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.