LEAVE. FIRST READING. (Hansard, 10 February 1873)

§ MR. CHICHESTER FORTESCUE,
in rising to move for leave to bring in a Bill to make better provision for carrying into effect "The Railway and Canal Traffic Act, 1854," and for other purposes connected therewith, said, the Bill was founded upon the Report of the Joint Committee of both Houses appointed last year to consider the various Railway Amalgamation Bills then before Parliament. The circumstances that led to its appointment illustrated the saying that "history repeats itself." In 1853 proposals were made for amalgamation which alarmed the country on account of their magnitude, and the fear of the monopoly which might result from them. A Committee vas moved for and obtained by the then President of the Board of Trade, the right hon. Member for Oxfordshire (Mr. Henley). A change of Government occurred; but the inquiry was carried on under the presidency of the present Secretary of State for War (Mr. Cardwell). Since then things in the railway world had pursued their course, very much unaffected by the proceedings of that Committee. Parliament had granted a number of lines, many of them competing lines; these lines had competed for a certain time; they had then combined, and, in many instances, they had sought to be amalgamated; and amalgamations which were condemned beforehand by the Committee of 1853 had been, nevertheless, since sanctioned by Parliamentary Committees and by Parliament itself. Great alarm was again excited last year in consequence of other important Railway Amalgamation Bills that came before Parliament, especially the proposed amalgamation of the Lancashire and Yorkshire Railway Company with the London and North-Western Railway Company; and the result was that he felt it his duty, on the part of the Government, to take a step that would have the effect of hanging up the Amalgamation Bills until Parliament should have further inquired into the matter. He obtained the appointment of a Committee consisting of Members of both Houses, which last year inquired into the whole subject of railway amalgamation. The members of that Committee were chosen for their 230 knowledge of the subject and their practical experience, so that their Report was calculated to carry great weight with both Houses. It was now his duty, as Chairman of that Committee, to lay before the House a Bill in conformity with the recommendations of the Committee, just as the present Secretary of State for War proposed, in conformity with the recommendations of the Commons' Committee of 1854, the Bill now well known as the Railway and Canal Traffic Act. The present Bill did not differ in principle from that Act; but he hoped it would be an improvement upon the Act, and that, as the result of further inquiry and larger experience, the Act would be rendered more effective for the purpose of attaining the object which Parliament had in view—an improvement both in respect of the provisions of the Act itself and of the machinery for carrying them out. A few figures showing the position of the railway world now, compared with what it was in 1854, would be interesting. The present Secretary of State for War then spoke of the magnitude of the subject; and, if great then, it was still greater now. In 1854 there were 7,686 miles of railway open, compared with 15,537 miles on the 31st of December, 1870. In 1854, the amount of capital raised was £264,000,000; and at the end of 1870 it was£530,000,000. In 1854 the annual value of the traffic was£16,700,000; in 1870 it was £43,000,000; and now it was probably £50,000,000. Such being the magnitude of the question the Committee of last year had to deal with, they proceeded to examine the whole history of railway amalgamation; they took both time and care in considering the subject; they examined a number of witnesses, who gave very valuable information; and then they gave Parliament the best account they could of the past, and the best advice they could in relation to the future. Many of the conclusions the Committee came to were, indeed, of a negative character. In this most difficult matter they found it much easier to say what, in their opinion, Parliament could not do than what it could do, and that he believed was not any fault of theirs, but it arose out of the necessity of the case. They reported that, in spite of the objections and protests of high Parliamentary authorities, amalgamation had gone on uninterruptedly down to 231 the present day, and that the amalgamations effected had not produced the evils which had been anticipated; and, he was bound to say, they came to the belief that, in many cases, amalgamation had conferred on the public much more benefit than disadvantage. They saw little prospect of distinguishing between amalgamations which might be allowable and beneficial and amalgamations which ought to be prevented on account of the probability of their becoming injurious to the public interest. They found, indeed, that, whether amalgamation was effected by Parliamentary authority or not, combinations between railways destructive of competition went on to an extent very little short of amalgamation itself. They came to the conclusion that the result of all this process was that direct competition with respect to rates and fares had very nearly come to an end; but that there still was a valuable competition in point of route, in point of accommodation, in point of facilities, in point of all those advantages which result from having two or more parties to deal with on the part of the public instead of one. They were unable to advise Parliament to prohibit railway amalgamations. They were not able to lay down for the guidance of Parliament a rule on the subject. They were not able to make a railway map of the country with a view of saying that such and such amalgamation ought to be sanctioned and such and such ought to be refused. That was a task which they made up their minds was impossible. They came to the conclusion that each amalgamation proposed to Parliament must, however imperfect the process, be considered on its own merits, and dealt with by Parliament on the best information and by means of the best machinery they could command; and, with that view, fully aware of the critical and important character of such a proposal as that for the amalgamation of two great railway companies which was made last year and made again this year, and which no doubt was only a specimen of the applications to be made in future, the Committee recommended that Parliament should at least do this—they should provide a specially qualified tribunal for considering each case as it arose and for the purpose of considering all applications for amalgamation that might come before Parliament, so that 232 they might all be dealt with as far as possible on the same basis by a tribunal competent to deal with so grave and critical a question, upon some principle of uniformity and with some prospect of securing the public interests. In compliance with that recommendation it would be his duty on a very early day to move Resolutions with a view, in case the other House of Parliament should concur, which he hoped they would, of remitting to one specially selected Committee all the Amalgamation Bills of this Session. The exact Report of the Committee was that to such a Committee should be referred all Bills for amalgamation of railways, all Bills for the transfer of canals or navigation to railways, and also all Bills to put any public harbour within the control of railway companies. That Resolution he should propose to the House; and his hope and belief was that such a mode of inquiry would secure the effective consideration of every one of these proposals for amalgamation, and, if any one of them were sanctioned, would secure the imposition, on the promoters, of such terms as would provide for the interests of other companies and the public. A large part of the inquiry conducted by the Joint Committee of last year referred to the conditions which, supposing railway amalgamation to be granted by Parliament, ought to be imposed on the companies seeking and obtaining such privileges. Both the Committee and the Government had before them very numerous memorials and applications from the great commercial bodies in the North of England interested in the great amalgamation, which was the principal cause of the constitution of the Committee, asking for a great variety of conditions which those gentlemen thought might very properly be imposed on the companies. On examining these proposals, they found that, to a very great degree, they were unconnected with the immediate question of amalgamation; that they were but partially adopted for the purpose of averting the dangers and monopolies to be produced by amalgamation; and that they were made because the parties interested very naturally thought there was a fair opportunity for Parliament to impose conditions, in the public interest, on companies which came for new privileges. These various suggestions, which hon. 233 Members would find set out and fully discussed in the Report, were very carefully considered by the Joint Committee. He would only mention two or three of the most important. He was bound to say the Committee, after the most careful examination, decided the greater number of them to be either impracticable or unwise. There was the question whether Parliament should not take the opportunity of these applications to reduce largely the companies' powers of charging their rates and fares to the public. There was the question whether there should not be reserved the power of periodical revision by some public authority. There was the question whether the unlimited power of varying their charges to the public which railway companies now used, certainly with great freedom, and in a manner which led to complaint, and sometimes to suspicion, ought not to be limited; and whether the system of equal mileage rates according to distance should not be imposed upon companies. These were strongly urged before the Committee. They were very carefully considered, and in all these three cases the Committee came to the conclusion unanimously, that they were not conditions which it was either practicable or for the public interest to impose on railway companies. After a lengthened inquiry into these and other similar proposals made for the control and regulation of railways, the Committee came, he thought unanimously, to the belief that the Railway and Canal Traffic Act of 1851, at all events, indicated a line which any attempt to regulate railway traffic should take, and that the objects aimed at by that Act were still those which it was necessary they should endeavour to attain. In fact, the Committee came to the conclusion that the best and only important thing they could recommend Parliament to do was to have an improved version of the Railway and Canal Traffic Act of 1854. The House knew the main objects of that Act. Those objects were to secure uninterrupted facilities for the convenient interchange both of goods and passengers from one system to another, and especially to observe the rule of equal charges under the same circumstances. That necessity was felt by the Committee in 1853, and it was equally felt by the Joint Committee of last year.Com 234 plaints were still too frequent that railway traffic was not always allowed to take its proper route; that the shortest and best route was often artificially barred by the conduct of some railway company which had an interest adverse to that of the public; and that the natural course of trade was diverted by the imposition of prohibitory tolls on those links of the canal system which had got into railway hands; tolls being imposed not for the purpose of fair profit on the canal itself, but for the express purpose of diverting traffic from its natural and proper course, and throwing it upon the railway. These evils were keenly felt by the author of the Bill of 1854. The Committee of 1853 made this recommendation with respect to goods and passengers—that every railway company should be compelled to afford full advantage of convenient interchange from one system to another, to give every class of traffic fair facilities, and especially to observe the rule of equal charges under similar circumstances. At the same time, his right hon. Friend told the House, in introducing his Traffic Bill, that what was wanted was, that Parliament should devise means by which the same facilities should be given in travelling from one part of the kingdom to another over several lines as over the same line. For reasons which he would state to the House, the provisions of that Act, however well intended, had accomplished very little. He did not say they had done nothing. In principle they had been most valuable, and so far as securing fair and equal treatment between trader and trader they had had considerable effect, and sonic excellent decisions had been given in the Courts of Law in that respect. But as to securing the equal treatment of company by company, or the free and uninterrupted forwarding of traffic over all the lines which Parliament had sanctioned, the success of the Act had been most imperfect. In controlling the dealings of company with company the Act had been to a great degree a dead letter. This point was very fully examined into and proved before the Committee of last year. This want of success was, in the opinion of the Committee, due to two causes, one the want of more specific enactments within the Act itself, the other the want of an authority better fitted for putting 235 the Act in motion and carrying its intentions and provisions into effect. Experience since the passing of the Act had very conclusively shown—and the Committee were of that opinion—that a Court of Law was not an authority fitted for giving effect to an Act so peculiar and special as the Railway and Canal Traffic Act. Upon certain points, as he had stated, good and valuable decisions had been obtained; but with respect to a great part of it the Court of Law, to which the carrying out of the Act had been confided, had not been able, or at all events certainly had not succeeded in giving effect to the intentions of Parliament in passing the measure. The difficulty was felt at the time the Act was passed. The framers of the Act did not then propose to leave this question of railway management, at least as regarded equal treatment, purely to the decision of a Court of Law, but endeavoured to meet the difficulties in the way by certain provisions in the Act itself. They proposed that the Court of Law should be enabled to call upon the Board of Trade for assistance in dealing with these special matters, or to employ some expert or engineer competent to advise them. But, after all, it turned out, as many expected, that a Court of Law would be a cumbrous and unfitting body for putting such an Act in force; that, from the very fact of its being a Court of Law, it deterred many from coming to it who would otherwise be most anxious to avail themselves of the powers and protection of the Act; and it was of itself most reluctant to undertake the duties imposed upon it by Parliament. He was not surprised that at that time Parliament should have endeavoured to make use of a Court of Law, for there was then a distinguished Judge—Chief Justice Jervis, of the Common Pleas—who, differing from all his brethren, thought that his own Court could undertake such a task. That, as he had said, was not the view of his brethren, and especially of one great and eminent Judge who protested at the time against the imposition of such duties upon any Court of Law; he meant Lord Campbell. That noble Lord, in his place in the House of Lords, more than once maintained that this was a duty which ought not to be imposed upon a Court of Law. Lord Campbell said— That was not a code which the Judges could 236 interpret; it left them altogether to exercise their discretion as to what they might deem reasonable.…. The Judges, and himself among them, felt themselves incompetent to decide on these matters.…. He confessed he was wholly unacquainted with railway management; he knew not how to determine what was a reasonable fare, what was undue delay, &c.…. They should have a lay tribunal for the decision of questions of the nature contemplated by the Bill, and not one composed of the Judges."—[3 Hansard, cxxxiii. 1137.] The prediction of Lord Campbell the Committee of last year found to have been entirely fulfilled, and now, at the end of nearly 19 years, they thought it would be well to take the advice of that noble and learned Lord, and to remove this jurisdiction from the Court of Common Pleas to some other tribunal. With that view the Committee recommended that the administration of the Railway and Canal Traffic Act should be transferred to a new body appointed for this express purpose, to a body which might be called the Railway and Canal Commissioners, consisting of three gentlemen of high standing and character, one at all events to be an eminent lawyer, and one, if it were possible, a man practically conversant with the management of railway traffic. The Bill which he was about to ask leave to introduce would carry out the recommendation of the Committee. It proposed to create such a Commission as he had described, consisting of men of high standing and with ample remuneration—a Commission which, if well constituted, as he ventured to assure the House it should be, would, he believed, command the confidence both of the country and of the railway interest. But in transferring to such a new authority the powers contained in the Railway and Canal Traffic Act the Committee had to consider whether the Act could not, in the public interest, be strengthened in its provisions. The principles of the Act were mainly two—namely, the free forwarding of traffic between railway and railway all over the country, and the fair and equal treatment of traffic and traders by railway companies. The Committee had to consider whether the Act could not be enlarged and enforced. They laboured long and carefully to find means of strengthening the Act in the public interest, and they found, as they believed, a method by which the Act, within its principles, could be greatly improved. Two proposals were 237 made to the Committee, which were largely discussed, with the end in view which he had described. One was a proposal that general compulsory running powers should be given to every railway company over the lines of every other. That was urged very strongly on the Committee by very high railway authorities. The other was a system of general through rates, under due provisions and regulations. The question of running powers was fully sifted, and the conclusion the Committee arrived at was that it would not be wise to enforce general running powers by any general enactment. It was shown that running powers were not, as a rule, necessary; that they were only convenient in some cases; that to enforce them upon unwilling companies would be a violent interference with the management of lines; that it would be most inconvenient, probably dangerous, and certainly impracticable and unworkable, to attempt to enforce them against the will and in spite of the opposition of the company owning the lines. The Committee, therefore, refrained from making any such recommendation in the way of general legislation. At the same time, it was quite evident there were now, and there would be in future, many cases in which running powers to be exercised by one company in case of need over the lines of another might be properly and wisely given; but the Committee desired to leave that to the determination of Railway Committees as a condition to be imposed in Amalgamation Bills, if it should be thought fit, and to be enforced by the Commissioners whom this Bill proposed to set up. The question of through rates and fares was found to be a different one, and the Committee came to the conclusion that something useful and valuable might be done in that direction by general legislation. After the most careful consideration of the subject, they came to the following Resolution:— Second, and only second, to the question of the control of railway charges, is that of the interchange of railway traffic, or, in other words, the question of best utilizing and developing, under the present system of occasionally conflicting companies, the capabilities of a railway.… If a company monopolizing a district is to be allowed to arrange or disarrange the traffic as it pleases, to time passenger trains so that they shall not meet at a junction with other passenger trains, to obstruct traffic coming from other lines, and to send traffic by the longest and least 238 convenient route, in order to keep it on its own line, there may be the greatest possible public inconvenience. And they went on to recommend that, under proper conditions, railway companies should have a right to require and obtain through rates over the lines of their neighbours. The primâ facie rule for the determination and apportionment of those rates would, of course, be according to the mileage; but that was a rule which was not capable of being always rigidly observed, and would, in some instances, even work injustice, and therefore the Committee were of opinion that the Commissioners proposed to be created should be invested with ample power to settle that matter between company and company. The Commissioners would take care that no wrong was done to the company required to forward the traffic of another company, the sole object of the provision in the Bill being to secure that the intention of the Railway and Canal Traffic Act should not be frustrated, or that, Act made a dead letter, but that the traffic should be forwarded by that route which it would naturally take, and by which it could most conveniently travel. This was intended, if Parliament sanctioned it—as he hoped it would—as a certain amount of interference with railway companies; but he ventured to submit to the House that it was an interference which was amply justified by the facts of the case, and one which, if guarded by proper and careful provisions—which he thought would be found in the Bill when it was in the hands of Members in a day or two—the railway companies themselves would be very unwise to complain of. They were but conditions and facilities which fell very far short of those which railway companies constantly thought they had a right to demand from, and were constantly willing to give to, each other when carrying on their contests in Parliament, and he was of opinion that the public were well entitled to draw their own conclusions from the demands and admissions made by the companies on those occasions. It would, too, be an interference which only had for its object the prevention of the imposition of that kind of charge which upon canals lead obtained the suggestive name of "bar tolls;" tolls imposed in order to close a route against traffic, not by a physical but a fiscal obstacle, 239 the object being to direct traffic over a course more profitable to the company. It would be an interference intended to prevent companies from absolutely defeating the intention of Parliament as expressed in the Railway and Canal Traffic Act. Beyond that interference it was not intended to go, and it was a degree of interference which, he believed, would be admitted by many railway authorities themselves to be a fair one. The Committee of last year found such to be the view of some of the best-informed railway witnesses they examined. He had one example before him in the language used by a very eminent railway manager, Mr. Scott, the general manager of the South-Western Railway. In answer to a question of his (Mr. Chichester Fortescue) Mr. Scott said— I have been very forcibly struck with the language of Mr. Cardwell's Act, which I believe to possess already very much of what is really required. Mr. Cardwell's Act, I am inclined to think, has never been fairly tested…. It would be necessary to provide that a through rate and fare should be of the nature of the facilities mentioned in the Act. That was exactly the object which the Committee had in view, and it was that which the Bill was intended to carry out —namely, that under proper supervision the granting of through rates and fares should be of the nature of the facilities required by the Railway and Canal Traffic Act. The result, then, of that part of the Bill would be this—that the Railway and Canal Traffic Act would be enlarged and strengthened—as he contended and as the Committee believed entirely within its scope and principle—by some specific enactments, and that the application and enforcement of the Act would be committed to a new tribunal specially constituted for the purpose, instead of to the Court of Common Pleas. The Committee considered very carefully what amount of duty should be imposed upon this Commission, if constituted, for the benefit of the public; and there was one duty of a very important kind with respect to which there appeared to be a positive unanimity of opinion among the experienced railway witnesses who were examined that it would be of the greatest advantage to allot it to the Commission—that, namely, of exercising the functions of arbitrator under the provisions of the 240 Railway and Canal Acts. The Committee were very much struck by the evidence of various witnesses as to the vexation and delay which attended private arbitrations under the special Railway Acts as now exercised. It was shown that those arbitrations often lingered for months and years, and constantly defeated the very object and purpose for which they were demanded; and, of course, while the railway companies suffered from this cause, the public suffered also. The Committee recommended and the Bill proposed that, whenever in any Railway Act, past, present, or to come, provisions for arbitration, for the purpose of carrying into effect its provisions, were or should be inserted, that arbitration should be carried out by the new Railway and Canal Commissioners. That provision, unless he was greatly mistaken, would give satisfaction to the railway companies and confer much benefit upon the public. The House would therefore see that on the one hand the new body would acquire the powers now nominally exercised by the Court of Common Pleas, and on the other hand the power which was now most inconveniently exercised by private arbitrators. And he might point out that this power would have no inconsiderable bearing upon the consideration of future important Railway Bills, and especially Amalgamation Bills: with respect to the securities which Parliament might require to avert any injurious consequences to the public arising from such monopolies, for where Parliament introduced provisions into Amalgamation Bills in future—conditions which would inevitably lead to arbitration, and which could not be carried out except by arbitration—the companies and the public would have the advantage of resorting to the eminent body to which he had referred, instead of to private arbitrators. There were matters of a minor character which hon. Members would find embodied in the Bill, such as a provision that a transfer of canals to railway companies should not be valid unless with the sanction of the Railway and Canal Commissioners. They would find clauses intended to enforce the due maintenance of canals in the hands of railway companies by their owners; and he need hardly say that the rule as to through fares would apply to canals just as much as to railways. There 241 was also a provision for the transfer, from the Board of Trade to the Commissioners, of powers with respect to railway agreements and other matters of no great consequence, but which, being questions connected with traffic, might well be handed over to that body. He believed he expressed accurately the feelings of the Joint Committee of last year when he said that they did not profess to provide by tins Bill a perfect remedy for such evils as those which accompanied the many great advantages which the railway system of Great Britain conferred upon the country. They found great difficulties existing. They foresaw great difficulties in the future. They were not sanguine as to their power, or even the power of Parliament, to provide a solution for all these difficulties. They did not, for instance, profess to find means of keeping competition effectually alive between company and company. Competition in point of price, at all events, they found was almost extinct, and they saw no means of maintaining it; but they did think they saw the means of securing to the public the full and free use of the railways which had been made and which might be made, and that in spite, he was going to say, of whatever combinations and alliances railway company and railway company might make with one another. That was what they aimed at. They had rejected a number of suggestions—some of them plausible—for increased Parliamentary interference and control; but a certain limited amount of Parliamentary control in the direction he had intimated the Committee thought possible and advisable and for the public benefit. He expressed their views and his own in confidently submitting them for the adoption of the House, and he hoped that in this matter the companies would not separate their interests from those of the public.

MR. GILPIN
said, he did not intend to oppose the introduction of this Bill, the character of which had been so lucidly explained by his right hon. Friend. On the contrary, he thanked him for undertaking at so early a period of the Session to carry out what, after the Report of the Joint Committee last year, it was his bounden duty to do. With very much of what his right hon. Friend had said he (Mr. Gilpin) cordially agreed; and with reference to the few points on which he differed from him, he 242 would probably have another opportunity of expressing his opinion. He would, however, say on this occasion that it would be necessary for the Legislature to consider how far it was wise—how far it was best for the interests of the public—that Parliament should interfere in the management of what after all was private enterprise, when they took up matters which were generally best managed by the companies themselves in their own interests—how far, in short, they might do mischief where they intended to do good. There was no doubt that a new tribunal was much wanted to deal with those various questions to which his right hon. Friend had alluded. He (Mr. Gilpin) did not express any opinion as to the form of tribunal; but he entirely agreed with the right hon. Gentleman that a competent tribunal should be established for most of the purposes, and with most of the powers, described by him. The powers to be given to this Commission would be a subject of grave discussion, and, perhaps, division of opinion. He concurred with the President of the Board of Trade in thinking that to give to a Commission of this sort directions that every company should have running powers over every other company would be to ensure a succession of accidents compared with which they had nothing in the history of railways. As to the adoption of any systematic rate from one end of the country to the other, that was a question which would require careful consideration. It was perfectly well known that while the cost of one line of great extent might be so much per mile, some of the smaller lines, like the Metropolitan, the Charing Cross, and some portions of the Brighton line, had cost an enormous sum, and that to have the fare anything like the same rate would be obviously unjust. He trusted that the Bill of his right hon. Friend would receive the sanction of the railway world and the public generally.

§ MR. ASSHETON CROSS
congratulated the right hon. Gentleman on his lucid analysis of so ponderous a blue book as that issued by the Joint Committee, and thanked him for having brought this measure forward at the commencement of the Session. It was a subject of great importance, not only to the railway companies, but also to the traders of the country, and it was de- 243 sirable that it should be dealt with in a satisfactory manner, and with as little delay as possible. He hoped, however, that time would be given to the country to consider the Bill before they came to a decision on the second reading. He wished to ask the right hon. Gentleman whether the Government meant to recommend any course to that House with respect to the Amalgamation Bills which were now before Parliament?

§ MR. DODSON
reminded the House that the Joint Committee was appointed last Session in consequence of the introduction of Amalgamation Bills of wider scope than any previously sanctioned, and that in their Report, while recommending regulations applicable to railways generally in their relations to each other and the public, they had specially in view the growth and progress of railway amalgamation. Several of those Bills having been reintroduced this Session, he would suggest that this Bill should take precedence of them, or proceed pari passu with them. This would remove some objections to the passing of those measures, and would guard against their passage unaccompanied by the antidote in the shape of this Bill which the interests of unamalgamated companies and of the public demanded. The announcement of such a course on the part of the Government might not be without effect in facilitating the passage of the Bill now introduced.

§ MR. MONK,
on behalf of the canal interest, thanked his right hon. Friend for the Bill, which, he believed, would give great satisfaction. The Joint Committee would, no doubt, take care that the Amalgamation Bills were not passed unless this measure accompanied them.

§ COLONEL BERESFORD
said, that he rose chiefly to enter his dissent from the opinion which had been expressed by the hon. Member for Northampton (Mr. Gilpin) against the adoption of the running through system. He believed that under proper supervision the through system could be adopted with safety and certainty, and that it would add greatly to the convenience of the public.

§ MR. CHICHESTER FORTESCUE,
in reply, agreed that his Bill was a necessary complement to amalgamation schemes. He intended to propose the reference of the latter to a Joint Committee of both Houses, as recommended by last year's Committee. With respect 244 to what had been said by his right hon. Friend behind him (Mr. Dodson), he agreed with his view of the situation, and he (Mr. Fortescue) would take care that one of these proceedings should not outrun the other, and that the Railway Amalgamation Bills should not precede the present measure.