The alternative for a railway company lies in the possibility of reducing expenses; but there are limitations in this direction if perfect efficiency in all branches of the service is to be maintained, and no one would be likely to suggest that these exactions of local authorities should be made good by reductions in, for example, that especially large item of working expenses represented by the wages of railway servants.
What I have said in regard to rates and taxes in general applies no less to the increased financial burdens that would fall on railway companies in respect to the National Insurance Bill. With the main issues presented by that measure I have here no concern; but the difference between railway companies which cannot "pass on" the heavier taxation that all measures of this type involve and the ordinary industrial companies which can should be sufficiently obvious.[[57]]
Clear, at least, it is that if both the Government and the local authorities continue to pile up these burdens of taxation on transport companies, themselves subject to the restrictions mentioned, the traders of the country cannot expect much relief in the railway rates of which many of them complain. It may be that the primary effect of the financial conditions thus brought about falls on the railway shareholders. It is, also, the case that the traders are well assured against any increase in rates. But the traders suffer a disadvantage as well as the shareholders because, though the railway companies may be prevented from raising their rates, they may, also, find it practically impossible to reduce rates which they would otherwise be willing to put on a lower scale. On the one hand the traders are protected from being charged more. On the other hand they are prevented from being charged less. They may not lose, but they may not gain; and inability to secure a benefit that might otherwise be secured amounts, after all, to the equivalent of a loss. In regard, also, to the wages of the staff, these may not be reduced yet the power of companies to advance them may be curtailed by any undue swelling of working expenses in other directions.
A good idea of the magnitude of the capital, the scope and extent of the operations, and the greatness and variety of the interests concerned in the working even of a single great railway company is given by the following table of what are deservedly called "interesting statistics," drawn up in regard to the Midland Railway for the year ending December 31, 1910:—
| Capital expended | £121,304,555 |
| Authorised Capital | £193,900,517 |
| Working Expenses | £7,716,665 |
| Salaries and Wages | £5,015,017 |
| Revenues:— | |
| Coaching | £4,058,129 |
| Goods, Mineral & Cattle | £8,375,673 |
| Miscellaneous | £607,581 |
| Rates and Taxes | £450,379 |
| Lines owned (miles) | 1,680 |
| Constructing or Authorised | 10¾ |
| Partly owned | 329 |
| Worked over by Engines | 2,378 |
| Train Mileage | 48,472,172 |
| Passengers carried | 46,481,756 |
| Season Tickets | 221,862 |
| Coal and Coke consumed (tons) | 1,773,179 |
| Minerals & General Merchandise passing over line (tons) | 47,533,420 |
| Engines | 2,800 |
| Carriage Stock | 5,489 |
| Waggon Stock | 117,571 |
| Horses | 5,158 |
| Road Vehicles | 7,009 |
| Signal Cabins & Stages | 1,942 |
| Miles of Teleg. Wire | 31,446 |
| Railway Telegrams | 14,542,689 |
| Steam Fire Engines, Pumps, &c | 511 |
| Fire Hydrants | 1,619 |
| Men qualified to render first aid to the injured | 10,037 |
| Contributions to Friendly Society | £21,916 |
| Sick Allowance paid by Friendly Society | £36,367 |
| Contributed to Superannuation Fund | £34,858 |
| Total number of Employés | 69,356 |
| Uniform Staff | 29,500 |
| Clerical Staff at Derby | 2,519 |
| Workmen in all Shops | 13,443 |
| Area of Carriage Works (Acres) | 126 |
| Acreage of Loco. Works | 80 |
The organisation and working of the English railway system as it exists to-day are matters as to which a good deal of interest has been shown from time to time, and a certain degree of knowledge thereof is essential to an appreciation of the position that has developed from the primitive conditions already detailed. The subject is treated very fully in "The Working and Management of an English Railway," by the late Sir George Findlay, formerly general manager of the London and North-Western Railway Company, whose line he naturally dealt with in his book. Much, however, has happened since the first edition of that book was published, in 1889, and some of the details given are not applicable to present conditions. I do not propose to bring them all up to date, but it may be of advantage if I attempt to convey to the reader a general idea of the basis on which the London and North-Western, as a typical English railway, is organised and managed, leaving aside the technical data concerning construction and operation with which, although they occupy a considerable space in Sir George Findlay's book, I have here no direct concern.
The London and North-Western Railway had, on December 31, 1910, a total length of line of 1966 miles, of which 380 miles were single track and 1586 double or more. The total length of track, including sidings, in equivalent of single track, was 5490 miles. The authorised capital was £133,989,000 and the paid-up capital £125,038,000. The magnitude of the company's operations is indicated by the following figures in regard to traffic, etc., in 1910: Number of passengers carried (exclusive of season-ticket holders), 83,589,000; minerals, 43,384,000 tons; general merchandise, 10,511,000 tons; number of miles travelled by trains, 47,463,000; receipts (gross) from passenger traffic, £6,699,000; receipts (gross) from goods traffic, £8,900,000; total working expenditure, £9,937,000.
The supreme control is exercised by a board of twenty directors, including a chairman and a deputy chairman. Four retire annually, and are eligible for re-election. The directors are appointed by the shareholders, all of whom have the right to express their views thereon at the half-yearly meetings of the company; and when it is stated that the number of shareholders—debenture, preferred and ordinary—in the North-Western is 100,000, representing 90,000 holdings, and that in 45,000 cases the holding is £500 or under, it will be seen that an English railway company is a far more democratic institution than one of those great railroad systems in the United States which may be completely dominated by a single individual. Any shareholder in the London and North-Western who possesses the necessary qualification, by being the owner of ordinary stock to the value of £1,000, is eligible for appointment on the board.
The main functions of an English railway board are—to decide questions of principle and policy; to keep close watch over the interests of the shareholders in regard to all questions of finance; and to exercise a general control and supervision in order to ensure the thorough efficiency of the line. Subject to such general control and supervision, the working details are entrusted to railway officers possessed of the skill, judgment, experience and technical knowledge requisite thereto. It is thus no more necessary that railway directors should be railway experts than it is that the proprietor, the manager and the editor of a great daily newspaper should themselves be able to write shorthand, set up type, cast a stereo and run the machines. They can dictate policy, attend to business details and direct heads of departments without these, in their case, superfluous accomplishments. Railway directors who, going beyond their legitimate functions as aforesaid, sought to interfere with or dictate to skilled railwaymen on matters of ordinary detail or office routine would, in fact, cause friction without necessarily promoting efficiency in operation.
In practice it is not unusual for a retiring general manager to be invited to take a seat on the board either of his own or of another company; but, generally speaking, the main qualification for a railway director, apart from the extent of his holding, is found in his possession, or assumed possession, of good business qualities, coupled with an interest in some particular part of the district the railway serves.