LONDON MIDLAND AND SCOTTISH RAILWAY CO.
CHARGES FOR MERCHANDISE TRAFFIC CLAIM OF COMPLETE EQUALITY WITH OTHER FORMS OF TRANSPORT LORD STAMP ON THE " SQUARE DEAL"
THE Sixteenth Annual General Meeting of the London Midland and Scottish Railway Company, was held at Friends House, Euston Road, London, N.W.t, on Friday, February 24th, 1939.
The Rt. Hon. Lord Stamp, G.C.B., G.B.E., Chairman of the Company, presided.
For some years we have been examining closely the general modern problem, made more acute by the necessary intensification of certain suburban services, of further protecting our trains during exceptional weather conditions of fog and snow.
After reviewing the various methods and relative costs of over- coming tl2e difficulty, it was decided to experiment with the Hudd system of Automatic Train Control, whereby a driver is advised automatically just before passing each distant signal whether it is at "Caution " or "Proceed " and, if at caution, a gradually increasing brake application is given sufficient to pull up a train before a danger point is reached. This system is based on the principle of magnetic induction, whereby a permanent and an electro-magnet laid in the centre of the track and projecting one inch above rail level induces through an air gap the necessary action in a suitable receiver mounted on the locomotive with a clearance of five inches above rail level. Close application and continuous experiment has now produced a system which bids fair to be a valuable adjunct to safe operation.
We have, of course, not relaxed in our main policy of increasing the safety factor in railway travel by the fuller provision of track circuiting. Track circuiting, as its name implies, consists of a low voltage circuit formed by the two running rails, whereby any pair of wheels across such rails forms a short circuit via the axle and de-energises a relay at the end of the section concerned, such relay being used to lock electrically the lever of any signal leading on to such section of track. By this means a Bain is automatically and effectually protected against failure of the human element. At present we have 7,700 track circuits in use throughout the system, most of which are on important running lines.
RAILWAY CHARGES FOR MERCHANDISE TRAFFIC
I shall be surprised and disappointed if any of you are not fully aware of the proposals which we have made to the Government through the Minister of Transport for a drastic revision of the law governing the fixation and quotation of charges for the conveyance of all classes of merchandise traffic and the statutory requirements attaching to them. It has become known as the claim for a " Square Deal " because we have asked for complete equality with our competitors, principally road hauliers and coastwise shipping, who are entirely free from the mass of statute and case law and governmental regulations imposed upon us.
In my maiden speech to you as Chairman eleven years ago I dealt —not with maiden brevity—with our disabilities and I have not tailed to refer to them at each subsequent annual meeting. In February, 5928, I was most concerned with the undercharges made on our competitors for their use of the public roads and the need for powers to operate our own road transport. These powers we ultimately secured with satisfactory results which disproved the fears of the opponents to our application and the pessimistic critics of the use of our powers, who suggested we were going to lose millions of money, indulge in wasteful competition, secure a monopoly, rook the public, &c. I see that then I put in the forefront first the public interest .ncluding the interests of those such as the heavy industries who are more or less compelled to use the rail, and secondly justice to the railway shareholders. I then stated that transport by toad and rail required co-ordination in the public interest, and that the most economic combination of these two means for each particular set of circumstances must be discovered and made available and that with road powers the railways would be able to explore the possi- bilities of co-ordination by voluntary arrangement between the two parties. We have in fact very largely secured this on the passenger 'ide, but on the goods side our success has been small because of the far greater number of operators who could not only " cry havoc " but, owing to their use of their freedom, played havoc with our comtnercial department working under a shackled rate system.
I further pointed out that we have no desire to force traffic on to the rails, but that every ton of traffic which economically ought to he on the rails and went on the roads was a loss to you and burdened the heavy industries unnecessarily.
I have inflicted upon you this glance at the past because it aids a true perspective now.
Since 1928 a system of regulating road haulage licences has been introduced which in some respects hears a slight resemblance to the obligation placed upon the promoters of a new railway line to show that their proposals are in the public interest, but of course unlike railway promotions in the past, the new licensee is not required to pay compensation for damage to other providers of transport.
But as regards co-ordination in charges nothing has been done. After several years' protests by the railway contapnies a Royal Corn- mission was appointed in 1928 to report upon transport questions In its final report in 5931 it found it impossible to make a positive proposal on co-ordination but recommended the setting up of a Transport Advisory Council for the purpose, amongst other things, of advising the Minister of Transport on the co-ordination of transport. In 1933 this Council was authorised by Parliament and set up in 1934. It dealt with various other matters and after pro- longed discussions in July, 5937, reported to the Minister on road and rail transport expressing the view that all forms of transport should, where practicable, be rate controlled and recommended that legislative steps should be taken at the earliest possible moment for machinery to secure uniformity of wages throughout the road transport industry, observing that no real co-ordination as between road and rail would be possible without it. The Council further recommended the internal creation of a rate structure by the road transport industry and the setting up of machinery for its enforce- ment, including a Road Rates Tribunal, and it was hoped that road and rail rates agreements would then be achieved on a voluntary basis. The Minister of Transport announced, as I informed you a year ago, that the Government accepted the broad principles of the report and proposed to introduce legislation accordingly. This was not introduced in the 1937/8 session or referred to in the King's speech opening the 1938/9 session.
Since July, 1937, road competition increased steadily in the manner I have earlier explained and certain road interests developed a strong attack on the railways, completely misrepresenting their position and suggesting that the adoption of the 1937 report would lead to a railway monopoly. The railways made no reply beyond representations to the Government upon the development of new diversions of traffic which were seriously impairing the railway rate structure required by Parliament, and making enquiries on the pros- pects of legislation on the report. No assurances were apparent after the legislative programme of the Government for 1938/9 was published, so the railways submitted new constructive proposals to the Government and asked for early action on them.
These proposals are briefly condensed in the report before you. The existing statutory regulation of the railway charges for con- veyance of merchandise and the requirements attached thereto should be repealed and the railways thus placed on terms of equality with other forms of transport. Such equality would remove parti- cular obstacles which have been cumulatively prejudical to the efficiency of the railways in recent years, and would then assist Parliament to deal with transport charges generally by equal regu- lations, and it is hoped lead to a large measure of co-ordination of transport.
We were criticised from various quarters by statements that this was a somersault, a volte-face or something else equally picturesque, that we wished to penalise the heavy trades, that we wished to favour the heavy trades at the expense of the small traders, that we were not entitled to equality on rates because passenger trains in London were overcrowded at the peak hours or because particu- lar long distance trains had run late in a blizzard, that the heating apparatus did not always work, that the remedy was to close un- specified branch lines, that the remedy was to write off some of your capital (making the present unfair return of profits look prettier on paper), that the creation of one huge transport amalgamation was the remedy. In short, that we should not now have equality because justice to us might check interests who are now gaining daily by the injustice and by delay in putting it right.
Might I again hark back to what I have said to you before—this time in 1933, six years ago ?
I then explained the nature of the statutory regulation of these charges, the classification under which Parliament placed higher charges on valuable goods and lower charges on the less valuable goods of the heavy trades, and the inroads of road hauliers on the former traffics. I added and I quote verbatim :
" While we believe that reasonable regulation of conditions must be in the interests of all branches of the transport service, if it is not to fall into chaos, which in the long run will inflict far more damage upon the user than any immediate advantages he may snatch from it, at the same time the existing situation is intolerable. The effect of an entirely free-lance and irresponsible competitor upon the system of rates classification is of immense importance to the public and the heavy trades, and the immediate gains of a section of the community will be dearly bought at the expense of the remainder if a solution is not found."
If the present proposals are a somersault the reason is to be found in the fact that a situation which I described as intolerable six years ago has grown worse to the knowledge of everyone, including the Government, and nothing has been done. That is why we urge Parliament as the protectors of the interests of the public and not of a section of it for a Square Deal—Now.
The proposals have been referred to the Transport Advisory Committee, of which I am a member, and I do not now propose (Continued on page 384) COMPANY MEETING
LONDON, MIDLAND & SCOTTISH RAILWAY CO.
(Continued from page 383)
to comment on their proceedings. I hope, however, that adequate and early action will be taken in Parliament and if no proposals are made or proposals which your Board consider inadequate, they will summon a special meeting of the stockholders of all classes, for this is a matter which affects the debenture stockholders also, in order to make the companies' position clear to you and to the public in general.
While I cannot at this stage give you the detailed position of the discussions, it is clear that we are being opposed by powerful interests, but I would refer to the arrangements entered into with the road haulage organisations, particulars of which have been pub- lished.
Contingent upon our proposals being adopted—and the road interests are prepared to support them—we shall co-operate actively with them for a new stage in transport history, the co-ordination of rates and services, and the spirit in which they have made this arrangement augers well for a resolute joint attack upon this diffi- cult problem.
Meanwhile we have already indicated ways in which you, as shareholders, can help us. When you discuss the railway com- panies' claim for a " Square Deal " with your friends be sure they understand the following points:—
The railways want to be free, like their ccmpetitors, to make charges by ordinary commercial methods.
They no longer possess a monopoly and old restrictions are no longer necessary.
They do not oppose regulation, provided it applies to all alike.
They have already undertaken that their charges shall be reasonable, and that the trader will have the right to appeal against any charge he thinks unreasonable—this is more than the trader has at present.
The small trader will have the same rights as the big one.
The railways desire true co-ordination of transport in the national interest. The " Square Deal " is a step towards co- ordination, which is impossible under present conditions.
The " Square Deal " does not restrict anyone else.
The need for action is urgent, not because of yesterday's traffics or tomorrow's, but because of the cumulative effect of many years' erosion.
THE PROSPECT What can I now profitably say upon the prospects ahead with all the world guessing ? The railway prospects depend upon economic prospects, and economic prospects are particularly depen- dent upon international political prospects, and these in turn are in the lap of several considerable gods.
Reports from the separate industries are varied and uncertain, and cannot be easily summarised, though there seems to be dis- cernible on balance a little more optimism in the last two or three weeks. It would not be honest to put it any higher, and I can only say that your officers and staff who have responded so magni- ficently to every call made upon them in 1938, are ready to secure the best from all that may come in 1939.