§ LORD MONKSWELL rose to ask His Majesty's Government whether, in their endeavours to deal with unemployment and improve the industrial efficiency of this country, they have considered a report which appeared in the Evening Standard of 28th December, 1929, in which it is stated that Sir Henry Thornton, President and Chairman of the Canadian National Railways, said that "the present British system of managing railways, in his opinion, caused inefficiency, insubordination and disloyalty, and that conditions among railways could not be much improved until this was altered"; to call attention to some of the obstacles which stand in the way of reform; and to move for Papers.
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The noble Lord said: My Lords, at a time like the present when the very existence of this country appears to depend on our ability to increase production all matters bearing on this question are of vital importance, and not one is of greater importance than the efficiency of our transport system. In these circumstances, I am sure your Lordships will be interested in the very outspoken remarks of Sir Henry Thornton, which have lately been reported in the Evening Standard and elsewhere. He is reported as saying that:—
the present British system of managing railways, in his opinion, caused inefficiency, insubordination and disloyalty, and that conditions among railways could not be much improved until this was altered.
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As your Lordships are aware, Sir Henry Thornton is one of the most prominent railwaymen in the world. He is President and Chairman of the Canadian National Railways and was formerly General Manager of the Great Eastern Railway so that he is well acquainted with conditions in this country. I may say at once that I am personally unacquainted with Sir Henry Thornton and have never had any communication with him. On the other hand, I have on various occasions ventured to put before your Lordships facts which have convinced me that the present system of managing railways is extremely defective. I am therefore naturally interested to find that so great an authority as Sir Henry Thornton seems to be of much the same opinion as I am and I hope the Government will let us have their views with regard to what he has said.
§ The defects from which the railways of this country suffer are, I think, well known to any one who has had the time and the inclination to study the question, but the railway managements are an extremely strongly entrenched vested interest. So far they have been able by a simple process of boycott to resist most of the attempts to infuse a new and better spirit into their administration. They are so absolutely assured that no one can bring any pressure worth speaking of to bear upon them that they simply ignore all attacks, no matter how detailed. Boycott is their only weapon, and indeed their last chance. Before proceeding further, I wish to make it plain that in saying what I shall have to say of British railway managements in their corporate capacity I am making no attack upon any individual. I am particularly anxious to make this clear, not only because I do not wish to pillory any individual, but because I regard the harrying of individuals as the most fruitful meant of wasting time and obscuring the issue. Unfortunately, when one has to make an attack on any sort of organisation, one may very easily be taken as attacking the man who is the nominal head of it or the man who has performed some action complained of. Though it is impossible to avoid alluding to individuals in this way, I wish to say at once that, whether I am speaking of persons in the railway service or of those outside it, I regard the system as entirely responsible and I attribute no incapacity 538 or want of rectitude to the gentlemen whose identity may be apparent.
§ In many great organisations the machine, that is to say the system that has grown up through the years, is so rigid and so powerful that no individual can make headway against it. This is particularly the case with regard to monopolies, and a more complete monopoly than is constituted by the railways in this country I do not know. For generations they have been left free to devise agreements among themselves to restrict progress until they have so entangled themselves in the net they have laid that no real reform is possible unless it is imposed by some outside agency. Probably the whole of the railway service, with the exception of a few fossils, would welcome reasonable reform, but the system has struck its roots so deep that no reform from inside is possible. I do not suggest that the individuals composing the railway managements are worse than their colleagues outside the railway service—I do not imagine that there is any difference—and I do not suggest that reform need be accompanied by any considerable infusion of new blood. No doubt a certain number of persons who have been entirely atrophied by the system should in the public interest be removed, but that is a comparatively small matter. The real trouble is the system. Until the system is first of all laid bare and then suitably dealt with, no effective action is possible.
§ It is, therefore, in no censorious spirit towards individuals that I bring forward my Motion. I happen to be one of that small band of persons who have made a study of railway management, and I have already on various occasions ventured to set before your Lordships some of the matters in which reform is urgently needed. No serious attempt has been made by any one to refute either my facts or my conclusions. The whole matter has simply been boycotted in accordance with the invariable practice, the invariable policy, of the railway managements. "What cannot be answered can be suppressed." It is just this question of boycott that lies at the root of the whole matter, and it is obvious that the boycott must be extremely efficient and most carefully arranged and maintained for the managements to place im- 539 plicit trust in it as they do. I therefore propose shortly to examine the methods by which the boycott is enforced.
§ There are three more or less distinct sets of people who might give trouble to the railway management. They are the public, the shareholders and the Government. Steps must be taken to muzzle all three. For the public to take any effective action, that is to say for a strong public opinion to arise, it is necessary that the facts should be frequently and clearly stated. For all practical purposes there is one way and one way only in which that can be done, and that is through the newspapers. If the Press can be induced to refuse to publish more than occasional criticism's and odds and ends of complaints, then it is absolutely certain that no pressure will be exerted by public opinion. What do the managements do to secure the support of the Press? It is the simplest thing in the world. A high official of the North Eastern Railway has lately stated that, apart from other advertising expenditure, the North Eastern Railway pays almost £500 every day of the year for newspaper advertisements. This for the London and North Eastern Railway alone works out at £180,000 a year, paid direct into the pockets of the newspaper proprietors by officials who are in a position to stop payment at any moment they please. If the payments on the part of all the groups are on the same scale, the yearly amount paid to the newspapers in this country is £600,000.
§ In these circumstances, though the editors are usually glad to publish the facts, the advertising managers absolutely refuse to allow any attack upon the railway managements to be continued long enough to have any practical effect. Again I do not wish to pillory any one, but that there may be no doubt that the purpose of the payments is fulfilled I am ready to give His Majesty's Government in private particulars of cases within my own knowledge in which very important newspapers have suppressed matter displeasing to the railway managements. I have been myself asked for matter for publication which, when furnished, has simply been suppressed, obviously because the advertising manager of the newspaper in question was afraid that it would offend his clients. In this way the public is put out of action.
540§ To render the shareholders impotent is an equally simple matter. The number of shareholders is very great; there are about 90,000 in the Southern Railway and twice that number in the London and North Eastern Railway. The immense majority are totally ignorant of railways and they have no sort of organisation. On account of the expense of communicating with so great a number of people and the large amount of explanation necessary, the task of organising the shareholders for the purpose of looking after their own interests is next door to an impossible one for any single person or unofficial group. The people whose plain duty it is to organise the shareholders are the managements. A confused mass of bewildered and ignorant shareholders, trying to exist in a world in which the railway servants and predatory politicians are organised to the last button of the last gaiter, is necessarily an easy prey. If the managements in their relations with their shareholders, had any sense of loyalty, the absence of which Sir Henry Thornton deplores, the first thing they would do would be to organise their shareholders. So far from doing this, they vastly prefer to deal with an unorganised and impotent rabble, whom they can and do treat with contempt, and they stick at nothing to defeat any effort on the part of their shareholders to obtain any voice in the management.
§ I happen to know a good deal about this, for some friends of mine recently tried to get proxies from the shareholders of one of the great groups. We found ourselves obstructed at every turn. To begin with, any person or committee that endeavours to secure any concerted action on the part of the railway shareholders has to pay the whole of the expenses thereby incurred, whereas the managements can use the companies' money (that is to say the shareholders' money) to any extent they feel inclined. On the occasion of which I speak, up-to-date lists of the shareholders were refused, all information with regard to the amounts of the shareholders' holdings—that is to say their voting power—was refused, and the management claimed and exercised the right to count proxies themselves and refused to allow the results to be checked. When it came to voting, the Chairman did everything he possibly could to get things settled by a show of 541 hands, obviously having no confidence in the figures with which his officials had supplied him. When eventually figures were forced from him, they were enormously in his favour. It is obviously contrary to reason to suppose that he would have done, as he did, everything in his power to avoid giving these figures if he had had confidence in their accuracy. The whole thing was a pure farce. The managements are so strongly entrenched that it is utterly impossible for the shareholders to obtain any voice in the management.
§ With regard to the muzzling of the Government, by far the most important period was when tie Railways Bill was prepared and passed into law in 1921. Then there was a real chance that something might be done to put the railways on a better footing and that the power of the official clique might be broken. The official clique were not caught napping. By hook or by crook they contrived to get, one of their own men appointed Minister of Transport and, so that there might be no mistake, they got others of their own men appointed to the posts of his principal assistants. At that time the whole of the higher official ranks of the Ministry of Transport were composed of an unbroken phalanx of railway officials; and they produced the Railways Act, under which this country has ever since been groaning. The Railways Act involved the abandonment of the interests of the shareholders and of the public in return for preposterously favourable conditions for the railway servants and the managements. The railway managements did a deal with the Government. In return for the consolidation of their dominant position, they agreed to bleed the shareholders aid the public so as to continue to pay to the railway servants rates of wages that had foolishly been granted them at a moment when one of the most unjustifiable strikes that had ever taken place, the railway strike of 1919, was breaking down.
§ I do not suppose that, of all the troubles that have afflicted this country since the War, there has been a worse one than this settlement—a permanent bleeding of industry so as to pay to the members of certain powerful trade unions wages that in the circumstances were absurd. I say "in the circumstances." I am all for paying men the highest wages they can earn and I think that, if the 542 railways were properly organised and satisfactorily run, it might be economically justifiable to pay them what they now receive. But in the actual circumstances of the case the whole country is bled to pay wages which the men receive but are not allowed to earn. In return for this surrender of the interests of the country, the managements were allowed to dictate terms for themselves. They were allowed to hand on to their customers any increase in charges which this surrender made necessary.
§ The only pretence of safeguarding the public was a vague condition that the right to impose these increased charges should be subject to "efficient and economical working and management" in the opinion of the Railway Rates Tribunal. As no attempt was made to define efficient and economical working and management and no procedure was laid down, the whole thing was an insult to the intelligence. The pretended safeguard meant absolutely nothing, but it is the only sentence in the Act in which the efficiency of railway management is even distantly alluded to. On this one supreme occasion, when there was a real opportunity for imposing reasonable reform, the managements triumphantly hoodwinked the Government in the same way as they hoodwink the public and the shareholders.
§ But though, at this disastrous juncture, the Government of the day hopelessly failed to safeguard the national interests, it is, for the reasons I have given, the Government alone that is in a sufficiently powerful position to act with effect. Such pressure as has in the past been exercised upon the railways has usually been due to the Government. It was the Government that enforced the adoption of safety appliances, such as block signals and continuous brakes, and there is nothing at all at the present moment to prevent the Government from proceeding at an accelerated pace down the path of coercion that they have never entirely abandoned. Even quite lately they have done something to overtake the neglect into which the railways have fallen. It was the Government that appointed the Bridge Stress Committee and published their findings. It may come as a shock to some of your Lordships to learn that a number of locomotives in use in this country are balanced in such a way that 543 each driving wheel is, at high speeds, lifted clean off the rail once in every revolution. The Committee have thoroughly investigated this matter and have informed the railway companies that all new engines must be more satisfactorily balanced. That is in the Report. To set your Lordships' minds at ease, I may add that it is perfectly possible entirely to eliminate defective balance.
§ That is just a single example of what ought to be done to improve the efficiency of British railways. There are, of course, quantities of other things. I have on various previous occasions set forth a good many of them, and I should not have asked your Lordships to-day to listen to any further remarks on this subject if it had not been for the very strong line taken by the Government during the recent proceedings upon the Road Traffic Bill in insisting upon the independence of the questions of speed and dangerous driving. I am in complete agreement with the Government attitude on these questions, and I note that almost precisely the same considerations apply on the railways. Just as the enormous improvements in motors have been primarily due to constant tests of these vehicles at the highest possible speeds continued for long periods, so is the stagnation in railway development primarily due to the boycott of high speeds by the railways. As on the roads so on the railways, there is no test of material in any way comparable with the test of high speed. Motors are constantly being subjected to this test, and I need not point out the revolutionary improvements that have followed. On railways the boycott of high speeds has enabled the managements to neglect all kinds of desirable improvements leading to increased economy and safety.
§ Speed, in itself, no matter how high, is safe so long as the conditions are suitable. What must be avoided is dangerous driving. With suitable rolling stock running over a strongly-built main line there is for all practical purposes no limit to safe speed, and all points such as sharp curves where reductions of speed are necessary are well known and can, if it is thought desirable, be protected by automatic appliances. The way in which dangerous driving occurs on railways is almost entirely from unpunctuality. Safety appliances, though 544 pretty good, are not, and never are likely to be, perfect, and on crowded lines punctuality is the sheet anchor of safety. Directly a train is out of its proper place the chance of an accident is enormously increased. Some of the worst recent accidents have been due to this cause. Anything more farcical than the way in which the railway managements handle this question could not be imagined. They boycott high speed, but all, except the Great Western Railway, who I am glad to say have listened to me, actually encourage dangerous driving by refusing to issue any instructions to their drivers on the principal remedy for unpunctuality, the making up of lost time.
§ What I want to point out is that until the system under which the railway companies of this country are managed is broken up, no real reform is possible, and so great an authority as Sir Henry Thornton appears to be quite as much dissatisfied as I am. The public and shareholders are, for the reasons I have given, impotent. Government interference is the only chance of reform. I suggest that the Government should do what they have done before in the matter of enforcing the use of safety appliances and the proper designing of locomotives—that they should now and at any subsequent times when it may be desirable draw up a list of reforms, and should require the railways, if necessary by Act of Parliament, as they have done before, to carry them out within a specified time. In conclusion, I hope we shall not be told that a Royal Commission on Transport is sitting, and that nothing can be done before their final Report is received. I have been a witness before that Commission, and I know that most of the things which I have mentioned have not been before them at all, so it is extremely unlikely that they will express any opinion about them. I beg to move.
§ LORD NEWTONMy Lords, those who have sat in this House for some time must by now be familiar with the annual entertainment provided by the noble Lord on the Cross Benches at the expense of the railway companies, and I confess that, to a certain extent, I feel in sympathy with him, because up to now, so far as my memory goes, he has never succeeded in extracting anything from any Government except an expression of 545 thanks for the valuable debate which he has initiated. That is a barren form of compliment with which many of us are familiar and which becomes less acceptable as time goes on. Year by year the noble Lord surveys the railway horizon and invariably finds it vile. I might say that he finds it viler every year. I gather from him that he is firmly convinced that Governments, Ministers of Transport, directors, managers and shareholders of the railway companies, and the Press—no doubt instigated by the malign influence of the railway companies—are banded together to prevent the British public enjoying the facilities which they should enjoy with regard to transport; and in fact that everything is done to dissuade the British public from travelling at all.
Not only that, but everybody appears to be deaf to his warnings and exhortations. I gather that the railway boards do not desire his co-operation, that the Commissions and inquiries do not respond readily to the suggestions which he occasionally makes to them, and which no doubt are admirable in themselves, and that an unappreciative Press, with one notable exception, usually refrains from publishing his contributions. On the whole I think that in that respect he is certainly deserving of sympathy. Hitherto the noble Lord has waged a gallant but unequal fight against all these combined bodies and authorities, and I do not think he has obtained any support hitherto unless, if I may term it so, the crusading Press, in endeavouring to resuscitate the British Empire by introducing a larger form of railway truck, is an exception. Now the noble Lord is able to present some tangible evidence of support in the person of Sir Henry Thornton. He is a gentleman of high reputation, an American by birth, I believe, but now a British subject, and he was brought over here by the late Lord Claude Hamilton, I think, in 1914. He remained with the Great Eastern Company until 1922. It is obvious that he had not a very prolonged experience of British railways under their ordinary conditions.
The speech to which reference has been made, and in which the opinions that have been quoted were delivered, was made in this country last December, and I cannot help thinking that it conveys in some respects a very wrong impression. 546 I refuse to believe that a person of Sir Henry Thornton's reputation would have consented to continue his duties if the state of things were really as bad as might be inferred from the remarks which he made. I have had an opportunity of reading that speech. It was delivered on a festive occasion and, as was appropriate, the greater part of it consisted of high compliments to this country generally and to the management of English railways. The expressions quoted by the noble Lord, that "the present system of managing British railways, in his opinion, caused inefficiency, insubordination and disloyalty" refer only to one particular practice which he deprecated—namely, that panels of directors interfered with the technical management. I absolutely refuse to believe that anything of the kind goes on at all. I do not believe that any railway director who is here present would admit that statement for a single instant. My opinion of railway directors is not particularly exalted. It is a better one than that of the noble Lord on the Cross Benches, but I entirely decline to believe that railway directors, who know nothing whatever about the technical details of the business, interfere with the work of experts. I should say that if they are like the ordinary human individual they are only too glad to leave details of that kind to the people who are competent to deal with them, and that they confine themselves—as I believe is the case—merely to questions of general policy.
In any case, I do not think that the noble Lord on the Cross Benches could really claim Sir Henry Thornton as a genuine ally. One of the numerous grievances of the noble Lord, if I have understood him correctly, is that the ordinary railway director is an incompetent dummy, who never opens his mouth at all, and takes no part in the management. Sir Henry Thornton's ideal of a director is a man who is continually silent, and who takes no part at all in the transaction of business. These two views are obviously totally incompatible. But for my part, without wishing to be disrespectful to Sir Henry Thornton, I fail to see why he should be regarded as a sort of infallible authority. His experience over here was not a very long one, and I have reason to believe that he was not looked upon as a brilliant or conspicuous success. Nor do I believe 547 that he is considered a brilliant and conspicuous success even in his own country. If I am not mistaken, the ordinary shares of the companies which he controls pay no dividends at all, and though the noble Lord no doubt has a great admiration for Canadian methods of railway management, his trains do not for a moment approach in rapidity the rate of the railways over here. I believe that Sir Henry Thornton's show train is only able to boast a record of something like 43 miles per hour, as compared to the English rates which I will deal with presently. It is only charitable to assume that Sir Henry Thornton, who left this country some eight years ago, has not familiarised himself with the present conditions, and that upon this occasion he expressed views on a subject with which he was not thoroughly acquainted.
To return for a moment to the noble Lord on the Cross Benches, I think I may say without fear of contradiction that any person who was not in the habit of frequenting this place, and who came here, as new arrivals, for instance, come, and listened to the noble Lord, would certainly conceive the idea that of all countries in Europe this was the one that was worst served by its railways. I do not think I am of an insular frame of mind at all. I have travelled by rail, I think, in every country in Europe, Soviet Russia included, and I have not the smallest hesitation in asserting, without professing to be an expert, that the railway traveller and the railway public generally are much better treated in this country than in any other European country. I have looked up some of the noble Lord's speeches in the past, and the grievance which is always rankling in his mind is that the railways in this country do not run fast enough. I think I am correct in saying that every big town in this country has a London service once a day which approximates a rate of between fifty and sixty miles per hour, including stops. But that is not nearly enough for the noble Lord.
I observe that in an interview which he accorded to a newspaper the other day, he expressed the opinion that railway trains ought to travel as fast as aeroplanes; in other words, that railway trains ought to travel at between 200 and 300 miles per hour. Who wants to do that? The noble Lord may want to 548 do it himself, but I can hardly think that he would find many persons of the same frame of mind; and I should have thought that, if anybody did want to travel at that sort of pace, it would be very much simpler to travel by air. Even the risk, not to speak of the discomfort, would certainly be less in the circumstances. Not only are the express trains in this country faster on an average than those in any other European country, but they are infinitely more comfortable, and they are infinitely safer. Incidentally, I may say that I personally long ago abandoned the practice of undressing in a French train, because it almost invariably happened to me that I was turned out in the small hours of the morning in consequence of an accident of some kind or other.
Let me recapitulate the advantages which we enjoy in this country over other European countries. In this country—and I do not think even the noble Lord will contradict me—we enjoy greater safety, greater speed, greater attention, and greater honesty, apart from other advantages. In this country, if you wish to engage a seat in a train you can do so, and you can obtain it. In other countries it is highly probable that you may have to pay blackmail to a hotel porter, or hairdresser, or someone of that kind; and even then you may find yourself defrauded in the end. In this country, if you send goods or property by train, it is long odds that you do receive them safely, or, at all events, only an infinitesimal part may occasionally be missing. But that is not the case in other countries which I will not mention. You are extremely lucky there if you ever receive your property at all. And finally, if you are unfortunate enough either to lose your property or to suffer an accident in your own person, you will be certain to receive fair compensation.
These are not inconsiderable advantages, and I think that they are appreciated by the vast majority of the public. And upon the whole, considering the enormous difficulties which the British railways have to face, in various forms which I will not enumerate at the present moment, I think that we may consider ourselves distinctly fortunate in possessing the advantages which we do. In conclusion I would venture to mention a very trivial experience of my 549 own which confirms me in the opinions which I have expressed. During the General Strike, strange though it may sound, I acted as a stationmaster myself, and I may say quite honestly that I do not think anybody here present was more unfitted for that position than I was; and yet, in spite of these facts, no accident of any sort occurred on the railway whilst I was nominally in charge of that station. That is only a small instance, but it has confirmed me in the good opinion I have always held as to railway efficiency in this country.
§ LORD BANBURY OF SOUTHAMMy Lords, I am not now in any way connected with a railway but I was for twenty years a director of the Great Northern Railway and for the last six years of that period I was Chairman, so that I have had some experience of the management of English railways. I read the speech of Sir Henry Thornton with considerable interest. But I observed that the noble Lord, Lord Monkswell, having stated that Sir Henry Thornton had decried the methods under which English railways were managed, left Sir Henry Thornton's speech altogether. He did not inform your Lordships what were the actual mistakes to which Sir Henry objected, but devoted himself, as far as I could make out, to a long attack generally upon the officials and the directors of the English railways. One point he made, as I understood it, was that the London and North Eastern Railway, of which a noble friend behind me is now a director, spent something like £180,000 a year on advertisements; I think that was the figure. I am informed by the authorities of the Great Western Railway, which is a very large railway, that their annual expenditure on advertising is £12,000 a year. Therefore, I am rather inclined to think that the noble Lord must have made some little error and probably added a nought or two when he talked about £180,000 a year.
What was it that Sir Henry Thornton said? Sir Henry Thornton objected to the management of the English railways because he said that there were sub-committees of the board, each of which had a chairman, which looked after certain departments of a railway. That is true; at least it is true with regard to the Great Northern Railway. When I 550 was a director of that railway there were four or five sub-committees of the board. There was the locomotive committee, consisting as far as I remember of four or five directors and a chairman; there was the way and works committee, and there were the hotels committee, the traffic committee and the horse committee. Each of those committees consisted of four or five members of the board with a chairman, and the Chairman of the board was ex-officio a member of all of them. Naturally, those committees, especially the chairmen of them, saw a good deal of and were in consultation with the official who was responsible for the work of the department concerned. Taking for instance the locomotive committee, the locomotive engineer, no doubt, was constantly in touch with that committee and with its chairman. The same was true of the other committees.
What Sir Henry Thornton said was that as a result the locomotive engineer thinks more of the chairman of the locomotive committee than he thinks of the General Manager. The result of that is that there is disloyalty and so on as stated in the Motion, and the General Manager is put in a difficult position. Sir Henry Thornton is in America, and there is or there was—I do not know so much about American railways now—a great deal of difference between the management of American railways and the management of English railways. I was Chairman of the committee which successfully rearranged the Central Pacific Railway of America and I have some knowledge, therefore, of American railway methods. In America—and this I think was the object of Sir Henry Thornton's remarks—the board of directors, at any rate at the time I knew them, was a nominal body. They knew nothing and they did nothing. They were figure-heads. The whole management of the railway was in the hands of the President, and the President resembled the Chairman and the General Manager of an English railway rolled into one. He had supreme command and did everything. That is very different from the practice in England where the directors, the Chairman especially, take an active part in the management of the company, not in the details of the actual working of the company—they do not go into a signal box and direct the signal-men how to pull the 551 levers—but they have a general supervision over the general policy of the company.
In my opinion that is a better way of managing a railway than the American way, and for this reason. First of all, there are the directors who are, I think I may say, and always have been, men of position, who do not become railway directors to make a living out of it but because they are interested in the railway and desire to do what they regard as a public duty. They are mostly business men who have had some business experience and are capable of dealing with general principles, with finance and questions as to whether or no there should be an extension, what amount should be spent on dividend and what amount on the fares, etc., during the year, without interfering with the actual management of the railway. Sir Henry Thornton does not like that. He wants the General Manager to be supreme and that, no doubt, would be followed by the appointment of a President as in America.
I think I am correct in saying that the breath of scandal has never touched the railway directors of this country. It has never been said that they have used their position, in the vulgar phrase, to feather their own nests. Is that always true of America? Let me point out what at any rate thirty or forty years ago was supposed to be a not uncommon practice in America, by which a railway President, who had everything in his own hands, was enabled to make a considerable sum of money. We will say fur the sake of argument that a railway is paying 6 per cent. on its ordinary shares. It must be remembered that in America railway shares pass from hand to hand. They are not registered as in England. You do not have to make a transfer of them; so that it is very difficult, if not impossible, to know whether the President of the railway is a large shareholder, a small shareholder, or not a shareholder at all. As I say, the railway is paying 6 per cent. on its ordinary shares. The President increases that to 8 per cent. In order to do that he does not spend any money, or spends an insufficient amount of money, on the maintenance of the property, on renewals of locomotives and carriages, on the maintenance of the permanent 552 way and so on; consequently, the railway itself gets into a rather depreciated condition.
That goes on for some little time. The public seeing that the shares are paying 8 per cent. buy a considerable number of them. The President, who bought some himself or whose friends bought before he raised the dividend from 6 to 8 per cent. sells when the shares have got pretty high, and rumour has it that he sells what they used to call "short"; that is to say, he sells a little more than he has got. He then pays no dividend at all and says that the profits have to go into the railway, that the railway really must have some locomotives, that the permanent way must be put into better order and so on. Consequently, the shares go down to very little. This goes on for three or four years. The public do not in the least know who the directors are. The directors are merely nominated, and they do not know what is going on. The public do not know what is going on. They get no dividend and they sell their shares. In the meantime the railway is being put into excellent condition by the net earnings being spent on it—what they call in America "betterment." The President then buys a large number of shares at a low price, takes advantage of what has come about from the net earnings being spent in betterment, and in subsequent years pays dividends. The result is he has done very well for himself.
I was at one time Chairman of the Mexican National Railway, and I could have done the same thing if I had wanted to—that is always provided the board of directors here would have allowed me. Therefore, I had some interest in knowing what was done in America in those ways. We must remember that Sir Henry Thornton s idea is that these committees interfere with the power of the manager, because that is what he objected to, and that is what the noble Lord has left entirely on one side. If his idea were carried out here, and the directors became merely nominees and the General Manager became President and controlled the whole railway, what is to prevent something of that sort happening here? You must, of course, in a General Manager, have a professional man, because he must know all about the working of a railway. But do you want to 553 put the management of the railways entirely into the hands of professional men who go there, in order to make a living out of them? Is it not far better that the management should remain as it is at present, when we have professional men but they are subject to the board of directors, against whom, as far as I know, there has never been a breath of scandal raised in any kind of way. It has never been suggested against them that they have used their position, not to encourage and maintain the interest of the railways and the shareholders, but to feather their own nests. Sir Henry Thornton, as an American, prefers his own way, but I do not think it would suit this country.
Perhaps what I say may have a little more weight with the noble Lord who raised this question if I tell him I was strongly opposed to the amalgamation of the railways, and moved the rejection of the Bill in the House of Commons on Second Reading. At that time I was Chairman of the Great Northern board, and I did all I could, backed up by others, to stop amalgamation of the railways. I thought it was a mistake and said so at the time. Perhaps, therefore, the noble Lord would look upon me a little more favourably, as I understand he does not approve of the amalgamation of the railways.
There is one other matter that I should like to deal with for a moment. I understood the noble Lord to say that the railways had put one of their own people upon the Ministry of Transport. I presume he was alluding to Sir Eric Geddes—I do not know, but I presume so. But the railway companies did not put Sir Eric Geddes there. I should have said that a. good many of the railway companies did not want Sir Eric Geddes there, and would have much rather he had not been there. They certainly did not put him there. I do not know where the noble Lord got that impression from. As a matter of fact, as far as I remember, the London and North Eastern Railway paid Sir Eric Geddes £50,000 to go, which does not look as if they were very keen about having him in any other position. I do not know what views the Government will have, but of this I can be quite certain, that nothing could be more fatal to the railways than Government interference. During the years of the War 554 the Government did interfere with the railways with very disastrous results.
§ LORD PONSONBY OF SHULBREDEMy Lords, I have had the pleasure to-day of hearing for the first time the noble Lord who put this Motion down on the Paper. I understand your Lordships have heard him on this subject before, but so as not to be handicapped in any way for this debate I have read through all his speeches, and also his evidence before the Royal Commission on Transport. I have emerged from my studies rather confused, but I quite recognise that the noble Lord is a great student of this question and has had very great experience. My memory goes back to about thirty years ago when the noble Lord and I were both clerks in the Foreign Office. I think he was just coming in, and I was just going out, and rumour declared in those days that his chief devotion and his great interest was rather for the locomotives on the metals than for the more complex and perhaps less satisfactory machinery of diplomacy, but in any case rumour was correct, for the noble Lord has pursued his studies since then with such ardour as to be the author, I understand, of a series of debates in your Lordships' House.
I would respectfully say that I rather deprecate the form in which this Motion on the Paper is placed. To advertise and give such great publicity to an extract from an evening paper in which one sentence is torn from a speech, and that a sentence which makes very grave charges against the British railways, seems to me rather an unfortunate way of raising the subject in this House. I am not here, of course, to defend the railway managements or the railway companies. On the other hand, I have neither the inclination nor would it be my duty in any way to join in such strong criticism against them. My experience as an individual, and I have travelled in a good many countries, including the United States, is such that, although in other countries one may see here and there details which might be copied, on the whole I prefer travelling in my own country to any other, and, therefore, when one sees such very grave charges, one has a sort of misgiving that there is some mystery behind it all.
In studying the noble Lord's speeches I find it very difficult to know what it is 555 he is attacking; his line of attack is so extremely broad that one does not detach the particular point upon which he wants to concentrate. Sometimes it seems to me to be the Managers, then there is that class which is roughly called the officials, then there are the shareholders, then the engine drivers and the employees, and lastly there is the Government. The noble Lord jumps from one to the other, and it is very difficult to ascertain what exactly it is that he complains of. The noble Lord who has just preceded me, who speaks with very great authority on railway management, has replied to the noble Lord, Lord Monkswell, on the question of the management of railways, and it certainly is not the business of His Majesty's Government to go into that question at all. As to whether they suppress criticisms by a sort of bribe by advertisement or not I do not know. Why should they? It is unlikely, it seems to me. I notice from time to time in the newspapers that complaints about travelling are aired like complaints on any other subject.
Now as regards the control by shareholders. There again I find the matter rather difficult. The noble Lord in some of his utterances seems to want to have greater control by the shareholders, but in the interview which he gave to the Evening Standard—the noble Lord will see how carefully I have followed all his sayings on this question—he said that shareholders do not know one end of an engine from another, so I do not see that their further control of the railways would be very advantageous. My business is to reply to his criticism so far as the Government are concerned. I am not going back to 1921. His Majesty's present Government are not responsible for what happened then, nor for the advent of Sir Eric Geddes and the various railway officials who accompanied him. That is past history and I think the noble Lord has told us about it on several previous occasions. But I would assure him that in so far as there is any Government control it is exercised judiciously, and there are occasions on which improvements can be suggested and advice can be given.
Not only is the Royal Commission on Transport sitting, before which the noble Lord himself has given evidence, but there is the Automatic Train Control Committee, appointed by the last Government, 556 which has been sitting for the last two years and is about to issue its Report. That Committee has been examining appliances and inventions and is going to make practical suggestions within a very short time. Then the present Government have set up a Committee to examine the question of main line electrification, and the Standing Committee on Mineral Transport has under consideration at this present time the question of increasing the capacity of wagons used for coal traffic to twenty tons. In addition to that, in connection with the schemes which the Lord Privy Seal has been drawing up, some of the railway companies have come forward with projects for further development, and they will accordingly get financial support from the Exchequer for those schemes. Therefore touch is kept not only by the Railway Rates Tribunal but by these various Committees between the Government and the railways.
But I think it should be recognised that the railways have gone through a very serious time since the War. The advent of the very keen competition of motor traction has undoubtedly made a very serious difference to the railways. If they were on the down grade, perhaps we might listen to the noble Lord who introduced this Motion with greater attention and feel that some great move ought to be made; but I think it may interest your Lordships if I give a very few figures to show that there is not any cause for grave apprehension so far as the railways themselves are concerned. The falling off in the number of passengers has been checked, but at the same time the receipts from passengers have dropped. This is due to the fact that there has been a very great increase in cheap tickets. Two-thirds of the passengers carried in 1929 travelled at specially reduced fares. In 1929 for the first time the receipts from specially reduced fares exceeded those from ordinary fares. An indication of activity on the part of the railway companies is that the number of passenger train miles run by the railways in 1929 exceeded those of previous years. Perhaps I may be allowed to give the figures because they are of some significance. The number of train miles on all railways during the year 1929 was 427,000,000 odd whereas the previous highest figure in 1928 was 416,000,000. 557 That at any rate shows an endeavour on the part of the railways to do all they can not only to serve the public interest but to see if the keen competition of motor traffic can be met.
The noble Lord always brings out in his speeches the question of speed. Well, I do not pretend to be an expert on that question, but I have a friend who is an engine driver as well as a Member of Parliament and I have very closely questioned him on this point of speed. I have also other sources from which I can get some sort of information. I can assure the noble Lord that he is labouring under a misapprehension if he thinks that in a very short space of time British railway express trains can be made to run at from 80 to 100 miles per hour on the average. There would have to be many adjustments with regard to rails, with regard to bridges, with regard to the capacity of engines and the weight of trains, and even if all that were done—this is a point which seems to be frequently forgotter—the layout of the railway lines in this country is very different from that in any other country. Not only are we a very small country, but we are very highly industrialised, and every twenty or thirty miles you have sidings where freight trains and merchandise and minerals obstruct the way. Even if it were desirable, I do not think it would be practicable and I hope that in his future speeches the noble Lord will drop that part of his programme. I myself believe that this mania for speed by which humanity is seized at the present moment will pass away. I dare say it may not pass away in our generation, but it will in a generation or two, because I am perfectly convinced that humanity will soon recognise that being projected from one part of the country to another, or from one part of a town to another, in a very short space of time is injuring our nerves and preventing our capacity for accomplishment.
Another point which the noble Lord has raised is a technical point, that of making up time. He is convinced that it should not be left to the discretion of engine-drivers to make up time, but that there should be regulations issued by the management telling engine-drivers that time must be made up between various points.
§ LORD PONSONBY OF SHULBREDESubject to all proper speed restrictions. Well, my information is that if there were any regulations to that effect they could not be carried out, that suddenly making a locomotive go at a greatly increased speed, feeding the engine with additional coal very rapidly, would not only mean great extra cost but might produce a sediment of clinker in the fire box that would very likely prevent the engine from going at the pace at which it was going. I see that the noble Lord laughs at what he thinks is my very inexpert way of treating this matter.
LORD MONKSWELLThe noble Lord must forgive me, but after all I have been studying the question all my life.
§ LORD PONSONBY OF SHULBREDEI quite recognise that the noble Lord has been studying the question all his life, but my information comes from a man who has been driving an express train most of his life.
§ LORD PONSONBY OF SHULBREDEI should think probably he did.
§ LORD PONSONBY OF SHULBREDEHe is an engine-driver.
§ LORD PONSONBY OF SHULBREDEI will not enter into controversy with the noble Lord, because I am sure that, with his expert knowledge, he would defeat me. But I think he is waging a battle quite alone when he says that British express trains should be driven at an average of 80 or 90 miles an hour. I should not have embarked upon this had it not been so frequently referred to in the noble Lord's speeches. His real charge, which I am here to answer, or rather his chief charge against the management of British railways is that the organisation is wrong and that no reform from inside, as he said just now, is possible.
Perhaps there may be arguments to be brought against the present form of man- 559 agement. I am very reluctant to embark on the great principle which really underlies this debate, but perhaps I may be allowed to say a passing word on the subject. I think that undoubtedly, as time goes on, it will be proved that a great national service of this character should be under public control. I think that will be recognised in time to come. I speak of public control, not meaning bureaucrats, officials, Members of Parliament, Ministers and Governments, but in the sense in which my hon. friend the Minister of Transport put it the other day in another place when he said that it should be made accountable to the nation, but that the day-to-day management of the undertaking should be left in the hands of a limited number of first-class business men, employed by the community and encouraged to run the concern with all the vigour of a commercial and business enterprise. I think that we shall possibly find, in a shorter time than some imagine, that this will be the proper way to manage the great railway services of this country. When that step is taken and when the proposals are made in your Lordships House from this Box, I hope that the noble Lord who moved this Motion will feel that his efforts have not been in vain and that his great ambition has been achieved, and I hope that he will give us his very hearty support.
LORD MONKSWELLMy Lords, I do not want to keep your Lordships. If I began talking I should go on talking all night, so I shall be as quick as I can. With regard to Sir Henry Thornton, I never made the slightest pretence that I was in communication with him or knew anything about his speech except what I read in the Evening Standard. I put it in my Motion that the words of Sir Henry Thornton to which I wished to draw attention were quoted from the Evening Standard and I simply left it at that, but if the Evening Standard have got them wrong I am sorry. I must leave it to the Evening Standard to fight it out with Sir Henry Thornton. I simply wished to draw your Lordships' attention to these words, which, on the face of them, expressed extremely strong dissatisfaction with the present management of British railways. Beyond that I know nothing. They were certainly very largely in accordance with a great number of things which I have myself 560 noticed and have previously ventured to put before your Lordships' House.
It is rather difficult to know how to treat the Government in this matter. The noble Lord gets up and says that my views are so immensely wide that it is impossible to deal with them. The fact of the matter is that there is a great deal that is wrong, and it is not very much use drawing attention to small particulars. I cannot ask your Lordships to come here and listen to a debate on one particular subject. The fact of the matter is that the railways made an exceedingly good start. From about 1825 to 1850 they went ahead, just as the motor industry has been going ahead up to the present time. About 1850 stagnation settled down. The railways found that they were so immensely superior to every other means of transport that they could put their heads together and say to one another: "We will do as nearly as possible nothing for ever and ever." That is what has been going on. I have several times said that what it really means is that, in the last eighty years, from 1850 onwards, the progress effected by the railways is perhaps reasonably sufficient for thirty years. That leaves about fifty years' progress that simply has not been made at all.
I am sorry that the Government completely refuse to listen to what I say. I am perfectly ready to talk with the noble Lord privately if he will listen to what I say, or I will do anything I can. The fact of the matter is that the thing is being boycotted. I have come here and have given your Lordships in the fullest possible detail all kinds of facts about the safety of trains and other matters, and I have expressed myself ready to do anything that I can. All that happens is that the representative of one Government after another gets up and says that they are not going to have anything to do with it. No doubt the noble Lord who replied to me to-day is at a disadvantage. He appears to have a friend who is an engine-driver. If he has one friend who is an engine-driver, I have probably fifty, and not only engine-drivers but a lot of engineers who do the actual designing of engines, a lot of inspectors, and all sorts of other people. I have read every technical book about the subject, and when I venture to speak about these things I know what I am talking about. I do not think I really need take seri- 561 ously what the noble Lord said on the subject of speed, of making up time and that sort of thing. If I got into that subject it would take a very long time. I have done it before and I hardly feel that I can take up any more of your Lordships' time, so I will leave it at that.
There are one or two little points that I should like to touch upon. I noticed that the noble Viscount (Viscount Churchill) said "Hear, hear" when I said that I was going to stop. I should like to say one thing to him. It is a curious thing that he comes and listens to me time after time, but the only time that he got up and said something for himself was four or five years ago when I raised this subject. One of the questions that I raised was why railway companies did not provide third-class sleeping carriages. The only thing that the noble Viscount ever told your Lordships was that the railways could not provide third-class sleeping carriages because they cost too much. I think that was in 1925. In 1928 the Great Western Railway, in common with the other railways, introduced third-class sleeping carriages, the one thing the noble Viscount told us could not be done. I will not say anything more about that. Within three years third-class sleeping carriages were there.
Perhaps I might be allowed to remind the noble Viscount of what this railway has done, because, frankly, the Great Western Railway is streets ahead of any other railway. Their new train from Swindon is quite a good train. I do not think I shall be betraying any confidence if I say that I have practically been officially informed by the Great Western that in consequence of what I said they issued orders to their drivers to make up time, of course under the strictest possible measures of safety. That has been done, so really, to a very great extent, I am in accordance with the noble Viscount and I am very glad indeed that he has taken so many progressive steps.
With regard to the remarks of the noble Lord, Lord Banbury, I have the greatest 562 possible regard for him. I believe in about nineteen cases out of twenty, in politics and everything else, we see practically eye to eye. I do not think I have anything to complain about with regard to what the noble Lord told us. He told us a great many interesting things about directors, but, although they were interesting, and we are grateful for the information, they had no real bearing upon what I said. I have reason to believe that in certain respects even in regard to railways Lord Banbury and I see eye to eye, and therefore I do not think that there is a great difference between us.
As to the remarks which fell from the noble Lord who answered on behalf of the Government, and from other noble Lords who have spoken, they really only amounted to skating round the question and did not touch upon the important points raised by myself. As to the question of £180,000 a year, which I stated was spent by the North Eastern Railway on advertisements, I got those figures from a report of a lecture printed in a paper called Modern Transport. It was a lecture delivered by the General Manager of the North Eastern Railway. As to the Great Western spending only £12,000 a year, I do not know anything about it. I merely calculated upon a proportional basis for other railways, but it was definitely stated in Modern Transport that the North Eastern Railway Company was paying £180,000 a year in newspaper advertisements, quite apart from the wonderful posters which we have seen. If desired I can give the reference. I beg leave to withdraw my Motion.
§ Motion, by leave, withdrawn.
§ PORTSMOUTH CORPORATION BILL. [H.L.]
§ SHOREHAM HARBOUR BILL. [H.L.]
§ PORTSMOUTH WATER BILL. [H.L.]
§ Committed: The Committees to be proposed by the Committee of Selection.
§ House adjourned at twenty-five minutes past five o'clock.