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Price One Penny.
THE
NATIONALISATION
OF OUR
RAILWAY SYSTEM,
ITS JUSTICE AND ADVANTAGES.
By F. KEDDELL.
(Reprinted from JUSTICE.)
LONDON:
THE MODERN PRESS, 13, PATERNOSTER ROW, E.C.
AND
W. L. ROSENBERG, 36, EAST FOURTH STREET, NEW YORK CITY.
�All who are interested, in
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THE MODERN PRESS, 13, Paternoster Row, London, E.C.
(The Publications of the Modern Press can be obtained from W. L.
Rosenberg, 261, East Tenth Street, New York City.)
�NATIONALISATION of oar RAILWAY SYSTEM.
ERY few of those who considered the future of railways when they
V were first introduced foresaw the important part they would play
in the economy of the nation. To the Railway Companies the Legisla
ture granted a virtual monopoly over the means of communication
between town and town, and the towns and the country. The mono
poly was fenced about with certain restrictions, some of which were in
favour of the owners of land : these have been stringently adhered to ;
others were designed to protect the interests of the community: these
have gradually lost the little vitality they ever had. The monopoly was
granted under the middle-class sophism that it would always be to the
interests of the Railway Companies to serve the community well inas
much as their profits would increase if they did their work well, and
would decrease if they did it badly. But, being companies started with
the main object of making profit, they have steadily kept that aim in
view, and have constantly neglected the interests of the community as
much as they dared. Manufacture for profit has brought us adultera
tion and shoddy; distribution for profit, of which the transport is an
important part, has brought us evils equally great.
From time to time members of the middle class have approached this
subject with a full appreciation of the evils of the present system of
railway management, aud they have invariably ended with proposing
the transfer of the railways to the State. But, being middle-class men
with all the prejudices of that class, they have also invariably advocated
a system of compensation that would render the whole business a
failure. The Irish Land Purchase Bill broke the back of the Home
Rule Bill, and compensation breaks the back of all schemes put forward
up to the present day for the Nationalisation of Railways.
Mr. Charles Waring in a recent number of the Fortnightly Review
stated with precision the evils of the present system. He is somewhat
in advance of most of those who have written on the subject as yet. He
summed up the situation fairly enough in these words: “ The facts
which confront Society are exigent. Labour is unemployed, trade is
stagnant, enterprise is suspended, and the people in large numbers are
hungry and disaffected.” All this we say, and we say something more
that Mr. Waring does not, for he gives no idea of tracing these evils
back to their source, that of production and distribution being carried
on for profit and not for use. Mr. Waring further states that “ Her
(England’s) welfare can then be maintained in spite of the increased
competition of other countries if her instruments of industry, of which
railways are the greatest of all, be made properly available.” With Mr.
Waring’s plan for making the railways properly available we will deal
�^\^:\x.ck\x^x\XVXxvvx>s-?-? ;
;v;.‘
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4
later on. With his contention that under the present system they are
not “ properly available ” we heartily agree, and we will proceed to con
sider the facts on which this conclusion is based.
In the first place we will consider the magnitude of the problem. The
Capital value, that is the nominal amount spent in building up the pre
sent network of railways, is in round figures eight hundred million
pounds.sterling. The number of miles of railway are 20,000, the pas
sengers carried per annum are nearly 700,000,000, the goods carried
(exclusive, of live stock) are 260,000,000 tons. The receipts amount to
^671,000,000, of which ^33,300,000 are paid away as dividends. The
shareholders are estimated to be 400,000, the debenture holders 100,000;
the persons employed are nearly 400,000. These figures, however, give
us no idea of the power and influence the present railway system
has over the prosperity of the country. We can only appreciate
this, though but faintly, when we consider that there is not a single
exchange of commodities in which distance is involved that is not mate
rially affected by the grasp the Railway Companies have over the means
of communication and transport. The supply of food, of building mate
rials, and of clothing, is affected by the rates that the railway may
choose to levy. The managers of our railways can build up an industry
in any town by preferential rates, they can destroy it by levying maxi
mum rates. They can, and do prejudice home industries by conveying
foreign produce at a less rate than that imposed on home produce. The
only rule that they follow is that of declaring the highest dividend they
can ; all else is subsidiary ; a home industry may be destroyed, the pros
perity of the nation may be impaired for aught they care, so long as they
can maintain their dividends. The question, however, that we have to
consider is not how to preserve the interests of a few possessed of a
monopoly, but whether or no the monopoly granted by the Legislature,
when it represented not the nation but a couple of classes, should be
continued to the great detriment of the interests of the nation.
The only valid ground for maintaining the monopoly would be the
proof that the Railway Companies have made a fair and proper use of
their great powers, and have conduced to the prosperity of the people.
But the exact contrary is the case. The Railway Companies have
abused their powers, they have used them constantly to the furtherance
of their own interests, and they have grievously mismanaged their busi
ness to the great harm of the community. As is well known the indus
tries of this country are rapidly passing from the purely individualist
into the company form, whaile the business is carried on, directed, and
managed by salaried officials. In the case of the Railways, the Company
form, by the necessities of the case, was assumed at the very outset.
Now the workers know well enough how much harder are the conditions
when working for a Company than for an individual master, but this
effect on the condition of the workers, great though it is, is only a small
part of the evils that competition and production for the profit in the
Company form inflict upon the community.
In the case of the railways, however, we have ample evidence of the
great injury done to the community generally by distribution for profit
under the Company form, which may serve as some guide in estimating
the evils of production for profit under the same phase.
We stated that the capital value of the railways is estimated at about
eight hundred millions, and the amount divided yearly amongst share
holders, &c.. at ^33,300,000. The National Debt amounts tO;f740,330,000,
and the interest paid to the holders is ^28,883,670. These two items
. A:.
�5
show the burdens placed upon the workers of the present day by the
class legislation of former years. It is generally known that of the sums
borrowed which form the National Debt an enormous amount was abso
lutely wasted, but it is not so generally known that much of what is
called the capital value of the Railways is in part wealth absolutely
wasted, in part purely fictitious.
The waste consists principally of the ridiculous compensation extorted
by landowners for the ground required by the railways. The Legisla
ture when railways were first introduced consisted almost entirely of
landlords, the whole of whose power was used to extort this unjustifiable
compensation. Joseph Locke, an authority on this matter, estimated the
excess of compensation at about ^80,000,000. This amount is appa
rently arrived at after allowing a “ fair” compensation for the land, but
does not take into account the increased value given to the remainder
of the property by the mere presence of the railway. Had the landowners
made a free gift of the land required they would still have gained largely.
Some idea of the excessive compensation for land may be gathered from
the following instances quoted by William Galt. A parcel of land was
bought by one company for ^3,000 ; a further sum of ^10,000 was
claimed and paid for consequential damages. The London and Bir
mingham Railway Bill met with so much opposition in Parliament from
the interested landowners that the requisite land was ultimately pur
chased at three times its fair value, that being the only way in which
the opposition could be bought off. When the Eastern Counties Rail
way was planned, a few miles were required of the estate of a noble
lord under one plan and of that of a right honourable gentleman under
another plan. The noble lord stipulated that he should be paid
£120,000 for his five or six miles, and although the Bill was amended,
the noble lord obtained his ^120,000 and the right honourable gentleman
^35,000. The following table taken from William Gait’s Railway
Reform shows the cost per mile for land compensation only, paid by
four companies :
L. and S. W.
... ^4,000
London and Birmingham ^6,300
Great Western ... ^6,300
London and Brighton ... ^8,000
Against these amounts may be placed the case of the Peebles and Edin
burgh line, which was constructed shortly after the era of excessive
compensation at a cost of ^1,131 per mile for land and compensation,
and at a total cost of a little more than ^6.000 per mile.
The second source of waste is found in the enormous legal expenses in
curred by the companies, partly on account of the opposition offered by the
landed interest, and partly by the quarrels between the companies to
obtain control of certain districts, In the case of the four railways
above mentioned, Galt estimates the Parliamentary expenses per
mile, viz:—
L. & S. W....................... £^5° I Great Western .......... ^1,000
London & Birmingham... ^650 | London & Brighton ... ^3,000
The whole of the Parliamentary expenses of the Peebles and Edinburgh
Railway were ^1,569, say /"So per mile.
Further: the capital accounts of all the railways in the United Kingdom is
taken to be about ^800,000,000 ; but this is the nominal amount, and does
not represent the sum actually received and spent. Some of the stocks
have been issued at a discount, and even debentures at a fixed rate of
interest have been granted for an amount larger than that paid for them.
To establish anything like an approximate statement of how much of
�6
these £800,000,000 was actually received and paid away, and how much
is purely fictitious, would require an exhaustive research into the
financial history of our railway companies since they were first estab
lished. We can, however, glean from the statements issued for the
half-year ending 31st December 1885 sufficient facts to warrant the con ■
elusion that a heavy reduction on the £800,000,000 could on this score
alone be easily made.
The London, Brighton and South Coast Railway pay dividend on
£"17,696,175 shares and stock; the accounts show that only £”17,413,500
were received. In the accounts of the Great Eastern, allowance is
made for £”1,609,054, difference between nominal amount of the ordinary
stock and its price of issue, and for £”1,542,758, for a similar difference
on the guaranteed and other stocks. Dividend is paid on £"27,833,289;
ordinary and guaranteed stocks together.
The Metropolitan Railway have issued perpetual Preference stock for
£”2,502,038, of which £”400,408 is nominal, and has never been received
by the Company. On an issue of £”1,500,000 Preference stock by the
Metropolitan District, a discount was allowed of £”548,766 ; this item
alone reduces the nominal capital of the Company (£”7,860,519) by
nearly 7 per cent.
In the account issued by the Chatham and Dover of their expenditure
of capital during the half-year ending 31st December 1885, there is an
item of £”137,296, discount on issue of arbitration Preference stock; the
amount received during that half-year for this stock was £”443,159.
The London and North Western accounts show that they have
received for stocks and shares, £"66,185,705, which rank for dividend
and as capital for £"75,539,781. The difference is startling, £”9,354,076.
Leaving out of account the difference on the Chatham and Dover
accounts, as the figures given in it do not allow of any precise statement,
we find that the capital accounts of the other five companies referred to
are 12 per cent, greater than they should be, and are £"13,737,737 in
excess of the cost of the railway. If a mere cursory glance at halfyearly statements gives this result we may reckon with confidence that
an exhaustive investigation would materially reduce the swollen nominal
capital of our railways.
There is a further heavy reduction to be made on account of the mis
management, to use a mild term, of the railway companies on the score
of having paid dividends out of capital. The greatest ingenuity is shown
by railway managers in their efforts to keep up high dividends, especial,}’
in times of crisis and depression. This national concern is run for profit
and not for use, and every nerve is strained to show the most profit,
even when the means adopted are such as to prejudice future
interests.
Under the present system, where the transport of
commodities is left to companies to exploit for their own benefit, we
can hardly be surprised if dividends are objects of greater anxiety than
the national welfare; but we have a crowning proof of the incapacity of
the middle-class to manage their business in the manner in which the
managers-of railway companies have deliberately sacrificed the future
interests of the shareholders.
The way in which dividends are provided, in ordinary times partially,
and in bad times entirely, is simplicity itself. It consists of meeting
expenses that should be paid out of the yearly income by the issue of
further shares or debentures. The accounts that the companies render
show nothing of this except to skilled investigators. The ordinary
shareholder believes that the dividend has been fairly earned, and that
�the formation of further capital can be justified by principle. But the
dividend has not been earned so long as one item of legitimate current
expense is met by the creation of further liabilities. Every share thus
issued is a mortgage on the future, and is a proof of mismanagement.
Nor do the railway officials content themselves with piling up the capital
account to meet current expenses; to give a show of prosperity they will
starve the permanent way, and will keep down necessary expenses to a
dangerously low level. Further, to keep up the appearance the officials
will encourage enterprises that have but faint expectations of proving
remunerative, and embark on an extravagant outlay of capital on lines
that are open. To such a pitch was this method of doing business car
ried that Willliam Fleming, a high authority on railway figures, calculates
that in 1878 the following dividends were paid out of capital:
77 per cent, of the Great Western dividend. 57 per cent, of the Glasgow & S W. divnd
19
ditto
Gt. Northern ditto
The whole of the Manchester, Sheffield &
Lincolnshire dividend.
90
ditto
L. & N. Western ditto. Ditto
Caledonian dividend.
Lan. and York, ditto.
49
ditto
Ditto
North British ditto.
North Eastern ditto.
22
ditto
An examination of recent accounts show the same mismanagement
The sound principle that all the costs of working, including additional
accommodation and new rolling stock on all lines open for traffic, should
be met out of the receipts is completely ignored. Even such details as
huts for fogmen (N. W.), miscellaneous expenditure (L. C. & D.), lamps
(G.E.R.), are met by fresh capital. Re-signalling, interlocking signals,
continuous breaks, the cost of which at the most should be spread over
a few years, become a perpetual charge.
The rolling stock is on some lines starved as long as possible until a
big outlay of capital becomes inevitable. During the half-year ending
31st December, 1885, the Midland spent on rolling stock £80,074, the
South-Western, £93,858, the Great Eastern, £43,766, and the Great
Northern, £95,463, whilst the North-Western expended only £11,496.
and the Great Western, £11,763. Rolling stock from an engine down
to a coal truck has a limited life, and its cost should be defrayed out of
the income of the periodofits existence. To meet such charges by increase
of capital is financial jugglery, but it is almost inevitable when dividends
are made the chief object of a railway manager’s care.
T o sum up when the capital account of the railways is put at £800,000,000,
it must always be remembered that this amount is susceptible of very heavy
reductions. To arrive at anything like the real cost of the railways
serious reductions must be made: 1, on account of excessive and ridi
culous compensation paid for land ; 2, money wasted on legal expenses ;
3, the nominal character of part of the capital; 4, the payment of divi
dends out of capital by charging working expenses to capital account.
The next point to be considered is that of the rates the Railway Com
panies charge for the services they render; they have a practical
monopoly of the transport of commodities and passengers, subject only
to a control by the Legislature which has been and is still oc
the most grandmotherly description. In the various Acts of Parlia
ment establishing the different companies there is a list of maximum
rates to be levied on some fifty to sixty articles. To remedy this
absurdly inadequate schedule the Railway Clearing House has drawn up
a list of some 4,080 articles which are divided into seven classes with a
rate for each class. But this list is drawn up by the traffic managers of
the different companies, and the public has no voice in the matter. The
list bristles with anomalies, and is acknowledged to be imperfect and
�8
jl
jr
unfair by the railway officials themselves. No effort, however, is made
by the legislature to exercise any control over this classification, and
any proposition to rectify the anomalies and to subject the whole matter
to exhaustive amendment is met by the railway interest, which is second
to none in the influence it possesses in our middle-class House of
Commons, with persistent and hitherto successful opposition. As matters
are now, the maximum rates, established by the Legislature many years
ago under very different circumstances to those that now obtain, remain
in full force. The cost of locomotion, the time occupied in transit, the
character and bulk of the goods handled have all materially changed,
but the maximum rates remain the same. The reason why the railway
companies fight against any control in this matter is that these rates
afford them the means of granting preferential rates to districts and to
individuals. The maximum rates are so much above the cost of trans
port that ample opportunities are given of favouring one town or one
manufacturer by-granting him a special rate whilst other towns and
individuals are charged full rates.
The maximum rates fixed by the legislature apply only to carriage,
and the companies are further empowered to charge “ a reasonable sum
for loading, covering and unloading of goods, and for delivery and the
collection, and any other services incidental to the business or duty of a
carrier.” This extra charge is now known by the name of “ terminals,”
and to the items enumerated is now added, owing to carelessness in
drawing an Act of Parliament, a charge for the sidings and ware
houses. The amount of the charge is only limited by the word
‘ reasonable,” and the railway companies have not been slow to
avail themselves of the almost unlimited power to charge what
they like for terminals. The control exercised by the Legislature over the
charges of the railway companies for carriage of merchandise is there
fore a perfect farce. The mere transport is regulated by an antiquated
list of maximum rates which have little or no reference to the present
day, and the terminals are left to the discretion of the officials. The
result of such a “ control ” is aptly shown by the evidence of the Goods
Manager of the South Eastern Railway before the Parliamentary Select
Committee in 1881. The total charge on hops from Sevenoaks to Lon
don is 24s. a ton, from Redhill, 27s., from Staplehurst, 36s. Allowing
5d. a mile per ton for transport (the L.B: & S.C.R. charge 2d., and the
L. &S.W., 3d. per mile) the Sevenoaks rate leaves 15s. 8d. for terminals,
that from Redhill, 18s. 3d., and that from Staplehurst, 19s. 4d. The
Goods Manager admitted that ns. 6d. a ton for terminals would “ satisfy ”
the Company. A “reasonable sum” for terminals therefore means
according to the S.E.R. official a surcharge of 4s. 2d. to 7s. iod. per
ton in addition to a rate for transport that is double the average charge
of two other companies.
Under these fossil maximum rates and these elastic terminals a system
has grown up of preference to districts, to individuals, and to foreign
produce. Part of what has been done might of course be defended with
some show of reason, but it has been done by the wrong men. Such
important questions as creating new industries, and protecting old ones
by low railway rates, should be settled by the representatives of the
Nation, and not by Directors of a Company carried on for profit. The
tendency to consider first and foremost how to declare a good dividend
must warp the judgments of the railway officials, when they fix new or
revise old rates. The same cause must lead them to take advantage of
the public whenever they can; the Committee of 1882 found that the
�9
charges for conveyance were such as the managers thought “ the traffic
would bear,” or in other words as much as could be got without reference
to the cost of performing the service.
Competition is practically
absent; there is complete monopoly at 4,500 stations out of the 6,000
in the United Kingdom, and as Mr. Findlay, L. & N.W. manager,
confesses frankly the Companies agree between competing points. Mr.
Findlay as frankly states that to certain stations they charge higher rates
than to others further off “ simply because it is within our power.”
As regards preference shown to towns or districts the course adopted
by the railway companies has been in some cases apparently very judi
cious. For instance, at Westbury there is iron ore but no coal. The
Great Western Railway, therefore, grants low rates for the import of
coal and coke, and an industry that would not otherwise exist springs
into life The iron industry of South Staffordshire could not exist
were it not for the very low rates charged on the import of iron ore.
. But these are national concerns, and should not be left to the discretion
of indirectly interested railway officials. Further, who will guarantee
that the directors will never have any direct personal interest in the pro
tection of this or the other district ? A future director of the G.W.R.
might have a strong personal interest in stifling the inconvenient com
petition of W estbury with other iron producing districts. The commer
cial morality of the middle class of the present day does not stand so
high that such things are so improbable as to be practically impossible.
The preference shown to individual traders admits of no defence. Mr.
Horrocks, who takes a very moderate and middle-class view of the evils
of our railway systems, calls the inequalities “startling.” Traders find
out that they have been handicapped for years; more favourable rates
having been granted to their rivals. The defence of the managers is
refreshing in its coolness. They see no objection to individual preferences.
“ It is in accordance with commercial principle to charge one customer
10 per cent,, another 20, another 50, and another possibly 100, for doing
the same service.”
The preference shown to foreign over home produce is a kind of “ topsy
turvy ” protection. There is no doubt about the practice. Mr. Charles
Waring is emphatic on this point. He says, “ The companies not only
charge less for foreign than for home produce over equal distances, but
they charge less for foreign produce over a long distance than for home
produce over a short distance. They also grant facilities for getting early
into the market to foreign produce which they refuse to home produce.”
We would recommend this aspect of the question to the Fair Traders.
Here are companies to which the State has delegated one of the most
important functions of modern society: that of the transport of
commodities. The powers of these companies are such that they can and
do protect, by preferential rates, home industries in some cases and foreign
industries in others. This apparent contradiction is, however, solved by
the consideration that the companies use their vast powers simply and
solely for the purpose of making profits and declaring dividends. If pro
tecting home industries will increase their dividends, then preferential
rates will be granted to them, but if protecting foreign industries at the
expense of home industries will swell their dividends, why home indus
tries may and do go to the wall.
The next point to consider is the treatment and remuneration of
the workers on the railways, who are in one respect better off than those
who are employed in the production of wealth, for as yet few, if any, rail
way companies have shut their doors and discharged their hands, neither
�IO
do we find any parallel to overproduction causing a glut on the market,
and culminating in short-time and a large addition to the number of the
unemployed. This, however, does not apply to those employed in the
construction of railways who are discharged when their work is done.
The workers on the railways are, nevertheless, as much at the mercy of
the capitalists as any other workers; their wages are low, their hours are
long, and their occupation, in many cases, is one of great risk. But the
competition in this, as in other branches of industry, is so keen that men
are easily found who are willing to work under the present onerous and
dangerous conditions. It is a fact beyond dispute that in consequence
of the railway companies refusing to take proper precautions a large
number of their workers are every year killed and injured at their work.
The Amalgamated Society of Railway Servants has, year by year,
specially called the attention of the Companies to the very dangerous
conditions under which the shunters have to work. But the Directors
have taken no step to remedy the evil; apparently the only thing they
have done has been to issue a rule that no one is to go between the car
riages or trucks whilst in motion. The utility of this measure is that in
case of a fatal accident the rule is produced at the inquest, the Company
is exonerated from blame, and the Employer’s Liability Act is shut out
of operation. The Companies thus protect themselves from any claims for
damages, although they know well that the work could not be done if the
rule were acted upon.
In the ten years ending December 31st, 1884, 1,081 shunters were
killed outright, and 9,256 injured; in rough numbers, three out of every
four of those engaged in this work were at the end of ten years killed or
injured, the injuries from the nature of the work being almost always
serious. This holocaust to capital grasping for dividends continues ;
in 1885 no less than 451 workers were killed and 2,117 injured, as will be
seen from the following tabulated statement of accidents to railway
servants.
Number
1885.
employed.
Killed. Injured.
—
6,165 station masters
7
7,407 brakesmen and goods guards 5°
435
37,840 permanent way
102
134
2
1,605 gatekeepers ...
3
149
12,874 engine drivers
23
48,070 porters and shunters
82
586
12,795 firemen
20
196
22
3,518 inspectors
4
5,902 passenger guards
63
5
19,012 pointsmen and signalmen .. 14
4i
70,405 labourers
86
48
1
2,060 ticket collectors, &c....
6
55,940 mechanics
20
23
62,833 other classes ...
87
367
346,426
45i
2,117
Notice should be taken of the proportion between the killed and
injured platelayers ; if a casualty happens to a gang of these workers and
eleven are affected by it, five will be killed outright. The accidents to
brakesmen and goods guards are also very serious ; out of every 150
employed in 1885 one was killed, and out of every 17 one was injured.
It is far safer to be a soldier than a brakesman.
�II
The wages paid to railway servants are an instructive illustration of
the way in which our capitalist society forces the proletariat to run
great risks to life and limb for a mere subsistence wage. Shunters
receive from 2s. 6d. to 5s. for a day of 10 to 12 hours; goods guards and
brakesmen 3s. to.5s. for 10 to 14 hours; and platelayers 2s. 2d. for 9 to
11 hours. The lower rates are those at which they commence, the
higher are those to which they can rise. The hours are no indication
of the length of the day’s work ; overtime is generally paid for at a higher
rate, but in some instances 144 hours per fortnight; 66 and 72 hours per
week must be worked before overtime commences. A statement was
made in the Huddersfield Examiner a short time ago that “ In a full week of
seven days there are 168 hours, and hundreds of railway servants can be
brought forward and produce a time bill of 112 hours.”
The wages of signalmen vary from 3s. to 5s. per day of 8 to 14 hours.
The difference between the length of the day is however not altogether
in favour of the shorter time. The eight hours indicate far greater
strain, and can only be undergone by men of exceptional tenacity and
hardness. The number of eight hours boxes is however small, and they
are only tp be found at points where the traffic is incessant or excep
tionally heavy.
The railway servants have a society established for the purpose of
resisting unjustifiable reductions in wages or increased hours, and for
obtaining reduced hours and fairer remuneration. It is also a benefit
society, making certain allowances to those of its members who meet
with death or injury by accident. It recently granted the sum of £500
to be offered in prizes for automatic and non-automatic safety couplings
to wagons. In this, and in the other matters, the Society is doing good
work, but at the best it is only a palliative, it does not pretend to attack
the root of the evil; it does not concern itself in any way with the social
problem. As long as the railways are private property, as long as the
workers are the proletariat, so long will the companies be able to find
workers only too anxious to work at the present low wage and under
present dangerous conditions.
In 1885 the remuneration of the workers on the railways, taking into
account the large salaries paid to managers and other high officials, the
directors’ fees, the salaries of all officials, and the wages of all the men
w’as met by the payment of about ^17,400,000. The number of officials,
commencing at station-masters downwards, is 346,426, giving an average
remuneration of under 19s. 6d. per week. The actual remuneration is,
of course, something less as the total amount paid away includes the
salaries of the high officials, clerks, book-keepers, &c., who are not
included in the Government returns of the number employed on the
railways.
The remuneration of the “ non-workers,” say the shareholders, deben
ture-holders, &c., in 1885 was ^32,768,000, being at the average rate of
4*02 per cent, per annum on the total capital, loans, &c. Say that the
workers are now at work on an average 12 hours per day, their numbers
could be doubled, that is, increased by over 350,000, their hours of work
reduced to six per day, and their average rate increased from 19s. 3d. to
28s. per week, if what is now paid away to shareholders were divided
among those who do the work.
It is merely a question of calculation how the railway men would be
affected by a gradual socialisation of the railways which would guarantee
a mimimum dividend on the average of 3 per cent, terminable within 30
years, or with the life of the present stock and shareholder. If such a
�scheme were commenced to-morrow, men who are now alive would live
to see the day when the overwork of 346,000 men would be divided
among 692,000 at fair rates of wages.
Again: the reduction of the average dividend to the same rate, 3 per
cent, of interest as Consols say, would increase the payments to the
workers by ^8,200,000 per annum, and would permit the immediate em
ployment of over 200,000 men at the present rate of wages, and in a few
years, long before the railways became the property of the nation, the
number of workers on them would be 700,000, who would receive some
thing approaching a fair wage.
The scheme for the nationalisation of our railway system put forward
by Mr. Charles Waring, is mainly based on the idea that the State shall
not work.the railways with the view of earning profit, but “ utilise this
national instrument in the way most calculated to benefit trade, and by
these means to contribute to and increase national wealth and welfare,
regardless of the remuneration of the instrument itself.” This is a very
taking way of putting forward what is thoroughly unsound. It is quite
correct that the State should not “ earn ” profit out of the railways as it
does now out of the Post Office. The remuneration of the instrument
itself, which we take to be the workers on the railways, is, however, the
most important matter, and should have the most careful regard and
attention. Mr. Waring’s contention that, under his system, “ the un
earned increment of trade will go into the pockets of the people instead
of the pockets of one class of capitalists,” shows at once that his point of
view is diametrically opposed to anything like a Socialistic solution of the
problem, and that he does not see how his plan would work. It is true
that the profits would not go into the pockets of one class of capitalists,
but they would go into the pockets of other classes of capitalists, and
would never reach the people at all. Mr. Waring’s plan is that the
smaller wolves should share between them what now goes to half-a-dozen
big wolves.
As far as regards the revenues of the Railways the receipts derived
from the Passenger traffic are not so important as those derived from
goods traffic. In 1885 the income of all railways in the United Kingdom
from passenger traffic was ^25,585,335, and that from goods traffic
^36,871,945. The return per train mile on the passenger traffic was 4s.
and on the goods traffic, 5s. iod. Passengers, however, embark and
disembark themselves, whilst goodshave to be collected and delivered,
loaded and unloaded. Further the average fare per passenger was last
year eightpence and i-8th ; taking'15 passengers as equal to one ton, the
railways received per ton of passengers 10s. 2d. as against 5s. 6d. say
per ton of merchandize.
The most noteworthy feature in the passenger traffic is the increasing
importance of the third class. In 1878 the number of 3rd class passengers
was 441,202,291, and their fares amounted to ^13,957^03, whilst in 1885,
the passengers were 603,762,117, and their fares amounted to ^17,588,730.
But the number of first and second class passengers in the same period
has fallen from 110,391,363 to 93,450,914, and the amount paid by them
for fares has decreased from ^8,064,726 to ^"6,174,081. In other words
whilst the first and second class passengers paid 36.62 per cent, of the
passenger receipts in 1878, last year they only paid 25.98 per cent.;
their quota of each 20s. received by the Companies has fallen from 7s.
4d. to 5s. 2d. in seventeen years. Considering the extra expense of
carrying first and second class passengers, and the great accommodation
placed at their disposal by the companies, it is manifest that the abolition
�of both or either of these classes will be one of the first steps to be taken
in Railway reform.
The treatment of the third classs traffic by the Companies is out of all
proportion to its importance. The middle class have at the present
day the control of the Public Press, and any shortcoming either in the
number or speed of the trains or in the conveniences and accommoda
tion afforded by the Companies and its officials is promptly enlarged
upon in the papers and as promptly attended to by the managers. The
consequence is that a large number of useless and superfluous trains are
run to suit the middle class, and the cost of running a large number of
nearly empty carriages is incurred without rhyme or reason. On the
other hand the complaints of the third class passengers seldom if ever
come before the public, and invariably meet with no redress. Anyone who
travels third class on our Metropolitan and Suburban lines can testify
to the inferior and scanty accommodation afforded by the Companies.
The passengers are themselves to blame to some extent for this state of
affairs ; they rarely object to being overcrowded, and any passenger who
protests against the presence of more passengers than can be carried
without great inconvenience is promply silenced and often abused by
those wno should protest with him. A second-claSs passenger who finds
no room in the second-class carriage promptly claims and is afforded a
seat in a first-class carriage ; the third-class passenger, however, crowds
into the third-class carriage while standing room remains, and if he com
plains at all, it is of those who obiect to his intrusion.
The immediate abolition of the second-class could be effected without
detriment to the finances of the Companies. The second-class pas
sengers in 1885, were 60,985,772, and their fares amounted to /2,931,111
giving an average of 114d ; the third-class passengers were 603,762,117,
and they paid in all ^i 7,588,730, or close on 7d a head. If all the secondclass passengers were to travel third-class there would, of course, be a
heavy loss, but the experience of the Midland Railway clearly shows
that this reform could be carried out with even an advantage to the
finance of the Companies. This reform, however, can only be considered
as a step towards the establishment of one class only. Those who insist
upon the distinctions that now obtain are mainly people who live largely
on the unpaid labour of the workers, or who are still under the yoke of
middle-class ideas of respectability.
The introduction of working men s trains at low fares shows that at an
early period local trains could be run at one and the same fare for anv
distance within the locality. This plan the London Road Car Company
has followed with success on the streets of London, and there is little
doubt that its introduction on our railways would be equally successful.
The longer journeys could then soon be treated on the same plan, but
the railway companies, who work the railways with the sole view of
earning a dividend, and who never regard the monopoly they possess
other than as a profit-earning machine are most unlikely to introduce so
sweeping a reform. But just as a letter can now be sent from London
to Inverness for one penny, so when the railways are taken over by the
community and managed in the interest of the community will a
passenger travel by train from Euston Square to the Highlands at a low
average fare.
The many complicated questions of rates for goods and passenger
traffic and the evil effects on the industries of the country caused by the
transportation of commodities being under the control and power of
joint stock companies, whose main idea is that of declaring the highest
�■
possible dividend, give rise from time to time to such great dissatisfaction
that railway commissions are appointed to examine into, and Bills are
proposedin Parliament to remedy, the evils and to solve the complicated
questions. The power of the railway companies is, however, so strong
in our present middle-class House of Commons, that both Commissions
and Bills come to naught, and the railway interest retains its old power
and control.
The consequence of this autocratic control of the companies
over the transportation of commodities was foreseen by many
prominent men of the Tory party when the present railway company
system was introduced. Sir Robert Peel declared to the railway mag
nates, “ You shall not have a permanent monopoly against the public,”
and his Government brought in and passed an Act empowering the
State to purchase the railways at the expiration of 21 years. This Act
has remained a dead letter, the principle of resuming the monopoly
is still fully recognised, but in practice the Companies have used
their monopoly as all monopolies have been used, namely for
their own benefit. Let us recite one or two cases of excessive
and of preferential rates. The principle on which the rates are framed
is simplicity itself; it consists in charging as much as the traffic will
bear, and the consequence is a set of rates defensible on no other principle
whatever. The London and North-Western charged 28s. 4d per ton on
steel wire from London to Birmingham, a distance of 113 miles, whilst
from Antwerp to Birmingham, 313 miles, they charged 16s. 8d. Another
Company charged as much for carrying goods 27 miles as for 86, and
again made no difference in the rate when the difference in distance was
116 miles. The Great Western charge id per gallon on milk for 10
miles, and the same rate for ten times the distance. Cattle are carried
from Norfolk to London at 10s. a head, whilst from the Midland
counties to London, a longer distance, the charge is 5s.
Foreign cattle
are carried on one line at 4s. less per head than English. Foreign
produce constantly obtains an undue preference. American meat and
cornare carried at lower rates than English meat and corn for
a shorter distance.
Large quantities of foreign produce are
charged less than home produce over equal distances, and are even
carried longer distances at less than home products over short journeys.
What is the remedy for this state of affairs ? Another Commission ?
All that a Commission can do is to make clear what previous Commis
sions have sufficiently demonstrated, namely, constant unfair preference
and a radically unsound treatment of the great question of the transport
of commodities by those who hold the monopoly, which Sir Robert Peel
declared should not be permanent. And what about a Railway Rates
Bill ? Anyone who followed the treatment by the railway magnates of
the very mild measure brought in by Mr. Gladstone’s Government in the
Spring of 1886 will at once see that any solution by the middle-class of
this important problem may hit a blot or two, remedy one or two evils,
but will never change the present system of monopoly carried on for the
profit and advantage of shareholders. Even supposing that a minister were
thorough enough to propose, and a House of Commons honest enough
to carry such a measure as Mr. Waring proposes, how much better off
would the workers be ? The railway question, as weil as all other
economic questions of the day, can only be solved by bearing steadily
in mind the effect that any proposed solution would have on the condi
tion of the workers.
Mr. Charles Waring is against the State carrying on the railways with
�II
a view of earning profit. He urges that they should be managed so as
to conduce to the “ largest development of trade, and to the “ growth of
commerce ; ” to help forward the establishment of innumerable centres of
industry,” and to “ increase the national wealth and welfare.” All these
are the fine phrases of the capitalist school. There is no reference to the
position of the worker, save such indirect and transient improvement of his
lot as may happen through greater development of trade and commerce.
His proposals might result in the improved position of the British trader,
but would leave untouched the relations between the Capitalist and the
Proletariat. In the domain of production of commodities every invention,
every discovery, every improvement in machinery, benefits the landlord
and the capitalist, and so in the domain of distribution, every improve
ment, every step towards perfection in working, also benefits the landlord
and the capitalist, but leaves the proletariat still the proletariat; the wage
slave of to-day is no less a wage-slave because the means of communica
tion and distribution are being improved day by day; in fact, the
tendency is in the other direction, the accumulation of unpaid labour is
accelerated by every improvement of which we boast so much to-day.
What, then, is the solution of the railway question that can alone be
deemed adequate, that will be able to solve at one and the same time the
two problems, how to manage the transport of commodities so that the
workers on the railways shall receive the full produce of their labour, and
yet at the same time help forward the production of wealth ?
If an energetic minority of the workers of Great Britain were thorough
Socialists the resumption of the monopoly granted to the railway com
panies could be effected in a single day and that without any compensa
tion whatever to shareholders, debenture holders, &c., except such as
they would have in enjoying the advantages of the organised system of
production and distribution which would replace the commercial anarchy
of to-day. Such a sudden change is, however, only possible at a climax
of an overwhelming popular movement. The French Revolution effected
a greater change when the land passed from the nobles to the people,
and the Stein land law brought about a “ Revolution ” in landholding
of equal magnitude in Prussia. This resumption of accumulated “ un
paid labour ” which has built up our railways without compensation is,
of course, the aim of every Socialist, and any deviation from this prin
ciple can only be justified on grounds of immediate expediency. A
moderate compensation might be advisable as solving the problem
sooner than a rigid adherence to the principle of recovering in full the
property of individuals who have no moral claim to it.
If the railways were taken over at once and without compensation,
the number of the workers could be doubled, their hours of work reduced
to six per day, and their average wages increased from 19s. 3d. per
week to 28s. At least 350,000 of the unemployed would be in work at a
decent rate of wages. If, however, full compensation were paid to the
shareholders, &c., not a single man could be added to the workers on
the railways, the wages could not be increased nor the hours of work
reduced. On the other hand, if the very liberal terms were arranged of
an annuity at 3 per cent, per annum for the next thirty years, the number of
workers at the present rate of wages could be increased by 200,000, and
the hours of work reduced to eight per day. What particular settlement
will be arrived at on this point will, however, depend entirely upon the
attitude of the workers ; the spread of Socialism amongst the prole
tariat and their steady combination will most materially affect the solu
tion. The average percentage paid away in dividends and interest
�i6
was 4.19 in i860, it is now 4.02 ; the variation has therefore been small,
but the average return on other investments has considerably fallen
during the same period, for instance, the value of money during the
same period has fallen from 5 per cent, per annum to 3 percent. The steadj^
return on the nominal capital of railways is of course the result of monopoly,
and the abolition of monopoly cannot be expected to carry with it compen
sation at the monopoly rate of return. Neither can the market value of
the shares be taken into account, for that also rests mainly on the return
per annum which is the result of the monopoly.
In any case, whether the railways are resumed by the community after
a long peaceful agitation, or at the climax of a short sharp struggle, the
first step towards reorganisation would be the concentration of all the
Boards that now direct our numerous railway companies. The practical
men, those who are conversant with the working of the traffic, would be
retained, whilst the guinea-pigs, the men of title, and the dummies who
say ditto to the leading spirit that virtually dictates the policy of the
company, would be retired. The practical men would then form a central
executive, and through local executives would carry out the organisation
of the railway service of Great Britain. But this central executive would
be subordinate to a Board which would direct which particular steps
should be taken first. On this Board it is not likely that there would be
a single man now in the service of any railway company. Apart from
the men who do the work on the railways to-day from the porters up to
those officials who actually manage the traffic, there is perhaps not a man
who is not so imbued with the present system of working for dividends
as to be virtually incapable of taking any new views. The direction of
the reorganisation would, therefore, of necessity be entrusted to some few*
thoroughly capable men, who, though they would have much to learn,
would have little to unlearn. In all probability the only apparent change
at first -would be the increase in the number of rhe workers, the
increase in their wages, and the reduction in their hours. It is not to be
doubted that this part of the programme could be carried into effect in a
few weeks. The other and no less important questions, the revision of the
rates on goods, traffic, and the systematisation of short and long distance
passenger fares, the proper use and extension of our canals, now burked
by the railway directors, the establishment of country tramways as
feeders to our trunk lines, would take more time, but all these reforms
would be carried out in a tithe of the time that it has taken the Com
panies to adopt and use a fairly efficient break, or to move one step
towards diminishing the annual slaughter of the shunters.
The main point, however, to be borne in mind is the inadmissibility of
any compromise whatever in the formation of the future directorate, or
in the principles of the reorganisation it is to carry out. In railways, as
in all other processes of production and distribution at present, the dead
instrument, capital, is that which now lives and grows whilst the workers
are changed to mere instruments, the reward of their labours is a sub
sistence wage, just sufficient to ensure the reproduction of the instrument
for the future. The due of the worker is, however, a share of all pro
ducts of labour in proportion to the work that he has done, and one
great step towards the realisation of this aim will have been taken when
the workers on the railways receive the full produce of their work.
�
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Victorian Blogging
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Conway Hall Library & Archives
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2018
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Conway Hall Ethical Society
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Title
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The nationalisation of our railway system, its justice and advantages
Description
An account of the resource
Keddell writes of his opposition to the monopolisation of communication, transport and profit by railway companies and the dangerous working conditions experienced by their employees.
Place of publication: London; New York City
Collation: 16 p. ; 23 cm.
Notes: Publisher's list on unnumbered page at end. Reprinted from 'Justice'.
Creator
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Keddell, F
Date
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[n.d.]
Publisher
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The Modern Press; W.L. Rosenberg
Subject
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Socialism
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<a href="http://creativecommons.org/publicdomain/mark/1.0/"><img src="http://i.creativecommons.org/p/mark/1.0/88x31.png" alt="Public Domain Mark" /></a><span> </span><br /><span>This work (The nationalisation of our railway system, its justice and advantages), identified by </span><a href="https://conwayhallcollections.omeka.net/items/show/www.conwayhall.org.uk"><span>Humanist Library and Archives</span></a><span>, is free of known copyright restrictions.</span>
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G4975
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application/pdf
Type
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Text
Language
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English
Nationalisation
Railways