§ LORD MONKSWELL had the following Notice on the Paper:—To draw attention to the grievances of shareholders in British railways and to the obstacles which hinder them from taking organised action to remove these grievances; to ask His Majesty's Government whether they will take steps to facilitate organised action on the part of the railway shareholders so as to put the railway shareholders in as favourable a position to enforce their demands as is now occupied by the railway servants' trade unions; and to move for Papers.
§ The noble Lord said: My Lords, it is unnecessary for me to trouble your Lordships with detailed figures with regard to the financial position of the railway shareholders and the railway servants, and the reaction upon the public finances and national industry which the present arrangements exercise. The broad facts are known to everyone. They are approximately as follows. Up to about 1910 the railway servants were paid what their work was worth in the open market. Rates and fares were on the high side but were not high enough seriously to hamper trade and industry, and the shareholders received a moderate return on their investments. After 1910 economic wages for the railway servants were gradually superseded by political wages. At the end of the War no trace of economic wage-rates was left. Taking hugely increased Government subsidies into consideration, since about 1917 the railway servants have received wages and subsidies with a purchasing power, measured in commodities and services, between two and three times as great per man as they received before 1910. Hours of work have been much reduced in the same period, so that, in spite of the somewhat improved methods that have been introduced, each man does about the same amount of work as he did before. That is to say, his services to the public have changed little and he receives from two to three times as much for them as he used to receive. The loss is divided be- 905 tween industry, which is bled at every turn by excessive transport charges, and the railway shareholders, many of whom have ceased to receive any interest at all upon their holdings. The excessive wages of railway servants are certainly one of the major causes of unemployment.
§ There are in this country somewhere about the same number of railway shareholders as of railway servants. One party is treated as prey to suffer plunder and extortion; into the pockets of the other is constantly poured a heavily swollen stream of public money which it has not lifted a finger to earn. Obviously the reason for this state of things is that the railway servants are organised in trade unions which are prepared to take drastic action to extract the uttermost farthing from the shareholders and users of the railways, while the railway shareholders have for all practical purposes no organisation at all. At the present time things are so arranged as to raise the most formidable and unfair obstacles when any body of shareholders attempts to take action.
§ The railway servants are organised and represented by trade union officials, who I do not suppose would themselves pretend that they give a thought to the solvency of the country. Apart from the political objects of trade unions, which I need not now discuss, the object of these people is to raise wages and diminish hours of labour, without any regard for what may be the result of their proceedings. I have no desire to suggest that trade union officials do not sincerely believe that they are acting in the best interests of the members of their own organisations, but their ideas are so crude and so limited that their very sincerity and honesty make them a public danger. They evidently have no conception of the conditions necessary for maintaining civilisation, which I suppose are, roughly, Os follows: Civilisation is based upon a plentiful production of goods and services due to co-operation and to the use of machinery of all kinds. This machinery is constantly wearing out or being superseded by something better and, if civilisation is to continue, must constantly be renewed. Regularly, therefore, every day, every month and every year, enough money must be saved to pay for this renewal. There are two possible ways of doing this. It can be done by allowing thrifty people to save, or it can be done 906 by forcing people under penalty to produce more than they require to keep themselves alive and to hand over the surplus to the State—in other words, by slavery.
§ Our present system of paying the whole of the working classes more than they earn and covering the loss by confiscating the capital of the thrifty and spending it as income, must necessarily come to an end when there is no more capital left to be seized, and cannot possibly become a permanent arrangement. All this can hardly be called economies. It is in the nature of simple arithmetic, but to the trade unions it is so much Greek. If the working classes were in the habit of saving and investing their money, there would be rather more to be said for artificial scales of wages. It might then with a certain amount of plausibility be represented as a transference of wealth from one set of people to another. But there is no pretence that this is the case. The whole idea of the trade unions is to get the money and encourage their members to spend it unreproductively, to urge them to raise their standard of living by spending their increased and unearned wages in ways that do nothing to facilitate the production of material wealth in the future. So far as I can make out, the whole of the working classes of this country, say nine-tenths of the population, in spite of the fact that for at least twenty years they have received wages and subsidies hugely swollen by political pressure, have saved so little that they possess at the present time only about one-tenth of the national wealth. As nearly as I can calculate, this means that they have saved well under 1 per cent. of their wages, and in wages, of course, I include subsidies. I am not putting forward these figures in blame of the working classes. I wish neither to praise nor to blame, but to get at the facts as they bear upon the Motion which I have ventured to bring before your Lordships.
§ I come now to the shareholders. They are supposed to be represented by the boards of directors. I need not ask your Lordships to listen to an examination of the functions of British railway directors. I pass straight on to the railway officials and leave out the directors altogether. It is impossible to attribute to the directors any serious influence. 907 With the rarest exceptions they have neither the time, the knowledge nor the opportunity to exercise influence. For all practical purposes the control of the railways is in the hands of the railway officials. The railways belong to the shareholders and are administered by the railway officials who are the shareholders' paid servants. To guard the interests of the shareholders is just as much the primary duty of the railway officials as that of the trade union leaders is to guard the interests of the railway servants. Just as capital and labour are indispensable for bringing into existence and working the railways, so should the shareholders and the railway servants have equal rights in claiming their shares of the earnings. If railway officials were as diligent in the service of their employers as trade union leaders are in the service of the men, this arrangement should produce a very satisfactory balance; but, unfortunately, an indispensable preliminary is that both sides should be equally well organised. The railway shareholders should have exactly the same facilities for striking on their own account, and for breaking strikes of the railway servants, as the trade unions have of ordering strikes and forcing unwilling men to strike in sympathy. If shareholders were properly organised they could do this. As it is they can do nothing because they are not organised at all.
§ The railway officials, like most other people, desire first and foremost a quiet life for themselves. It would be a perfectly simple matter for them to organise the shareholders at least as strongly as the railway servants are organised; but it would need trouble, energy and, I am afraid I must add, a sense of duty to their employers which is conspicuously absent in the great body of railway officials. The bright exceptions, which I am glad to recognise undoubtedly exist, are too few to exert any serious influence. Till the railway shareholders are strongly organised and prepared, if necessary, to produce at short notice large bodies of able-bodied men and women ready in an emergency to run a skeleton service, there is no chance that their grievances will receive consideration. The railway officials, far from helping them, appear to be ready to go all lengths to prevent the railway shareholders from getting organised, and this obstruction is powerfully assisted by the law as it stands. I 908 happen to know a good deal about this, as, some years ago, I did my best to help a movement for organising the shareholders of the Southern Railway. If any one desires to organise the railway shareholders to take action at a general meeting he has first of all to give very long notice—three months I think it is. The secretary, that is to say, the railway officials' mouthpiece, is not hound to furnish up-to-date lists of shareholders, nor the amount of stock which each shareholder possesses. The distribution of any circular addressed to the shareholders by people desiring to oppose the board has to be paid for entirely by the people sending it out, whereas the board can send out their circulars at the company's expense. All proxies are counted by the secretary, that is to say, by the railway officials themselves, and the opposition are not allowed to have a representative present during the counting or to check the results in any way.
§ The railway officials in fact can do exactly what they please without being accountable to any one, and I can assure your Lordships that the railway officials use their powers to the full. The result is that, so long as these rules remain as they are, the difficulties in the way of any body of shareholders who wish to overrule the railway officials are insuperable. The railway officials, perceiving that the railway servants have a powerful organisation and that the railway shareholders have practically no organisation at all, have not hesitated to throw in their lot with the strong, and to treat the weak with contempt and neglect. The railway shareholders in fact have not the ghost of a chance of justice till they set to work to help themselves. Their real enemies are the railway officials, and the shareholders are most unfairly hampered by obsolete and absurd rules, which apparently have the sanction of law, in any attempt which they may make to defeat their enemies.
§ I would suggest that legislation on some such lines as these would meet the situation: any body of, say, not less than 100 shareholders in one of the four big railways holding between them capital to a certain specified amount, say, £1,000,000 in ordinary shares, should be given the following Rowers: (1) They should be entitled to 909 receive all information known to the secretary as to the names and addresses of all shareholders in the company and the amount of their holdings; (2) they should be given all the rights now enjoyed by the board to issue circulars to the shareholders at the company's expense; (3) they should be given the right to appoint representatives to check the results of all voting by proxy. I beg to move.
§ LORD TEMPLEMOREMy Lords, the noble Lord was good enough to write to the Department for which I have the honour to answer in your Lordships' House, setting forth the proposals which he meant to bring up to-day, for which I am grateful to him. I do not think it would be relevant to this Motion, I think your Lordships will agree, for me either to go into the question of the wages and hours of railway servants, or to defend trade union officials, which is probably better left to noble Lords opposite, or to go into the very interesting economics with which he entertained your Lordships' House during the' first two or three minutes of his speech. But to start with, I hope that the noble Lord will appreciate that His Majesty's Government cannot accept general statements which he has just made of the kind impugning, as they appear to do, the conduct of the boards of directors and of the officials of the railway companies. If he has in his mind ally specific grievance or instances of steps which have been taken by the directors and the officials to prevent railway shareholders from taking action to remove any grievances which they consider that they have, his proper course would appear to be to bring the facts of that particular case before the Government, seeing that railway companies are statutory companies and derive their authority from Parliament. At the same time, I should like to emphasise that as far as the staff are concerned, the establishment of a sense of identity of interest between the railway undertaking as a whole and its employees is not necessarily undesirable: in fact, to my mind and to the mind of His Majesty's Government, it is an eminently desirable state of things. It can certainly not in my opinion be maintained that the railway officials invariably side with the employees against the shareholders. If that were so, 910 elaborate arrangements, such as those made for conciliation machinery in matters of wages and so forth, would never have come into existence.
The noble Lord asks in his Notice whether His Majesty's Government will take steps to facilitate organised action on the part of the railway shareholders so as to put the railway shareholders in as favourable a position to enforce their demands as is now occupied by the railway servants' trade unions. In the absence of details as to what these particular demands may be, it is rather difficult to deal with the suggestion, but if the suggestion is that the demand of a minority in regard to policy or administration is to prevail over the demand of a majority of the shareholders, it is most clearly quite unacceptable, while if the suggestion relates to facilities for the organisation of shareholders for the purpose of giving expression to their opinions, it is difficult to see what justification there could be for the shareholders of railway companies being placed in a privileged position as compared with the shareholders in a company registered under the Companies Acts with regard to the affairs of such a company.
I understand that the noble Lord contemplates that there are three directions in which extended powers should be conferred on railway shareholders. First of all, that railway shareholders should be given the right to know the names and addresses of all shareholders in the company and the amounts of their holdings. I should like to remind the noble Lord—he is very well up in these matters, but it is a matter that he may have overlooked—that Section 10 of the Companies Clauses (Consolidation) Act, 1845, which is applicable, speaking generally, to all railway companies, provides that a register of shareholders called the Shareholders' Address Book shall be provided, and that every shareholder may peruse the register gratis and may further require a copy or part thereof at the rate of sixpence per one hundred words. The right conferred in this section goes at least as far as that conferred on shareholders in companies registered under the Companies Acts by Section 98 of the Companies Act, 1929; and it may be noted that by the Great Western Railway (Additional Powers) Act, 1924, and other Railway Acts of that year, a card index or other approved 911 index may be substituted for the address book and the charge for copies suitably adjusted. It is admitted that shareholders in railway companies do not have the right to inspect (except as regards consolidated stock) a list of the share holdings which, in the case of an ordinary company, is available to the public on demand of a small fee. It should be borne in mind that the value of a list of share or stock-holdings is discounted by the fact that the names may be those of nominees and not of the actual beneficial owners.
The noble Lord's second suggestion is that shareholders should be given all the rights now enjoyed by the board of directors to issue circulars to the shareholders at the company's expense. There is no provision in the Companies Act, 1929, giving the shareholders the right to issue circulars at a company's expense. It is hardly necessary to give in detail the obvious objections to such a provision. No company could prosper in which any section of shareholders, not responsible as are the directors to the shareholders as a whole, were able at their own will to incur expenditure. There is, of course, no provision in the law to prevent circulars being sent out by shareholders to other shareholders at their own expense; and it is interesting in this connection to note that under Regulation 47 (2) of the London Transport Regulations it is provided that in the event of an application by the shareholders to the High Court for the appointment of a Receiver, the applicants
may send by prepaid envelope (to be addressed and posted by the appropriate registrar, if they so require, on payment by them of the reasonable costs thereby incurred by the registrar) to the holders of each or any class of stock, a statement of the grounds on which such application has been made, with or without a form of proxy.The noble Lord's third suggestion is that shareholders should be given the right to appoint representatives to check the results of all voting by proxy. This appears to His Majesty's Government to cast an unjustifiable doubt on the good faith of railway officials and directors. The powers suggested do not exist under the Companies Act, 1929, in the case of ordinary companies, and it is conceivable that such a power could be used by a small minority of dissentient shareholders 912 gravely to hamper the business of the meeting. If shareholders are dissatisfied they can, by attending the general meeting, or by appointing proxies, at any rate voice their opinions in such a way that the directorate is bound to take notice of them. I have, I think, dealt as far as I am able with the noble Lord's suggestions. I am afraid I have no Papers which I could lay, but in conclusion I would like to say that His Majesty's Government do not consider that railway shareholders suffer under any disability, in comparison with shareholders in other companies, and they are not prepared to adopt the suggestions which the noble Lord has made.
§ LORD DARYNGTONMy Lords, I do not wish to touch on the general question, but I would like to say one word with regard to what the noble Lord said in reference to the fact that shareholders have no one at their backs. I happen to know of the British Railway Stockholders Union. I recognise that it has not the strength of a trade union, but it is an important body, and is really supported by important people. In this House, for instance, I may mention Lord Gladstone, Lord Jessel and Lord Exeter, who are on the council. If shareholders really wish to assert their rights they have opportunity of joining a union of that kind.
LORD MONKSWELLMy Lords, I am obliged to the noble Lord, Lord Templemore, for the trouble he has taken in giving an official answer to my Question. I can really regard it as nothing more than the ordinary smoke screen of officialdom. The Government apparently find it convenient to shut their eyes to the most ordinary facts, and simply give us the official attitude. Of course, everybody knows perfectly well that things are as I have stated, but I will not attempt to argue with the noble Lord. All of your Lordships must be aware that the official view is really untenable. For instance, there is the question of minority shareholders. The noble Lord asks: How can you give a minority of shareholders any of these rights? The fact is that the railways now are entirely run by a minority, for it is the officials and the board, who put up a smoke screen, and they can send out to all their friends, who are big shareholders, proxy 913 forms at the company's expense, and anyone who wishes to take action against them has to send out circulars at his own expense. It is a perfectly impossible position. I did not expect any other answer from the Ministry, and I really brought this Motion forward more in the hope that it might ventilate the subject. With regard to what Lord Daryngton said, I know all about the British Railway Stockholders Union, and in fact I was talking to the secretary about it yesterday, but as I then told him I do not regard that union as at present capable of exercising any influence at all. I hope it may be different in the future.
§ LORD DARYNGTONMay I say that Mr. Whitelaw; the Chairman of the North Eastern Railway, addressing his shareholders, mentioned the union as of importance?
LORD MONKSWELLI was shown a copy of what he said, but while parts of Mr. Whitelaw's speech were satisfactory, there were other parts which I did not think satisfactory at all. I do not, however, wish to detain your Lordships, and in the circumstances I am prepared to withdraw my Motion.
§ Motion for Papers, by leave, withdrawn.