Edwin A. Pratt

“ It is not a case of making the no-sea-competition places pay a rate in itself unreasonable; it is simply a case of charging the sea-competition places no more than they would be likely to pay. There may be an apparent inconsistency; but an increase in the rates where the sea competition exists would not necessarily be of advantage to the trader in the district where there is no such competition, though it might lead to the traffic going by sea, and involve the railway company in a loss of revenue which would not improve their position in giving the best possible terms to the inland trader. ”

“ The original idea that railway rates and charges should be fixed on a mileage basis, on the same principle as tolls on turnpike roads and canals, was soon found to be impracticable, and successive Parliamentary Committees have demonstrated its futility; though its advocacy, in one form or another, has not even yet been discarded by those who think that railway rates for any given commodity should be so much per ton per mile for all traders alike, irrespective of distance and all other considerations. ”

“ The rates are governed by the nature and extent of the traffic, the pressure of competition, either by water, by a rival route, or by other land carriage; but, above all, the companies have regard to the commercial value of the commodity, and the rate it will bear, so as to admit of its being produced and sold in a competing market with a fair margin of profit. ”

“ Whenever any person receiving, or sending, or desiring to send goods by any railway is of opinion that the railway company is charging him an unfair or an unreasonable rate of charge, or is in any other respect treating him in an oppressive or unreasonable manner, such person may complain to the Board of Trade. ”

“ The principal cause of the comparative absence of litigation lies in the fact that a law of railway traffic is being gradually evolved, reasonably considerate of the rights of both parties, and adapted to the actual circumstances of the traffic. ”

“ The excellent work carried on by the society is calculated to confer, in many different directions, much more benefit on market gardeners, dairy farmers and agriculturists in general than would be gained by them simply from seeking to persuade, or even to force, the railway companies to carry at wholly unremunerative rates the small consignments of non-associated producers, forwarded under the least favourable conditions in respect to economical transport. ”

“ The rates for traffic between Newcastle and London, or any other two ports, will necessarily be influenced, if not controlled, by the possibility of the commodities going by a coasting vessel if the railway company should try to get more than, in these particular circumstances, such traffic will bear. The amount of the railway rate in such a case as this will, in fact, be determined far more by the element of sea competition than by any question as to either presumptive cost of service or actual mileage. ”

“ No basis exists on which the most expert of railway men could decide the respective costs of transport for each and every article in a train-load of miscellaneous goods, nor could any one apportion the exact amount that each should bear in regard to interest on capital outlay and other standing charges which must needs be covered as well as the proportionate cost of actual operation. ”

“ The "tapering" railway rate—in addition to giving the companies a greater volume of long-distance traffic, and bringing greater prosperity to the long-distance places—thus helps to establish equality in the general conditions in regard to a particular market, whereas the equal mileage rate would keep the distant trader to markets within a circumscribed area, and shut him out from others at which he might otherwise hope to get a far better sale. ”

“ In the United States the effect of this "tapering" rate, when applied to large volumes of traffic carried for distances of 1000 or 2000 miles or even more, is to give a very low average rate per ton per mile, and especially so when such average is worked out for the whole of the goods and mineral traffic in the country. The United States average is, in fact, for these reasons, much lower than the corresponding average for this country, where both the average haul and the average weight per consignment are considerably less. ”

“ The companies each do their best to meet the circumstances of the trade, to develop the resources of their own particular district, and to encourage the competition of markets, primarily, no doubt, in their own interest, but nevertheless greatly to the advantage of the community."
The application of the principle is worked out by the division into various classes of all minerals and merchandise carried on the railway. The classes are known respectively as A, B, C, 1, 2, 3, 4, 5, the rates charged being lowest for commodities in Class A and highest for those in Class 5. ”

“ In effect, no British railway rate may give a preference to foreign as distinct from British produce so far as quantities, conditions and circumstances are the same. The rates are to be available for like consignments whatever the source of their origin. Where the home producer has been unable to provide the same quantities, under the same conditions and circumstances as the foreigner, he has equally been unable to avail himself of a rate open to all the world. ”

“ While the plea of the companies in respect to shortness of time was abundantly warranted, the counter-allegation of the traders would appear to have been not without foundation, in view of the fact that the setting of increases against the decreases was defended by the companies on the ground that, being corporations based and operated on commercial principles, they were bound to see that their revenue did not suffer, while, it was further pleaded, they were still charging no more than the rates which, having been expressly sanctioned by Parliament, were, presumably, reasonable. ”

“ Each rate is made up of two parts—conveyance and terminals. The conveyance scales for all companies are as near alike as circumstances will allow, and the maximum terminals (station terminal at each end and service terminals in respect to loading, unloading, covering and uncovering) are common to all the Confirmation Acts.
Sir Henry Oakley, who was at this time acting as secretary of the Railway Companies' Association, declared concerning the new conditions thus brought about in regard to the bases of railway rates and charges that "practically they amounted to a revolution." ”

“ Traders dealing in commodities of the latter type do not themselves lose by the fact that minerals, raw materials, or other things are carried at rates which, although exceptionally low, are the most they can be expected to pay. No injustice is done to them because the other classes of traders concerned get lower rates than they do themselves. They may even gain—directly, because they are saved from having to cover a larger proportion of the total railway expenditure ”

“ The question is certainly complicated by the fact that the wholesale man here in question is generally a foreigner; but the railway companies could not be required to discriminate against him, and to penalise him on account of his nationality. The matters at issue must needs be looked at from the point of view of a business proposition rather than from that of expecting the railway companies to usurp the functions of the State in carrying out a policy of Protection. ”

“ Much of the adverse criticism of railway rates and charges which has been indulged in of late years, without even any resort to an inexpensive complaint to the Board of Trade, has been due to comparisons with railway conditions in other countries. ”

“ Turnpike trustees had always had full power to reduce and subsequently to advance their tolls, at their own discretion, provided they never sought to exceed the maxima imposed under their special Acts; and down to this time it had been assumed that railway companies had similar powers in regard to maxima which Parliament had already expressly sanctioned in the Act or Acts of each individual company. ”

“ Other apparent anomalies arise from the fact that where two or more railway companies have lines running to the same destination, the rates charged by each and all of them are, by arrangement between the companies concerned, generally governed by the shortest distance. ”

“ Complaint is first to be made to the Board of Trade, and, if agreement between the trader and the railway company should not follow thereon, the trader has the right of appeal to the Railway Commissioners, to whom jurisdiction to hear and determine such complaint is given. ”

“ Whether traders have really gained any balance of advantage from this further outcome of legislative policy in the assumed protection of their interests, as against the railway companies, is open to question. On the one hand they have a guarantee against increases that offer even the slightest suggestion of unreasonableness. ”

“ While, also, the rates for the low-value articles may not cover every item in the so-called cost of service, they do contribute to the revenue an amount which might otherwise have to be made good by the fixing of higher rates on goods in other classes. ”

“ How the general principle of a sliding scale, under which the charge per ton per mile decreases with distance over twenty miles, works out in practice may be shown by taking the case of merchandise in Class 5, the rate for which would be 4.30d. per ton per mile for a distance of up to twenty miles. ”

“ As the railways extended, and began to deal with the great bulk of the commerce of the country, these original lists were found to be hopelessly crude and inadequate, and one of the duties undertaken by the Railway Clearing House, first set up in 1847 and incorporated by an Act of 1850, was the preparation of what became known as the Clearing House classification—a work required in the interests equally of the railways and of the traders. ”

“ On the Belgian State railways, for instance, there are special rates for 50, for 100 and even for 300-ton consignments which can obviously be taken advantage of by only a limited number of traders. But while the retail man cannot expect to get the same terms as the wholesale man, there is no adequate reason why the wholesale man should be kept to the same level as the retail man, and be refused the lower rates for his consignments to which he is entitled on account of their greater bulk or better loading. ”

“ The principle here involved disposes of, probably, most of the complaints which have been made from time to time on the subject of undue preference; but as these complaints were especially rife in 1904, a Departmental Committee, presided over by Lord Jersey, was appointed by the Board of Trade to inquire whether or not the railway companies were according preferential treatment to foreign and colonial farm, dairy and market-garden produce from ports to urban centres as compared with home produce. ”

“ The Board of Trade, if they think that there is reasonable ground for complaint, may thereupon call upon the railway company for an explanation, and endeavour to settle amicably the differences between the complainant and the railway company. ”

“ They gave the assurance, however, that the rates were still undergoing revision, and that the increases made were not necessarily final. They further undertook that no increases should be made which would interfere with trade or agriculture, or diminish traffic, and that, unless under exceptional circumstances, there should be no increases at all which exceeded by five per cent the rates in force in 1892. ”

“ Even when these results do not follow, the commodities carried at these low rates may help to develop the resources, or to expand the population, of a particular district, and thus serve to create traffic in other directions. ”