HC Deb 04 May 1888 vol 325 cc1374-404
MR. WATT (Glasgow, Camlachie) ,

in rising to call attention to the present position of affairs with regard to the Railway Companies of the United Kingdom, and to move— That, in the opinion of this House, the time has arrived when the Government should appoint a Committee or Royal Commission to take into consideration the question of acquiring the railways of the United Kingdom in accordance with the provisions contained in the General Railway Act of 1844, said, he thought that he need not apologize for introducing this subject, having regard to its immense importance. So far back as 1844 a very considerable section of the community was in favour of the purchase of railways by the State; but the Committee appointed in that year declared that they would deem it unwise to enter into any engagement which would tend to interfere with the action of the Legislature in future times. How much the State had lost in consequence could be seen from the figures he would give to the House. At that time the receipts of the Railway Companies amounted to between £5,000,000 and £6,000,000 sterling. Within eight years from 1844, that was in 1852, they exceeded £15,000,000, and within 21 years from that time they amounted to more than £32,000,000. In 1843, then, the receipts of the Railway Companies amounted to £4,500,000, while the capital employed exceeded £72,000,000. At the expiration of 21 years the growth had been enormous, the total revenue exceeding £32,000,000, and the capital employed amounting to £455,500,000. As to the present state and condition of railway enterprise in this country, according to the last Returns published by the House, dated December 31, 1886, the total capital employed in the railways amounted to nearly £828,500,000, and the total receipts from all sources exceeded £66,500,000, and the net receipts £30,000,000. As to the different Stocks at present constituting the total of £828,000,000, he found that of Ordinary Stock the capital exceeded £305,000,000, and Preferential and Guaranteed Stock £314,500,000, and of Debenture Stock and Loans £208,500,000. The amount which had been paid by way of dividend upon the Ordinary Capital exceeded £12,000,000; upon Preferential and Guaranteed Stock, £13,000,000; upon Debenture Stock and Loans, nearly £9,000,000. The average rate per cent upon Ordinary Stock had amounted to 3.94; upon Preferential Stock to 4.14; and upon Debenture Stock and Loans, 4.18. The average rate of interest paid had therefore slightly exceeded 4 per cent. These figures would show what a source of profit the railways might become to the State, and he considered that it was neither expedient nor possible for this country to take up an isolated position with regard to this matter. He would call the attention of hon. Members to the action of Germany, as well as that of Belgium. Although in France the system was similar to our own at present, yet France was moving in the direction which Germany and Belgium had pursued, and Switzerland was arranging within the next 15 years to take into the hands of the Government the entire control of the railway system throughout the Federal States. Nearly all the railway lines in our Australian Colonies had been constructed by the different Governments of those Colonies, and the opinion of the best-informed authorities was that their railways would constitute for the future an increasing source of revenue to the Colonies. On the question of economy, the disadvantage under the existing system was obvious if they compared rates current throughout the different countries. In Sweden the estimate was 30s. 4d. per ton per mile; France, 12s. 10d.; Great Britain, 11s. 3d.; Holland, 9s. 10d.; Austria, 9s. 3d.; Italy, 9s.; Germany, 7s.; Belgium, 6s. 10d.; United States, 5s. 3d. The English rates, therefore, were nearly 20 per cent above the average of Continental rates, and more than double those current in America; but if they took the two Continental countries which had control of the railways, they found that our rates were 85 per cent above those of Belgium, and 60 per cent above those of Germany, showing the enormous extent to which our traders and manufacturers were handicapped by the present system as compared with our two chief rivals. The terminal charges were also much higher in England than in other countries. Reverting to the question of capital, the amount required to be provided if the Government decided upon taking over the Railway Companies would depend entirely upon the terms of purchase, and the rates of interest proposed to be paid to existing shareholders. Even assuming that shareholders should receive the same rates of interest as at present, he estimated that by means of uniform rates, a superior management and consequent economy, a saving might be effected of not less than £10,000,000 sterling per annum. One of the principal reasons which could be urged in support of State purchase would be the material benefit resulting to our great industries, and the consequent stimulus to production which would follow. The rapid strides which certain Continental countries had been making, and the harder competition which our merchants and manufacturers had had to contend against, had resulted from no source more potent than the existing high tariff in this country as compared with Continental rivals. In addition to that it was notorious that certain Railway Companies had offered inducements in rates to Continental competitors for the importation of their products. He maintained that State purchase of railways would tend largely to remedy the disadvantages under which our great national industries laboured owing to the present system. Anyone conversant with the action of Railway Companies in the past would agree with him that their operation and action had been based entirely on a regard for selfish interests, and not either to further the trade and commerce of the Empire or to give the facilities and low rates which the community as a nation had a right to expect. The great object of a Government ought to be to develop to the utmost our internal resources, and to afford every facility for utilizing the products of every district of our country. Under the present system towns of which the industries had been decaying for years past, and where the consequent wealth and influence of the inhabitants were on the decline, could not possibly bring to bear that influence on Railway Companies which, by securing cheaper rates, might, at least, check that unfortunate condition of things, and the inhabitants of the more remote districts possessing advantages for certain manufactures by a uniform scale of rates would be able to develop new industries upon the introduction of capital which would follow the facilities afforded by cheap rates. While 1d. on the Income Tax realized a sum of about £1,500,000 sterling, 1d. upon the railway rates of the United Kingdom represented a sum of over £4,000,000, so that in a life-and-death struggle the Chancellor of the Exchequer would possess a financial source of boundless capabilities. The acquisition of railways by the State would enable the Chancellor of the Exchequer in the near future so to develop and increase the Revenue of the country as to proportionately lighten the burden of the taxation, while materially reducing the amount paid for the transit of goods and passengers. He felt convinced that the acquisition of the railway system would tend to stimulate further the energy, wealth, industry, and national credit of the country, and that every industrial enterprize would thus become developed to its utmost capacity, so that we would be enabled in a manner unparalleled in past history, great as that had been, to retain for generations to come our foremost position among the nations, and a hold of those markets which it was the complaint of politicians of every Party we were fast losing from no cause more than from the fact that one of the greatest motors of commercial enterprize had been allowed by successive Governments to become a monopoly, to the discredit of the country and to the disadvantage of the entire population.

MR. HOWELL (Bethnal Green, N.E.)

said, he would have preferred to have seconded the Motion after the Mover of the Amendment to the Motion (Sir Julian Goldsmid) had addressed the House, because then he would have known on what arguments the Amendment of the hon. Baronet was based. The terms of the Amendment were— The principles laid down in the Resolution of 28th April 1874 ought not to he departed from. That was a very much larger question than the purchase of the Irish railways, though he was persuaded that the same arguments applied in both cases. As to the Irish railways, he ventured to say that if the sage advice of Lord Melbourne had been followed in 1838 many of the troubles in Ireland, economical, social, and political, would probably by this time have disappeared. If the hon. Member for South St. Pancras (Sir Julian Goldsmid) had been able to bring forward any argument of any weight in support of his contention that it was financially inexpedient for the State to purchase the railways, the other two heads of the argument might not have been insisted upon. But he (Mr. Howell) contended, on the contrary, it was financially expedient that the State should purchase the railways. It was financially expedient when the inquiry was instituted in 1844. The great misfortune to the country was that at that time the House did not see fit to follow up the indication given them by the Committee; but he thought the House was more at fault in 1865, when it refused to carry out the Act passed by the House. It was very singular why in 1865 the House did not see fit to put in motion the powers of the Act of 1814. On that occasion the House refused because the terms were exorbitant, because it was thought that the terms could not be carried out to the advantage of the country. That depended upon circumstances—it depended upon whether they took one isolated case, or whether they regarded the matter from a bread point of view. Taking the case broadly, as it was formulated in the Act of 1844, the terms were elastic enough to cover whatever was needed at the present clay. Financially inexpedient. Surely, when by a mere stroke of the pen the right hon. Gentleman the Chancellor of the Exchequer (Mr. Goschen)—who was so wonderful at finance—could convert the National Debt; there were many Railway Companies perfectly willing to accept the scrip of the Government in lieu of that already in existence. A great number of railways, that to-day could pay no dividends at all, would be able to pay dividends if they were under the control and management of the State. But, taking the case as it stood, what did they find? As his hon. Friend (Mr. Watt) had said, the fact was that about 4.8 per cent would cover the entire dividends paid on all the railways in the United Kingdom. Many of the Companies could pay no dividends, and possibly one of the reasons was the way in which they had been hampered by other Companies that wore able to pay dividends. As a matter of fact, our present railway system was ruinously expensive in every way. It was expensive to the great body of the shareholders. Notwithstanding that, the average profit was something over 4 per cent. A certain number of the railways paid considerably over that amount. Under judicious management all the railways could participate in the advantages of the immense traffic there was in the country. One of the reasons why some of the Irish railways could pay no dividends at all was that Railway Companies in Ireland had the very singular habit of running their trains in such a way that they could not by any means accommodate one another. Pas- sengers frequently found they arrived at a station just after a train by which they had desired to travel had started. He could quite understand that under such a system of management many of the Irish Companies were unable to pay dividends. But if the lines were under the control of the State, not only the particular bondholders or shareholders, but the whole nation would be considered—the advantages would be with the nation at large. Not only did he contend that it would be financially sound, as a mere matter of business, for the State to purchase the railways, but that it would be of immense advantage to the traders of the country. They had heard a great deal, both in and out of the House, of the depression of trade, and of the way in which many people were handicapped in their business. One of the reasons why many of our agriculturists were not able to compete with the foreigner was that every obstacle was thrown in his way by the Railway Companies. Cattle and corn could be brought across the Atlantic and carried through England at a cheaper rate than they could be carried from two points in this country. Girders could bo manufactured on the Continent and sent rid Grimsby to Sheffield at an immensely less cost than home manufactured girders could be carried from Grimsby to Sheffield or from Sheffield to Grimsby. This was the fault of the Railway Companies, which he hoped would be remedied by the Railway Rates Bill. He maintained that it was wise that the nation should take into its own hands an immense monopoly of this description, and administer it, not for the benefit of the shareholders of any particular railway, but for the benefit of the entire nation. He knew, judging from the observations made in a debate upon this subject in 1874, he would be met by the remark that it was not desirable to take away from individuals and place in the hands of the State too many matters. He held that opinion, but he also maintained that the State had the right to control everything in connection with our body politic. The railways had become an immense monopoly—possibly the greatest monopoly in the world—and from his point of view the State would have a perfect right to interfere with it, and especially to interfere on the lines of the Act that had already been passed. But another reason urged for the Amendment—and, of course, he was only able to anticipate the arguments of the hon. Baronet (Sir Julian Goldsmid) by referring to Hansard, where he found the terms of the Amendment moved on a previous occasion—was that the purchase of the railways would unduly enlarge the patronage of the Government. He would not have been surprised at such an argument being used by a Member holding views similar to his own with regard to politics generally; but one would have thought the hon. Baronet would not have objected to enlarge the patronage of the Government. Speaking broadly, he (Mr. Howell) was not so much opposed to enlarging the patronage of the Government. What he wanted to sea was the patronage of the Government wisely bestowed. If the patronage of the Government was bestowed for the benefit of the entire nation there was no harm in giving to the Government a large amount of patronage. The misfortune in the past had been that this patronage had been used, not for the benefit of the many, but for the advantage of the few. He fancied that, with the extension of our representative institutions, that was not likely to recur in the same ratio. But there was a third argument used by the opponents of this proposal, and that was that the pressure of Business in Parliament would be seriously increased. His experience of Parliament had been by no means equal to that of the hon. Baronet; but he ventured to think the effect would be in a contrary direction. The fact was that a large amount of time was taken up now by the consideration of Railway Bills by Committees sitting upstairs. A very considerable portion of this time would be saved if the railways were under the control of the State, to say nothing of very great expense. To-day the Board of Trade had a very great deal to do with the management in an indirect way of railways, and it cost the nation a very large sum of money to keep the Railway Companies straight. Then there was, in addition, the Railway Commission, which had been sitting for many years, and whose powers were, he supposed, to be enlarged by the Railway Rates Bill. By the same Railway Commission, or some such Commission, the entire railways of the State could be managed with more economy and better effect than they were managed to-day. It had been said by many men, who were capable of judging, that the absolute cost of management could be reduced by one-fourth. If that were so, the State would derive a splendid revenue, and that very speedily. As to the time of Parliament being wasted, it was wasted now, and for what purpose? For the purpose of preventing free competition in railways. They heard a great deal about free competition and not interfering with the right of contract, yet Railway Companies fought each other year after year, spending large sums of money belonging to the shareholders in the first instance, but which had to be paid by the public in the long run, and for what reason? Simply to prevent that free competition that was intended to be enlarged by the Act of 1844. He fancied that, instead of enlarging and increasing the pressure of Business in Parliament, so far as this particular matter was concerned, it would do just the reverse. Whatever time was spent upon railway matters would be spent for the benefit of the entire country. The main reason why he supported this Motion—and it was no new question as far as he was concerned, because he had held this opinion for over 30 years—was that great advantage would accrue to the nation. He thought that an immense development of home industries would result. Our home industries would be able to compete with the foreigners, if they were not handicapped as they were to-day. It was all very well to deprecate competition on the part of the foreigner. It was all very well for some hon. Members to be looking forward to the time when we might be able to resort to Protection in regard to our industries. Let them remove the obstacles in the way of the industries at home. If they did that they would have little reason to fear the competition that might take place in respect of many matters. America, if she were only wise enough to remove her protective tariffs, would prove a great competitor with us. France was no great competitor of ours, and had not been for years. Germany, however, with her State railways, must be regarded as our greatest competitor. Belgium, with her management of railways, and now Switzerland with her railways were competing with us, and certainly France had an advantage over us with regard to the control of the traffic of I the railways. What was proposed to be done by the Railway Rates Bill was to regulate to some extent our railways with regard to tariffs, and so forth. That was all very well, but what was asked by the supporters of the Motion was that the State should assume some kind of authority with regard to railways. He believed that the purchase of the railways by the State would prove of immense advantage to the country, and for that reason he had pleasure in seconding the Motion of his hon. Friend.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "in the opinion of this House, the time has arrived when the Government should appoint a Committee or Royal Commission to take into consideration the question of acquiring the Railways of the United Kingdom, in accordance with the provisions contained in the General Railway Act of 1844,"—(Mr. Watt,) —instead thereof.

Question proposed, "That the words proposed to be left out stand part of the Question."


said, the hon. Member who opened the discussion (Mr. Watt) appeared to have ignored the fact that the House of Commons had, on more than one occasion, considered the question whether it was desirable that any portion of the railway system of the United Kingdom should be purchased by the State. He (Sir Julian Goldsmid) remembered at least three long and important discussions upon this great question. They applied only to a small section of the railways of the country—namely, the Irish railways; but he referred to the matter in order to show that there was something in the history of the past to which it would have been well that the hon. Member (Mr. Watt) should have turned his attention. The first debate took place in 1872, the second in 1873, and the third in 1874. In the Division in 1873 there voted for the purchase of the Irish railways 65 Members, and there voted against that purchase 197. The Motion was brought forward by the late Lord Claud Hamilton, and at that time they were distinctly told there were several reasons, connected with the poverty of the country and the large number of small Companies in Ireland, which ought to induce Parliament to consider the question of purchasing those railways, and which did not apply to the railways in England or in Scotland. The same thing was repeated in 1871, when the Motion was made by Mr. Blennerhassett, and opposed by himself (Sir Julian Goldsmid). Upon that occasion there voted in favour of the proposed words standing part of the Question 56 Members, while there voted against it 241, and there voted for his (Sir Julian Goldsmid's) Amendment, which the hon. Gentleman the Member for North-East Bethnal Green (Mr. Howell) had just referred to, 235 Members, and against 156. That being the more recent history of the question of purchasing a small part of the railway system of this country, he should have expected that the hon. Member, who, with great courage, proposed that the country should go into a business, which would involve an expenditure of capital of more than £1,200,000,000, would have given them some strong reasons for departing from the principles laid down in the Resolution adopted by the Government of Lord Beaconsfield. But the hon. Member had done nothing of the kind. He had quoted a considerable number of figures from the Statistical Abstract of the United Kingdom, to which all of them had access, but which merely wont to show that the railway capital had increased enormously in the last few years; and that, as far as they were concerned, they could not complain at the high rate of interest which was paid upon that capital to the shareholders. But the real question was, was there any great, any overwhelming necessity which ought to compel them to embark on this new business? He looked to the authority of great men, who had experience of Public Business in this country, and he asked himself, what did they say upon this matter? He found that the right hon. Gentleman the Member for Mid Lothian (Mr. W. E. Gladstone), in 1873, uttered these very significant words— Nothing but a case that might be said to amount to very nearly a rigid necessity could warrant the State in undertaking a trade or business."—(3 Hansard, [215] 1158.) That was a proposition in which he (Sir Julian Goldsmid) entirely agreed, and upon that ground, if upon no other, he should be prepared to oppose the proposal of the hon. Member for the Camlachie Division of Glasgow (Mr. Watt). There was no paramount necessity—in fact, there was no necessity at all—for the adoption of the present proposal. But if there were a necessity, what would be the result? Again, he referred to the right hon. Gentleman the Member for Mid Lothian, for that right hon. Gentleman had said— It was totally impossible to suppose that if the State attempted to work railways directly, and under principles of Parliamentary responsibility, the persons entrusted with the carrying out of that system would not be liable to pressure, legitimate and illegitimate in every sense, from every quarter."—(1bid. 1163.) There were many other disadvantages which would ensue upon the purchase of the railways by the State. In the first place, they must remember that the present capital of the railways was nearly £900,000,000 sterling, and that to purchase the railways of this country would involve an expenditure of something like £1,200,000,000; because if the capital paid 4 per cent, and if they were to give 2¾per cent to the holders of the Stock, it was perfectly obvious that they must give a much larger nominal amount of capital. That was a serious undertaking, for which he thought Parliament was not prepared. But they must remember the constant pressure which was brought to bear in former times upon Members of Parliament, and upon the Government, even with regard to very small and unimportant posts connected with the Post Office. What would not happen with regard to the 300,000 employés who were now under railway control? They would have constant Motions made in the House with regard to salaries, with reference to the promotion of officials, and respecting the superannuation of officials, with which the House of Commons would have to deal. Then they would have a higher and a larger class of questions. One town would consider itself unfairly treated in comparison with another. One town would consider that insufficient advantages were given to it, and complain that it had not sufficient terminal facilities, and so on. It was easy to see that the House and the Government would be overwhelmed if they undertook that immense business. The hon. Member imagined that the possession of the railways by the State would promote the industries of the country. How would it do that? Why, the moment the Government took the management of any undertaking, they did their best to stifle private enterprize. What had been the experience of Government management in many cases? Had they not heard of Dockyard scandals, and of War Office discredit? Were they not going to have a Commission appointed to inquire whether the State was doing its duty in one of the most elementary departments of the work which was entrusted to it? They were told by hon. Members opposite, and by hon. Members on that side of the House, that the State had not done its duty, that the Admiralty and the War Office did not fairly allow the country to be defended in the way it ought to be, because their work was badly done, and when they were told this day after day, it was proposed to impose upon the responsible Government the duty of managing the greatest financial and commercial undertaking in the world. It was an impossibility, for reasons which could be given, that the Government could undertake such onerous and enormous duties. They were told just now by the hon. Member for North-East Bethnal Green that the method of managing this great Railway State Department would be by means of a Commission, and that that Commission would be more economical than the Boards of all the great Railway Companies. He (Sir Julian Goldsmid) supposed there was nobody who had had greater experience of railway matters than Mr. Moon, the Chairman of the Loudon and North-Western Railway Company, and what had he said? He had said that every member of a Board of a great Company like his should undertake a particular section of work and be responsible for it, and he (Sir Julian Goldsmid) was informed by a gentleman who had been connected with that Board that each man had to do separate work, and that each man had as much to do as he could fairly undertake. That meant that if they had a great Railway Board it would be impossible for them to manage all the railways in the United Kingdom. They would be obliged to have a largo number of Committees. They would bring all the railways under Government manage- ment and place them under Committees, so that, in fact, pretty much the same system as the present would prevail, only that the Government would be responsible, and that there would be frequent discussions in the House of Commons upon that responsibility. He did not wish to labour the question; but it was well known that if the House of Commons in 1873 and 1874 was of opinion that it was undesirable to add to the commercial relations of this country by purchasing the Irish railways, it would be all the more unwise to add to them by purchasing the railways in this country, because the new louse of Commons ought to remember that the business of the Government was to govern, and not to trade. It was quite right, in the interests of the public, to regulate the method and management by means of the Railway Commission, and by rules established by Parliament; but it did not follow, for that reason, that they ought to obtain this immense monopoly. He believed that the desire of all the best railway men in the country was, by reducing the rates, to serve the public as far as they possibly could; and he thought they would find that there was no country in the world—and he knew a great deal about foreign countries—where there were as many trains and where the public convenience was so largely consulted, and where, on the whole, the people were served better than in England. He had lived for many years in France, and he knew that, although there was a slight difference in the price of a ticket per mile between the French and the English ticket, it cost him more to travel in France than in England, for the very reason that every pound of surplus luggage was charged for; whereas, in England, there was scarcely any charge for luggage.


said, he did not say that the railways in France belonged to the State.


said, that certain lines in France were laid down, and Companies were authorized to work them upon certain conditions. The Companies were under certain regulations. In Germany the trains were few and far between. He had travelled much in Germany, and he had seen a good deal of the proceedings of German rail- ways. No complaint was scarcely ever attended to, because they could not complain to anybody but Government officials, who would not forward them to headquarters. Then there were hard-and-fast rules which must be accepted by people, whether they liked it or not. What was the difference between England and Germany in this respect? If hon. Gentlemen took the trouble to inquire, they would find that there was hardly a main line in England on which I a train did not run at least once in half-an-hour. There was nothing of the kind in Germany; and he was satisfied that if we had State management here, similar to that in Germany, the hon. Member (Mr. Howell) would be the very first to revolt against it. The hon. Member referred to Switzerland; but there was a more important instance which he entirely refrained from mentioning—namely, that of Italy. Italy found that it was impossible for the State to manage the railways satisfactorily, and having purchased the railways they immediately created two great Companies to manage the railways instead of the State. These Companies held a lease of the railways, and regulations were laid down for the management of the lines by the State. He considered that the right system was that the Government should not hold, and should not work, railways, but should control their management on behalf of the public where there was any necessity for doing so; and he was satisfied the interests of this country would be best consulted by not increasing the debt, by not undertaking this immense administrative and Parliamentary responsibility, but by leaving matters as they were, with such improvements of the law as the wisdom of Parliament might from time to time suggest. He understood that he could not move the Amendment of which he had given Notice, because the proposal of the hon. Member (Mr. Watt) was itself an Amendment. He was certain, however, that the Government would not give the Commission asked for; because, if they did, it would imply that they were prepared to accept the principle of the Amendment of the hon. Member. Knowing the Government's past history and present opinions, he was satisfied they would not do anything of the kind; and, therefore, he contented himself with opposing the proposition of the hon. Gentleman.

LORD HENRY BRUCE (Wilts, Chippenham)

said, that in Canada and Australia, under Government management, the people had far more lines in proportion than we had in this country. He noticed that in the observations that had been made nothing had been said as to what would be for the interest of the country. If previous Governments had done their duty in this matter the present system would never have been maintained, and the railways of the country would have been conducted in the interests of the nation, and not for the benefit of private individuals. He supported the Motion, because all that they now asked for was that a Royal Commission should be appointed to inquire into the subject, and sooner or later this great question must come to the front and be encountered.

SIR BERNHARD SAMUELSON (Oxfordshire, Banbury)

said, that he was unable to support the proposal. If he thought the suggestion of the hon. Member for the Camlachie Division of Glasgow (Mr. Watt) would supply a remedy for the grievances which they complained of in connection with Railway Companies, he (Sir Bernhard Samuelson) might be disposed to look with favour upon the appointment of the Parliamentary Commission which the hon. Member asked for; but he saw no possibility of any good arising in that direction from such a Commission. If the result of the deliberations of a Commission should be a recommendation that the railways should be purchased by the State, he believed that no Government would adopt it, and, in his judgment, they would be perfectly right in refusing to do so. We had had our own experience of the State purchase of the telegraphs. At the head of the postal telegraphs was a most efficient officer, Mr. Preece; and everyone acknowledged that that gentleman was a person of great scientific attainments, and quite capable of managing his Department, which, in fact, he did manage in a most excellent way; but in the purchase of the telegraphs we acquired at a cost of £11,000,000 what we might have constructed for £3,000,000 or £4,000,000; and for railways that we might construct for £400,000,000, we should have to pay £1,200,000,000. After we purchased the telegraphs, there was a new invention, the telephone; and in other countries this invention had been enormously developed; but it had not been so largely developed in this country, simply because it would interfere with our vested interests in the telegraphs. In all such things there was nothing like private enterprize for promoting their development; indeed, he might say that the Mover of the Resolution had himself proved that, and had answered himself when he told the House that between the years 1844 and 1865—that was in 21 years—the income of the railways had increased from £5,000,000 to £32,000,000. Would anyone believe that such an increase, which meant an equivalent increase in the accommodation afforded to the country, would have occurred if the development of the railway system had been left to the Government? But it was notorious how badly the Government in this country, at all events, managed all industrial undertakings. The Government had been the shipbuilders of the Navy for he was afraid to say how many years, and at the end of that time they were told at the beginning of the Session that things had hitherto been so badly managed that by some new regulations our ships were to be built 40 per cent cheaper than before. Whether that economy would actually be realized was another and a very different question. So also with the construction of our artillery, we were constantly hearing of guns parting from their trunnions, of guns losing their muzzles, and of their lining tubes being cracked from end to end. He believed that in Germany railways were well managed by joint Boards of Government officials and commercial representatives, with regard to the interests of traders as distinct from those of passengers. In this country we had a competition of a curious kind between the railways themselves—to carry goods and passengers, not at their cheapest rate, but in the shortest time. In many cases facilities were afforded which were more than were really necessary, and they had to be paid for whether they were wanted or not. Mr. Oakley, of the Great Northern Railway, had told him that the competition between the railways in the manufacturing districts was as to who was to carry goods and to keep them longest in warehouses; and the result was that enormous warehouses had been built in order that customers who did not require goods immediately might have them warehoused. For affording these facilities rates were much increased, for those who did not require these facilities had to pay equally with those who did require them. The payment for this kind of facility, which was afforded at great cost, might well be regulated so that there should only be a claim for payment on account of services actually required and asked for, and to this extent the provisions of the Railway Rates Bill of the Government, or, if he might allude to it, of his own Bill, would, no doubt, be of considerable service. There were three trains starting at the same time from London for Manchester, and each, it might be, carrying very few passengers, and because they afforded these facilities the Companies could not afford to reduce their fares. While he was altogether opposed to the acquisition of railways by the State, he thought that much might be done by regulation and by amalgamation. One advantage would be a fusion of the directorates. But, of course, measures would have to be taken for the protection of the public. The Midland Company recently came to Parliament with a Bill asking for power to make arrangements with six or seven other railways for a joint purse, and that might have been a good thing for the railways, but perhaps not for the public, unless there had been full provision for the protection of public interests. He had insisted on clauses being introduced giving that protection, and the Railway Companies assented to their introduction; but in the end they withdrew the Bill. Without such protection was afforded, it might be doubted whether railways would care for the public interests. If amalgamation could be effected under proper conditions to be laid down by Parliament, it might be accompanied by a reasonable reduction of rates, and the public might be benefited and the railways too. That he believed to be the alternative to the purchase of railways by the State. It was not surprising that the question had been brought forward, because the Companies did things which could not be justified, and the traders were feeling their action more and more. It was true that the merchandize rates on the Continent, particularly those of Germany and Belgium, were lower than those of this country. We had to compete with the manufacturers who used those railways, and the competition was becoming keener every day. Antwerp was as magnificent a port as any in Europe, and it enjoyed facilities of cheap transport from North Germany, from the manufacturing districts of Westphalia, from those of Belgium, and even from France. It was not surprising that Glasgow should have moved in this matter, because Glasgow suffered from the competition of Belgian manufacturers and engineers. Still, he did not believe that State purchase of railways would be a remedy. A truer remedy seemed to be amalgamation under proper conditions imposed by the State, and such amalgamation would do far more for the commerce of the United Kingdom and for the railway proprietors—because the two interests were bound up together—than any legislation such as that contemplated by the Railway Rates Bill could possibly effect.

MR. J. C. BOLTON (Stirling)

said, he agreed with much that had fallen from his hon. Friend the Member for Banbury (Sir Bernhard Samuelson), but he thought that he had taken a wrong moment for the ventilation of his particular views with regard to the railway system on the Continent. But while, undoubtedly, he had obtained a large amount of information on these matters a year or two ago, he thought he had probably forgotten that his facts were for the most part dispelled by the late Mr. Grierson. Undoubtedly, cases might be found in which the rates and fares charged on the Continent would compare favourably with those in this country; but it was not only the rates charged, but there was the question also as to the work performed for those rates. They all knew, or ought to know, when they expressed decided opinions on points of this kind, that the speed at which merchandize was carried was very different in this country from that with which it was carried on the Continental railways. His hon. Friend had referred to the fact that there were many more trains in England than were actually necessary for the convenience of the public. Undoubtedly, if they looked to the convenience of one man alone, there were far too many trains running at the present time, and he was prepared to admit that, even looking at it from the point of view of the public as a whole, there were too many trains running; but deprive the public of one of these trains, and he said the result was many and repeated complaints. Referring to the remarks of the Mover of this Resolution, he (Mr. Bolton), speaking as a railway shareholder, and having had many years' experience of the management of railways, said that railway shareholders would welcome very heartily a scheme for the purchase of railways by the Government if they considered only their own pecuniary interest. But he was not of that opinion, if he could transpose himself for a moment from the position of being a railway shareholder and director into one of the general public; for he was quite certain that the public would not derive those advantages which they anticipated, if once the railways became the property of the State. Undoubtedly, there would be enormous advantages to be derived from concentration of management, and to that extent he agreed entirely with the hon. Baronet (Sir Julian Goldsmid), when he said it would be a great advantage to the public were amalgamation of railways possible without extravagant cost. But he did not think that any Railway Company would, without some prospect of strong help from the Government, propose to amalgamate with any of its neighbours. Speaking for one line in which he was interested, he said that the cost of the fight would absorb nearly the whole of the ordinary revenue of the year. The hon. Member who introduced the subject based his argument, to some extent, upon the great advantages that would have accrued, judged by the state of railways 20 or 23 years ago. But if the railways had been taken over by the Government in 1865, was there a sane person who could imagine that, under Government control, the country would have been covered by such a network of railways as at present existed? It was competition that had done that; but competition was killed the moment a Government took over railways. The hon. Gentleman told the House also that this country was the only one where the Govern- ment had not made some progress in obtaining the control of railways; but he had forgotten the United States of America, where, perhaps, there were as many miles of railway as existed on the whole Continent together; and, as far as he was aware, not a single mile of those railways was under Government control, nor had any proposal been made for their acquisition by the State. Then, the hon. Member told the House that railway directors had been governed in their conduct by selfishness, and not for the general public advantage. Why, how could a railway director be expected in that sense to act without any regard for his own interest? The whole interest of railway shareholders and directors lay in the development, as much as possible, of the trade and commerce of the country. To be selfish in the sense in which he would have the House judge of railway directors would be suicidal; it would mean to kill the traffic by high rates, or the withdrawal of facilities, whereas the whole object and purpose of railway directors was to see how they might best serve the public, which was by increasing the facilities they afforded. He also, as well as the hon. Baronet below him, had travelled a good deal on the Continent, and he must say that he always felt great delight when he left a Continental railway carriage and entered an English one. Let hon. Gentlemen picture to themselves the position of men of business living 10, 15, or 20 miles from London. If the railways of this country were managed as railways are managed in Germany, they would have men hurrying away from their breakfasts in the morning to get to the railway station 20 minutes before the train started. There they would be locked up in a pen, and when the train was about to leave would have to rush out, and as many of them as were able find places. Those who could not get into the train would have wait for another, for the idea of putting on carriages for the accommodation of the public was a thing unknown on the Continent; whereas they all knew it to be the usual custom in England immediately to put on additional carriages whenever more passengers presented themselves than the train would accommodate. Therefore, he said that those gentlemen who expected to find increased facilities under Government management upon the German system would awake to very great disappointment. The hon. Baronet below him had spoken of storage being provided by Railway Companies in a general way. He did not quite follow him; but he did know, in connection with the Railway Company to which he had referred, that stores were being built as a means of affording free storage, or at a small charge, with a view of attracting more traffic to the line; but he must refuse altogether acquiescence with his assurance that it was the custom of any Railway Company in this Kingdom to retain goods in warehouses for purposes of their own. He would not trouble the House with any further remarks on that point. He could say a great deal more on the comparison of charges which had been made against Railway Companies of misusing their privileges; but he imagined they would have shortly a more full discussion of the subject in connection with the Railway and Canal Traffic Bill, and he should therefore defer such remarks he had to make until that measure was before the House.


The hon. Member who has just sat down remarked on the academic character of this debate. I may add, that I do not remember ever hearing so important a proposal supported by weaker arguments. The hon. Gentleman the Member for the Camlachie Division of Glasgow (Mr. Watt), desires that steps should be taken by the appointment of a Commission to consider the advisability of the purchase of the railways by the State in accordance with the principles laid down in the Act of 1844. I think the right hon. Gentleman the Member for Mid Lothian (Mr. W. E. Gladstone) will bear me out in this opinion—namely, that Parliament did not intend at that time to lay down the principle that the railways ought to be purchased and managed by the State, but merely to make provision for perfect freedom on the part of its Successors in dealing with railways constructed after the passing of the Act. Therefore, the hon. Member who has made this proposal has no right to refer to the Act of 1844 as in any way establishing the principle that the railways ought to become the property of the State, or to be managed by the State. But I am convinced that if Parliament should attempt to undertake the purchase of the railways, it would be found practically impossible to purchase them under the provisions of the Act of 1844. There are more than 2,000 miles of railway, many of them parts of the great main lines of this country, which were constructed before the passing of that measure, and which, therefore, would not come under its provisions. The Government have no right to accept the proposal of the hon. Member unless they can agree to the principle of the purchase and management of the railways by the State. In my opinion, nothing could be more injurious than the policy advocated by the hon. Member. There is no ground for it. If it were acted upon, many of the evils which he has alluded to as existing at present would be aggravated, and we should certainly be brought face to face with new evils of far greater magnitude than any which we now know. The House has been warned of the enormous magnitude of the operation which the hon. Member contemplates so calmly. It has been said that the purchase of the railways could not be effected without adding £1,200,000,000 to the Debt. Whether that would be the exact addition or not, the sum would certainly be immense—so immense as to cause a financial disturbance in the Money Market of a kind which might oven affect the credit of this country. Of course, we should, to a certain extent, obtain value for our money, but only to a certain extent. The purchase of the telegraphs ought to be a lesson to us. We all remember how, owing to the necessity of taking prospective increment into consideration, the State had to pay far more for the telegraphs than it would have paid had it constructed them itself. Ever since the purchase, the Government have been pressed without pause to cheapen telegraphic communication and to extend it, and the result has been a deficit last year of £500,000. When we compare the far greater cost of railway construction and management with the cost of telegraphic construction and management, we may imagine what would be the cost to the State of carrying out the proposal of the hon. Member below the Gangway. When this proposal has been made on former occasions it has always been stated that if the Government should become the owner of the railways it ought to lease them to Companies or individuals. I will not detain the House with arguments to show that no such arrangement could secure the objects aimed at, for both the hon. Member who moved this Amend meat and the hon. Member who seconded it distinctly stated that they desired the railways to be worked as well as purchased by the State. This means that the Government should undertake a commercial enterprize of the greatest magnitude. Everyone will, I think, admit that the Government has no right to enter into competition with private individuals merely for the purpose of profit. It is, therefore, essential to the case of the hon. Member that he should make out that the railways would be better managed by the Government than they are at present. Would they? I do not believe it for a moment. Our railway management is not perfect; it might be improved; but I believe that, owing, to the financial success that has attended much of our railway enterprize in England, the Railway Companies do better work at a cheaper rate than any other railways in the world. There may be lower rates and greater punctuality on the Continent; but the public pay for these by having less frequent and slower trains and great delay in the delivery of goods.


I did not suggest that there was greater punctuality on the Continent; quite the reverse.


Well, that is an argument that is sometimes used. The great objection to the hon. Member's proposal is that the Government could not manage the railways so well as they are managed now, and that if such management was attempted it would involve this country in grave political evils. Something has been said about the mismanagement of our naval administration. Many of us would be disposed to admit that such maladministration has in some degree been due to the political representation of the Dockyard Boroughs. This proposal would involve our taking into the service of the Government an army of railway employés numbering about 367,00. Differences between the employed and the employers sometimes occur in the railway service of a very serious character. These, under the present system, are settled on their merits, and without any reference to political influences. I would decline to introduce the curse of political influence and Party sympathy into the railway service of England. I think it would be a great public evil if the business of this House were to be smothered by innumerable Questions as to the disposal of railway patronage, the pay or the grievances of railway employés, the punctuality of trains, the rates and charges on the Government railways—all the multifarious details of railway management which would perpetually become the subject of question and debate in this House. I should be very sorry indeed to see the Government of this country laid open by such a system to the temptation which more than one foreign Government has not been able to resist—namely, the temptation of bribing localities by concessions to them of better terms for railway working and greater railway accommodation, and the construction of branch lines at the expense of the general taxpayers. The Royal Commission of 1865 reported, with only one dissentient—namely, Sir Rowland Hill—against a proposal of this kind. Since that time great changes have been made in the political system of this country. Public corruption, rather than private bribery, is the danger of an extended franchise, and no greater instrument of public corruption could well be devised than the ownership and management of the railways by the State. Reference has been made to the evil of railway monopoly. I admit that some of the anticipated methods of competition against railways have not been realized. There has never been any real road competition with the railways, and competition among the railways themselves has been reduced by amalgamations and working agreements, though not always to the public disadvantage. In this country, however, it is impossible that there should ever be complete railway monopoly, for it has been calculated that at three-fifths of the railway stations there is competition by sea. There is also competition from the artificial waterways of the country. I would suggest that hon. Members would do much more towards preventing railway monopoly if they were to devote their attention to the possibility of the State acquiring the canals. The canals would not require a great rolling stock, or a large staff for their management. The carriage upon the canals has always been in the hands of private carriers, and possibly they might be purchased at a reasonable cost; and if they were owned by those who were able and willing to develop them, the traffic might be largely increased. Parliament has tried, but hitherto vainly, to prevent canals passing into the hands of Railway Companies, and I believe that there is a strong desire among the authorities of our great towns that some further step should be taken to preserve the competition of our artificial waterways. On this point I have only expressed my own opinion, and I am far from saying that there would not be grave objections to the acquisition by Government even of our canals. But from every point of view it is a more feasible and arguable proposal than that which we are discussing this evening. The railways have not, and are not likely ever to have, such a monopoly as would justify the heroic remedy which the hon. Member suggests. By means of legislation such as the Railway Rates Bill, by the competition of our artificial waterways and of the sea, I think it possible to preserve and safeguard the freedom of the commerce of the country. It must be admitted that the Railway Companies have themselves done a great deal to develop industry. What can have been more advantageous than the enormous third-class traffic on railways which has been promoted by the generous treatment of the public on the part of the Railway Companies? Treatment which was adopted by the Companies at the risk of their dividends, though it has ultimately resulted in their own pecuniary benefit. In conclusion, I can only repeat that I think that there is hardly any project that could be brought forward which is so little warranted from a financial, commercial, or political point of view, as that proposed by the hon. Member.

MR. W. E. GLADSTONE (Edinburgh, Mid Lothian)

There is now a long interval between the present time and 1844; but the circumstances under which the Act of that year was passed are sufficiently fresh in my recollection for me to respond to the appeal of the right hon. Gentleman the President of the Board of Trade. I do not think he has mis-stated the general intention and effect of that Act. Undoubtedly, the idea of State purchase of railways at that time was in an undeveloped state. It was quite impossible at the time to form any accurate judgment as to the extension of the railway system, and it appeared right that measures should be taken to establish the freedom of the State as to dealing with Railway Companies; but whether it was to be on the general basis of control or purchase it was then absolutely impossible to decide. It is almost ludicrous to look back upon the infant state of the whole question at that period when compared with the enormous development it has now attained. As this subject is of great interest, perhaps I may mention a fact which is within my own knowledge and recollection—a fact of very considerable interest—as being illustrative of the manner in which this vast subject has passed beyond all human computation of the possibilities it at first appeared to involve. About the year 1841 or 1842, when I was at the Board of Trade, the question arose whether there could be a railway into Scotland. I think at that time we owed a great deal to a gentleman well known in connection with railways, as a very bold, and not at all an unwise, railway projector—I mean Mr. Hudson. It is a great mistake to look back upon him as a speculator. He was a man of great discernment and possessing a great deal of courage and rich enterprize, and owing, perhaps, partly to him and partly to other men, we were bold enough at that day to entertain the idea of making a railway into Scotland, and the unusual course was adopted by the Government of Sir Robert Peel of appointing a Commission of a scientific nature to examine the whole question of what ought to be the line of railway into Scotland; and the House may be curious to know why it was the Government intervened in that particular case, simply to determine where the railway ought to run, when, I believe, there is no other example in the entire history of railways of a Government having attempted anything of the kind. I remember perfectly well the motive of the Government. The motive was this—that as it was known, and firmly believed to be absolutely impossible, that there should over be more than one railway into Scotland, it was considered of the highest public importance that the best scientific power of the country should be brought to bear on the choice of the line. As it was admitted that there could be only one line, it was most important for the public interest it should be the best, and upon that principle an inquiry was held and a Report was made in favour of a line which now crosses Shap Fell; and that single circumstance will illustrate more than any detailed statement the infant state of our ideas of railways about that time, and certainly it would have been most premature and unwise if that Commission had been appointed with a view to commit the State to the principle of the purchase of railways. Substantially, therefore, I agree with the account given by the right hon. Gentleman of the Act of 1844. I need not now go into the circumstances which prevented the more full operation of the control contemplated by that Act, for it would be a matter of considerable length, and it is not necessary to trouble the House with it. I think, with the right hon. Gentleman, that, upon the whole, the Railway Companies of this country have a very honourable record. They have set a very good example to the world. We may endeavour to pick out here and there points in which greater advantages are given on railways abroad; but it is quite plain that the public opinion of this country never would tolerate the restraints put on the movements of passengers which are of habitual occurrence on the Continent. I think one may fairly make this statement in justice to the Railway Companies—that when the first news was brought of the free movement of the locomotive on the first trial trip from Liverpool to Manchester, it was unquestionably considered an enormous innovation and a wonderful invention; but since that time—more than 50 years ago—it is hardly too much to say that we now travel at twice the pace and at half the price. I have always thought that if the purchase of railways could have been dealt with merely as a great financial operation, so that the Government should be the owners of the freehold in the per- manent way, and that vigorous and active commercial Companies should have undertaken the working under the Government, there would have been a great deal to say in favour of such an operation; but then comes the question, whether leasing is a practical system, and I am afraid that, upon the whole, the commercial mind of this country has arrived at the conclusion that it is not a practical system, and that if the Government owned the railways they must also be the managers of them. I entirely agree with the right hon. Gentleman that, upon the whole, the objections to that system are conclusive. The Government of this country is the heaviest-laden Government in the world. There is no Government existing which has such a complexity and diversity of functions to discharge, and for us, unless in the case of the most urgent necessity, to load ourselves with an operation involving the taking on the back of the State of what I may call roughly the one-tenth part of the property of the country, and then to become responsible for the management of the railways, is, I really think, a suggestion which, though I admit it does present many attractions, would not for a moment be entertained by Parliament. In point of fact the Commission of 1865 went, I think, to the bottom of that question. I remember it well, because I was then the person principally concerned with the appointment of that Commission. Undoubtedly the attempt was made to fill that Commission with men of the greatest weight and of the most diversified qualifications, and when their Report came out it could not but be regarded as constituting a reliable and almost conclusive authority in favour of the view expressed by the right hon. Gentleman. At that time, I must own, I looked with considerable interest to that limited part of the question which is expressed by the word "Ireland." It appeared to me that if the question of purchase was one that could be entertained at all, Ireland was the portion of the Empire within which to apply it, because there the railway system had received a very limited development. The public were suffering then—I fear they suffer to some extent at the present time—from the very limited nature and extent of the operation of railways in that country; and it was then felt that if the question of purchase was a question to be entertained at all, Ireland was the portion of the Empire in which it might best be carried out. But the investigations of the Commission went to the point that even in Ireland the subject could not be entertained, for even there it appeared unwise and impracticable, mainly because of the inexpediency of charging the State with the management of the railways, and the impossibility of conducting State railways on any other basis. Now, Sir, the right hon. Gentleman has referred—I think very properly—to the hope that Parliament will exercise its best abilities in the reasonable control of the railway system, and he has referred to a subject in which we all feel a friendly interest—that of the Railway Rates Bill now before Parliament. I hope also, Sir, that due consideration may at some time possibly be given to what has been said by the right hon. Gentleman on the subject of the canals of this country. It does undoubtedly appear singular that the canal system, which has suffered so considerably, should have been checked so much in its development and so contracted in its operation in consequence of the great development of railways. But I will not enter upon that subject further than to say that if the right hon. Gentleman is able to give his attention to it in connection with the other subjects that demand his attention as President of the Board of Trade, ho will possibly be able to do something practical in respect to it. It is undoubtedly, I think, one of the weakest portions of our present system of communication. There is no doubt that in these days and the days to come, the means of communication between different parts of the country form a subject of great interest and importance—an importance so great and so vital to the prosperity and development of productive industry that it is impossible to overstate it. I think, Sir, we cannot expect Her Majesty's Government to appoint a Commission on this subject until it can be shown that the investigation of 1865 was an insufficient investigation. Until we can entertain a reasonable hope that there is some other mode of progress to the national advantage which was unknown and undiscovered at that time, I should very much doubt whether it would be wise for us to undertake an inquiry, and unquestionably the Government would not be justified in assenting to it unless they saw their way as a matter of probability to some important practical results.

Amendment, by leave, withdrawn.

Main Question, "That Mr. Deputy Speaker do now leave the Chair," again proposed.