Royal Railways with Uniform Rates / A proposal for amalgamation of Railways with the General Post Office and adoption of uniform fares and rates for any distance

by Whately C. Arnold

I admit the argument would hold good if the restriction be not imposed by an inflexible rule that there should be no attempt to work the concern, whether Post Office, telephone, railway or other monopoly for purposes of profit.

I have already referred to the mistake the Post Office are making in following the example of the private monopolist, the National Telephone Company, in charging for telephones according to distance, although between the very same towns in which different rates are charged the same department charges 6d. only for telegrams! This can only be with the strange, yet futile, intention of making more profit without regard to the benefit of the community. If the same rate were charged for Trunk calls as for local calls, many more provincial and country people would subscribe, and the wires being already laid and exchanges established, the additional expense would be but small.

It would seem, indeed, that the search after profits in the case of Government or municipal monopolies is as futile as the search by people after happiness, personified by Maeterlinck as “The Blue Bird,” and that when the only object is to benefit the community, the profits come, as does happiness, when the only object is that of benefiting other people.

Now, in considering the principle here laid down, it appears to me that there are four rules which should be observed when a nation or municipality undertakes anything in the nature of a trading concern:—

1. Only such concerns should be taken over as are, and must be, in the very nature of things, a monopoly, or, in other words, are not susceptible of effective competition.

2. Any such concern taken over should be worked with the sole object in view of benefiting the community and, therefore, the charges made should be so adjusted as to pay for the acquisition of the concern and for working expenses, and any surplus from time to time applied, only in improving the efficiency of the undertaking, or in reducing the charges made.

3. In the event of any invention or improvement being made, and proved to be commercially successful, whereby the benefit to the community can be increased, and provided the concern remains in its nature a monopoly, such improvements should be taken over and worked by the State or municipality, and meantime there should be no prohibition of any private enterprise carried on in competition apparent or real.

4. All such concerns, whether national or municipal, should be worked or directed by one or more Department of State, having at its head a Minister, who should be a Member of the Cabinet, and responsible to the House of Commons, and as such liable to a vote of censure for any abuse or want of efficiency in the concern.

As to Rule No. 1, there appears sometimes to be a very thin line between what is, and is not, susceptible of effective competition. As a general rule, any concern which involves a right or easement over land, must be in the nature of a monopoly. Thus the supply of gas, water and electricity, all of which must be conveyed by pipes or wires into houses, are in the nature of a monopoly, but the fittings used in the houses are not, but are susceptible of very efficient competition, both as to workmanship, manufacture and design. All roads, including railroads and tramways, are, and must be, in the nature of a monopoly, but the manufacture of materials and rolling stock, the catering of hotels, forming part of the railway undertakings, or in the trains themselves, or in railway steamers, are all the subject of effective competition and should, therefore, be put up for competition with special supervision and restrictions against abuse of the privileges obtained by competition on Government property.

Now, I would ask any unprejudiced reader who has studied the writings of the eminent authors already quoted, and other opponents of nationalisation, to read those books again with these four rules in his mind, and consider whether all the objections so forcibly brought forward against nationalisation would not be very nearly, if not completely, answered, if such nationalisation were carried out with strict adherence to these rules.