Chapter XVII: Act 18: Geo. II., c. 33, provided, among {50}other things, that the streaks (14)

In England and Wales there is a separate assessment of a railway for each and every parish through which it passes. Such assessment is divided into two parts: (1) station and buildings, and (2) railway line. The former, arrived at by a per centage on the estimated capital value of buildings and site, is a comparatively simple matter. It is in regard to the latter that the complications arise. The main consideration in each case is the amount of rent which a tenant might reasonably be expected to pay for the property assessed; and such {369}presumptive amount is arrived at in regard to the lines by calculating the amount of net earnings the railway is able to make through its _occupation_ of the particular length of line that passes through the parish in question, and according to the actual value of such length of line as an integral part of one concern.

The extent of these net earnings is ascertained, in effect, by first taking the gross receipts on all the traffic that passes through the parish, and then making a variety of deductions therefrom. The cost of construction of the railway does not enter into consideration at all. The calculations are on what is called the "parochial earnings principle"--that is to say, the amount earned _in_ the parish, and not the amount received from traffic arising in the parish. The railway company may have no station in the place, and the amount of traffic derived from the parish may be practically _nil_; but the assessment of the line, on the basis mentioned, is followed out, all the same.

The main principle is the same in Scotland and Ireland, but with this important difference in detail: that in each of those countries a railway is first valued as a whole, the total value being then apportioned among the several rating areas.

It will be seen that the taxation of a railway line--as distinct from that of railway buildings--is, to all intents and purposes, the enforcement of a toll, on all traffic carried, for the privilege of passing through the parish concerned; while there is no suggestion, as there was in the case of turnpike roads, that those who collect the toll confer an advantage on those by whom the toll is paid. The turnpike trustees did provide a road, and they were, also, under an obligation to keep it in order. The toll-payers thus got some return for their money, and, though the trade of the district, or of the country, was taxed, it was, also, directly facilitated by the toll-receivers. The railway company, on the other hand, provide and maintain their own road, without putting the parish to the slightest expense, yet the parish is authorised to levy upon them what is, not only a toll, but a supplementary Income Tax for local purposes, based on the principle of the profits the company are supposed to make in the parish, often only because, for geographical reasons, it is necessary their lines should pass through it in going from one part of the country to another.

{370}On page 114 I have told how, in the early part of the sixteenth century, the local authorities of Worcester, Gloucester and other towns on the Severn sought to raise funds for their local exchequers by taxing the traders who used the river for the transport of their commodities; and I have further told how, in 1532, it was enacted that any person attempting to enforce such toll or tax should be fined forty shillings. But a practice held in the sixteenth century to be unjust in itself as well as prejudicial to the interests of trade, and penalised by the Legislature accordingly, is considered quite right and proper, and receives express legislative sanction, in the twentieth century, though the local authorities upon whom the toll-privilege is conferred to-day may do no more to help the railways than Worcester and Gloucester and the other Severn towns did to help the river traffic--and that was nothing at all.

One result of the power thus given to local authorities to bleed the railway companies as an easy and convenient method of providing themselves with funds is that in a large number of parishes throughout the country a railway company pays the bulk of the rates, even though it may not even have a railway station in the place.

In Chapter IV of my book on "Railways and their Rates" I have given a table showing that in a total of 82 parishes, divided into four groups, the proportion of local rates paid by the London and North-Western Railway Company ranges from 50 per cent to 86.9 per cent, although in 53 of the parishes the company have no station. In a further table I specify sixteen parishes in which the area of the same company's property ranges from four to fifty-eight acres, or from 1.3 per cent to 5.1 per cent of the whole of the land in the parish, while the proportion which the railway assessment bears to that of the entire parish ranges from 66.9 per cent to 86.1 per cent.

Being thus enabled to depend for the greater part of their revenue on railway companies, who are given the privilege of paying but are denied the privilege of representation or of having any voice in the way the money they contribute shall be spent, there are local communities which show the greater readiness to carry out comparatively costly lighting, drainage, education, road improvement or other such schemes because {371}it is a railway company that will pay most of the cost, the proportion thereof falling on the great bulk of the individual ratepayers in the parish being thus inconsiderable. Social reformers tell us of the improvements they find proceeding to-day in village life in England. What is happening to a large extent is that rural centres are providing themselves with urban luxuries at the cost of the railway companies--that is to say, at the cost either of the railway shareholders or of the railway users or both together.

The same tendency may, however, be carried further still.

On the occasion of the coronation of King George and Queen Mary, various local authorities had the less hesitation in voting supplies to defray the cost of festivities out of the rates because they knew that most of the money so voted would have to be paid by a railway company. In a letter to "The Times" of June 3, 1911, on this subject, Mr James E. Freeman, of Darlington, says:--

"The village of Carlton Miniott, near Thirsk, lately held a parish meeting to consider whether the £30 or so that will be spent in local festivities in connexion with the Coronation should be raised by means of private subscriptions or from the rates. It was decided to levy a penny rate, with the result that the North-Eastern Railway Company, which had and could have no voice in the decision, will pay £21 13s. 4d., and the loyal residents, who receive the whole of the benefit, will pay £9 11s. 8d. towards the £31 5s. that is to be expended. At the neighbouring village of South Otterington the keen-witted Yorkshiremen have profited even more from the law's absurdities. They have voted a precept of £30 on the overseers for their merry-making, and of this amount the North-Eastern Railway Company will have the satisfaction of paying a little over £25."

The "Great Western Railway Magazine" for July, 1911, in referring to the same subject, tells of "a parish having the good fortune to have a railway running through one end of it, in which a rate of threepence in the £ has been imposed. This has produced £200, all of which has been spent on eating and drinking in a population of less than 2000, while the governing idea in raising the rate appears to have been that the railway company would have to pay some £70."

Without stopping to discuss the question as to the exact {372}proportion in which the results of this taxation system should ultimately fall on, or be made good by (a) shareholders, or (b) traders and travellers, the policy, if not the justice, of allowing the internal transport of the country, and, therefore, the trade and industry of the country, to be subjected to this abnormal taxation, if not to this actual plundering, by constituted authorities, may well be open to question, and especially so when one bears in mind the already heavy expenditure which has fallen on the companies, and the dissatisfaction expressed, from time to time, by traders with the railway rates, by railway servants with their pay, and by shareholders with their dividends. Certain it is that in the Board of Trade "Railway Returns" all these payments on account of rates and taxes and Government duty are included among the items of "working expenditure," and are deducted from the gross receipts before arriving at the amount of the net income available for dividends or to be taken in account in regard either to reductions in rates and charges or to increases in wages.

There is no suggestion that railways should be exempted altogether from the payment of local rates; but the complicated, anomalous and exorbitant system of taxing the traffic on their lines has long called for amendment.

So far back as 1844 Mr Gladstone's Committee declared they were "satisfied that peculiar difficulties attach to the application of the ordinary laws of rating to the case of railways which give rise to great uncertainty and inequality, as well as to expense and litigation, and they therefore consider that the subject is one which will properly call for the attention of the Legislature when any general measure for the amendment of the law and practice of rating is before it."

In 1850 the unsatisfactory nature of the law and practice in regard to railway assessments was pointed to by a Select Committee of the House of Lords on "Parochial Assessments."

In 1851 Lord Campbell adjourned the case of R. _v._ Great Western Railway Company, and expressed the hope that "before the next term Parliament might interfere" and relieve the court from the difficult position in which they were placed when called upon to administer the existing law {373}with regard to the rating of railways. He added, in reference to the matters arising in the case then before the court: "If we settle those questions we may be considered as legislators rather than as judges, making rather than expounding law."

In 1859 Mr Justice Wightman, in R. _v._ The West Middlesex Water Company, said: "The whole subject matter appears to me to be involved in so much difficulty and uncertainty that I cannot but hope that the Legislature may interfere or make some provision adapted to the rating of such companies as that in question."

Among still other judges who have expressed similar views and indulged in similar hopes may be mentioned Lord Justice Farwell, who, in January, 1907, in the case of the Great Central Railway _v._ the Banbury Union, said: "Fifty-six years ago Lord Campbell protested and implored the Legislature to intervene. His voice was the voice of one crying in the wilderness, and I suppose ours will be equally ineffectual if we make the same appeal."

Then, also, the Royal Commission on Local Taxation, in the report they presented in 1901, made various recommendations in regard to the assessment of railway companies; but the advice of Committees and Commissioners has been no less unavailing than the protests of judges.

Meanwhile, and pending the long-delayed action by the Legislature, the railway companies have themselves done what they could to protect the interests of those they represent, or of those for whose wants they cater, by appealing against excessive and unjust assessments, and in many of these appeals they have been successful. Such appeals have been warranted, not alone by unfair increases of assessments but by the fact that taxation based on earning powers ought to be reduced as those earning powers decline; and on this last-mentioned point the Assessor of Railways and Canals in Scotland is quoted in "The Rating of Railways" as having said:--

"There is the undeniable fact, which the Board of Trade returns amply prove, that the companies are now carrying on their business at less remunerative rates than formerly. The average fare per passenger carried, and the rates per ton for goods and minerals handled, have fallen enormously; while, at the same time, working expenses have been {374}continually going up, mainly owing to the demands for higher wages and shorter hours of employment, and the more stringent regulations of the Board of Trade as to block-telegraph working, brake-power, etc. Further, the increased gross or net revenues could not have been earned without a large capital expenditure for additional and more costly plant. It is well known that what would have satisfied the public twenty years ago would be deemed wholly inadequate to-day. Competition has compelled the companies to advance with the times; engines are now more powerful, carriages more comfortable, in many cases even luxurious; trains are better heated and lighted; continuous brakes and also the newest type of telegraphic instruments for signalling and working have been provided; stations are better furnished and equipped--all of which would mean a greatly increased outlay on the part of a tenant, which outlay he would undoubtedly take into account before deciding what rent he could afford to pay."

The considerations here presented in regard to the general question of railway taxation are strengthened by the fact that, although a railway company is a commercial enterprise, it has not the facilities possessed by commercial enterprises in general in meeting any increase in cost of production or working expenses by an increase in its charges to the consumer, or the person equivalent thereto. In this respect an ordinary industrial concern, producing goods for sale, is a free agent to the extent that it is restrained in its charges only by market and economic conditions; whereas the railway company, producing for sale the service known as transport, may not raise a single rate or charge in regard to the transport of goods without incurring the liability of having to "justify" such increase before either the Board of Trade or the Railway and Canal Commission. It has even been recommended recently by a Departmental Committee of the Board of Trade that like restrictions should be made to apply in the case of increases of passenger fares.

The alternative for a railway company lies in the possibility of reducing expenses; but there are limitations in this direction if perfect efficiency in all branches of the service is to be maintained, and no one would be likely to suggest that these exactions of local authorities should be made good by {375}reductions in, for example, that especially large item of working expenses represented by the wages of railway servants.

What I have said in regard to rates and taxes in general applies no less to the increased financial burdens that would fall on railway companies in respect to the National Insurance Bill. With the main issues presented by that measure I have here no concern; but the difference between railway companies which cannot "pass on" the heavier taxation that all measures of this type involve and the ordinary industrial companies which can should be sufficiently obvious.[57]

Clear, at least, it is that if both the Government and the local authorities continue to pile up these burdens of taxation on transport companies, themselves subject to the restrictions mentioned, the traders of the country cannot expect much relief in the railway rates of which many of them complain. It may be that the primary effect of the financial conditions thus brought about falls on the railway shareholders. It is, also, the case that the traders are well assured against any increase in rates. But the traders suffer a disadvantage as well as the shareholders because, though the railway companies may be prevented from raising their rates, they may, also, find it practically impossible to reduce rates which they would otherwise be willing to put on a lower scale. On the one hand the traders are protected from being charged more. On the other hand they are prevented from being charged less. They may not lose, but they may not gain; and inability to secure a benefit that might otherwise be secured amounts, after all, to the equivalent of a loss. In regard, also, to the wages of the staff, these may not be reduced yet the power of companies to advance them may be curtailed by any undue swelling of working expenses in other directions.

{376}A good idea of the magnitude of the capital, the scope and extent of the operations, and the greatness and variety of the interests concerned in the working even of a single great railway company is given by the following table of what are deservedly called "interesting statistics," drawn up in regard to the Midland Railway for the year ending December 31, 1910:--

Capital expended £121,304,555
Authorised Capital £193,900,517
Working Expenses £7,716,665
Salaries and Wages £5,015,017
Revenues:--
Coaching £4,058,129
Goods, Mineral & Cattle £8,375,673
Miscellaneous £607,581
Rates and Taxes £450,379
Lines owned (miles) 1,680
Constructing or Authorised 10¾
Partly owned 329
Worked over by Engines 2,378
Train Mileage 48,472,172
Passengers carried 46,481,756
Season Tickets 221,862
Coal and Coke consumed (tons) 1,773,179
Minerals & General
Merchandise passing
over line (tons) 47,533,420
Engines 2,800
Carriage Stock 5,489
Waggon Stock 117,571
Horses 5,158
Road Vehicles 7,009
Signal Cabins & Stages 1,942
Miles of Teleg. Wire 31,446
Railway Telegrams 14,542,689
Steam Fire Engines, Pumps, &c 511
Fire Hydrants 1,619
Men qualified to render first
aid to the injured 10,037
Contributions to
Friendly Society £21,916
Sick Allowance paid by
Friendly Society £36,367
Contributed to Superannuation
Fund £34,858
Total number of Employés 69,356
Uniform Staff 29,500
Clerical Staff at Derby 2,519
Workmen in all Shops 13,443
Area of Carriage Works (Acres) 126
Acreage of Loco. Works 80

The organisation and working of the English railway system as it exists to-day are matters as to which a good deal of interest has been shown from time to time, and a certain degree of knowledge thereof is essential to an appreciation of the position that has developed from the primitive conditions already detailed. The subject is treated very fully in "The Working and Management of an English Railway," by the late Sir George Findlay, formerly general manager of the London and North-Western Railway Company, whose line {377}he naturally dealt with in his book. Much, however, has happened since the first edition of that book was published, in 1889, and some of the details given are not applicable to present conditions. I do not propose to bring them all up to date, but it may be of advantage if I attempt to convey to the reader a general idea of the basis on which the London and North-Western, as a typical English railway, is organised and managed, leaving aside the technical data concerning construction and operation with which, although they occupy a considerable space in Sir George Findlay's book, I have here no direct concern.

The London and North-Western Railway had, on December 31, 1910, a total length of line of 1966 miles, of which 380 miles were single track and 1586 double or more. The total length of track, including sidings, in equivalent of single track, was 5490 miles. The authorised capital was £133,989,000 and the paid-up capital £125,038,000. The magnitude of the company's operations is indicated by the following figures in regard to traffic, etc., in 1910: Number of passengers carried (exclusive of season-ticket holders), 83,589,000; minerals, 43,384,000 tons; general merchandise, 10,511,000 tons; number of miles travelled by trains, 47,463,000; receipts (gross) from passenger traffic, £6,699,000; receipts (gross) from goods traffic, £8,900,000; total working expenditure, £9,937,000.

The supreme control is exercised by a board of twenty directors, including a chairman and a deputy chairman. Four retire annually, and are eligible for re-election. The directors are appointed by the shareholders, all of whom have the right to express their views thereon at the half-yearly meetings of the company; and when it is stated that the number of shareholders--debenture, preferred and ordinary--in the North-Western is 100,000, representing 90,000 holdings, and that in 45,000 cases the holding is £500 or under, it will be seen that an English railway company is a far more democratic institution than one of those great railroad systems in the United States which may be completely dominated by a single individual. Any shareholder in the London and North-Western who possesses the necessary qualification, by being the owner of ordinary stock to the value of £1,000, is eligible for appointment on the board.

{378}The main functions of an English railway board are--to decide questions of principle and policy; to keep close watch over the interests of the shareholders in regard to all questions of finance; and to exercise a general control and supervision in order to ensure the thorough efficiency of the line. Subject to such general control and supervision, the working details are entrusted to railway officers possessed of the skill, judgment, experience and technical knowledge requisite thereto. It is thus no more necessary that railway directors should be railway experts than it is that the proprietor, the manager and the editor of a great daily newspaper should themselves be able to write shorthand, set up type, cast a stereo and run the machines. They can dictate policy, attend to business details and direct heads of departments without these, in their case, superfluous accomplishments. Railway directors who, going beyond their legitimate functions as aforesaid, sought to interfere with or dictate to skilled railwaymen on matters of ordinary detail or office routine would, in fact, cause friction without necessarily promoting efficiency in operation.

In practice it is not unusual for a retiring general manager to be invited to take a seat on the board either of his own or of another company; but, generally speaking, the main qualification for a railway director, apart from the extent of his holding, is found in his possession, or assumed possession, of good business qualities, coupled with an interest in some particular part of the district the railway serves.

The full board of the London and North-Western Railway meets twice a month; but much work is also done by committees which, as in the case of a county council or other important public body, exercise supervision over certain departments, or groups of departments, presenting minutes of their proceedings to the board for confirmation. The principal committees are the Finance Committee, the Permanent Way Committee, the Locomotive Committee, the Passenger Traffic Committee, the Goods Traffic Committee and the Debts and Goods Claim Committee. There are, in addition, various smaller committees which deal with questions arising in connection with legal business, stores, hotels, refreshment rooms, etc.

The heads of the different departments concerned attend, either regularly or as desired, the meetings of these various {379}committees, whose members are thus kept thoroughly in touch with everything going on in regard to matters under their special cognisance.

On the subject of finance, Sir George Findlay says (and the position is still as here stated, except that certain members of the Finance Committee now meet weekly to pass current accounts for payment):--

"The system of control over the expenditure of the Company's money is a very complete one. The general theory is that no expenditure is incurred without the direct sanction of the directors, expressed by a minute of some committee approved by the board. The district officers are, indeed, allowed to make small necessary payments, but for these vouchers are submitted monthly and, after being carefully examined, are passed by the Finance Committee. No work is done by any of the engineering departments, except ordinary maintenance and repairs, without a minute of the directors to sanction it, and, in like manner, no claim is paid, except those of trifling amount, without the authority of the 'Goods Claims Committee.'"

The executive management is carried out by the general manager, the chief goods manager, and the superintendent of the line, the heads of the various other departments--and, also, the district officers--reporting to, and being under the direction of, one or other of these three officers, or, in the case of the chief goods manager and the superintendent of the line, of their assistants.

The general manager naturally exercises general control. He is accountable to the chairman and directors for the good working of all departments, and when one takes into account the magnitude of the financial interests at stake; the extreme complexity of the movements and details involved in the operation of so many miles of railway transporting so huge a volume of traffic; the responsibilities of the company towards the multitudes of travellers who depend for life or limb on the perfection of the arrangements made for their safety; the enormous value of the goods of which temporary charge is undertaken; the questions of principle or precedent that arise in connection with a whole army of workers, no less than the matters of policy as regards development of the line or the relations with other companies, involving, it may be, {380}introduction of or opposition to Railway Bills; the preparation of evidence to be given before one or other of those oft-recurring Parliamentary or Departmental Committees; together with the ever-present need of reconciling, as far as possible, the conflicting interests of public, of staff and of shareholders--when one tries to realise the full extent of all these duties, obligations and responsibilities devolving upon the general manager of a great English railway company, the holder of such a post would seem to occupy a position more onerous than that, probably, of any other British subject, even if he should not deserve to rank as a ruler of what, in the variety and extent of the interests concerned--interests greater far than those of many a Continental State--is itself the equivalent of a small kingdom.

In the chief goods manager's department there are, besides himself, an assistant goods manager, two outdoor goods managers, a mineral traffic manager and a large staff of clerks. The chief goods manager and his assistants take charge of all matters connected with merchandise and mineral traffic, apart from the actual running of the trains. They arrange the rates and conditions of carriage; control the handling, the warehousing, and the collection and delivery of the goods; deal with all questions of goods accommodation and goods rolling stock; negotiate the arrangements in regard to private sidings for traders, and discharge a great number of other duties besides.

The main function of the superintendent of the line, in whose department there is, also, an assistant superintendent of the line and several assistants, is to deal with all passenger, horse, carriage and parcels traffic, and, also, the running of all trains, whether passenger, merchandise, live-stock or mineral. All questions relating to the actual working of the line, passenger stations, signals, etc., are referred to him, and the issue of all time-tables is also under his control.

The other heads of departments include: Secretary; solicitor (with assistant solicitor); chief accountant; locomotive accountant; cashier; chief of expenditure department; chief of audit department; registrar; estate agent; rating agent; chief engineer (with a chief clerk and two assistant engineers, one for new works and one for permanent way); chief mechanical engineer (with a chief indoor assistant {381}in locomotive department, general assistant and two outdoor assistants); signal superintendent; electrical engineer; rolling-stock superintendent; carriage superintendent; waggon superintendent; stores superintendent; horse superintendent; police superintendent; marine superintendent; hotel manager; and chief medical officer. The total number of persons engaged in these various departments, as carried on in the general offices at Euston station, without reckoning those employed elsewhere, is about 1500.

For administrative purposes the entire system, with its close on 2000 miles of railway, is divided into a number of districts, each of which is in charge of a district superintendent who is responsible for the working of the trains and the control of the staff in his district. Each district superintendent has an assistant and several travelling inspectors working under his direction, their duty being to visit regularly every station and signal box, and deal with any matters requiring attention.

In some districts the superintendents are responsible both for passenger traffic and for goods traffic. In this case they are called district traffic superintendents. They report in regard to the passenger business to the superintendent of the line and in regard to the goods business to the chief goods manager. In the most important districts the district superintendent is relieved of the management of the goods business (except as regards the working of the trains) by other district officers known as district goods managers, or goods superintendents, who are responsible to the chief goods manager at Euston.

In Dublin there is an Irish traffic manager who takes charge of all the interests of the company in Ireland, and there are agents in Paris and New York who look after the Continental and American business.

The same general principle, as applied to the various districts, operates, also, in regard to individual towns and the management of the stations therein. At the majority of the company's stations there is an agent, popularly known as the station master, who is in charge of both the passenger and the goods traffic; and at the larger stations the work is divided between a station master--who attends to passenger traffic, and is accountable to the district superintendent--and a goods agent, who is responsible for the goods work, and is under {382}the control of the district goods manager. The station master, in turn, has authority over the signalmen, porters and lamp-men at his station, just as the goods agent has authority over the local goods department. The chain of responsibility thus works out as follows:--

Station staff. Goods staff.
Station master. Goods agent.
District superintendent. District goods manager.
Superintendent of the line. Chief goods manager.
----------------------------------------------------
General manager.
Committees of the board.
Chairman and full board.

While the control through the board of directors and the general manager is complete yet, at the same time, it would be impossible to keep pace with the rapidity with which business is done at the present day unless the district officers were able to act on their own responsibility in those cases where time did not permit of matters going through the usual routine, and for that reason the district officers of a company like the London and North-Western are capable men who are able, and are encouraged, to take full responsibility when it is necessary for them to do so.

Just as the committees of the board of directors keep in touch with the chief officers and heads of departments, so do the chief officers keep in touch alike with one another and with the country officers, doing this by means of periodical conferences.

There is, in the first place, what is known as the "Officers' Conference." Held once a month at Euston or elsewhere, as convenient, it is presided over by the general manager, and is attended alike by the chief officers and by the district officers for both the passenger and the goods departments. At this conference the matters discussed include proposed alterations in the train service, mishaps or irregularities and their avoidance, suggested changes in the rules, and everything appertaining to the working, loading and equipment of the trains.

Another conference, known as the "Goods Conference," is also held monthly--generally on the day preceding the Officers' Conference--and is presided over by the chief goods {383}manager, who meets the district officers responsible for the goods working, and discusses with them the various subjects that arise from time to time in connection with the goods traffic.

The minutes of both conferences are submitted to the directors, who are thus kept still better informed of all that is happening. Nor do the officers themselves, whether chief officers or district officers, fail to benefit from the opportunities for the exchange of views and experiences which the conferences afford.

Periodical inspections of the line, or of the stations, in various districts by the directors and the chief officers--whether both together or by the chief officers alone--afford further opportunities for checking any possible irregularities, for ensuring the provision of adequate station accommodation, for seeing that rules and regulations are properly observed, and for maintaining the thorough efficiency of the system in general.

The locomotive works of the London and North-Western Railway Company at Crewe extend over 140 acres, including 48 acres of covered-in shops, mills, etc. These works give employment to about 10,000 men and boys. In addition to the making of locomotives, the various processes carried on include the production of steel rails, girders for bridges, underframes for carriages, hydraulic machinery, cranes, bricks, gas-pipes, water-pipes, drain-pipes, and a great number of other objects and appliances necessary to the construction and operation of the railway. Created by the London and North-Western Railway Company, Crewe has developed from an agricultural village into a flourishing industrial town of 42,000 inhabitants.

At Wolverton, half-way between London and Birmingham, the company build and repair their own railway carriages and road vehicles, and do much work besides in the making of station furniture, office fittings, and other requirements. The works cover 90 acres, and give employment to about 4000 hands.

The Earlstown waggon works extend over 24 acres and employ 1800 persons, Earlstown, like Crewe and Wolverton, being essentially a railway colony. In each instance--as will be shown more fully in Chapter XXVIII--liberal provision is {384}made for the educational, social and recreative needs of the workers and their dependents.

No fewer than 82,000 persons are included in the industrial army which to-day constitutes the staff of the London and North-Western Railway. Of this total 11,000 are salaried officers and clerks and 71,000 are employed at weekly wages. A company which employs such a multitude as this, and, indirectly, ensures sustenance to a much greater number of persons, incurs obligations that are not met entirely by a stated salary or wage. Hence the company, in addition to their encouragement of schools and educational institutes, support a Superannuation Fund Association and a Widows and Orphans' Fund for the salaried staff, and various funds, on a contributory basis, for the wages staff. Other organisations supported by the company include a savings bank, a literary society, chess, rifle and athletic clubs, a temperance society and numerous coffee taverns for the staff.

{385}CHAPTER XXVII

WHAT THE RAILWAYS HAVE DONE

To say that the railways have revolutionised trade and industries would be simply to repeat one of the commonplaces of modern economic history. Taking the general statement for granted, I would invite the reader to look a little more closely at some of the actual results that railways have, or have not, brought about.

In the first place it would be going too far to say that the Railway Age inaugurated the Industrial Era. The invention of, or the improvements in, machinery which gave so immense an impetus to our national industries preceded the opening of the particular lines of railway--the Stockton and Darlington and the Liverpool and Manchester--that were more especially to lead to the great development of the railway system on present-day lines. All the same, it was the railways that, by offering a far more effective means of transport than was already afforded by canals, rivers or roads, made it possible for the industries then already started, or for those following thereon, to attain to their present proportions.

For the creation of what is known as the factory system, with its teeming industrial populations aggregated into busy urban centres, the railways are certainly far more responsible than the earlier modes of transport. The merits or the drawbacks of that system, from the point of view of general interests, are matters that need not be discussed here. Suffice it to say that as soon as the railways had allowed of great quantities of raw material being conveyed, at especially low rates, to particular localities; of machinery being set up there, also at lower cost than before; of labour from the rural districts being brought in and concentrated in the same localities, and of an efficient distribution, again at lower rates, of commodities produced on a large scale under the most economical conditions;--it was inevitable that factories should supplant home {386}industries, that manufacturers should succeed small masters, and that great towns should grow up in proportion as rural centres declined.

In helping to bring about these results--results that so materially accelerated the "economic revolution" already proceeding--railway transport also supplied a ready means for providing these urban communities with the necessaries of life.

It is only with the help of the railways that the provisioning of such vast collections of humanity as are to be found in London, Manchester, Liverpool, Birmingham, Glasgow and other centres is rendered possible. As compared with the earlier conditions of life, when households were mainly self-supporting, each providing for its own needs from its own fields, pasture or garden, the average urban family to-day is dependent on the trader for practically all domestic necessaries, and the same is mostly the case in suburban or even in country districts except, it may be, in regard to vegetables, eggs and table poultry. It is doubtful if London or any other of these great centres ever has more than, at the outside, a fortnight's supplies on hand. The complete stoppage of the railway system for any such period would thus be a national disaster. Food might still come to the ports in the same quantities as before; but without the railways there would be no adequate means for its distribution, and the large inland towns would more especially be at a disadvantage. The mere possibility of such an eventuality may help one to realise the extent of our dependence to-day on rail transport from the point of view, not alone of trade, industry and commerce, but of our daily life and sustenance.

While it is true that many rural centres suffered a decline in population when the railways led indirectly to so many agricultural workers leaving the fields for the attractions and the supposed advantages of urban life, it is no less true that the expansion of the towns gave to those who remained in the rural centres greater markets for the sale there of such produce--and especially for such market-garden produce, eggs and poultry--as they could supply to advantage. The railways may not have annihilated distance, but they were engaged in curtailing distances; and such curtailment became still more effective when the achievements of the locomotive were {387}followed by the adoption of the sliding-scale principle under which the rates per ton per mile decreased in proportion as consignments were sent for a greater distance than twenty miles.

The towns and the industrial centres expanded further as rail transport afforded increased facilities for the conveyance of raw materials to works which, thanks to the steam-engine, could be set up in any part of the country, regardless of the once indispensable water power; and the procuring of these raw materials not only gave a further great expansion to national wealth, but led to the opening up to industrial activity of many a district previously isolated and undeveloped.

Increased congestion in the towns was thus none the less supplemented by a widespread development of the interior resources of the country; and in this respect the railways accomplished results that could not have been attained by the most complete system either of canals or of turnpike roads. There certainly were losses, besides those in the rural districts, and this was notably the case in some of the county, market, or smaller towns which no longer command the same distinction in the social and economic world as before; but the balance as between gains and losses was in favour of an industrial expansion, a commercial development, and an unexampled increase in general prosperity.

On the general trade of the country the railway was to produce results no less striking than those that related to individual industries.

When the facilities for distributing domestic and other necessaries throughout the inland districts, and even in the most remote parts of the country, were so greatly increased, the reason for the fairs which had for many centuries played so all-important a part in English trade and commerce no longer existed, and the country hastened to deserve Napoleon's sarcasm by becoming "a nation of shopkeepers."

To the country trader the railway gave new opportunities. There was no longer any need either for his going to one of the periodical fairs or for his awaiting a call from a travelling middleman with his troop of packhorses in order to obtain supplies. Nor was it now necessary for him to purchase comparatively substantial quantities of wares at a time. Thanks to the railway, he could generally have goods sent to him {388}direct from the manufacturer or the warehouseman in London, Manchester, Sheffield, Glasgow or elsewhere, and those goods, sent for one day and delivered the next, could be ordered by him in exactly such quantities as would suit his immediate requirements. In this way he was enabled to keep smaller stocks of a greater variety of articles, trade with less, or with better distributed, capital and anticipate a much larger turnover. The advantage of these facilities became greater still in proportion as the post, the telegraph and the telephone gave the retailer greater opportunities for communicating his wants to the wholesale trader who supplied them.

In these circumstances village stores are to be found to-day in rural districts where shops had been non-existent down to the Railway Age, while the conditions of retail trade in probably every country town have no less changed, and have altered to a proportionate extent the conditions, also, of wholesale trade.

On the other hand, the same transport facilities which gave these opportunities to the small trader are now, to a certain extent, operating to his disadvantage, since there is an increasing tendency for retail trade to be done by the large houses which are to-day more and more dealing direct with the public, consigning to retail customers either by rail or by parcel post. In this way many of the small traders are sharing the fate of the small masters who had already been suppressed by the factory system.

The movement here in question is, of course, only a development of the dual tendency now prevalent throughout the commercial world for (1) the substitution of large or associated undertakings for numerous small and independent ones; and (2) the abolition of middlemen; yet such a movement could hardly have been carried out to its present actual extent but for the opportunities offered by the railway for the regular, speedy and economical transport of commodities under just such conditions as will alone allow of this further transition in trade being brought about.

So far as the railways themselves are concerned, these various developments have not been an unmixed blessing, since they have increased the tendency for the general merchandise traffic to travel in small or comparatively small consignments or parcels, involving a greater amount of {389}handling and of clerical work, and, therefore, an increase in working expenses, without a proportionate gain in revenue.

The vast majority of traders in the country seem content to live "from hand to mouth," ordering only just what they want from day to day or from week to week, and depending implicitly on prompt delivery by the railway whenever they need fresh supplies. Thus we get such conditions of trade in respect to general merchandise (distinct from minerals and raw materials) as are suggested by the following table, showing the total tonnage of traffic dealt with, and the average weight per package handled, at the goods depôts mentioned:--

AVERAGE WEIGHT
DEPOTS. TOTAL OF TONS NO. OF PER PACKAGE.
HANDLED. PACKAGES. Qrs. lbs.
Broad Street, London 906 23,067 3 4
Curzon Street, Birmingham 1615 51,114 2 14
Liverpool Stations 3895 79,513 3 26
London Road, Manchester 1341 28,277 3 22

How this small-parcel-at-frequent-intervals arrangement, so convenient for a large number of traders, increases the work of the companies in a greater ratio than it increases their receipts is shown by the following typical figures, worked out by a leading railway company in respect to the comparative increases in traffic receipts and number of invoice entries respectively at four large stations on their system:--

INCREASE IN
INCREASE IN NO. OF INVOICE
STATION. YEARS COMPARED. TRAFFIC RECEIPTS. ENTRIES.
A. 1899 and 1906 2.93 40.0
B. 1903 " 1907 5.74 28.46
C. 1902 " 1905 10.36 22.0
D. 1902 " 1905 14.33 24.3

The tendencies in the direction of repeat orders for small consignments are no less prevalent in the case of raw materials and bulky commodities than in that of general merchandise. The cotton-spinner has frequent consignments of cotton, in quantities sufficient to meet immediate needs, rather than less frequent consignments in greater bulk. The average builder saves yard expenses and cartage by ordering from time to time {390}the exact quantities of timber or the precise number of bricks he wants for the particular work, or for a certain stage of the work, on which he is engaged. The coal merchant orders forward from day to day, or at intervals according to the state of business, only the particular quantities of coal he requires for present or prospective early needs, since the railway arrangements generally render it unnecessary for him to provide for more than a few days' supply at a time. So it goes on through almost every department of present-day trade.

The advantages for the trader himself are enormous, and the railways have encouraged him in the tendency here in question by giving, for 2-ton or 4-ton lots, minimum special or exceptional rates which on the State railways of the Continent would be available only for 5-ton, 10-ton or still higher quantities. Yet when a trader has delivery made to him in several consignments rather than one, it is evident that, whatever the convenience to himself, the company must do more work for their money and incur the risk, also, of having to run two or more partly-filled waggons on separate days in place, it may be, of one full one. Hence a further problem in the railway world of recent years has been how to adjust traffic arrangements to commercial conditions based on the now established requirements of the British trader for small consignments at frequent intervals, and yet secure for the railways themselves the advantage of economical loading. Much has been done in this direction by the leading companies in the setting up of transhipping depôts and otherwise, and substantial economies have been effected thereby.

Another respect in which railway facilities have influenced the course of trade lies in the fact that the large warehouses, provided by the railway companies at certain of their goods depôts enable a large number of merchants, agents or other traders to dispense with warehouses of their own and carry on their business from a city office, whence they send their instructions to the railway companies as to the destination of particular consignments when these are to be despatched to the purchaser. The railway companies are thus relied on to (1) collect the goods, (2) load them into the railway waggons, (3) transport them from one town to another, (4) unload them, (5) remove them to the railway warehouse, (6) store them there until they are wanted, (7) pick out, as and when required, {391}a particular bale or parcel from a possible pyramid of bales or parcels warehoused for the same trader; and (8) deliver it to a given address.

In some instances all these services are included in the railway rate, a certain period of free warehousing being then allowed. In other instances, or when the free period is exceeded, a charge is made for rent; but the trader still saves considerably as compared with what he would have to pay for a separate warehouse for himself, with rates, taxes and cost of cartage in addition.

At the autumnal meeting, on October 3, 1906, of the Executive Council of the National Chamber of Trade, held at Bradford, it was declared, in reference to the inequality in assessments for local rates, that there were in Bradford certain large concerns whose business turnover amounted to more than £40,000 a year, while the rental of the premises they occupied was not more than £100. Some exceptionally large and commodious railway warehouses in Bradford are certainly made use of by local traders under precisely such conditions as those here in question; and it is, probably, because of these railway warehouses that the concerns alluded to are able to carry on a £40,000 business in £100 premises.

Even when the traders own extensive mills or factories they often find it convenient to allow the railway company to warehouse most of their raw material for them, sending on supplies to them as needed, a saving thus being effected in respect alike to capital outlay on land and buildings for store rooms and to rates and taxes thereon. In other instances goods are sent, as ready, to the railway warehouses at the port to await shipment, the manufacturers once more saving in not having to provide extra accommodation on their own premises for the storing of goods until a large order has been completed or until a vessel is due to leave.

The extent of this railway warehouse accommodation will be better understood if I mention that two sets of premises which constitute the Broad Street goods depôt of the London and North-Western Railway Company, in the heart of the City of London, have a total floor space of 29,500 square yards; that the same company have at Liverpool a series of warehouses with a total of about 30,500 square yards of floor space; that the Great Northern Railway Company have at Bradford one {392}wool-warehouse which can accommodate from 50,000 to 60,000 bales, and another that has a storage capacity of 150,000 bales; and that an exceptionally large goods depôt and warehouse in Manchester, with floor space equal to one and a quarter acres, cost the Great Northern Railway Company no less a sum than £1,000,000.

To illustrate the nature of the accommodation offered by, and the work carried on, in these great goods stations and warehouses, I offer a few details respecting the Bishopsgate Goods Station of the Great Eastern Railway Company.

Situate in the midst of one of the busiest of London's commercial centres and in the immediate proximity of docks, wharves, markets and warehouses carrying on, in the aggregate, an enormous business, the Bishopsgate Goods Station is a hive of activity of so extensive and varied a type that the working bees employed form a staff of no fewer than 2000 persons.

The premises, which have nine exits and entrances, are divided into three levels, known as the basement level, the rail level and the warehouse level. The total area covered by the goods station, including railway lines, yard and buildings, is twenty-one acres.

The basement level consists of a series of arches on which the lines leading into the goods station have been built. Originally the arches were designed by the railway company to serve the purposes of a general fruit, vegetable and fish market, and this market was opened in 1882; but the lessee of the Spitalfields market claimed certain monopoly rights under an ancient charter, and the Bishopsgate market had to be closed; though the railway company continued to carry on a market they had previously opened at Stratford, E., subject to the payment of certain tolls to the aforesaid lessee in respect to his rights. The Stratford market, located immediately alongside lines of railway bringing produce from the most important agricultural districts of the Eastern Counties, has conferred great advantages alike on traders and on residents in the East of London. The basement arches at Bishopsgate are to-day let mainly to potato salesmen and others, who find them of the greatest convenience because loaded trucks arriving on the rail level can be lowered into the basement, there to be moved by hydraulic power to the particular arch for which the consignment is destined.

{393}The rail level is the goods station proper. It has eleven sets of rails and five loading or unloading platforms, or "banks," while two shunting engines are constantly employed in taking loaded or empty trucks in or out. In 1910 the business done gave a daily average of 725 trucks inwards traffic, and 632 outwards traffic, a total daily average of 1,357 trucks. About eighty goods trains leave or arrive at the station during the twenty-four hours. These include two which are fitted with the vacuum brake, and give the traders and inhabitants of Lincoln and towns beyond all the advantages of an express goods service at ordinary rates--a service, that is, equivalent to what, in Germany, traders would have to pay double or treble their own ordinary rates for if they wished to ensure a corresponding speed.

Of potatoes from the fenland districts of the Eastern Counties the total quantity received at Bishopsgate during 1910 was 100,000 tons. Of green peas from Essex as many as 1000 tons have been received in a single day. Fish from Lowestoft and Yarmouth runs into an annual total of many thousands of tons.

Passengers' luggage in advance is also dealt with at Bishopsgate. This system, saving the traveller much trouble, and greatly facilitating the working of passenger traffic at the stations, is evidently advancing in favour, the packages handled at Bishopsgate having increased from 18,617 in 1900 to 87,129 in 1910.