The Railway Library, 1909 / A Collection of Noteworthy Chapters, Addresses, and Papers Relating to Railways, Mostly Published During the Year

by Unknown

These considerations do not, however, apply with equal force to the State management of railways. The State would have a complete and universal monopoly. There would be no private competition left, except, of course, competition by sea or by tramway or any other mode of conveyance which can compete with railways.

Then there would not be, it may be assumed, any body like a municipal council who would practically interfere with the management. There might be Advisory Councils, like the Prussian State Railway Councils, and, of course, there would be a Minister of State responsible to Parliament for the railway administration, and Parliament itself, already, one may remark in passing, clogged and overburdened with work. But it is certain that whatever the details of the organization adopted might be, the whole of the management would practically be left to the expert permanent officials of the railways. There is no reason to doubt that railway officers would serve the State with as much loyalty and with as great a measure of success as they now serve the proprietors. Instead of being responsible to boards of directors and shareholders, they would be responsible to a certain number of officers of State, probably, indeed necessarily, to a large extent recruited from their own ranks, and I do not think that the change would result in much practical difference so far as the work of those who really carry out the duties of management are concerned. The only difference would be that these officers would have in view that they were working for the State instead of for shareholders.

There can be little doubt that if railways were nationalized they would be used as a field for many kinds of social experiments. The combination of philanthropy with business is generally regarded with suspicion, but the conversion of the railway manager into a social reformer would, I think, arouse serious and legitimate alarm. The certainty which we now possess that the action of any railway company, whether it be wise or foolish in itself, is wholly commercial in its motives and its aims, is a valuable safeguard. But if railway policy were to become the medium for the promotion of social or even economic theories under the guidance of politicians, would not this be a most alarming peril to trading and industrial interests? One group might insist, by political pressure, that the standard of wages should be maintained at a higher level than could be commercially justified. Another group, or many groups, might devote their efforts to securing the construction of railways in districts which could not support them with sufficient traffic, with the result of burdening the railway system with many unremunerative branches for which either traders, passengers, or the taxpayers throughout the country would have to pay. The policy of others would be to make suburban railways at enormous cost, and run cheap trains to serve the population resident in large cities, regardless whether such railways or trains were self-supporting or not. In this policy they would have the ardent and influential support of the owners of suburban land, who would rejoice in the increase of their rents, brought about by the expenditure of public money in creating railway facilities on uncommercial terms. These are not fanciful dangers. They are the results which we may feel sure would inevitably follow the nationalization of our railways, and the advantages to be gained from State management would need to be very great to compensate for these burdens.

Another aspect of the question which requires the gravest consideration is that which concerns the position of the State as an employer of labor. There are upwards of 620,000 railway officers and servants. The State would become the direct employer of that huge army, and would have to settle all questions relating to hours, wages, and other conditions of service. If a railway company is unable to settle differences with its men the ultimate resort of the men is the withdrawal of their labor, whilst the company are free to employ other men who are willing to accept their conditions of employment. Any railway strike on a large scale is a dire calamity to trade and to the public, but if one were compelled to consider the possibility of a general strike on a national railway system, even the deplorable results which accompany strikes on privately-owned railways would seem comparatively insignificant. Probably a railway department of Government would not urge the adoption of compulsory arbitration, if they were themselves concerned, with as much equanimity as they do in the case of strikes on private railways. It is true that in this matter the advocates of State railways can point to the comparative absence of labor conflicts in connection with the services now under Government control, but municipal undertakings have not been so successful in avoiding labor disputes, and in many cases have secured even the degree of immunity from such conflicts which they enjoy by the concession of terms of employment which constitute heavy burdens on the ratepayers. It seems to me that the danger of serious labor disputes cannot be put aside, and I confess that I am unable to see any safe way of meeting the objection to State ownership on the ground that the State ought to limit, as far as possible, its liability to become directly concerned in such disputes.

In conclusion, I would say that I have felt unable to take up a partisan attitude on the question. For many years past both my studies on railway subjects and my practical experience have led me to a convinced belief in the advantages of well-regulated monopoly, and I am unable wholly to disapprove of a scheme which would secure for the country the advantages of a system of well-regulated monopoly in which I believe, even although it should come in the guise of State ownership.

Competition, in my judgment, creates more evils than it cures, especially the half-hearted and imperfect competition which exists in England so far as railways are concerned, which cannot be regarded as free competition on a commercial basis.

I recognize that it is impracticable to secure unification or any very extensive or far-reaching combinations of railways under our system of private ownership. The public would not tolerate uncontrolled railways under private management, and I doubt whether any form of control which has yet been devised, or is likely to be devised, combined with partial competition, can give entirely satisfactory results. That there are grave dangers and risks in the public ownership of railways I fully admit; indeed, so grave are they, that I think he would be a very bold minister who would venture to bring forward, under Government sanction, a proposal for the nationalization of our railways. The existence of such a huge amount of Government patronage would open the door to political corruption. The existence of such an enormous body of Government servants possessing the franchise—and I confess it seems to me impracticable to hope that any measure could be carried subject to disfranchisement of Government servants—would imperil the financial stability of the railway system, and introduce new and very serious sources of weakness and danger into the body politic.

The risk of loss from the charging of unduly low rates under pressure from the influential body of traders seeking to enrich themselves at the expense of the general community seems to me a risk which no thoughtful man can ignore. No expedients for checking and restraining political influence so that it could not reach or sway the decision of the officers of State responsible for railway management seem to me practicable under our democratic constitution.