GROUPING HERE AND ON THE CONTINENT.
“Grouping,” is the name of the familiar arrangement by which
collieries or works within a given area are charged equal rates,
and are thus enabled to compete on equal terms. In fixing the rates
for traffic carried long distances, grouping stations far apart is
carried out to some extent. For instance, the rates for tin plates
from South Wales and Monmouthshire to Liverpool are the same from
the works between Carmarthen on the west, and Monmouth on the east,
the distances varying from 160 to 206 miles. So, too, the rates
between Scotland and places in England, south of and inclusive of
Yorkshire, are divided into groups--22 in the former, and 39 in
the latter. Though the practice is not of the first importance to
railway companies, it is not without value to them. If “grouping”
were prohibited, and the nearest collieries or works could supply
all the coal or goods which were required, railway companies might,
in some cases, earn as much net profit on the traffic carried as if
grouping were adopted. No doubt, however, if the nearest collieries
or works charged the public enhanced prices, or if they could not
supply the commodities to the extent required by the public, the
railway companies would suffer. They would lose not only the traffic
which they might have carried, but they would also suffer from the
lessened prosperity of districts in which they had an indirect as
well as a direct interest.
The chief sufferers, however, from the giving up of “grouping”
would be the public; they distinctly gain by the practice, though
producers near great towns or sea-ports may lose the benefit of
“geographical position.” Collieries and works which are “grouped”
are enabled to contribute to the available supply. They enter
markets from which they would be otherwise shut out; the extent of
the trade is thereby increased; the price paid by the consumer may
be lessened. In fact, many traders admit, tacitly at least, the
value of the practice.
Its legality has lately been called in question. It has been
supposed to be prohibited by the decision of the Railway
Commissioners in the case of the _Denaby Main Colliery Company_ v.
_Manchester, Sheffield, and Lincolnshire Railway Company_, which
came before them in January, 1880. The complaint was that the rates
and tolls charged to the owners of the Denaby Main Colliery, for
the conveyance of coal, both by railway and canal were an undue
prejudice and disadvantage to themselves and undue preference to
the others within the meaning of Section 2 of the Railway and
Canal Traffic Act, 1854. The railway rates from the Denaby Main
Colliery to Keadby, which is 25 miles, and to Grimsby, which is 56
miles, were 2s. 1½d. and 3s. 1d. per ton respectively. Similar
rates were charged from the other collieries in the same group,
although the distances between Keadby and Grimsby and the Denaby
Main Colliery were 15 miles less than the most distant of the other
collieries in the group. For all coal passing to certain places to
the eastward, the Denaby Main Colliery was grouped with 48 other
collieries in the same district. But, except in certain cases, the
collieries were not grouped for coal going to the west; on traffic
sent to places in that direction Denaby had to pay according to
its geographical position. With regard to some portion of their
traffic to the west, the Denaby Main Colliery had special rates. The
decision of the Railway Commissioners, which has not been reversed,
was that this particular grouping system did subject the proprietors
of the Denaby Main Colliery to undue and unreasonable prejudice and
disadvantage. But their decision was probably upon the facts, not
upon the law; and their finding really was that the group was too
large, and that the Denaby Main Colliery ought to be taken out of
it. The same question was to some extent discussed in the House of
Lords in the _Denaby Main Colliery Company Limited_ v. _Manchester,
Sheffield and Lincolnshire Railway Company_ (L.R. 11, A.C. p. 97);
and the observations of the learned law lords do not confirm the
opinion that grouping is _per se_ illegal.[21] If the contrary were
the case--if all such arrangements were necessarily illegal--the
result would be somewhat serious to trade.
[21] “I think that even if it were distinctly found that the
differences in the charges actually made were so disproportioned
to the differences in the cost as to be undue and unreasonable, it
would not impose an obligation to charge equally.”--Lord Blackburn,
p. 122.
A few particulars as to grouping on the Continent may be mentioned.
It will be found that it has been adopted there for the same reasons
as led to it here.
In Germany and Holland grouping is recognised. There, as has been
previously mentioned, mileage rates is the principle on which the
tariffs are based, and the State practically controls the rates. But
some exceptional tariffs for coal and coke are not calculated upon
the distance from the place of origin to the station of destination.
Sending stations in certain cases, and sea-ports in others, are
formed into groups. In Germany, for instance, the sending stations
included in the exceptional tariff with Bremen, Hamburg, and other
ports in the North of Germany, are divided into seven groups. The
first three embrace all the stations in the Right Rhenish district
where coal mines exist. Group 1 contains about fifteen stations from
6 to 24 kilometres distant from each other, in a total distance
of 245 kilometres to Bremen and 359 kilometres to Hamburg. Group
2 contains about thirty-five stations from 1 to 19 kilometres
distant, and Group 3 seven stations at distances varying from 1 to
13 kilometres. The total distances to Bremen and Hamburg are 271
and 385 kilometres respectively. For all stations in the same group
there is one tariff, which is for one fixed consignment per week:--
Group 1 ... ... 49 marks per ton.
” 2 ... ... 50 ” ”
” 3 ... ... 51 ” ”
If there are two fixed consignments sent regularly every week for
one year, a reduction is made of one mark for every 10 tons, and for
3 Consignments weekly a reduction of 2 marks for every 10 tons.
4 ” ” ” 3 ” ”
5 ” ” ” 4 ” ”
6 ” ” ” 5 ” ”
The coal stations of the Rhine Province and Westphalia are also
grouped for Dutch, Belgian and French traffic. In the two last
cases, however, the differences of distance are very slight. For
Dutch traffic the differences of distance between the stations in
Group 1 vary from 1 to 16 kilometres in a total distance of 218
kilometres, in Group 2 from 3 to 20 in a total distance of 233
kilometres, and in Group 3 from 1 to 33 in 265 kilometres.
The grouping of the ports in the North of Germany, shows a much
greater difference in favour of certain ports. For instance, the
same rates are charged from the coal stations to Bremen as to
Hamburg, although the former is 114 kilometres (71 miles) further;
the distance from Dortmund to Bremen being 237 kilometres (147
miles), and to Hamburg 351 kilometres (218 miles.) The same rates
are also charged to the following ports as to Bremen, which is
distant from the various coal stations from 221 to 271 kilometres:--
Kilometres. Miles.
Bremerhafen 66 41 beyond Bremen.
Geestemünde 62 38½ ” ”
Harburg 103 64 ” ”
Hittfeld 94 58 ” ”
Nordenhamm 40 25 ” ”
Thus the “grouping” which is permitted, and indeed actually carried
out, by the German authorities, exceeds in degree anything of the
kind known on the railways in this country.
In France also, “grouping” of ports is sanctioned with a view to
promote competition. The special import and export rates from
Dunkirk, Calais, and Boulogne to Paris, which are equal in amount,
notwithstanding the differences in distance, may be taken as an
example:--
Dunkirk to Paris, 304 Kilometres.
Calais ” ” 296 ”
Boulogne ” ” 252 ”