§ LORD TAUNTON
, in rising to move a Resolution that no Railway Bill proposing to increase existing Hates for Passengers or Goods shall be read a Second Time until a special Report from the Board of Trade shall have been laid before the House, said, he had supported an Amendment moved by the noble Marquess (the Marquess of Clanricarde) the other night to strike out of the London and Brighton Railway Bill a clause permitting the Company to increase its fares. The noble Lord the Chairman of Committees (Lord Redesdale) had for many years so persistently set his face against any attempt on the part of railway companies to obtain power to raise their fares that they had almost refrained from making such an attempt; but in a most important instance their Lordships had broken down the barrier so usefully raised by the noble Lord, who had since told their Lordships that his hands would now be paralyzed, and that he would no longer be able to oppose Bills of this kind. This was a most serious change. There could be no question that extensive amalgamation resulting in an increase of fares and charges would not only bear hard upon passengers, but would have a very injurious influence upon commerce. He would not say that under no conceivable circumstances should the fares of a railway company be modified or increased; but every precaution ought to be taken that proposals of this kind should not be agreed to without the utmost deliberation. It was in an especial manner the duty of the Legislature to protect the public, because when railway companies came before Parliament with Bills of this description no individual opponent of the Bill could afford to pay counsel and go to the expense of opposing the Bill in 1070 Parliament; but while the interest of each individual who travelled over the line was very small, the community as a whole had a very great interest in the matter; because an increase of rates and fares in railway communication was attended with most injurious consequences. Their Lordships should consider themselves in the position of counsel to the public. It was said that such an increase was necessary to protect the interests of the shareholders. If the shareholders had mismanaged their affairs he was sorry for them; but he could not admit that this would justify an application to Parliament to restore their finances at the expense of the public. There might be cases of short lines of railway in which it might be necessary or expedient to raise the fares; but when the great lines came to be tampered with, the public injury inflicted would be most serious. It was said that in many cases the advance of fares had become necessary to clear off the expenses which the companies had incurred in defending their rights; but he did not see any reason why the public should be called on to pay the expenses created by what was in too many cases unnecessary and bootless litigation. He had communicated with various authorities on the question, and he found that there existed a very general feeling that, after their Lordships' vote the other night it was absolutely necessary that some safeguard should be devised for the protection of the public. He did not know any Public Department which could more properly discharge this duty than the Board of Trade, whose function it was to watch over the trade and commerce of the country. The best thing would be for the Board of Trade to undertake, in every case where railway companies came to Parliament for power to increase their rates and fares, to make inquiry into all the circumstances of the case in order to direct and enlighten the judgment of their Lordships and of the other House of Parliament.
§ Moved to resolve, That no Railway Bill that proposes to increase the Rates now payable on the Conveyance of Goods or Passengers shall be read a Second time until a special Report from the Board of Trade on the Subject shall have been laid upon the Table of the House.—(The Lord Taunton.)
§ LORD CAMOYS
said, he believed that there was no better method than the present of arriving at a correct conclusion with regard to railway Bills, for the Select 1071 Committee heard evidence and counsel on both sides. If the Board of Trade reported in the way proposed by the noble Lord, the House might have to choose between the conflicting decisions of the Board and the Committee. The proposition was, moreover, too late, the House having accepted the decision of the Committee in the case of the London and Brighton Company's Bill. It was impossible to lay down a "hard and fast" line as to fares, for it would be unjust to the public to select the highest existing rates and impose them on all lines; and it would be unjust to the companies to select the lowest fares and make them universal, while to take the average would probably combine the disadvantages of both plans. The increased fares on the Brighton line were not so high as the rates originally charged before a competing line was projected, and the Committee had given universal satisfaction by insisting on so moderate a scale of fares in the Brighton and South Eastern Amalgamation Bill that the companies preferred abandoning the measure altogether.
§ LORD REDESDALE
said, he regarded the decision of the Committee in the case of the Brighton line as a very unwise one, and regretted that the Amendment moved on the third reading of the Bill was not pressed. He thought less weight would have been given to that decision had it been known that it was carried by only a bare majority: two of the Committee differing from it, though they did not divide against it, and consequently felt precluded from taking part in the discussion on the third reading. He objected to this proposal as an admission that the raising of fares might be proper in some cases. Now, he should like a decision against raising fares in any way. Every company took property and made the line on the promise of affording certain accommodation at certain prices, and people built houses along the line on the presumption that those fares would be adhered to. There was therefore a contract between the public and the company; and if the fares were reduced in consideration of some concession from the Legislature, those reduced fares also formed a contract to which the public had a right to hole the company. Let companies be cautious what they asked for originally, and let them be cautious what reduction they might subsequently offer; but he would have them bear in mind that what was once done was done for ever, and that 1072 Parliament would not permit any increase As to the Brighton Company, it was true that the reduced fares were originally proposed on account of a competing line; but their counsel stated at the time that, whether that line was sanctioned or not, they were equally prepared to reduce their fares, believing that such reductions would prove remunerative. With regard to the Board of Trade, he was sorry to say he felt no confidence in its competency to report on railways. It was a large body, and comprising many subordinate officers who conducted a large number of inquiries; and, painful as such a view might be to his noble Friend behind him (the Duke of Richmond), experience had led him (Lord Redesdale) to believe that the railway interest possessed a great influence over them. Moreover, if the Board reported in favour of increased fares, that increase would have the support of the Government in both Houses. If their Lordships were unprepared to lay down the rule that increased fares were altogether inadmissible, but wished to refer proposals of this kind to some Committee, or other body, he would suggest that the Standing Orders Committee should every Session appoint three of their number—I say the Chairman and two other Members—and that those three Members should report to the House upon such proposals. There would be no danger of conflict between their decision and that of the Select Committee, since the question of increased fares would not be referred to the latter at all. There would thus be a uniform decision by a small and responsible body.
§ THE MARQUESS OF SALISBURY
said, the noble Lord who had just sat down (Lord Redesdale) appeared to lay down two rules with regard to railways—first, that whatever railway companies asked for must be wrong; and, secondly, that whoever expressed an opinion in favour of railway companies must be acting under corrupt influences. [Lord REDESDALE: No!] The noble Lord had applied the latter maxim to the officials of the Board of Trade, than whom, he believed, there was no purer portion of Her Majesty's subjects. Now, he ventured to protest against the doctrine which the noble Lord had asked the House to adopt, namely, that railway companies ought never to be allowed to increase their rates. Extreme severity was a mistake, not only from the railway companies' point of view, but also from that of the public, and very much of the evils into which railway companies 1073 had fallen and of the sufferings the public had undergone had arisen from that extreme anxiety which the noble Lord himself had had so large a share in enforcing. There was one reason why their Lordships should not accept the doctrine of the noble Lord, which was that the value of money was from time to time subject to great variations; and there was nothing which affected it so much as large discoveries of the precious metals. Another consideration was, that so long as even small dividends come to the proprietors, directors—who, with other elastic bodies always moved in the direction of the least resistance—would try to meet the complaints of the public by making the railway as comfortable as possible; but the moment the dividend became so small that the complaints of the shareholders became more violent than those of the public, every possible economy was practised, and the comfort of the public became quite a secondary consideration. He had ventured to call their Lordships' attention to this question of the dynamics of railway Boards in order to show that no legislation which Parliament might adopt would prevent those Boards from consulting their own interests against those of the public, and therefore there was the greatest possible inducement to adopt a generous treatment of railway companies as a matter of policy in regard to the public. He was one of those who held a strong opinion that it was a great mistake to allow those great lines of communication to get into the hands of private companies; but, having done so, Parliament must not crush out the private interests which they had thus encouraged. He had no objection to the proposal of the noble Lord opposite (Lord Taunton); but he hoped the House would never consent to be led away by the arguments which had been used by the noble Lord the Chairman of Committees (Lord Redesdale).
§ EARL GRANVILLE
said, this was a question which they could afford to discuss in a cold latitude, and it appeared to be quite possible to do so in a spirit neither of partiality nor hostility to the railway companies. He agreed with the noble Marquess (the Marquess of Salisbury) that their Lordships could not adopt the principle laid down by the noble Lord the Chairman of Committees, that it was impossible at any time to grant a rise in railway fares. He held that the proposal of his noble Friend (Lord Taunton) would act as a security that a power of that kind 1074 would not be carelessly granted. Such a power was desirable, not only on account of the variations in the value of money, but also on account of the variations in the rate of wages, and a thousand other circumstances which must make a great difference in determining matters of that sort. Suppose that a company showed that they could not continue to work a line at the rate of fares they were charging and no one would buy it, the result would be that the railway would be closed unless the fares were raised, and the public might be put to the most serious inconvenience. He protested against the implied charge that the Board of Trade could not be trusted to supply facts and data on which Parliament could proceed. He had the greatest confidence in the noble Duke the President of the Board of Trade (the Duke of Richmond), and he believed the Board would act impartially and judicially in a question of this sort.
§ THE DUKE OF CLEVELAND
said, that the question raised by his noble Friend behind him had a very important bearing upon the public interests. He quite agreed with the noble Marquess (the Marquess of Salisbury) that it was not desirable to lay down a "hard and fast line" such as that recommended by the noble Lord the Chairman of Committees. Great injury might be done to the public from such a course, particularly in the case of a short line which it might be desirable to carry on, but which might be shut up because it had become entirely unremunerative. Therefore a power to increase the fares to a slight degree might be very beneficial. It would be most unjust not to take into consideration the difficulties in which railway companies were sometimes placed. They must take care that they did not prevent new railways being established, which might be the case if they were to lay down a "hard and fast line."
THE MARQUESS OF CLANRICARDE
said, he felt very strongly that it would be most unadvisable to lay down a "hard and fast line;" but he did not think that fares should be raised except in very exceptional cases. That fares should not be raised without good reason was a matter which affected the railway companies as much as the public. In a case which was before their Lordships the other day the company offered no reason whatever for raising the fares except that they had expended a great deal of money. They did not pretend that it would be of any 1075 advantage to the public, the shareholders, or any party whatever; they simply said that they had sprat money and they wanted to have the fares raised. He wished to have the public protected, and who was so proper to protect them as the Minister of trade and commerce of the country? No doubt the public and also the shareholders had suffered because the Government had not sufficient control over the management of railways. The Government only had a certain amount of control over the accounts, with which they ought not to have meddled as much as they had done. The present Motion was, in his opinion, a most valuable one, and he sincerely trusted that the Government would not oppose it, but would take upon themselves that responsibility which they ought to assume in the interests of the public.
§ THE DUKE OF RICHMOND
said, he must enter his protest against the language used by his noble Friend the Chairman of Committees (Lord Redesdale) with regard to the Department over which he had the honour to preside. He was extremely sorry to hear remarks of such a kind coming from his noble Friend, because, proceeding from such a quarter, they were calculated to carry with them considerable weight. He was afraid his noble Friend was not justified in making those remarks, which, in point of fact, amounted to charges of dishonesty on the part of the officials of the Board of Trade. Unless his noble Friend was prepared to prove that the officials of that Department had been actuated by dishonest motives he was not justified in making such a charge; and he might remark that if the charge were distinctly brought forward in their Lordships' House he should be prepared to meet it with a distinct and unqualified contradiction. As to the subject immediately under consideration, he would not discuss it, because it had already fully occupied the attention of their Lordships' House, and had also been fully debated in the House on a former occasion on the Motion introduced by the noble Marquess opposite (the Marquess of Clanricarde). The noble Lord opposite (Lord Camoys) did not appear to have correctly apprehended the object of the Motion, for he understood the noble Lord to say it would be unfair to allow the decision of the House to be over-ridden by the decision of the Board of Trade. Now, he believed that the Motion raised no question as to the Board of Trade deciding the matter. 1076 The object of the Motion was merely that in cases where a railway company proposed to ask Parliament for power to increase its fares a special Report from the Board of Trade should be laid upon the table, in order that their Lordships' attention might be duly directed to the subject. He saw no objection whatever to such a proposition, and on the part of the Government he had great pleasure in acceding to the Motion of the noble Lord.
said, he thought it an anomaly that the management of a railway was not affected by the ordinary law of supply and demand with regard to the charges it made and the remuneration it received, although it was, to a certain extent, a monopoly. If a "hard and fast line" were applied to railway fares it certainly could not be applied to railway management, for unremunerative fares would always result in insufficient attendance, dangerous materials, and bad management generally. To assume that a railway would not be affected by a change in the value of money or a rise in the price of iron, and that the fares ought to be uniform, notwithstanding such mutations, was, in his opinion, a totally incorrect application of a well-known commercial principle. Indeed, it was almost impossible to conceive that any rate of fares could be both remunerative to the company and just to the public if they were continued unchanged for a long period of time. In his belief the advantage gained by the public would be in proportion to the freedom and pliancy given to the system of railway charges, and the possibility of railway remuneration. In conclusion, he would point out that the whole question of excursion trains depended upon the raising and lowering of fares.
§ EARL FORTESCUE
said, he must protest against the doctrine of the noble Lord who had just sat down (Lord Houghton) that the trade and commerce of the country should be kept in a perpetual state of uncertainty, which would be the consequence of the pliability and variability which his noble Friend had so highly extolled. It should be remembered that a great part of the expenses to be defrayed by railways consisted of the interest on the capital which had been expended upon their original construction; and wages, materials, and working expenses did not constitute so large a portion of the outlay as had been represented. He wished to impress upon their Lordships that the interests of the public were not represented before. 1077 Railway Committees, nor before Private Bill Committees generally, and the case of the public was not stated before such Committees. In some instances the interests of opponents might be identified with those of the public, but in many cases it did not suit opponents, who were generally another company, in the case of railway Bills to consult the interests of the public. To support this position he quoted the Report of a Committee of 1847, who said that the chief imperfections of the present system arose from the fact that no provision was made for furnishing Committees with complete and trustworthy information as to local wants; and that when a Bill was not opposed the Committee were wholly dependent for information on the interested representations of the promoters, while expense deterred all persons from opposing unless their interests were directly affected. The public were as much interested in being represented by counsel before a Committee as prisoners were in being defended by counsel. Exactly the same arguments used to be urged against the defence of prisoners that were now urged against the representation of the public, and he could only hope that in the course of time the public would succeed, as prisoners had done, in obtaining professional representation. He considered that the Motion would be of the utmost value, and he thanked the noble Duke at the head of the Board of Trade for acceding to it.
§ LORD REDESDALE
My Lords, I wish to offer a few words of explanation in consequence of what fell from the noble Duke the President of the Board of Trade. I made no charge of corruption against the officials of the Board of Trade, but I did say that from the intercourse which they have with clever persons belonging to the railway companies, and the railway influence brought to bear upon them, something such as I have referred to is sure to be the consequence. I have seen evidence of it on many occasions. I can even now cite a case which is just occurring. Your Lordships will remember that on the 30th of June there was a division in this House upon a provision in the South Eastern Railway Bill with regard to the division of the ordinary capital into deferred and preferred stock. I objected to that provision, and your Lordships rejected it by a majority of 44 to 35. Mr. Watkin, the Chairman of that Railway, then came to me and represented the importance of carrying this provision, and 1078 said that such a provision ought to be proposed as a public matter, not affecting one company, but applicable to all. He further stated that there was a Railway Bill at that time before the House, and that the provision might be proposed in that Bill and discussed as a public question. Now, I find that he has been to the Board of Trade, and that this very provision is to be proposed in the Commons by the Vice President of the Board of Trade in Committee upon the Railway Bill referred to. That is what I have complained of, and it is well worthy of consideration. The Bill will return to this House at a late period of the Session, and, in all probability, the imprudence of the Vice President will impose upon your Lordships the necessity of reversing a decision of the other House. Why should it not have been left to Mr. Watkin to propose the Amendment when it had in substance been rejected by your Lordships?
§ LORD TAUNTON
said, as their Lordships seemed disposed to accept the Resolution, which it would be necessary to embody in a Standing Order, perhaps the Chairman of Committees would undertake the responsibility of giving effect to the wishes of the House.
§ Motion agreed to.