuccessful, they can reinstate the original rate when the need arises.

These are some of the directions in which the proposals of the railways-will operate to the benefit of trade and industry.

However, it is only fair to look at the problem from another 'angle, and to examine some of the apprehensions which have been expressed. It has been suggested that the railways are seeking to be freed from their common-carrier obligations, and that a trader might be faced with a refusal from the railways to carry his goods. There is no foundation whatever for this fear. In all cases where the railways are common carriers now, they will continue to be common carriers ; they have no intention of refusing to carry any traffic which is offered to them in suitable conditions. The retention of the liabilities of common carriers is entirely consistent with the policy of" equality for all" advocated by the railways, since the Carriers' Act applies to all forms of transport. Road carriers as well as railways may be common carriers, when they provide a regular booked service as the railways do.

Another objection relates to the publication of rates. The railways are at present under a statutory obligation (which applies to no other carrier) to publish all their rates. Their competitors can insist on seeing them, and having seen them, can undercut them in perfect security. It has been objected that if the railways are freed from this obligation they will use th: opportunities to conduct their business under a cloak of secrecy. The suspicion is unfounded ; modem business conditions demand a reasonable publicity ; . it will be to the railways' interest to meet the demands of their customers, at the risk of losing their business. It is not publicity to which the railways object, but one-sided compulsion.

The demand of the railways is based on the contention that the restrictions on them were based on a supposed monopoly which has now gone. This contention is often met by- the objection that in fact they still possess a monopoly where the heavy industries are concerned, and that the heavy industries need statutory protection if they are to beguarded from oppres- sion. _This is a weighty objection, and though the railways consider that its weight rests more on appearance than on reality, they have -no desire to make light of it . .They have in fact, taken the initiative in approaching the various organisa- tions representative of the heavy industries, with the object of discussing the Whole question with them. For this reason it would be inopportune to enter here into the arguments which might be advanced on one side or the other.

It has been the purpose of this article thus far to show that the railways' proposals will operate to the advantage of traders as well as of the railways. But they possess another advantage, no less important. The railways believe firmly in the ultimate aim of co-ordinating all forms of transport. This is no new attitude ; they gave clear evidence of it, in the sphere of passenger transport, when they obtained their road powers in 1928. Fears were then expressed that they would enter into cut-throat competition with the existing omnibus companies. Nothing of the sort occurred. On the contrary the railways used their powers to enter into partnership with omnibus companies all over the country. Thereby, road and rail together established a remarkable experiment in co-ordi- nation, which - has been strikingly successful. Indeed its success is perhaps best attested by the fact that the public are hardly conscious of it while they enjoy, both by road and rail, a system of passenger transport which has no equal in any other part of the world.

So it may come about, not necessarily by identical means, in the sphere of goods transport. This is for the future. But, at this moment, it is certain that the process of co-ordi- nation between rail and road goods transport is needlessly complicated so long as railway rates are governed by the principle of Standard Revenue, and Standard Charges based upon an elaborate classification. It is impossible that other forms of transport should be brought into line with the railways in this respect. Only by bringing the railways into line with other forms of transport can the hope of a co-ordinated system of rates. be realised.

The railways are putting forward their proposals first of all in the belief that they will benefit the railway industry by making their sales organisation more adaptable, less central- ised and more efficient. They believe that for the same reasons their proposals will be of immediate and increasing benefit to industry generally. Lastly, their proposals will make a substantial contribution towards the co-ordination of transport as a whole, and the railways are ready, in equal co-operation 'With the other forms of transport, to direct their efforts whole-heartedly to the attainment of this objective. It is in the conviction that their proposals raise an issue both of elementary justice and of immediate national importance that the railways have put their case before the Government and the public.