£ s. d.
    England  62 10  0
    France   47 12  0
    Belgium  41  2  3
    Holland   34  3 10

The amount paid per person by the English railway companies, whose lines comprise 11,538 miles, a gross revenue of £52,904,920, and the total aggregate expenses of which amount to £27,731,876, would probably be too high an average for the United Kingdom. Assuming, however, the difference in the amount per person paid in England as compared with the other countries to be an average of only £10, and that the cost of wages in this country could be reduced to that extent, there would be a saving of about £3,500,000 per annum.[78]

So much for the grounds put forward to justify a reduction of rates. Far from proving that working expenses are less on lines in this country, and that this forms grounds for reducing the rates, these figures clearly prove the opposite to be the case.

Rates and Taxes on Railways in England
and on the Continent.

A large item in the expenses of railway companies in this country is the amount paid for rates and taxes other than the Government duty. The matter is too important to be passed over in general terms. In the United Kingdom the amount paid by all the railway companies for rates and taxes in the year 1884 was no less than £1,937,691. This is exclusive of Government duty to the extent of £398,577 and of income tax on the net receipts amounting to about £800,000. Including these items the total sum paid for rates and taxes for the year was £3,136,268. In England and Wales alone the amount paid for that year was for

From the year 1871 inclusive to the end of 1884, the following sums were paid in the United Kingdom for

No such payments as these are made to the Governments or parishes by the railway companies in Belgium or Holland, or in respect of the State lines, in Germany. In Belgium, for instance, the railway companies pay no rates and taxes of any kind except small sums to towns for local rates (which amounted in the aggregate to only £1,468 for the year 1884), and a license duty or income tax to the State of 2 per cent. on the annual profits amounting for the same year to £4,406, a total of £5,874 for the year.

In Germany the whole amount paid by the railways for rates and taxes in the same year was £261,221, together with a State tax of £26,209, paid under the head of “tax on profits,” by the independent and semi-independent companies only, and not by the State railways. This made a total for the year of £287,430.

The railway companies in Holland do not pay any rates and taxes, except a license duty to the State of 2 per cent. on the dividends paid to the shareholders. Indeed, Article No. 8 of the Convention of the 24th and 25th May, 1876, for the working of the State railways by the Dutch Company, stipulates that the railways shall be exempt during the period of the Concession, from all Government taxation or payments to towns or parishes.

In France the condition of things is different.[79] Although there is no taxation on merchandise traffic, the payment in respect of passenger and grande vitesse traffic, which is added to and levied with, the railway charges, is heavy, and amounted in the year to £4,683,937.

The other taxes paid by the railway companies themselves, or by the holders of shares, &c., amounted to £1,490,415, making together a total for the year of £6,174,352.[80]

Such are a few of the differences in the position and rights of English and Continental railways, and those who depreciate the former should explain whether they wish to adopt all the practices of foreign lines—the features unfavourable to traders as well as the advantages, slow transit, very limited liability for loss of goods or damages to them, and exemption from fiscal burthens which English railways bear—and how the cost of working, especially in the item of wages, can be reduced.

SECTION XIV.
HIGH RATES AND THEIR EFFECT ON TRADE.

It is not uncommon to attribute much of the existing depression of trade to rates charged by railways. Before the Royal Commission which lately investigated the subject, many statements to that effect were made. Against their accuracy there is a strong presumption in the fact that trade has been in recent years depressed elsewhere, and in countries supposed to enjoy lower rates than exist here. When particulars of the exact nature of these complaints are furnished—which is seldom done—it is found for the most part that there is no real connection of cause and effect between railway charges and depression in trade; that the latter revives or declines independently of the former; that for the most part, the evils complained of are beyond the power of railway companies to remove; and that the complaints are contradictory. Two of the forms which these complaints have taken may be noted. One is the statement that[81] differential rates operate in favour of the foreign producer, and that works are being removed from inland to seaboard towns to save carriage.[82] Obviously this grievance could be wholly abated only by free carriage; producers on the sea coast, near points of shipment, inevitably possess certain advantages. These again could only be materially reduced by differential rates somewhat lessening the inland producer’s geographical disadvantages; and to this remedy the persons loudest in their complaints most strongly object. Another form which such complaints take may be noted. The following extract is from a paper sent in by the Mining Association of Great Britain to the Royal Commission on Trade:—

“The heavy trades of coal and iron are also unduly burdened by the high rates and tolls charged by the Railway Companies. They are slowly but surely killing the trade of the country by their high charges and by the preference given to foreign countries.”[83]

Charges against Railway Companies are, generally, of a vague character. But this statement is sufficiently definite to make it possible to test its accuracy by comparing the rates charged for conveying the articles referred to, viz., iron and coal, to some of the chief ports in this country, with the corresponding rates of other neighbouring countries. The following is a comparison of a few of the rates charged for coal and iron in England with those to Belgian and German Ports:—

Such figures are a conclusive answer to charges of the sweeping character we have quoted. They are a warning of the peril of generalizing from a few hastily collected local instances. The owners of some inland collieries and manufactories, not so favourably situated as their rivals, might have reason to complain—there would be plausibility in the statements we have quoted—if English coal and iron were inferior to foreign, and could not bear the same charges as foreign products, or if collieries and iron works, near the sea, were unable to supply more coal and iron than they now do. Neither supposition is true. The house and steam coal raised at some of the English collieries named in the foregoing tables is probably the best in the world. The iron and steel are equal, if not superior, to any produced; and the districts in which the collieries and works are situated can (if only there were the demand, which, unfortunately, there is not) produce much more than they do. In these circumstances, with rates so favourable as those which are quoted, there appears to be absolutely no ground for the crude allegation that railway rates are the cause of the diminished exportation of either coal, iron, or steel.[87]

As regards the conveyance of minerals and goods, there is no sign of decline of trade, far less that it is “slowly, but surely killed by high rates and tolls.” Taking three tests: receipts from minerals and goods, tonnage conveyed and amount produced—it will be seen that the figures stated in Appendix II. indicate no decline. The volume of trade is larger, lower prices may rule; but this will scarcely be attributed to the action of rates.

Even when foreign rates seem lower, the difference is often more apparent than real. With few exceptions the English rates for merchandise traffic include the charges for loading and unloading, collection and delivery, and all the other services connected with conveyance. On the other hand, the foreign rates are exclusive of collection and delivery, and of the various other services of booking, weighing, advising, stamping freight note, &c., and also of the cost of loading and unloading, except in the case of part loads in Belgium, where the rates include compulsory charges for loading and unloading.[88]

In judging of the effect of rates in encouraging foreign competition, one circumstance must not be lost sight of. If railways in this country do not carry all species of merchandise traffic at as low rates per ton per mile as some of those charged on railways in countries where, not only has the cost of construction been less than here, but where the lines are owned or subsidised by the State, such a fact is not conclusive. To determine how far rates charged in this country really affect the ability of manufacturers to compete with foreign rivals, the charges per ton per mile must not alone be considered. The gross rate per ton from the place of production to the port of export is important. A manufacturer cannot fairly say that he is prevented from competing with his foreign rivals by rates less in the aggregate than those paid by the latter. Otherwise one whose works were situated within 20 miles of a sea-port, and who paid 1¼d. per ton per mile for the conveyance of his goods, might with equal justice say that he could not compete with another manufacturer whose works were 50 miles from the port of shipment, and who paid only a 1d. per ton per mile. 2s. 1d. is less than 4s. 2d., however the sums may be made up. Now, such superiority of situation English manufacturers, as a rule, must from the nature of things enjoy. A glance at a map will show that in England no such distances have to be traversed to get to the seaboard as in Germany, France, and, in some instances, Belgium. In England there is no place 100 miles distant from the coast, and so numerous are the ports, and so near to them, relatively speaking, are the great coal districts and centres of other industries and manufactures, that producers of coal are more favourably situated, and other producers are, in general, more favourably situated than those on the Continent, especially as compared with those of France and Germany. To illustrate this fact, a few examples of various manufacturing centres may be given.

Such natural disadvantages foreign countries have, by special rates, sought to diminish, but they cannot be wholly effaced.

It is a curious circumstance that in the discussion of the problem of railway rates on the Continent, wholly different language is employed with reference to English railways. Here, it is common to hold up foreign railways as models of cheapness and efficiency; there, in the discussions which have taken place in France and Italy on the same subject, the opposite course has been pursued. English railways have been extolled as worthy of imitation; they have often been praised for the very qualities in which it has been alleged in recent discussions that they are wanting. Can both views be right? Is not this deprecation of home railways, this vague praise of foreign lines, sometimes an example of a common artifice of controversy? Is it not often an illustration of the tendency to treat omne ignotum pro magnifico? Very different from this loose, unverified deprecation is the opinion of those foreign observers who have carefully examined the question. This might be illustrated by many official documents; but the following quotation from a report of M. Richard Waddington to the Chamber of Deputies may suffice:—

“Comparison between the French and foreign rates has often been made in Parliament, and the defenders of our tariff have presented it as favourable to our French companies; but this comparison can only justly be made, provided the conditions of delay and distance are taken into consideration. Now, in England, the delays are extremely short, merchandise which leaves Manchester in the evening being delivered in London next day, slow goods trains hardly existing, and the consignee placed rapidly in possession of his goods, avoiding the loss of interest which, under the French system, tends to increase the amount of charges. On the other hand, in view of a well-known principle, the longer the distance the lower the charge per kilometre, but the average distance of 135 kilometres (84 miles) in the French system is greater than the average distance travelled on the railways of Great Britain, of Belgium, and of Alsace-Lorraine. From the figures which have been already quoted, and the documentary evidence which we attach, we are led to conclude that the conditions and rate of carriage of merchandise in France are less favourable than those by which our nearest neighbours are benefited; therefore, far from being able to share the optimist view to which we have already alluded, we fear that we can only report that the comparison is really unfavourable.”[89]

Such facts are familiar to foreign merchants and traders; and it might be well in future discussions of the comparative merits and efficiency of English and Continental railways, to gather information as to the latter from persons who are conversant with their working, and not from those who can know them only imperfectly and indirectly, and who may have an interest in praising them to the disadvantage of the former.

If high rates impede the progress of trade it must be by raising the prices of commodities, and so diminishing the demand for them, or by seriously reducing the profits of producers. Have those who complain of the effect of rates on prices established the existence of either of these results? They have had before them, as a rule, only a few special instances of unfavourable rates. They have ignored the mass of cases in which the charge for conveyance is a trifling element in price. They have not, as would be but fair, taken a large group of articles, and noted how insignificant is the cost of transport as compared with other charges, how small is the rate of profit of the railways as compared with the charges of the manufacturers and distributors. Here it is not right to stand merely on the defensive; we are well warranted in saying that if, fortunately, trade is not more depressed than it is, we owe this in no small degree to the efficiency of the railway system which has aided the manufacturer and producer in their difficulties. Economists are agreed that wages and salaries must bear some relation to cost of living, and must eventually rise if that becomes permanently dearer. Everywhere, but in great towns especially, railways have prevented the rise in the cost of provisions. They have made it possible for people to obtain food from great distances at low prices, and thus for employers to obtain labour at prices which might not have been possible but for the cheapness of provisions. The few figures given in the following table may be instructive:—

Fresh Meat is carried to London from:—

Potatoes (Old), Carrots, Parsnips, Turnips, are carried to London from:—

Green Vegetables are carried from Cookham to London, 27 miles, at 11/8 per ton, C. & D. in one ton lots, or 7d. per cwt.

Bacon is carried from Calne to London, 99 miles, in one ton lots at 22/6 per ton; 1/1½d. per cwt., or ·12d. per lb.

Cheese is carried from Chippenham to London, 94 miles, at 27/6 per ton, ¼½ per cwt., or ·147d. per lb.; and from Cirencester to London, 95 miles, at 23/4 per ton, ½ per cwt., or ·125d. per lb.

Milk is carried from Shrivenham to London, 72 miles } for 1d. per imperial
    ”    Swindon  ”    77   ”  } gallon.

Fish is carried to London at the following rates (per lb.):—

    A = By Passenger Train
    B = By Goods Train.