§ Order for Second Reading read.
§ MR. LAMBTON (Durham, S.E.)
, in moving the Second Reading of the Railways (Contracts) Bill, apologised to hon. Members for the Bill's not being in their hands at an earlier date, which, he said, was due to the fact that he was not acquainted with the process of bringing in private Members' Bills. The House would see that it was a modest measure, and was of a kind which ought to be brought in by a private Member on a Friday afternoon. It was not an heroic measure, nor 345 did it propose a great change. He did not imagine it would entitle him to much glory, nor did he hope that a statue would be erected in his honour at all the principal railway stations on account of it. On the other hand, it ought not to excite much opposition. He saw there was no objection to it even by the Member for the City of London, who generally objected to a measure which was brought forward on a Friday. In introducing the Bill he thought he ought to say something on the question of law, and he had very great diffidence in approaching questions of that kind. The Bill affected the law as to carriers. There were three classes of carriers—carriers without hire, private carriers and common carriers. Carriers without hire were responsible for loss through gross negligence; private carriers also were responsible for loss arising through neglect; while common carriers were responsible for every kind of loss, except that resulting from act of God or the King's enemies. He need not deal with gratuitous carriers, except to point out that even those who carried gratuitously for others were liable to pay compensation for gross negligence. In 1830, when the Carriers Act was passed, many common carriers tried to limit their liability by publishing notices of conditions which the Law Courts said were unfair and unjust. That Act was followed up by the Railway and Canal Traffic Acts of 1854 and 1894, and under them the railway companies were by law to be regarded as common carriers. At the same time they were able to contract themselves out of their liability as common carriers. At present, under the sanction of Parliament, they were allowed to charge two rates. The first was the ordinary rate, which made them common carriers, and under which they were liable for every loss, except those occasioned by act of God or by the King's enemies. Those two exceptions were not of much practical importance in this country. The idea of danger from the King's enemies, so long as the Government kept up the Navy, was not to be apprehended. Also an Act of God under our climatic conditions was not such that they need have any fear of. He noticed, however, that a claim was made the other day on the ground that a motor-omnibus skidded on a greasy road, which was said to be an act of God. 346 The Lord Chief Justice said it could not be considered to be an act of God, but it was open to the jury to find a verdict for the plaintiff if there was negligent driving. There was also an owner's risk rate, and the question was whether the companies at the present moment, under the rates they could levy, were in an equitable condition. The Bill really dealt with the owner's risk rate, which limited the railway companies' liability as common carriers to cases of wilful misconduct, but he proposed under the Bill to make them liable for gross negligence as well. It might be said that that was dealing with contracts in an arbitrary fashion, and violated what was called the sanctity of contracts; but he would point out that railway companies were in a different position from an ordinary individual, as they enjoyed a monopoly granted by Parliament, which gave them an arbitrary position and enabled them to force contracts upon people. The conditions laid down by Act of Parliament in regard to those special contracts, and contracting out under the Common Carriers Act, were limited to cases which could be proved to be just and reasonable. He asked was it just and reasonable that a company should be able to exonerate themselves from acts caused by gross negligence on the part of their own servants? He did not think anyone would say that was a principle that ought to be enforced. The question of wilful misconduct was very difficult to prove or to deal with. Goods sent at owner's risk might be treated in a way that was grossly negligent, although there was no wilful misconduct. Damage done by a railway company's servants through gross negligence might be quite as injurious as if it were caused by wilful misconduct. He did not wish to bring before the House specific cases based on private information, because it would be difficult to discuss their merits. He would, however, take complaints laid by the Midlands Chamber of Commerce against certain railway companies, in which it was contended that the latter since 1902 had been very arbitrary in their proceedings with regard to damage to goods carried at owner's risk rates, and that traders were not treated as they should be. The railway companies replied that of the eleven cases brought forward three had reference to explosives for which they 347 could not be expected to pay compensation, because they were carried at owner's risk. In one case, however, some cartridges were left out in the rain all night without covering. Some blunders were worse than crimes, and he said that to leave such goods out all night was gross negligence, and equally injurious as if there had been wilful misconduct. The railway companies said that traders ought not to grumble, because, after all, there were two rates—the ordinary and the owner's risk rates—and they could choose between them. But, as a matter of fact, traders had not, in certain cases, got the choice, in consequence of the keen competition existing. One case struck his attention, and that had reference to the sending of flowers from Glasgow to London. There was an extremely small difference between the two rates, but, flowers being a perishable commodity, it was essential that under stress of competition they should be got to the market early. The railway companies pointed out that a good deal of delay and injury was caused by the way in which traders sent their goods, and, no doubt, they had some ground for that complaint. He might take the case of Sandown. If the precise locality was not specified a sporting porter might send the goods to the place where races were held, while a consumptive porter would send them to Sandown, Isle of Wight. The trader, under those circumstances, must risk the idiosyncracies of the railway porters. The railway companies, he was informed, had added greatly to the number of articles which must be sent at owner's risk. Therefore, the traders were unable, in more cases than ever, to obtain compensation unless they could prove wilful misconduct. Since 1902 there had been a Joint Claims Committee to deal with claims, and cases were not considered on their merits. The companies had by combining done away with that competition which in the old days used to give some protection against arbitrary action. The companies objected to an amendment of the law in this respect. A number of substitutes for "wilful misconduct," or "gross negligence," had been proposed, but not being a lawyer he was not concerned about words. The railway companies objected to "culpable negligence," and the words "negligence of a serious character" had been suggested; but he was not caring about the form 348 of words so long as the principle of the Bill was made manifest. Any form of words which would carry out the principle would be acceptable to him. He maintained that it was not just and reasonable to exclude gross negligence from the sphere of liability. He hoped that the House had been able to follow, to some extent, the case he had brought forward, and would give the Bill a Second Reading and send it to the Grand Committee on Trade. The Bill was not ambitious. It was brought in in the interests of traders and of the railway companies of the country. He had tried to be strictly impartial. Of course he recognised that traders never would be satisfied with rates. No one ever was satisfied with rates of any sort or taxes. He would be glad, however, if his proposals conduced to a more friendly and sociable feeling between traders and the great carrying companies. For the benefit of all it was essential to remove from the minds of the traders the suspicion that the railway companies were treating them unreasonably. He begged to move.
§ *Mr. HOOPER (Dudley)
, in seconding the Motion, said that the first thing the House had a right to ask was that the promotion of the Bill should state the exact grievance, explain the proposed remedy, and say to what extent the trading community of the country affirmed the grievance and approved the remedy. The grievance was that in regard to merchandise carried at owner's risk the railway companies were relieved from liability for damage or detention, except it was proved that either arose from "wilful misconduct" on the part of the companies' servants. The traders said that it was practically impossible to prove that even though private detectives were sent with each consignment of goods, because, even though they might witness acts of negligence they could not diagnose the porter's mind and prove the motive controlling his actions. The railway companies, therefore, were practically immune from all liability except in a few isolated cases, no matter how careless their servants might be. Traders affirmed under those circumstances that to throw upon them the onus of proving "wilful misconduct" was harsh, unreasonable, and unfair. That shortly was the grievance. As to 349 the remedy, they asked the House by this Bill to approve what he admitted was an important principle—that all railway companies in the handling of merchandise in course of transit should be responsible for acts of gross carelessness on the part of their servants; and that they should not have the power, under any circumstances, to contract themselves out of that obligation. The traders submitted that railway companies had had granted to them, from time to time, great privileges; that they had practically a monopoly of transit, and held in their hands the trade life of the country. They contended that with those privileges there were allied certain obligations on the part of the railway companies, one of which was that in the handling of traders' goods they should exercise reasonable care, and that power to contract out of that obligation ought to be refused. The practical effect of the Bill, if passed, would be that in the owner's risk contracts, the words "wilful misconduct" would be eliminated, and in their stead would be substituted "gross negligence." The benefit to traders of that would be this. At the present moment when a trader brought a claim in a Court of law the Judge would not allow the case to go before a jury unless wilful misconduct could be proved. It was practically impossible to prove that and in consequence it was almost impossible to get a case before a jury. If, on the other hand, the railway company were liable for acts of gross negligence, then it would follow that where an act could be proved from which it could be reasonably inferred that there had been gross negligence, the Judge would be bound to let the case go to a jury, and it would be for the jury to determine whether upon the facts proved gross negligence had been committed. He would pray in aid of that contention the Report of the Departmental Committee (appointed by the late Government) which sat to consider the fruit industry and issued its Report in 1905. That Committee took a great mass of evidence from the railway companies on the one hand, and the traders on the other, and among the many questions submitted to them for consideration was the question of the owner's risk contract with the "wilful misconduct" clause. In para- 350 graph 64 of their Report the Committee stated—That the exemption of a company from liability unless 'wilful misconduct' is proved is too stringent a condition, for in hardly any case would it be possible for a consignee to obtain the necessary evidence, as that would have to be derived from the servants of the company itself. They consider that the term 'culpable negligence' should be substituted for 'wilful misconduct.—The Bill practically adopted that recommendation, and he thought he would receive the assent of the House when he said that the attitude of the traders in the matter could not be considered unreasonable, when they could call in aid the Report of an impartial tribunal which made that recommendation after hearing evidence both from the railway companies and from the traders. He thought he would be able to shew, by overwhelming evidence, that the traders affirmed the grievance and approved the remedy. No less than thirty-nine chambers of commerce in all parts of the country, including those of London, Liverpool, Manchester, Birmingham, Aberdeen, and his own constituency Dudley—representing almost all the important industrial centres of the country—had given their recognition to the principle of the Bill. In addition to that, on the 13th of October last a conference was held, at the Westminster Palace Hotel, of representatives of the chambers of commerce of the United Kingdom, for the purpose of considering the grievance and its remedy. At that conference 150 representatives of the trade of the country met, at a great sacrifice of time and money, and gave unanimous expression to the widespread nature of the grievance, and approved the remedy now before the House. Furthermore, the Associated Chambers of Commerce last week held their annual meeting under the presidency of his hon. friend the Member for the Rotherham Division of Yorkshire. They represented about 100 chambers of commerce, and spoke in no uncertain voice as to the widespread nature of the grievance, and they also approved the remedy. Further, no less than forty Chambers of Agriculture and thirty-two trade associations, including the British Iron Trade Association, and the great trade-protection societies, had approved, by resolution or otherwise, of 351 the principle of the Bill, and had spoken of the widespread character of the grievance. The House, therefore, would agree that behind the principle of the Bill was a great volume of trade opinion. It might be asked how was it that the question had become suddenly acute, having regard to the fact that the owner's risk rate had been in use for so many years. The answer was simple. It was, that prior to 1902 the railway companies individually settled the claim of the individual trader, and that to some extent the trader had the benefit of the competition between the railway companies. The attitude of the railway companies before 1902 in regard to the payment of these claims was that while they were protected by the "wilful misconduct" clause, and were not legally liable in any case, yet where they were satisfied that gross negligence had been committed by their servants, they would acknowledge the claim of a trader and compensate him as an act of grace while denying liability. On the whole, although there might have been some grumbling here and there, that system provided a fair working basis, and generally gave satisfaction to the traders. But in 1902 the railway companies entered into a combine which had been referred to, and, as a result, had set up a Central Claims Committee. No railway was allowed to settle the claims independently, and the Central Claims Committee had insisted more strongly on the strict legal rights of the companies, and had enforced them more rigidly than before. If therefore the Bill passed into law its practical effect would be to restore the practice which obtained up to 1902, with this exception, that traders would be enabled then to claim as a right that which prior to 1902 was given as a matter of grace. It was necessary for the information of the House, in order that they might form a judgment on the issue, that he should say one or two words on the main arguments which would be used by the railway companies in support of their position. As he understood, the railway companies said they had two rates—one the company's risk rate under which they accepted responsibility, and the other the owner's risk rate. If therefore the traders did not like the conditions attaching to owner's risk rates, why did they not send their goods under the com- 352 pany's risk rates? On the face of it that seemed a very fair and reasonable argument; but a closer examination showed that it was fallacious. The traders said they had practically no alternative, because the companies' rate was in many cases so much higher than the owner's risk rate as to make it, owing to the exigencies of trade competition, compulsory upon them to send their goods by the lower rate, in spite of the conditions. On that point he would again refer to the Report of the Committee on the fruit industries, in paragraph 56 of which it said that the disparity existed in some cases to the extent of 50 per cent., and there were cases cited where the difference was 100 per cent. He had information from traders which showed that the difference ranged from a very small percentage up to 200 per cent. He would quote on that point the judgment of Lord Justice Lindley in the case of Manchester, Sheffield and Lincoln Railway v. Brown. Lord Justice Lindley said:—In the case now before the Court the plaintiff was a fish merchant sending his fish to market, and practically he was compelled to send his goods at the lower rate. It is true lift was not compelled to do so by the railway company, but it is plain that unless the plaintiff sent his fish as cheaply as he could he would be undersold in the market by his competitors in trade.That was just the traders' contention. He desired further to state that the traders of the country viewed with increasing anxiety the action of the railway companies in saying that certain classes of goods could only be carried under the owner's risk rate, and unless the traders sent them under that rate they would not carry them at all. Another argument used by the railway companies was that if traders sent their goods at company's risk, the increased rate for freight would be in excess of their losses under the owner's risk rate, and therefore, after all, the traders were the gainers. To that the traders replied that where the company's risk rate was in excess of the owner's risk rate to an extent beyond a percentage necessary to cover claims, the company's rate was fictitious and arbitrary. He could prove that by a concrete case from the evidence and report of the Departmental Committee. In paragraph 63 they found, and indeed it was admitted by the railway companies, that 5 per cent. 353 added to the owner's risk rate would be a fair percentage to cover average losses for claims. Consequently hon. Members would naturally suppose that the company's risk rate would be owner's risk rate plus 5 per cent. to cover claims, but the Committee found in some cases the percentage was no less than 50 per cent. higher, which showed how arbitrary, unreasonable, and unfair the company's risk rate was. They might be asked what quid pro quo the traders were willing to give the railway companies for the lower rate quoted to them. It was quite fair that if the railway companies undertook to carry traders' goods at lower rates they should receive a quid pro quo, and the traders said they were willing to relieve the railway companies from the common law liability as carriers and from the liability for accidents if the cause of such accidents was ordinary negligence. But where the accidents were the consequence of gross negligence the railway companies ought not to ask for any relief. The distinction between ordinary and gross negligence was well understood in law, and it would be for a jury to determine whether the facts constituted gross negligence. He ought, in fairness to the railway companies, to say that they did to-day in some extreme cases pay traders' claims, although they were not legally compelled to do so under the terms of the owner's risk contracts. They paid the claims but denied liability. But the traders said they did not wish to come cap in hand and ask as a matter of grace that to which they were entitled as of right. The railway companies made the strong assertion that the owner's risk rate was a boon to the trader in that he was enabled to pack his goods less carefully and more economically than he would be enabled to do under the company's risk rate. But that fact was taken into consideration in the classification of the goods, and an increased charge was made according to the classification. Traders, therefore, could not see that it was any argument for the railway companies to say, "If you send your goods not properly packed we are entitled to be grossly negligent." While he thought it his duty to put those arguments, he rested his case upon the broad principle that the railway companies which had now practically a monopoly ought not to be allowed under 354 any circumstances to contract themselves out of their liability for gross negligence. He thought that to allow them to do so must produce slackness in management and be detrimental to the trading community. There was one other point. Objection had been taken to the Bill on the ground that it was another piece of grandmotherly legislation, and that it did violence to the great principle of freedom of contract between adults. He admitted, that principle and its importance, but the principle itself rested on the assumption that it operated in the interests of the community at large, and if it could be proved in any given circumstances that the principle clashed with the interests of the community, then to that extent the principle must give way and an exception be established. It was not necessary, however, for him to prove that the contractual relations between railway companies and traders constituted such an exception, for Parliament had already interfered in respect to these very contracts, saying to the railway companies,. "Thou shalt not do this," and "thou shalt not do that." Let him sketch in a few brief sentences for the information of the House what Parliament had heretofore done. Prior to 1830 the common carriers of the day sought to limit their common law liability by issuing public notices to the effect that they would not be liable under certain conditions. So prevalent did that custom become that Parliament intervened on behalf of the traders and passed the Carriers Act of 1830, which prescribed that no such notice should be valid, but at the same time gave the carrier a right to enter into special contracts with particular traders with regard to the carriage of their goods. There were several legal decisions, and it was ultimately held in the law courts that when a railway company sent a printed set of conditions to a trader, and he received it, it amounted to a special contract, although he had not agreed thereto and had even protested. It was in consequence of those legal decisions that Parliament again intervened and passed the Railway and Canal Traffic Act of 1854, Section 7 of which governed the case to-day. That section said in effect that such contracts must not only be in writing but signed, and the conditions must be such as a Judge or a Court 355 deemed just and reasonable. Those special contracts, the owner's risk contracts with their "wilful misconduct" clause, had been taken before the Judges, who had decided in favour of the railway company; consequently the traders had come to the House, and placed their case before it as the highest tribunal. In conclusion, he would like to say that the Bill had not been conceived in any spirit hostile to the railway companies. He recognised that railway companies were trading concerns and not philanthropic institutions. But he held say that they did not stand on the same footing as ordinary trading corporations. They had had great privileges conferred upon them by Parliament, and allied to those great privileges were great responsibilities to the community at large. He thanked the House for the patience with which they had listened to him. He had endeavoured to compress his arguments as much as possible compatible with the clear elucidation of the case, and he now begged to second the Motion.
§ Motion made, and Question proposed, "That the Bill be now read a second time."
§ *MR. STUART WORTLEY (Sheffield, Hallam)
said he recognised the spirit in which the mover and seconder of the Bill had advocated its acceptance by the House, and he was glad to note the concluding words of the speech of the hon. Member for Dudley, in which he disclaimed any special hostility to the railway companies. He felt also that, in rising to state the case of the railway companies, he had to appeal to the known generosity of the House towards the advocates of unpopular causes. He did not plead guilty to having a deservedly unpopular cause, but he had to recognise what had happened recently in the House when anything was demanded by the trade unions or by the chambers of commerce as against the railways. Although chambers of commerce were useful and representative bodies, yet it must be borne in mind that for the purposes of this dispute they were parties to the litigation and could not be treated as umpires, and what they said should not be taken as the last word on the subject. The findings of the chambers of commerce were very different from what they might have been if the railway companies 356 had attended their meetings, and if the companies' voting power had been in proportion to the volume of their capital. Probably, if that had been the case, the verdict might have gone the other way. As was very well known, it had been found almost impossible to organise any shareholders so as to establish their political or economic power in anything like proportion to the tremendous interests they represented. But, after all, their money was risked in an industry, and the shareholder in a railway was entitled to at least as much consideration as all other traders whose money was risked for the benefit of the general community. Another thing was, that if it was to be a question of presuming gross negligence, and should this Bill pass it would nearly amount to presumption in some cases, where there was no evidence of negligence, it was to be borne in mind that the servants of railway companies were not more addicted to habits of gross negligence than the servants of anybody else. There was no greater reason for presuming gross negligence in their case than in that of others. He hoped that, with that initial disclaimer or declaration, he might be permitted to say what the railway companies conceived to be their case. The traders should not be allowed to be judges in their own cause. The hon. Member for Dudley had made the important admission that even at the present time, notwithstanding the existence of the Joint Claims Committee, the railway companies in a very large number of cases did stop short of insisting on the exaction of their full rights, and that they did pay in respect of claims which, under the strict terms of the owner's risk clause, they might very justly and legally repudiate. He was glad of that admission. If it was to be a question that freedom of contract must go, let them remember that railway companies themselves did not enjoy the rights of true contract. A railway company was not entitled to say, "We will get from you all the rates we can," because they were limited in respect of the amount they could take, for the reason that the State imposed a maximum rate. Again, the railway companies were obliged to charge the same rate to all traders, and could not give preference to one over another. In those initial and most important respects railway companies had been deprived of the right of 357 entering into what was called free contract. It was not on the basis of free contract, however, that they were going to argue the question. There were other considerations which appeared to him to be the true reason why, if at all, the House should interfere. It had been attempted to be argued that owner's risk terms were so favourable to traders, or rather were so wide apart from the carriers' risk terms, that the higher rate paid under the carriers' risk terms was not really a true alternative at all. The hon Member for Dudley had quoted Lord Justice Lindley, but those who read the virile observations of Lord Bramwell in the same case would see how he, at all events, brushed aside that kind of argument. The lower rate terms, which constituted the owner's risk clause, could not at one and the same time be so intolerably unjust as to demand a remedy from the House, and also be so good that they put the alternative in the shade and altogether out of sight. If it was to be argued as a case of two alternatives, one of which might be described as altogether out of sight, and therefore of no use at all to the parties, the companies were entitled to ask which was to be the datum line? Was this a Bill to get rid by a side wind, and without avowing its real purpose, of the maximum rate created by Parliament with such gigantic labour and with the exercise of such splendid skill and judicial faculty as was involved in the inquiries of 1888 and 1892? Which was to be the datum line? It must be borne in mind that the carriers' risk rate was admittedly less than the maximum rate in practically every case, and that maximum rate was fixed, after very close inquiry by Parliament, so recently as fourteen years ago. The position was that, starting from that datum line, in the great majority of cases the railway companies had given traders the alternative of taking owner's risk rates at a diminution from the rate in their favour greater than the diminution which represented the cost of insurance. Therefore the trader was really in a position, under the owner's risk contract, even if he took the whole of the risk of the company's "gross negligence," of having got more into his pocket than the burden of insuring against that "gross negligence" would lay upon him. The traders contended that competition among themselves de- 358 stroyed the value of the alternative rate. But how did it operate to do so? It was so good that it tempted them to keep the money in their pocket, and shirk the obligation of insurance. The result was that they did not insure; yet they came to the House and after having received from the companies the money for the premium on that insurance, claimed to be allowed to keep that money in their pockets, and still to be in the position that they would have occupied if they had effected the insurance. That was how the companies could put the case if they chose to take the extreme point of view. What the railway companies feared was the great ambiguity of the words "gross negligence." The President of the Board of Trade, being the acute man they knew him to be, was quick to seize upon that difficulty at the interview he was kind enough to give to the railway companies in one of the committee rooms of the House. As he had said, there was no necessary presumption that railway servants were more likely to be guilty of negligence than anybody else. Parliament ought not to encourage the idea that the disappointment of a trader, or the amount of damage which he suffered, was the necessary measure of the negligence of which anyone had been guilty. He could understand that the trader who sent by rail cut flowers, or strawberries or season fruit, and who lost his market by delay, would be very indignant, but his indignation was not of itself evidence, although it was indignation with which they all sympathised. They all wanted to get their goods sent at as low rates at possible and without delay, but the indignation felt when one was disappointed could not be accepted as conclusive evidence of negligence, or of anything like gross negligence by anybody. He had looked through the list of eleven cases which had been referred to, and he found that except in one or two of them there was practically no evidence available at all. In all those cases, however, it was the fact that such evidence as there was must be in the possession of the railway company itself. That was the direction, if he might respectfully point it out, where possibly something in the nature of a remedy might be found, if they looked at the consequences which flowed from that necessary state of things. He did not known what would result if the railway 359 companies were to say that they would accept the provisions of the Bill. It must be borne in mind that the Bill, not content with abolishing the supposed freedom of contract, made it impossible for the railway companies to say, "If you do not like these conditions we will offer you others." It closed the door to any alteration at the instance of the railway companies themselves. If they withdrew the owner's risk rate, that would be an unreasonable interfering with the rates, which would bring them under the terms of the Railway and Canal Commission Act. Again, there was a similar provision against anything like altering the amount to be paid under the owner's risk rates. That made it very difficult for the railway companies to say that they would on any terms agree to the Bill. Of course it was obvious that they must leave themselves, as he had begun by saying, to the generosity of the House. He felt quite certain that they were safe in leaving themselves to the justice of the House; and anybody must be able to see that there were possible conditions upon which the issue might be equitably settled. The right hon. Gentleman the President of the Board of Trade had himself said that it ought to be possible to find a better form of words than "gross negligence." There were other possible alternatives which he could only hint at. In truth, he thought it was better perhaps not to look at the past, for when traders said that they had suffered the railway companies replied that they had been very well paid for it. The traders, however, denied that, and inquiry into that part of the subject had now become unprofitable. There was a higher position altogether to be taken up, and that was, what did public policy require? He could quite conceive its being said, and very cogently advocated, though perhaps not in any legal sense, but still in a sense which interested legislators, that it was not in accordance with public policy that any persons in the realm should be allowed to contract themselves out of the consequences of their gross negligence. That was what they might call the extreme case at one end of the scale. The hon. Member for Dudley had talked about the unreasonable requirements of the companies about packing. That was at the other end of the scale. He did not think it would be contended that the House should artifically assist 360 those who by imperfect packing of their goods subjected railway servants all along the line, as well as the servants of the consignees and the carting agents, to exceptional temptations. That was another object which Parliament ought not to make the subject of a special legislative effort. The railway companies submitted themselves in all respects to the sense of justice which animated the House, and they asked hon. Members to remember that although the chambers of commerce had demanded this reform there were many reasons why it should not be conceded in the way the Bill had been formulated. Although it might be true that by reason of their great wealth the railway companies were all powerful, the traders through the chambers of commerce were powerful in a way which made it practically impossible to resist their demands. After all, railway companies were traders and were entitled to justice from the House. They thought it was quite possible to find some other equitable solution of the claim, and he hoped the President of the Board of Trade would give them the assistance of his department and experience in finding that solution.
§ *MR. ELLIS (Nottinghamshire, Rushcliffe)
supported the Second Reading of the Bill. They had heard the case of the traders presented by the mover of the Bill and its supporter, and the case of the railway companies presented by the right hon. Gentleman opposite with all the acumen and legal training which he possessed and in his position as a railway director. The discussion brought back old memories. The House could not be better employed on a Friday afternoon than in quietly and moderately discussing such a matter. Were the great railway systems of the country manned and worked in a manner which tended to promote the social welfare of the community? The railway companies stood in an entirely exceptional position, and that fact should never be forgotten. It had been forgotten too much in the past. Every railway company was the creation of Parliament, and had to come to the House for its powers. He had been looking into the record of the old Committees, and he found that Mr. Gladstone was Chairman of one great Railway Committee in 1844which inquired into the position of the 361 railway companies. The Act of 1844, issued from the Report of that Committee, and the preamble of that Act ran—Whereas it is expedient that the concessions of new lines of railways should be subject to such conditions as are hereinafter contained for the benefit of the public.They had heard a good deal about tractors, but he wanted to speak solely from the point of view of the public. The right hon. Member for the Hallam Division had said that traders should not be the judges in their own case. That was not exactly the position, because the House of Commons were the judges. The situation reminded him of what happened in 1892, when railway companies made an extraordinary abuse of their powers. A Committee was appointed, and in 1894 they presented a very strong Report to the House. They investigated the whole question of the manner in which railway companies had exercised the powers given them by the Acts of 1891 and 1892. Any one who read through that Report would conclude that the railway companies were then tried and found wanting. Then, as to-day, it was found that a joint committee of railway managers had been formed to promote concerted action by those great corporations, and thus to vitiate the protection given to the public by each case being decided on its own merits. The right hon. Member for the Hallam Division had said that the shareholders were badly organised, and could not present their case; but railway boards and their railway associations presented an example of most complete and powerful trade unionism. The joint committee of railway managers in 1891 arrived at certain conditions which were not disclosed when the Act of 1892 was passed, and had they been disclosed, that Act would have been framed in quite a different way. The Select Committee in 1893 reported that—In view, however, of the action of the railway companies, and of the alarms felt by traders as to the future, they are of opinion that matters cannot be left as they now are, and that some greater security should be provided against unreasonable increases of rates within the maximum charges fixed by recent Acts of Parliament as the minimum protection to which traders are entitled. Your Committee are also of opinion that traders should be protected against the imposition of unreasonable conditions of transport on risk notes and otherwise.362 Very little had been done since 1893—during the last fourteen years—and therefore he welcomed this Bill as an instalment. It must be borne in mind that in 1865 a Royal Commission, of which the then Duke of Devonshire was head, laid down that it was the right and duty of Parliament whenever a railway company applied for increased powers to see how far it had exercised the powers it already possessed. They all acknowledged that railway companies had lights, but those rights were founded on Acts of Parliament in which certain conditions were implied and imposed, and the House must see that they were observed in a reasonable manner. In 1882 the then President of the Board of Trade put some foolish stipulations into an Act of Parliament in regard to electric lighting which delayed the development of electric lighting in this country for years. He did not wish to see unreasonable restrictions, but he held that in the matter of railways they should watch very jealously the powers which were given by Parliament and see that the conditions under which they were granted were carefully fulfilled. He gathered from the concluding sentences of the speech of the right hon. Member for the Hallam Division that there was a possibility of a modus vivendi. If they went to a division he would support the Second Reading, although he gathered from the promoters that they were not wedded to any particular form of words. If, however, some other way of carrying out the main purpose and object of the Bill could be found, he for one would support it. He hoped they would hear the view of the President of the Board of Trade on the question as speaking for the Government.
§ COLONEL LOCKWOOD (Essex, Epping)
said that in view of the moderation with which the hon. Members who moved and seconded the Bill had expressed themselves it should not be impossible for the railway companies and the traders to come together and discover some modus vivendi. The object of all who represented the railway companies should be to remove suspicion from the minds of those who had dealings with them. He hoped that as time went on they would be able to prove to the House that their great object was to be of use to the community, 363 while at the same time acting fairly to those who had entrusted them with the spending of their money. While there were two rates—one at owner's risk and the other at company's risk—the owner's risk rate was entirely voluntary. That fact was referred to by the hon. Member for Dudley, who said, "Yes, it is perfectly true that it is voluntary, but you must remember that there now sits a powerful board in London, and that they are, practically speaking, too much for the small trader who finds fault with his voluntary rate" In answer to that he would point out that in the last six months in connection with the company which he had the honour to represent there were over 3,000 claims in regard to owners' risk contracts, and only one was for over £50, county court jurisdiction now extended to cases where the amount involved was £100, so that the means of redress open to the owner who thought he was aggrieved owing to the negligent handling of his goods was cheap. The trader could take his case to the county court, and the fact that the railway companies had a joint committee in London did not really affect him at all. He was sorry that the right hon. Member for the Rushcliffe Division had gone back forty years to look for the misdeeds of railway companies. Would it be impossible in his own career to discover some little acts which could not be defended?
§ COLONEL LOCKWOOD
said he thought the right hon. Gentleman went back to 1865. He honestly confessed that blameless as he looked upon himself now, he would be sorry to go back forty years to the salad days of youth, and say that he never did anything wrong. Railway companies when they started their career did exercise powers which they would not attempt to exercise now in view of the present temper of the House of Commons. If these contracts were to be altered—and it was a very good thing that it was in the power of the House to alter and vary them—the House ought to remember the liabilities of the railway companies under their present contracts, and view the contracts in the light of modern times. They 364 surely would not ask that all the onus should be put on the company and none on the trader. He could not explain that to the House better than in the words of Sir Charles Owens, a member of the deputation to the President of the Board of Trade. He said—We have said to the traders, if you will relieve us, the railway companies, of liabilities A, B, C, and D, we, on the other hand, will reduce your rates by the amount X. That is a business proposition. But I venture to suggest it is the reverse of a business proposition if the trader brings in a Bill to the House and suggests that while the rate is still to be reduced by X, the liabilities A, B, C, and D, or one of them, is to be transferred back from the shoulders of the trader to the shoulders of the railway company. Surely, in common justice, if a trader wishes to retire from an absolutely voluntary contract, both parties to that contract should be left free to enter into another contract, but one party to that contract should not be relieved of obligations on the one hand, while they remain on the shoulders of the company on the other.That was what the companies felt. In regard to gross or wilful negligence, legal definitions had been given to them, but it seemed to him open to doubt whether it could be accurately defined. Words had been suggested to the Board of Trade, and in his reply the President of the Board would no doubt state whether or not his advisers thought those words sufficient. If they were sufficient, something would be gained upon which an understanding could be arrived at between the traders and the railway companies.
§ *MR. BEALE (Ayrshire, S.)
said he would speak on the question from the point of view of a lawyer. He represented a large constituency in which there were many traders who took one side of the question, and there were others who were interested on the other side as railway proprietors. Therefore, his interest in the question was to help in finding, if possible, a way out of the difficulty with which they were faced. The proposition in the Bill was practically to substitute "gross negligence" for "wilful misconduct" in the present contract notes employed by the railway companies. He was quite alive to the difficulty in which hon. Gentlemen opposite who represented the railway companies were placed by the necessity which had arisen for the introduction of a definition of "gross negligence." It appeared to him that the railway companies had 365 had it in their power to avoid the necessity of any such definition at all, and yet to meet the reasonable requirements of traders who had brought forward this Bill, for the railway companies had got it declared in the Courts that a contract which in terms exonerated them from everything except "wilful misconduct" was a lawful contract which would be upheld. He believed the railway companies were very fortunate in getting such decisions. He thought it was brought about by a certain straining of the Act on the part of the Courts. If the railway companies had taken a liberal view and held that a line between "wilful misconduct" and "gross negligence" ought not to be drawn so as to exclude things which were reasonably and popularly called gross negligence, the House would not have heard of this Bill. He did not blame railway managers for protecting the interests of the companies when claims were made which could not always be justified, but he thought when they took every objection they could they threw away a grand opportunity of avoiding the difficulties of which this Bill attempted the solution. The traders who supported the Bill were really asking nothing more than that the intention of the Act of 1854 should be made a reality. Before the passing of that Act the law was to be found in the works of several writers, of whom the most noted was Mr. Story. In his definition of the law he said—Carriers cannot by special notice exempt themselves from responsibility for gross negligence or fraud, or by demanding exorbitant rates compel the owner to yield to unjust terms.After the Act of 1854 was passed its intention was very fully discussed in the House of Lords in the North Staffordshire case. The Judges were summoned to state their opinions to the House of Lords. He would read some of the statements which were made as to the meaning and intention oft he Act. Mr. Justice Crompton said—Carriers cannot say we will not carry your goods at all unless you pay insurance, or agree that we are not to be responsible whatever negligence we may be guilty of, either by not providing proper carriages or by gross neglect or default of our servants.Baron Martin said—The condition could not mean that the company should not be under the obligation to 366 avoid actual negligence or misfeasance, as that would be contrary to the enactment.Chief Justice Cockburn expressed an opinion to exactly the same effect. He believed that this Bill would never have been introduced if it had not been that the railway companies had attempted to draw a line to exonerate themselves from liability in case of gross negligence on the part of their employees. The offer of alternative rates at company's risk had no doubt been held in many cases under the then circumstances to remove the injustice done to traders. The question always arose as to what was a reasonable alternative rate under the circumstances and that was the question now. As a matter of fact many people had gone into business and had invested a large amount of capital on the strength of these low rates at owner's risk being maintained, and if they were not to be continued, or something like them, those people would be unable to carry on their business. He hoped that the Bill would become law, because it was reasonably required on the part of traders, and he could not see that it would do injustice to the railway companies. Any definitions required on their behalf could be suggested in Committee.
§ MR. ABEL SMITH (Hertfordshire, Hertford)
said he did not desire to prolong the debate unnecessarily, but he would like, on behalf of those whom he represented, to say that the agricultural community regarded this measure as of very great importance to them. It was idle to talk about freedom of contract in this regard. It had been pointed out by several hon. Gentlemen that the railway companies owed their very existence to the action of Parliament, which had always exercised a certain control over the arrangements and contracts which they made with their customers. The only desire of those who promoted the Bill was to see that fair terms were given to traders, and specially to agriculturists who were compelled to employ the great railway companies as carriers of their goods. It seemed to him, looking at the question not from a technical or legal point of view, but as a practical man, that it was monstrous that the railway companies should be able to contract themselves out of their 367 responsibility for the gross negligence of those whom they employed; and he hoped, therefore, that the Bill would be given a Second Reading and any necessary Amendments of details could be made in Committee upstairs. It was a matter of special importance to the agricultural community, because they dealt in perishable articles which had to be sent to market by rail. Allusion had been made in the Report of the Departmental Committee on the fruit growing industry. Those who were familiar with that trade knew that the men engaged in it attached considerable importance to the Bill. The most modern and enterprising farmers in the country who made their living by consigning their produce, such as milk and fruit, by rail to market were keenly interested in the Bill, which had been supported in a very moderate and reasonable spirit; and he hoped that the House would give it a Second Reading so that the legal questions involved could be calmly discussed in Committee in a satisfactory way.
§ *MR. BRIGHT (Oldham)
said that some time ago certain railway companies were under the temptation, for the sake of gaining traffic from competitors, to allow to large traders claims for damages almost as if their goods had been forwarded under carrier's risk instead of under owner's risk. That was done for the larger traders, whom they wanted to propitiate, but not for the smaller, who were thus at a disadvantge. The Committee of managers who considered the matter had behaved not ungenerously to the traders, and had shown themselves to be perfectly ready in many cases, even where gross negligence was not proved, to meet the traders in the demands that they had made.
§ *MR. SMEATON (Stirlingshire)
said that his constituents, who consisted largely of agriculturists, miners and working men, hundreds of whom were members of co-operative societies, would, he knew, desire him to support this Bill. Co-operative societies had suffered loss by the present unfair system of railway rates on the carriage of perishable goods, and the impossibility of getting security that their perishable goods should be carried to market except in large quantities and packed in an expensive manner. But, apart from these local reasons, 368 another matter of great importance to the country was the competition between native fruit growers and dairymen and the same class in Denmark, Belgium, and Holland. The native farmers and fruit growers believed that they were handicapped by what they considered the favouring rates and other privileges accorded by the railway companies to foreign growers and producers, as against the unfair rates demanded by the railway companies from them. Hon. Members opposite were very much in favour of protection, and he would, therefore, invite their support to the Bill for the protection of our home products, and he hoped that the system of railway rates would be revised so as to prevent the unfairness which at present prevailed. He therefore supported the Bill and hoped it would be passed into law.
§ SIR F. BANBURY (City of London)
said that the reason for establishing the Joint Claims Committee was to see that justice was done to all classes of traders. His hon. friend the Member for Hertfordshire had talked about free contract, and the seconder of the Bill had also mentioned it, but the railway companies did not found their opposition to the Bill on any question of that sort. The railway companies themselves had not the power of entering into free contracts. They did not complain of that, but they were under an obligation to carry goods under certain conditions imposed by Parliament. The railway companies had, like other companies, to face a rise in price in the raw material necessary to them in order that they might carry on their business. Every other trader who had to encounter that rise of price put up his own price and so recouped himself, but the railway companies had to go on carrying goods without any increase of price. Again, there had been large increases of rates and taxes for which they could not recoup themselves, as the ordinary traders would, by putting up their prices, because they were under an obligation to Parliament. But the railway companies had said that they were prepared to meet the traders under certain conditions, if the traders would in their turn relieve them from certain obligations which Parliament had imposed upon them. They said, that if the traders would do that, they they would give them lower 369 rates. Now the traders came and said they would accept the proposition that they should carry their goods at a lower rate, but they would not accept the other terms which the railway companies proposed. The hon. Gentleman in charge of the Bill said it would be impossible for the traders to do so in consequence of the keen competition now existing, and that traders who sent their goods now at owner's risk rate would suffer if they took the ordinary company's risk rate. Surely that was an argument against the traders and not the railway companies, because if the owner's risk rate was so onerous the traders would not have availed themselves of it. Railway companies did their best to meet the traders. The traders were the customers of the railway companies and the latter had no desire to quarrel with their customers; it would be foolish of them if they did so. The railway companies desired to be on friendly terms with their customers, but there must always be some small differences of opinion, and as his hon. friend himself had said, no rate would satisfy every trader. They must not forget the real effect of this Bill. As lately as fourteen years ago, it was enacted that the railway companies were to charge for the carriage of goods certain rates and to undertake certain liabilities to their customers. The effect of the Bill was to say that the rates which had been charged had been so excessive and had been imposed in such a manner as to render nugatory the wishes of Parliament in the bargain entered into fourteen years ago. If that was so, the proper course was to have a real and thorough inquiry. But it was now proposed to effect a change by means of a private Members' Bill introduced at the instance of an interested party. Such a course was, he thought, detrimental not only to the railway companies but to the true interests of the country. Contracts had constantly been entered into between Parliament and other people, as in this case, and if on the faith of those bargains people had invested their money in certain undertakings, the terms ought not to be altered without the consent of one party. He had never heard of cases where the companies had refused to take goods except at the owner's risk rate, and he did not think the companies had any power to do so. They were bound to 370 accept goods if they were brought to their stations.
§ SIR F. BANBURY
said that if a trader presented to the railway companies for carrage goods which were not properly packed, he would say the companies were not bound to receive them. But, subject to that, the railway companies had no alternative but to accept the goods. It had been said that, after all, all the traders desired was to substitute the words "gross negligence" for the word "wilful misconduct." There had been very many different interpretations of the word "gross," and he believed one learned Judge had stated that "gross" meant nothing at all, and that it might just as well be called "negligence" as "gross negligence." In his judgment it was perfectly unfair for the traders, who had availed themselves of the generosity which the railway companies had shown in making reduced rates, to say they would accept what the railway companies gave but would not accept the conditions imposed. It had been said that there was in some cases a difference of 50 per cent. between owner's risk rate and the rate sanctioned by Parliament. That of course was a large difference, but there being so many rates (hundreds of thousands of them), he would not like to say off-hand that it was not possible for such a rate to be imposed, but he doubted it. Because, however, the railway companies had been so anxious to meet the traders and had over and over again reduced the rates, there was at the present moment in some cases a considerable divergence between the owner's risk rate and the ordinary Parliamentary rate. The promoters of the Bill desired to change the rate which Parliament fixed fourteen years ago and to substitute another rate which would make it impossible for railway companies to charge it with any chance of profit to themselves. It had been said that the railway companies, owing to the establishment of the Joint Claims Committee, did not meet claims in the way in which they did formerly. He knew, however, that on one particular railway in England during the last six months 3,000 claims had been 371 met. In one case Messrs. Buggins & Co., of Birmingham, claimed £98 15s. the value of 11 tons 7 cwt. second-hand wire rope delayed and a portion wrongly converted. That consignment, which was despatched on September 17th, 1906, from Monument Lane Station, should have gone to William Harrison Ltd., Brownhills. About the same time another coil of cable weighing about 4 tons was being dealt with, which should have gone to the Wood Farm Colliery Co., at Bloxwich. The large coil weighing 11 tons 7 cwt., and measuring 4,800 yards was sent to Bloxwich in error, and although the firm there were only expecting one 1,500 yards long, they cut the amount they required off the large one, which they must have seen was not the one ordered by them. That had the effect of destroying the large coil for the purpose for which Messrs. Wm. Harrison Ltd, Brownhills, required it. The traffic was carried at owner's risk at a reduced rate, but in spite of that the Joint Claims Committee authorised settlement of the claim, although the company's servants' mistake in confusing the two consignments could not be considered "wilful misconduct." Such a case as that showed that although the railway companies had shown great consideration to the traders, in some instances traders showed no consideration for them. He hoped, although he knew it was a vain hope, that the Bill would not be carried, but if it was carried he trusted that the President of the Board of Trade would remember that the railway companies had as much right to consideration as the traders. The Chairman of Ways and Means on the previous night had stated that he would view with great apprehension the absence of any capital which was now put into railways; but it was not the best way to encourage the influx of new capital to take away powers which had been deliberately granted.
§ THE PRESIDENT OF THE BOARD OF TRADE (Mr. LLOYD-GEORGE, Carnarvon Boroughs)
said the discussion had been of an exceedingly satisfactory character, as it had been carried on in a conciliatory spirit on both sides, and he was very glad to see the frame of mind in which the railway companies were prepared to meet the traders. He did not quarrel with the hon. Baronet who had just sat 372 down, and he agreed it would be very disastrous from the point of view even of the trader if they were to put such conditions on railway companies that they frightened off capital from railway investments. It was in the interests of the railway companies to obtain more capital, in order to afford greater facilities, and it was also in the interests of labour and the traders of the country. In a discussion they had recently had, the reason assigned for the long hours of labour was that railways could not cope with the excessive traffic unless they had more facilities, and he quite agreed that nothing should be done to make railway investments so unremunerative that the companies could not get money for the purposes of development. The case under consideration was one in which the Board of Trade ought not to take a side. Railway companies were themselves traders, and it would be a mistake to regard them as if their interests were not identical with those of the general trade of the country. He was glad to see that the Second Reading was not contested at all. He assumed that there would be no division, and therefore the matter resolved itself into a question of the frame in which the Bill should ultimately pass through the House. For that reason his duty was a light one. He did not mean to say that the railway companies accepted the fairness or justice of some of the contentions put forward in the interests of the Bill, but they were not prepared to oppose the Second Reading. He had a very satisfactory interview the other day with the representatives of the railway companies, and he ventured to suggest to them that they had better turn their mind to the framing of some form of alternative words which would meet the justice of the case all round. He must say they met the suggestion very fairly, though he was not sure that their alternative words would be accepted. He did not think there had been any quite satisfactory discrimination between ordinary negligence and gross negligence, and the whole difficulty had arisen from that fact. He was not going to express any opinion upon so difficult and complicated a legal problem, and he had, therefore, taken the opinion of the legal advisers of the Government. All these 373 questions could be discussed in Committee upstairs, and he did not despair, especially having regard to the admirable spirit which prevailed on both sides, of a reasonable arrangement being arrived at. He thought it possible the railway companies might be able to import words into their contracts which would cover the case. Admitting that in certain cases they ought to compensate for damage sustained oven by those who sent goods at owner's risk, they contended that they ought to be the sole judges of the kind and class of cases in which the compensation should be given; but that was not a claim which the general public would admit. It must be put upon a much more satisfactory basis than that. Certain arrangements which had been made between the companies themselves would have the effect, he thought, of restraining the operation of the competitive system between the railways, and would have to be vigilantly watched. At all events, up to the present, he did not think the traders had much reason to congratulate themselves upon those arrangements.
§ MR. LLOYD-GEORGE
said he meant the Joint Claims Board to a certain extent. He thought the traders had not much reason to congratulate themselves on the result of the appointment of that Board. It had the effect of preventing competition among certain lines of railways in the country, and it was the business of the trader to encourage competition. He understood that the Bill was accepted, so far as the Second Reading was concerned, and therefore he would suggest that the best plan would be that it should be sent to one of the Standing Committees. It was very desirable that the question should be discussed purely as one of alternatives, although it had been suggested that the railway companies had done their best to find some alternative form of words. He did not find, on the other hand, that the traders were absolutely agreed about gross negligence. The traders were quite agreed as to what they wanted, and he thought the railway companies on the whole were prepared to meet them. It had been stated, on behalf of the railway 374 companies, that the trader wanted the railway company to pay the premium, to take the risk, and also to reduce the rate. He did not think the trader made a claim of that sort. He was willing to take ordinary risks upon his own shoulder—the ordinary case of carelessness. That was as much as the trader could be expected to take upon himself. It was rather too much to say that railway companies should exercise no discretion and no care—that they should be able to shunt a truck of fish or fruit into a siding for a couple of days through sheer carelessness, and then send it forward to market after the goods had been irretrievably damaged, without any legal liability to pay for the damage. That was an utterly inequitable doctrine. He did not say they would not pay; he was merely discussing their legal liability. Fortunately, in a good many cases they had paid compensation, but only as an act of grace. Taking their pure legal liability they would not be liable, because the case assumed was not wilful misconduct. But it would be gross negligence, and it was clearly a case in which railway companies ought to compensate the trader. The trader did not contemplate risks of that character. What he contemplated was cases of accident—thethousand little careless nesses of an ordinary working day. Those he was prepared to take and to pay a premium on them. In the circumstances, he saw no object to be gained by prolonging the discussion. He thought the best plan would be to take the Second Reading now, and send the Bill to the Standing Committee on Trade.
§ MR. AKERS-DOUGLAS (Kent, St. Augustine's)
recognised that the subject had been discussed without any exhibition of Party feeling on the part of the railway companies and the traders. If some such arrangement as had been referred to could be arrived at, he believed it would be in the interest both of the companies and of the public. As one who represented a railway company and had given some study to the subject, he thought the trader had not so much ground of complaint, at all events, as had been made out by the seconder of the Resolution. The hon. Member had admitted that the owner's risk rate was not compulsory upon the trader in theory, although he sought to make out that it 375 was in practice. He could not see, if the owner's risk rate was not forced on traders, why they could not avail themselves of the opportunity and take the companys' risk rates, which were regulated by statute. The owner's risk rates were low rates allowed in consideration of the trader's accepting all risks for damage, except damage arising from the wilful misconduct of the companies' servants. He had heard it said that the companies' servants discriminated between goods consigned at owner's risk and those consigned at company's risk. He protested against that allegation. The men who handled the goods had no means of distinguishing between them, and they were no worse than any one else's servants. He objected to Clause 1 of the Bill, because it made a railway company liable for gross negligence, although they might have expressly contracted themselves out of that liability by voluntary agreement with the trader. Then he thought Clause 2, which prevented the company from withdrawing the present owner's risk rates, was extremely unfair. He accepted the Second Reading of the Bill, trusting that some satisfactory form of words with regard to gross negligence would be found and substituted for the clauses now in the Bill.
§ MR. LLOYD-GEORGE
intimated that the Government would be prepared to approve of any better form of words, if such a form could be found.
§ MR. AKERS-DOUGLAS
said that if an arrangement of that sort could be made he believed the Bill could be made to satisfy both the railway companies and the traders. The railway companies reluctantly accepted the proposal, because they felt the general interest of the public had to be considered. If the proposals when placed upon the Paper carried out the view which he and his right hon. friend the Member for the Hallam Division of Sheffield thought reasonable they would have a very happy solution.
§ *MR. MOND (Chester)
said he would not have intervened had it not been for the observations of the right hon. Gentleman who had just sat down. it appeared to him that the Board of 376 Trade was always too anxious to arrive at a bargain between the traders and the railway companies. Today a kind of ad misericordiam appeal had been made by the railway companies, who had done what they always had done in every Act of Parliament affecting them. They had accepted the Bill and immediately proceeded to whittle away the privileges for which the traders had pressed. He considered that the gentlemen who represented railway companies had ingeniously tried to confuse the House and the President of the Board of Trade.
§ COLONEL LOCKWOOD
asked whether it was in order to say that the object of Members who had spoken was to confuse the House.
said that he understood the hon. Member to mean that the arguments used by the representatives of railway companies had the effect of confusing the House, and if so he was in order. It would not be in order to accuse Members of deliberately misrepresenting facts for the purpose of confusing the issue.
§ *MR. MOND
said he withdrew his observation, if it appeared to convey any personal imputation. With the usual ordinary rate, the carrier's rate, and the maximum rate, the railway companies had three independent rates. The maximum rates the railway companies never charged in ordinary practice, because they knew that if they attempted to charge them the country would revolt. As everybody knew, those rates were fixed ridiculously high. He was now talking of the comparison between the maximum, the ordinary, and the owner's risk rates. It was true that the owner's risk rates were much lower than the maximum rates, but they were not in many cases much lower than the ordinary traders' rates. What traders complained of was that the railway companies, under the owner's risk rates, wanted the traders to take the risk of the dislocation of traffic and the companies' mismanagement upon the top of all the other risks they had to take. With regard to milk and other agricultural produce, many cases had occurred where goods properly addressed and consigned had been sent to wrong destinations, and, after having been carried backward and forward between 377 the place from which they were sent and that to which they had been consigned, were eventually delivered in a condemned state. In every such case the railway companies had refused to pay compensation. The farmers suffered most severely, because the railway companies practically refused to carry their milk at any other than owner's risk rates. He knew that legally they could not refuse, but the farmers would have to spend thousands of pounds in taking the railway companies before the Railway and Canal Commission in order to compel them to do so, and that they could not afford. In fact, he knew of one railway company that had no rate in their book save the owner's risk rate. The railway directors in the House did not appear to be particularly well acquainted with the details of their own business. They were reasonable men when they came to the House of Commons, and if they could only instil some of their reasonable spirit into their goods managers and lower officials, traders would have loss cause of complaint. That was really the point of Sub-section 2 of the Bill. It was absolutely vital. If Sub-section 2 did not remain the Bill would be valueless, and they need not have it at all. The railway companies were adopting their old practice; while they were willing to accept the Bill, they were so endeavouring to whittle down the phraseology that the Bill would be useless when passed. That sub-section had been very carefully drafted by people who had had years of experience in these particular matters, and the section was not unreasonable, because all it did was to declare that if the company raised any owner's risk rate it should be deemed unreasonable under Section 1 of the Railway and Canal Traffic Act, 1894, and thus would enable the traders to appeal to the Railway Commissioners. The railway companies ought to be reasonable. There could be no objection to such a sub-section, and unless the traders had some protection of that sort the Bill would be absolutely valueless. He therefore earnestly asked the promoters not to allow any form of words to be introduced which would alter that clause. If they did they would only land themselves as they did in the Private Siding Act. They were fifteen years getting that Bill, and now they had to go to the Railway Commissioners to find out what it 378 meant. The traders and the agricultural classes of the country were determined to have this Bill whether the Board of Trade and the railway companies liked it or not. They had been told of the treatment they had received from the railway companies, but he warned hon. Gentlemen opposite that unless they wanted to see State railways in a very few years in order to save trade and agriculture from being ruined and strangled, they would be wise to accept a small measure such as that now before the House.
MR. CLEMENT EDWARDS (Denbigh District)
said he would not have intervened in the debate, but for what had fallen from the hon. Baronet the Member for the City of London. What hon. Members had said might not have been said to confuse the House, but it had confused the issue between the railway companies and the traders. What the hon. Member for the City said was perfectly true, that if a trader did not like to take the owner's risk rate he could fall back on the legal maximum rate, but the hon. Member treated the legal maximum rate as if it was a possible standard rate, whereas it was perfectly notorious that if the maximum rates were put into operation to-morrow, more than half the traders in the country would be ruined. The late chairman of the London, Brighton, and South Coast Railway had stated that the maximum rates had been fixed as the limit to which railways could go under circumstances of the most abnormal character, and to suggest that the companies could enforce their maximum rates as if they were applicable to the normal state of trade was absurd and calculated to mislead the country as to the position in which the controversy stood. That being so, the position in which the traders were placed was really the same as that in which a person was placed by a highwayman who put a pistol to his head and said, "Your money or your life." The form was for the railway company to say, "Take our owner's risk rate which is possible, or take our maximum rate which will ruin and destroy your trade." It was an extraordinary thing, but for the last seven years there had been a continuous increase on the part of the railway companies in the number of goods placed in the category of owner's risk. At present 379 there were no less than 180 different classes of goods in that category, and it was time Parliament took the necessary steps to protect the traders and restricted the contracts of the railway companies in that regard. The position had been made particularly acute by the fact that quite recently the railway companies had extended the principle of combination so as to deal with the whole of the claims in regard to owner's risk rates. It had been suggested by the hon. Member for the City that the Joint Claims Committee of the railway companies had been formed in the interests of small traders. They had heard that story before. He hoped not only that the Bill would go through, but that there would be no weakening of its phraseology. A great railway director once said that, unless the State controlled the railway companies, the railway companies would soon control the State. That had been the position for many years, and was the position at the present time. There was now a great opportunity to change the whole course of things, and he hoped the President of the Board of Trade would grasp the situation and make a great name for himself.
§ MR. LUPTON (Lincolnshire, Sleaford)
remarked that the House had heard the points of view of the great railway companies and of the organised traders; he wanted to put the case of another section of the community—that section which had no railway company to grumble at. The great difficulty with regard to railways was that new ones seldom paid. If, therefore, the carrying rates of railways were compulsorily reduced, prospecting promoters of new lines would be discouraged from proceeding with them. Parliament did not want to make the position of railway companies unbearable. It had been contended that railways were monopolies, but that was no longer the case. They had competing with them other methods of transit, but they carried goods better and cheaper than any other carrier. He was not a railway shareholder. He had had nothing to do with the companies except to send an enormous amount of traffic on certain systems. He had nothing to thank them for; they had a great deal to thank him for. They had got enormous sums of money out of the work he had projected and carried 380 through, and he hoped they would get a lot more. He did not want to discourage railway companies. Everybody who knew anything about the country knew that our great prosperity was due to the railway companies. It was futile to attempt to drive the railway companies. Such attempts had always failed in the past and would fail in the future. He ask the supporters of the Bill not to expect too much from it. He was sometimes accused of being a Radical. Had he ever said a word against the rights of property or ever threatened to deprive the owners of one fraction, of their legal and rural lights? If they attacked security of capital which was now earning only 3½ per cent., they would do great harm to the traders of the country.
§ MR. CHARLES WILSON (Hull, W.)
said that owing to the present position of the companies and the Socialistic tendency in the House and elsewhere, everybody was in a very nervous state, and nobody would put anything into companies, industrial or otherwise. He considered the phraseology of the Bill was rather a matter of arrangement between the President of the Board of Trade and the railway companies.
§ Question put, and agreed to.
§ MR. LLOYD-GEORGE
suggested to hon. Gentlemen opposite representing the railway companies that they should put down the words they proposed as soon as possible, as they would have to be considered by the Law Officers of the Crown. There might be alternative forms of words.
§ MR. MYER (Lambeth, N.)
asked whether the railway companies were officially represented in the House.
§ MR. CROOKS (Woolwich)
raised the question whether it was right for a Minister of the Crown to refer to representatives of railway companies in the 381 House. He was under the impression that the House was represented by members for constituencies, and not by directors of railway companies, and that the mover of the Bill was representing the great public. To ask any hon. Member what the railway companies had to say about the matter seemed to him to be quite a new order of procedure.
§ *MR. SPEAKER
I do not see anything disorderly in it. We all represent the public, but we also represent other interests at times.
§ SIR F. CHANNING (Northamptonshire, E.)
said it was only suggested that those who were in a position to speak for the railway companies should, with regard to an alternative form of words proposed by them, place those words as early as possible before the Committee with the view of their consideration by the Board of Trade and others.
§ Bill referred to the Standing Committee on Trade, etc.