Chapter XI: Section X: New Classification

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One inconvenience incidental to the course taken by the railway companies has been experienced. The actual classification in use does not follow the meagre, and in many respects arbitrary, statutory classifications; the latter may not be a guide to the former. This was one of the grievances laid before the Railway Rates Committee in 1881 and 1882. Traders, it was said, could only with difficulty ascertain the companies’ powers to charge for goods not enumerated in their Acts. The representatives of the railways agreed with some of the witnesses who gave evidence on behalf of the traders as to the original classifications in the Acts of the companies having become obsolete. They explained that from time to time they had been rectifying, in the manner already described, the defects of the statutory classification, and that, acting on information communicated by manufacturers and merchants, and guided by their own experience, they had framed and generally adopted the Railway Clearing House Classification, which embraces some 2,700 articles, and which is, on the whole, fairly adapted to the requirements of trade. They added that the companies were prepared to agree to a revised maximum classification in lieu of the original classification.

Accordingly, the Committee recommended--

“That there should be adopted over the whole Railway system
one uniform classification of goods.”

“That terminal charges should be recognised, but be subject
to publication, and, in case of challenge, to sanction by
the Railway Commissioners.”

The Board of Trade thereupon intimated to the railway companies their intention of introducing into Parliament a Bill with the view of carrying out some of the recommendations of the Committee, and requested them to prepare a standard maximum classification for general adoption.

This was done. The companies were also prepared to assent to a codification of their maximum rate clauses, having due regard to their existing powers, so as to assimilate them to the new classification. But they stipulated that certain, rights which at that time were considered by some to be doubtful--in particular, the right of the companies to charge for terminal services--should, as; recommended by the Committee, be recognised. The Bill introduced in the Session of 1883 by the Board of Trade was not proceeded with. Acting therefore on a suggestion which was made to them, several of the companies introduced Bills in the Session 1884-5, with a view to consolidate the maximum rate clauses, and secure the adoption of a general classification, and the recognition of terminals. But the companies received from Government no such assistance as they had reason to expect. The mere consideration of their Bills was strongly opposed, the Board of Trade eventually joining in the opposition; and the measures had to be withdrawn. Last Session the Board of Trade introduced a Bill, not only to compel the companies to do what they, by their Bills introduced in the Session of 1885 sought to do, but also to make it obligatory on them to accept such altered rates and tolls as the Board of Trade, with the subsequent sanction of Parliament, might lay down, and to submit to periodical revisions thereof--requirements so contrary to the conditions on which the companies provided the capital for the construction of the railways, that it is difficult to believe that the effects of the provisions of the Bill could have been clearly understood. The companies unanimously objected to a measure which amounted to confiscation. It is probable that a satisfactory arrangement would have been come to; but owing to the dissolution of Parliament the Bill was not proceeded with. In view of the desire of the public for a new classification, the recommendation of the Railway Rates Committee, end the general assent of the companies, it may be assumed that in the course of the next Session the subject will again be brought forward; and it is therefore desirable to consider the principle on which a classification should be framed.

In the earliest Canal and Railway Acts the basis of the classification was the nature, bulk and value of the articles carried. The lowest tolls were applicable to articles carried in large quantities, such as lime, dung, coals, and rough stone; the medium tolls to grain, timber, &c., and the higher to manufactured goods, and the more valuable articles of merchandise, such as wool, tea, wines and spirits, &c. On canals, this classification was in force, notwithstanding the fact that they were at first only toll takers, and did not incur any cost in conveyance or any risk--services and liabilities for which the carriers charged the public beyond the tolls. The numbers of articles enumerated in the original Acts were, as previously stated, from 50 to 60, divided generally into from three to five classes. The present Railway Clearing House classification, which has been revised from time to time, contains seven classes. The following is a comparative statement of the number of different articles enumerated in it during the last 34 years:--

1852 748
1860 816
1870 1,621
1880 2,373
1886 2,753

Judging from remarks which have been made[36] as to the “inconsistency and want of classification,” it appears to be the view of some persons that this classification has been framed by the companies in an arbitrary manner and without regard to the necessities of trade. Nothing could be more erroneous than this assumption. Of necessity it is from the traders themselves that the railway managers have primarily obtained the information by which they have been guided in framing the classification. The questions to be determined in fixing rates are not simple; the elements to be taken into account are many. Whether the traffic is considerable, whether the cubical contents are large or small in proportion to the weight whether it is carried in large or small quantities, whether the merchandise consists of raw materials or manufactured goods, articles of necessity or luxury, must be considered. The requirements of traders with conflicting interests, the different views taken by the companies, and the desire to encourage special industries must be studied. In practice what takes place is this. When a new article of commerce or of manufacture is introduced, the merchant or manufacturer calls on the railway company immediately interested to have it classified and to fix the rates. Of course, there is an endeavour to get it placed in the lowest possible class. Such applications are carefully considered; and they are from time to time discussed by the managers at their conferences. Thus the classification is continually under consideration and revision; there is a constant process of re-adjustment to the changing circumstances of trade. So-called anomalies there no doubt are, and departures from the basis on which a classification should be framed. But the Railway Clearing House Classification, which is the result of this continual effort to adapt charges to new conditions, answers reasonably, if not perfectly, the requirements of trade.[37]

[36] “What is complained of by the traders is not so much the high scale of the rates as their inconsistency and want of classification, as well as the want of facilities given by the railway companies for the development of the trade in a particular locality. That before the Royal Commission on Depression of Trade, not a single witness, except in the shipping interest, was examined in reference to railway rates who did not complain of some act of injustice on the part of the railway companies, not so much in regard to the rates, although they were onerous and prohibitory in some cases, as to the inconsistency of such rates.”--_Mr. L. Cohen, House of Commons Debate, 6th May, 1886. Hansard, vol._ cccv., _pages 428-9_.

[37] NOTE.--The New Zealand correspondent of the “_Economist_” (Oct. 23, 1886), writes from Wellington as follows: “The fact of the railways being in the hands of Government is by no means an unmixed good. A uniform system of rates is demanded everywhere. If a concession is made to one district, the rest of the colony naturally demand to be placed on the same footing, so that the Railway Department rarely meet the wishes of the public. _A private Company, if it found that the freight could be got by lowering the tariff on some particular item, would do so at once, and if it paid, continue it._ The cost probably would be merely a few tons of coals, and a small amount for wear and tear. _Many trades, notably the timber trade, are very much hampered by the Government tariff which does not admit of differential rates._”

This is a sample of the inconveniences attending uniformity.

It must be borne in mind, in framing a new standard classification, that it will be the maximum beyond which the companies must not go. If adopted generally over all railways, the scales of maximum rates must allow scope for the local necessities and peculiarities of different districts of the country. Inverness-shire and Cornwall, as well as Staffordshire, Lancashire, and Yorkshire, agricultural, manufacturing, and mining districts, must all be considered. There must be sufficient elasticity in the scale of maximum rates to allow of the charges being remunerative on short distance traffic. Goods coming under the same generic name often vary considerably in cubical contents in proportion to weight, value, and risk of damage, as well as in the extent to which they are carried; all considerations not to be forgotten in constructing a uniform classification. The following few examples, taken casually from consignments actually carried, illustrate the remarkable variations in the weights and bulk of some of the traffic:--

Cubic feet to the ton.

Agricultural Implements vary from 70 to 1316
Boots and Shoes 75 ” 108
Coal 34 ” 48
Copper 10 ” 165
Carpets 68 ” 159
Drain Pipes 99 ” 205
Furniture 142 ” 3501
Hay 364 ” 630
Holloware 106 ” 214
Hats 529 ” 1719
Iron (Bar) 7 ” 39
” (Scrap) 24 ” 165
Luggage 95 ” 971
Millinery 315 ” 986
Sewing Machines 104 ” 350
Straw 788 ” 1256
Tobacco 53 ” 165
Wool 266 ” 747
Ditto (Australian pressed) 93 ” 282

The value of goods coming under the same description, and the risk in conveying them, frequently vary as much as the cubical contents. No matter what pains are taken to frame a fair classification, it is to be feared that any classification based on a careful consideration of the nature and value of the articles carried, and all the varying circumstances of trade--and an omission to consider any such element would work injustice--must appear to some traders to be more or less anomalous. Some will still consider they have a grievance to lay before Chambers of Commerce.

It may be well to state how the problem has been dealt with on the Continent. The particulars given may be instructive to those who hastily recommend an adoption of the systems in force abroad.

In France the classification of goods and rates is in a transition state; and a large portion of the trading and manufacturing classes are discontented with the charges at present made by the railway companies. With a view of simplifying the tariff, in 1879 the Minister of Public Works took steps to frame for adoption on all the French Railways a classification divided into six classes. Subsequently an attempt was made to prepare a uniform scale of railway rates diminishing according to distance. But after a long enquiry, and full consideration, the proposal was abandoned. In 1883, the Paris, Lyons, and Mediterranean Railway Company proposed the adoption of a revised tariff, which professes to afford, on the whole, a reduction in the rates as compared with the former tariff. It was sanctioned by the Minister of Public Works in August, 1885. It consisted of six classes for general goods in any quantities, and six for goods of the special classes, which are generally carried in lots of one and five tons. The latter six classes were in substitution for the many special tariffs formerly existing. The Eastern of France Railway Company also revised their tariff, re-adjusting the classification, and reducing the number of their special tariffs to 28. An article formerly carried at a special tariff between certain specified stations is now charged at the fourth class rate. But when carried generally, and not between particular stations, such an article remains, as before, in the second class. The Northern of France Railway Company have also revised their tariffs on a somewhat similar basis.

Long debates on the subject of the charges under the new tariffs, and on the railways generally, took place in the Chamber of Deputies, in February and March last. There were complaints that the “reformed tariff,” and particularly that of the Paris, Lyons, and Mediterranean Company, had not brought about the anticipated reductions, and that, while in some cases lower rates for certain goods carried in large quantities had been conceded, higher rates had been fixed for similar goods sent in small quantities. The rate for 5 ton lots, for instance, is lower; but that for lots under 5 tons is generally higher. The larger traders had derived a benefit from the change; but the small traders and consumers compared with what they were, are placed at a disadvantage. So far the other companies have not made any alteration in their tariffs.

Thus it will be seen that in France there is no uniform classification. The tariffs of the companies, with the exception of the Ouest, Nord and Est, are composed of a different number of classes, and the number of articles enumerated in the classification also varies. Articles, too, are not included in the same classes on all lines. For instance, the Ouest enumerates 1686, the Nord 1519, and the Paris, Lyons, and Méditerranée, 1425. The tariffs are divided--

by the Compagnie de l’Ouest into 6 classes.
” ” ” l’Est ” 6 ”
” ” ” du Nord ” 6 ”
” ” ” Paris, Lyons, } 6 general tariff classes.
” ” ” Méditerranée } 6 special ” ”
” ” ” d’Orleans ” 4 classes.
” ” ” du Midi ” 5 ”
” ” ” de l’Etat ” 9 ”

The following examples show how the classifications vary:--

----------------------------------------------------------------------
| | | |Paris- | | |
| | | |Lyons- | | |
ARTICLE. |Ouest.| Est.| Nord.|Medite-|Orleans.| Midi.|Etat.
| | | | ranee.| | |
------------------+------+------+------+-------+--------+------+------
|Class.|Class.|Class.| Class.| Class. |Class.|Class.
Ironmongery | 4 | 2 | 2 | 2 | 2 | 3 | 2
Colours (common) | | | | | | |
in Casks | 4 | 1 | 1 | 1 | 3 | 3 | 4
Manure | 6 | 6 | 6 | 6 | 4 |Spec’l| 6
Flour | 4 | 4 | 4 | 4 | 3 | 3 | 4
Wool (raw) | 4 | 2 | 2 | 3 | 3 | 2 | 2
Machinery (packed)| 4 | 3 | 3 | 3 | 1 | 3 | 3
China in Casks and| | | | | | |
Crates | 3 | 1 | 1 | 1 | 2 | 2 | 1
Raw Sugar | 5 | 4 | 4 | 4 | 3 | 3 | 4
Potatoes in Bags | 5 | 4 | 4 | 4 | 3 | 3 | 4
Window Glass | 4 | 3 | 3 | 3 | 2 | 3 | 3
----------------------------------------------------------------------

In Germany, Holland and Belgium there is no such classification as is in force in this country. Generally speaking, goods of all descriptions, except wagon loads of 5 and 10 tons, are charged according to weight, irrespective of their nature or value. In Germany the railway tariff consists of 8 classes, viz.:--

1. _Grande Vitesse_ which includes articles of all
descriptions carried by
passenger train.[38]
2. “_Stückgut_,” or Which includes articles of all
“Piece” Goods. descriptions of less than
5 tons carried by goods
train.
3^{A1}. Wagon Loads Articles of all descriptions in
truck loads of 5 tons not
mentioned in the special
classes.
4^B. ” ” Articles of all descriptions in
truck loads of 10 tons.
5^{A2}. ” ” Certain articles specified in
the classification, in truck
loads of 5 tons.
6. Special Tariff, I. }
7. ” ” II. } Ditto in 10 ton lots.
8. ” ” III. }

[38] _Grande Vitesse_ goods are not always carried by passenger train. They can be carried by any train the railway company may determine, provided the time allowed by law, which is half the time for ordinary goods, is not exceeded.

The system actually existing in Germany is a compromise. Previous to 1878 different systems existed in North and South Germany. The classification in use in the former was governed by the value of the goods; while that in force in the latter was framed with particular reference to their weight and measurement. In that year, however, an attempt was made to reconcile the two systems; the “Reform Tariff,” as it is called, was established on all the German railways. There was a concession to the Southern system; rates for goods in covered trucks in five or ten ton lots were adopted. The North system, on the other hand, was recognised by establishing the Special tariff classes, in which the relative value of the goods has been taken into consideration. The actual classification is therefore dual; it is a compromise between two totally different systems. Obviously it does not accord with the requirements which have been put forward by, or on behalf of, traders in this country.

In Belgium, also, there is practically no classification except for traffic in full truck loads. The tariff consists of--

Tariff No. 1 Articles of all descriptions
up to 5 kilogrammes (11 lbs.)
carried by passenger trains.
Tariff No. 2 Articles of all descriptions
carried by ordinary passenger
trains, but chiefly articles
of all descriptions up to 200
kilogrammes (4 cwt.) carried by
goods trains.
Tariff No. 3--Class I.--Goods of all descriptions from
8 cwt. and upwards, conveyed
by goods trains.
{Certain goods specified in
” II.--{ the classification, in truck
” III.--{ loads of 5 tons.
” IV.--Certain goods specified in
the classification in truck
loads of 10 tons.

For Tariffs 1, 2, and Class I. of tariff No. 3, there is practically no classification. All goods up to the specified weights are included, without reference to their value or nature. Only in respect of the wagon-load classes of tariff No. 3 does any classification exist. In this classification, which applies to all the Belgian railways, about 639 articles are enumerated. It is assumed to be framed with reference to the value of the goods, the mode of transit, the amount of the company’s responsibility, and the circumstance of the goods being carried in open or covered trucks.

In Holland, the classification is very similar to that which exists in Germany. Goods are divided into two classes, i.e., “_Stückgut_” or “Piece” goods, to which belong all consignments less than 5 tons carried by goods train; and “_Truck Load_” goods, which includes goods in truck loads of 5 or 10 tons, or which pay as for those weights. The “_Stückgut_” class is subdivided into two classes, and the “_Truck Load_” class into four classes. The total number of articles enumerated in the classification is about 242. Although the bases of the tariffs charged for conveyance differ, the classification is practically the same on all the railways in Holland. The following is an example of the classification of goods on the Dutch Rhenish Railway. It will be seen that such articles as coffee, cheese, butter, in consignments of less than 5 tons, are included in the same class as coal, coke, gravel and raw iron; a feature not likely to be imitated by admirers of the “scientific classification” supposed to exist abroad.

This diversity of system and practice will give some idea of the difficulty experienced in framing a classification suitable to each country, or, indeed, to various portions of the same country. The difficulty will be still better understood by observing the different manner in which goods placed in the 2nd Class, under the Railway Clearing House Classification, are classified in other countries.

CLASSES.
----------------------------------------------------------------------
| | FRANCE. | | | |
| |-----------| | | |
DESCRIPTION OF |ENG- |Nord. |BEL- | HOL- | GER- | CANADA.
GOODS. |LAND.| |Ouest. |GIUM.|LAND. | MANY.|----------------
| | | |PLM| | | | Any | Car
| | | | | | | |Quantity| Loads.
---------------+-----+---+---+---+-----+------+------+--------+-------
Aerated Waters | 2 | 4 | 5 | 4 | 1 | Gen. | Gen. | 3 | 4
| | | | | |Tariff|Tariff| |
Agricultural | | | | | | | | |
Machines| ” | 2 | 2 | 2 | 1 | ” | ” |1, 1½ | ..
| | | | | | | | &D1 |
” Seeds | ” | 4 | 4 | 4 | 3 | B |S.T. 1| 2 | 5
Bacon and Hams | ” | 2 | 4 | 2 | 1 | Gen. | Gen. | 2 | 4
| | | | | |Tariff|Tariff| |
Bedsteads | ” | 2 | 3 | 2 | 2 | ” |S.T. 1| 1 | ..
Biscuits | ” | 1 | 1 | 1 | 1 | ” | Gen. | 2 | 4
| | | | | | |Tariff| |
Cattle Food | ” | 3 | 3 | 3 | 3 | B |S.T. 2| 3 | 5
Cheese (Packed)| ” | 2 | 4 | 2 | 1 | Gen. | Gen. | 3 | 4
| | | | | |Tariff|Tariff| |
Cider in Cases | ” | 2 | 4 | 2 | 1 | ” | ” | 3 | 4
Colours and | | | | | | | | |
Paints, Common| ” | 1 | 4 | 1 | 1 | ” | ” | 3 | 5
Confectionary | | | | | | | | |
in Casks | ” | 1 | 1 | 1 | 1 | ” | ” | 1 | 4
Flax, Raw | ” | 3 | 4 | 3 | 2 | ” |S.T. 2| 3 | 5
Hemp, Raw | ” | 3 | 4 | 3 | 2 | ” | ” | 3 | 5
Leather, | | | | | | | | |
Undressed | ” | 3 | 4 | 3 | 1 | ” | Gen. | 3 | 5
| | | | | | |Tariff| |
Osiers | ” | 2 | 4 | 2 | 2 | B |S.T. 2| 2 | 6
Preserves, | | | | | | Gen. | Gen. | |
Casks | ” | 3 | 4 | 3 | 1 |Tariff|Tariff| 2 | 4
Cotton Yarn for| | | | | | | | |
Weaving | ” | 2 | 2 | 2 | 1 | ” | ” | 3 | 5
----------------------------------------------------------------------

The following is a comparison of the number of articles included in each classification, so far as such exists, in France, Germany, Holland, and Belgium:--

CLASSES.
Chargeable
ENGLAND. Mineral Special First Second Third Fourth Fifth at Mileage
Scale, &c.
Railway Clearing
House 80 446 453 500 672 319 180 103

FRANCE. Sixth. Fifth. Fourth. Third. Second. First.[39]
Ouest 36 329 533 250 212 326
P.L.&M. 35 104 231 265 279 511
Nord 36 106 253 279 288 557

[39] The first class in France corresponds with the highest or fifth class in England.

CLASSES.

BELGIUM.
Fourth. Third. Second. First.
168 177 294 Goods of all descriptions
in part loads.

HOLLAND.
B. C.
158 84

GERMANY.
Special Tariff 1. Special Tariff 2. Special Tariff 3.
314 119 176

The number of articles which the companies proposed to provide for in the standard classification by their Bills deposited in the Session of 1885, was 2,656, classified as under:--

CLASSES.

Mineral. Special. First. Second. Third. Fourth. Fifth.
86 389 469 483 682 334 213

Assuming that any maximum classification to be framed should comply with the conditions which have been already stated, and that it should accommodate trade in all districts of the country, the classification suggested by the railway companies in their Bills will bear the test of any fair inquiry. When the change which we have indicated is carried out--when the maximum rate clauses of the companies are consolidated and revised on an equitable basis having regard to the present powers and to the new classification--traders will be able easily to ascertain whether the charges made by the companies are within their Parliamentary powers.

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