The Basis of Goods Train Rates.
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The inception ot railway rates was, of course, with the opening of railroads, but the original rates, or tolls, as they were recognized in the early days of railways, with the classification necessary to apply such tolls, were simplicity itself compared with the involved and intricate system of rates and classification, as everyone connected with the commercial side of a railway company in the present. day will be able to testify. Such original tolls and classification could with ease have been printed on a piece of foolscap. The tolls generally were fixed at so much per ton per mile, varying from id. to 4d. or so. and the usual classification, instead of comprising, as now, a book of 372 pages, consisted of about 50 headings, with such generic terms as " cottons," " wools," " manufactured goods," " other articles," " matters and things." However, this was the foundation of what we have to-day. Further, the railway companies, at the commencement of their careers, were chiefly owners of rail tracks, so much so that even anyone possessing a locomotive that satisfied the requirements of t'hose days—certainly not so onerous as in 1907—could supply their own power, performing their haulage in their own trucks. I refer to these almost prehistoric times because, naturally, they show us very forcibly, I think, how the railway business and its methods have extended. With this glance at the beginning of the existence of railway rates, we will skip nearer and into our own times, and see how railway goods train rates, as we know them, are got at.
Maximum Rates.
In the first place, it must be stated that the Legislature has all along the line held a sort of " watching brief " in the way of stipulating that " thus far and no further shalt thou go " in the matter of charges, as they have always fixed a " not exceeding " or " maxima charges." In the years 1891 and 1892 Acts of Parliament were passed to confirm provisional orders made by the Board of Trade under the Railway and Canal Traffic Act, 1888. These Acts are styled "Rates and Charges Order Confirmation Acts," and contain the Parliamentary " hold of the reins," as we will call it, by fixing the maxima rates and giving the tables of classes of merchandise for applying the same. The rates are fixed up by the respective railway companies interested in the traffic, in the case of non-competitive stations by the company concerned, and with competitive stations by agreement of the companies carrying between the points. The general principle of rate-making will be stated later.
The Mileage Basis.
The primary basis of railway rates, then, is a mileage One, and the basis should he fixed in relation to the cost of haulage and other services. I say " should be " advisedly, for the reason that up to the present the British railway companies have not been able to arrive at actual costs of working the traffics dealt with, although attempts in this direction seem to be now more in the air. It must, however, be at once admitted that the question of " cost " is not only a difficult one, but one which can only be fixed on averages, and it seems to me that such averages must be applied to varying carryings and cover a lung period. The mileage basis of rates fixed by the Board of Trade, as authorized in the various " Order Confirmation Acts " passed in 1891, is, I think it will be generally admitted, upon a sound and equitable basis, apart from considerations of " cost," plus a reasonable margin of profit, because the maximum rates for conveyance are fixed by scales lessening as the distance lengthens up to 100 miles ; thus, taking class 1 as an example, the Great Northern Railway Co.'s Order Confirmation Act
gives the maximum conveyance rates as follow :—Per ton per mile 2.20d. for first 20 miles, or any part of such distance; 1.85d. for the next 30 miles, or any part of such distance; 1.40d. for the next 50 miles or any pare of such distance; and 1.00d. for the remainder of the distance. It, however, seems that. the reduction should continue beyond 100 miles, as equally the cost of haulage must lessen. Further, a mileage basis of rates would seem to be a necessity to comply with the very definite order under the Railway and Canal Traffic Act, 1888. as clause 27-3 provides:— " The Court or the Commissioners shall have power to direct, that nu higher charge shall be made to any person fur cervices in respect of merchandise carried over a less distance than is made to any other persun for similar services in respect of the like description and quantity of merchandise carried over a greater distance on the same line of railway."
Station and Service Terminals.
The " maximum rates for conveyance " are plussed by maximum station and service terminals which are fixed for each class. The " station " terminals cover the provision of and
cost of maintaining the stations, whilst the service " terminals are for services performed at the stations, viz., loading and unloading, covering and uncovering. If services beyond these are required by traders, the railway companies are empowered to charge a reasonable sum " in addition to the tonnage rate. Again taking class 1 for illustration, the " station " terminals at each end are is. 6d. per ton, and " service " terminals :—Loading, 5d, per ton; unloading, 5d. per ton; covering, 11d. per ton; uncovering, 1.d. per tun.
be Classification of Rates.
The rates are under eight classes applicable to traffic under the respective classes as follow :2-Class " A," applicable to consignments of four tons and upwards in owner's wagons )when railway companies' wagons are used, additional charges being authorized, according to distance). Class " applicable to consignments of four tons and upwards. Class " C," applicable to consignments of two tons and upwards. Classes 1, 2, 3, 4, and 5. Classes 1 to 5, both inclusive., are applicable to consignments in any quantity, except that for weights of 3 cwt. and under authority is given for the railway companies to charge amounts additional to the tonnage rate according to the amount of the rate) to cover the extra labour necessary, and resultant increased cost in dealing with consignments of such weights. Classes 1 to 5, inclusive, generally include the services of collection and delivery within fixed cartage limits. As a principle, the classification of merchandise is upon the basis of value, liability to damage, method of packing, and bulk in proportion to weight, as will ',eddy be seen by instances hereunder:—
Classified under A, such as coal, gravel, ironstone. Classified under B, such as bricks (clay, common, and fire), pig iron, slates (common). Classified under C, such as grain (as per list), iron and steel ale per list), potatoes in bulk or in sacks. Classfied under 1, such as ale and porter in esslis. glue. paper for news-printing; packing or wrappering. Classified under 2, such as chocolate, gun-metal. ropes. Classified under 3, such as calicoes, drugs in caeaa, bales or bags, iron drums. stationery.
Classified under 4, such as earthenware in boxes or caeca, hire-, (British, not silk), meat (fresh).
Classified under 5. such as bicycles. furniture, pictures.
Suggested Alterations in Classifications.
In the classification, anomalies are occasionally hought to light owing to (1) articles being reduced in value : 2) ; (3) new modes of despatch and in increased quantities, altered packing; (4) proprietary articles; (5) comparisons between articles in the different classes. Such anomalies, however, may be said to be almost restricted to articles in Classes 1 to 5, both inclusive, and it has often tecurred Inc whether railway companies would not, act wisely by abridging the classification under broad and generic headings, and time avoid the too-frequent fine distinctions mede by the existing classification, as in its present constitution it is often very difficult to ascertain the class under which certain traffic falls, and it frequently happens that the actual practices of charging followed by different companies. and even different stations of one company (to whom the classification is available at a cost of 1s. per copy) are ever watchful for the cheapest means of forwarding, and often ingeniously claim the application of the classification in a manner which gives
the lowest charge, frequently even by recourse to misdeclarations. If a system of classification could be adopted, such as upon a basis of, say, packing, handling, and loading with a limit of compensation for loss, damage, mis-delivery, or other liability in the case of rates at the ordinary risk of carriers, and in the case of owner's risk rates of goods only carried at the owner's risk, with the carrier's position definitely and legally defined (the advantage of rates at owner's risk being made applicable to all articles, instead of, as now, being restricted, and at a percentage reduction on carriers' risk rates), it would be a great convenience to the public, and I venture to think the railwas companies would also be in a far more satisfactory position than they are at present. It must, however, be stated that " owner's risk " reduced rates are granted by railway companies, without Parliamentary compulsion. I mention this because at the present time there is a bill to be brought before the House of Commons to saddle the companies with increased responsibility when such rates are taken advantage of by traders. Such a principle of classification is, I believe, already adopted, to some extent at least, on the Continent and in the 'United States, and as showing the operation of the British railway companies' classification compared with that of the Continental railways, the frequent instance may be cited of through traffic from, say, Germany to Leeds being declared to the satisfaction of the Continental railways under a generic term, whilst the consignment upon reaching these shores becomes subject to a far more particular and exacting classification. It has been my experience to find that the exacting system of railway charges has very often diverted business to agents, packed parcel, and water carriers, simply because those people are prepared to make all-round quotations at so much per consignment, per month or year. or are not £0 particular as to terms, enabling senders to thus easily assess their carriage charges, to say nothing of time and labour saved in check* accounts and consequent bookkeeping.
exceptional Rates.
The basis of rates upon the class " principle has been illuetrated, but the railway, companies, in addition, have in operation 1 system of granting rates, termed " exceptional," being reductions on the " class " rates. Such, rates are granted for regular or large traffics, and it is in respect of these that more frequent anomalies are found, either by comparison with each other, i.e., "exceptional " and " exceptional," or " exceptional" and " class," one district with another district, or distance for distance. "Exceptional " rates are either fixed upon scales, according to mileage, or are figures that will secure traffic, either by creation or diversion, and I think that in the case of staple business it may he safely affirmed that at least, say, 60 per cent, is carried under " exceptional " rates. Exceptional rates are not provided for in the schedules of the Rates and Charges Order Confirmation Acts, but where they have been given by the railway companies, and are duly recorded in rates book open to public inspection, they cannot be withdrawn, where such withdrawal would mean an increase of charges, or advanced, except by publication in a manner described by the Board of Trade, and such a course is an expensive one and liable to resistance, by traders interested, and has not been resorted to except in rare cases. This arrangement that advance in rates must be published on the authority of the Board of Trade is of general application, except, of course, where the railway companies are empowered to charge " reasonable sums " for special services, when the company is subject to be called upon to justify the reasonableness of such charges. " Exceptional " rates are also given upon the group principle, this being permissible tinder the Railway and Canal Traffic Acts 1888, and may be said to be a very convenient method of charging, both for the traders and railway companies, and one that should be encouraged.
The "What the Traffic Will Bear' Basis.
The practice of granting rates on the principle of " the most the traffic will bear " is, I consider, a fallacious nice. because this leaves the rate open to reduction by the cutting of prices of the commodity, and other influences outside rail'ay companies' control. But even a stronger argument against such rates is the fact that there are always natural or convenient centres of production or business, and, generally speaking. any attempt to divert traffic from these is usually of no
and is similar to "sending coals to Newcastle " : therefore, the railway companies' best interest is to foster business from its recognized sources. Further, rates fixed on "what traffic will bear " means the breaking down of all consistency.