A History of Inland Transport and Communication in England

by Edwin A. Pratt

It will be seen that the taxation of a railway line—as distinct from that of railway buildings—is, to all intents and purposes, the enforcement of a toll, on all traffic carried, for the privilege of passing through the parish concerned; while there is no suggestion, as there was in the case of turnpike roads, that those who collect the toll confer an advantage on those by whom the toll is paid. The turnpike trustees did provide a road, and they were, also, under an obligation to keep it in order. The toll-payers thus got some return for their money, and, though the trade of the district, or of the country, was taxed, it was, also, directly facilitated by the toll-receivers. The railway company, on the other hand, provide and maintain their own road, without putting the parish to the slightest expense, yet the parish is authorised to levy upon them what is, not only a toll, but a supplementary Income Tax for local purposes, based on the principle of the profits the company are supposed to make in the parish, often only because, for geographical reasons, it is necessary their lines should pass through it in going from one part of the country to another.

On page [114] I have told how, in the early part of the sixteenth century, the local authorities of Worcester, Gloucester and other towns on the Severn sought to raise funds for their local exchequers by taxing the traders who used the river for the transport of their commodities; and I have further told how, in 1532, it was enacted that any person attempting to enforce such toll or tax should be fined forty shillings. But a practice held in the sixteenth century to be unjust in itself as well as prejudicial to the interests of trade, and penalised by the Legislature accordingly, is considered quite right and proper, and receives express legislative sanction, in the twentieth century, though the local authorities upon whom the toll-privilege is conferred to-day may do no more to help the railways than Worcester and Gloucester and the other Severn towns did to help the river traffic—and that was nothing at all.

One result of the power thus given to local authorities to bleed the railway companies as an easy and convenient method of providing themselves with funds is that in a large number of parishes throughout the country a railway company pays the bulk of the rates, even though it may not even have a railway station in the place.

In Chapter IV of my book on "Railways and their Rates" I have given a table showing that in a total of 82 parishes, divided into four groups, the proportion of local rates paid by the London and North-Western Railway Company ranges from 50 per cent to 86.9 per cent, although in 53 of the parishes the company have no station. In a further table I specify sixteen parishes in which the area of the same company's property ranges from four to fifty-eight acres, or from 1.3 per cent to 5.1 per cent of the whole of the land in the parish, while the proportion which the railway assessment bears to that of the entire parish ranges from 66.9 per cent to 86.1 per cent.

Being thus enabled to depend for the greater part of their revenue on railway companies, who are given the privilege of paying but are denied the privilege of representation or of having any voice in the way the money they contribute shall be spent, there are local communities which show the greater readiness to carry out comparatively costly lighting, drainage, education, road improvement or other such schemes because it is a railway company that will pay most of the cost, the proportion thereof falling on the great bulk of the individual ratepayers in the parish being thus inconsiderable. Social reformers tell us of the improvements they find proceeding to-day in village life in England. What is happening to a large extent is that rural centres are providing themselves with urban luxuries at the cost of the railway companies—that is to say, at the cost either of the railway shareholders or of the railway users or both together.

The same tendency may, however, be carried further still.

On the occasion of the coronation of King George and Queen Mary, various local authorities had the less hesitation in voting supplies to defray the cost of festivities out of the rates because they knew that most of the money so voted would have to be paid by a railway company. In a letter to "The Times" of June 3, 1911, on this subject, Mr James E. Freeman, of Darlington, says:—

"The village of Carlton Miniott, near Thirsk, lately held a parish meeting to consider whether the £30 or so that will be spent in local festivities in connexion with the Coronation should be raised by means of private subscriptions or from the rates. It was decided to levy a penny rate, with the result that the North-Eastern Railway Company, which had and could have no voice in the decision, will pay £21 13s. 4d., and the loyal residents, who receive the whole of the benefit, will pay £9 11s. 8d. towards the £31 5s. that is to be expended. At the neighbouring village of South Otterington the keen-witted Yorkshiremen have profited even more from the law's absurdities. They have voted a precept of £30 on the overseers for their merry-making, and of this amount the North-Eastern Railway Company will have the satisfaction of paying a little over £25."

The "Great Western Railway Magazine" for July, 1911, in referring to the same subject, tells of "a parish having the good fortune to have a railway running through one end of it, in which a rate of threepence in the £ has been imposed. This has produced £200, all of which has been spent on eating and drinking in a population of less than 2000, while the governing idea in raising the rate appears to have been that the railway company would have to pay some £70."

Without stopping to discuss the question as to the exact proportion in which the results of this taxation system should ultimately fall on, or be made good by (a) shareholders, or (b) traders and travellers, the policy, if not the justice, of allowing the internal transport of the country, and, therefore, the trade and industry of the country, to be subjected to this abnormal taxation, if not to this actual plundering, by constituted authorities, may well be open to question, and especially so when one bears in mind the already heavy expenditure which has fallen on the companies, and the dissatisfaction expressed, from time to time, by traders with the railway rates, by railway servants with their pay, and by shareholders with their dividends. Certain it is that in the Board of Trade "Railway Returns" all these payments on account of rates and taxes and Government duty are included among the items of "working expenditure," and are deducted from the gross receipts before arriving at the amount of the net income available for dividends or to be taken in account in regard either to reductions in rates and charges or to increases in wages.