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Has Absorption Gone Too Far? .
Page 102
Page 103
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With the Development of Quasi-monopolies, About 70 per cent. of Public Service Vehicles Have Fallen into the Hands of
the Larger Operators
HAS the time come to call a halt in the process of monopolization in the road passenger-transport industry ? Is the way being paved towards nationalization? Is the convenience of the whole British public being jeopardized by the growth of large inter-connected combines and statutory monopolies?
Let us weigh up the position. Each year sees a further decline in the num-• her of independent operators and an expansion of combine interests. In addition, the businesses of hundreds of operators in the Metropolitan Area have been compulsorily acquired on the establishment of the London Passenger Transport Board, which has an absolute monopoly in a territory covering practically the entire Metropolitan Area.
In 1933, there were altogether 5,936 operators, 5,747 of them owning fleets of up to 24 vehicles each Two years later we find that the total number of operators had dwindled by 623 to 5,313, the class for fleets of up to 24 units having declined by 625 operators to 5,122.
623 Fewer Operators.
On the other side of the dividing line —the 25-vehicle mark—the number of operators fell by only one (179 in 1933 and 178 in 1935). When the increase of three (from 10 to 13) in the number of persons who operated with hired vehicles is brought into the calculation, the previously mentioned figure of 623 is reached for the aggregate decline in coach and bus owners.
Operators of fleets of up to 24 units possessed altogether 15,964 vehicles in 1933, but with the development of monopolistic tendencies, their aggregate vehicle strength dropped to 14,707. The bigger concerns, however, increased their fleets by 2,361 units between 1933 and 1935, with the result that, whereas in the former year they had between them 29,369 machines, in 1935 they owned 31,730.
The larger operators have, therefore, been entirely responsible for the increase in the total fleet strength of the industry from 45,393 to 46,437 units luring the years under review.
But the process of absorption so far carried out is a mere shadow of the hulk of annihilation looming above independent enterprise in the industry. Undaunted by their earlier failure, the leading supporters of the project for forming a great municipal transport board in South East Lancashire and part of Cheshire are, spurred on by the ,railways, seeking to reintroduce the scheme on an even larger scale.
They are, no doubt, encouraged by the initiative of Stoke-on-Trent and Newcastle-under-Lyme Corporations in promoting a Bill for the establishment of a transport board in North Staffordshire-. This is a highly dangerous measure, under which it is proposed to take over all private passenger-transport undertakings in a wide area.
Provisional contracts with most of the independents, who own a total of some 250 buses, have been reached, providing for the purchase of their businesses on tM basis of about £4,400 per vehicle. The Bill will doubtless be strenuously opposed on behalf of the Potteries Motor Traction Co., Ltd., which also. owns 250 vehicles, and by various local authorities.
Mr. O. C.*Pciwer, traffic manager of the Birmingham and .Midland Motor Omnibus Co., Ltd., recently summed up the situation by saying: "We shall have the transport of a huge area controlled by 39 members of a board; each . with a parochial intere4 to •secure advantages for tbe.area he represents and all -fighting for their .own ends."
Menaces to the Industry.
' No doubt -Mr.Power would dismiss with similar contempt, but with rather more fear, .a scheme of unification for Lancashire. The Staffordshire project is a menace to the industry, but the plan for the Manchester area is infinitely larger in capital value and territorial scope.
The seeds of nationalization are being sown in these schemes—however airy they may be—for the setting up of further statutory monopolies on the lines of London Transport. The main strength of the industry to resist nationalization lies in its division into a fairly large number of comparatively small units, hut if it were compounded into a handful of groups, the task of a Government in taking over the whole road passenger-transport industry would be greatly simplified.
That the Traffic Commissioners are aware of the possible dangers of quasimonopolies, whilst appreciating their administrative advantages, is shown in their Fifth Annual Reports, The South Wales Commissioners state: " We have found it necessary resolutely to check the attempts to withdraw facilities from the travelling public, which have resulted directly from such absorptions.", Commissioners Apprehensive.
The East Midland Commissioners appear not to be altogether impressed with the wisdom, financial and Otherwise, of amalgamation. They say
" The question that comes before our minds from time to time is whether absorptions haye not gone far enough, and that a halt should be called. It has been found, where there are disputes between emPloyees and the larger operators, „owing ,to the elimination of the small owners, it becomes increasingly difficult to provide services for the public when the services of the larger companies are brought to a:standstill, or seriously curtailed. " Further, complaints are frequently received that when the services of small operators are taken over by the large operators, the public find that the facilities they previously, enjoyed have been considerably reduced. Whilst we do all we can to see that the public does
not suffer by absorptions, cases do undoubtedly arise where, owing to the apathy of local authorities who have a right to object, we agree to reductions in services, not being aware of the force of the arguments against such reductions."
The Commissioners mention a vital point when they refer to the ill-effects of industrial stoppages in large organizations. With some 70 per cent. of vehicles in the hands of groups of large operators and over 13 per _ cent, of buses and coaches owned by one statutory monopoly, the dangers of passenger-traffic paralysis by strikes are 'enormous, and call for immediate public recognition.
Those dangers can best be illustrated by reference to figures. 'Throughout the country there are 34 operators As ith fleets of 200 vehicles or over, each serving a widespread territory, and much of it heavily populated by people of the class to which the bus is a necessary adjunct to the earning of bread, and butter. These companies control be
tween ' them 20,727 vehicles—nearl half the total number of public servic vehicles in operation.
In the Metropolitan Area, the oui come of a widespread stoppage woul be even more grave, for the Board hr a monopoly in the greater part of territory comprising 1,986 square milt and with a population estimated at OVE 9,400,000, Strike action by the lat and tram employees of London Tram Port would result in the almost con plete cessation of surface-transpo: facilities in an area extending approx mately 45 miles from cast to west an 50 miles from north to south.
As is shown by the accompanyin table, the influence of powerful grout is particularly strong in certain otht areas. In the West Midland Area, ft instance, where 3,463 vehicles are i the ownership of 495 operators, 1,514 t the machines are operated by the Bi mingham and Midland Motor Omnibt Co., Ltd., and Birmingham Corpor: tion. In other words, the remainir 493 operators between them contr. little more than 50 per cent, of vehicles.
Powerful Yorkshire Interests.
Another striking example of turret tendencies is provided by the Yorkshi Area, where 3,000 of the 4,169 publ service vehicles are in the hands of operators of more than 19 vehicles eacl These figures emphasize the extel to which the travelling public is at tl mercy of a few large operators an their employees.
The question of the withdrawal I travel facilities, following amalgam. tions, is also important. This tendem is not unnatural, and the desire to ci down unprofitable services is probali driving force in the case of mar absorptions.
When will this process of erosic stop? Will the time come when ti road passenger-transport industry controlled by 100 or so inter-linked pi Irate companies and a similar numb, of municipalities, or fewer transpo boards? This is a grave problem whit must be faced. On the answer to ' depends the interests of a huge .trave ling population, undertaking-. OV 6,000,0001000coach and laud journe-, annually: —