OEPT, It MINISTRY OF TRANSPORT. ' SECOND INTERIM REPORT OP THE COMMITTEE ON INLAND WATEEWAYS. Presented to Parliament by Command of His Majesty. LONDON : PRINTED AND PUBLISHED BY HIS MAJESTY'S STATIONERY OFFICE. To be purchased through any Bookseller or directly from 11.; VI. STATIONERY OFFICE at the following addresses: Imperial House, Kingsway, London, W.C.2, and 28, Abingdon Street, London, S.W.I ; 37, Peter Street, Manchester; 1 St. Andrew's Crescent, Cardiff; 23, Forth Street, Edinburgh ; or from E. PONSONBY, Ltd., 116, Grafton Street, Dublin. 1921. [Cmd. 1410.] Price \d. Net. MINISTRY OF TRANSPORT. ~k DEPT - I COMMITTEE ON INLAND WATERWAYS. LIST OF MEMBEKS. Mr. Neville Chamberlain, M.P. (Chairman) Sir William M. Ac worth. Mr. Ernest Bevin. Mr. E. B. Dunwoody, O.B.E. Sir John E. Eaglesome, K.C.M.G. Sir Noel T. Kershaw, K.C.B. Sir Halford J. Mackinder, M.P. Mr. Arthur Sharp (Secretary). TEEMS OF REFERENCE. To consider and report as to — (1) What portions, if any, of the inland waterway system of the country should be acquired by the Ministry of Transport with a view to improvement and upon what terms ? (2) What should be the form of ownership of such acquired portions, whether under the State, through a Depart- ment of the Ministry of Transport, or through a regional trust, or by any other method? If a trust be recommended, what should be its constitution and the nature of its governing body? (3) What improvement should be carried out in such acquired portions ? What would be the cost of the improvement and how should the necessary funds be raised? Whether such acquired or improved portions would become self-supporting, and if not, what deficit would be involved ; also what indirect advantage would be obtained to compensate therefor? (4) What method should be adopted to ensure that any im- provement in the value of the frontages should be secured in part at least to the body carrying out the improvement to the waterway? (5) In what manner could co-operation best be developed between transport by water and transport by rail or road? The expenses of this Committee up to date amount to £143 2s. Od., of which £6 16s. 6d. represents the cost of printing and publishing this Eeport. MINISTRY OF TRANSPORT. COMMITTEE ON INLAND WATERWAYS. SECOND INTERIM REPORT- To the Right Hon. Sir Eric C. Geddes, G.C.B., G.B.E., M.P., Minister of Transport. Sir, 1. In February last we presented to you our first Interim Report dealing with the proposed improvement of the River Trent between Newark and Nottingham, and in the eighteenth para- graph we indicated that we might have further proposals to put before you in connection with that river, embracing the whole water route between the Midlands and the Humber ports. 2. We have not yet worked out all the detail of our plan, but it seems to us that the introduction of the Railways Bill makes it desirable that we should immediately lay before you the broad outlines of the policy in regard to Canals which, in our opinion, should be followed in the future. The Bill provides for a great strengthening of the Railways of this country by amalgamating them into groups, and it appears to us necessary that the future of the other forms of transport should be considered and if necessary safeguarded at this critical stage. 3. When comparing the traffic carried by inland waterways and railways respectively, it must always be remembered that even those water routes which connect the great ports with important industrial centres inland, are generally divided into sections belonging to different owners. As a rule these owners are not themselves carriers but merely toll takers and con- sequently there is no regular service, no attempt to attract traffic and generally very indifferent means of handling such goods as are carried by the bye-traders. 4. It was the consideration of these facts which led the Royal Commission of 1906 to the conclusion that the first essential to progress was unification of ownership, and their principal recom- mendation was that the unification should be achieved by pro- gressively substituting the State for the existing owners of the waterway system known as " the Cross." Their recommenda- tions were not adopted, possibly owing to the magnitude of the operations involved in improving the whole of " the Cross," and since the Report was issued not only have the waterways them- selves further deteriorated, but the change of values brought about (7/21) (34259r-12) Wt. 11892-35 375 8/21 H.St. G. 6 462'J90 by the War has made it useless to put forward any scheme upon such a basis. 5. Nevertheless, we are convinced that certain important waterways, were they given a fair chance and put under unified and competent management, would be capable of playing a very important part in the transport of the country. Experience shows that for certain kinds of traffic, water transport can more than hold its own with other methods, and in this connection it may be pointed out that where rivercraft can load direct to or from a ship lying in an estuary, lighterage, dock and warehousing charges are avoided. 6. In our last report we gave reasons for not putting forward estimates of increased traffic or revenue to be obtained from unified and improved waterways. Such estimates are bound, in the present state of our knowledge, to be speculative and un- reliable, and any deductions based upon them would lack authority. If any progress is to be made it will be necessary to take some risks, but we are of the opinion that it is possible to proceed by steps, the first of which would be comparatively in- expensive, but would afford data on which to found further advance if the results justified anticipation. 7. It is clear that no experiment can be expected to succeed unless it is on a scale large enough to give scope for adequate management. Nationalisation of our whole Canal system we put aside as involving liabilities greater than the nation is prepared to face, but if it were possible to divide up the various waterways into groups, each centring round some important traffic route, it appears to us that the conditions necessary for a successful experiment would be attained without incurring the risks involved in a national scheme. On consideration of the principal waterways of the country they seem naturally to arrange themselves into seven groups or systems, which may be roughly described as follows : — 1. The River Trent and its connections. 2. The Yorkshire Canals. 3. The Lancashire Canals. 4. The Canals joining Liverpool with the Midlands. 5. The River Severn with its' connections. 6. The River Thames and its connections with the Midlands and Bristol. 7. The Birmingham Canal and its connections in the Midlands. 8. The policy which we recommend as best suited to the needs and conditions of the times, contemplates the ultimate fusion of all the waterway connections in each of these groups into a single ownership, just as in the Railways Bill six groups of amalgamated railways are proposed. But whereas the railway position is estab- lished with adequate staff, equipment and capital, that of the waterways is still uncertain and precarious, and our proposal, therefore, is that a beginning should be made with one or two only of the groups, selecting those which present the best prospec* of success with the least amount of capital expenditure. The other groups would be proceeded with if and when their forma- tion appeared justifiable in the light of the experience gained. 9. There is a further difference between the position of rail- ways and canals in that the credit of the latter would not be sufficiently good to enable them to raise capital for improvements. A mere amalgamation of the existing owners, therefore, as in the case of the railways, would not provide the means of making the experiment we have in mind, and we are, accordingly, driven to the only remaining alternative, namely, a Public Trust, suitably constituted and supplementing its financial resources by the aid partly of the State and partly of local authorities having a special interest in the development of the group. 10. At this point it becomes necessary to consider the relations between such a waterway group as we have been contemplating and the railway group serving the same area. The waterway group in this connection may be viewed asa" nascent industry," and while we do not suggest that it should permanently receive specially favoured treatment if it cannot maintain its position on an economic basis, we think it necessary that it should be pro- tected from unfair competition during its earlier years. We have had evidence that, in the past, railway companies have, in order to meet water competition, not merely quoted special and un- economic rates, but that they have even given free lighterage, cartage and warehouse accommodation. This course of action may be compared to the "dumping" of which manufacturers complain, and since in this case the result would be to ruin the enterprise before it had proved whether it could stand on its own legs or not, we consider it essential that special concessions, either in rates or conditions, given for the purpose of crushing out water competi- tion should be barred by statute. In this matter, inland water- way traffic and coastwise traffic stand together, and the necessary provisions should be inserted in the Bill now before Parliament. 11. In order to carry through the grouping system which we are proposing,. it would be necessary to be able to bring in all the waterway connections comprised in any group, even though the Trust, when formed, might find it desirable to close certain branches. It follows, therefore, that the Trust must have the power of taking over any canals owned or controlled by railways within its area, and we consider that a clause should be inserted in the Railways Bill providing that, in the case of any Bill or Order proposing to transfer a canal or waterway owned or con- trolled by a railway company to a body of Trustees or Commis- sioners to be constituted by Parliament, the Railway Company shall not be entitled to be heard in opposition except upon the terms of the transfer. 34259 A 2 12. Eeturning now to the proposed Public Trusts, we con- template that these should take the form of a statutory body composed of representatives of the Ministry of Transport, the local authorities of the area covered by the group, users of the waterway, Chambers of Commerce and the stockholders. The latter would comprise the original owners of the various waterways in the group, who would receive Trust Stock in return for their interest, and also subscribers to the capital of the Trust whether in the form of Debentures or of Preferred or Deferred Stock. It is proposed that local authorities should be represented as such, but additional representatives would be appointed to the Board in proportion to capital subscribed. 13. While we do not desire to give the Trust a monopoly of carriage on its own waterways, we consider it essential that it should have power to carry and to conduct the business of carriers, including the provision of proper equipment, the soliciting of traffic, &c. The rates charged would be governed by competition, but the tolls to be charged to bye-traders would be fixed under statutory conditions. Further, the Trust should have power to apply under Clause 42 of the Kailways Bill for through rates on traffic to be forwarded partly by water and partly by rail, and provision should also be made for the fixing of through tolls where traffic is to be forwarded wholly by water but partly over routes not included in the area of the Trust. The Trust must also have power to purchase land compulsorily for widening existing water- ways or for the construction of new works, and we consider that these powers should extend to the purchase of land adjoining the waterways up to a statutory distance so as to give the Trust the benefit of any appreciation of frontage values in consequence of its operations. Finally, the powers of the Trust should include the acquisition by agreement of land beyond the statutory distance. 14. Keverting to the various groups suggested in paragraph 7, the one which we have put at the head of the list, namely, the Kiver Trent and its connections, stands out as pre-eminently suit- able for the first experiment. The Kiver is already navigable for 120-ton barges as far as Newark, and the Corporation of Notting- ham is under a statutory obligation to carry out certain im- provements which even at present day costs would involve an expenditure of less than £500,000, and would enable these craft to go right up to Nottingham. In our last report we set forth our reasons for believing that a very considerable increase of traffic would follow this improve- ment. We pointed out that although Newark itself is not a great originating source of traffic, the execution of the works which brought it within reach of craft capable of navigating the Humber, at once induced a great accession of water-borne traffic ; so that the final completion of the water connection between a first class port like Hull and so important an industrial centre as Nottingham might reasonably be expected to show far greater results. But if the various water connections of the river were also brought under a unified management and regular services established, we can see possibilities of very much larger develop- ment. The Foss Dyke Canal, for instance, would bring in the large works established in the neighbourhood of Lincoln and we have had evidence to show that, even now, a certain amount of trade goes by this route in spite of the inadequate locking accommodation. We do not suggest that it would be necessary to include all the eventual elements of the Trust at its com- mencement, and indeed it would simplify procedure if it were limited in its scope to begin with, but we think it is possible to map out the area to be included in the sphere of influence which might ultimately be taken into its control. 15. Accordingly, we propose that the following waterways should be regarded as within the " sphere of influence " of the proposed Trust : — The Eiver Trent from Trent Junction to Keadby. The Chesterfield Canal. The Foss Dyke Canal. The Grantham Canal. The Nottingham Canal. The Cromford Canal. The Ere wash Canal. The Derby Canal. The Trent from Nottingham to the Trent and Mersey Canal. The Trent and Mersey Canal from the Trent to Fradley Junction. The Loughborough Navigation. The Leicester Navigation. Some further investigation would probably be necessary before deciding which of these waterways should be acquired by the Trust, but we think it should be considered whether the original Trust should not include representatives of Lincoln, Derby, Burton, Loughborough and Leicester, even though the naviga- tions and canals with which they are particularly concerned do not come within its original scope. 16. We may now recapitulate our suggestions and proposals so far as they are expressed in this report. Before the War, canals and inland waterways carried some 40 million tons of traffic annually, with profit to themselves and advantage to the public. The altered conditions of the present day have, at any rate for the time being, placed them at a serious disadvantage, but it is quite certain that traders do not desire to see them become derelict if it is at all possible to carry on their business on an economic basis. To achieve this, it is necessary as a first step to bring about unification of ownership, and, nationalisation being out of the question, we propose the only practicable alternative, namely, the amalgamation of the various undertakings into a series of groups. For financial reasons, it seems impossible to leave these groups purely to private enterprise, and accordingly we propose that they should be owned and administered by Public Trusts, limited as to dividends and financed wholly or partly by the State and the Local Authorities concerned. These Trusts would be composed of representatives of various bodies having interest, financial or otherwise, in the working of the waterway system and they would have power to act as carriers as well as toll-takers from bye-traders. In order to facilitate their formation, we suggest that a clause should be inserted in the Kailways Bill providing for the transfer to the Trust by the Kailways, as and when required, of any railway owned or controlled canals on terms to be set forth in the Bill. We also consider that provisions should be inserted in the Bill which would make it impossible for any Kailway Group to quote rates or to give special services free of charge for the purpose of crushing out competition by a Waterway Trust in its area. We desire to make it clear that we do not contemplate the immediate setting up of Trusts to deal with all the seven groups into which we suggest that the principal waterways of the country should be amalgamated. On the contrary, we propose that the process should go forward by steps, beginning with those groups whch offer the best prospects of a return with a minimum of expenditure. In our opinion, the Kiver Trent and its connections, offers unique advantages in this respect and we urge that the formation of a Trent Trust should be proceeded with at the earliest possible moment. We have the honour to be, Sir, Your obedient Servants, (Signed) Neville Chamberlain (Chairman). *W. M. Acworth. E. B. Dunwoody. John Eaglesome. Noei T Kershaw. H. J. Mackinder,. Arthur Sharp, Secretary, 10th June. 1921. * Sir William M. Acworth has signed the Report subject to the Reservations appended hereto. Mr. Ernest Bevin has been unable to assist in the deliberations of the Committee upon this Report, but he wishes it to be placed on record that he dissents from the conclusions of the Committee with regard to ownership and control, being of the opinion that nothing short of national ownership of the Waterways of the country is likely to secure their full utilisation or proper development. Reservations by Sir William M. Ac worth. To the Eight Hon. Sir Eric C. Geddes, G.C.B., G.B.E., M.P., Minister of Transport. 1. I have hesitated whether I should sign the above Eeport. I agree with my colleagues on most points. I differ on others, which seem to me more important. My signature must therefore be taken with the reservations which I make below. 2. I agree that canal development is not possible unless the whole of the waterways within the same geographic and economic area are brought under unified control, and that with this object railway companies should be required to surrender any canal properties they may own within such an area. I agree that the canal owner must be permitted to be also a canal carrier. I agree further that, if an experiment is to be made at this stage, it should be on a modest scale ; that the Trent basin offers the best field for such an experiment, and that the proposed expenditure of £500,000 in order to enable 120-ton barges to reach Nottingham may fairly be described as modest. But at this point I am reluctantly compelled to part company. I think that an experi- ment at this moment would be premature. 3. Experiment means an advance from the known to tin* unknown. An advance into the unknown future should not be made till the relevant facts of the past and the present have been ascertained with such accuracy and completeness as is possible. I do not think this has yet been done. I will indicate very briefly two lines of investigation which in my judgment should be further explored before embarking upon an expenditure even of £500,000. There is evidence obtainable from other countries which is in my judgment relevant to the question how far traffic on artificial waterways in a district fully provided with railways has an economic future. The State of New York has spent in the last twenty years about £25,000,000 sterling on the improvement of the Erie Canal. This canal occupies a route of traffic as dense as anywhere in the world. It is capable, I believe, of accommo- dating barges of 800 or 1,000 tons, and yet from such information as I have been able to obtain privately I gather that the canal is almost empty and that the traffic continues to flow by rail. There was before the War an enormous volume of traffic carried on the Rhine. I have recently seen in the German technical press lamentations from the Rhine shipping interests that, under changed economic and political conditions, a large proportion of that traffic has been diverted to the railways. I mention these two instances — there may be many more — where I think investi- gation should have been made as a guide in estimating future probabilities in this country. If it be true that the Erie Canal is failing to obtain and the Rhine is ceasing to hold traffic in face of railway competition, there must be reasons. I think we should ascertain what they are. Whether American and German experi- ence will have any lessons for us, we cannot say till we know what the experience is. But a priori, if the Erie Canal and the 10 Khine cannot hold their own against railways, the chance M success seems small for a canal capable only of accommodating 120-ton barges. 4. In this country also, I think further investigation should, be made before we embark on experiments. I think the Statistical Department of the Ministry would be able to give, if called upon, an approximate estimate of the volume and composition of the traffic in the basin of the Trent, and that these figures might afford an approximate idea of the amount possibly available for canal carriage. I believe further, that an estimate — rough,*. I admit, and provisional — could be made of the actual out-of-pocket cost of carrying traffic of different kinds in 120-ton barges between, say, Hull and Goole on the one hand and Nottingham on the other. A comparison of these costs with the existing railway rates for similar traffics would afford at least some indica- tion of the maximum possible inducement that there would ^e for traders to transfer their trade from the railways to the water- way. There would then be at least some data available on which to calculate the level at which tolls could be economically fixed, and the possible revenue to be derived therefrom. I assume it will be agreed that if, for instance, the proposed improvement costs, adding together interest on capital and current maintenance charges, £50,000 per annum, while traders, by using the cannl instead of railways, made a saving of £25,000 per annum, the scheme would not be economically justifiable. If, on the other. hand, the saving to the traders was £100,000, the position would be reversed. 5. I have one further point of disagreement. If the proposed^ experiment is to be tried, I agree that the local authorities along" the route should be permitted to subscribe towards the cost, if they desire to do so. But, except so far as the Government is already pledged, I do not think any contribution should be made by the State. Under the Eailways Bill now before Parliament, there will be in the east of England a single railway group extend- ing from the Thames to the Tweed. The Bill provides that the rates chargeable within the group shall be so adjusted as to pro- duce a certain net revenue for the railway shareholders. If the improvement of the waterway were to result in substantial diversion of profitable traffic from the railways in the Trent basin, the railway rates in East Anglia or Northumberland might be put up to meet the deficit. The inhabitants of the Trent valley are quite entitled to spend their own money for their own advantage. But it is not just that the State should intervene to help one district at the expense of others. (Signed) W. M. Acwokth. 28th May, 1921.