ORDINARY.
RATES OF DIVIDEND OR INTEREST. Amount of Per cent of
Capital. Total.
Nil £67,358,262 13.7
Not above 1 per cent 29,427,057 6.0
Above 1 and not above 2 per cent 18,072,847 3.7
" 2 " 3 " 87,676,759 17.8
" 3 " 4 " 109,788,247 22.3
" 4 " 5 " 38,193,955 7.7
" 5 " 6 " 85,503,721 17.4
" 6 " 7 " 54,962,066 11.2
" 7 " 8 " 362,000 0.1
" 8 " 9 " 40,000 0.0
" 9 per cent 694,907 0.1
------------ -----
Total 492,079,821 100.0
{363}The various classes of capital on which the rates of dividend or
interest paid in 1910 were either _nil_ or not above three per cent may be
shown thus:--
RATES OF DIVIDEND OR INTEREST.
Above Above
1 per cent 2 per cent
DESCRIPTION OF Not above and not above and not above
CAPITAL. Nil. 1 per cent. 2 per cent. 3 per cent.
£ £ £ £
Ordinary 67,358,262 29,427,057 18,072,847 87,676,759
Preferential 16,607,907 631,967 2,296,250 103,019,553
Guaranteed -- -- 101,180 23,318,760
Loans and
Debenture Stock 558,782 676,789 4,666 189,122,426
---------- ---------- ---------- -----------
Totals 84,524,951 30,735,813 20,474,943 403,137,498
-----------------------------------------------------
£538,873,205
There are those who regard railway shareholders as "capitalists," and
consider that the keeping of railway dividends at a low level, together
with any depreciation in the value of railway stock that may result
therefrom, are matters only likely to affect a comparatively few wealthy
men, and not, therefore, of material concern to the country so long as the
railways give the best possible service at the lowest possible rates. In
the United Kingdom, however, the ownership of the railways is distributed
among a far greater number of persons than is the case in the United
States, where the control and the dividends of a great railway system may
alike be in the hands mainly of a few financiers. That by far the larger
number of shareholders in British railways have comparatively small
holdings was well shown by a table published a few years ago giving the
percentage of holdings of £500 or under by shareholders, exclusive of
debenture-holders, in thirty-nine leading railways of the United Kingdom.
An analysis of this table gives the following results:--
Number of Percentage of Holdings of
Companies. £500 or under.
2 32 to 40 per cent.
10 41 " 50 "
8 51 " 60 "
9 61 " 70 "
7 71 " 80 "
3 81 " 90 "
--
Total 39
{364}It is true that many of the shareholders here in question might have
invested in several companies, so that their £500 or less would not
represent the full extent of their railway holdings. On the other hand,
there is the fact that many of the single investments are those of friendly
societies, trade unions, or other organisations representing the interests
and dealing with the savings of a large number of members of the artisan
class.
In any case, whether the railway shareholder be a capitalist large or small
or only an ordinary thrifty middle-class person who has saved a little
money which he seeks to put into something both safe and remunerative, the
fact remains that since the advent of the railway era he is the person who,
though supplying the means by which this huge system of inland
communication has been brought into existence, has had the least
consideration of all. The trader, the passenger and the railway servant
have all been the subject of much legislative effort for the protection or
the furtherance of their own interests, whereas the railway shareholder has
been too often regarded with an absolute lack of sympathy, and treated as a
person who must be severely restrained from becoming unduly wealthy at the
expense of these other interests, and should be thankful that he is not
deprived of his property altogether.
It has really seemed as though the aim alike of the State and of local
governing authorities has been less to ensure to the railway shareholders,
who have undertaken a great public work at their own risk and expense, a
fair return on their enterprise than to extract from the railway system
huge sums in the way of taxation.
What the railway companies have paid in the way of "rates and taxes" since
1894 is shown by the following table, which I compile from the Board of
Trade Returns for 1903 and 1910:
INCREASE (+) or
DECREASE (-) as
AMOUNTS PAID FOR compared with
YEAR. RATES AND TAXES. previous year.
£ £
1894 2,816,000 --
1895 3,011,000 (+) 195,000
1896 3,149,000 (+) 138,000
1897 3,249,000 (+) 145,000
1898 3,425,000 (+) 131,000 {365}
1899 3,582,000 (+) 157,000
1900 3,757,000 (+) 175,000
1901 3,980,000 (+) 223,000
1902 4,228,000 (+) 248,000
1903 4,493,000 (+) 265,000
1904 4,736,000 (+) 243,000
1905 4,933,000 (+) 197,000
1906 4,965,000 (+) 32,000
1907 4,863,000 (-) 102,000
1908 4,884,000 (+) 21,000
1909 5,010,000 (+) 126,000
1910 5,102,000 (+) 92,000
Total payments in ----------
17 years 70,228,000
These figures show a continuous increase since 1894, with the exception
only of the year 1907, when there was a decrease of £102,000 as compared
with 1906, due to the activity of the railway companies in appealing
against excessive assessments. The advance in the total paid in 1910 over
the total for 1894 was no less than £2,286,000, or 77.9 per cent.
It should be remembered, also, that the figures given relate to sums paid
for rates and taxes, and do not include the expenses incurred by the
railway companies in respect both to their rates and taxes departments
(conducted by highly skilled officers) and to litigation arising on their
appeals against assessments they consider unfair. The total expenditure
under these two heads has been estimated at over £80,000 per annum.
Since comparisons are frequently made between English and German railway
rates, with a view to showing that the former are higher than the latter,
it may be of interest to compare, also, the amount paid for taxation by the
railways of the United Kingdom with the corresponding payments of the
Prussian State railways. The length of line of the two systems is
approximately the same; yet while the taxation of the British system comes
to £5,000,000 a year, that of the {366}Prussian State railways is only
£750,000 a year. Naturally, when a Government owns the railways, it is much
more interested in checking excessive taxation of the lines by the local
authorities than when the railways are owned by commercial companies; and
one of the questions to which proposals in regard to the nationalisation of
the British railways gives rise is whether, when the Government owned the
railways, they would be willing to continue the payment from the railway
revenues of all the taxation which local authorities are now able to exact
from the railway companies. Presumably not; and in that case the trader,
whether or not he got lower railway rates from the State, would probably
have to pay higher local rates in order to make up for the tolls no longer
levied, or levied only to a much less extent, on the railway traffic.
The growth in the payments made by individual companies for rates and taxes
between 1902 and 1910 may be illustrated by giving the figures for the
London and North-Western, the Great Western and the Midland Companies
respectively:--
LONDON AND
YEAR. NORTH-WESTERN. GREAT WESTERN. MIDLAND.
£ £ £
1903 520,000 524,000 418,000
1904 572,000 558,000 435,000
1905 599,000 592,000 453,000
1906 603,000 621,000 475,000
1907 603,000 608,000 458,000
1908 610,000 638,000 436,000
1909 631,000 663,000 438,000
1910 638,000 669,000 456,000
In addition to the items coming under the head of "rates and taxes" the
railway companies still have to pay to the Government the passenger duty of
which I have spoken on page 263, their function here, presumably, being
that of honorary tax-gatherers who are required to get the money from the
British public in the interests of the national exchequer, and save the
Government the cost and the trouble of collection. The passenger duty thus
collected by them in 1910 came to £319,404, the total contributions of the
railways to the public finances for that year being thus increased to
£5,421,715.
{367}The amounts paid in 1910 by some of the leading companies under the
two heads in question may be shown thus:--
GOVT.
RATES PASSENGER
COMPANY. AND TAXES. DUTY. TOTAL.
£ £ £
Great Central 149,899 4,156 154,055
Great Eastern 322,894 14,296 337,190
Great Northern 223,254 13,099 236,353
Great Western 669,330 29,640 698,970
Lancashire and Yorkshire 261,734 18,141 279,875
London and North-Western 638,443 50,359 688,802
London and South-Western 268,130 34,356 302,486
London, Brighton and
South Coast 209,491 31,617 241,108
Midland 455,759 16,423 472,182
North-Eastern 467,404 12,982 480,386
South-Eastern and Chatham 278,505 53,015 331,520
Caledonian 150,609 8,905 159,514
North British 129,486 8,721 138,207
The following table shows how the sum total of the payments both for rates
and taxes and for Government duty in the years from 1900 to 1910 work out
(a) per train mile and (b) per mile of open railway:--
PER TRAIN MILE. PER MILE OF RAILWAY.
Rates and Govt. Rates and Govt.
YEAR. Taxes. Duty. Taxes. Duty.
d. d. £ £
1900 2.24 .21 172 18
1901 2.39 .22 180 19
1902 2.53 .23 190 19
1903 2.73 .23 200 19
1904 2.86 .22 209 18
1905 2.95 .22 216 18
1906 2.87 .21 215 18
1907 2.72 .20 210 18
1908 2.77 .20 210 17
1909 2.86 .20 215 17
1910 2.89 .19 218 16
This question of the taxation of railways is a matter of material concern
as regards (1) the direct results thereof on {368}(a) rates and charges and
(b) dividends paid--or not paid; and (2) the general policy of the State
towards the whole problem of internal communication.
As in the case of cost of land, of expenditure on Parliamentary procedure,
of capital outlay on construction, and of any undue increase in cost of
operation, the payments in respect to rates, taxes and Government duty can
be met by the railway companies only by one or other of two expedients:
either by getting the money back through the rates, charges and fares
levied on the railway users (an expedient necessarily curtailed both by
legislative restriction and by the economic necessity of not charging more
than the traffic will bear), or, alternatively, by leaving the railway
investors with only an inadequate return--if not, in respect to a large
proportion of the capital, with no return at all--on their investments.
The system of assessing railways for the purpose of local rating is one of
extreme complexity. It grew out of the earlier system of the taxation of
canals, and, had the railway companies fulfilled the original expectation
of being simply owners of their lines and not themselves carriers, the
principles on which the system was based might have applied equally well to
rail as to canal transport. But, while rail transport underwent a complete
change, there was no corresponding adaptation of local rating to the new
conditions, and the system actually in force is the outcome far less of
statutory authority than of custom, as sanctioned by the judges--who have
themselves had to assume the role of legislators--while the machinery of
railway valuation differs materially in England and Wales, in Scotland, and
in Ireland.[56]
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