RAILWAY RATES.*

Tins book is the most valuable contribution to Railway literature since the appearance of Professor Hadley's Railroad Trans- portation, (Putnams). It deals with facts, and not with theories, and the case is stated as well as possible from the Railway Managers' point of view. If we differ in the following remarks from this somewhat negative attitude, we should be glad to be able to support our views by such well-digested and certain facts as those of Mr. Grierson, but this is nearly impossible for any one outside the railway world. From the general principle with which Mr. Grierson starts—viz., that in any proposed change of rates, "all interests should be considered "—no one is likely to differ.

As to practical methods of considering these interests in rela- tion to the new and constantly changing state of trade and transportation business, there will probably always be differences of opinion. Mr. Grierson seems to consider that the Railway Companies should be the only judges as to the justice of rates. One by one, he disposes of the somewhat wild suggestions for fixing rates theoretically, pointing out that neither cost of service, equal mileage, nor even a differential scale based on distance or quantity, can afford a scientific or satisfactory basis for fixing-a rate, for all these have been tried in one way or the other, and have been found wanting. Even abroad, where Rail- way Companies are practically monopolies, this is so ; how much

Western Rahway Rawly.: EInctidallarnLiteriarlisi By Stanford. Grierson, General ]Sanger, Great

more would it be the ease in England, where three-fourths of the traffic is affected by sea competition 1 Throughout the world it is admitted that cost of individual goods' services is impossible to discover; that equal mileage simply means protection to the nearest producer, and also takes away the commercial basis of railway working ; that differential rates (in the sense of a differentiated scale of rates according to dis- tance) is merely an attempt to combine the principle of cost of service with a mileage rate, and has proved an utter failure, even with Bismarck to back it. Mr. Grierson seems ultimately to fall back upon the natural principle of all trade,—viz., to charge " what the traffic will bear," not, as the traders often imagine, what it will not bear. No one who has studied trans- portation business will doubt that this is the view which must ultimately be accepted. But the question really goes further than this, for one must ask whether the Railway Companies are always the best judges of what this figure should be. It is in this part of his case that we think Mr. Grierson is hardly so strong. Mr. Findlay, now the General Manager, and for many years the Goods' Manager, of the London and North-Western Railway, has admitted before a Parliamentary Committee that he never yet met a trader who was satisfied with his rate, and further says that a Goods' Manager ought theoretically to know every business which sends goods by rail. It is impossible to suppose that any human being can do this, and it seems to us that what the public want is more certainty that their individual complaints are honestly considered by the Goods' Managers, and especially that there is none of what Professor Hadley has named " personal discrimination."

That there is so very little complaint in England of the con- duct of passenger traffic seems to us due to the necessary publicity with which that business is managed. If the Railway Companies wish to avoid very arbitrary action on the part of the public towards them, it seems to us they would be wise to make a simpler and more intelligible tariff, so that any trader may know, when he sends goods from one place to another, by looking in a book what is the most he will have to pay. To the average person, the following definition of a rate seems the simple one, viz. :—One payment, including all charges, in re- spect of goods put on the Company's premises at A, for delivery to another part of the same or another Company's premises at B. We confess that the arguments of Mr. Grierson against the possibility of such an arrangement seem to us to be weak.

The principal reason alleged is that it is difficult to state the cost of "terminals,"—i.e., the payments made for use of the accommodation provided by the Company at each end. Carting, of course, involves a separate payment. Now, Mr. Grierson has himself admitted that in making a rate at present, the " cost of service " cannot be accurately defined. How, therefore, can it be so accurately defined in the case of a terminal P For instance, he says that the Great Western Railway have con- strncted a goods' depot at Smithfield, where the expenses to the Company come to 3s. 8d. per ton ; while they might have con- structed their goods' depilt at Wormwood Scrubbs instead, and have let the public cart thence at 7s. 6d. a ton. But considering that the six other Companies which reach places competitive with the Great Western,—viz., the Great Eastern, Great Northern, Midland, London and North-Western, London and South-Western, and South-Eastern Railways—all have City stations, does Mr. Grierson intend to say that the Great Western would have allowed them to carry all competitive goods' traffic ? Was not the building of the City Goods' Station really due to competition, and not to goodwill towards the public, on the part of the Great Western ? If this argument be admitted, it seems to ns that there ought to be no difficulty in framing a new schedule of higher rates which should include all terminals. TheRailways would doubtless dislike it,because all extrapublicity tends to produce competition ; but it would probably put an end to many useless disputes between traders and Railway Companies. People want to know what they have got to pay and what their neighbours are paying, and though in a progressive country special rates must be made, there is no reason why the in- dividual should not know the absolute maximum which he can be called upon to pay, or why special contracte should not be published openly. If the " Courts of Conciliation " which have proved so successful in America are very much objected to by the railway authorities here, there is no method so likely to render them useless as by the Companies making their own rates intelligible ; and on this point we admit to having a sym- pathy with the Railway Companies who wish to fix these them-

selves, instead of having it done by a State Bureau. But it seems unreasonable to claim this freedom from interference, freedom from publicity, and freedom from competition, which is what Mr. Grierson is inclined to do.

This leads to some interesting questions of detail raised by his book. Mr. Grierson, on p. 31, while arguing against equal mileage rates, admits that "competition between Railway Com- panies is carried on extensively." In chap. 18, on "Railway Amalgamation," he goes on to say that competition should be avoided by agreements between Companies, and there is no reason why such arrangements should not be made beneficial to the public. From so great an authority, one would have been glad to hear how such arrangements are to be made beneficial to the public. This is especially the case in regard to passenger traffic. No doubt for a time an amalgamated system of previously competing lines is better for the public. But, as Professor Hadley has pointed out, what is enterprising policy in a railway to-day, will be totally behind the times in twenty-five years in a progressive country. This is specially the case in passenger traffic. At first, the

French railways, arranged on a theoretical system of complete monopoly, were considered models of speed and comfort. Now, they are almost grossly behind the age. Or, again, take the North-Eastern system. When first amalgamated, its service and dealings with the public were first-rate. Now, its only really fast services are the through competitive Scotch trains, its time- keeping is very poor, and, as Mr. Foxwell says, the line is more noted for dividends than expresses. Again, a writer in the Rail- way News has recently pointed oat that since the St. Gothard Tunnel was opened, the Nord and Paris-Lyon-Mediterramle of France, through the Cenis, have quickened up ten hours from London to Rome, and are 23 cheaper, entirely owing to com- petition. And Mr. Grierson admits that the Parliamentary agreements between the Chatham and South-Eastern, and the Brighton and South-Eastern Companies, have not resulted in as great benefits to themselves as might have been expected. Certainly the public have not benefited. Dover and Folkestone have the dearest trains and the worst rolling-stock of any places in England; and the development of traffic to the Continent has been enormously hampered by the agreement, combined with the virtual monopoly on the French side. The Chatham have got out of it by Limning steamers from Queenboro', and the South-Eastern are per- petually trying to evade the agreement. Again, Brighton is the only town of any size near London to which only one line runs; and it is the only town to which the expresses are almost all destitute of third-class, and slower than the expresses of any other Companies.

Then, again, would such lines as those from Croydon to East Grinstead, Canterbury to Folkestone, Okehampton to Launces- ton, &a, ever have been made by the older Companies if they were not afraid of a competing Company making them ? Such potential competition it is which keeps railways alert, for we believe that no system of pooling over yet devised would make it to the ultimate interest of any Company possessing a route from A to B not to try for traffic between those points, so long as another Company may build a line if the old one does not do its duty. Still, we are willing to admit that, even in this case, where the question is how much accomodation shall be given, as in that of rates, Railway Companies can be the only ultimate judges of what is to their interest ; and if the Great Western Railway think it not to their interest to compete in speed for passenger business from London to Liverpool, or from Bristol to Manchester, people naturally choose other routes ; but a Free- trader will scarcely say that they have in such circumstances a locus standi against a new Company which proposes to make a better route independent of them.

It is curious that in the book no allusion is made to Italy, where the whole question has been made the subject of a more complete study than anywhere else, and where the country has now been divided into two great systems—each with lines to the principal towns—with the very object of producing some competition. The public are too apt to forget, when comparing our lines with foreign ones, that the most important factor of all in a fair comparison—viz., quantity and quality of train service—is necessarily one impossible to get at. You can com- pare mileage rates, you can compare speeds, but you cannot compare the general facilities for getting about the country at convenient times, or quickness in actual despatch of goods. Nor, perhaps well for us, can you compare timekeeping. But still, Mr. Grierson's figures on these questions are very interest- ing, and allow conclusively that our roads still keep the foremost place in passenger business, and consequently that our passenger business pays better proportionately than that of other countries. Roughly speaking, we have in England and Wales doable the number of passenger-train miles per mile of railway to that of France and Germany, and treble the number per one thousand people, and yet our gross receipts per mile are three times as

great,—showing how profitable passenger traffic here is, or how undeveloped abroad. We should like to ask Mr. Grierson how he reconciles these figures with his statement of the "undue competition for passenger traffic which no doubt exists in England."

With regard to dividends, it seems to us that the very fact that the average railway dividend of this country has kept just about the same as (rather above) the average safe rate of interest for capital, shows that the construction of railways has followed the ordinary economic laws of supply and demand,— in other words, that our Free-trade system has been favourable to a moderate rate of interest on a large capital, the foreign system to an enormous rate of interest on a smaller capital. It will hardly be doubted that our system is most favourable to the con- sumer. Nor should it be forgotten, in comparing dividends, that

abroad the State has had to go to enormous expense in construct- ing branch lines to develop the country ; while in England such

lines have either been made by the big Companies in order to

keep themselves free from competition, or by local people who may have a very great indirect interest in having the accommo- dation, even if it does not pay them directly. It has always

seemed to us moat unfair, when it can be avoided, to tax the whole nation, as has been done in France, in order to construct such secondary lines, and it is obviously unfair to classify the financial result of such branches together with those of the parent and more profitable lines, in considering the average dividend.

To sum up, it seems that Mr. Grierson has made out his case ; so far as this,—that he proves there has hitherto been no great injustice done by the railways themselves towards the public ; that in most points, and quite certainly in passenger business, our railways are ahead of Continental ones ; that his plea for no further interference can only be justified if the Companies will be more open in their dealings towards the public, especially with regard to goods' rates ; that his plea for freedom from further competition cannot be entertained in a Free-trade coun- try. We go so far as to say, however, that if any Government Bureau undertakes to reduce rates, some guarantee should be given to the Companies against loss. This has been done in Italy.

Finally, there are three points which Mr. Grierson does not touch, which ought not to be left out of sight in considering why our rates are somewhat higher. First, the excessive sums paid to landowners, who used to be the governing class in this country. Secondly, the extravagant working of our Private- Bill system, which has no merit but publicity. Thirdly, the expense caused by the public demanding through Government interference such extravagant forms of safety appliances, which has led to the construction of much more "double line " than necessary, as proved on p. 124, where the per-centage of double line in England is nearly twice that of Germany. If the traders' grievances are really so serious, let them combine to get these things altered, and then make a few new cheap com- petitive lines, which will do more to reduce goods'rates than any tribunal of Government, however ably administered.