§ MR. G. A. HARDY (Suffolk. Stowmarket)in moving—"That, in view of the widespread complaints on the part of traders, agriculturists, and the general public with regard to the railway charges and facilities, and particularly with regard to preferential treatment of foreign goods, the time has come to consider how far these evils could be remedied by State purchase of the railways, as fore-shadowed by the Railway Regulation Act of 1844,"—said that in bringing this subject before the House, he was fully conscious of the many difficulties and objections which surrounded it. But Socialism was not one. For the Conservative Government in 1844 passed an Act by which the State ownership of railways was settled in principle. Compulsory acquisition was definitely provided for at the discretion of Parliament within twenty-one years from that date. This principle had been steadily kept in view in all the new Railway Acts since that period. The question of 1613 railway purchase was not a Party one. It was now advocated by our chambers of commerce, our chambers of agriculture, Members of the House of Lords and Members of the Conservative Party as well as by an immense mass of public opinion. A great impetus had been given to the movement by the remarkable progress abroad. Great Britain was now the only country in Europe except Spain and Portugal which did not control or partly control their railways. France, Germany, Austria, Belgium, Italy, Holland, Russia, Scandinavia and Balkan States owned or partly controlled their lines. In India we possessed our own State railways, perhaps the largest in the world, 32,000 made or making, and 482,000 officials. Those railways not only developed the country and strategetically helped the military, but paid a steady profit for the Empire. Not only did the Continental countries control their railways, but Japan had taken all its railways over. Argentine, Mexico, and even Siam were also acquiring or owned their railways. If they looked at the self-governing Colonies, every one of them except, perhaps, Canada owned their railways. So that, practically, only in England, United States, Spain, Portugal and Turkey private ownership had full sway. Ever since the great powers were granted to the railway companies by the Acts of 1844 and prior Acts there had been a continual struggle and conflict with the traders and the agriculturists against the hardships and burdens the companies had inflicted upon them. Parliament had again and again by Resolutions appointed Select Committees to inquire into the question, and to protect the traders and public, but their grievances still continued, and many had, in despair of obtaining redress, thrown up their hands and said they could not fight the railways longer and had accepted the burden with all its hampering restrictions. He believed he was right in saying that the President of the Board of Trade had received more deputations from aggrieved and suffering agriculturists and traders on this subject than on any other. What were these grievances? Mr. Balfour Browne, whose expert knowledge none could dispute, said—
I am not exaggerating when I say that the agricultural question which has been attempted 1614 to be mot very ineffectually by a palliative Agricultural Rates Bill, is nothing else but a question of railway rates.They had heard many speeches about protecting the worker, the farmer, and the manufacturer from foreign competition, but here at our doors, in our country, there was a preference given to the foreigner which terribly handicapped our farmers and traders, by the railway companies, who in their search after dividends retarded the development of our commerce. They found meat and dairy produce, fruit and vegetables from Denmark and France, and manufactured goods from Germany and Belgium, conveyed to English markets at a cost in carriage of ½, and not infrequently ⅓ of what the English manufacturers were charged. Rates and fares were generally much dearer in Great Britain than on the State-owned railways on the Continent. The average amount received per ton of goods per 100 miles in the United Kingdom was 10s. as against 5s. 6d. on German railways. The President of the Board of Trade, speaking in December, 1906, to traders stated that—In the near future we shall have to consider the whole question of railway rates from be ginning to end—I have been much impressed since I came to the Board of Trade with what one speaker calls the growing discontent with the whole system.This discontent was still more accentuated when they considered the preferential transport tax exacted by the railway company which frequently gave the foreign producer a monopoly here to the exclusion of our own farmers. These preferential rates often enabled French fruit to find a ready sale upon the London market, when at the same time the high home rates compelled English farmers to let theirs rot upon the ground This applied to almost every kind of agricultural produce. He would quote some figures he had obtained from the valuable book on the subject written by the hon. Member for Denbigh District. The hon. Member mentioned the question of hops, and all hon. Members must be conscious of the terrible injury inflicted on our hop farmers when some years ago hops were brought from Boulogne through Folkestone to London at 17s. 6d. a ton, when the price charged to the home producer was 35s. a ton 1615 from Ashford. Let them take barley. The charge for foreign barley from West Hartlepool to Mirfield was 10s. 2d. per ton, the charge for home grown barley was 18s. 4d. In the case of potatoes, the charge from Penzance to London was 45s. per ton, and that from Cherbourg 30s. per ton. The difference in the charges for potatoes from Spalding to London compared with the preference given foreigners equalled from 10s. to 20s. an acre in France, at the cost of English farmers. Formerly Spalding group rates were fixed at 9s. 2d., but competition brought them down to 7s. 2d. But a combination of the railways brought them up to 8s. 4d.; 150,000 tons per annum came from that region alone every year, and that meant that the increased rate took £15,000 per annum from the farmers. This was the grievance of agriculture with which the House sympathised and which he believed they would do their best to remedy. The present rate resulted in the lowering of the value of land by 4s. an acre, and that must come out of someone's pockets. Yet they found at this very time in St. Malo, Brittany, land had increased in value through the railways bringing produce from Brittany at the low rates they did. There had been a boom in land in Brittany and it had gone up in price. Let them take the case of cheese. He had before him a statement made before the Commissioners, which said—The cost of conveying cheese by the London and North Western Railway from Chilford, Cheshire, to London was greater than bringing it from New York, all the way past the very station to London.In fact the rate was actually less. The Field pointed out worse cases in 1894. The rate for imported butter, cheese, bacon, lard and wool, from Southampton Dock to London, seventy-six miles, was 6s. per ton. From Botley in same county a similar distance for all these goods, the rate was 19s. 2d., 219 per cent. more. The difference between Southampton Dock for foreign and Southampton Town for home was as follows:—Hops, foreign, 6s.; home grown, 20s. Apples, foreign, 5s.; home grown, 12s. 11d. Pressed hay, foreign, 5s.; home, 9s. 11d. Eggs, foreign, 6s. 8d.; home, 20s. Before the Commission on Trade Depression one of the Agricultural Commissioners declared 1616 that the Worcestershire farmers were prevented from selling corn in Coventry because of the exorbitant rates. What could traders and farmers do? Professor Hunter stated that while French fruit was charged 2½d. per ton per mile, 5½d. was charged to Kentish farmers. But there were many cases brought before the farmers' alliance where the railway company had charged far beyond the maximum rates. He would take, for example, guano and packed manure. From Petersfield to Nine Elms the maximum was 9s., but 12s. 6d. had been charged. To Wimbledon 13s. 4d. was charged, the maximum being 8s., and to Guildford, where the maximum was 4s. 1d., 9s. 2d. was charged. What could the trader do? What could the agriculturist do? What could any one person do against a great railway company? For a farmer or shopkeeper to attempt to contest these railway rates was to court disaster. One of the largest merchants in London who knew all about it and had been again and again before the Commission had told him "It is not the slightest use going on. We can do absolutely nothing. The railways are too powerful for us. They trample on us and we have to take it." That was the feeling in commercial circles. If they turned to poor Ireland it was worse than in England. It was cheaper to send cattle by road than by rail, and it was cheaper to carry goods to England and have them re-shipped to Ireland at through rates than to pay local rates. In March, 1903, in consequence of the outrageous increase of the railway rates, this resolution was passed in the House—That, in the opinion of this House, the revised railway rates are most prejudicial to the agricultural and commercial industries of the country and this House urges upon the Government the necessity of dealing promptly and effectively with this subject.The result was that a Select Committee was appointed two months later, and an Act was passed in 1904 handing over the task of finding a remedy to the Railway Commission. Could they honestly say that the Commission had found a remedy that took away the objection which the people of the country had? The result had been that for every shilling cut off the rate, 1617 it had been only too easy for the railway companies when they were in harmony to withdraw 2s. in facilities. Who was there in business who cared to quarrel with a railway company? He became a marked man. They had ways of dealing that made it most unfortunate for him. Professor Hadley said—The railway companies can behave in an exasperating manner without endangering any of their well-recognised rights. Such impudence as was displayed by the companies in face of the early discussions of the railway companies would be almost impossible in America. But in the majority of cases it may be fairly said that, honestly managed, American corporations have really tried to conform to the requirements of Commissioners even before the courts have taken the steps to render such compliance necessary.They could not say that of the English railways. The experience since the passing of the Act had confirmed that opinion. The Mansion House Association had brought a case on behalf of its members in Northampton, who urged that rates had been increased and should be reduced to the 1892 level. After two years delay and after costing some hundreds of pounds the railway company were defeated. Naturally traders imagined that this would be a test case, but what was the result? The railways in their easy confidence simply sailed away and said that anyone else could bring another action against them. For instance, the southern farmers through the Mansion House committee challenged the preferential rates at Southampton, and it cost them £2,000 to fight the railways. They were successful that time, but when it was remembered that there were over 200,000,000 separate rates, what chance had the public? If they contested one rate and won they could go on—he hardly liked to calculate how long before they brought justice to the people of England. But they were faced with another danger, the growing danger of railway combinations. Competition had broken down; amalgamations and working agreements were being arranged. Many of the companies had had their privileges granted them on the distinct understanding that they would be a help to the British public by competing with the old lines, and they could see the danger they were faced with as these railways amalgamated and competition ceased. 1618 The latest proposal was the Great Northern and the Great Central. The Central Chamber of Agriculture were protesting against it and if the protest was successful they might be able to retain the liberty which was likely to be taken away from them. But there was little competition now left because they found that there were rate conferences. There was one rate all over England. If they wanted a special price from a railway company they found their prices were all alike. They found that the Great Western subsidised forty-one different lines and paid £146,000 per annum. The London Brighton and South Coast Railway paid the South Eastern yearly subsidies of £24,000 not to use their running powers to Eastbourne. They had had great hopes that the canal competition would keep railway rates down, but the railway companies had bought up the canals. The Great Northern Railway Company had entered into an agreement with the Witham Navigation Company for 999 years, and agreed to pay £10,545 a year for tolls on the condition that the tolls would be so prohibitive that there was a yearly loss of about £700. What was the remedy? They could not look for help to the railway companies. They were commercial undertakings. At all costs they must get their dividends. It mattered not to them whether trade went under. The directors had to face their shareholders and must earn dividends, regardless of how trade suffered. They had to work their men very long hours and did not give them too much pay. Practically they had to study dividends before the country's needs. They were overloaded with expenses. Twenty-three thousand miles of railway were owned by 213 different companies, with 250 boards of directors whose fees must come to something like half a million a year. The salary of the Minister of Railways in Prussia was not as much as the smallest board of directors in England. Then each line had its solicitors and engineers and a separate staff. The trucks went half filled and that was a very important item. The average load of a goods train in the United States was 173 tons; in Germany, 132; in France, 121; in Belgium, 96 and in the United Kingdom, 70. It had 1619 been estimated by the London and North Western Railway that the loss on working expenses resulting from divided management was 20 per cent. Working expenses alone amounted to something like £70,000,000, so that there would be a saving of £14,000,000 a year. What shorter hours they could give railway men and better pay, and yet have a handsome dividend to relieve oppressed agriculturists! With State ownership there would be greater uniformity. The service would be conducted with a sole eye to public utility. This had been done in Belgium and Germany. He was very much struck with the principles laid down by Bismarck when he advocated the acquisition of the Prussian railways. If they had those same principles before them they would be making a success of any step they attempted in this direction. First, that the railway tariff should be so clearly drawn that anyone could calculate freights; secondly, that all inhabitants of all parts of the country should be secured in equality of railway charges; thirdly, that the disadvantages which weighed down small producers should be eliminated; fourthly, that the unnecessary and therefore wasteful services should be abolished. They knew that this problem was a great one, and full of difficulties, but they had a President of the Board of Trade who had undertaken successfully and carried through the almost impossible task of reconciling two opposing factions, the directors who refused to recognise the men and the men who insisted upon being recognised, and had saved the country from disaster. If he would take up this question which had baffled statesmen in the past he would rally to his support the vast body of business men and agriculturists as a whole, the working men and all who would benefit by greater facilities and better arrangements. He begged to move.
§ MR. CHIOZZA MONEY (Paddington, N.)said it gave him very great pleasure to second the Resolution. He thought the House was very much indebted to his hon. friend for bringing this subject forward. This was a non-party question which they could discuss in the light of common sense and from a business point of view. It was a question of trade, and 1620 that rightly regarded must be a public question, for the interests of trade and the public could not be divorced. Surely a question like this must concern a British House of Commons. Railways were a British invention, and he thought there were grounds for the proposition that in no great industrial country had railways been of less advantage to the people than in the country which produced the inventors of railways. It should be remembered that the United Kingdom, consisting of two small islands, enjoyed tremendous natural advantages. At no point was the larger of the two islands concerned removed from tidal water at a greater distance than 100 miles. He would ask hon. Members to reflect upon the contrast which existed in this matter between the geographical position of the United Kingdom at the gates of Europe and our greatest commercial rival, Germany, situated in the very heart of Europe cut off by nature from tidal water. How had Germany survived those inherent natural disadvantages? Germany had surmounted them chiefly during the last twenty years by reason of the fact that she had used her railways for national purposes, and had developed them entirely with a single eye to the interests of German trade and the German nation. The marked progress which Germany had made in the last twenty years had been very largely due to the fact that her railways had been thus used. Although Germany was not concerned in the invention of railways, although they might go to Munich and find in its industrial museum not the original Rocket built by George Stephenson but merely a copy of it, it was nevertheless the fact that Germany this moment, at the beginning of the twentieth century, derived greater advantage from British railway inventions than the British nation. That was a proposition which could be supported by many conclusive arguments. Mr. Stephen Jeans, the Secretary of the British Iron Association said in his book on the British Iron Trade—
It would naturally be supposed that in a small country like Great Britain the cost of transport would be much lees than in countries which, like Germany and the United States, are differently situated. Geographical conditions should be entirely favourable to this 1621 country. But the natural advantages of our geographical position are not realised as they should be, because of the relatively high railway rates enforced.It had sometimes been advanced as an excuse on behalf of our railway companies that they had acted as pioneers in the matter of railways. He would remind the House that George Stephenson's pioneer work was not only done in this country, because Stephenson himself was employed by the Belgian Government upon the Belgian State railways. Stephenson died in 1848, and four years before he died, in connection with the debates in this House which led to the passing of the Act to which his hon. friend had referred, Mr. Gladstone said—I believe that the charges on the Belgian railways are not more than one-third of ours. Because this country is rich it is no sound reason that it should pay more than is necessary.And then the right hon. Gentleman went on to say—There is no likelihood that the great experiment of the greatest possible cheapness will be tried under the present system.Those words were uttered by Mr. Gladstone in 1844, and speaking in February, 1908, he ventured to assert that those words were as true that night as when Mr. Gladstone uttered them. In a country that depended so much upon its trade with the world at large, which had to bring materials from over the sea and take them to the centres of industry at the cheapest possible price, railways might be truly said not merely to be distributive, agents but they were actually manufacturing agents, and the cost of the freights charged entered into every price quoted by a British manufacturer. If therefore, those freights were excessive; if those charges were as a whole greater than the charges levied by railways upon their commercial competitors, then he claimed they had allowed to be erected in this country great private taxing authorities which levied upon the trade of this country and upon every movement of material or manufactures made in this country a great tax in restraint of trade which tended to rob them of the advantages which they naturally possessed. He found from the Board of Trade Returns that in the year 1906 £58,000,000 were paid in this country for the privilege of moving goods over 1622 the British railways. For a comparison he turned to another country which had a population very nearly the same as our own, but a larger area, viz., the Kingdom of Prussia. He found that Germany for all purposes, whether for carrying goods, minerals or passengers, only paid £79,000,000, whilst this country paid £58,000,000 for minerals and goods alone. The total receipts of the British railways in 1906 came to £117,000,000, whilst their working expenses, including rates and taxes amounting to less than £5,000,000, came to 72.7 millions, leaving a net profit to the British railway companies in 1906 of £44,500,000. How did that compare with Prussia? He would remind the House that while it was undoubtedly important to compare British ironclads with German ironclads, it was also important to compare German railways with British railways and, he might add in passing, German schools with British schools. Whereas the British railway companies drew from this country in 1906 £44,500,000 net profit, the State drew in Germany a net profit of only £30,000,000. That was to say that in a country of a smaller population the State drew a net profit of £15,000,000 less than the British railway companies drew from the activities of the United Kingdom. His claim was that here there was a very great sum of money to be accounted for. It became more remarkable when they reflected that this princely profit of £44,500,000 sufficed only to pay a very small dividend on British railway capital. The explanation of small dividends went very near to the heart of the question, and the permanent officials at the Board of Trade obliged them every year with an account of some small share of the "water" added to British railway companies which in 1908 made it possible for a railway director in this House to state that that dividend was only 3 per cent. As a matter of fact, the Board of Trade pointed out very clearly with reference to one particular variety of water alone, that no less than £200,000,000 of capital had been added to the British railway companies' stock by manipulation to produce the gigantic total which was supposed to represent capital invested in British railways. Mr. MacDermot, of the Railway News, 1623 in his book on railways, said the published figures required considerable modification in view of the fact that the capital has been swollen of late years by nominal additions. Take, for instance, the Taff Vale Railway Company, which used to pay a dividend of 18 per cent. What sort of dividend did it pay now? Only 5, 6, or 7 per cent. The Taff Vale Company came to Parliament, and Parliament allowed it to call every £100 worth of stock £250 worth, and this was done by a stroke of the pen. Consequently, the large dividend disappeared and the small dividend appeared, and there was the excuse for the miserable set of rattling locomotives and carriages upon which he had the misfortune to travel only a few months ago. In view of these facts and many others he might mention, such as the fact that charges which ought to have been made against revenues were made against capital in order to swell dividends, in view of such facts as that in a notorious case the price of tarpaulins was added to capital—a curious case of tarpaulin letting in water instead of keeping it out; in view of these facts, need they be surprised that railway directors were able to rise in that House and state that the dividend paid by railway companies was only 3 to 3½ per cent.? Such a statement in view of the many varieties of "water" in British railway capital, some of which he had referred to, amounted not to interest but to usury. His charge against railway companies was that their dividends were not a proper charge upon materials and goods, but they amounted actually to a tax. He would ask the House to consider one or two instances out of many which he had collected, to show how the trade of this country was hit by these railway charges. Take the position of a Staffordshire iron firm which desired to get its goods to tidal water. The cheapest way was to take it to Liverpool at a cost of 8s. per ton to a railway company. Iron from Westphalia to Rotterdam, 156 miles, was carried for 6s. 4d. per ton, and from Westphalia to Antwerp for 7s. 6d. per ton. The charge for hardware from Birmingham to Newcastle, 207 miles, was 25s. per ton, but from 1624 Dortmund to Rotterdam, 153 miles, the charge was only 10s. per ton. Taking cutlery from Sheffield to Hull cost 20s. per ton, and the German State railways carried the same class of goods for 6s. 7d. per ton. Indeed, there were some articles like cheap chemicals, whereon the freight was often more than the value. These charges hit the small man as well as the large man. He mentioned the case of a Putney blind-maker who sold a blind worth £9 to a man in Liverpool, and the freight of which was £4. This case was brought into court, and the blind-maker said: "If such charges are allowed it would cripple my trade" The Judge gave the man his sympathy, but on law decided against him. There was a celebrated case about potatoes. A hundred tons of potatoes were shipped from Dundee to New York. When the ship approached New York it was found that the duty was so high that it it would not be worth while to land them. The potatoes were brought back from New York to Liverpool at a cost of 23s. 10d. per ton. If the potatoes had been sent direct from Dundee to Liverpool they would have cost 24s. 2d. per ton. What redress had a trader in view of all these things? His hon. friend had already shown what sort of redress he had. He could appeal to the Railway and Canal Commssioners. If he was rich and not very wise he could fight a case there, and if he was poor he could not fight at all. As illustrating what a railway company could do he referred to the treatment the well known firm of Messrs. Howard had received at the hands of the Midland Railway Company. That firm fought and beat the railway company, and immediately the company raised the railway rates to Bedford to punish the Messrs. Howard. But the Messrs. Howard did not take it lying down. They took a case before the Railway and Canal Commissioners who in deciding in favour of the Messrs. Howard described the action of the railway company as an abuse. A small firm could not have fought such a case at all. The practice of giving foreign producers a preference over British producers was one, as his hon. friend had pointed out, which Parliament had already tried ineffectively to control. It had absolutely failed, and 1625 considering the repeated failures for two generations of even' attempt in this country to control the greed of private railway proprietors he would appeal to Parliament to end this matter by authorising the Government to assume the entire control of the railways. As to the question of owner's risk he would give a case which illustrated the whole gravamen of the case against the railway companies. A gentleman ordered a special tree for his garden and paid 5s. for it in a Midland town. The freight charge was 4s. 9d. Although the tree was well packed it was badly damaged on arrival, and the owner sent in a claim. The claim was returned as the tree was carried at owner's risk. The owner would like to know what the rate would have been if the tree had been carried at company's risk. Under the present management railway companies were able practically to force consignors to sign a note absolving them from any risk whatever. He contrasted our system with that of Germany where the State accepted full responsibility for goods lost, delayed, or damaged. A large sum of money was paid every year by the German Government to consignors whose goods had been lost or damaged in transit. The German railways were used with a single eye to the nation's benefit. Our traders were not able to stand the racket of the higher railway rates they had to pay and the preferential rates granted to foreigners. The German State railways were so managed that bounties were given in certain districts in order that they might be able to compete successfully with foreign countries. Special rates were granted for Westphalia coal to enable it to compete with British coal. In the case of the Levant and East African trade the German State railways granted special bounty rates to enable German traders to compete with British manufacturers in certain markets in regard to certain products. But in spite of those bounties being given, which, of course, reduced the profits of a German State railway, it still remained true that these railways made satisfactory profits. Further, the German State railways forwarded their shipbuilding and naval interests. Special freights were charged for shipbuilding materials to enable the vessels to be 1626 built more cheaply, and it was for that reason that shipbuilding in Germany now more nearly approached than ever before the prices in this country, which was of very serious import to our shipbuilding industry. Another point was that the German Minister for Railways, just because the State owned the railways, was able to help any part of the country which happened to be in distress. The area of Germany was very large, and one district might be visited with distress during a bad harvest. In 1891, in order to assist that, the grain freights were lowered; in 1893, special rates were given to fodder. In 1898–1899 there was famine in certain quarters caused by great floods, and half rates were charged for the carriage of food and fodder by the German State railways. Again, Germany had largely constructed her railways with relation to national defence, so that when that country embarked in war as a business operation as she did in commerce, she had in her railways a ready instrument for protective purposes. All this had been shown in a special Report on the subject prepared by the Hon. Robert Collier. Switzerland, which was a more democratic country than Germany, had profited very largely by means of the nationalisation of her railways in 1901. In the small number of years since then railway freights in Switzerland had been lowered, passenger fares lessened, the tracks improved, profits increased, while at the same time better wages and terms of employment and shorter hours had been given to the railway servants, and old-age pensions had been established. He would not trespass longer upon the House by entering at length into the larger question, but he might briefly point out that the position of British railways was obviouly uneconomic. Their capital and labour was wasted in useless competition. They had not only thousands of directors, but the administration and management were duplicated over and over again. He instanced the shunting of wagons and the advertising as illustrations of the disadvantages which followed from private competitive management of the railways of this country. Hundreds of thousands of pounds were spent in advertisements 1627 in such newspapers as the Sketch, which having a United Kingdom circulation could only be of limited use to a local railway. The facts to which he had referred claimed the attention of all classes of the community. At a recent meeting of the Association of Chambers of Commerce, Lord Brassey had pointed out that we were on the eve of a great change of policy in regard to our railways; that they saw what was taking place on Continental Europe where the requirements of the public in regard to railway transport were fully considered, with a result which was at the same time satisfactory to the Exchequer of those countries where the railways were the property of the State. He hoped that the House would agree that the irresponsible and competitive management of our railways could not go on. It seemed to him as true now as when it was stated by a Parliamentary Committee in 1872 that the case of the public against the monopolist charges of the railway companies was a very strong one. It had been said by another Committee, that of 1846, that the railroads of the country were public concerns and as necessary to the people as the air they breathed. He reiterated that statement that night. Parliament had legislated again and again, without result in order to control private railways which were inherently monopolistic, and he appealed to the President of the Board of Trade to crown his brilliant term of office by putting the railways under national control.
§ Motion made, and Question proposed, "That, in view of the widespread complaints on the part of traders, agriculturists, and the general public with regard to railway charges and facilities, and particularly with regard to preferential treatment of foreign goods, the time has come to consider how far these evils could be remedied by State purchase of the railways, as foreshadowed by the Railway Regulation Act of 1844."—(Mr. George Hardy.)
§ MR. BONAR LAW (Camberwell, Dulwich)said there was one point on which the two hon. Gentlemen who had just spoken were very firmly agreed, and that was the inherent imbecility 1628 of the present railway directors. That was shown by the mover of the Resolution, who asserted that railway directors thought only of their dividends and did not care in the least what happened to trade, apparently convinced of the idea that dividends had no connection whatever with trade. The results showed that they got only comparatively small dividends. The hon. Member for Paddington had attempted to make out that the dividends were colossal, but there the Board of Trade was against him. The Board gave the amount of water in those railways as far as it had been able to estimate it. It was £200,000,000 out of a total of £1,300,000,000. There remained £1,100,000,000. The profit was £44,000,000, and, therefore, the dividend was only 4 per cent., and not the colossal amount suggested by the hon. Gentleman. The hon. Member's idea of the stupidity of railway directors went further than that, but his idea that they would spend hundreds of thousands of pounds in advertising without finding by experience that advertising paid them was, he thought, one which no one except the hon. Member would entertain. The Resolution before the House was, it was true, generally in favour of the nationalisation of railways, but the wording of the Resolution and the two speeches to which they had listened put that desired change on the extremely narrow ground of the preference which was given to foreign produce as against British produce on our railways. There was a very general belief that that preference existed. He had heard of it long before he came to that House, and when, a few years ago, he was appointed to the Board of Trade, he believed that it did exist, and he had an earnest hope that it might be possible for him to assist the head of the Department to put an end to the evil which, if it did exist, was certainly impolitic. They looked into the matter, and they received many deputations, who all made complaints in general terms of precisely the same sort of thing of which they had heard that night. They tried to get specific instances, and when they did get them it was found in every case, without exception, that preferential rates did not exist. 1629 He did not rely on his own experience only for this statement. Both hon. Gentlemen had overlooked the Report of the Departmental Committee which was appointed for the very purpose of inquiring into this alleged preference. That Committee was appointed not by the Board of Trade, the permanent officials of which were sometimes supposed, though there was no reason, he believed, for the suspicion, to be unduly partial to railways, but by the Board of Agriculture, the whole bias of which was in favour of the Resolution now before the House. That Committee gave everyone like the hon. Members who had spoken the opportunity of putting before them such grievances as were alleged to exist, and, at the end of a long inquiry, they gave a practically unanimous Report to the effect that this preference did not exist, and that, therefore, there was no need of any legislation to deal with it. There was no preference, but the foreign producer had advantages which enabled him to get his goods carried at a lower rate than were possible to the home producer. These advantages were inherent in the nature of the business. Foreign produce came in large quantities, and hence was carried at lower rates. But that was not a preference. The same preference applied to home goods carried in the same quantities. Therefore, if there were rigid uniformity of rates, it would not only upset the whole Parliamentary basis on which the railways were carried on, but it would be contrary to all business experience, which was that charges should in some way correspond with the cost incurred. The hon. Gentleman had pointed out the low rates given by German State railways. They were low rates, but the low rates on goods which came to this country were compensated for by higher rates on goods used in Germany. Germany deliberately used its railway system in order to force exports upon us, with the result that undoubtedly we got the goods cheaper. And, therefore, he would ask the hon. Member whether, if railways were not nationalised, he would charge lower rates for our export goods and higher rates for goods transported internally from one part of the country to another, so that people would have to pay more for them.
§ MR. CHIOZZA MONEYGerman rates, in spite of the loss on the bounty rates, are lower than the ordinary rates charged in this country.
§ MR. BONAR LAWsaid he had looked into that with some care, and he did not agree with the hon. Gentleman. They could not compare rates on the basis of the amount of railway miles that the goods were carried, as a large part of the cost to the railway depended on the terminal charges. From the nature of the case our terminal charges were out of all proportion to the length of the distances, and therefore our rates seemed higher in proportion to those of other countries than they really were. The moral which he drew was that, if they wanted to put the home producer on an equality with the foreign producer, the way to do it was not by insisting upon our railways adopting an unbusinesslike system, but to adopt a much more simple and much more effective course, and the effect of that more simple and more effective way would be this, that instead of enormous quantities of potatoes being produced in Brest, and raising the price of land in Brest, land would go down there and go up in this country, and then the hon. Gentleman would find that the larger quantities came from the British rather than from the foreign districts. But had he desired to advocate the nationalisation of railways he would have done so upon a much broader ground than the two hon. Members had adopted, and have taken the line that unnecessary competition had the effect of raising prices, and from that point of view a very great deal could be said in favour of the system. Nevertheless, he would not himself approve of it, and largely because he believed unnecessary competition could be put an end to without so drastic a change. He believed most strongly that private enterprise under equal conditions would always beat State enterprise. The motive lay in the mainsprings of human nature; that motive was personal energy, and it was based largely upon personal ambition. If they took that away they took away one of the strongest forces for progress. [A LABOUR MEMBER: Does Tariff Reform rest on that?] He confessed he 1631 did not see the point of that interruption. It would be admitted that in some directions what he had said was true. Take, for instance, the War Office and the Admiralty. There never had been a war in this country in which there had not been an almost universal complaint that the business part of that operation had been badly done. That was true not only of our last war but of all wars. He had as high an opinion as anybody of the qualities of our civil servants, but business, like everything else, had to be learnt, and could only be learnt by experience. And the best kind of experience was the experience derived from the knowledge that if you made a mistake you would pay for it. That was a kind of experience which an official never could get. Let them establish a State system of railways, and there would be immediately another big concern like the War Office and the Admiralty. If the one was not managed well on business lines, how in the world could the other one be expected to be? His other reason was based on entirely different grounds, the effect of the adoption of such a proposal on our political institutions. The danger of all Governments was corruption, but there was corruption of different kinds, and the danger to which a democratic community would be liable would be introduced into every constituency if railway servants were to become the employees of the State. He would not enlarge upon this. Every Member would realise what the argument meant. He could not imagine there was anybody who had thought upon the subject who would not regard with something like horror the possibility of an organised body in every constituency putting pressure upon candidates for the improvement of their condition at the expense of their fellow-citizens. He admitted that the present position of rail-' ways was not satisfactory, but the ground upon which he arrived at that opinion was not that taken by the majority of Members opposite. It seemed to him, and he thought so in the last Parliament, there was far too much inclination to look upon railway companies as public enemies. The President of the Board of Trade last year made a statement which was obvious, but which might be 1632 repeated, for it could not be too much emphasised, that unless the railway companies had a fair chance of a return for their money they could not be kept up to the requirements of the day, and the public would suffer from a starving of the service. They had had an example that night of the kind of thing to which he referred. When hon. Members or groups of hon. Members opposed the progress of a Bill promoted by a railway company they opposed a Bill which would be for the public advantage, and every attempt of the kind added to the cost. The amount of money spent in getting railway Bills through Parliament was enormous; he had forgotten the amount, but it was a sum almost fabulous, and the money so spent was just as much capital used for the enterprise as if it were spent in construction. The House of Commons ought to avoid causing expense of this kind unless public advantage required it. He disagreed with the hon. Member who moved the Resolution. The real hope for the prosperity of railways, and upon that largely depended the prosperity of the trade of the country, was the doing away with unnecessary competition. Much of this competition was utterly wasteful, and among managers there was a strong movement on foot to put an end to it. He urged on the President of the Board of Trade that he should assist rather than retard arrangements of the kind. Many traders opposed such arrangements because they liked, to exercise the pressure that competition allowed, and in doing so they often got facilities which represented to them far less advantage than the cost to a company. Somebody had to pay in consequence, and in nearly every case it was the public who paid in higher rates or diminished facilities. Undoubtedly it was the business of the President of the Board of Trade to see that every precaution was taken to prevent abuses arising from amalgamations and arrangements of that kind, but equally so it was to keep down competition that benefited nobody, and must be injurious to the whole community.
§ MR. PERKS (Lincolnshire, Louth)said he did not speak as a railway director, 1633 although for some years he was chairman of one of the London railway companies and he might say that he had not always been in accord with some of the directors of the railway companies, as to their relations either with their employees or the public. The mover of the Resolution in referring to the Act of 1844 omitted to state that the Act, passed when Mr. Gladstone was at the Board of Trade, contained a proviso that there should be no expropriation of a railway unless it paid to the proprietors a dividend of 10 per cent., and in those early days when railways were very speculative and the rates of interest higher than they were to-day, that did not seem at all an unreasonable proposition. He ventured to doubt whether more than two railways in this country had paid the dividend he had named. Neither of the two underground railways in London had a single penny of watered stock in their capital and one of them had carried more than the entire population of the globe in the last thirty years without any return whatever to the ordinary proprietor. That might not show much sense on the part of the proprietors, but it certainly showed the sacrifice that had been made for the benefit of London. He ventured to suggest that while there might be some considerable ground for complaints, as far as concerned the burden placed on agriculture and the trade of the country, and also the public, the remedy of State purchase suggested by the Resolution before the House was worse than the disease. It proposed that all the transport business of the country should be taken out of the hands of the private managers who had managed it for the last seventy years, and transferred to a State Department. The pecuniary obligations involved in this important proposition were enormous, yet no suggestion had fallen from the mover or seconder as to how they proposed to deal with the large amount of capital which after deducting the suggested amount of watered stock amounted to some £1,100,000,000. Mr. Gladstone once, in dealing with a similar proposal affecting another class of property, put an acute dilemma to a man to whom 1634 he was speaking on the subject. Mr. Gladstone said—
Do you mean to pay for it? If you mean to pay for it it is folly, if you do not mean to pay for it it is robbery.That dilemma would have to be faced by men who suggested the nationalisation of railways. Another large class which had to be considered was the class comprising the railway employees and those dependent upon the railways, of whom there could not be less than a million in this country. What had been the effect upon labour of the transfer to the State of the Italian railways? He was in Genoa when the strike against the proposed reduction of wages by the Italian Government took place, and he saw women lying down on the lines in front of the trains which were coming out of the station so as to stop by that means trains running at all. It was highly problematical whether the transfer of the railways of this country to the State would mean the employment of a greater number of people, or whether it would mean a rise in wages. The effect not only in Germany but in Italy was directly the reverse. Another large section of the community not very popular in this House but one which had to be considered was the 600,000 or 700,000 railway shareholders. The railways in this country were not held by great magnates like those in the United States. The average holdings in the railways of this country were not more than £1,000, and when some of these stocks were quoted at 10 per cent. or 11 per cent., it would be seen that the holdings were small. A great deal of railway stock was held by friendly and insurance societies, and some was held by foreign investors who had thus shown their confidence in British railways, and the British Parliament. The foreign investors were persons who ought not to be lightly put aside. This Resolution, however, could not be regarded as an isolated step. It was part and parcel of a programme of nationalisation of land, and the transfer to the State of all means of production, distribution and exchange. It was because this was the first step in a programme which he believed to be commercially and socially unsound that 1635 he would oppose the last portion of this Motion. Applying the proposal to the London railways with which he was familiar, he concluded that it would not be possible to turn over those railways to the State without also handing over the tramways and all other means of distributing the public. And what applied to London applied far more to the provinces, even down to the carrier's cart which brought in from and took out produce to the villages. Four systems of handling railways existed in different parts of the world. State control as in Germany, Italy and Australia; partial State control as in France and Canada; private ownership as in the United States, and private ownership under Parliamentary control as in this country. If they compared the speed in travelling and the charges made the comparison would be found to be largely in favour of the privately owned lines. In regard to the Italian railways, Signor Crispi in a letter to The Times in December, 1906, said that the service had greatly deteriorated since the railways had been taken over by the State, and that there had been a heavy fall of revenue and incalculable injury done to the trade of the country by the delay of traffic. In the early days of the Argentine Republic—now one of the most progressive and stable Governments in South America—the railways were owned by the State, but that system had been almost entirely abandoned and the railways were now largely under the control of British managers, who had magnificently developed the resources of the country. Indeed, the State management of railways was almost invariably marked by failure, and in many of the countries it had been steadily modified or abandoned. If our privately managed railways were compared, in the matter of passenger service, with State controlled railways abroad, it would be found that the foreign railways were slower, dearer and afforded fewer comforts and facilities, especially with regard to third class passengers, who constituted 90 per cent. of the travelling public in this country. Let them take, for instance, the lines between London and Edinburgh. We had twenty trains a day running between London and Edinburgh, and third class passengers travelled by every 1636 train. An hon. Member below the Gangway wanted to go even further and to provide third class sleeping carriages. There were only seven express trains which ran between Paris and Marseilles as compared with twenty running between London and Edinburgh. There were fifty express trains a day going out of Paris in all directions—to Germany, Belgium, Austria, Italy and various other places, and there were only four of these which carried third class passengers, whereas our trains carried third class by almost every train. Then let them mark the very slow delivery of goods on the Continent compared with the rapid delivery here. The arrangements for through rates and transit were most unsatisfactory on the foreign lines. There were many works in Alsace-Lorraine which could not get their coal and ore simply because the State railways refused to make through quotations. There were railways in this country which had made unfortunate speculations in connection with the outlay of huge sums of money. For example, out of £16,000,000 or £17,000,000 recently expended on the underground lines of London, at least £8,000,000 were at present wholly un-remunerative. That was one of the risks which the nation ought not and probably would not undertake and the result would be that necessary lines would not be built. Another great railway had spent £6,000,000 or £7,000,000 in giving a new competitive service to London. Nearly, the whole of that capital was unremunerative. A national system of railways would mean greatly increased cost. Great corporations could not trade and buy their raw material and carry on their enterprise as cheaply and efficiently as private traders. One of the best informed economists of France, M. Waddington, said—French railways which are not exposed to competition, give the public fewer advantages than English railways, which have the full benefit of competition.When the Prussian railways were taken over by the Government the Minister of Finance found it was an extremely satisfactory concern to the revenue, and he raised the rates in order to increase the revenue, and there was the greatest possible pressure brought to bear upon him in Parliament for the purpose of 1637 increasing or diminishing the revenue. It was perfectly clear that already the Government had its hands quite full. It could not undertake the control, management, administration, and construction of the railway system of the country. It would create a vast machine which could be used for political purposes and would not be always used in the interests of labour or the Liberal Party. It might be used by their friends for the purpose of carrying out the social programme which they so closely identified with tariff reform. He hoped the Board of Trade would be able to tell them that whatever the Government thought with reference to an inquiry as to a revision of rates or economies which might be effected by stopping useless services, His Majesty's Government did not intend to take a step in the direction of the nationalisation of our railway system without infinitely more consideration and thought than had been given to it in that two or three hours debate.
§ THE PRESIDENT OF THE BOARD OF TRADE (Mr. LLOYD GEORGE,) Carnarvon Boroughssaid he could assure his hon. friend that he was not rising on behalf of the Government to commit them to the nationalisation of railways. As a matter of fact the Resolution even as it appeared on the Paper did not seek to commit the House to that step; it was simply a suggestion that the time had arrived for considering the question of putting into operation the State Purchase Act of 1844. That was a very different proposition. It simply said that this matter had been inquired into two or three times already; it was forty years since the last inquiry was instituted, and it was suggested that the time had arrived when it might be profitable to inquire into it once more. That was the only proposition, as he understood it, which his hon. friend had placed before the House. He could not accept the form of the Resolution, but he would come to that later. He rather regretted that more time could not have been given to the discussion of what was a gigantic issue from any point of view, and the House of Commons could not be expected to express an opinion—in fact all shades of opinion could not even have 1638 the opportunity of giving expression to their views in the course of a three or four hours discussion. He thought it was a very useful thing that they should make a start in discussing the problem. He was more and more convinced since he had had the opportunity of coming into close contact with railway administration that it was one of the most important problems connected with the trade and commerce of this country, but it was not so simple a proposition as some hon. Members seemed to imagine. While he sympathised with a good deal that had been said, and while he admitted that hon. Members had made out a powerful case, he did not agree with them in their attack upon the railway companies. With the material at their disposal, and considering all the difficulties of the case, he believed that our railways were very ably managed in the main. The primary responsibility of railway directors, it must be remembered, was to their shareholders. Bearing this in mind, and having regard to all the difficulties, he thought they had done their best for the general public of this country. He agreed with the hon. Member for Padding-ton that there was a good deal of "water" in the capital, but not sufficient appreciably to affect the argument. He would remind his hon. friend that the real difficulty was not so much water as the land. If his hon. friend wanted to see the reason why railway rates were so much cheaper on the Continent than here, he must not place the responsibility altogether upon the railway directors and managers, nor even upon stockbrokers, because the House of Commons was largely responsible—he was not sure that it was not entirely responsible. Before they were allowed to get any privileges for the development of their lines railway companies had to go to a gigantic expense and spend huge sums upon experts and others before they could get a Bill through Parliament. Having, perhaps, after the third try, got their Bill through, they were allowed to go down into the country to buy a piece of land. What happened? The persons whose property was developed and whose property was enhanced in value by the transaction got ten times as much value out of it as the railway companies. It was a story of scandalous pillage from 1639 beginning to end. The extravagant costs of the land and the heavy expenses were sometimes increased by ludicrous conditions. The London and North-Western expresses had to slow down in passing a certain village to three miles an hour simply because that condition had been inserted by some landowner. These circumstances and conditions had so hampered our railways that it was no wonder they could not compete with the railways of Germany and other countries. The matter was a purely business proposition, a proposition for the nation to go into, and to mix it up with questions of prejudice against railway directors was, in his opinion, a mistake. It was quite unnecessary and created bitterness in the examination of a problem which was a business one. He did not agree with his hon. friend who spoke last that this was only part of the Socialistic programme of nationalising everything. His hon. friend knew that this was one of the very few countries in the world in which railways were not nationalised. Who were the men who had nationalised railways? The man who nationalised the railways in Germany hated and fought Socialism. Prince Bismarck was not a member of the Labour Party. Prince Bismarck considered the question purely from the point of view of the development of the interests of Germany. The thirty years experience of Germany had proved his plan a colossal success and a great financial success. Then, 40 per cent. of the revenues of Prussia were paid out of State railways, and the main part of the revenues of Saxony came from the State railways. Nobody had proposed that the railway investor should get less than the full market value of his securities. In Germany the railways had been used as an instrument for the development of German industry and for fighting against foreign industry; and a very formidable weapon it was—much more formidable, in his judgment, than tariffs. The hon. Member for Dulwich had made the interesting admission that he was apprehensive that the State's mixing itself up in business would lead to corruption—that pressure would be brought to bear upon Parliament in the interests of a class. He quite agreed with that, but he was not sure that it was confined to labour. He did not know that manufacturers were 1640 above bringing pressure to bear upon Parliament. The whole question really was whether there was any case for some inquiry into the present position of railways. He thought the railway directors themselves would admit that there were things that ought to be looked into. They had grievances. When they were settling the railway dispute the directors pressed two or three matters upon the consideration of the Board of Trade, and he believed they had grievances in regard to the acquisition of land for railway development, the conditions under which the law allowed the development of light railways, and the rigidness of the provisions of the Act of 1894 with regard to rates. He thought that more elasticity and flexibility in those provisions would be better for the railway companies, and also for the traders. But the traders also had their grievances. He did not say it was the fault of the railway companies. These grievances were largely the inevitable result of the present system. He was much surprised to hear the hon. Member for Dulwich challenge the case with regard to preference to foreigners. Several cases had come within his knowledge while he had been at the Board of Trade, in which there was no doubt that preference was given to the foreign producer over the home producer, through railway rates. He thought that in that matter agriculturists had a real grievance. The hon. Gentleman said that there had been an inquiry by a Departmental Committee into this question, and that the Committee reported against the case for preference. That was not the case. The Committee took a technical view of its reference. It took the view that it was commissioned to inquire whether there was preference within the meaning of the Act of Parliament. That was a very different thing. The Act said—
Any difference in the treatment of home and foreign merchandise in respect of the same or similar circumstances.The Committee simply inquired whether within the meaning of the highly technical interpretation which the Railway Commission placed on the words "in respect of the same or similar circumstances," there was preference. They did not inquire into the broad question whether there was not a higher tariff for the home 1641 producer than for the foreign producer. The representative of the Board of Agriculture came to the conclusion that there was preference, though the majority of the Committee were of opinion that, within the terms of their reference, there was no preference. But the question had really never been investigated on its merits, and he did not think the hon. Gentleman could deny that there had been preference to the foreign producer. He was quite certain that if an inquiry was held on a broader reference, it would be found that there had been this preference, and he thought the time had certainly come for an inquiry into that particular matter. It would, he thought, be possible to remedy these cases of hardship by adopting some means of combination and of eliminating wasteful competition. The hon. Member for Dulwich admitted that there was a good deal of this wasteful competition, and that it was the duty of the Board of Trade to help and not to retard the elimination of that element. He agreed with the hon. Gentleman that there was a good deal of wasteful competition—trains running at the same hours to the same places, two-thirds empty, and running for purely competitive purposes, and the public had to bear the expense of that. More than that, there was the condition of the district where there was no competition at all to be considered. Where there were three or four lines of railway serving the same centre, the public would perhaps get fair play and good terms; but what happened where there was a district served by only one line, as was almost invariably the case in agricultural districts? In the large centres where there was competition the railway companies had been beating down their rates to the finest point, and an unfair burden was thrown on the districts where there was a monopoly, in order to meet the loss on the charges in the competitive districts. There ought to be an end of that sort of thing, and it could only be done by saving the railway companies from the evil effects of competition. But it must be remembered that the benefit must not be merely the benefit of the railway companies. Of that saving, whatever it might be—and he believed there might be an enormous saving of 1642 expense if the companies got rid of purely unnecessary competition—the districts which now suffered from excessive rates must have their fair share. He was not going to enter into the various grievances that came before the Board of Trade. There was no question on which they received a larger number of representations. They came from all parts of the country and from every class of trader, and the more he heard of them the more he felt that it was not the fault of the railway directors or managers, but of the present system. So long as they had the present system it would be impossible for them to work on any other lines than those on which they were now working, and those were lines which were detrimental to very large industries in this country. The hon. Gentleman had referred to the Italian railways, which he said were a bad example with regard to nationalisation, but since they were nationalised they had improved. They could not have got worse. That was actually impossible. There was only room for improvement at the time when those railways were nationalised, and they had improved. At the present moment they were engaged in considerable operations which would improve them still more. When they were private railways they were hopeless. Now, with State credit behind them they were able to find capital, and they were really undertaking great works of improvement. The difficulty was that an inflated price had to be paid for them, and, therefore, they did not start under fair conditions; but they were improving nevertheless, and they would improve still more within the next few years. But let the House take the case of railways more or less similar to our conditions, for instance, that of Germany and Belgium. The hon. Member for Louth had referred to the Paris to Marseilles express, but after all that was a private railway; he quoted the case of a French railway, which belonged to a private company.
§ MR. LLOYD-GEORGEsaid that that was the very worst form of either nationalisation or private enterprise. They had got the evils of private management, and 1643 also of excessive public control; it was neither one thing nor another. The German and Belgian railways were used in the interest of the industries of those countries. He had taken the trouble to make inquiries into the working of the State railways in the industrial districts of Germany, and he must say that he had been amazed at the results of that inquiry which he intended to place in full in a Paper before the House. There was general agreement that the State railway administration, in spite of alleged defects, which he could not say were altogether favourable from a labour point of view, was far superior to the old system of private ownership and administration. Several merchants and traders spoke of the advantages they witnessed from, and the value of the co-ordination of railways in Prussia, and said that the uniform administration could not be too highly appreciated, or the services rendered by the Minister for Railways in establishing through rates and special rates for special industries, and in his readiness to meet the wishes of traders and manufacturers. One of his investigators recorded a conversation which he had had with English merchants trading with Germany, who all agreed that from their own experience the Prussian railways, in so far as railway rates were concerned, were directed with more regard to manufacturers' and traders' interests than was the case with regard to private English railways. There were three investigators, who carried out their investigations separately, and they were all agreed that in Germany the trader was perfectly satisfied; that he would no more go back to private ownership than we would go back to private ownership of the Post Office in this country. The German system was used as a very powerful machine for the purpose of helping and developing German industry. When that state of things existed in Germany and Belgium, for the House to say they would not inquire into the matter would, he thought, be a mistake. There had been two inquiries. One was an inquiry when Mr. Gladstone was President of the Board of Trade in 1844, by a Committee of that House, not merely into this question, but into the general question of the relations of the railways 1644 to the State. That Committee unanimously recommended that provision should be inserted in the Act of Parliament which would enable the State to resume the ownership of railways on certain terms. There was another inquiry in 1865, over which the late Duke of Devonshire presided, and Mr. Lowe and Mr. Ayrton were members of the Committee. A very influential Committee, they inquired, not merely into State purchase, but into the whole conditions of the railways, and, while expressing their opinion that it was inexpedient at that moment to put in force the Act of 1844 as regards any great scheme of State purchase, they by no means attempted to lay down any rule to guide the action of Parliament for an indefinite future. They decided against any great scheme of purchase under that Act of 1844, and assigned as their reason that it was of no use at all, and was not applicable to the circumstances of the present day. It was forty years since the last inquiry, and he thought the time had come for another inquiry into the whole question. The conditions had entirely changed since 1865. The question of State purchase was then a new one. The great State experiment in Germany had hardly begun; in fact, it only began about ten years afterwards. The experience of Belgium was also practically new, and so was the experience of other countries such as Austria. Denmark, Norway and Sweden. There was also another condition which the House would, he hoped, take fully into account. The railway companies themselves were beginning to realise that the present system was impossible. They were pressed for increased wages, shorter hours, cheap workmen's trains, whether or not they would pay as a commercial undertaking, for lower rates, and for greater facilities. The companies could not face all these demands under the present system. Unless the investor got a fair return for his money the railways would not get the capital necessary for essential developments. Increase of facilities and development of railway communication meant more capital, and these demands on the railways all meant raising more capital for the purpose. In addition to that there was the demand of the trader, which was after all the 1645 demand of the industries of the country. Between the two there was a real danger that the railways might be crushed. But the companies were coming together and making arrangements. What for? To stop competition. The hon. Member for Dulwich said that this army of canvassers, who went about touting for orders and quoting rates, could be stopped. But apparently they had the same schedule, and yet there were some advantages offered—exceptional facilities, or it might be discount. There were indeed many ways in which they could walk round the schedule. But the companies were stopping all that. The traders had enjoyed the advantage up to the present, but could get it no longer. Not only was competition being stopped, but there was another thing worthy of notice, the railway companies were beginning to make arrangements which were not far short of amalgamation. Up to the present the Report of this Commission was based on the assumption that free competition was a good thing, not in the interest merely of railways, but in the interest of the general public. When the trader benefited every class in the community benefited by free competition. They were coming to an end of free competition, and the sooner they realised this the better. The companies were arrayed in self-defence, and no one could complain of it. He thought that they were bound to do this, and as business men it was imperative on the railway directors to look to this as the only possible source of increasing their revenue. The hon. Member for Dulwich used the illustration of the War Office, but he would point out that the past complaints against that Department were largely due to the fact that the War Office had not been organised by business men. It had been run by swells, and if the railways were run in the same way the same results would follow. Perhaps there was even too much of the swell element in the railway companies. But if the railways were run as the War Office had been, the result, he was sure, would be identical. The railway companies were hardly a fair example of "the incentive of personal ambition." The trader who worked for himself felt that incentive. But the railway director was only working, like 1646 the official at the War Office, for a large body of men whom he did not know, and his remuneration was not of the kind to make him sweat over it. Those were purely War Office conditions.
§ MR. BONAR LAWMay I point out one difference? The railway directors are chosen for their qualities as business men.
§ MR. LLOYD-GEORGEsaid that he must congratulate the hon. Member on having perpetrated an excellent joke. Some railway directors were undoubtedly chosen for their business qualities; but there were many who were chosen for reasons of influence with the House of Commons and elsewhere, and the railway companies had also to look to that sort of thing as they had to defend themselves. But now competition was being eliminated by the railway companies themselves, and the time he thought had come for the State to inquire under what conditions they should allow that process to go on. He had to face a great problem. The Great Northern and the Great Central Companies had an agreement which was very desirable in many respects, as getting rid of waste. But the State and the community had a right to inquire where they came in. Such agreements would be multiplied, and therefore the time had come for a statutory inquiry. The Government would offer no resistance to the Resolution if the mover of it would consent to a slight alteration of form. He proposed to leave out the words: "State purchase of the railways as foreshadowed by the Railway Regulation Act of 1844," and to substitute for them the words: "Any change in the existing relations between the railways and the State." Those were the words used in the Report of the Commission of 1865, and they would enable an inquiry to be held into the whole of the conditions of the railway service. No inquiry would be useful that did not go into the whole question of grievances and the best method of arranging them and—the most practical question of the moment—the conditions under which the State should permit these agreements for amalgamation and co-operation between the railway companies. He begged to move the Amendment which he had indicated.
§
Amendment proposed to the proposed Resolution—
To leave out the words 'State purchase of the railways, as foreshadowed by the Railway Regulation Act of 1844,' in order to insert the words any change in the existing relations between the railways and the State.' "—(Mr. Lloyd-George.)
§ Question proposed, "That the words proposed to be left out stand part of the Resolution."
§ MR. G. A. HARDYI think it would be quite well to accept that.
§ SIR F. BANBURY (City of London)said that, speaking as a railway director, he would be inclined to think that purchase by the State would not be a bad thing for the railways, but, speaking as a taxpayer, he thought it would be the worst thing that could possibly be brought about. He would have thought that the House had had enough to do with nationalisation or municipalisation since one of the most recent enterprises of that nature—the purchase of the London water companies—had been followed by the general raising of the water rates without any corresponding advantage.
§ Mr. G. A. HARDYrose in his place, and claimed to move, "That the Question be now put; "but Mr. SPEAKER withheld his assent, and declined then to put that Question.
§ SIR F. BANBURYsaid the moment the State became the proprietor of a big enterprise they must have a fine office, and in addition there was an immediate demand for the wages to be raised: Those were only two of the reasons why the Water Board had not been a success. His hon. friend below him had alluded to the policy of electoral corruption, and the right hon. Gentleman had rather laughed at it. The right hon. Gentleman was a man of very great ability, and he knew that tariff reform had nothing to do with this question, but he could not get over the fact that if something like 680,000 men were employed by the State the result of their vote might affect an election.
§ Mr. G. A. HARDYrose in his place, and claimed to move, "That the Question 1648 be now put;" but Mr. SPEAKER withheld his assent, and declined then to put that Question.
§ SIR F. BANBURYsaid the result of the railway being owned by the State in Victoria had been that special legislation had to be passed in order to deal with the votes of the employees, who were formed into one constituency and had a special representative. How long would hon. Gentlemen opposite tolerate such a state of things in this country.
§ And, it being Eleven of the Clock, the Debate stood adjourned.