EQUAL MILEAGE RATES.
Another proposal which, though always condemned by competent judges,
is still, in some form, very often brought forward, is to charge
equal mileage rates.[7] Admitting the impossibility or impropriety
of making rates vary according to the cost of conveyance of goods
without reference to their value or quality--recognising the
expediency of classification in some form--many persons think that
it would be well to charge for the same kind of goods the same sum
per mile universally. This plan is simple; it has an appearance
of being equitable; and, as such, it is attractive. But, on the
slightest consideration, it becomes apparent that exceptions which
mar this simplicity must be admitted. In fact, no one proposes that
this principle should be inflexibly carried out. Far from being
really equitable, equal mileage rates would often act most unfairly.
Mileage run is only one element out of many in cost of service; and
to compel companies to charge the same sum between points equally
distant, irrespective of the original cost of constructing the way,
the nature of the gradients, the amount and regularity of the
traffic to and fro, and the extent of back haulage of “empties,”
would be doing great injustice. Obviously an allowance must be
made to cover the cost of specially expensive undertakings, such
as the Runcorn, Tay and Forth Bridges, the Sol way Viaduct, or the
Severn Tunnel. So, too, allowance must be made for steep gradients;
manifestly the same paying load cannot be carried over gradients of
one in forty as over one in eight hundred. In Germany and Holland
an effort has been made to adopt the mileage system; and (subject
to exceptions for import, export and transit rates, referred to
afterwards) it is assumed to be carried out. But patent facts
could not be ignored; in these countries an extra mileage up to 12
kilometres (about 7½ miles) is taken into the calculation of
rates for expensive bridges and steep gradients. Speed, too, must
be taken into account; as it increases, a more than proportionate
increase in engine power is necessary.[8]
[7] The late Member for West Wolverhampton, in comparing the rates
for Coke between Staveley and Northamptonshire and Staveley and
Wolverhampton, practically advocated mileage rates, although,
probably, not intending to do so. (See debate on the second reading
of the Railway and Canal Traffic Bill, May 6th, 1886.)
[8] If an engine and tender weighing together 56 tons is capable of
drawing a maximum load of say forty loaded wagons weighing 560 tons
at 25 miles per hour on the level, it will only take the following
loads over the gradients named below, and, in addition to the
reduction in the load, the speed would also be considerably reduced.
Level. 40 wagons weighing 560 tons. Incline 1 in 100 20 ” ” 280 ” ”
1 ” 50 10 ” ” 140 ” ” 1 ” 30 6 ” ” 84 ”
See also Spon’s Dictionary of Engineering; Encyclopedia Britannica
“Railways,” and the elaborate work _Des Pentes Economiques en
Chemins, par M. Charles de Freycinet_.
Equality is here not equity. To all railway companies the result
of establishing a system of equal mileage rates would not be the
same. Much would depend on the question whether the rates were the
same over all parts of the same railway, or whether equal mileage
rates were in force throughout the country: a distinction not always
borne in mind by those who propose such rates. Undoubtedly to many
railways the loss of traffic as the result, of equal mileage rates
would be serious. Unless a very low scale of rates, entailing heavy
and unnecessary loss, were adopted, much of the long distance
traffic would cease to be carried. On other railways, however, the
present net revenue might be maintained by levelling up rates;
although the amount of traffic would be less, the working expenses
might be reduced. On the whole, the more the theory of equal mileage
rates is studied, the clearer it becomes that its adoption would
probably be much less injurious to some railway companies than to
colliery proprietors, manufacturers, traders, ports, and to the
country at large.[9]
[9] Before Mr. Cardwell’s Committee (23rd February, 1853) the late
Mr. Robert Stephenson, the eminent engineer, gave the following
illustration, which is not yet antiquated:--
“I referred to that in order to shew the Committee the great
impropriety of attempting anything like an equal mileage rate on
railways. I can elucidate that in a very remarkable manner, and shew
the injustice that the carrying out of the principle would inflict
upon some railway companies, especially where goods are concerned.
I will take the case of the Great North of England Railway, from
Newcastle coal-field towards York, and towards the rivers Tees and
Tyne. In one direction there were 5,450,000 tons of coals carried
over one mile, which was equal to 320,588 over one mile for each
engine; there having been employed by the York, Newcastle and
Berwick Company for the performance of that duty 17 engines. Towards
York, where the distance was greater, and the gradients were better,
and the loads heavier, and the work more uniform, 13 engines took
14,435,000 tons over one mile, which was equal to 1,110,000 tons
for each engine over a mile; in the other case, the duty that one
engine performed was carrying 320,588 tons over a mile; therefore in
this case one engine has done 3·466 more work than the other engine,
so that on the first line it cost the Company nearly four times as
much as it cost them for doing the same duty on the other line. On
the one line there are a number of collieries; the engines have to
stop and pick up the traffic, and the railway wagons do not average
perhaps more than seven or eight miles per day, whereas in the other
case they work for hours continuously, and with heavier loads and no
stoppages.”
To consumers, whose interest are so apt to be lost sight of in
the controversy, the change would be disastrous. Equal mileage
rates would seriously lessen or even destroy traffic now conveyed
long distances. By narrowing the area of supply, they would raise
the prices of provisions and commodities such as milk, fish, and
vegetables in and near great towns. The sustenance of a community
such as London, is, one might almost say, possible only because
it is not fed solely from the region immediately round it, but is
supplied from very distant points. If the London markets are able
to procure fish from remote parts of Scotland or Ireland, beef
from Aberdeenshire and adjacent counties, milk from farms within
100 miles, vegetables from Penzance, and the Channel Islands, eggs
and butter from Normandy, coals from the Midlands, Lancashire and
South Wales, the capital owes these advantages to the fact that
English railways have not been bound by equal mileage rates. Were
such a system strictly enforced, fuel, provisions, and most of the
necessaries of life would be raised in price. So far as consumers
are concerned, equal mileage freights by sea--the height of
absurdity in the eyes of all who know anything of commerce--would
be as reasonable as equal mileage rates by land.[10]
To manufacturers whose works and premises are not near densely
populated districts or ports--the great centres of consumption or
export--the change would be disastrous. They would be driven out
of the field by more favourably situated competitors, who would
acquire a monopoly. The pursuit of certain trades would become
impossible in districts in which they are now carried on with
success. Not a few manufactories would soon be closed, but for
the facilities which they now possess for procuring raw materials
from remote parts. To give a few illustrations out of many: South
Staffordshire is supplied with iron ore or pig-iron from Staveley in
Derbyshire, Westbury in Wiltshire, Fawler in Oxfordshire, Frodingham
in Lincolnshire, Ulverstone and Wigan in Lancashire, Middlesborough
in Yorkshire, and also from South Wales; and it receives limestone
from Froghall in North Staffordshire, Minera in Denbighshire,
Wirksworth in Derbyshire, Presteign in Radnorshire, and Porthywaen
in Shropshire.[11] Such are examples of the interdependence of
districts and industries, the co-operation of places far apart, with
which equal mileage rates would interfere. Even if originally they
would have been beneficial they would revolutionize the conditions
under which trade has been carried on in this country since the
introduction of railways.[12]
[10] See preface to Smiles’ Life of Stephenson, and, as to the
provisioning of Paris by means of railways, interesting details in
_La Transformation Des Moyens de Transport, par Alfred de Foville,
Chef de Bureau au Ministère des Finances_, p. 256.
[11] About thirty years ago, when the iron works at Westbury in
Wiltshire were constructed, it was anticipated that fuel would
be obtained from the Badstock district, about 14 miles distant.
But after sinking collieries it was found that the coke was not
suitable; so that it has now to be obtained from South Wales, a
distance of about 130 miles. The pig iron is sent to South Wales in
the return coke wagons, and also to South Staffordshire, a distance
of 140 miles. The coke and pig iron are carried at special low rates
below those in force for traffic to intermediate places. Without
such special rates, or if mileage rates were charged, the works
would have to be closed.
[12] An American writer points out that the following would be the
result of applying the principle of equal mileage rates, or of
basing rates on cost of service:--
1. “There would be little or no classification of freights.
Grain, lumber, coal, iron, shoes, dry goods, groceries, drugs and
chemicals, would all have to pay near about the same rate per 100
pounds per mile, and that rate would have to be something like an
average of the present rates charged upon the different classes of
freight. The higher classes of freight would be a good deal lowered,
and the lower classes would be materially raised. The result would
be that cheap and heavy products could be no longer transported over
the distances that are now carried.
2. “The rates on through freight would have to be proportioned very
nearly to the distance hauled. The rate from Chicago to Boston for
instance, would be materially higher, and the rate from Chicago to
Baltimore materially lower than the rates from Chicago to New York.
3. “Roads having the lowest grades, and most favourable alignment
would have lower rates than their competitors, and would monopolise
the business, to the entire exclusion of those lines which traverse
more difficult and expensive territory, and upon which the cost
of transportation was greater. And the tide once turned, the evil
would multiply itself; for the rates would decrease rapidly on the
favoured roads, with the increase of business, and would increase
on the unfortunately located roads, with the decrease in volume of
their freight, until the latter would be left with nothing but their
local business to support them, which would then have to be advanced
to the highest figures possible.”--_Railroad Transportation, by E.
P. Alexander, Vice-President of the Louisville and Nashville Railway
Company._
Some advocates of the theory of mileage rates may concede that
their adoption would entail loss on certain districts and to
some individuals, but deny that the community as a whole would
suffer.[13] Is this a reasonable view? Even if the home trade were
not injured, the result of equal mileage rates must be to increase
the cost of production of many articles manufactured at a distance
from ports of shipment. Would not this make competition with foreign
countries more difficult than it is? And must it not reduce the
demand for labour?
[13] Very recently the fishermen in the North of Scotland have been
asking that the same gross rates shall be charged from Wick to large
towns in the South as are charged from the fishing ports, such as
Grimsby, on the East Coast of England. What would they, or most
consumers of fish, say to equal mileage rates?
The principle of equal mileage rates, it may be added, has been
condemned by every Royal Commission and Parliamentary Committee
which has investigated the subject; and this condemnation has been
pronounced on grounds for the most part wholly independent of
the interests of railway companies. As pointed out by the Select
Committee of 1872, the principle would “prevent railway companies
from making perfectly fair arrangements for carrying at a lower
rate than usual goods brought in large and constant quantities,
or for carrying for long distances at a lower rate than for short
distances.”
“It would prevent railway companies from lowering their fares
and rates so as to compete with traffic by sea, by canal, or by
a shorter or otherwise cheaper railway, and would thus deprive
the public of the benefit of competition, and the company of a
legitimate source of profit.”
“It would compel a company to carry for the same rate over a
line which has been very expensive in construction or which from
gradients or otherwise is very expensive in working, at the same
rate at which it carries over less expensive lines.”
The Committee add--“It will be found that the supporters of equal
mileage, when pressed, often really mean, not that the rates they
themselves pay are too high, but that the rates which others pay are
too low.” In other words, they desire to apply the principle when it
works in their favour, and to reject it when it does not.[14]
[14] “We have nothing to do here with the study of the tariff
systems adopted on the Alsace-Lorraine lines, and extended with
some modifications to the generality of German lines. Seductive by
its simplicity, the principle of fixing the rate according to the
weight only, and without regard to the value of the object carried,
has not found numerous partisans in France. Such a radical reform
would overthrow our commercial habits, and would occasion results,
in a financial point of view, which would be impossible for us to
estimate.” Report of the French Commission of the Third System on
Railway Tariffs, by M. Richard Waddington. (Appendix 31 to Report
from the Select Committee on Railways (Rates and Fares), 1881-2,
Vol. 11. p. 449).