3£=^^©=&^4fc=S==& 3:: © ::; ©^^ jfcr^^i^^^Js^^^S 21 ®^:*^ 3 *^^ The person charging this material is re- sponsible for its return to the library from which it was withdrawn on or before the Latest Date stamped below. Theft, mutilation, and underlining of books are reasons for disciplinary action and may result in dismissal from the University. UNIVERSITY OF ILLINOIS LIBRARY AT URBANA-CHAMPAIGN (y I RAILWAY PROBLEMS. 1 "BatTantjNie Jpttsa HAI.T.ANTYNE, HANSON ANI> CO. KIMNBURCK AND LOKDOtt I RAILWAY PROBLEMS: AN INQUIRY INTO THE ECONOMIC CONDITIONS OF RAILWAY WORKING IN DIFFERENT COUNTRIES. BY J. S. JEANS, FELLOW AND MEMBER OF COUNCIL OF THE STATISTICAL 80CIETT, AUTHOR OF "ENGLAND'S SUPREMACY," ETC. .. LONDON: LONGMANS, GREEN, AND CO. 1887. inscribes TO DAVID DALE, of Darlington, IN TOKEN OF LONG FRIENDSHIP, MANY FAVOURS, AND HIGH ESTEEM. p CONTENTS. INTRODUCTION AND OUTLINE HISTORICAL AND RETROSPECTIVE RAILWAY CAPITAL f COST OP RAILWAY CONSTRUCTION RAILWAYS AS INVESTMENTS LEGAL STATUS OP RAILWAYS IN GREAT BRITAIN LEGAL STATUS OF FOREIGN RAILWAYS GROSS AND NET EARNINGS WORKING EXPENSES '. LOCOMOTIVE POWER .... ECONOMY OF FUEL .... EXPENDITURE ON PERMANENT WAY . THE TAXATION OF RAILWAY8 . THE DISTRIBUTION AND COST OF RAILWAY LABOUR ROLLING STOCK ,/ . TRAFFIC CHARGES \f. EXTENT AND CHARACTER OP RAILWAY TRAFFIC . . . Scotland „ ,, Ireland . United Kingdom Stock and Share Capital. ;£l = IOOO. .£27,371 26,668 53.952 3°. 265 74,965 20,722 17.695 17.459 18,542 8,283 57,645 43,367 16,430 495,594 79,098 25,703 600,396 Loans and Deben- tures. ;£l = IOOO. Total Capital. ;£l = JOOO. ;£l2,320 8,393 17,335 9,359 24,957 7,035 5,609 7,722 7,55o 3,048 17,178 13,549 5,395 £39,691 35,o6i 71,287 39,624 99,922 27,757 23,304 25,181 26,092 ",33i 74,823 56,916 21,825 169,461 21,556 10,050 201,068 665,055 WCV654 35,753 801,464 31 24 24 24 25 25 24 31 29 27 23 24 25 25 21 28 25 The foregoing statement shows, as might be expected, that Ireland has raised a larger proportion of her total 24 RAILWAY PROBLEMS. railway capital by loans and debentures than either of the other two countries. The circumstances of Ireland, were, however, in every way peculiar. Under the several Acts authorising the advance of money out of the Con- solidated Fund for public works, considerable sums have from time to time been advanced to aid in the construc- tion of Irish railways. In 1865 the total amount so advanced amounted to ^"2,364,300, of which ,£1,208,748 had been repaid. In another respect, part of the Irish railway capital was exceptionally provided. The Mid- land Great Western Company was assisted by a guarantee from the baronies through which it passed of 5 per cent, upon the capital required for certain extensions. The baronies were called upon to levy rates for the purpose of this guarantee during many years. Finally, in 1866, an advance of ^"500,000 was granted by Parliament to certain Irish railway companies for a period not exceeding, twelve months, to enable them to meet pressing liabilities. On looking into the subject of the capital expenditure on British railways, it will be found that there is a remark- able disproportion between the amount raised by loans and debentures, or as guaranteed capital, and the amount held as ordinary stock. Between 1874 and 1884 the different descriptions of capital increased as under : — Ordinary capital, from ^248,528,000 to £298,983,446, or 20 per cent. Guaranteed capital, from ^71,207,480 to .£95,603,613, or 34 per cent. Preferential capital, from ^129,723,140 to ^205,809,234, or 60 per cent. Loans and debenture stock, from ^160,437,061 to ^201,068,074, or 25 per cent. At the latter date, therefore, the ordinary capital only formed 37 per cent, of the whole, as compared with 40 per cent, of the whole in 1 874, while the preferred capital, &c, was 61 per cent, of the whole in 1884, and 59 per cent, of the whole in 1874. Of the £298,98 3,446 of ordinary capital above stated, RAILWAY CAPITAL. 25 over 42 millions received in 1 884 no dividends whatever, while more than 27 millions received dividends under 3 per cent. It has been held by high financial authorities that, in order to be a commercial success, a railway should not cost more than ten times the amount of its yearly traffic ; or in other words, the annual traffic should be £10 per cent, of its capital cost. But if they are to be measured by this test, the railways of the United Kingdom would be found decidedly wanting. There has hardly been a single year during which the railways of the United King- dom, taken as a whole, have met this test. In 1854 the gross receipts amounted to only 7 per cent, of the total capital expenditure. In 1870 they had risen to 8 per cent. ; in 1873, 9.8 per cent.; in 1875, 9.7 per cent.; in 1880, 8.9 per cent.; and,in 1884 they were 8.8 per cent, of the capital cost. As between 1873 and 1884, there was, therefore, a decrease of about 1 2 per cent, in the gross earning power of capital, which is attributable, not to the falling off in the gross receipts per mile open, which had in the interval increased by £126, or nearly 4 per cent., but to the very great additions made to capital expenditure, which had risen from an average of £36, 174 to one of ^"42,486 per mile. Even, however, if railways are laid down and carried on in strict conformity to the rule that the capital expenditure shall not be more than ten times the amount of their gross annual revenue, this, of itself, will not suffice to make them eligible investments. There must also be a limitation in the matter of working expenses, for it obviously matters little what the gross revenue may be, if it is practically all swallowed up in the expenses of carrying on the traffic. In order to pay a dividend of jQ6 per cent., on a line conducted on the principle just laid down, the work- ing expenses should not exceed £\o per cent, of the revenue. There are, however, few English lines to which this limitation applies, and on the railways of the United Kingdom, as a whole, the working expenses are 53 per 26 RAILWAY PROBLEMS. cent, of the gross receipts. The proportion of the work- ing expenditure to the total receipts, has, moreover, been increased from year to year for a number of years past, so that the relation of net to gross receipts has been getting worse, instead of better, for investors, as such. There is some reason for believing that, considering the generally safe character of the investment, and the average rates of discount and prices of consols over a series of years, the railway companies of this country are paying higher rates of interest than they ought to do, though on this point one can hardly pronounce definitely without taking a very wide survey of the course of the money market generally, and the range and tendencies of rival securities. On the 34I millions appropriated in 1 884 to the pay- ment of dividends on railway capital in this country, I2f millions were expended in the payment of dividends averaging 4.24 per cent, on guaranteed and^preference capital, and 85 millions in paying dividends averaging 4.21 per cent, on loans and debenture stock. This shows a lower average rate of dividend than that paid some ten or twelve years ago. In 1874, for example, the average dividend paid on guaranteed and preferential capital was 4.52 per cent., and on loans and debenture stock 4.28 per cent. In the interval, therefore, there has been a decrease of .28 in the average dividend paid on guaranteed, and of .07 per cent, in that paid on loans and debenture capital. In neither case does the decrease appear to be a large one ; but it may be pointed out that in the case of the guaranteed and preferential capital invested at the end of 1884, amounting to 301J millions sterling, the reduction of .28 per cent, in the rate of dividend is equal to ;£ 842,800, or roughly 2.4 per cent, on the total amount available for dividend in that year. This considerable amount, then, has gone towards a further reduction of the expenses of carrying on our railways within the last few years, and furnishes a still RAILWAY CAPITAL. 27 stronger evidence of their capacity for improvement as an investment. It is not too much to hope that railway boards may see their way to borrow money on more advantageous terms. At a time when the value of all equally secure invest- ments is so high as it is now, and has been for many years, 4.24 per cent, seems a needlessly high rate of interest to pay for preferential and guaranteed capital. If any good company were now going into the market to borrow at 3.5 per cent., there is little doubt that its requirements would be immediately met, and the payment, therefore, of anything above that rate would seem to be a wilful and unnecessary waste of resources. 1 So far as the capital raised for the construction of foreign railways is concerned, it has been obtained in a multitude of different ways, which it would be both tedious and unnecessary to attempt to describe. In France, Germany, Belgium, and indeed in most Continental countries, it has been obtained under State guarantees, or as a direct result of valuable State concessions. In the United States, Canada, South America, our Australian Colonies, and some other countries, capital has been raised for railway extensions, partly as a result of land grants conceded by Government, partly in consequence of special loans borrowed on security of local rates, and partly as a result of contributions made by local authorities, and in respect of which the districts through which the railways were carried have voluntarily taxed themselves. There is only one country that can show the same amount of capital raised by private subscription as the United Kingdom. That country, it need hardly be added, is the United States, which has performed much more remarkable prodigies of railway finance than even England has succeeded in accomplishing. 1 Since this was written the New South Wales Government has borrowed 5^ millions at 3J per cent., and could have had the loan subscribed several times over. 28 RA IL WA Y PROBLEMS. In 1 87 1 the total capital raised for the construction of railways in the United Kingdom was 5 52 \ millions sterling. In the same year the United States had raised 555^ millions sterling, or about 3 millions more. In 1884, however, the capital invested in United States railways stood at 1599^ millions sterling, being an increase of 1044 millions sterling, or 190 per cent, on 1871. The capital embarked in the railways of the United Kingdom had, in the same interval, increased by 249 millions, or 45 per cent. Between 1871 and 1884 the capital expended in American railways had increased by £20 for every man, woman, and child in the United States in the census year 1880. In the United Kingdom the increase of rail- way capital during the same interval would represent only about £7 per head of the population of 1881. The United States, therefore, have within this period added nearly three times as much to their fixed invest- ments in railways, relatively to population, as the United Kingdom. It is often made a source of complaint in America that the capital of that country is being converted too quickly into fixed investments, and the fact that 1044 millions have been embarked in railways alone within so short a period would seem to justify this impression. But, on the other hand, it is contended that this money has not been withdrawn from other forms of investment or modes of employment, but has actually been furnished, for the most part, from the savings in freight charges effected by and through the railways themselves. If we consider that the annual value of these economies is not short of 100 millions sterling a year on the present annual traffic movement of the United States, and that this sum would suffice to construct about 8300 miles of railroad per annum, at the present average annual cost of the whole American railway system, it would seem as if this remarkable claim were really substantiated. It is certainly true thai the RAILWAY CAPITAL. 3 9 decrease effected on the transport of the goods traffic of the United States as a whole, as between 1871 and 1882, was quite equal to furnishing the capital that is now annually added to the account of American railway construction. With reference to the Continent of Europe, the following table shows in what way the capital has been raised in certain countries, to the end of 1883, so far as the par- ticulars are available x : — Statement showing the Capital Expenditure of the Railways of Different European Countries (£i = iooo). Countries. Share Capital. Subven- tions. Obliga- tions. Loans. Total. •M g S. e2« Germany (private ) lines) . . J Austria-Hungary Belgium — State lines Companies' lines France Luxembourg Norway . . Holland (private rail- ) ways only) . j Russia — btate lines Companies' lines Switzerland Totals £ 30,683 90,065 3,717 64,685 1,500 5,284 6,124 i,753 72,896 14,043 £ 300 2,270 3,593 54 106,885 36 4,5i6 £ 25,021 210,351 4,426 289,473 290 5,836 5,4i6 168,124 22,676 £ 2,846 4,165 30,488 387 68 £ 58,850 306,851 34.081 8,197 461,043 1,790 5,671 12,064 7,169 241,020 4i,235 52 29 45 14 84 93 5i 24 30 34 290,750 "7.654 73 x >6i3 59,954 i,i77,97i Average 25 There is a striking disparity in the proportions of share and loan capital raised in different countries, as shown in 1 " Statistique de chemin de fer de l'Europe." 30 RAILWAY PROBLEMS. this table. In France the proportion of the total railway expenditure raised as share capital appears to be as low as 14 per cent. In Norway, on the contrary, share capital represents as much as 93 per cent, of the total. Between these two extremes there would appear to be every degree of intermediate proportion. Over the whole sum of 1 178 millions sterling dealt with in the table, the average raised as share capital is about 25 per cent., which, it will be noted, is closely approximate to the average so raised in the United Kingdom. An average made up of such extremes as 14 and 93 can hardly, however, be regarded as of much statistical utility. ( 3i ) CHAPTEE III. COST OF RAILWAY CONSTRUCTION. There is nothing in the economics of railway working that varies more than the cost of construction. A railway may be made either cheaply or expensively, according as the purchase of the land involves a large cost or a small one, as the permanent way is light or heavy, as labour is cheap or dear, as the line is level or the reverse, as there is a larger or a smaller proportion of double and treble mileage. The problem is also affected and complicated by many minor considerations, of which we cannot stay to take account. For these and other reasons, it is not always, nor indeed generally, a foregone conclusion, thatlTTihe that has cost an exceptionally high sum relatively to its mileage is necessarily a line in which economy has been wanting. The mere arithmetical process of dividing the mileage into the total cost of making a line does, indeed, afford an index to the capital expended, and therefore to the amount that must be realised in order that a certain dividend may be paid upon the cost of construction ; but it affords no just criterion whereby to calculate whether the line should have cost more or less by comparison with other lines, whether the capital has been wastef ully spent, or whether the results are likely to justify the expenditure. In considering the average cost incurred in the laying out and equipment of railways, regard must, therefore, be had to the special circumstances of each country and of each railway, as regards alignment, labour, land, and many 32 RAILWAY PROBLEMS. other physical and economic features by which the outlay is regulated and determined. In the United Kingdom, the average cost of the railways constructed to the end of 1884 amounted to £42,486 per • mile. The only other European country that approaches this average is Belgium, where the cost to the end of 1883 was £36, 508 per mile. France follows some distance behind, with an average of £27,704 per mile, while Ger- many has only run to £21,236 per mile. In Eussia (in Europe) the average falls to £20,000 per mile, and in Scandinavia the average has not in any case exceeded £10,000. In the United States, for reasons to be here- after more fully considered, the average is rather over £11,000 per mile, disregarding "watered" stocks. The greater average cost of English railways is mainly / due to the greater cost of land, the greater strength and 1 stability of the permanent way, the larger proportion of double line, the more difficult alignment, the heavy cost * of Parliamentary contests, and other points that will be dealt with as we proceed. It would be very interesting, if it were possible, to arrive at a just estimate of the total cost incurred by the rail- way companies of the United Kingdom in the purchase of land. There is, however, no means whereby this item can be ascertained, short of making specific inquiries as to the cost incurred for each separate line. That very large / sums were expended in conciliating opposition, over and above the amounts actually spent in consideration of the supposed or adjudicated Value of the land, is one of the best known facts in English railway history. In the case of our large towns the price paid for land has been naturally large, and may, in many cases, have borne something like a fair relation to its market value. But there are many cases in which fabulous prices have been paid for purely agricultural land, sometimes, ostensibly, because it was held that it would be damaged by the railway being allowed to traverse it. COST OF RAILWAY CONSTRUCTION. 33 In 1868 a return was ordered by Parliament, on the I motion of Mr. Childers, of all the land held by the railway^ companies of the United Kingdom, or by companies leased by them, which is calculated to throw some light upon the question of what proportion of the total area of the country is under railway control. The total amount of land thus held, so far as returns were received — and the returns received embraced all the lines of any importance — was 253I square miles, being an average of 12.32 acres per lineal mile of railway. This figure is equal to an aver- age width of land of 102 feet over the whole, including, of course, land for stations, sidings, and other purposes, and surplus land. If the ratio of land to mileage constructed is the same now as it was then, the railways of this country would own at the present time about 235,000 acres in all. If the value of this land is calculated at ;£ioo per acre, it would amount to a total sum of 23^ millions, which is less than 3 per cent, of the total capital expenditure on the railways of the United King- , dom to the end of 1884. Obviously, however, this com- putation is much more curious than reliable, since the cost incurred by railways in the acquisition of land must have been much higher than any such figure. It is sometimes said that the principle upon which compensation has been awarded to landowners for the compulsory acquisition of their property has been alto- gether wrong. It is, at any rate, entirely at variance with the principles and practice of ordinary business affairs in other walks and relations of life. In what other commercial transaction do we find the one party paying to the other a very exorbitant price for the pri- vilege of vastly improving the property of the party to whom such price is paid ? And yet this is exactly what has occurred in the case of the dealings of railways with landowners. No one, nowadays, will be found to dispute that in a general way a railway very greatly improves the value of landed property, whether for agriculture, industry, c n 34 RAILWAY PROBLEMS. or ordinary residential purposes. There is, however, a class of property, employed for what may be called extra- ordinary residential purposes, that is deemed to be injured, instead of being improved, by the proximity of a railway — such property as fox-covers and deer-forests, which is used by those who "neither toil nor spin" for pur- poses that are equally outside the scope of toiling and spinning. But why should a railway be compelled to pay an extravagantly high sum because it proposes to acquire a piece of land that forms the demesne of a lordly mansion ? Why should land so used be deemed to be of less value when regarded in reference to purposes of local rating, and of more value when considered from the point of view of compulsory purchase ? The railway has gene- rally so greatly improved the value of all productive landed property that the owners of such property ought, in strict equity, to compensate the railways for the im- provement so effected. But this is a plea that even the railways themselves would be slow to urge. What they do urge, and have urged, is, that it is the reverse of fair that they should confer great benefits upon the community as a whole, and upon every section of it, as such, and at the same time be required to pay a high premium for the privilege of conferring such benefits. And what is the character and incidence of that premium ? There is not, so far as we are aware, any record of the exact proportion of the total capital expenditure that British railways have laid out in the purchase of land. But we may be under the mark if we put the average at ^4000 a mile, and there are many cases in which it has been ten and twenty times that amount. 1 At ^4000 per mile the railways of the United Kingdom will have paid about j6 millions, or one-tenth of their total capital expenditure for the pos- session of some 235,000 acres of land, giving an average of 1 The Manchester and Leeds Railway cost for land £6 150 per mile ; the London, Birmingham, and Great Western, ,£6300 ; the South-Western, ,£4000 ; and the Grand Junction, .£3000. COST OF RAILWAY CONSTRUCTION. 35 ih&T £3 2 3 P er acre > an( ^ it happens, somewhat curiously, that they own about -g^ part of the area of the United Kingdom. It comes, then, to this, if our assumption of average cost is near the mark, that for the purchase of this 323d part of the total area of the United Kingdom, our railways have, as a whole, paid about one-twelfth of the estimated current agricultural value of the whole land of the country. And those who have compelled them to do this have at the same time been profiting, in many cases enormously, by the additional value im- parted to the land that was not acquired by the railway, in consequence of the facilities for transport, not pre- viously available, that were thereby furnished. Truly the landed interest have much to thank railways for ! Will they ever light upon such another El Dorado ? Another very substantial cause for the greater cost of English railways is the larger proportion of double or treble mileage, and of sidings, than in other countries. It appears that at the end of 1884 there were double lines or more : — In England, 8504 miles out of 13,340, or 64 per cent. „ Scotland, 1 161 „ „ 2,999, „ 39 ». „ Ireland, 574 „ „ 2,525, „ 22 „ These figures, however, come very far short of showing how the proportions of single and double mileage really stand in Great Britain. There is r in fact, no record of the mileage of sidings, or of the treble and quadruple mileage that is so general on English railways, but is seldom to be found on those of other countries. These several additions will not be likely to add less than 20 per cent, more to the total track of England and Wales, considered as such, and would bring up the total single mileage in England and Wales from 13,340 to over 24,512 miles. In Continental countries, there are very considerable differences in regard to the mileage of single and double lines. In Germany, Belgium, and France, the total mileage laid down, considered as single track, is more than double 36 RAILWAY PROBLEMS. the total lineal mileage open ; but in other countries the mileage of double track is less considerable, as the follow- ing figures show x : — Statement showing the Length of Single and Double Railway Track in the Principal European Countries, in Kilometers. Percentage of Total. Country. Single Line. Double Line. More than Double. Sidings, Total Track. Main Sidings, Lines. Ac. Germany . ' 24,369 10,381 59 14,207 59,5 2 6 7 6 24 Austria- Hungary 17,349 1,780 4,718 25,627 82 18 Belgium 2,332 1,364 1,792 6,852 74 26 Denmark . 1,577 45 256 1,923 87 13 France 18,577 9,928 18 7,286 45,773 84 16 Italy . 8,556 626 1,626 ",434 86 14 Luxembourg 127 22 29 200 86 14 Norway 1,258 121 1,379 9i 9 Holland . 1,369 '584 729 3,266 78 22 Roumania . 1,380 9 234 1,632 86 14 Russia 19,348 3,989 5,513 32,839 84 16 Finland 812 20 l6l 1,013 84 16 Switzerland Totals 2,274 424 5 8l 3,703 84 16 99,328 29,172 77 37,253 195,167 It will be observed from these figures that the average cost per lineal mile, or, as it is more commonly expressed, per mile open, does not follow in strict correspondence with the extent of double mileage or more. In other words, it is not always the country that has the largest proportion of track to mileage open that shows the highest average cost per open mile. If this principle were to be observed throughout, France should show a lower average cost per mile than Germany, whereas the cost of French 1 These figures are taken from the official "Statistique des chemins de fer de l'Europe, pour l'annde 1882, et resultats generaux de cette Statistique pour l'Exercise, 1883." The figures are published as in the original. COST OF RAILWAY CONSTRUCTION. 37 railways has averaged about .£6500 per mile more than those of the Fatherland. The above table also shows, as might be expected, that the greatest proportion of siding accommodation, &c, is provided by the countries that have the largest industrial traffic, Belgium taking the lead, and Germany, Holland, Austria, and France, each following in the order given, although not strictly in the order of the magnitude of their traffic. A more serious source of heavy first cost in railway con- struction than even the multiplication of sidings and double and treble lines is known to engineers as the conditions of \ the alignment and gradients. It needs not to be demonstrated how much more cheaply a railway may be constructed where there are no embank- ments, cuttings, or viaducts, and but few bridges, than in a case where the physical configuration of the country involves a very serious expenditure in respect of these items. There is very little published information as to the exact circumstances of English railways in this regard. Generally, however, there is little reason to doubt that England and Scotland are, by reason of their undulating characteristics, certainly not more favourably situated than the majority of Continental railways in the matter of align- ment. The gradients, also, on some railways that run through what, for England, may be regarded as a com- paratively level country are decidedly heavy, and on a few leading lines, such as the Lancashire and Yorkshire, they are very bad indeed. For Continental Europe the conditions of the gradients and curves have been statistically ascertained, and are pre- sented in tabular form in the following statement 1 : — , 1 "Statistique des chemins de fer de l'Europe pour l'ann^e 1882." 38 RAILWAY PROBLEMS. 1 I a 5S *« s I I 4 o 1 8*3 . B _ ■ OB S 3 > 2 o o o o o o 8 oo 8 o 00 o >/■> CO »o M u-> 00 C/J o M VO 'S'd 3 1 •>• CO n N i(2° n Is 3 fl §1 1 co in oo CO lO VO o * o CO vo o J 2 SO CO co rf co H M c^ M nf vo vo •*> s g m vo vO « : : CO ON « CO IN O h ■ "3 2 A J5 b • °j N co CO VO CN * O 00 Ov 3 2 r^ O ■* vO VO -■ 00 T3 •-:-£ t * oo : Tf M i CO 9 ^ a 3 " d "o 8 ■ o u J? 00 r^ 00 o co • On CO c^ O N VO !■* M ■* 0) in : N ro CN1 CO M "S h .2 w ■ °" t- w Ov Ti- co p« CO C) VO oo Ov Tj- i 2 on oo ro co O ^*- CI u-i co « "* "9 co co CO io r*- * CM VO *>. 1 O w a VO ro vo" n" tC in a 3 ■ m t>. 00 o 00 »t co ^ lO NO CO r~~ O >o •«*• ■* ■* «* ** CN1 CO NT CO N O 5 § 1 iE M VO CO o vO "I M X VO tN OV Tf .2. 0< 6 g l>» 00 ro Ml VO cs N vo •* 00 o •b -3£ VO oo_ CO VO l^ O CO NO NO °. S" 1 M a vo 00* O" -f t-C o 8 o* M VO •^ On ■* «1- »o M N t^ VO NO o >-• be ° CO (M VN CO N N CO 0) o (N CO CN1 e « « H s n t» 00* LO •- l*» no Ov ■* N CO vo O 00 >- 3 6 «» i-i O *^ r^ CO 00 vo Tf t^ NO CO ai 00 oo VO ON ►* CO N CO w t^ * g VO IN M oo" • • 00 a "3 . J3 *o .£ J * • 00 3 o a a*3 s« -o i 3 5 >> C e3 s "S u i >> ■B "3 • fl 1 I 8 3 Mm *3 § ■ B a >> p -2 £ p ■ t-. o 1 a S OS (U « a OQ .T* 3 iS O -< tt A Ph m A fe w « Ph 02 COST OF RAILWAY CONSTRUCTION. 39 It appears from these data that the most advantageously- situated country in Continental Europe as regards railway gradients is, as might be expected, the Netherlands, where 95 per cent, of the whole mileage is under 5 in 1000, and 62 per cent, is perfectly level. Germany, the adjoining country, comes next to Holland in this regard, with 31 per cent, of level, and 45 per cent, of gradients of 1 to 5 in 1000, making 76 per cent, of the whole mileage under 5 in 1000. Austria and Belgium come but a very little behind Germany, the former hav- ing 73 per cent, and the latter 75 per cent, under 5 in 1000. France, however, as a consequence of the highly mountainous character of some of her more southern provinces, has to contend with much more difficult gradients, having only 24 per cent, of her total system on the level, and 38 per cent, more under 5 in 1000. It may further be remarked that fully 10 per cent, of the total mileage of all her principal lines, including the Nord, the Est, the Ouest, the Midi, and the Paris and Orleans railways, has gradients of 16 to 20 in 1000. Of European countries, the one with the heaviest gradients is Switzerland, which has only 26 per cent, of her whole system on the level, and 25 per cent, more in gradients of less than 5 in 1000. About 5 per cent, of the Swiss rail- way mileage has gradients of 16 to 20 in 100; about 6 per cent., gradients of 21 to 30 in 1000; and 2 per cent., above 30 in 1000. The Righi railway is, of course, in the last-named category, as well as 24 per cent, of the Appenzell line, 13 per cent, of the Lausanne-Echallens, and 72 per cent, of the Eorschach-Heiden railways. In the United States, there has been collected, for the Report of the Tenth Census, a great mass of information bearing upon the profile and alignment of the several railways, from which it would appear that the conditions of the grading, as regards the Middle, Western, and Southern States are certainly not worse than in Great Britain. This information, however, is not put into a 40 RAILWAY PROBLEMS. form that enables it to be readily compared with the data given above for Continental Europe. 1 It will again be found, however, that the highest cost of construction is not always identical with the worst profile and alignment, as an analysis of the tables shows, although this, as we have elsewhere remarked, has a not unimportant influence on first cost. The amounts that have been expended in the United Kingdom in promoting and opposing Bills in Parliament have been enormous. According to a return presented to the House of Commons in 1883, a total expenditure of ;£ 3,924.7 1 2 had been incurred on this account between 1872 and 1882. As the increase of railway capital in the United Kingdom during the same period was 198 millions, it follows that the amount spent over Parliamentary battles was 2 per cent, of the total addition to capital expenditure in these ten years. If it were correct to assume that the same percentage of the total capital expenditure had been wasted in Parliamentary contests over the whole of our railway history, the aggregate sum so spent would amount to about sixteen millions sterling. It is probable, however, that the actual expenditure has been greater even than this, since the fights were much fiercer, and more costly in proportion to the capital in- volved, in the earlier history of the system than in its later stages of development. 2 On some English railways there has been a wasteful expenditure of capital in other ways. The Commission of 1867 gave a remarkable example of how much the capital of a company may be increased by the mode in which it is raised. Out of the whole capital of the London, Chatham, and Dover line in 1865, amounting to £ 16,683,000, not less than ;£ 4,109,000 was admitted to 1 "Statistical Report on the Railroads in the United States," by A. E. Sherman, p. 447. 2 Some specific examples of this waste of capital, and its relation to results, will be found in a succeeding chapter. COST OF RAILWAY CONSTRUCTION. 41 have been dissipated in obtaining the rest from the public, and jf 1,948,000 more was disbursed out of capital for payment of interest and dividends. 1 There is reason to believe that this is not by any means a solitary case. When the railway mania was at its height, many millions were frittered away in a similar fashion. The capital expenditure on English railways has been swollen inordinately by an equally common and scarcely more creditable expedient. It was at one time a very prevalent custom for a railway company to distribute shares among its proprietors at par when the existing shares were at a premium. This practice first originated in special Acts, which authorised the raising of additional capital to complete a line when the original estimates had proved insufficient. It was a custom justified, according to Mr. Clifford, 2 ' "on the plausible ground that to the shareholders, who had run the risks, belonged whatever advantages might accrue from the enterprise when its success was assured ; " and it was maintained that " they were as much entitled to the benefit of new capital legiti- mately required for the completion of their railway as if this capital had been included in the original estimate." The question naturally occurs, " Who was to determine what capital was so required? " There can be little doubt that this pernicious system tended to greatly increase the capital expenditure, and to " water " the stock of English lines beyond all legitimate requirements. Indeed, Mr. Clifford expressly declares that in this way "enormous sums were realised by shareholders in the great com- panies," and he mentions, as a specific example, the case of the London and Birmingham Railway, in which the share- holders received from the issue of new shares, down to 1846, more than 4^ millions, while their original outlay was 5f millions. In another railway — the York and 1 Report of the Royal Commission on Railways. 2 "A History of Private Bill Legislation," vol i. p. 129. b 42 RAILWAY PROBLEMS. North Midland — each shareholder who had acquired an . original .£50 share received upon that £250 in the way of premiums. 1 It must, however, in all fairness, be borne in mind that in the building up of our great railway system other exceptional expenses were incurred in a more legitimate manner. Some of these were thus referred to by Mr. Dudley Baxter in 1867 : 2 — " 1. The English expenditure includes, on a probable estimate, no less than £40,000,000 sterling absorbed by metropolitan railways and termini. This of itself is £4500 per mile on the 8890 miles constructed. " It also includes very large sums for termini in Man- chester, Liverpool, Leeds, Sheffield, Birmingham, and other great towns, far beyond what is paid in Continental cities. " 2. The English expenditure also includes considerable capital for docks, as at Grimsby, where £1,000,000 was laid out by the Manchester, Sheffield, and Lincolnshire Company ; and at Hartlepool, where £1,250,000 was spent by a company now merged in the North-Eastern. "It also includes, in many instances, capital expended on steamers, and capital for the purchase of canals. " 3. The counties whose trade and population are greatest, and which are most thickly studded with rail- ways, as Lancashire, Yorkshire, and Glamorgan, are exceedingly hilly, and necessitate heavy embankments, cuttings, and tunnels, which enormously increase the cost of construction. The Lancashire and Yorkshire Eailway has cost .£52,400 per mile for the whole of its 403 miles. Had those counties been as flat as Belgium the company might probably have saved something like £20,000 per mile, or £8,000,000 sterling. The Manchester, Sheffield, and Lincolnshire Company, even after deducting £1,000,000 for the docks of Grimsby, have spent £53,000 per mile. A 1 Evidence of George Hudson before the Select Committee of 1846. 2 "On Railway Extension and its Results." Paper read before the Statistical Society. COST OF RAILWAY CONSTRUCTION. 43 flat country might have saved them a similar sum per mile, or .£5,000,000 sterling. " 4. England, as the inventor of railways, had to buy experience in their construction. Other nations have profited by it. There is no doubt that our present system of lines could now be made at very much less than their original cost. In addition, we have paid for experiments, such as the broad gauge and the atmospheric railway." We now propose to inquire into, and to endeavour to find adequate replies to, the two following questions : — (1.) To what extent has the capital expenditure upon English railways varied as between one period and another? (2.) What have been the principal causes of these varia- tions, and how far have they been justified by the results ? As collateral to these inquiries, we shall further en- deavour to ascertain whether the railways of the United Kingdom have shown a higher or a lower capital expendi- ture, as between one period and another, when compared with Continental and American lines. The following statement shows how the average cost per mile has increased, as between different periods, in constructing English railways : — Year. Miles Open. Cost G£i = iooo). Capital Outlay per Mile. 1838 . . 540 £ 13.300 £24,630 1843 2,390 82,348 34,450 185 1 6,890 248,240 36,029 l86l 10,869 3 62 »3 2 7 33.335 1871 I5»376 552,680 35.944 1874 16,449 609,895 37.078 1884 l8,86l 801,464 42,486 showing that the average cost per mile of line opened has 44 RAILWAY PROBLEMS. largely, although by no means steadily, increased, until in 1884 it was close on double what it had been in 1838. It seems not a little curious, on the face of it, that England, which can purchase most of the articles required in railway construction more cheaply than any other country, should show this remarkable increase of capital per mile open. The increase has not been of anything like the same amount in other countries, as we shall subsequently see. Between 1873 and 1884 the total capital outlay upon the railways of the United Kingdom rose from 588J to 80 1 J millions sterling. In the same interval, the mileage of open railway increased from 16,081 to 18,681 miles. The 2783 miles of railway constructed in the interval thus represented, as measured by the concurrent increase of capital expenditure, an average of about .£77,000 per mile, whereas the average capital expenditure per mile open throughout the country was at the earlier date £36,574, and at the later date £42,486 per mile. It is not without interest to ascertain how this great increase of expenditure, averaging £5912 per mile open throughout the United Kingdom, has been distributed within the three kingdoms. Its apportionment is shown in the following: return : — Average Capital Expenditure per Mile in 1873. 1884. , England • £42,533 £49.800 Scotland 25,800 33.520 13.723 14,160 from which it would seem that the increase per mile amounted to £7267 in the case of England, £7720 in the case of Scotland, and only £437 in the case of Ireland. Taking the average of the kingdom as a whole, the increase has been a fairly steady one, and has not been a thing of leaps and bounds in one year, to be followed by stationariness the next. It might reasonably be expected that the principal leap would have occurred in or about COST OF RAILWAY CONSTRUCTION. 45 the year 1873, when the cost of both labour and materials took a very remarkable upward movement. But the in- crease in 1873 over 1872 was not more than £590 per mile open, and in 1874 it was only £504 per mile over 1873. Neither increase was equal to that which occurred in some subsequent years, when the same disturbing elements were not at work to anything like an equal extent, if at all. Thus, for example, the average of 1882 was £586 above that of 1881, although in 1882 there was a generally low range of prices and labour costs. The fact is, that it is difficult to account satisfactorily for the increase of capital cost, except, as we shall hereafter see, in so far as it has been entailed by increased provision for the safety of passengers and the accommodation of traffic. The enormous increase of capital expenditure relatively to mileage that has happened since 1872 is. all the more difficult to explain when we find that for some years before the movement was in rather a contrary direction. Thus we find that in 1856 the average capital expendi- ture was returned at £35,315 per mile. In i860 this had fallen to £33,368 per mile, and in 1863 it was as low as £32,804, or £9682 less than the average of 1884. It is obvious that if the average of 1863 had never been exceeded, the present capital outlay on the railways of the United Kingdom would have been standing at about 185 millions less than it actually is, and that the pos- session of this difference would have enabled the rail- ways of the country to work at a much lower range of rates and fares than they are now accustomed to charge. In point of fact, this difference would have represented an annual increase of over 1 per cent, to the average dividends earned by British railways. Into the causes of the very serious increase of capital expenditure, to which allusion has been made, we shall not attempt to enter. They are declared by railway apologists to have been mainly the creation of facilities 46 RAILWAY PROBLEMS. for meeting an extraordinary increase of traffic, and to some extent this plea is undoubtedly a good one. But it should not be forgotten that in most other leading coun- tries there has been an almost corresponding increase of traffic without a corresponding increase of capital cost. In the United States, for example, the increase of capital expenditure per mile of railway open, as between 1872 and 1 883, was only £2092, although the increase of traffic in that country was infinitely greater in the interval than in the United Kingdom. In Germany, as between 1870 and 1883, the average capital expenditure per mile rose from £17,771 to £21,236, being an increase of £3465 per mile ; and in France, during a rather shorter interval, the capital cost has actually decreased by £3613 per mile. Italy has followed the same excellent course as France, having diminished the average capital cost from £19,944 in 1872 to .£19,434 in 1883 per mile open. The truth of the matter appears to be, that the British railway companies have launched out more or less largely into expenditure that scarcely comes within their legiti- mate business of common carriers. They have become steamboat owners, refreshment-room and hotel proprietors, manufacturers of permanent way materials and other com- modities, dock and harbour builders, and have added numerous other functions of minor importance to that which was their original, and is still believed by many to be their only true and proper one. Whether the results have fully justified these new departures is a moot point, upon which the best authorities fail to agree. It must, however, be recollected that in the case of the United Kingdom there have been no special terms or ad- vantages accorded to railway companies, as there have been in some other countries. They have all along had to fight, like Hal 0' the Wynd, for their " ain han'," and they have been beset by exorbitant claims and the levying of black mail on every side. In the United States, on the contrary, as we have elsewhere explained, the Government has COST OF RAILWAY CONSTRUCTION. 47 conceded special privileges, such as land-grants, that have largely reduced the cost of construction. Some of the Canadian lines, again, have received from the Dominion Government remarkable concessions in land and money. The Canadian Pacific received a grant of 25 million dollars in money as a loan, and 25 million acres of lands fit for settlement, as well as the right of way, station grounds, dock privileges, and water frontage, in so far as these are vested in the Government. Besides this, the Government undertook to construct and transfer to the Company, free of cost, 714 miles of railway, the value of which is estimated at 30 millions of dollars. The Com- pany is further privileged to import steel rails and other materials used in construction free of duty, and to build branch lines, with right of way and other privileges. But this is not all. The stations, buildings, equipment, and capital stock of the Company are to be free from taxation for all time, and lands granted by it within the North- West Territories are also to be free from taxation for. twenty years, unless sold in the meantime ; while, finally, the Company is protected from the construction of com- peting lines for twenty years from the date of its charter. Upon the capital stock of the Company, which is 100 million dollars, the Dominion Government has guaranteed a minimum dividend of 3 per cent, per annum for ten years. In 1884 the Company received from the Govern- ment a further loan of 22^ millions of dollars. In some of the chapters that follow, and especially in Chapter xxii., there will be found additional data bearing on the cost of railway construction in the colonies of Great Britain. ( 48 ) CHAPTEE IV. RAILWAYS AS INVESTMENTS. The subject of this chapter is one of such very wide scope that we can only hope to deal with it here in the most superficial, if not perfunctory manner. To adequately present the infinitely diversified aspects of railway pro- perty as investments would exhaust a great deal more scope than has been proposed for the present work as a whole. Many of these aspects, moreover, are touched upon more or less fully in other sections of this book. There cannot, indeed, be any important phase of railway economics that does not in some manner, direct or reflex, bear upon the character and tendencies of that description of property from an investor's point of view. Since it is no part of our purpose to deal with the special circumstances, as regards administration of par- ticular railways, so it will be no part of our aim, in this chapter, to refer to particular lines in reference to their financial position and prospects. We seek to cover a wider area, and to occupy a larger, and not, we trust, a less useful field, in attempting to analyse and diagnose the more salient features of railway property, as such, from a national, or even international, rather than a merely local aspect. One of the first things that strikes the inquirer into this subject is the remarkable uniformity of the average range of dividends paid in all countries in which railway pro- perty is not subsidised. Another remarkable feature of RA IL WAYS AS IN VESTMENTS. 49 this description of investment is, that it does not appear to yield more than a certain average range of dividends, no matter how much the property may have improved, nor how great the economies that may have been intro- duced in its working. The reasons for these phenomena are not far to seek. Until and unless railway property yields a certain amount of profit, which may be above or below the average of the safest investments otherwise available, but does not usually greatly differ therefrom, there is no inducement to con- struct further lines that are designed to be self-supporting. Another equally manifest characteristic is, that if the range of dividends yielded by railways should exceed a certain average — which may be described as the normal or usual one — the effect is to draw into such investments a larger amount of capital than can be remunerated on the same scale, and hence there is a fall of dividends until the normal average has again been restored by abstention from further developments. So far as the United Kingdom is concerned, there have only been three years since 1854 when the average rate of dividend yielded on the capital invested in British railways, as a whole, fell below 4 per cent. Those years were 1862, when the average was 3.86 per cent.; 1863, when it was 3.99 per cent.; and 1867, when it was 3.91 per cent. It is not less remarkable that over the same period there have only been three years when the average rate of dividend was above 4J per cent. Those years were 1 87 1, when it was 4.66 per cent. ; 1872, when it was 4.74 per cent.; and 1873, when it was 4.59 per cent. But although the average rate of dividend earned by British railways over this period has exhibited this some- what striking uniformity, the component parts of that average have shown the most singular variations. There have, besides, been considerable differences as between the three kingdoms. D 5o RAILWAY PROBLEMS. The average rate of dividend earned on all railway- capital in 1884 was as under: — For England and Wales . - . 4. 27 per cent. „ Scotland . . 3-6 „ from which it appears that the average of England and Wales is considerably higher than that of either of the sister countries. The average for all three countries would, however, be considerably higher than it is if the dividend-paying lines only were to be considered. There is, unfortunately, a very large proportion of the capital invested, embracing not only ordinary but preferential, and to a less extent guaranteed capital as well, upon which no dividend has been paid for years ; and there is another large proportion upon which the dividends paid are under 2 per cent. For each of the three kingdoms these proportions were, in 1884, as under: — Countries. Ordinary Capital Receiving Preferential Capital Receiving No Dividend. Not Exceeding 2 per Cent. No Dividend. Not Exceed- ing 2 per Cent. England and Wales Scotland . Ireland . Totals . £34,446,000 4,908,673 2,831,202 £13,258,098 3,514,267 867,900 £ 9,733,635 134,780 651,109 £458,000 81,670 I2'9,i59 £42,185,875 £17,640,265 £10,519,524 £668,829 Of the total railway capital of the United Kingdom, amounting to 801 millions sterling at the end of 1884, it thus appears that 5.1 per cent, of ordinary capital received no dividend whatever in that year, while 2.2 per cent, received not more than 2 per cent. If, however, we take the total ordinary capital, as such, it appears that 14.4 per cent, of it received no dividends in 1884, and 6 per cent, received less than 2 per cent. RA IL WAYS AS IN VESTMENTS. On the other hand, however, it must not be o that 65^ millions of ordinary capital, or 8 per the whole, received between 5 and 6 per cent, 60 between 6 and 7 per cent., and 6| millions over cent. More than 44 per cent, of the total ordinary was thus in receipt of upwards of 5 per cent. The following tabular statement shows the proportions of the ordinary capital of the railways of the United Kingdom upon which no dividends have been paid since 1870 (£ 1 = 1000):— Amount of Percentage of Years. Total Ordinary Capital. Ordinary Capital upon which no Ordinary Capital on which no Dividends were Dividend was Paid Paid. 1870 . ,£229,282 £31.266 14 I8 7 I " 230,234 30,098 13 1872 239.039 29,791 12.4 1873 244,449 34.1" H 1874 248,528 41,121 16.6 1875 254,600 1876 262,008 35.675 13.6 1877 265,041 38,291 14.4 1878 265,675 35.281 13-3 1879 266,914 41,546 15-5 1880 270,496 37,973 14.0 1881 275.935 36,514 13.2 1882 283,574 39,160 13-5 1883 293.437 41,140 14.0 1884 . 298,983 42,186 14. 1 It appears that the percentage proportion of the total ordinary capital that received no dividend over the whole of this period was pretty uniform. In other words, if the relative position of the ordinary shareholder over this period has not been improving, it has not been made materially worse. . This, however, is hardly a satisfactory state of affairs. The law of railway development is generally, and should always be, the law of progress. Especially ought this to be the case in regard to a system which has witnessed 52 RAILWAY PROBLEMS. such a wonderful expansion of traffic as the railway- system of Great Britain has done during recent years. 1 It is not, therefore, altogether surprising to find that the growth of ordinary has not kept pace with that of other descriptions of capital during the period under con- sideration, as the following figures show (£i = iooo) : — Description of Capital. Total Amount Paid up in Amount of Increase. Percentage of Increase in 1884. 1870. 1884. Ordinary Guaranteed . Preferential . Debenture Stock . £229,282 36,188 122,503 51,220 £298,983 95,603 205,809 186,274 £69,701 59.415 83,306 135,054 30 165 68 263 The conclusion that these figures naturally suggest is, that the position of the ordinary shareholder is not being improved in relation to other descriptions of investors in railway securities, and that the public are disposed to fight increasingly shy of ordinary stock. This is sufficiently proved by the fact that ordinary capital only represented 37 per cent, of the total investments in British railways in 1884, as compared with 44 per cent, of the whole in 1870. It is, however, important to remember that the principal railways in the United Kingdom are, as a rule, remarkably good and safe investments. The Midland, the London and North-Western, the Great Northern, the Great Western, and the North-Eastern Eailways represent unitedly 338 millions of capital, or about 42 per cent, of the total of the United Kingdom, and 50 per cent, of the total railway capital of England and Wales. The average dividends paid by these five companies in 1884 was over 6 per cent, on their ordinary capital. 1 The gross receipts from British railways increased from 45 million" in 1870 to 70^ millions in 1884 RAILWAYS AS INVESTMENTS. 53 Each of these main lines is, however, largely made up of a congeries of smaller railways, some of which yield very excellent dividends, while others return none at all. Thus, for example, the Great Western system is made up of thirty-nine different lines, of which twenty paid no divi- dend whatever in 1884, while the others paid dividends ranging between J and 8 per cent. It is, therefore, of importance to investors to endeavour to discover what is the exact dividend-paying character and prospects of each of the many different stocks of which our principal systems are composed. It is, again, a fact, and a striking commentary on the variable and unreliable character of railway investments, that in the year 1884, of 258 railways in England and Wales, including those leased to or worked by the great companies, 137, or more than one-half of the whole, paid no dividends whatever. Of thirty-eight railways in Scotland, in the same year, eighteen paid no dividends, and only six paid 5 per cent, and upwards. Ireland was in a worse case still, having thirty-four lines out of fifty-one that paid no dividends on the ordinary capital. The foregoing facts may be thus summarised, with a view to showing the statistical position of the railways throughout the nation as a whole : — Countries. Number of Railway Com. panics that Paid Totals. Dividends. No Dividends. England and Wales . Totals . 121 20 17 137 18 34 258 38 51 158 189 347 54 RAILWAY PROBLEMS. The fact that 189, or 54 per cent., of all the railways in the United Kingdom paid no dividends to ordinary share- holders in 1884 can hardly be regarded as a good augury for that class of stock. It is, of course, obvious that these non-dividend-paying lines must generally have been of minor importance, in regard both to their extent and the capital invested, or the proportion of the total ordinary capital that received no dividend would have been much greater than we have found it to be. In the United States there is quite as great a disparity between the profits of different companies and the aver- age rate of dividends earned on railway investments in different States as in the United Kingdom. It is worth while examining the special circumstances of the United States in two of their more prominent aspects — the first, that of the average rates of dividend earned over the whole; and the next, that of the averages of particular States. Both points of view are of singular interest to English investors generally, as well as to the railway world, and those whose interests are controlled thereby. The first question that naturally occurs, in considering the subject of American railways as investments, is that of how far the traffic carried on the railways as a whole admits of further expansion; and the next, that of how far the remunerative character of the railways, as such, is likely to be affected by the wars of rates that have every now and again prevailed, with the result of forcing down profits to an extremely narrow margin. An answer to these two inquiries will be found in the following statement 1 : — 1 The figures in this statement are taken from the " Statistical Abstract of the Principal and other Foreign Countries," issued by the English Board of Trade. RAILWAYS AS INVESTMENTS. 55 Statement showing the Cost of Construction of the Railways in the United States, with Gross and Net Receipts for each Tear from 187 1 to 1884. Cost of Con- Gross Working Net Bivi- Years. struction Receipts Expenses Receipts ' (£1 = 1000). 06 1 = 1000). (£ 1 = 1000). (£ 1 = 1000). Cent. 1871 . £555,208 £84,167 £68,750 £15,417 2.8 1872 658,333 96,875 69,796 27,079 4.0 1873 788,541 109,791 71,458 38,333 4.8 1874 879,583 101,875 68,958 32,917 3-6 1875 920,000 104,791 66,041 38,750 4.2 1876 93I,IOO 103,541 64,791 38,750 4.0 1877 951,675 98,541 62,916 35,625 3-7 1878 956,250 102,079 63,125 38,954 4.0 1879 1,015,004 109,504 58,304 51,200 5-o 1880 1,125,425 127,861 74,822 53,039 4.8 1881 1,308,034 140,204 82,784 57,220 4-3 1882 1,461,823 154,042 90,963 63,090 4.4 1883 1,557,889 164,750 97,988 67,382 4.4 1884 . 1,599,248 160,559 72,866 87,693 5-4 The remarkable feature of this statement is, that it proves the existence of an elasticity and capacity for improvement in all directions, on the part of American railways, that are probably unique. Since 1 87 1 the work- ing expenses of the system as a whole have only increased from £68,750,000 sterling to £"72,866,000 sterling, being an increase of only £4,116,000, or 5.9 per cent., while the net receipts have increased by £72,276,000, or about 468 per cent. ! Concurrently with this movement, the gross receipts have increased from 84 to 160 J millions, being an advance of about y6 millions, or 90 per cent. These figures, and the enormous increase of capital expenditure in the same interval — from 5 5 5^- to 1599^ millions — ex- plain the remarkable fact that while the gross earning power of capital has fallen from 15 to 10 per cent., the net earning power of the same capital has advanced from 2.8 to 5.4 per cent., concurrently with a general reduction of freight rates that is computed at a total of not less than 100 millions sterling a year, or twelve millions more than the total net receipts for 1884. In the United Kingdom, 56 RAILWAY PROBLEMS. the course of railway finance has been very different, the total traffic receipts having increased from 51^ to 71 millions, the net receipts from 25! to 3 if millions, and the working expenditure from 25 § to about 36 millions ster- ling. In other words, to earn an additional J2\ millions of net receipts, the working expenses of the American lines have been increased by a little over 4 millions sterling ; but in the United Kingdom there has been an increase of over 10 millions in working expenditure to earn about 6 millions more of net receipts. But this is not the only remarkable feature of the com- parison, or, to speak more correctly, of the contrast. The railways of the United States have effected this increase of 468 per cent, in their net receipts concurrently with an enormous reduction in rates and fares, whereas in the United Kingdom any reductions that have occurred in these directions during the same interval have been im- material. This is substantially proved by the fact that in the United Kingdom the average rate per ton carried and the average fare per passenger, have scarcely varied as between the one period and the other. The average rate of dividend earned on railway capital is not only higher in the United States, but the proportions of the whole ordinary capital that take an exceptionally high range appear to be greater as well. Thus, it seems that iu the year 1880, 3.35 per cent, of the whole railway capital of the United States earned between 9 and' 10 per cent., as compared with only 0.31 per cent, in the United Kingdom ; 6.28 per cent, of the whole American railway capital earned between 10 and 11 per cent., against only 0.38 in the United Kingdom; 7.97 per cent, earned between 11 and 12 per cent, against nil in the United Kingdom ; and 6.01 per cent, earned between 12 and 13 per cent, in the United States, against 0.0 1 per cent, in the United Kingdom. On the other hand, however, 10.23 P er cent, of the whole only received from 1 to 2 per cent, in the United States, and 9.19 from 2 to 3 RAILWAYS AS INVESTMENTS. 57 per cent., against 6.64 per cent, and 1.92 per cent, respec- tively in the United Kingdom. The following table, which has been compiled from the Census Reports of the United States for 1880, and the Board of Trade returns for the United Kingdom, shows the amounts of dividend paid on the total railway capital of the United States and on the ordinary capital of the United Kingdom, respectively : — Statement showing the Dividends Paid upon the Capital Embarked in the Hailways of the United States and the United Kingdom, respectively, in the Year 1880. Amount of Capital. Percentage of Total in Dividend or Percentage of Profit United States ($1 = 1000). United Kingdom C61 = 1000). United States. United Kingdom. Under 1 . $394,762 £39,030 18.77 14-43 I to 2 215,015 17,979 IO.23 6.64 2 „ 3 293,364 5,187 9.19 I.92 3 >» 4 64,327 22,487 3.06 8.31 4 >. 5 52,892 28,387 2.52 I0.49 5 ,, 6 120,131 62,168 5-71 22.98 6 „ 7 137,497 31,763 6-54 II.74 7 ,, 8 137,061 36,057 6.52 13-33 8 M 9 156,457 2I,86l 7-44 8.08 9 .. 10 70,415 827 3-35 0.31 10 „ 11 132,184 1,036 6.28 0.38 11 „ 12 167,561 7-97 12 n 13 126,505 30 6.01 0.0 1 13 II 14 52,768 2.51 14 ,, IS 336 I,IIO 0.02 0.41 15 » 16 5,969 S f 0.28 16 „ 17 2,026 I O.IO 17 „ 18 260 0.01 18 „ 19 5,o86 - NiL \ 0.24 19 „ 20 54,030 2.57 20 „ 21 2,614 0.12 22 „ 23 280 0.01 23 and upwards II,Sl6 * o.55 Total 3 2,103,068 270,496 100.00 99-03 The foregoing statement is very instructive. It proves unmistakably that American railways are, in the main, 58 RAILWAY PROBLEMS. both very much better and very much worse, regarded as investments, than those of England. There never, pro- bably, has been a year in the history of English railways when 18.77 °f a H ^he capital expended in their construc- tion paid under 1 per cent, dividend, and yet this was the condition of things in the United States in a year when business was so generally prosperous as that of 1880. It will be observed, again, that 38 per cent, of all the capital invested in American lines paid less than 3 per cent., while only 23 per cent, of the capital invested in English lines was in that condition. On the other hand, however, over 26 per cent, of all the United States railway capital paid over 10 per cent., as compared with less than 1 per cent, of the total railway capital of the United Kingdom. These facts would seem to prove that American railways are a much greater lottery than English, and that they require to be much more closely looked into. It is, of course, necessary to remember that a considerable section of the American railway system, including the two Pacific lines, was largely built at the cost of the State, with a view to opening up the country, whereas the State has done nothing whatever on behalf of English lines, which have all been constructed as private enter- prises. In the United States, as in most foreign countries, the funded debt of the railways bears a considerably higher rate of interest than in the United Kingdom. On the fifteen leading American lines, having a net income equal to the payment of 9.2 per cent, average dividends upon their stock in 1880, and actually declaring average divi- dends of 5.0 per cent, for that year, the average rate of interest paid on a funded debt of 65 5 £ millions of dollars was 5.6 per cent. But the average was made up of rates varying from a minimum of 3.1 per cent, in the case of the Union Pacific to a maximum of 8.2 per cent, in the case of the Wabash, St. Louis, and Pacific Line. In England the rate of dividend payable on loans and debjn- RAILWAYS AS INVESTMENTS. 59 tures varies from 3! to 4I per cent., the average for each description of capital in 1884 being — Ordinary capital 4-34 per cent. Guaranteed capital . . . .4.42 „ Preference capital . . . . .4.16 „ Loans 4.20 „ Debentures 4.22 „ The best-paying lines in the United States are those of the New England and Middle States. In 1884 the per- centage of net income on the total cost of the railways and their equipment was — For Massachusetts ..... 5 per cent. Rhode Island ..... 8 Connecticut ..... 5 New Jersey . . . . .5 Pennsylvania . . . . .10 Maryland 6 On the other hand, however, there have been very low average rates of dividend earned in most of the Western, South-Western, and Pacific States, including — For Ohio 3 per cent. , Minnesota 3 ,, , Iowa 2 ,, , Arkansas I „ , Wyoming 1 „ , California 3 >» On the Continent of Europe the average rate of dividend does not greatly vary from that earned by railway capital in England. There is, however, a distinction to be made between State and private or companies' lines. In regard to the former, they are often constructed without any immediate expectation of their being a source of profit, whereas private companies generally make this the ne plus ultra of their plans and operations. The effect of this condition of things may be traced in the following figures : — 6o RAILWAY PROBLEMS. Dividends Earned on State and Private Companies' Lines in European Countries. Countries. Average Rate of Dividend Earned in 1883 on State Lines. Private Lines. Austria Norway Russia Per cent. 2.49 0.37 I.40 O.24 Per cent. 446 5- H 6.71 4.89 In addition to the State lines and the private lines, as such, there are, in some Continental countries, private lines worked by the State, and State lines worked by private companies. The following detailed statement shows the average rates of dividend earned on all four classes, and on the system of each country, as a whole, in 1882 : — Statement showing the Percentage of Net Receipts on Total Capital Expen- diture of European Railways in 1882, distinguishing State from Private or Companies' Lines. Private State Lines Average of all Lines. Countries. State Lines. Lines Worked Private Lines. Worked by- Private by State. Companies. Germany 4-63 5-45 4-56 4.68 Austria .... 2.49 2.56 4.46 O.63 3-98 Belgium 5.62 5.00 4-03 Denmark 1.88 ... 2.71 2.18 France — Lines of general interest o.37 5.14 O.I2 4-77 Lines of local interest . 0.89 Italy .... 3- 70 2.17 Norway . 1.40 6.71 1.90 Holland 5-40 3.OO 4.09 Roumania 2.61 0.52 2.06 Russia . 0.24 4.89 4-75 Finland . 4-54 4-54 Switzerland . 367 3-67 RAILWAYS AS INVESTMENTS. 61 It would be a mistake to base on these figures any judgment as to the differences that distinguish private from State lines in reference to their management. It happens, no doubt, in a few cases, as in those of Germany and Belgium, that the State lines yield a higher rate of dividend than the others. That, however, may be merely due to the accident of their traversing districts in which there is a greater amount of traffic, or in which the con- ditions favourable to good dividend-earning capacity are otherwise more at command. Taking the Continent as a whole, it will be seen that the only countries in which the railways earn a higher average rate of dividend than our own are — Germany, with an average of . . .4.68 per cent. France, 1 „ „ .... 4.77 „ Russia, „ „ . ' . 4.75 „ Finland, „ ' „ . . . . 4.54 „ It is necessary to remember that Continental railways have not generally the same volume of traffic at command as English lines, that their gross and net receipts are usually much under those of English railways per mile of line open, and that their working expenditure generally takes a lower range. With the same extent of traffic, Continental railways would yield much higher rates of dividend than English railways, both because their capital cost is much less, and because their working expenses are lower. These points will be found more fully explained in other chapters. In the next table the comparative results of working the State and private lines in several leading European countries are recorded for the year 1883, being a year later than that to which the figures already quoted relate : — 1 This figure applies to the lines of general interest only, but it embraces all the important railways in the kingdom. 62 RAILWAY PROBLEMS. Statement Showing the Financial Results of Working Continental Railways in 1883. Countries. Germany — State lines Private lines worked by the State . Companies' lines Austria — State lines . State lines worked by private companies Private lines worked by the State . Companies' lines Belgium — State lines . Companies' lines — Grand CentL Beige Italy — State lines . Private lines Holland — State lines . Companies' lines Total Cost Incurred. (1 fr. = 1000. 9.656,654 628,542 1,512,061 911,178 87,646 956,664 6,013,413 1,217,213 139,204 1,757 1.095,234 345,467 257,181 Cost per Kilometre Con- structed. Expendi- ture SIS* 5* 2 a. Incurred in g £ § g 305,901 282,745 242,364 253.952 180,341 406,227 430,698 397,392 242,939 336,282 258,920 294,265 387,321 Working. (1 fr.=iooo.) 534,198 46,434 83,781 38,162 3,302 35,241 253,761 73,141 7,940 102,553 33.636 15,889 16,183 OS 55IO 52.20 53-60 62.53 77-83 61.70 51-14 59-98 53-47 63.89 80.28 64.20 54-14 t£ O . .So.* "2 ? o 8 ~ fc. O O o 4-49 6.63 4.72 2.50 1.07 2.29 4-03 4.00 4-99 3-29 0.82 2-55 5-33 These returns clearly show that in Germany, Austria, and Holland, the railways constructed by the State cost; on an average, less than those laid down by private companies, and this should ultimately assist them to earn better dividends. The State lines, however, appear to show a larger proportion of their total gross receipts expended in their working in Germany, Austria, Belgium, and Holland, which is a symptom that would generally lead to a less favourable financial result. ( 63 ) CHAPTER V. LEGAL STATUS OF RAILWAYS IN GREAT BRITAIN. There is no subject of greater present or prospective im- portance, in relation to the future of industry and com- merce — not to speak of the travelling public, as such, and the community" in so far as it is concerned in what is, after all, a more favourite investment than any other, not even excepting the funds — than the extent to which railway companies have received Parliamentary sanction to their several undertakings. There is no modern function of the State that has been j found more onerous and irksome than that of holding the / balance evenly between the railway companies and they general public. The rights and obligations of both have often been in fierce and protracted dispute. It has been found, in a general way, that the railways, as was no doubt perfectly within their right, stuck most tenaciously to the privileges and concessions conferred upon them by the State ; while the public, in so far as their interests were not identical with those of the railways, have been most jealous of the monopolies exercised by the latter, and have ever and anon called upon the State to curtail and qualify what appeared to be an arbitrary power to establish mono- polies almost as great as their own — to exalt one district at the expense of another, and to show favour to interests or individuals, that was not regulated by any more obvious impulse than that of mere caprice, and was, in its results, attended with a great amount of detriment to conflicting and rival parties. 64 RAILWAY PROBLEMS. After more than half a century's experience of railways, this question of rneum and tuum remains as hotly con- tested, and as far from being settled, so far as present appearances go, as ever. There has been a great deal of vacillation and ill-regulated zeal over this matter. At! one time it has been deemed by the Government of the day to be necessary to impose the strictest limitations on the powers possessed by railway companies. At another, those powers have been extended and confirmed, apparently without let or hindrance. Successive Governments have appointed Select Committees and Eoyal Commissions to inquire into the working of railways, and many elaborate reports have followed thereupon; but in very few cases has it happened that effectual checks were imposed upon the powers of the railway companies, as originally con- ferred, so that to-day, if we except a number of regula- tions that have been imposed with the view of securing the safety of life and limb, the railways of this country are as free from State control as ever they have been. The reasons assigned for this condition of things have generally been the same, whether stated by the Minister of the day, from his place in Parliament, by a Select Com- mittee, after a long investigation of the charters under which railway companies hold and exercise their enormous powers, or by the apologists and defenders of the railways in the press. * It is contended (i) that as an enormous capital has been invested in British railways on the faith of the privileges originally conceded by Parliament, it would be a gross in- justice, amounting almost to an act of confiscation, to now withdraw the concessions which led to that capital being subscribed; and (2) that it is in accordance with the genius of English enterprise, and the proved experience of the past, that the State should interfere as little as possible with what is being adequately and efficiently performed, or capable of being so performed, by the unaided efforts of the public, as such. \J STATUS OF RAILWAYS IN GREAT BRITAIN. 65 There is undoubtedly strong force in both of these arguments. It is, of course, open to the other side to argue that when Parliament granted the powers originally conferred upon railway companies, it was not anticipated, even by the most prescient and sanguine, that the system would ever attain to the colossal influence that it wields to-day, and that if the present development could have been foreseen, the regulations made by Parliament would have been framed in a manner that would have protected the public much more effectually. In proof of this, the experience of Continental nations is pointed to, where it was perceived, at a very early period, that the rights of the State over all high roads must be equally asserted over the new ways of inter-communication which were about to be substituted for them. But while the principle that the State should retain control over the highways of the country is no doubt a . sound one, it is proper to draw a broad distinction between the conditions under which J railway s were established in England and those that obtained on the Continent of Europe. The first and most essential feature of this distinction is that the State neither did at the beginning, nor subse- quently, undertake the ownership and control of railways in England, as it had previously done in the case of the common turnpike roads. The construction of railways"^ was left entirely to private enterprise, which found the whole of the capital necessary for the purpose, and under- took every risk and responsibility attaching thereto. The State was simply an onlooker, and, for some years at any rate, a rather indifferent one. Quite a contrary system was pursued in other countries. In some cases it was the policy of the State to undertake, not only the con- struction, but the maintenance and working, of the prin- cipal lines. This fact led to the setting up of very diver- gent principles of control. In one country, the State used £ 66 RAILWAY PROBLEMS. the transport of goods and passengers as a source of revenue. In another, regarding the facility of intercommunication and the development of industry as advantages paramount to revenue, the State fixed the tariff at so low a figure that railways were not carried on mainly as a source of profit. These main principles may, and have been, infinitely varied. Examples might be quoted where the State has either wholly or partially constructed the railways, and then let them for a term of years to a company, under a lease which usually contains clauses reserving a right of rever- sion to the State, and fixing the limits of maximum rates and fares, the conditions on which the State can cancel the lease, and the terms on which the line is to be sur- rendered by the company at its termination. It is manifest, then, that the circumstances under which English railways have been constructed are such as to re- move them, as regards State regulation, from either of the two categories with which they are generally compared — that is to say, from the category of turnpike roads on the one hand, and from that of State-constructed and State- administered lines on the other. The Government does, nevertheless, exercise a very considerable amount of control over both the construction and the working of English railroads. This control com- mences, ab initio, with the authorisation of the under- taking, for which, and for any modification or extension thereof, direct Parliamentary sanction is necessary. Before obtaining such sanction, the promoters must comply with quite a legion of standing orders, and must " show their hand " in every particular. The Act under which every railway in the United Kingdom has been constructed specifies the maximum rates and fares authorised to be charged, and the con- ditions under which the line is to be worked generally. It is competent for any one whose interests are liable to be adversely affected by the proposed new line to enter an appearance against it, so that it seldom happens thai the STATUS OF RAILWAYS IN GREAT BRITAIN. 67 sanction of Parliament is accorded to the whole of the , railway projects put before it in any one session. J There can be no question that the system under which the railway system of the United Kingdom has been built up is attended with many disadvantages, if it may also claim to have much to recommend it. It is of great service to the public that no railway company can have any alteration made in any of the powers conferred upon it by Parliament, without submitting a special Bill, and obtaining a special Act for the purpose, while this necessity secures to the public the right of overhauling the authority of the railway company, and of opposing such provisions as are not likely to be to their own advantage. Such applications, on the other hand, necessarily add to the already enormous number of Acts of Parliament, under which the powers of the railway companies and the rights of the public are now provided for, and render it more than ever difficult to distinguish between the two. As the case now stands, there is no company that has not a more or less consider- able number of different Acts, which makes it very difficult indeed to ascertain the law as bearing upon any particular case. This difficulty was present to the minds of the members of the Railway Commission of 1867, when they recommended that "when railway companies apply to Parliament for power to amend their Acts, advantage should be taken of the application to require them to consolidate all the clauses of existing Acts which remain permanently applicable to their undertaking." Besides the obligations imposed upon them under their special Acts, railway companies are subject to the pro- visions of a number of general Acts. Among the obliga- tions devolved on railway companies under these general Acts are the following : — (1.) To afford all reasonable facilities for forwarding delivering, and interchanging traffic, without pre- ference or delay. '* 68 RAILWAY PROBLEMS. (2.) To charge equal tolls to all persons, and after the same rate, in respect of all traffic passing over the same portions of railways tinder the same circumstances. (3.) That distance posts or stones shall be set up at every quarter mile along the lines of railway. (4.) That the tolls authorised to be taken and exacted shall be published by being exhibited on a board. (5.) To permit to be carried on their lines all goods except such as are dangerous. (6.) To allow any persons to use a railway, with their engines and carriages, upon certain conditions. (7.) To run at least one train each way daily, at an average speed of not less than twelve miles an hour, and to stop at every station. (8.) To charge not more than id. for each mile travelled, half-price for children between 3 and 12 years, and to carry children under 3 years free. (9). To allow each passenger to carry 50 lbs. of luggage free. (10.) To carry soldiers and police at id. per mile, and officers in first-class carriages at 2d. per mile; and to carry public baggage and stores accom- panying them at 2d. per ton per mile. (11.) To allow the Postmaster-General to run trains at such times as he fixes, and at such speed (not exceeding 27 miles per hour, including stoppages) as the Board of Trade certifies to be safe. (12.) To submit to the purchase of existing lines of railway by Parliament, after the expiration of a definite period. (13.) To adopt an uniform gauge of 4 feet 8| inches. Parliament has, besides, reserved a power, in certain \ contingencies, of reducing the maximum tolls and rates leviable by railway companies; of passing any general railway Act which it may deem necessary for the reguia- STATUS OF RAILWAYS IN GREAT BRITAIN. 69 tion of the railway system; and of having the railways, engines, and carriages inspected by the officers of the Board of Trade whenever they think fit. It may also, when applied to, make regulations for the safe working of the traffic at the junction of the lines of two companies The Treasury has power to reduce the rate of tolls at tHe^ end of twenty-one years when the dividends exceed 10 per cent., and in some amalgamation Acts, as, for instance, that of the Great Western, the South Wales, and the West Midland Eailway, the rate of interest is limited to 6 per J cent. British railway companies are free to construct and work their lines as they please, provided that they are con- structed in such a way as to be capable of being worked i without public danger. Government, however, possesses a power of making! regulations at junctions between the lines of two com- panies, and where the lines interfere with landowners' interests, as, for example, at level crossings. Eailway companies are liable, under the common law, to compensate persons who are injured ; and under Lord Campbell's Act they are liable to compensate the near relatives of persons who may be killed by the negligence of either themselves or their servants. The special Acts under which railways are, and have been, constructed in this country are divisible into three parts. In the first place, they create an incorporated company, with power to raise capital, and with all the corporate privileges attaching to such incorporation. In the next place, they give the incorporated company the necessary powers to take land, and otherwise interfere with existing interests, in order that they may be enabled to construct their lines; and, thirdly, they regulate and define the rights of the public to use the railway, and of the company^ I to levy tolls and charges. The necessity for the first of these provisions arose from 70 RAILWAY PROBLEMS. the circumstance that, in the earlier days of railways, joint-stock enterprise was in its infancy. Incorporation, with the extinction of individual liability, was regarded as a privilege, and was only granted by Parliament to enterprises or trades which it was considered could not be effectually carried on by individual capitalists or private partnership. It follows, as a consequence of Parliament having granted" 1 to each company, in its special Act, its charter of incorpora- tion, that when the company desires to alter the terms of that incorporation, as between the several shareholders, or to enlarge its original capital, or to vary the conditions under which the capital is to be raised, a fresh application to Parliament becomes necessary. -/ "It is," in the words of the Commission of 1867, " of no slight importance to the public that railway companies should be compelled to apply to Parliament for its sanction to every alteration of, or addition to, their under- takings, and that any other railway company or person affected by the change should have the liberty of being heard in opposition. The railway companies, being thus continually before Parliamentary committees, either to defend their interests against invasion or to obtain further concessions from Parliament, an opportunity is afforded to the public of bringing forward any grievances from which they may suffer, and to Parliament of imposing such fresh regulations as the public interests may require, as a condition of the new concession. Thus Parliament becomes an arbitrator between the railway companies and the public, and the railway companies voluntarily accept its decisions to promote their own objects or interests. This operates as a powerful inducement to the companies to remove any grievances of which the traders in their different districts might complain." The Royal Commission on railways reported in 1867 that there were then about 1800 Acts of Parliament sanctioning the construction of new lines up to that time, STATUS OF RAILWAYS IN GREAT BRITAIN. 71 and about 1300 Acts modifying the provisions of the original Acts by authorising the extension of capital, the variation of lines, the construction of additional works, the leasing or amalgamation of lines, the variation of tolls and rates, and the amendment and consolidation of original Acts, so thatrit had become an extremely difficult task to ascertain the precise law affecting any company, or any j particular portion of its lines of railway. . This condition of affairs has greatly tended to produce ] and encourage litigation, and has thus provided a rich > harvest for the lawyers. The consolidation of the several private Acts possessed by each company is urgently re- quired with a view to the simplification of the relations existing between them and the general public. Not less requisite is the codification of the several general Acts, although these are by no means so difficult of compre- hension. The present confusion is bad for both the railways and those whom they serve, entails upon both a great deal of expense that might be avoided, creates uncertainty as to the issue of many points that should not be left in the slightest doubt, and can be of ultimate benefit to no one outside of that numerous but undesirable 1 class who live on the misfortunes of others. ( 72 ) CHAPTER VI. THE STATUS OF FOREIGN RAILWAYS. A JUST comparison of the legal conditions under which railways have been constructed in different countries would necessarily involve a historical record that cannot be attempted here. The powers and prerogatives, the limitations and reservations, the principles and practice, by which railway systems are distinguished in the leading countries of the world are legion, and are varied by fresh enactments, bye-laws, regulations, and restrictions, not only from year to year, but almost from day to day. But the fundamental principles on which railway enterprise was founded at the outset have in most, if not in all, countries continued to remain practically unchanged to the present time. Each country has adopted a policy deemed at the time to be the best suited to its own special requirements. From that general policy but few departures have been made, except in matters of minor detail. We shall, therefore, attempt to expound some of the leading principles that have guided the chief countries of the world in the system of railway development, without seeking to deal with such regulations and ordinances as are apt to be constantly varied by the exigencies of experience and public necessity. The United States. There is no general Governmental control over the rail- roads of the United States. Since the State of New York led off, by enacting, under its " General Railroad Law," that THE STATUS OF FOREIGN RAILWAYS. 73 " twenty-five or more persons may, without any application to the Legislature, associate themselves, and by so doing become a body corporate, authorised to do any act necessary in the construction, operation, or maintenance of a railroad," this example has been generally followed by other States, so that railroads can be built anywhere or everywhere. The right so conceded carries with it that of taking lands for railway purposes, on paying their value. Thus the State Legislatures "were at once relieved of one of the most troublesome subjects that ever came before them." The advantages of this absolute freedom of action are thus described by Mr. Poor : x — " There is hardly a person in the Northern and Western States that does not live within the hearing of the whistle of the locomotive engine. The necessity of railroads was everywhere so pressing that a great many lines were built by people living along them, not with the expectation of direct income, but for the incidental advantages which they secured. Great success in the form of dividends was certain to lead to the construction of rival railroads to share in the profits of the first-comer. There was no monopoly in this right of construction. There could be no monopoly in their operations, as all were competitors for each other's business. . . . Eelative to each other, in the matter of transportation, New York, Pennsylvania, and Maryland are distinct sovereignties. On the north, the Canadian lines are an equal corrective of any attempt at extensive charges on the New York lines. The exten- sions and ramifications of lines, that must always be rivals and antagonistic, are so complete that the business of every important section and community in the United States is now fiercely competed for — to be competed for all the more fiercely as time goes on." This citation from a high authority affords a sufficiently exact and comprehensive idea of the general conditions under which railways have been established throughout 1 "Manual of Railroads of the United States for 1881." 74 RAILWAY PROBLEMS. the United States. Practically each State is omnipotent with reference to its own system. Each State accordingly frames by-laws and regulations designed to meet the special requirements of its railway traffic. No two States have precisely the same code of railway laws. In some cases the railway practice as regards traffic regulations is much similar to that of Great Britain in essential matters of detail. In other cases, as we have sufficiently shown elsewhere, it is widely different. But whatever may be the special circumstances and laws of particular States, all are alike in this, that railway corporations are exempted v V from general or national control to an extent that is not J equalled in any other country. It must be admitted that the system has been justified by its results. In America railway commissioners have been appointed in twenty-one States. In some cases these officers are paid by the railways ; in others, they are paid by the State. The general scope of the laws under which the commissioners are appointed is said to be "to control railroads within the State;" and, it is added, that "they exercise, in many cases, a healthful influence over railroad management ; but railroad transportation, strictly confined I within State jurisdiction, is so limited that it leaves the ] real difficulties unsolved and nearly unaffected. It cannot be said that the State laws have been successful in dealing with the subject." 1 Again, "the limited jurisdiction of the State laws involves conflicts with both the general Government and the sister States. Diverse decisions ,have been rendered by the highest judicial tribunals of neighbouring States upon State laws of like import and purpose." As examples of this fact, it may be stated that while the Supreme Court of Iowa decided that " a railroad company has the right, as a common carrier, to make its own contracts, and disregard any laws of a State which seek to regulate shipments to ports beyond the limits of the State," the Supreme Court of Illinois decided that 1 "Report of the Secretary of the Interior for 1882," p. 446. THE STATUS OF FOREIGN RAILWAYS. 75 "while the Act of the Illinois Legislature of May 2, 1873, to prevent unjust discrimination in the rates of charges of railway companies, may affect commerce, it cannot be said to be a law regulating commerce among the several States, within the meaning of the Federal Constitution." If the Supreme Court of the United States should concur with the Supreme Court of Illinois, then each State would be at liberty to enact regulations for itself, with the result of certain conflict of laws and extra-State authority, difficult, if not impossible, to define, and leading to vexatious litigation ; but if, on the other hand, the de- cision of the Supreme Court of Iowa were supported, then the regulation of railways is a matter of exclusive Federal jurisdiction, and only Congress could legislate upon the subject beyond State lines with any effect. The state of the laws that regulate railway property in America would thus appear to be far from satisfactory. The Constitution vests in Congress the power to regulate com- merce, and this is described as applying " to all commerce with the several States, except such as is completely in- ternal." Hence the universal use and absolute dependence of all inter-State commerce upon railroads gives constant rise to new questions, under new conditions, which only experience can properly solve. Among the "general laws" of the United States relating to railroads is one that requires every company that has received United States bonds or grants of lands to make to the auditor of railroad accounts "any and all such reports as he may require from time to time," and to sub- mit to his inspection all books and records, under a penalty of not less than 1000 nor more than 2000 dollars. Besides this regulation, which is strictly carried out, the Pacific companies, which have been largely constructed with Government help, are required to keep open their roads as " a public highway for the use of the Government of the United States, free from toll or any other charge," and the United States Government takes power, under the Act 76 RAILWAY PROBLEMS. of 1862, to appoint railway commissioners, to elect direc- tors, to call meetings of stockholders, and make other arrangements of an administrative character. France. In the early history of French railways the lines were generally planned, and in many cases constructed, by the Government. The line was ultimately offered to the com- petition of the general public, the length of the lease, the maximum rates and fares, and other essential facts being distinctly set forth. In a very few cases leases were granted in perpetuity, but these were mostly for mineral lines. The railways are generally, however, conceded to the com- panies in leases for ninety-nine years, at the expiration of which period they become the property of the State ; and in order that the debenture and share capital may be ex- tinguished at the time the transfer takes place, a sinking fund is set aside out of the receipts from traffic, from which a portion of the debentures and shares are annually paid off or bought up. In addition to the advantage of making direct subscrip- tions to the cost of construction, the Government has guaranteed nearly all the bonds issued by the companies. Sometimes the guarantee does not quite cover the cost of interest and sinking fund. In return for this assistance the French Government has required the free performance of the postal service and the conveyance of military and other employes at very low rates. It has fixed lower maximum rates than England, and has required the companies to submit to considerable control, over both rates and fares, for all classes of traffic, as well as over the management. The French Govern- ment also levies a duty upon traffic of 10 per cent, upon the gross receipts from goods carried by fast trains and from passengers. The policy of the French Government has materially protected the companies in that it has not THE STATUS OF FOREIGN RAILWAYS. 77 allowed more railways to be made than it considered would adequately accommodate each district. The result of this is that (whilst the system in vogue tends to ensure a full traffic to every railway), as a rule, those who desire to travel over or send goods by railways have to pay, besides the railway fare, an additional and heavier rate for the road carriage ; whereas in England a very limited amount of road carriage will now bring passengers or goods on to the railways in any part of the country, except in moun- tainous and unproductive districts. A Commission appointed by the French Government to inquire into the construction and working of railways made an elaborate report in 1863. This Commission care- fully considered the prohibition from charging special rates, or rates not authorised by the Government (although lower than the tariff named in the " cahier des charges"), which is one of the main features of the French system of traffic, and they make some remarkable references to the necessity of special rates as a means of developing the resources of the country. They do not, however, recom- mend such rates, because at the time the Commission sat special rates had been prohibited in France, on the ground that they were contrary to the principles of equality. Under the French law of 1842, the State undertook the earthworks, masonry, and stations, and one-third of the price of land. The departments were bound to pay by in- stalments the remaining two-thirds of the land, and the companies had only to lay down rails, maintain the per- manent way, and find and work the rolling-stock. It was intended that three-fifths of the total cost should be borne by the State and departments, and two-fifths by the com- panies. Under this system of subventions, a number of concessions were made, the shares rose to 50 per cent, premium, and in 1848 a total of 1092 miles had been opened. The Revolution of 1848 was a terrible shock to credit, and railway shares went down to half their value. 78 RAILWAY PROBLEMS. Many lines became bankrupt and were sequestrated, and for three years no fresh concessions were granted. But the concessions already made were meanwhile slowly com- pleted, and by the end of 185 1 France had opened 2124 miles, against 6889 miles of railway opened in the United Kingdom. In 1852, the Emperor took the French railways in hand, and by a system which Mr. Dudley Baxter has declared to be singularly adapted to the French people, he put an end to the previously feeble management, and launched into a bold course of railway development. The French public shrank from shares without a guarantee ; he gave a State guarantee of 4 or 5 per cent, interest. The French public preferred debentures to shares ; he authorised an enormous issue of debentures. The companies complained of the shortness of their concessions ; he prolonged them to an uniform period of ninety-nine years. At the same time, he provided for the interests of the State by a rigid system of government regulation and audit. And lastly, coming to the conclusion that the small companies were weak and costly, he amalgamated them into six great com- panies, each with a large and distinct territory, and able, by their magnitude, to inspire confidence in the public, and aid the Government in the construction of fresh rail- ways. This vigorous policy was very soon successful. Capital flowed in readily, construction proceeded with rapidity, and between the end of 185 1 and 1857' the length of the railways opened was increased from 2124 miles to 4475 miles, or more than doubled. England at the same time had opened 9037 miles. The laws and regulations affecting railway administra- tion in France are scattered throughout many volumes, and form a very large mass of literature. They are all, however, founded on two early sets of laws — the first dated the 15th July 1845, and the second the 15th November 1846. The latter, which is the more im- portant and comprehensive, deals with — THE STATUS OF FOREIGN RAILWAYS. 79 (1.) The stations and the permanent way. (2.) The materials of construction. (3.) The composition of the trains. (4.) The number, despatch, and arrival of trains. (5.) Eates and fares. (6.) Inspection and surveillance. 1 (7.) Eegulations for passengers, &c. (8.) Sundry regulations. Since the above laws were framed, however, they have been modified and varied in their scope by many succeed- ing enactments. There is, indeed, no country in the world where railway control has been more completely developed into a system of State interference than in France. The result is scarcely satisfactory to those who have had opportunities of comparing it with what is achieved under the freer and more democratic systems of England and the United States. Germany. In Prussia, under the law of the 3rd November 1838, every company proposing to lay down a railway required to apply to the Council of Trade, with particulars of the projected line, and the amount of capital proposed to be raised. The line of road, in its entire course, was to be subject to the approval of the Council of Trade, as well as the conditions of construction and the vehicles to be employed. The authority of Parliament was required for the issue of more shares than the number originally fixed, as well 1 In France, the Minister of Public Works appoints the members of a corps of commissioners and sub-commissioners, whose duty it is to see that the regulations made for the administration of the railways are pro- perly carried out. In 1856 these officials numbered thirty, of whom six resided in Paris, two in Lyons, and one in each of the other large towns. Their annual emoluments amounted to a total of 110,000 fr. (about ^146 each). — "Bulletin des Lois de la Republic Fransaise," No. 240, 1850. 80 RAILWAY PROBLEMS. as the raising of loans, which required to be coupled with the condition that a fund should be set aside for defraying the interest and redeeming the loan. With reference to the acquisition of the land necessary for a new line, the company could purchase it without the consent of the authorities, but such consent was neces- sary to its re-sale. If the company failed to agree with the owners of land, the company had the right to appro- priation, subject to the consent of the authorities, who named the appraisers and conducted the valuation in the presence of both parties. If dissatisfied with the ver- dict thus obtained, the owner of the land could obtain a judicial verdict on the question of value ; but the rail- way company had no such privilege. The Prussian Government, under section 42 of the General Railway Code of 1838, reserved the right of pur- chasing the property of the railway companies, on making compensation, under the following terms : — (1.) The relinquishment cannot be demanded before the expiration of thirty years from the opening of the railway. (2.) It could only be required to take place when a new settlement of the road tolls would have to be made. (3.) The intention to require the surrender of the rail- way must be notified to the company at least one year before the period appointed for such surrender. (4.) The Government to pay compensation to the com- pany at the rate of twenty-five times the amount of the annual dividends which have been paid to the shareholders on an average of the previous five years. On the 1st January 1871, a set of police regulations applicable to all the railways in the North German Cou.- THE STATUS OF FOREIGN RAILWAYS. 81 federation came into force in that country. The regula- tions are classified under seventy-nine sections, and em- brace the following heads : 1 — (i.) Condition and control of the line. (2.) State of the rolling stock. (3.) Rules and arrangements for working the traffic. (4.) Regulations affecting the general public. (5.) Police. (6.) Supervision generally. A railway company is bound to keep its line and rolling stock at all times in good condition, and any failure to do so may lead to interference by the legally constituted authorities. 2 A new set of regulations applicable to the whole railway system of Germany came into operation during the year 1886. 3 This code is most comprehensive, and is well worthy the close study of railway authorities in all parts of the world. It deals with every possible phase of rail- way construction and control — perhaps, if anything, with too great minuteness — but it is, at any rate, entitled to con- sideration as the crystallised embodiment of a long and a varied experience on the part of the State. We can only say here, in general terms, that the more important sub- jects dealt with include the condition of the permanent way ; the provisions requisite for bridges, crossings, signals, &c. ; the construction of* the locomotives; the testing of locomotives and tenders ; the construction of the rolling stock, with specific regulations as regards wheels, tyres, axles, &c. ; the periodical examination of locomotives, carriages, and waggons ; the weight and working of both goods and passenger trains ; the rate of speed for different descriptions of traffic ; the arrival and departure of trains ; the conditions of working express and slow traffic ; the 1 " Collection of Laws for the German Confederation for 1870," No. 24. 2 '' Prussian Collection of Laws for 1838," sec. 29. * Approved by the Minister of Public Works, 5th January 1 886. 82 RAILWAY PROBLEMS. transport of passengers by goods, and of goods by pas- senger trains; communication between passengers and guards ; the character of electric communication ; rules for working the signals ; and many others that we cannot stay to enumerate. The regulations are classified under the four following principal headings : — (i.) State and maintenance of the permanent way. (2.) Condition and revision of the rolling stock. (3.) Working the traffic. (4.) Regulations affecting the public. There is perhaps no system of State-aided and State- regulated railways that has been initiated and managed with more prudence than that of Germany. In all agreements for assistance or concessions to pri- vate companies, the State has made stipulations with a view to the advantage of the general public in reference to the fixing of low tariffs, the construction of branch lines or feeders, the acquisition in certain cases of the manage- ment, the reservation of the right to repurchase the lines in certain contingencies at an earlier date than that fixed by the general law, and the recouping of the State for its expenditure under guarantees. With a view to promote branch lines as feeders to main trunk lines, the State has in some cases given a free grant of part of the mileage cost. In other cases it has, been made a preliminary to a concession for a proposed new line that the district should itself either furnish the land^ or sufficient funds to buy it free of cost to the company. AUSTRIA-HUNGAKT. In Austria the concessions for railway lines are granted for a fixed period not exceeding ninety years, at the end of which time the whole of the property in land, lines, and buildings reverts to the State without any payment what- soever. Not only so, but the railway company is bound THE STATUS OF FOREIGN RAILWAYS. 83 to hand over the property in good repair and in working order. The rolling stock, &c, remains the property of the company. The concession is, however, forfeited if, with- out grounds approved by the State, the completion and opening of the railway is delayed beyond the date fixed in the concession. Of £ 65, 000,000 invested in Austrian railways to the end of 1866, the State had guaranteed interest at the rate of 5 per cent, on ^50,000,000, with the view of stimulating the investment of capital in railway enterprise. The Minister of Commerce is empowered to revise the tariff of charges on each line once in every three years. If the net profits of any company exceed 15 per cent., the Government can make such reductions in the tolls authorised by the concessions as will bring them within that limit. Belgium. According to the law in force in Belgium, the land neces- sary for the formation of railways has been acquired in pur- suance of royal decrees, which direct the compulsory sale of such land for the public good. In consequence of these decrees, the Government has placed itself in communication with the owners of the land, of which it has taken possession in legal form in those cases in which the Government and the owners have been agreed as to the price and condition of sale. But when there has been disagreement on these points, — that is to say, when claims believed to be exorbitant have been put forward, — the matter in dispute has been settled by the courts of law. Some lands have been ceded to the Government gra- tuitously. So far as regards the land on which the railway itself is constructed, the basis on which the offers of payment to the owners have usually been founded has been the prices obtained by public sale at the nearest date for the neigh- S4 RAILWAY PROBLEMS. bouring land under analogous conditions. In default of these means of valuation, reference has been made, by mutual consent, to skilled arbitrators or valuers, whose valuation could be relied upon as representing the market value of the land. It has frequently happened that various considerations have tended to enhance the claims of landowners, such, for instance, as the depreciation in the value of the land remaining after the compulsory sale of so much as was required for the construction of the railway, difficulties in cultivating pieces of land severed by the railway which previously were undivided, &c. In such cases the claims of the landowners have often been exorbitant, and re- ference has had to be made to the courts of law, which have given their decision after hearing the opinions of arbitrators or valuers appointed by themselves. The Government has, as in most other countries, had to pay, besides the price of the land, compensation for the loss of crops, and of profits arising from manufacturing works, &c. It has been the custom in Belgium for the State to grant a lease to private companies for ninety years, at the end of which time the lines revert to the State, or to construct the railways at the public expense. In the former case, the leases specify that the land required for the construc- tion of the railway and its accessories shall be acquired in the name of the State. In point of fact, although there are nominally three different systems of railway control and proprietary, — that of railways constructed and worked by the State, that of lines constructed by private companies but worked by the State, and that of railways constructed and worked by private companies, — the three systems are virtually alike in this, that the lines are funda- mentally the property of the State, since, even in the case of private companies' lines, the State only surrenders for a time the profit of the railways, on the condition that they are properly maintained and worked. THE STATUS OF FOREIGN RAILWAYS. 85 The lessees of a railway in Belgium are bound, before commencing any part of their line, to submit to the Government their working regulations, embracing all the orders and arrangements necessary for the safe and efficient conduct of the traffic. These regulations, after approval or modification by the Government, are strictly binding on the company. If a company should fail, within a reasonable time of the opening of a line, to undertake its working, the Govern- ment is empowered to step in and work the line on the company's behalf, making use for that purpose of the rolling stock, &c, just as if all belonged to the State. If, after three months of such provisional official working, the receipts do not amount to a certain specified limit, the company is deprived of all its rights. The control of the State railways in Belgium is vested in a Council of Central Administration, with the Minister of Public Works as president, the Director-General of Railways as vice-president, and the six inspectors-general as members. This Council advises the Minister of Public Works on all matters that he may have to submit for consideration. Italy. In Italy, the Government exercises control over all railways, under the authority of the Department of Public Works, by commissioners, who, as the immediate represen- tatives of the State, are required to correspond directly with the Public Works Department, and with the prefects of the provinces traversed by the lines under their super- vision, whose decisions they are bound to notify to the companies. The commissary is also required to watch over the persons employed, and to see that the railway and everything belonging to it is always in good working order. He must, moreover, make a general inspection of the line and works every three months, and address to the Public Works Department a detailed report thereupon. 86 RAILWAY PROBLEMS. It is also the duty of this official to make inquiries into railway accidents, and furnish reports thereon to the Government. Under the Public Works Law of 1865 it is provided that in Italy, on the completion of a railway, the Ministry of Public Works shall cause a general inspection thereof to be made, for the purpose of ascertaining whether all the requirements of the law and conditions of the conces- sion have been fulfilled, with regard principally to those intended to ensure public safety and the efficient and permanent working of the line. If there appear any defects, and the persons having the concession fail to remedy them when required to do so, the Government is, by the same article, empowered to execute the necessary works, and to employ for that purpose any portion of the deposit, still held by it, or, should such means prove in- sufficient, to repay itself out of the first receipts of the railway. By Article 268 the Department of Public Works may at any time order additions to be made to the rolling stock, or changes to be introduced into it, provide for its examination, and order the disuse of such vehicles as are judged to be dangerous or unfit for service. Article 282 empowers the Government to regulate time- tables. By Article 289, holders of railway concessions are sub- jected not only to regulations issued in execution of the law, but also to such special rules as may be prescribed for the police, and the maintenance and regular working of the railways. Article 317 provides that all that relates to the police, to the security and the regular working of railways, to the particular rules to be followed with regard to the establishment and preservation of a railway and its de- pendencies, to the supply, employment, and keeping in repair of the rolling stock, to the composition, departure, arrival and running of trains, and to the supervision THE STATUS OF FOREIGN RAILWAYS. 87 (sorveglianza) of the working of the line, &c, shall be laid down by royal decree; and further, that breach of such regulations may entail penalties and fines, to an amount not exceeding 1000 francs in any one case. In 1 88 1, a report was presented by a Special Commis- sion appointed by the Italian Government to inquire into the relations between the railways and the State. They did not encourage the principle of State control. Under contracts made in 1885, the State ceded the control of the railways to two great companies for sixty years — each party having, however, the right to retire at the end of twenty or forty years. The companies buy at a valuation the rolling stock now owned by the State, and keep it in repair at their own charge as part of the ordinary operating expenses. The receipts are divided between the railways and the State in definite proportions. It is provided that as soon as the gross returns of either company shall be two millions sterling, or thereabouts, over the assumed minimum, it shall only receive about fifty per cent, of any further increase, while six per cent, shall be applied to such reductions of rates as the State may prescribe. Again, the State reserves the right to share to the extent of one- half in dividends exceeding y\ per cent. In this case, therefore, the State has practically abdicated direct control over the railways — subject to certain reservations and gaurantees — in favour of private companies. Holland. The King of Holland, William L, convinced of the great importance of a railway connection between the Dutch seaports and Germany, proposed in 1837 to the Chambers to build such a railway on behalf of the State, begin- ning with a branch from Amsterdam to Arnheim. This proposal not having been approved of, the King issued, in 1838, a decree by which he opened a loan to the amount of 900,000,000 florins, at 4! per cent, interest 88 RAILWAY PROBLEMS. per annum, guaranteed on his personal estate. The pro- duce of this loan was to be used for the construction of a railway from Amsterdam to Arnheim, whilst his Majesty- reserved to himself the power to increase this loan subse- quently, in order to obtain the necessary funds for a junction from Rotterdam to Utrecht. The loan was to be redeemed out of the profits of the undertaking, whilst, after the whole loan had been paid off, the railway with all its dependencies was to become the property of the State. The first years of the undertaking having yielded very unsuccessful results, King William II. resolved to give up the whole undertaking to the Dutch-Rhenish Railway Company, which meanwhile had been formed, in consider- ation of the said company taking over all the obligations of the above-named King's loan. The company was to be at liberty to supply the funds eventually required for the redemption of the loan out of their own capital, but, on the other hand, the Government was to be bound to refund to the company all amounts whatsoever spent by it, either for construction, for improvement, or for redemption, before the State could again take over the undertaking from the company. The State railways in Holland have been constructed by the Government entirely with public money. The working of the State railways has, however, been entrusted to a private company. As the State railways are a Government undertaking, the necessary funds were unconditionally provided. The capital spent on the construction of the State rail- ways in Holland is considered as the permanent property of the State. So far as the State will participate in the net proceeds of the working, the public revenues will obviously be benefited. The State does not run any risk of loss in consequence of the working of the State lines, as such risk has been thrown entirely on the company that has undertaken the THE STATUS OF FOREIGN RAILWAYS. 89 working of the State railways and the Dutch company already referred to. The net profits are divided between the Government and the companies, according to a scale to which both are contracting parties. Eussia. Eussia is furnished with a larger proportion of private or companies' lines than almost any other European country. Out of a total of 19,348 kilometres of railway open in 1883, no less than 18,298 kilometres were the property of private concerns, leaving only 1050 kilometres owned and exploited by the State. The provisions made with a view to securing the proper construction and working of Russian lines are not greatly different to those that are enacted in other Euro- pean countries. Concessions are granted by the Govern- ment for the building of projected lines for a certain term of years, at the end of which period the lines revert to the State. There is a railway department carried on as a Governmental bureau, in which the regulations and enactments under which Eussian railways are adminis- tered are framed. We have now seen that in all the leading countries of Europe alike, the necessity of exercising more or less con- trol over railways has been appreciated and provided for^, In the United Kingdom the control so exercised is prob- \ ably less strict — it is assuredly less irksome and inquisi- torial — than in most other countries. The supervision^ exercised by the Board of Trade in England applies mainly to seeing that the permanent way is in good order before being opened, that adequate provision is made against the occurrence of accidents, and that when accidents unhappily do occur, in spite of all precautions to the contrary, they shall be fully and fairly inquired into. But on the Continent, State control, over even private lines, generally goes a great deal further than 90 RAILWAY PROBLEMS. this. The commissioners, inspectors, superintendents, police authorities, and others charged with the duty of keeping railway companies up to their duty, and enforcing com- pliance with the laws relative thereto, are continually pursuing their inquisitorial functions, watching over the persons in charge of the several departments, making frequent inspections of the permanent way and works, drawing up reports on defects of working or breaches of the law ; and they are even authorised in some cases to call meetings of boards of directors, and in others to stop a railway that does not appear to them to have adequate provision for the safety of those who use or are employed on it. We have also seen that the railways of England occupy almost an unique position, so far as Europe is concerned — so much so as almost still to justify the criticism made exactly forty years ago, that this is " the only country in the world whose Legislature has committed the singular imprudence of surrendering, without available conditions, and for an indefinite time, its public communications into private hands." 1 Has the evil become too deep-seated to be incapable of remedy ? If not, how and from what source is the remedy to be applied ? We shall consider this point more fully when we come to deal with some allied questions. 1 Edinburgh Review, October 1846, p. 529. , ( 9i ) CHAPTER VII. GROSS AND NET EARNINGS. There is a remarkable variation in the proportions of gross and net revenue which are earned by different railways. To account for this fact adequately would involve an ex- haustive examination of all the conditions under which each individual railway is carried on. The gross earnings of a railway are, of course, the total amount of revenue re- ceived from all sources, without any deductions whatsoever. The net earnings are the receipts that are left as profit, or for disposal otherwise, after the working expenditure has been deducted. It is manifest that the gross receipts will be large or small according as the traffic is heavy or light, and that the net receipts will be mainly a function of the working expenditure. There are, however, no two railways that are precisely on the same lines in reference to either item, and the differences that obtain in reference to both are such as to make a really capable and trust- worthy analysis of this subject one of the most difficult and complicated in the whole domain of railway economics. The Gross Earning Power of Railway Capital. — The capacity which railway capital shows for earning a large gross percentage upon its amount, is in some cases a fair ! criterion of the character of the investment. It is not, however, always to be regarded in this light, since the' conditions of no two railways are exactly alike ; and it is easily possible to conceive, and even to cite examples, of lines that ought, theoretically, to show a large earning 9 2 RAILWAY PROBLEMS. capacity when they really have a small one, and con- versely, it is no rare thing to find an entirely different state of affairs. If the percentage proportion of the gross income re- quired for the working expenses of a railway — the " co- efficient of exploitation," as it is called on the Continent — were in all cases the same, there could be no truer test of the value of any railway as an investment than the gross earning power of the capital embarked. But it so happens that the theoretical requirement here laid down is never really attained in practice. The tendency of the gross earning capacity of British railways has been in the direction of decline during the past few years. This is apparently the result, not of diminished gross earnings, but of the enormous increase of capital expenditure, as the following figures show : — Statement showing the Increased Mileage, the Increase of Capital, and the Increase of Mileage and Capital relatively to the Gross Income of Railways in the United Kingdom in each Year from 1870. Average Gross Years. Increase of Mileage. Increase of Capital (£1 = 1000). Additional Capital per Mile Added 0£i = 1000). Receipts of Railways in the United Kingdom (£1 = 1000). Percentage of Gross Receipts on Capital. Total Capital 0£i=iooo). per cent. 1873 268 £19,273 £7i,9H £55,675 9 £588,320 609,895 1874 367 21,575 58,787 56,899 9 1875 209 20,328 97,263 58,982 9 630,223 1876 214 27,991 130,799 59,917 9 658,214 1877 205 15.845 77,293 60,644 9 674,059 1878 256 24,486 95,648 60,454 9 698,545 1879 363 18,458 50,848 59,395 8 717,003 1880 237 ",3H 47,738 62,961 9 728,316 1881 242 17,211 71,120 64,493 9 745.528 1882 282 22,372 79,333 66,537 9 767,899 1883 224 17,021 75.986 68,210 9 784,921 1884 183 16,543 90,399 67,701 8 801,464 The facts that appear to be most prominent in this statement are : — GROSS AND NET EARNINGS. 93 (i.) That as against an increase of only 2782 miles in the length of line opened, there has been an in- crease in the capital expenditure of 2 1 3 millions, or an average of about £77,000 per mile added. (2.) That the effect of this enormous increase of capital has been to raise the average capital per mile open from £36,574 in 1873 to £42,486 in 1884. (3.) That the gross earning power of capital has thereby- been kept down, notwithstanding a considerably larger average revenue per mile of line open. At the present time the gross earning power of capital in the United Kingdom is lower than in any of the prin- cipal countries of Europe, the character of whose railways is most in common with our own. This fact is clearly brought out in the following statement, which shows that, after Sweden, railway capital has the highest gross earnings in the United States, and the next highest in Germany, while France and Belgium occupy the third and fourth places respectively : — Statement showing the Gross Earning Power of Railway Capital in Different Countries in 1883. 1 ! Total Capital Gross Receipts Percentage of Coun tries Invested in from Railways Gross Receipts HJUli Li IO. Railways in 1883 on Capital G£x = 1000). G£i = iooo>. Invested. Germany £462,636 £48,494 10.4 "S France . 459,278 45,021 9.8 v Belgium . 68,817 6,479 9-4 v Holland . 26,202 1,998 7.6 Austria- Hungary 263,333 23,080 8.7- Italy . 114,092 8,245 7.2 Switzerland . 38,042 3,083 8.1 Norway . 6,900 . 372 5-4 Sw-den . 12,209 2,169 17-7* Denmark 7,614 726 9-5^ Canada . 83,122 6,684 8.0 United States M99>°94 164,754 io.9< United Kingdom (1884) 801,464 70, 522 8^ Totals and avt sragef 1 3,842,803 381,627 9-9 94 RAILWAY PROBLEMS. It is necessary to bear in mind, in considering this sub- ject, that the gross earning power of capital, although a function both of the average capital expenditure per mile open and of the quantity of traffic brought on to a line, may be affected very largely by either consideration, with- out reference to the other. Thus, we find that, in the United Kingdom, the average gross receipts per mile open are very much higher than in the United States or Ger- many, so that if this fact alone were to be the deter- minant of gross earning capacity, English railways would be far superior to any others. But as the capital expen- diture on English railways is also greatly above that in- curred in other countries, the result is as we have stated. Perhaps it would be impossible to illustrate this fact more clearly than by comparing the conditions, as regards capital and gross earnings, of the Pennsylvania and the London and North- Western Kailways. On the Pennsyl- vania Eailway the average capital expenditure per mile has been £26,360. On the London and North- Western Kail- way it has been £55,078. The gross earnings per mile open on the Pennsylvania Railway have been £4880 ; on the London and North- Western Eailway they were £6000. The result of these differences has been that the gross earning power of capital on the Pennsylvania Railway is 26 per cent., as against only 10.7 per cent, on the London and North- Western Railway. But if the average capital expenditure per mile on both lines had been the same, the London and North- Western Railway would obviously have shown a much better result than the Pennsylvania Company. It is not necessary that the subject of the greater average cost of English lines should be examined here. The subject is referred to elsewhere at some length, and we need only remark now, in general terms, that the enormous difference in capital cost, as against English lines, must; always tend to prevent any substantial improvement in their gross earning capacity, although it is not unlikely GROSS AND NET EARNINGS. 95 that the net earnings may be increased by a greater re- gard to economy of working. Should this be the case, the position of English railways as investments need not necessarily be worse than that of countries in which the gross earning power of capital takes a greatly higher range. It is also to be remarked that the tendency towards a lower gross earning capacity of railway capital is not peculiar to England. In the United States there has, within a few years, been a reduction from 1 5 to about 10 per cent., and in Belgium, as the following table shows, the reduced gross earnings of capital since 1880 have not been accompanied by any corresponding reduc- tion in the percentage of net receipts on capital expen- diture : — Statement showing the Cost of Construction and Gross and Net Receipts from Railway Working in Belgium, 1876-84. Total Cost of Percentage of Gross Gross Net Working Percentage of Net Re- ceipts on Capital. Years. Construction Receipts on Receipts Receipts Expenses C6i = iooo.) Cost of Con- struction. {£1 = 1000). (£l = 1000). (£1 = 1000). 1876 £53,720 9.6 £5,173 £l,958 £3,215 3-6 1877 55,828 9.2 5,137 2,048 3-089 '3-7 1878 55,553 9.6 5,308 2,2lO 3, 98 4.0 1879 59,92o 9-i 5,470 2,266 3,204 3-7 1880 62,294 9-7 6,858 2,470 3,588 3-9 l88l 63,504 9.6 6,078 2,401 3,677 3-7 1882 66,385 9.6 6,355 2,525 3,830 3-8 1883 67,877 9-5 6,480 2,666 3,814 3-9 1884 68,817 9.2 6,359 2,661 3,698 3-8 Net Earning Power of Railway Capital. — The net re- venue from railway working is, as we have already indicated, the revenue that remains for the payment of interest on capital, and the distribution of profits, after the deduction of the working expenditure from the gross receipts. This subject having already been considered in treating of railways as investments, the briefest reference to it here mav suffice. 96 RAILWAY PROBLEMS. In the United States there has been an interesting con- troversy as to what is the proper meaning of the term "net earnings." The chief parties to the dispute have been the Government on the one hand and the Union Pacific Kailroad Company on the other. The terms upon which the former advanced money to the latter for building their lines provided that a certain proportion of the net earnings of each year should be paid over to the Govern- ment, and that the net earnings " shall be ascertained by deducting from the gross amount of the earnings the necessary expenses actually paid within the year in operat- ing the same and keeping the same in a state of repair, and also the sum paid within the year in discharge of interest on their first mortgage bonds, whose lien has priority on the lien of the United States." In one case where this point was brought to the test of a legal judg- ment, it was held that " net earnings, within the meaning of the law, are ascertained bv deducting from the gross earnings all the ordinary expenses of organisation and of operating the road, and expenditures made bond fide in improvements, and paid out of earnings, and not by the issue of bonds or stocks." In another case, the Court held that " in ascertaining net earnings there should be deducted from gross receipts the equipment account, or replacing and rebuilding of rolling stock, machinery, &c, the amounts paid for depot grounds, and the expenses of the same, and the construction account, or improvements and additions to the track." The United States Government, however, maintained that outlay for new construction and new equipment was not " necessary expenses actually incurred within the year" in keeping up and operating the line, and declined to settle upon any basis which deducts such items from gross receipts in ascertaining net earnings. It appears to be not a little remarkable that, notwith- standing the enormous increase in the volume and value of the traffic on English railways within the last twenty years, and the considerable reduction of working expenses GROSS AND NET EARNINGS. 97 as regards most of the principal items that have elsewhere been shown to occur over the latter half of that period, the average percentage proportion of net earnings to the total paid-up capital has varied but little as between one year and another since i860. During the whole period that has since elapsed the average of such percentage has never risen to 5 per cent., and has only in three years been below 4 per cent., the average for i860 being practically identical with 1884, and this in spite of the fact that in i860 the net receipts per mile open were .£1400, and in 1884 amounted to ;£i8oo per mile. This fact argues that there has in the interval been an enormous increase of unproductive capital expendi- ture, which is vividly reflected in the increase of capital per mile of line open — this item being represented by £33,368 in i860, and £42,486 in 1884. The question may well be asked, What is there to show for this differ- ence ? There has been, as we shall presently see, a great increase of net receipts per mile open, but that net in- crease would have accrued, as it has in other countries in which there has been no addition to average mileage expenditure, in any case. The net receipts of a railway are regarded in several different aspects, each one of which is calculated to throw its own light on the questions that cluster around this problem. They may be looked at either from the train- mile point of view, or they may be considered in reference to the mileage open, or, finally, they may be examined in reference to the dividends which they represent on the capital invested. In most countries the net receipts have not grown so quickly nor so largely as the gross. This is attributable to the increase that has taken place in working expendi- ture. Great Britain, however, does not come into this category. Of the total gross receipts in 1884, only 53 per cent, were required for working expenditure, as compared with 55.6 in 1874. The largest increase took place in g * 98 RAILWAY PROBLEMS. Scotland, where only 52.1 of the total gross receipts were required for working expenses in 1884, as compared with 56.8 per cent, in 1874. In England and Wales, considered separately, the diminution was from 55.4 to 53 per cent. ; and in Ireland it was from 57.0 per cent, to 56.2 per cent., or the least of the three. The Board of Trade returns set forth the gross receipts per train mile from railway working in the United King- dom as a whole. This information is continued from year to year in a most useful summary table, whence we have borrowed figures, quoted, elsewhere, that show a very substantial increase in the gross income. The increase between 1874 and 1884 was £130 per mile open, or about 4 per cent. During the same interval the net receipts from railway working which are not — as we think they ought to be — so specifically set forth in the Board of Trade returns, increased from £1535 to £168$, being an increase of £150 per mile of open line, or over 9 per cent. It is, therefore, apparent that the improve- ment during this interval has been more marked in the net than in the gross receipts," as tested by the average per open mile; and this result quite corresponds with what we have elsewhere stated as to the economy of working that has taken place over the same period in nearly every department. The total net receipts and the net receipts per mile open on the railways of the United Kingdom have, over the eleven years ending 1884, been as follows : — GROSS AND NET EARNINGS. 99 Statement showing the Net Receipts from Railway Working and the Net Receipts per Mile Open in the United Kingdom, 1874-1884. Year. Total Net Re- ceipts C£ 1 = 1000). Mileage Open. Net Receipts per Train Mile. 1874 £25,252 £16,449 £l,535 1875 26,784 16,658 I,6o8 1876 27,445 16,872 1,632 1877 27,823 17,077 1,629 1878. 28,309 17,333 1,633 1879 28,345 17,696 I,6oi 1880 30,464 17,933 I,6 9 8 l88l 30,792 18,175 1,695 1882 31.637 18,457 I,66o 1883 32,l66 l8,68l 1,711 1884 31,789 18,864 1,685 In Continental countries the percentage of the total gross receipts required to work the traffic varies very greatly, as we shall see in the next chapter. It is not necessary to reproduce the figures there given, which afford all the light that is necessary to enable a just esti- mate to be formed of the circumstances of the different countries in this regard. With a view to showing the net receipts per kilometre constructed, we have collated the following tabular state- ment from the official records of European countries. It appears that the highest net receipts, measured by this standard, are obtained in France, the next highest in Austria, the next in Germany, the next in Belgium, and the next in Russia. These figures do not, however, necessarily correspond with the highest percentage of profit on the capital in- vested, which is a function of the capital expenditure equally with the net receipts. As a matter of fact, the highest percentage of net receipts on the cost of construc- tion is almost in an inverse order to that of average net receipts per kilometre, Russia coming first with 4.75 per cent.; Germany next, with 4.68 per cent.; France next, IOO RAILWAY PROBLEMS. with 4.63 per cent. ; Belgium next, with 4.03 ; and Austria last, with 3.98. Statement showing the Total Receipts and Expenses of European Railwags in 1883. Countries. Receipts (ifr. = iooo). Working Expenses (ifr.=iooo). Working Expenses per Kilo- metre (Francs). Net Receipts (ifr.=iooo). Net Receipts per Kilo- metre (Francs). Germany . Austro-Hungary Belgium Denmark . France Italy . Luxembourg Norway Holland . Roumania . Russia Finland Switzerland 1,154,769 589,845 136,907 16,352 I."5,957 193,409 2,590 8,233 5I.099 23,130 860,651 7,917 67,084 604,915 285,204 83,779 12,354 580,615 132,836 1,605 5,494 28,365 14,447 574."8 4,743 32,398 17,341 15,241 22,796 7,771 20,805 14,772 10,771 4,353 14,532 11,001 25,165 57oo 11,808 549,933 305.495 53,126 3.998 535,342 60,574 985 2.739 22,733 8,682 286,533 3.174 34.686 15,764 16,268 14,457 2,526 I9,l83 6,737 6,6 11 2,171 11,646 6,614 12.561 3,8i5 12,640 Totals and average ! 4,227,943 2,350,873 182,056 1,868,000 10,076 Among foreign countries out of Europe there are equally great variations in the proportions of net to gross receipts. The best results, curiously enough, appear to be obtained in Egypt, where more than 60 per cent, of the gross receipts were available for profits. Japan is also one of the most successful countries in this respect, showing in 1883 a net product of 47.50 per cent. Among other countries the results of working in 1883 were as under: — 58.50 per cent of gross receipts were absorbed in working. In Brazil . 58.50 „ Canada . 76.00 „ Algeria . ■ 75-90 „ British India . 48.50 „ New South Wales 54.00 „ New Zealand . 68.00 „ Victoria 67.00 „ Queensland . 49.00 GROSS AND NET EARNINGS. 101 It has been calculated by a high French authority that, taking all the countries of the world together, the per- centage proportion of the gross receipts from railways required for working expenditure is 62 per cent., which means that the average net receipts would amount to 38 per cent, of the whole. In the United Kingdom, where the net receipts are 47.4 per cent, of the whole, the average result is thus superior to that of railway working generally. Traffic managers are accustomed to point to the fact that the average receipts per train mile have diminished within recent years, as an evidence that they have been within late years working for less profit and at reduced rates of freight. This most probably is the case, but the fact that the average receipts per train mile have fallen from 5s. 6|d. in 1854 to 5s. in 1884 is not a necessary nor irrefragable proof of such a circumstance. The same result would have occurred with the same rates of freight if either of two other things had happened, viz. — (1.) A reduction in the average weight of the trains as measured by the number of waggons ; or (2.) A reduction in the average weight, carried per waggon. And there is some reason for supposing that the rail- way companies do not now provide for securing such full train loads as they did at an earlier stage of their opera- tions. Be that, however, as it may, the average receipts per train mile were slightly higher in 1 866 than they are at the present time. The Duke of Devonshire's Commission of 1867 gave some interesting examples of the average receipts per train mile in different countries, the more important being — For United Kingdom . . .5/1.74 per train mile. France (Nord) „ (Ouest) Belgium Prussia Austria 7/4 7/1 1 6/3 5/9 5/4 102 RAILWAY PROBLEMS. The Commission, arguing that the higher the receipts per train mile the fewer the number of trains in propor- tion to the amount of traffic carried, and vice versd, con- cluded on these facts that the accommodation provided in Great Britain was greater than on the Continent of Europe. This is no doubt the fact, to a certain extent ; but it should never be forgotten that the average receipts per train mile are liable to be as much affected by the range of the rates and fares charged as by the quantity of traffic carried. In the next table we have compiled a statement of the gross traffic earnings, in relation to the train miles run for the principal countries of the world. The statement is of importance as showing that in the United States and in Germany, where the range of rates and fares is lower than in England, the receipts per train mile are higher, owing, no doubt, to the greater loads carried : — Statement showing the Gross Earnings of Railways in Different Countries, the Number of Train Miles run, and the Average Earnings per Train Mile in 1883. Total Train Grosa Traffic Average Countries. Miles Earnings Earnings per Train Mile. (1 = 1000). (j£i = iooo). Belgium .... 30,693 6,479 t. 4.22 ' Germany 141.597 48,494 6.85 France 162,722 45.021 5-53 Switzerland 9,523 3,083 6.66 Italy . 35,707 8,245 4.62 Norway 2,007 372 3-71 Sweden 8,804 2,169 4-93 Denmark 3.503 726 4.14 Canada 29,758 6,684 4-49 United States 389,247 171,619 8.00 United Kingdom 272,803 70,522 5-'7 Totals anc ! avei •age . 1,086,364 363.414 6.7 It does not seem as if the above figures required GROSS AND NET EARNINGS. 103 any specific explanations or comments here. They are, moreover, more fully illustrated and analysed in the chapters that deal with railway expenditure in its several branches, and with the working of goods and passenger traffic. ( io4 ) CHAPTER VIII. WORKING EXPENSES. Fkom a commercial point of view, a railway enterprise naturally divides itself into three separate heads, viz. (i) the first cost ; (2) the gross receipts ; and (3) the working expenses. Given these three items, and the character of the railway as an investment may readily be determined'. The working expenses, however, show more than this. They afford a clue, in their details, to the comparative economy or extravagance with which a railway is managed, to the sources of possible leakage, to the higher or lower comparative prices of materials and costs of labour, to the greater or less expense attending the various descrip- tions of traffic, and to other points that are of more or less importance in relation to the efficient administration of our transportation system. Such being the case, it is obvious that in considering the many problems that are continually presented for settlement in relation to railway control, the expenses of working the systems possessed by different countries are entitled to a foremost degree of attention, being, in point of fact, next to gross receipts, the determining factor alike of rates, fares, profits, and efficient service. The subject of railway working expenses may be con- sidered from many different points of view. They may be regarded with reference to the gross earnings, with reference to the train mileage, with reference to the amount of traffic, and with reference to the capital expen- WORKING EXPENSES. 105 diture. Then, again, they may be examined in relation to the several subjects under which they naturally divide themselves, such as — 1. Maintenance of way. 2. Locomotive charges. 3. Eepairs of rolling-stock. 4. Traffic charges. 5. Compensation, taxation, &c. With reference to some of the more important of the items specified, we have written at some length in sub- sequent chapters. The general bearings of the whole subject we propose to consider here. It is manifest, db initio, that the cost of working a rail- way, and especially of working a whole national system, will be affected by the extent and consequent cost of its administration, in relation to the mileage which it controls, and the area of its operations otherwise. There is no phase of railway administration that is of greater importance in its ultimate effects on economical working than that of having as few boards of direction as possible. A great deal has been done within recent years, by the amalgamation of smaller with larger lines, to reduce the cost of management to the narrowest limits. In 1843 the 2100 miles of railway open in Great Britain were owned by seventy companies, giving an average mileage of 30 miles to each company. In 1865, however, there were 1 1,45 1 miles of railway under the control of seventy-eight companies, giving an average of about 1 50 miles to each. In the special case of Ireland, there were seventeen companies controlling 1838 miles, being an average of 108 miles per company. In 1884 the position of the railway system of the United Kingdom stood as follows : — io6 RAILWAY PROBLEMS. Countries. Number of Companies. Total Mileage. Average Miles to Each Com- pany. England and Wales . Scotland .... Ireland .... Totals and average . 94 8 23 13,340 2,999 2,525 142 375 109 125 18,864 151 It would therefore appear that the average number of miles of railway to each separate administration is greatest in the case of Scotland, and least in the case of Ireland. This circumstance is coincident with the generally superior economical results obtained in the case of the Scotch lines. There are, indeed, few countries where economy of adminis- tration has been carried to such perfection as in Scotland, and there are few nations that have a better idea of what is necessary and desirable to "save the bawbees" — the one fact being indeed the inevitable complement of the other. In Ireland, on the other hand, where seventeen railways have each less than 100 miles of length, there would seem to be a much greater administrative expen- diture, which may, again, be accepted as a reflex of the average Irish character. Thus, although it would not probably be to railway control that one would naturally look if asked for a sufficient example of the psychological and economic tendencies of different peoples, we are yet furnished with one of the most typical and convincing proofs of the differences in national idiosyncrasies in the facts to which attention has just been directed. Of the ninety-four separate railway administrations in England and Wales, seventy-two controlled less than 30 miles each, and six controlled about 9000 miles, or, roughly, 50 per cent, of the entire railway system of the United Kingdom, and about 70 per cent, of the entire railway system of England and Wales. On the Continent of Europe the number of separate WORKING EXPENSES. 107 railway administrations, relatively to the mileage of lines open, appears to be less than in the United Kingdom. The following statement will show how the principal European countries compare in this regard : — Table showing the Mileage of Railways Open in Different Continental Coun- tries, and the Number of Separate Administrations relatively thereto. Countries. Mileage Open. Number of Administra- tions or Companies. Average Miles per Administra- tion. Germany Austria Belgium Denmark France Italy . Luxembourg Norway Holland Russia Finland Switzerland 21,785 12,603 1,885 926 16,578 5,871 94 970 1,406 14,226 638 i,795 49 64 4 2 117 12 I IO 5 5° 3 17 445 197 471 463 142 489 94 97 281 285 213 106 Totals and ivera g e • 78,777 334 236 In the United States the relation of miles of railway to the number of separate corporations, in the census year 1880, was as under for each group of States: — States. Total Miles of Railway. Total Number of Corpora- tions. Average Miles per Corpora- tion. New England States Middle States (New York, ) &c.) . . { Southern States Western „ Territories, &c. Pacific States . . Totals . 5,887 28,692 14,243 25,037 876 I3.044 132 458 I40 160 12 "5 45 63 102 156 73 "3 87,779 I,OI7 86 It appears from these figures that in the United States io8 RAILWAY PROBLEMS. as a whole the principle of the subdivision of mileage under a large number of companies is carried further than in either England or Continental Europe. This feature of American railroad working would be still more marked were the half-dozen largest corporations withdrawn from the list, some of these controlling about 2000 miles each or upwards. It is, however, to be observed that in spite of this presumed disadvantage the American railway system has the lowest freight charges in the world, as well as, in some respects, the lowest working charges. The actual expenses incurred for salaries of general officers and clerks on American railroads generally amounted in 1880 to a little over three millions out of a total working expenditure of 88 J millions, being 3.5 per cent, of the whole. Put in another way, the costs of management, as represented by salaries of general officers and clerks, were 2.2 per cent, of the gross transportation earnings. On the Continent of Europe the railway authorities are accustomed to make a careful analysis of the different items that enter into the cost of working their several systems, corresponding to the classification already indi- cated. The different countries vary so considerably in reference to the average proportions of the whole working expenses, returned under the several headings of main- tenance of way, locomotive charges, traffic charges, and administration, &c, as to suggest a doubt whether the figures supplied always apply to exactly the same parti- culars, and are expressed in exactly the same terms. Unless this were the case, it is obvious that any com- parison of one country with another must be fallacious and misleading. The relation of each separate item to the whole in the working expenditure of British lines has undergone very material modification during the last thirty years. Some items have largely, and, it almost appears, permanently increased. Others have been considerably reduced. The increase is chiefly conspicuous in rates and taxes, repairs WORKING EXPENSES. log and traffic charges. The reduction appears to have been most marked in locomotive charges, maintenance of way, compensation for injury to passengers and goods, and legal and Parliamentary expenses. These variations are quite accordant with the economic changes that have been occurring during the interval. Maintenance of way is chiefly affected by the price of labour and materials. The former has not materially advanced within recent years, while that of the latter has largely decreased. Locomotive charges, again, are partly affected by the two considerations just named, and partly by the element of fuel, which latter, as we shall have more particularly to show later on, has considerably fallen in cost. The increase that has occurred in rates and taxes is readily accounted for by the enormous multiplication of local and imperial burdens generally, and that in traffic charges is to be explained by the restrictions imposed by Statute law with a view to public safety. The following statement shows the percentage propor- tions which the different items of expenditure in the working of railways bore to each other in the years 1842, 1865, and 1884:— Statement showing the percentage proportions of Working Expenditure on the Railways of the United Kingdom. Items. 1842. 1865. 1884. Per cent. Per cent. Per cent. Maintenance of way .... 17.8 18.31 17.70 Locomotive charges .... 30.O 27.48 25-45 Repairs of carriages . . . . ) 3!-3 8.83 9.14 Taffic charges \ 28.64 3°-3° Rates and taxes 5-9 3-93 5.22 Government duty 10.0 2.63 1.07 Compensation for injury — To passengers . . . . . \ ( 1-94 0.50 To goods . . . . . . f 5-o J 0.68 o.55 Legal and Parliamentary expenses . ( ) 1-44 0.87 Miscellaneous expenses . . . . ) Totals ( 6.12 9.1 1 1 00.0 1 00.0 1 00.0 no RAILWAY PROBLEMS. This table is very instructive. It shows that the cost of maintenance of way has not varied greatly as between the three periods tabulated, that locomotive charges have shown a tendency to decrease, and that the percentage of rates and taxes (including Government duty) has been increased. The expenditure per train mile has also decreased con- siderably within recent years. In order to ascertain the precise effect of this economy on the working of the traffic, it would be necessary to ascertain precisely the conditions under which the traffic was worked, as regards receipts, and the quantities carried at different periods. It is not enough to state the fact that the total expenditure per train mile on the railways of the United Kingdom lias fallen from 37-89d. in 1874 to 31.59c!. in 1884. We must ascertain, at the same time, the standard to which this reduction of expenditure has reference. That standard is generally held to be the average receipts per train mile, and per mile of railway open for traffic. In the average receipts per train mile there was a re- duction between 1874 and 1884 from 68.1 id. to 59-56d., being 8.5 5d. or 2.2d. more than the amount of the reduc- tion effected within the same interval in the working expenses per train mile. In the receipts per mile of line open for traffic there was an increase from £3459 to ^■3589 between 1874 and 1884, so that, in reference to this test, there has been a real improvement. But the train mile test is, after all, the true one, and the reduction in the average receipts per mile run is not a healthy indi- cation, seeing that, as we have elsewhere shown, it is undoubtedly largely attributable to the running of both goods and passenger trains less fully loaded than they should be. The details of the working expenditure per train mile for each of the years 1874 and 1884 are recorded in the following table : — WORKING EXPENSES. in Statement showing the Expenditure per Train-Mile on the Railways of Hie United Kingdom in 1874 and 1884, with Amount and Percentage of Increase and Decrease in the latter Tear. Total Expenditure Per Cent. per Traiu-Mile in Amount of Decrease Items. Increase or Decrease in 1884. — or In- crease + in 1884. 1874. 1884. d. d. d. Maintenance of way • • 7.85 5.82 - 2.03 - 26 Locomotive power IO.80 8.35 - 2.45 - 23 Rolling-stock 3.06 3.OO - O.06 - 2 Traffic expenses . . IO.83 9.9I - O.92 - 8 General charges I.4I I.44 + O.03 + 2.1 Rates and taxes I.42 I.70 + O.28 + I9.0 Government duty 0.75 0.37 - O.38 - 5* Compensation — For personal injury O.43 O.I6 - O.27 -63 For damage to goo< [8 . . O.3O O.I8 - O.I2 - 40 Legal and Parliaments try expenses 0.38 O.29 - O.09 - 24 Miscellaneous . Totals 0.69 O.4I - O.28 - 4i • • • 37.89 31.59 - 6.30 - 16 On all the pincipal railways, both English and Scotch, there has been a substantial decrease of working expenses, as between the years 1874 and 1884. The minimum decrease occurs in the case of the London and South- Western Eailway, where it amounts to 1 1 per cent. The maximum decrease appears in the case of the South- Eastern, where it reaches 24 per cent. The variations that have occurred in the working expenditure per train- mile, as between these two periods, are shown in the next table for the chief British railways : — 112 RAILWAY PROBLEMS. Statement slwwing the Working Expenditure per Train- Mile in 1874 and 1884 on British Sailtoays. Total Expenditure per Tr.iin-Mile in Amount Per Cent. Railways. of Decrease in 1884. of Decrease in 1884. 1874. 1884. - d. d. d. Caledonian .... 34-77 30.13 4.64 13 Great Eastern .... 39-31 30.62 8.69 22 Great Northern 35-07 28.12 7-55 21 Great Western 34.12 29.67 4-45 13 Great West of Ireland 38-I9 33-65 4.54 12 Lancashire and Yorkshire 41.94 35-53 6.41 IS London and North-Western 38.21 32.83 5-38 14 London and South-Western 40.37 35-73 4.64 II London, Brighton, & South Coast 35-99 31-85 4.14 12 Manchester, Sheffield, & Lincoln 37.60 32.51 5-°9 14 Midland 35-97 28.26 7.71 21 North-Eastern .... 39-99 33-89 6.10 15 South-Eastern .... 46.65 35-29 11.36 24 The accounts of a railway company, if properly made up, ought to show the number of passengers and goods carried per train-mile of passenger and merchandise trains respectively. In the absence of such data with reference to the United Kingdom we cannot estimate either the gross charge or the net profit per mile run. The working expenditure does not afford any clue to this desirable information. No more doe3 the gross revenue, since ihe train-mile proportions of goods and passengers carried are unknown quantities. In the United States the working expenses are not tabulated as they are in England and in Europe generally. It is therefore difficult to find exactly parallel data in regard to any one item. In the next table, however, we have abstracted from the Census Eeport for 1880 the items that make up the total expenditure incurred in working the railways of the United States for that year, and the percentage of each item on the total earnings for that year. WORKING EXPENSES. "3 Statement showing the Cost Incurred in the Maintenance of the Railways of the United States for the Year ended July I, 1880. Items. Percentage of Total Expenditure. Percentage of Earnings. Repairs of road-bed and track . II.23 6.82 Renewal of rails 4.89 2.97 Renewal of ties 3-04 I.85 Repairs of bridges 2-55 i-55 Repairs of buildings . 2.17 1.32 Repairs of fences, crossings, &c O.42 0.25 Telegraph expenses . I.OI 0.62 Taxes Total expenditure in maintenance of ) track, &c ) Repairs of locomotives .... 3-77 2.29 29.08 17.67 6.19 3-76 Repairs of carriages and cars . 2.99 1.82 Repairs of wagons Total for repairs of machinery and cars Passenger train service .... 6.40 3.89 15-58 9-47 2.85 i-73 Passenger train supplies . o-33 0.20 Passenger car mileage 0.23 0.14 Freight train service 5.68 3-43 Freight train supplies 0.36 0.22 Freight car mileage . 2.21 i-34 Fuel for locomotives . 9-3i 5-66 Water-supply .... 0.68 0.41 Oil and waste .... 1.06 0.65 Locomotive service . 7.72 4.69 Agents and station service 10.42 6-33 Station supplies 0.81 0.49 Salaries of officers and clerks . 3-46 2.10 Legal expenses .... 0.70 0.42 Insurance ..... 0.26 0.16 Stationery and printing . 0.76 0.47 Outside agencies and advertising i-34 0.82 Contingencies and miscellaneous 6.04 3-67 Loss and damage — Freight 0.28 0.17 Property and cattle . 0.31 0.19 Personal injuries o.39 0.24 Expenses not specified .... Total operating and general expenses 0.18 0.11 55-34 33-64 Aggregate expenses . . • • 100.00 60.78 II 114 RAILWAY PROBLEMS. That the railways of Great Britain have not within recent years been managed with a perfect regard to economy has already been shown. The working expendi- ture, equally with the capital expenditure, supplies ample evidence of the fact In i860 the working expenditure of our railways as a whole amounted to 47 per cent, of the gross receipts. In 1871 they amounted to precisely the same figure; and although there had been considerable variations in the interval, they were always within the limits of 3 per cent. But in 1873 the working expendi- ture rose to 53 per cent, of the gross receipts, and in 1874 to 5 5 per cent. This probably was directly due to the coal famine, which greatly increased the cost of fuel. Hence the item of locomotive power rose from 7_92d. per train mile in 1870 to 10.8 id. per train mile in 1874. The great rise that occurred in the price of metals may no doubt have contributed to the same result, since the average expenditure for maintenance of way rose from 5.89d. per train mile in 1870 to 7.83d. in 1874. But both these principal items have since been reduced in the case of locomotive power to 8.3 5 d. per train mile, and in the case of maintenance of way to 5.82d. per train mile, bringing a total of the two items up to only 14.17& per train mile in 1884, as compared with i5.6id. in 1870. In the interval everything has become cheaper, except perhaps the one item of labour, with regard to which it is probably correct to say that if it has not become nominally cheaper, it has at any rate become more economical, by reason of the more general use of mechanical appliances. And yet it appears, with all these points in their favour, the working expenditure has never since 1872 been under 50 per cent, of the gross revenue, and for the last three years it has been 53 per cent., or 6 per cent, more than in 1870. There is still another test to which this matter may be brought. There is a remarkable lack of rapport between the average expenditure per train mile and the percentage WORKING EXPENSES. "5 of working expenditure to gross receipts, as the following figures for the railways of Great Britain show : — Years. Percentage of Work- ing Expenditure to Total Receipts. Total Expenditure per Train Mile. I8 74 . 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 55 54 54 54 53 52 5i 52 52 53 53 37-89 36.88 36.13 35-82 34-69 33- °° 32.37 32-28 32.47 32.17 31-59 Here we find that, whereas the working expenditure per train mile fell from 37-89d. to 3i.59d., or 16 per cent, there was only a fall of 2 per cent, in the percentage of working expenditure to total receipts. But what is more noticeable still is the fact that although the working expenditure per train mile was .78d. less in 1884 than in "i 880, the percentage of working expenditure to total receipts was 2 per cent. more. On the Continent of Europe the percentage of the working expenses on the gross receipts varies enormously as between one country and another. It appears to be highest, over a considerable area of operations, on the State lines worked by private companies in Austria-Hun- gary, where it reaches the very high figure of 92.36 per cent. It is next highest on the State lines of France, where it reaches 90 per cent. The same two countries furnish, on the railways belonging to private companies, the best examples of economical working, those of France being worked with 50.41 per cent, of the gross receipts, and those of Austria with only 44.80 per cent. The particulars for the State and private railways of Germany, Austria, Bel- gium, and France are given in the following return : — n6 RAILWAY PROBLEMS. Statement showing the Total Receipts and Total Working Expenses on the Railicays of Continental Europe. Total Total Percentage Countries. Receipts (i fr. = iooo). Working Expenditure of Working Expenses on (1 ir. = 1000). Receipts. Germany — State lines 9H.63I 476,462 52-30 Private lines worked by the State 98,328 52,196 53-io Private companies' lines Total for Germany 146,237 77,686 53-5o 1,154.769 604,915 52.40 Austria — State lines 53,352 34,605 64.87 State lines worked by private ) companies \ 4,235 3,912 92.36 Private lines worked by State . 57,090 33,848 59-45 „ „ „ companies 589,845 212,838 44.80 Belgium — State lines ..... H9,344 74,550 62.20 Companies' lines 17,562 9,229 52-57 Prance — State lines , 24,414 21,979 90.03 Companies' lines 1,067,956 538,448 50.41 State lines worked by companies 7,033 6,760 96.11 It must not, of course, be supposed that the lower pro- portions of working expenses are necessarily coincident with economical management, and the higher proportions the contrary. The figures must in all cases be considered relatively to the amount of the total gross receipts. ' ( U7 ) CHAPTEE IX. LOCOMOTIVE POWER. There is probably no subject connected with railway- working that has been so fiercely contested, and with regard to which there have been so many important changes and developments as that of locomotive power. In this department of railway expenditure, there is equally scope for great waste and great economy. In general, it is perhaps not too much to say that the profits or losses of a railway may be traced to the efficiency or otherwise with which the locomotive arrangements are controlled. The form of the engines employed, their weight, their durability, the tonnage that they are made to carry over a given period, the cost of repairs, the fuel expenditure, and many other considerations that are of the first im- portance in relation to economical working, are primarily within the cognisance and command of the locomotive superintendent, so that it is essential in any analysis of railway economy to bestow careful attention on this aspect of our subject. That there is a very great diversity of practice and results in reference to locomotive working is sufficiently proved by the fact that the cost of locomotive power varied in 1884 from a maximum of io.75d. per train mile on the North-Eastern to a minimum of 7. 1 3d. on the Manchester, Sheffield, and Lincolnshire ; that the cost of repairs per engine varied from 4-32d. per train mile on the North-Eastern to i-57d. on the Highland railways; and that the consumption of fuel per engine mile varied 1 1 8 RAILWAY PROBLEMS. from a maximum of 47.48 lbs. per train mile on the Caledonian to a minimum of 28.92 lbs. on the London, Brighton, and South Coast Eailways. These differences are not to be understood as applying to conditions strictly relevant and parallel to each other. On the contrary, the circumstances under which different descriptions of traffic are worked are often so dissimilar that no proper comparison is possible. If anything, we have to make a contrast rather than a comparison, in considering the light passenger traffic of the southern lines with the very heavy goods traffic of the Midlands and the north of England — the very lightly-laden trucks that are generally found running in agricultural districts with the full truck-loads that are invariably found in the working of mineral traffic in manufacturing centres. When, therefore, we state that the cost of locomotive power had increased from 8.13d. per train mile in 1869, on the railways of the United Kingdom as a whole, to u.cxjd. in 1873; had fallen again to 8.13d. in 1880, and increased again to 8.3 5d. in 1884, these figures in them- selves, unaccompanied by any explanatory comments, might very seriously misrepresent the true state of the case. The fact is, that during this interval, brief as it is, the conditions under which the traffic of our leading lines is worked had greatly changed. In the earlier days of the railway system the locomotive engines employed were very much lighter than they have since become. In 1850, engines of 25 tons weight were regarded as very heavy, and so were 35 tons engines in i860. In 1870, comparatively few engines were 40 tons in weight. Now however, many engines are running on the Continent, and some in this country, that weigh 45 to 50 tons, exclusive of the tender, and locomotives have been constructed that weigh as much as 60 tons. 1 1 In 1862, Mr. Meyer exhibited at Vienna an engine that weighed 60 tons, and had a tractive force of 22,000 lbs., equal to the draught of 2300 tons, exclusive of engine, on a level LOCOMOTIVE POWER. 1 19 Again, it is not to be assumed that the locomotive engines that give the greatest mileage over a given period are necessarily the most economical. It may very well happen, indeed, that the contrary is the case. The higher the speed at which a locomotive is worked, the greater the expenditure all round. Increased speed entails greater wear and tear, both in locomotives and in permanent way, and a larger consumption of fuel ; and it is a moot point with railway authorities how far these extras are com- pensated for by the additional work got out of the rolling stock. The locomotive cost of working the railway traffic of the United Kingdom in 1884 was over 26 per cent, of the total cost per open mile, amounting to £5 03 on a total working cost of ^1904. Anything that tends to increase this serious item of working expenditure ought, therefore, to be very critically examined in all its bearings. The element of speed is most important. It is a cardinal article of a locomotive engineer's creed and practice that the resist- ance of the atmosphere to the passage of a train is pro- portionate to the square of the velocity of a train. 1 It might naturally be expected that some light would be shed upon the comparative cost of working locomotives at high and low rates of speed, by an analysis of the loco- motive expenses of railways having different descriptions of traffic — that is to say, we might expect to find that on lines that chiefly carry passengers the locomotive expendi- ture would be relatively high, and that on the great mineral- carrying lines it would be relatively low. This, again, however, will be found a very unreliable test to apply, unless we can obtain access, not only to the average rate of speed for all trains, but to the average weight of the train, the age and weight of the locomotives, the character of the permanent way, and other determining considerations. The expenditure per train mile in respect of locomotive 1 It has been found in the case of ocean-going steamers that an increase of speed from 1 1 to 12^ knots per hour involved an additional expenditure of 47 J per cent, for fuel. i2o RAILWAY PROBLEMS. power was, in 1884, as under for the principal English mineral- carrying lines : — Expenditure per Railways. Train Mile. d. Great Northern 7.62 Lancashire and Yorkshire . . . . 8.19 London and North-Western .... 7.86 Manchester, Sheffield, and Lincoln . . . 7.13 Midland 7.67 North-Eastern i°-75 — while for the principal passenger-carrying lines, the corresponding expenditure in the same year was as under : — Expenditure per Railways. Train Mile.. South-Eastern Great Eastern ..... London, Brighton, and South Coast . London and South-Western Great Southern and Western of Ireland d. 8.61 8.56 8.97 9.68 9.09 But these figures do not, after all, go a long way in clearing up the question, seeing that the passenger-carry- ing lines have generally to pay a much higher price for their fuel, 1 in consequence of being remote from the coal- fields ; while the North-Eastern Eailway, which has pro- bably the command of the cheapest fuel in the United Kingdom, and is at the same time the greatest mineral- carrying line, has the highest locomotive train-mile expen- diture of the whole. It has been contended in several quarters that the cost of motive-power on English lines is much higher than it ought to be, considering the comparative cheapness of fuel and labour. Mr. Dorsey 2 has calculated that in Eng- land the expenditure on this account is almost double what 1 The cost of fuel per ton varied in 1885 from 58. iod. in the case of the Lancashire and Yorkshire Railway, to 17s. 8d. in the case of the North London. 2 Paper read before the American Society of Civil Engineers, Janua-v 1 886. LOCOMOTIVE POWER. 121 it is on American lines when the latter is reduced to Eng- lish prices. The details of his comparison of fourteen leading English and ten leading American lines are sum- marised in the following table, in percentages of the total operating or working expenses : — Items. English Lines. American Lines. American Per- centages after Reducing the Cost of Fuel and Labour to English Rates. Fuel Wages .... Repairs and renewals of ) locomotives . . ) Totals . Per cent. 7.2 8.6 7.8 Per cent. 9.6 6.1 Per cent. 4.6 3-6 4.6 23.6 22.8 12.8 Mr. Dorsey maintains that this rather remarkable result is not an accidental feature of a single year's working, but one that is confirmed by an analysis of the annual cost of motive-power on the principal railways of both countries over a series of years. He does not, however, seek to explain the reasons for the difference which he seeks to establish in favour of American working. It is to be re- gretted that this has not been attempted, since the matter is one of vital importance, in the interests alike of railway shareholders and of the general public. In considering the cost of any specific commodity or product, regard should be had to a given standard of comparison. In attempting to frame an estimate of the comparative expenditure incurred in locomotive power, that standard is manifestly the amount of service rendered, or work done. In Mr. Dorsey's comparison of English and American railroads, this standard does not appear to 122 RAILWAY PROBLEMS. have been kept adequately in view. In order to place the matter on what we conceive to be a more reasonable and intelligible basis, we have applied this standard to Mr. Dorsey's figures, and the result hardly appears to bear out his statement of results. The first test to which we propose to submit the figures is that of the cost of locomotive power per train- mile run. This is not necessarily an infallible test, as every engineer must be fully aware. The service rendered by a locomotive cannot be adequately measured by any such standard, since there are no criteria whereby to estimate the useful effect of the mileage so dealt with, and the locomotive may be simply shunting a wagon, or hauling empties in one case, and in another it may be hauling a load of iooo tons at the rate of 30 miles an hour. In both cases, the work done is expressed in the same terms of mileage run. In the United States, as we show elsewhere, the average work performed by a locomotive per train-mile run, as tested by the average earnings per train-mile, is considerably higher than in the United Kingdom, and this fact is entitled to the fullest consideration. Subject, then, to these qualifica- tions, we find that the average expenditure for locomotive power per train-mile on the ten railways selected by Mr. Dorsey is not less than i2d. ; and if we cast out the Baltimore and Ohio Railway, which appears to show the remarkably low average of 5d. per train mile, the average comes out as I4d. per train mile. Against this, we have an average of only 8.7CL per train-mile for the ten prin- cipal railways in the United Kingdom — again the same railways, by-the-bye, that Mr. Dorsey selected, but reduced in number from fourteen to ten, in order that the con- ditions of the comparison may, as far as possible, be strictly parallel to each other. The details for both sets of railways are given in the following tabular statements (I. and II.):— ' LOCOMOTIVE POWER. 123 ^ 5 '4- CO 00 •§ M E s q a 8 ^• ■0 *» a bi '4 =S i | 3 N u R Cr> | ^ ^ 5: 3q 60^, ce3<2.£ or t. a c ? ? Msmo iooo OnvO On « jsm\o 'tvo t^.«o *i-*d m I>. Perc of Wo Expe Incu Locc Pc NCiNNNNCSNNCO N ^3 « . 6.5 &£~ .^OOO NON f^SO H lfllNM t^ 1,3 1^. 6 «>. ti. t^.od oo vd on d 00 « p< •«1 ■ 00 O NOiiflN OnnO >-• VO O O fOOOO ulO»M TtOO 00 lO °o S3 i-vo qo\Tj-Tfo n o_ « ■S3* S? d\ On C O d"vd "-T co t? i-T r? ro o o o roNO >0 ionO N •- to O o» CJ gP-l too O n cy.wTS-roTtco oo 1-1 Im a © U& &* cooo t}- t-» novo »o N O Tf r^ es 3 "NNcititiNNNMN N c 's > Lt » <~ w >o OvVO t~% t^OO VO S)OvtOO\fl NNmNVO ON LO H o »< II w rOfOiOM" w i-i •-• »o * H 3 N s? 1 j 00 tON . r^vo oo ifluiov t^oo ro On ON00 N — tj- O *3-nQ «-i ** N *|» SO ro fOOO O ■* N — <- 00 a HN«nn« J= 03 P. as P . . .fi . . . .El 4) cB "ri 00 1 • . .£ . . . .£§ o H 3 5 ° Be 'jzjBg *i^|, O fc S ►} O O O ^ iJ (4 124 RAILWAY PROBLEMS. ^ 5S 00 _ CO V H 5g A* »« S g 5 c o »T ■tt Cfc M -i s « &Q l^gfi! . SB e Kb a 5 to ro t}- osvo OM fOOM-; q TO Perc of Ope Ex] Incu Loco Pc CONNNNi->NNNN N *" . N vO CO M tv. vn >- 00 '^'O w*» {*) M IH M M C C^ 0\ f) 1-1 r^ °+S ■<*- A s? k 2 o P«j w .ts^isq ►« q fi rj- n oo •* 2.3 * ^-inio tCvd >d lni^Tj-N • tl Ol 00 ■-« •-■ ro tJ- tJ- w t^ 3^4 s* a O u-> on ro o\ r-» tt n i- o o E a x 0\ £,2 o C\ O\00 <3\ tJ-00 M*Nn m 3^ II TfH M NnMio on M M A M oo O ,£, B ra T3 >h . 0> o a > es E i|a > e3 ■ w£g s'Sjgi • a > • n § ft no '3 « O ■S5J2 Sis 1 2 s s c c fi'SlS'S * « « cJei eS^O o O Ort g C C fl fl *C tH fcH fcM >> a c o o oO^ 1 " 1 ; g.2 o © o ©2 » » » §^s « « « n O fc & £ Ph m LOCOMOTIVE POWER. 125 It will be observed that while the average locomotive expenditure per train-mile is absolutely higher in the United States, it is relatively lower, being only 23 per cent, of the total working expenditure, as compared with 27 per cent, for the United Kingdom. This fact is mani- festly not without importance, and it is made a good deal of in comparisons of English and American railways ; but the truest test would seem to us to be that of the expen- diture per train-mile. Although not strictly germane to the point under consideration, attention may suitably be directed to the fact that the average working expenditure per train mile on the railways dealt with, under all heads, is 44s. in the United States, and 2.7s. in the United Kingdom, showing an increase of 1.7s. per train mile for American lines, or 63 per cent. In a subsequent chapter we shall show how this remarkable difference arises, so far as it is capable of elucidation by the figures at command. There is still another method of instituting a comparison of the cost of motive-power as between different countries, which we propose to apply to the case under considera- tion. It is that of the average annual expenditure for power per locomotive employed, including, of course, as before, the several items of fuel, repairs and renewals, and drivers' wages, &c. The next two tables (III. and IV.) have been compiled for the purpose of showing the results of this test as regards the English and American lines already specified. It will be observed that, on the ten English lines dealt with, the average annual expenditure incurred per locomotive employed has been .£636, the average number of train miles run for that expenditure being 17,539. In the United States, the average annual expenditure per locomotive has been ^1151, and the average number of miles run has been 23,928. To run and maintain the American locomotive has, therefore, cost ^515, or 80 per cent, more over the year than has been spent on its English congener, against which there 126 RAILWAY PROBLEMS. is to be placed the fact that the American locomotive has done an average of 6389, or 37 per cent, more miles than the English one. This does not appear to justify the assumption that American motive-power is less costly than English, but seems, on the contrary, to point to quite a different conclusion. It is desirable that we should not overlook the fact that both averages are made up of great and entirely inexplicable extremes. On the English lines, the South-Western shows a maximum of £900, and the North-Western a minimum of £505, per locomotive. On the American lines, the maxima and minima are still more remarkable — the New York, New Haven, and Hartford having an average as high as ^"1774, and the Baltimore and Ohio one as low as £557, per locomotive. In the latter case, therefore, we find one line with just about three times the average annual expenditure of another, with which we should be justified in expecting it closely to correspond. There are equally unaccountable differences in the annual mileage got out of the locomo- tives on different lines. The details of the comparison are presented herewith : — LOCOMOTIVE POWER. 127 ^ -5 I £S i E ^ la el s o •3 e 1 S 42 .1 £ 1 3 m s a Eh p,-g MOON rOVO m ^M* '-•Tl-ON'-'W^OiONTj- On ass ro WN« 'J-M^-m On rOOO 10 £38 h>0 On m On >-> 00 On N On r^ Nh H __i_ N _,h«Ni-i ^ J < a fl . 00 MM TjT^^OvO ^^ * cS? t^t^vOOO uivr> OM^OO «*> On ehK g OnOO N « TT O Tj-vO « « M ^ » m NO ror<100 O^Nnhoo ^ .g.2 11 »N WnONNMM is* © , 1 t 3> 2 -~ • ? rooo vo mrwO MN O N NO Avers Anni spend per ocomc OONNO'-O'-'fOO **■ fO vo t^NO vovo t^vO "0 0\N VO s? s? W M fl 5 - 00 O K0\U1N On NO w NO 00 i&i O O fOOM uiO^m Tt-00 in 1^°- °. ^ ""t 't °. 1 * " H «8(S On On ro 0"n0~ <-T ro ■<£>-«" tF ro cn.no >0 WNO N n 10O On inO O N On w> tJ- CO •* co 00 •o" *^ s? W On O l^vO ►"• 10 O v>m O •^ 2 s a 00 l^ On J-^ t^ ""> OnOO O "" u-> t-» ■<1-nO ■<*■ "">no no »o 10 tJ- 00 m m (Cm O fco H- ►J in *■ B § i > no | ■a 5 E ja ^ ^ 123 RAILWAY PROBLEMS. <-. xSili QQOOQOOOQQ OOOOOOQQOO OOOOOOOOOO 00 on O "1-00 O » T "TO I** ro J* ^ d ® fcfJ NNNi-iNrowNNN N s § 2§ § O m On fO O N tJ- « >- O O vO>-'C , »i"^NNOioO\i-i ON o c M On CnDO On *00 fOThN- «o Tj-wii NMhiOON 6*"-' M M H M 00 t. erago ual Ex- ture po motive. 0\»-" t^oo vr> rj- r^oo m r^ _ 00 r>.vo o N t^ j^oo m \j~t 10 Tj- t^ ro ■<*• ro f^3Q «o cs in «Jf 1 <* s? *|S g ° 10 EJ5 . OOOOOOOOOO OOOOOOOOOO *3 = o a rj- tj- t^vo o -*vO O "1 O VO Tot Expondil Locom Tow cinO w Tf CnO 00 O H m r^ V© COM InIAmOO ^-vo «■> r<^«„ i-i N NO O On rO S? *"!2 Tf- 1^ On O O N uiiflinN t-% 5 o •* *->00 >flN NM "ICNtO t^ M 11 ih t-N.'O t^O .? w fc 9 J to ■ ' » * * ••g "|. • ' | t- a E £ a > - 153 • • i3|g §•2! § - § W 2 • ' * * g -tT> • 00 1 ■ c IU 1 ■ "3 -4-> O >>_ ,2 hr. a ^ . .2 C 71 2 3 • W " ^8 cS -S S ? fit h.o«-£j^ BBS CSttlSgp eJcjeSeSOcoO^g O O 2 ® ® ® 5 eS pq « « pq £ fc £ P* H LOCOMOTIVE POWER. 129 There is still another point that requires to be put in the foreground in any attempt to compare the cost of locomotive power in different countries and on different railways. It is a well-known fact that passenger traffic costs less, both in fuel and in engine repairs, than heavy goods, and especially coal, traffic. It seldom happens that exact data as to the differences arising in this respect are at command, but the following comparison, which we have collated from a good authority, 1 will show approxi- mately how the two descriptions of traffic compare as regards the cost of fuel : — Railways. Consumption of Fuel per Engine Mile in Passenger Engines. Goods Engines. Great Southern and Western of Ireland Philadelphia and Reading . Paris, Lyons, and Mediterranean . Averages . lbs. 23-36 57 35-iS lbs. 37-6 87 66.94 38-50 1 63.85 It would appear to follow from these figures that the consumption of coal by goods engines is about 25.35 lbs., or £6 per cent., higher than in the case of passenger engines. In the working of mineral traffic the consump- tion of fuel is greater still, the Philadelphia and Reading Railway returning their average at 121 lbs. of anthracite coal per mile, as compared with %y lbs. in the case of ordinary goods engines. It is much the same with regard to the cost of repairs 1 Paper on " The Repairs and Renewals of Locomotives," by Alex. M'Donnell. Minutes of Proceedings of the Institution of Civil Engineers, vol. 48, pp. 7, 18, and 25. 13° RAILWAY PROBLEMS. and renewals, although not to an equal extent. From the source already quoted, we extract the following figures, showing the differences that have been found in this regard on leading lines in the United Kingdom, the United States, and France : — Railways. Cost of Repairs and Renewals per Engine Mile in Ordinary Pas- senger Engines. Ordinary Goods Engines. Great Southern and Western of Ireland Philadelphia and Reading . Paris, Lyons, and Mediterranean Averages . d. .809 2.IO 2.54 d. .900 2.13 3-34 I.816 2.123 In this item there would seem to be, on an average of these three lines, a difference of -307d. per mile against the goods engines, being equal to about 17 per cent. In the case of coal traffic, the Philadelphia and Eeading Company calculate their engine repairs at 3.13d. per mile, which is about 50 per cent, more than the average of the passenger engines. Assuming this difference, more or less modified, to be of general application, it is clear that in the United Kingdom, where there is a much larger coal traffic than in any other country in the world, the ex- penditure for motive-power might fairly be expected to be correspondingly mora With reference, however, to the ten typical lines of each country selected by Mr. Dorsey, and adopted by our- selves, for the purposes of a comparison of the United Kingdom and the United States, there does not seem to be any point in favour of English lines, as regards the character of the traffic carried. On the contrary, tne ten LOCOMOTIVE POWER. 131 American lines, with a total mileage of 81,587,000, have run 51,150,000 miles, or 63 per cent, of the whole, in goods trains. The United Kingdom, on the contrary, shows, with regard to the selected lines, a total train mileage of 200,291,000, of which 99,497,000 miles, or 50 per cent., were goods trains. This difference manifestly, to a certain extent, explains and justifies the higher expenditure for locomotive power, per train mile and per locomotive employed, that we have found to prevail in the United States. It may at the same time be remarked that in both cases the more important mineral carrying lines are embraced in the comparisons, and that a com- parison of the two countries as a whole would bring out a rather different result. Particulars are contained in Tables V. and VI. :— V. Statement showing the Comparative Mileage of Goods and Passenger Trains on Ten Principal British Railways in 1884. Mileage Mileage of Total Percentage of Railways. of Goods Trains (1 = 1000). Passenger Trains (1 = 1000). Mileage (1 = 1000). Goods Train Mileage on Total. Great Northern 8,214 8,764 16,978 48 North-Eastern . '3.955 9,918 23,873 58 Midland 19,700 I3.56I 33-261 59 London and North Western . 18,437 19.747 38,184 48 Great Western . . 15.836 14,621 30,457 52 Creat Eastern . 5.502 8,551 14,053 39 Caledonian 6,910 5.579 12,489 55 North British 6,435 5,241 11,676 55 London and South Western . 3.075 8,109 11,184 27 London, Brighton, and South ) Coast \ 1,433 6,703 8,136 18 Totals and aver age . 99,497 IOOJ94 200,291 50 132 RAILWAY PROBLEMS. VI. Statement showing the Comparative Mileage of Goods and Passenger Trains on Ten American Railroads. Railroads. Mileage of Goods Trains (i = iooo). Mileage of Passenger Trains (1 = 1000). Total Mileage of all Trains (1 = 1000). Percentage of Goods Train Mileage on Total. Boston and Albany Boston and Loweli Boston and Maine Boston and Providence . Old Colony .... New York, New Haven, and ) Hartford \ New York, Lake Erie, and i Western ( New York Central and | Hudson River . . \ Pennsylvania — Pa. Division . Baltimore and Ohio Totals and average . 3,oio 610 540 246 799 1,461 7,513 10,027 15,015 11,929 i,949 1,305 1,289 727 1,629 2,365 3,791 6,425 5,776 5,i8i 4,959 i,9i5 1,829 973 2,428 3,826 n,304 16,452 20,791 17,110 6l 32 30 25 33 38 66 61 72 70 5i,i5o 30,437 81,587 ^3 Hitherto we have limited our comparison of the cost of locomotive power in the United Kingdom and the United States to a number of selected lines in both countries, selected, not by us, but by the author whose statements and conclusions we have deemed it desirable to traverse. It is, however, possible to carry the matter further than this, since there are in existence data concerning the general working expenses of all the railroads of the United States for the year 1880, collected for census purposes. 1 In the absence of such statistics for a later period, we must have recourse to those for that year ; but it is scarcely probable that, in the comparatively short interval that has since elapsed, the general character and scope of the facts will have altered very materially. Taking the railroads of the United States as a whole, the expenditure incurred in 1880 under the head of 1 Report on the Agencies of Transportation in the United States, includ- ing the Statistics of Railroads, &c. Washington, 1883. LOCOMOTIVE POWER. 133 locomotive power was 88,048,000 dollars, divided as follows : — Fuel 32,836,000 dollars Water-supply 2,388,000 ,, Locomotive service .... 27,239,000 ,, Repairs, &c 21,831,000 ,, Oil and waste , 3,754,000 ,, And as the total train mileage for the same year was 463,341,000 miles, it follows that the average cost of locomotive power per train mile was approximatel y^! d.* The average expenditure under the same heading and for the same year was, in the case of the United Kingdom, ^&i d. per tra in rnile^ 2 so that there was a difference of i.od., or about 12 per cent., against the railways of the United States. On comparing this item of 8.5d. per train mile with the 1 2d. per train mile which we found to be the average cost of motive-power on Mr. Dorsey's ten selected lines, the difference is so startling as to suggest either that on the latter lines the average expenditure on this account is considerably higher than that of the country as a whole, or that the locomotive expenditure has largely increased in the interval. Both reflections are probably more or less accurate. It is certainly true that since 1880 the average load carried per train mile has been considerably augmented, and it may safely be assumed that locomotive expenses have proceeded on the same lines. The considerations just stated naturally lead up to that of the comparative earning power of English and American locomotives. This question, while not less important than that which has been already dealt with, is even more readily demonstrable by figures. In the United Kingdom, the total number of locomo- 1 In this calculation, the dollar has been converted at 4s. 2 Messrs. Calcraft and Giffen's General Report to the Board of Trade on the Railways of the United Kingdom for 1880. 134 RAILWAY PROBLEMS. tives returned as being in the possession of all the railways in 1884 was 14,827. The total gross receipts from all traffic for the same year was 67% millions sterling. The gross earnings of each locomotive would therefore appear to have been about^£4j>86. In the United StatesTthe total number of locomotives returned as belonging to the railways as a whole was 23,823, and the gross earnings from all sources amounted to about 202 millions sterling, so that the average gross earnings per locomotive amounted to about £8476. It would therefore seem as if the American locomotives each earned a sum of £3890, or 84 per cent., more than the locomotives on English lines. It must not, however, be forgotten that, in the United States, the railways have a considerable revenue from coal lands and other sources, with which locomotives have really nothing to do. In the returns for 1883, the gross earnings from passenger and freight traffic are returned at 188 millions sterling, so that there was a difference of about 14 millions earned from other sources than transportation. Even, however, when we have deducted this last-named sum from the 202 millions returned as the gross revenue from all sources, there still remains a really astounding differ- ence in favour of the earning power of the American locomotive. When we come to consider the net earning capacity of English and American locomotives, we find equally re- markable differences. The total net receipts from railway working in the United Kingdom in 1884 amounted to 33! millions sterling, which corresponds to an average of £2246 per locomotive ; whereas, in the United States, the net transportation earnings amounted to a total sum of 73 millions sterling, giving an average of ^Jo64_per locomo- tive, which is^8i8_p_er locomotive, or 36 per cent., higher than the average for the United Kingdom. At the first blush it would appear that this greater earning power of American locomotives must be due LOCOMOTIVE POWER. 135 either to the existence of a higher range of rates and fares in the United States, or to the fact that they run a con- siderably greater average mileage, or to a greater average train-load, or to all of these causes combined. There is no reason for supposing that the first of these presumed influences has anything to do with the matter, since the average charges for the transport of both goods and passengers, but especially the former, are much lower on American than on English lines, or indeed on any European railways. We come, then, to consider how far the apparent supe- riority of American locomotive earnings is affected by the greater average mileage run per locomotive. The total number of train miles run by the 14,827 loco- motive engines in the United Kingdom was 272,803,00x5, being an average of 18,395 miles per engine. In the United States, the 23,823 locomotives ran a total distance of 538,011,000 train miles, being an average of 22,583 per engine. In the United States, therefore, each locomotive covered during the year 4188 miles, or 23 per cent., more than the locomotives of the United Kingdom. It is, however, necessary to proceed further even than this before we can get at the whole truth of the matter. After all, the real secret of the higher average earning capacity of the American locomotive is not due so much to the greater average mileage which it performs, as to the greater average load which it draws. This is suffi- ciently evident from the circumstance that, while the average gross receipts per train mile in 1885 amounted in the United Kingdom to 4s. iod., they were not less than 7s. 5d. in the United States, showing a difference of 2s. 7d., or 54 per cent., in favour of the latter country, and that, too, notwithstanding the lower range of rates that prevails on American railroads. Unfortunately, there are no reliable materials at com- mand for a comparison of the average weight of the live, or paying, load in the two countries. In the United 136 RA IL WA Y PROBLEMS. States, the number of tons carried one mile in 1883 was returned at 44,065 millions, and by dividing into this sum the 350 millions of train miles run by goods trains, it would appear as if the average number of tons carried per train mile was 1 26. In the absence of any specific returns of ton-mile traffic on English lines, any attempt to com- pute the average weight of the trains would necessarily be conjectural. The gross and net earning power of locomotives on English lines has shown a decrease within recent years. The gross earnings have fallen from £"5039 in 1874 to £4611 in 1884; and the net earnings have fallen within the same period from £2248 to £2167. The details are appended : — Gross and Net Earning Power of English Locomotives. Number of Total Gross Total Net Gross Earnings Net Earnings Tears. Locomotives Earnings Earnings per per (£i = 1000). (j£i = iooo). Locomotive. Locomotive. 1874 9,554 ,£48,142 £21,476 £5,039 £2,248 1875 10,000 49,771 22,473 4,977 2,247 1876 10,439 50,504 23,000 4,838 2,203 1877 10,636 5 x »o63 23,367 4,801 2,197 1878 10,804 51,069 23,915 4,727 2,214 1879 10,977 5o,437 24,222 4,595 2,207 1880 11,172 53,598 26,033 4,805 2,330 1881 11,474 54,924 26,348 4,787 2,296 1882 11,847 56,596 26,849 4,777 2,266 1883 12,144 57,978 27,399 4,774 2,256 1884 12,482 57,557 27,043 4,611 2,167' Whether the decrease of earning capacity here exhibited is due to a reduction of the train load, or to a reduction of the average tariff charges, is not apparent on the face of it. The gross earnings per locomotive in the United States were £"6420 in the census year 1880, and £6800 in 1883. Coming now to deal with the Continent of Europe, we find that the number of locomotives, and the average annual and daily mileage of each, on the principal railway LOCOMOTIVE POWER 137 systems — distinguishing the State from the private or companies' lines — were, in 1883, as under: — Statement showing the Total Number of Locomotives in Different Countries, the Number of Train- Miles, and the Average Mileage Run per Locomo- tive Annually, and per Day. Average Average Number Train- Miles per Miles per Countries. of Loco- Miles Locomo- Locomo- motives. (1 = 1000). tive per Annum. tive per Day. Germany — State railways 8,938 105,613 II,8l6 32 Private railways worked by ) State . . . . \ 932 IO,8l2 II,6oi 32 Companies' railways Totals 1,460 18,062 12,371 34 ii,33° 134,489 11,870 33 Austria — State railways 410 5,819 I4J93 39 Private lines worked by the ) State \ 382 6,029 15.783 43 State railways worked by j companies \ 50 627 12,540 34 Companies' railways Totals 2,829 34,668 12,255 34 3,671 47,144 12,842 35 Belgium — State railways i,S7o 21,550 13,726 38 Companies' railways Totals 220 2,320 IO,545 29 1,790 23,870 13,335 37 France — Lines of general interest State railways .... 376 6,576 17,489 48 State railways worked by ) companies \ 18 2.355 Companies' railways 7,496 122,822 16,385 45 Lines of local interest — Private railways .... Totals 198 4,106 20,737 57 8,088 135,860 16,798 46 Italy- State railways 1,630 24,642 I5,Il8 41 Luxembourg .... 34 433 12,735 35 Norway ..... in *,557 14,027 38 Netherlands .... 519 ",435 22,033 60 Roumauia ..... 211 2,207 10,460 29 Russia ..... 5,844 61,940 10,599 29 Finland 98 i,i77 12,010 33 Switzerland .... 595 7,674 12,897 35 138 RAILWAY PROBLEMS. According to these figures, it would appear that the greatest amount of work was got out of the locomotives employed on Dutch railways and on local lines in France ; the next greatest on the State lines of the latter country ; while the third place is occupied by the French private lines of general interest. In Germany, the average appears to be pretty uniform, as regards both State and companies' lines. In India the average mileage run by locomotive engines varies quite as much as in European countries, as the following figures show : — Statement showing the Average Number of Locomotives Employed on the Principal Broad Gauge Railways in India, and the Average Work obtained from each during the Tear 1883. Railways. Number of Locomo- tives. Total Engine Mileage (1 = 1000). Average Annual Mileage per Engine. Average per Engine per Day. East Indian Great Indian Peninsula Madras .... Bombay, Baroda, and ) Central India . \ Eastern Bengal . Said, Punjaub, and Delhi . Oudh and Rohilcund . Indus Valley and Candahar Nizam's .... Totals and averages 536 447 150 100 48 159 125 156 9 11,982 8,943 2,172 2,2IO 1,019 3.306 1,781 2,195 3" 22,355 20,007 14,478 22,101 21,231 20,781 14,248 14,069 34,514 6l.2 54-8 39-6 60.6 58.1 56.9 39-o 38.5 94-5 1730 33,9i9 19,606 5371 The average mileages shown by the East Indian and the Bombay, Baroda, and Central Indian Eailways are much higher than are generally to be found on European lines. On the other hand, the results shown for the Madras and the Oudh and Eohilcund lines are below the European average. It is, however, to be borne in mind that the question of the average daily or yearly mileage of a locomotive engine is not to be determined by its own capacity alone. It is a LOCOMOTIVE POWER. 139 problem that has other factors surrounding and influencing it, that must be taken into account. One of these is the most economical rate of speed. Another is the endurance of the men in charge. The greatest proportion of the locomotives employed in the principal countries of the world are engaged on goods traffic. That traffic may be regarded as worked with a minimum of economy at the rate of 15 to 18 miles per hour. If the lower figure be taken, it is clear that, unless the enginemen are to be kept on duty for more than ten hours per day, it is not economically practicable to run the same engine for more than 150 to 160 miles per day. Sir Daniel Gooch specifically stated to the Eoyal Commission of 1866 that on the Great Western line the average to which the engines were generally worked was about 160 miles per day. He added, however, that with- out undue wear and tear an engine should do as much as 200 miles per day, if the endurance of the men per- mitted. In the United States most of the principal lines now adopt a system known as " first in, first out," which is designed to obtain a higher average mileage from the locomotive without exacting too much from the men in charge. The principle of the system is, that the next engine staff or crew in order shall take the next engine in order, and < thus, by having many more engine-hands than are absolutely required to man the locomotives, something like 50 per cent, more service is got from the engines. By the adoption of this system, the Pennsylvania Eailroad Company increased the annual mileage per locomotive from 19,244 miles in 1870 to 27,644 in 1881. 1 Eegarding the cost of working locomotive engines over a series of years, it appears that the average has within the last few years shown a substantial decline. On the principal British railways the decrease has varied from 1 " Report on the Internal Commerce of the United States for 1882," p. 301- 140 RAILWAY PROBLEMS. a minimum of 2 1 per cent, on the Lancashire and York- shire and North-Eastern Kailways to a maximum of 30 per cent, on the South-Eastern. In only one case — that of the South-Western — has there been an increase in the later year. The figures are appended : — Statement showing the Cost of Locomotive Power per Train Mile on the Principal English Railways in 1874 an ^ 1884. Percent- Railways. 1874. 1884. Decrease in 1884. age of Decrease in 1884. d. d. d. Per cent. London and North-Western . . IO.38 7.86 - 2.52 24 Caledonian IO.72 8.13 - 2.59 24 Great Eastern "•35 8.56 - 2.79 25 Great Northern 9.92 7.62 - 2.30 23 Great Western 9.29 7.69 - I.60 17 Great Western of Ireland 11. 14 9.09 - 2.05 18 Lancashire and Yorkshire 10.24 8.IO - 2.I4 21 London and South-Western 9.42 9.68 London, Brighton and South Coast 11.97 8.97 - 3- 00 2 5 Manchester, Sheffield and Lincoln- ) 9-3° 7-13 — 2.17 23 Midland 10.84 7.67 - 3-17 29 North-Eastern .... 13-67 10.75 — 2.92 21 South-Eastern .... 12.38 8.61 - 3-77 30 In order, however, to fully appreciate the extent of the economy that has been effected in locomotive power, it is necessary to go much farther back than 1874. The most remarkable results in this direction took place prior to that date. In 1865, locomotive and traffic charges amounted to 64.95 P er cent « °f tne whole, and in 1884 they were 27 per cent, of the whole cost of working per train mile. The variations which this item had undergone up to 1867 are thus referred to in the Report of the Royal Commission issued in that year. " The Reports of the Board of Trade show the following to have been the cost per train mile for 1840: — LOCOMOTIVE POWER. 141 d. Coke . . 8.356 Oil 0.360 Wages of enginemen and firemen 1.510 Wages of labourers and cleaners, &c. .... 1.910 Superintendent, clerks, office charges, firemen . . . 2.040 Repairs 3-549 Sundries 0.936 Total 18.661 "Soon after that time an essential improvement took place in the construction of engines by the introduction of the system of working steam expansively, and in 1845 the following appears to have been the cost per train mile on the Great Western Railway : — Items. Trains. Cost of repairs „ coke ..... „ enginemen and firemen's wages , general charges Total . d. 3-°3 3.13 1-34 I.64 9.14 Goods Trains. d. 2-34 5.26 1. 16 I.94 IO.70 "On the Great Western Eailway, the cost in 1866 was as follows : — d. Fuel 1.71 Wages of enginemen and firemen ..... 1.49 Wages of cleaners and cokemen, &c. 43 Oil, tallow, and sundry stores 28 Wages and materials for repair and renewal of engines > and tenders J Water, including pumping-engines 1 8 Salaries of superintendents 16 Gas rates, buildings, and fire charges 13 Total .... 7.62 Or more accurately, as deduced from the cost and mileage 7.65 * This average may be resolved into 6.7 5 d. per train mile for passengers, and 8.5d. per train mile for goods. " The repairs to engines and carriages, including the rent 142 RAILWAY PROBLEMS. of wagons which the company hire, amounted to 3.57c!. per train mile ; hence the average cost of a train for all these charges was ii.22d. per mile run in 1866." The following table shows the cost of trains per train mile on the Great Northern Kail way : — Items. Engines. Carriages and Wagons. Totals. The cost of working passenger trains ) averaging 7 carriages . . . \ The cost of working passenger trains ) averaging 8J carriages . . . ) The cost of working passenger trains j averaging 10 \ carriages . . . \ The cost of working goods trains ) averaging 25 carriages . . . \ The cost of working passenger and ) goods trains averaging i6£ carriages \ d. 5-9° 7-63 8.54 8.99 8.50 d. I.47 I.74 2.21 2.6o 2.26 d. 7-37 9-37 10.75 "•59 10.76 The items of expenditure which make up the total expense of working the trains on the Great Western Eail- way are shown in detail for 1865 in the following state- ment supplied by Sir Daniel Gooch : — Items. Cost per Train Mile. s. d. Maintenance of way o 6.35 Locomotive ........ o 7.65 Carriage and wagon repairs o 3.37 Rent for wagons o .19 Traffic charges . o 6.91 , General charges o 2.74 Compensation O .45 Furniture, &c. o .13 Working joint lines and stations . . o .99 Fire insurance o .07 General office expenses o .62 Government duty o 1.12 Miscellaneous expenses o .04 Rates and taxes o 1. 10 Bad debts o .06 Stamps for debentures o .02 Total ... 2 7.81 LOCOMOTIVE POWER. . 143 On the Great Northern Eailway the following were the corresponding charges, as furnished by Mr. Sturrock to the Devonshire Commission : — Cost Derived from an Average of Ten Years. For 1865. d. d. Engines 8.50 per train mile . . 9.577 Carriages . . . 1.74 » - I 2.32 j g Wagons .... 2.60 $ 2,2 ° " " \ 3.00 j 2-74& 10.76 12.325 Maintenance of way . . . 5.13 „ „ . . 5.880 Coaching and merchandise traffic, | 12,180 compensation, duty, &c. ) ' " " * * Total working expenses . . 27.98 „ „ 30.685 The whole cost of working a train on the Great Western Eailway for 1865 thus amounted to 2s. 7.8 id. per train mile. On the Great Northern Railway, it was 2s. 6.68 5 d. ; on the South-Eastern Eailway, 2S. io.72d. ; and on the Northern of France, 2s. 7-34d. These figures sufficiently prove not only the great varia- tions that have occurred in the cost of locomotive power, as between one period and another, but also the relation that this item of expenditure bore to each of the others. It is necessary to remember, in regard to these figures, that the economy is much greater than it appears on the surface, since the size and power of the locomotives have been very greatly increased, and the average train loads have also been augmented, although not, as we have elsewhere shown, to the extent that they should have been. The following statement, which has been compiled from the reports of the London and North-Western Eail- way Company, shows in what items the economy has chiefly taken place over the last ten years : — 144 RAILWAY PROBLEMS. Statement shoioing the Total Expenditure incurred for Locomotive Power on the London and North- Western Railway over the Ten Years ending 1885, with the Expenditure for that Year alone, and the Averages per Train-Mile for both Periods. Items. Total Expen- diture for Period 1876-85. Average per Train MUe. Expenditure in 1885. Average per Train Mile. Wages .... Fuel .... Water .... Oil and stores . £ 4,323,829 2,623,769 107,844 463,866 d. 2.9 i-7 0.07 0.31 £ 466,600 288,074 8,485 54,707 2.8 i-7 0.05 0.32 There are many engineers who contend that the English locomotive is still an expensive machine as regards fuel consumption. Mr. Crampton, whose engines have been worked with such signal success for many years on the Northern of France, has recently had a report from the engineer-in-chief of that line, intimating that the average consumption of fuel in his engines over twelve years has varied from 24.8 lbs. to 29.9 lbs. per mile. This figure, on the face of it, appears to compare very favourably with the average of English lines, but it is needless to remark that it is not the quantity of fuel alone that is to be considered. The weight of the load carried, the quality of the fuel burned, the rate of speed, the condition of the locomotive, and other points equally manifest, must exercise each its share of influence in the determination of this problem. ( 145 ) CHAPTER X. ECONOMY OF FUEL. In a previous chapter we have pointed out that locomo- tive power represented 26 per cent, of the total working expenditure per train mile of the railways of the United Kingdom in 1884. The several items that make up this sum are not specifically given in the Board of Trade returns, but they are tabulated in the railway companies' half-yearly reports, which show that, next to wages, fuel is the most expensive of the several items that make up the running account. There are, however, remarkable differences as between one line and another, even in a matter that would seem to admit of so much uniformity of practice and results as that of fuel. These differences are sometimes dependent upon the type and age of the engines employed, sometimes upon the quality of the fuel, sometimes upon the average rates of speed, and sometimes upon the average weight of the train. It is not without interest to examine these differences, so far as we have materials at command, with a view to ascertaining how far English railways compare favourably or otherwise with the railways of other countries. But first let us look at the British railways in relation to one another. From the accounts of the two leading Eng- lish lines — the London and North-Western and the Great Western — we have compiled the following statement of the several items that entered into the running expenses K 146 RAIL WA Y PROBLEMS. account for the year ending December 31, 1885, with the percentage proportion which each bore to the total : — Statement showing the Expenditure incurred for Locomotive Power on the North-Western and Great Western Railways during the Year 1885. Items. London and North- western. Great Western. Total Sum. Per Cent, on Total. Total Sum. Per Cent, on Total. Wages Fuel .... Water .... Oil, stores, &c. Totals ,£466,600 288,074 8,485 54,707 57-o 35-2 1.0 6.7 £322,886 194,448 26,426 25,202 56.7 34-2 4.6 4.4 £817,866 1 99.9 £568,962 99-9 These figures are in themselves sufficient to prove that, in the working of two of the chief English railways, the conditions of which are as nearly as possible parallel and relevant to each other, there may be, and actually are, considerable variations that are no doubt largely attribut- able to local circumstances. There is another valuable piece of statistical data that may be quoted on this head. From returns that have been compiled by one of our leading railways, and placed at the disposal of the author, the following returns of the average cost of fuel per ton and the average consumption of fuel per engine mile on two recent half-years are com- piled for a number of the principal lines : — ECONOMY OF FUEL. Lines with a High Average Consumption of Fuel. 147 Half-year ending Half-year ending Railways. 3i8t December 1883. 30th June 1885. Fuel Fuel Cost of Consumed Cost of Consumed Fuel per Fuel per per Ton. Engine Mile. per Ton. Engine Mile. *. d. lbs. *. d. lbs. London and North-Western 6 8 38.78 6 8f 36.53 North-Eastern .... 7 73 37-35 6 II 37-25 Midland ..... 6 9 37-°7 6 8£ 37-48 Great Northern 7 9i 40.56 7 6 39-96 Great Eastern .... n 8£ 36.21 10 9 37.20 Manchester, Sheffield, and ) Lincoln j 6 54 40.92 6 3 42.45 North British .... 5 31 41-57 5 oi 40.18 Caledonian .... 4 9 50.05 4 2i 47.48 Glasgow and South-Western 5 6i 45-36 4 " 45.29 Lines with a Low Ave rage Consumption of Fuel. London, Brighton, and South ) Coast \ 17 2 30.47 16 9 | 28.92 Metropolitan .... 16 6 29.52 16 7 34-41 District ..... 17 31 30.22 16 ui 31-77 Midland and Great Western of) Ireland . - . ) 14 2| 28.29 14 2 28.91 Great Northern of Ireland 15 3 27.24 '15 4l 28.80 Belfast and Northern Counties . 15 10 27-15 15 4 28.53 There are two facts that stand out with marked promi- nence in these returns — the first, that the largest con- sumption of fuel per engine mile is to be found on the lines that have the heaviest goods and mineral traffic ; the second, that lines that pay the greatest average price for their fuel continue to work with the lowest nominal consumption. There are other reflections that will naturally be sug- gested by an examination of the figures. It will be ob- served, on looking at the returns for the latest half-year, that the Manchester, Sheffield, and Lincolnshire Kailway has an average consumption of fuel per engine mile of 42.45 lbs., whereas the North-Eastern Company, travers- ing a neighbouring district, and having much the same 148 RA IL WA Y PROBLEMS. description of traffic all round, has an average of only 37.25 lbs. per engine mile. 1 If the former line had con- sumed the same average quantity of fuel per train mile as the latter, it would have made a difference on the train mileage of the Manchester, Sheffield, and Lincolnshire Railway in 1885 of nearly 16,000 tons of coal. It may be added that the economy of only 1 lb. of coal per engine mile would represent, on the train mileage of 1885, upwards of 120,000 tons. Mr. iStroudley gives the following particulars of the consumption of coal by several leading types of engines employed on the London, Brighton, and South Coast Railway : — Class of Engine. Average Load Vehicles. Average Running Speed, Miles per Hour. Lbs. of Coal. per Vehicle Mile. Lbs. of Coal per Train Mile. C. Goods . . \ B. " Gladstone " ) Passenger . \ D. ■ Tank " Pas- j senger . . \ G. Passenger . [ 28.89 40.42 14.5 25.O 6.8l 13-54 IO.22 14.OO 25.2 16.3 41.2 43-3 32.3 26.2 35-9 38.6 I.58 I.3I 1-37 I.06 2.23 I.29 1.49 I.72 45-85 53.24 19.91 26.55 15-23 17.2S 15-27 24.20 It is a subject that may well afford cause for congratula- tion to engineers that they have brought the locomotive engine to such a high standard of efficiency that 1 lb. of coal will convey a ton weight of train 13J miles at an average speed of 43^ miles per hour. 2 There are other considerations to be borne in mind 1 Of the total train miles travelled by the Manchester, Sheffield, and Lincolnshire Railway in 1885, 62 per cent, were mineral trains, as against 59 per cent, for the North-Eastern Railway, so that there was only a difference of 3 per cent, between the two lines. 8 Proceedings of the Institution of Civil Engineers, vol. Ixxxi. p. 102. ECONOMY OF FUEL. 149 besides the efficiency of the engine in examining the question of economy of fuel. It sometimes pays to burn a poor instead of a rich coal, although by doing so the poorer coal will show a much higher absolute consump- tion. Mr. Webb mentions, as an example of this fact, that he ran one link of trains in the South Staffordshire district with South Wales and the ordinary local coal, with a view to testing the comparative consumption of each for a given service. He found that the consumption of Welsh coal was 25.25 lbs. per train mile, while that of the local coal ran up to 32.82 lbs. per train mile ; and yet it was cheaper to burn the local coal, because, although it was of poorer quality, there was less action on the tubes and fire-boxes, and the work was done more cheaply. 1 In relation to results, there would appear to be a lower consumption of fuel on our leading lines at the present time than there was a few years ago. This fact will be borne out by an examination of the following particulars, which have been extracted from the reports of the several companies : — Tears. London and North- Western Kailway. Great Western Railway. Cost of Fuel. Train Miles Run (1 = 1000). Average per Train Mile. Cost of Fuel. Train Miles Run (1 = 1000). Average per Train Mile. 1876 1880 1882 1883 1884 £ 311.606 231.773 253,198 277.258 283,118 32,583 35.105 36,999 38,326 38,184 d. 2-3 1.6 1.6 i-7 1.8 £ 191,634 153.503 184,164 203,577 207,532 25.599 27.857 29.591 30,346 30,457 d. 1.9 1.3 i-5 1.6 1.6 These figures apply, of course, to prices only, and not to quantities ; and it must not be forgotten that quantities are the true test of economy, since a fall of price may 1 Vide Minutes of Proceedings of the Institution of Civil Engineers, vol. lxxxi. p. 134. ISO RAILWAY PROBLEMS. cause the consumption to appear less, while it may really have increased, in reference to volume. The materials at command for a comparison of the fuel consumption on English railways with that on railways abroad are not so full as could be desired. There are, however, some interesting and valuable data to be found in two reports that are well worthy the attention of those interested in this subject, the first being the Eeport on Transportation, &c, prepared by Mr. A. E. Shuman for the Tenth Census of the United States ; and the second, Colonel Stanton's annual " Administration Eeport on the Eailways of India." In the first-named volume there occurs a series of tables exhibiting the consumption of fuel for locomotive purposes on the principal railways of the United States in the Census year 1880. From these returns we have com- piled a table showing, as regards fourteen of the leading lines, the total consumption of fuel, 1 the total train miles run, and the average consumption of fuel per train mile. The result is truly remarkable ; for if the figures are to be accepted as worth anything at all, they show an average ranging from a minimum of 37 lbs. per train mile on the Delaware, Lackawanna, and "Western Eailways, to a maximum of 174 lbs. on the Union Pacific line ! We will perhaps do well to disregard this latter figure, as well as that brought out for the Missouri- Pacific line — 1 I2,lbs. per train mile — seeing that both are so abnormally large as to suggest the probability of error. We should then have to deal with a maximum of 79 lbs. on the Albany and Susquehanna line, which appears to be 28 lbs. per train mile, or 55 per cent, more than the average consumption on the Pennsylvania Eailway — one of the greatest mineral- carrying lines in the United States. Herewith are the detailed figures : — 1 In a number of cases certain quantities of wood were burnt as well as coal. The wood has in all cases been reduced to its coal equivalent at i£ cords to the ton ; but in the examples selected the quantities of wood used have been too small to exercise any appreciable influence on the result. ECONOMY OF FUEL. iSr Statement showing the Consumption of Fuel, the Train Mileage, and the Average Consumption of Fuel per Train Mile on Leading American Railroads in 1 880 : — Average Railroads. Tons of Train Miles Consumption FueL Bun. of Coal per Train Mile. New York, New Haven, and ) Hartford \ 61,379 2,462,000 49 Old Colony .... 46,906 2,466,000 38 Albany and Susquehanna . 464 2 5 I,I75,000 79 Baltimore and Ohio . 328,280 13,490,000 48 Delaware, Lackawanna, and ) 8.419,000 Western Railroads . . ) 155.500 37 Lake Shore and Michigan . 394,621 13,051,000 60 New York, Lake Erie, and ) Western ) 520,314 14,293,000 73 New York Central and Hud- ) son River ) 700,000 22,222,000 63 Pennsylvania .... 635,000 24,941,000 5i Philadelphia and Reading . 412,000 11,103,000 74 Pittsburg, Fort Wayne, and ) Chicago .... J 273,000 8, 1 1 7,000 43 Chicago and Alton 214,000 5,510,000 78 Union Pacific .... 428,000 4,929,000 174 Missouri Pacific .... Totals and average . 152,000 2,723,000 112 4,367,425 134,901,000 65 It will be observed that nine railways out of the fourteen tabulated show an average consumption of over 50 lbs. of fuel per engine mile. This is a much higher average than that found for the United Kingdom, where the consumpt of about 50 lbs., which has occurred on the Caledonian system, is regarded as an extremely exceptional figure. Even so well managed a road as the Pennsylvania shows a higher average than the most extravagant of our British railways ; but there is this to be said for the Pennsylvania line, that fully two-thirds of its total train mileage belong to goods and mineral trains. It is much the same with the Philadelphia and Eeading line, which, however, instead of keeping down to the comparatively modest (for the United 152 RAILWAY PROBLEMS. States) limit of 51 lbs., shows an average of 74 lbs. per train mile. But that high fuel consumption is not always a func- tion of heavy goods traffic is shown by the experience of the Delaware, Lackawanna, and Western Eailways, which, with 77 per cent, of their traffic as either goods or minerals, have averaged only 37 lbs. of coal per train mile, being exactly one-half of the quantity recorded for the Philadel- phia and Beading line, which has by no means an equally high proportion of the heavier description of traffic. The United States have the command of the cheapest fuel in the world, as regards certain districts ; but in other localities, remote from coal-fields, the cost of fuel is exceptionally high. As examples of the great variations that are found in this regard, it may suffice to mention that in the Census Reports for 1880 some lines return the average cost of their fuel — bituminous coal — at 60 cents (2s. 6d.) per ton, while others paid as much as 7 dollars (283.) per ton for coal of practically the same description. The principal lines, however, appear to have their fuel supplies quite as cheaply as those of England. The Pennsylvania Railway, for instance, returns the average cost of its anthracite and bituminous coal consumption in 1880 at 1 dollar 20 cents (4s. iod.) per ton. The Pitts- burg, Fort Wayne, and Chicago returned the cost of its fuel, which was almost entirely bituminous coal, at 1 dollar 70 cents (6s. iod.) per ton, and the New York Central paid as much as 3 dollars (12s.) for the bulk of its supply. There are, however, many lines that have purchased their supplies at less than a dollar per ton. The highest-priced fuel in the whole country appears to have been the bituminous coal bought from Wyoming territory by the Nevada County railways at 12 dollars (48s.) per ton, and the next most expensive was that bought in British Columbia at 8 dollars 26 cents (33s. ojd.) by the Southern Pacific line. In the United Kingdom there is almost as great a range of prices in locomotive fuel as in the United States. The ECONOMY OF FUEL. 153 cheapest fuel that we have found in our analysis of British lines is that bought by the Caledonian Railway Company for 4s. 2 Jd. per ton ; the dearest, that purchased by the North London Railway Company at 17s. 7fd. per ton. It is probable that although there must be a few very remote localities in America where the cost of fuel runs very high, it can be purchased, as a rule, quite as cheaply in the United States as in our own country, and in some cases for less than the lowest prices quoted in England. Notwithstanding these facts, however, the average cost of locomotive fuel in the United States, per train-mile run, is much higher than it is in our own country. This is a point that admits of no dispute, since it can be solved by returns that are not to be gainsaid. We have already seen that in the United Kingdom the average cost of fuel per train-mile amounted in 1883 to i.7d. on the London and North-Western Eailway, and to i.6d. on the Great Western. These two lines pay what may fairly be de- scribed as an average price for their fuel, and are in other respects typical of fully two-thirds of the locomotive ex- perience of the United Kingdom. But in the United States, according to the Census Report for 1880, the average cost of locomotive fuel per train-mile amounted to not less than 34d., being exactly double the price shown to be the average for our two chief British railways. 1 The source whence these figures were derived does not make it clear whether this enormous difference against the United States is chiefly attributable to the higher average consumption or the higher average price of fuel ; but how- ever it may be with reference to these two points, it should never be forgotten that the invariable practice in that country is to have heavier train loads than in our own ; and if it were to be ascertained that the American average train-load is as much again as the English, the result 1 The total cost of fuel for locomotive purposes in the United States was 32,836,470 dollars, which, divided by 465,341,000, the total number of train miles, gives, as above, an average of 3-4(1. per train mile. 154 RAILWAY PROBLEMS. would not, after all, be so unfavourable to American lines. Before dismissing this subject, it is interesting to observe that on the Indian railways there are to be found dif- ferences in fuel consumption almost as extreme as those that we have discovered to apply to the United States, as the following official table shows : — Statement showing the Description, Quantity, and Cost of the Fuel used on Indian Railways per Train-Mile in l88z Per Train Mile. Railways. Description of Fuel. Consump- tion. Cost. lbs. 1. East Indian . Bengal . 50.72 0.79 South Indian . English . 27.OI 3-n Great India Peninsula . English and Bengal 45-°3 4.19 Eastern Bengal Bengal . 55-30 3-34 Oudh and Rohilcund Bengal . 45.26 3.80 Punjaub Northern . Bengal (and Wood) 38.61 7-99 Wardha Coal . Warora . 104.00 4.00 Calcutta and South- ) Eastern . . ( Bengal . 63-34 4-32 Northern Bengal . Bengal . 31.84 2.69 Rangoon and Irrawaddy English . 20.36 2.41 Gaekwar of Baroda's English . 18.55 3-i6 Nizam's .... Wood . 79.28 2-44 It needs no expert in locomotive practice to pronounce that some of the Indian coal is not at all suited to loco- motive use, so far as the quantity consumed affects the problem. Where English coal is used, the consumption falls below the English average, which is quite what we might expect, considering the lighter character of the traffic, and the necessity for economising fuel acquired at such a considerable cost. ( 155 ) CHAPTEE XI. EXPENDITURE ON PERMANENT WAY. The working expenses of a railway are principally made up of three items, which, in the order of their importance, as regards the United Kingdom, are — i. Traffic charges, 2. Locomotive power, and 3. Maintenance of way. Each of these, in its turn, is subdivided into a number of other items. In regard to permanent way, the principal items of this subdivision are — (a.) Wages. (&.) Materials. (c.) Ballasting. (d.) Bridges. (e.) Stations. (/.) Other expenses. Of the sum of these six items, wages and materials generally represent from 55 to 70 per cent. 1 There is no department of railway expenditure that has shown a more remarkable economy within recent years than that of the maintenance and renewal of the per- manent way. This economy is mainly due to the very 1 In the case of the London and North -Western, they represented 54 per cent, for the ten years ended 1885. On the Great Western, over the same period, they formed 66 per cent, of the whole. i 5 6 RAILWAY PROBLEMS. greatly reduced cost of permanent way materials, and also, presumably, to the greater endurance of steel rails, with which most of the railway lines in the United King- dom are now furnished. The economy may be tested in either of two ways — 1. The expenditure per train mile. 2. The expenditure per open mile of railway. The following are the items of expenditure per train mile in each division of the United Kingdom for the two years 1875 and 1884: — Countries. 1875- 1884. Percentage of Decrease in 1884. England and Wales . d. 7-35 d. 5-72 22 Scotland . 7-35 5-52 25 Ireland 10.45 8.50 19 United Kingdom 7-49 5-82 22 In the expenditure per open mile of railway, the figures have varied, as between the two periods, in the following manner : — Countries. 1875- 1884. Percentage of Decrease in 1884. England and Wales . ^454 ^409 IO Scotland . 286 245 14 Ireland . 194 166 14 United Kingdom 393 35o IO It appears from these returns that, relatively to the amount of traffic, or work actually performed, the EXPENDITURE ON PERMANENT WAY. 157 economy has been greater than it seems to be when tested by the mileage standard alone. But in order to a correct and adequate appreciation of the extent and precise character of this economy, it is necessary to resolve into its several component par- ticulars, the item that we have hitherto dealt with as permanent way expenditure. In attempting this analysis, we shall deal with five typical railways only, believing that these will furnish the most satisfactory means of enabling the true position of the case to be apprehended. Those five lines are — 1. The Great Western. 2. The London and North-Western. 3. The North-Eastern. 4. The Midland. 5. The Great Northern. With a total length of 8160 miles in operation, these five railways comprise about 60 per cent, of the total railway mileage of England and Wales, and much more than 60 per cent, of the total traffic. Per train mile, the expenditure incurred for maintenance of way on each of these railways, in the years already tabulated, was — Eailways. Great Western London and North-Western North-Eastern Midland . Great Northern . . ' . x8 7S . d. 7-77 7-57 7.96 6-95 6.54 d. 6.90 6.07 6.19 4.48 4.60 Decrease in 1884. d. .87 I.50 i-77 2.47 1-94 Percent- age. II 20 22 35 29 i 5 8 RAILWAY PROBLEMS. The diminution of expenditure has thus been very far from uniform, ranging from only 8-7d. per train mile in the case of the Great Western to 2.4yd. in the case of the Midland. This great variation appears to call for some explanation that does not lie quite on the surface of the facts. It is probably to be found in the earlier adop- tion of steel rails by the Midland Company, and the consequent more complete realisation of whatever reduc- tion of annual expenditure is attributable to that source. It is mainly in the cost of material that the economy to •which we have called attention has chiefly been attained. The expenditure per open mile in each of the years 1876 and 1885, on each of the lines dealt with, is shown in the next table : — Statement showing the Expenditure for Permanent Way Materials on Leading English Railways in 1876 and 1885. Kailways. 1876. 1885. Miles Main- tained. Cost of Materials. Aver- age per Mile. Miles Main- tained. Cost of Materials. Aver- age per Mile. Great Western . London and North- ) Western . ) North-Eastern . Midland . Great Northern Totals and averages 2,004 I.540 1,402 I.I55 I,OI3 £ 405.727 345.207 269,916 2I9,5H 125,905 202 224 193 190 124 2,327 I,7l6 1,535 1,402 1,180 £ 225,799 163,092 147,699 119,963 61,589 97 95 96 '86 52 7."4 1,366,269 192 8,160 718,142 88 The economy here is most striking, amounting as it does to an average of £104, or 118 per cent, per mile of line open. At the same rate of reduction, the economy resulting from this source in the total railway mileage open in the United Kingdom in 1885 should be approxi- mately close on two millions sterling per annum. EXPENDITURE ON PERMANENT WAY. 159 It is, of course, possible that the expenditure on materials for renewals, &c., was abnormally high in 1876, and abnormally low in 1885. It is, therefore, important to take into account the average annual expenditure on this score over the whole period of ten years, which was as under : — Statement showing the Expenditure in respect of Maintenance and Renewal of Permanent Way on the Several Railways specified for the Ten Years ended 31** December 1885. Railways. Average Miles Main- tained. Average Annual Expenditure on Materials. Average Annual Expenditure per Mile. Great Western .... London and North-Western North-Eastern .... Great Northern .... Totals and average . 2,155 1,648 1,472 1.330 1,135 £305,365 228,005 189,830 155,466 84,920 £141 138 129 117 75 7,740 £96.3,586 £124 According to this showing, the average annual cost incurred in respect of materials of construction over the ten years was £68 less than the average of 1876, and £2,6 more than that of 1884, per mile open. Wages are the next principal item in the maintenance of way account, representing, in the specific case of the Great Western, 29 per cent, of the whole, as compared with 37 per cent, in respect of materials. There has not, however, been the same great reduction in the cost of wages as in the expenditure for materials, although wages are largely a function of the life of the permanent way. The fol- lowing statement shows the wages cost incurred in 1876 and 1885 : — i6o RA IL IV A Y PROB LEMS. Railways. 1876. 1885. MUes Main- tained. Wages Paid for Main- tenance of Way. Aver- age per Mile. Miles Main- tained. Wages Paid for Main- tenance of Way. Aver- age per Mile. Great Western London and North-) Western . ) North-Eastem Midland . Great Northern Totals and averages 2,004 1,540 1,402 1,155 I,OI3 £ 254,208 263,432 205,171 208,297 76,871 £ 122 173 188 180 76 2,327 1,716 i,535 1,402 i,iSo £ 237,455 274,591 188,154 2OO.917 91,617 £ I02 159 122 143 78 7, "4 1,007,979 142 8, 160 992,734 121 We have here to deal with an average reduction of £21 per mile maintained, as compared with an average of £104 in the cost of materials. Distributed in the same ratio on the whole railway mileage of the United Kingdom, the reduction of wages expenditure as between 1876 and 1885 would amount to a further sum of .£394,000. This figure is considerably above that which Mr. Price Williams calculated in 1 879, 1 but it is not safe to assume that the saving will be uniformly as great over the whole of the country as on the five lines above tabulated. 2 There does not appear to be much in the other items that enter into the cost of maintenance of way to call for special remark. Station repairs and renewals, as might be expected, are a constantly increasing quantity. Thi3 is a necessity apparently entailed by the demands of a greatly increased and increasing traffic, and by the more exigeant demands of the public, who do not now tolerate the accommodation that would have been borne without com- plaint a few years ago. Still, as the item of station repairs, &c, is only about 7 per cent, of the total expenditure 1 "On the Economy of Railway Working," Proc. I. M. E., Jan. 1879, p. 101. 2 There is still a considerable mileage in out-of-the-way districts that has not been laid with steel rails. EXPENDITURE ON PERMANENT WAY. 161 incurred in respect of maintenance of way, it does not greatly affect the general result. The item which is vaguely classified as " other expenses," appears to show remarkable variations as between one company and another. In the case of the Midland it only amounted to an average of £2 per open mile in 1885, against an average of .£104 in the case of the London and North- Western. Again, on the other leading lines this item appears to have considerably diminished, both absolutely and relatively, as between 1876 and 1885, but in the case of the Great Western, it mounted from £J to £49 per mile open, as the following figures show : — Railways. 1876. 1885. Miles Main- tained. Total Ex- penditure. Aver- age per Mile. Miles Main- tained. Total Ex- penditure. Aver- age per Mile. Great Western London and North- ) Western . ) North-Eastern Midland . Great Northern Totals and averages 2,004 1,540 1,402 1,155 I,OI3 £ 13.400 187,451 48,008 2,489 4,524 7 122 34 2 4 2,327 1,716 i,535 1,402 1,180 £ 115,629 177,745 23,291 2,169 3,102 49 IO4 15 2 3 7,114 255, 8 72 36 8,160 321,936 39 In bringing to a focus the several items that compose the maintenance of way expenditure, we are* naturally struck with the differences that appear as between one line and another, the average outlay over the whole hav- ing, in the case of the North-Eastern, fallen from ^562 to £367, or £ig$ per mile, as between 1876 and 1885, while in the case of the Great Northern, the decrease only amounted to £$j per mile. The average over the whole of the five railways dealt with was £522 in 1876, and L 1 62 RAILWAY PROBLEMS. £386 in 1885, being ^136 per mile open, or 26 per cent. The details are given in the following summary table : — Railways. 1876. 1885. Miles Main- tained. Total Ex- penditure. Aver- age per Mile. Miles Main- tained. Total Ex- penditure. Aver- age per Mile. Great Western London and North- ) Western . ) North-Eastern Midland . Great Northern Totals and averages 2,004 1,540 1,402 i,iS5 1,013 £ 943,513 1,028,228 787,283 652,857 300,939 471 668 562 565 297 2,327 1,716 i,535 1,402 1,180 £ 827,693 894,694 564,079 579,368 283,300 356 521 367 413 240 7,"4 3,712,820 522 8,160 3,149,134 386 It is almost worth the while of those immediately con- cerned to inquire how it happens that on the London and North-Western and Great Western Eailways, the expen- diture in respect of wages on permanent way account was identical, namely, 29 per cent., whereas materials repre- sented 25 per cent, of the whole in the case of the London and North- Western, and 37 per cent, of the whole in the case of the Great Western, for the same period. Presum- ably the Great Western pays more for its materials or less for its labour than the London and North- Western ; but it is by no means obvious why this should be the case. I 163 ) CHAPTER XII. THE TAXATION OF RAILWAYS. Railway taxation may be divided into the three distinct categories of passenger duty, imperial burdens, and local or municipal imposts. Under the old system of stage-coach travelling in England, the law imposed a tax of one penny per mile on every coach licensed to carry not more than four passengers, and of three-halfpence per mile on every coach not carrying more than six passengers, with an ad- ditional halfpenny for every additional three passengers. The principle of levying the tax was that of the capacity of the coach, the tax being levied equally whether the number of passengers in question was carried or not. Under 2 & 3 Will. IV., c. 1 20, it was provided that rail- way companies should be taxed at the rate of one half- penny per mile for every four passengers carried. The tax in this case was imposed, not upon the capacity of the carriages, but upon the number actually carried, which was a very different and much more equitable method of adjustment. The system of levying one-eighth of a penny per passenger per mile was, however, objected to very strongly on several grounds. The first and most obvious was, that the incidence of the tax was unequal as between the different classes of passengers, the poor traveller, who paid to the railway company a less fare than the rich one, being required to pay the same duty to the Government. The next objec- 1 64 RAILWAY PROBLEMS. tion was a consequent of the first, viz., that the incidence of the duty prevented railway companies from reducing the fares in the interest of poorer passengers. To obviate these objections, it was proposed, on behalf of some companies, that the duty should be a percentage on the gross passenger receipts. Upon this subject, the Select Committee of 1839 examined several witnesses, and reported thereafter that "there would be considerable difficulty in fixing upon a percentage which would pro- duce the same amount of revenue ; and it would also be in the power of any railway company to lessen the gross income derived from passengers, without reducing their profits." As an example of this, the Committee mentioned that railway companies would find it to their interest to reduce the fares of passengers, which were subject to duty, and increase the charge made for passengers' luggage, which was not so subject, if the duty were to be based upon gross income as such. By the 52nd section of the Act providing for the taxa- tion of passenger fares, the Board of Treasury was em- powered to compound with railway companies for any sum of money less than the amount of duties chargeable under the Act in lieu of such duties. This power was for a time exercised rather largely, especially in the North of England and in Scotland, with the result that very much less than the full amount of the duties was obtained in many instances. The Select Committee of 1839 x stated that these compositions were determined generally, " after a review of the peculiar circumstances of each case, and of the propriety of each individual application," without regard to a general principle. These compositions had been entered into for three years, and in some cases had then terminated, while in others they had been renewed, though not upon terms so favourable to the railways. The Railway Passenger Duty has been modified or affected by several subsequent Acts of Parliament. The 1 Select Committee's Second Report, p. xiv. THE TAXATION OF RAILWAYS. 165 Cheap Trains Act, which made it obligatory on all com- panies to run one train at least each way on every week- day, except Christmas Day and Good Friday, to provide for the conveyance of third-class passengers, to and from the terminal, and other ordinary passenger stations of the railway, 1 imposed a maximum fare of a penny per mile, an average speed of not less than twelve miles per hour, including stoppages, and the free transport of 56 lbs. weight of luggage for each passenger. Under this Act, as modified subsequently by " The Farthings Act," 2 the railway companies made claims for exemption from passenger duty, which has been allowed by the Inland Eevenue Department in respect of fares charged at a penny a mile and under. It is a singularly cogent example of the way in which matters of great public concern are frequently managed (or mismanaged) in England, that for twenty-two years no attempt was made to obtain an authoritative legal decision on the point of whether this exemption was properly allowed or not. In 1874, a decision was given by the House of Lords, which set aside the exemption, and led a number of com- panies, who had power under their Acts to do so, to charge the duty in addition to the fares, thus pressing with undue severity upon the poorer class of travellers. In 1876, a Select Committee of the House of Commons was appointed to inquire into and report upon the law relating to the railway passenger duty. In a comprehensive report, made in June of that year, the Committee announced their recommendations to be as follows : — "(1.) That the tax is an undesirable one to maintain longer than is necessary from a fiscal point of 1 7&8Vic. c. 85 (1844). 2 21 & 22 Vic. c. 75 (1858). i66 RAILWAY PROBLEMS. view, and they recommend its repeal whenever the state of the public revenue will permit. " (2.) That until the finances of the State warrant the abolition of the tax the following modification should be substituted ; that the present tax of 5 per cent, be restricted to fares over id. per mile, and that the fares of all classes of passengers for the single journey carried in any train pay- ing id. or less per mile be exempted, and that this exemption should apply to return, weekly, and season tickets ; that in levying the duty in respect of return tickets, of whatever class, and by whatever trains the holders may be carried, one-half of the amounts be treated as the fare in one direction, and the other half as the fare for the return journey ; that in levying the duty in respect of season tickets of whatever class, or whether the holders have been carried by express or stopping trains, the fare for each journey shall be reckoned by dividing the cost of the ticket by double the number of week- days in the period during which the ticket is available. " (3.) That in urban and suburban districts all fares of all classes up to and including 9d., and all return fares based upon the fare for the single journey, be exempted. " (4.) That in any future legislation care should be taken to keep in view the object that was aimed at by the legislative obligation to maintain ample com- munication between the several stations on each line." The duty, although still in operation, is limited to other than Government fares, and Ireland is entirely exempted from it. The amount raised under the Act in 1884 was £ 398,577, which was 1.6 per cent, on the total gross sum THE TAXATION OF RAILWAYS. 167 derived from passenger traffic in Great Britain. It cer- tainly does not seem worth the while of Parliament to continue an impost that yields so little to the revenue, and is so peculiarly obnoxious to the railway companies, as being not only a tax upon locomotion, which they regard as an article of primary necessity, but as being also dif- ferential in its character and incidence, inasmuch as all corresponding taxes upon competitive modes of locomo- tion have either been repeated or reduced to a minimum. In addition to the railway passenger duty, railway companies are liable to heavy burdens in the form of general and local rates and taxes. It is often put forward by railway companies as a good reason for the maintenance of high rates of transport, that they are taxed and rated much more heavily than formerly, and that they require a larger margin to meet such increase of expenditure. It is an easy matter to bring this question to the test of actual facts. The amount of rates, taxes, and Government duty paid per open mile of railway in the United Kingdom rose from £g$ in 1870 to £119 in 1875, and ^129 in 1880. It fell to £124 in 1884. There is an increase between the first and the last year of the series of ^29, or 30 per cent. But this is not, after all, the correct method of estimating the difference, which should be calculated in reference to the traffic carried and the receipts accruing therefrom. In 1870 the traffic carried on the railways of the United King- dom was 169 millions of tons, being about 11,000 tons per mile; in 1884 the total traffic carried was about 259 millions of tons, or about 14,000 tons per mile. In 1870 the gross receipts per mile open were £2794; in 1884 they amounted to £3589, or 25 per cent. more. It appears, therefore, that while the rates and taxes have increased by 30 per cent., the receipts have increased by 25 per cent, per mile open, leaving the one nearly balanced by the other. 1 68 RAILWAY PROBLEMS. Statement showing the Incidence of Taxation per Train Mile on the principal British Railways in 1874 and 1884. Railways. Rates, Taxes, &c, per Train Mile in Increase or Decrease in 1884. Percent- age of Increase or Decrease in 1884. 1874. 1884. Caledonian .... Great Eastern .... Great Northern .... Great Western .... Great Southern and Western of ) Ireland ) Lancashire and Yorkshire London and North -Western London and South-Western London, Brighton, and South ) Coast .... | Manchester, Sheffield, and Lin- j coin .... | Midland North-Eastern .... South -Eastern .... d. I.52 2-43 I.90 2.08 2-33 2.02 1.95 2-95 3-76 I.72 i.6 S 1.91 5-75 d. 1.65 i-93 1.81 2.23 2.49 2.12 1.88 2.51 3-48 1.80 1.50 1.96 4.22 d. + O.13 - O.50 - O.09 + O.15 + O.16 4- 0.10 - 0.07 - o-44 - 0.28 -f 0.08 -0.15 + 0.05 - i-53 per cent. 9 21 50 7 7 5 4 15 7 5 9 3 27 According to this showing, the amount paid per train mile — which is really the best test to apply, since the train- mile standard affords the best idea of the amount of the traffic, actual or possible — has declined on seven lines, and increased on six others, as between 1874 and 1884. The most striking cases of decreased taxation are those of the South-Eastern and the Great Eastern, two lines that are almost entirely dependent upon their passenger traffic. One point which was brought forward by railway com- panies before the Commission of 1 867 as laying a heavy burden upon them, and thus acting as a prohibition to reduce their charges, is, that the railways, whilst they are not in many cases a source of increase to the rates, are taxed for local purposes to a higher amount than any other kind of property ; that the existing mode of ascer- taining the assessable value leads practically to the assessment of profits of trade, and stock in trade ; and that the system is vexatious, difficult, and uncertain in THE TAXATION OF RAILWAYS. 169 operation, and creates inequalities which do not usually attach to the assessment of any other kind of property. The general principle upon which railways should be rated was stated by the Commission to be a clear one, viz., to take the net annual value of the land, as improved in the hands of the railway company by the construction of the line, stations, and other works, without reference to their profits as carriers ; that is, to take the rent which would be paid by a tenant to whom the line might be leased. When it is attempted to apply this principle in practice, though it appears to be simple, great difficulties arise. One of the difficulties is, that most sorts of rateable property lie exclusively within the parish which makes the rate ; for example, houses or farms, or a manufactory or a coal-mine, which are the ordinary objects of rating, usually lie within the parish in which the rate is made, and the assessing autho- rity has only to consider what the probable net annual value of such occupation may be. If the occupation should be of property in several parishes, it is not difficult to value the property in each parish separately. But with regard to a railway which passes through a long succession of parishes, the person making the assessment cannot ascertain what amount of traffic passes over the section of the railway within the parish ; he must consider what would be the probable letting value of the entire line, and he must then take such proportion of that entire value as falls within the particular parish. There is also a further complication arising from buildings, or stations, being unequally distri- buted in the parishes in which the railway is situated; thus in some cases there is a station in the parish, and in others there is not, which adds to the difficulty of making a fair assessment upon the railway. The authority in each parish or union makes the assessment without re- ference to the assessment in other parishes or unions. When the railway passes through numerous parishes or unions in succession, each parish or union is entitled to make its own assessment, without any reference whatever 170 RAILWAY PROBLEMS. to the aggregate that would be produced by adding together the rates of the different parishes or unions. If the rates were made fairly, by adding up the assess- ments in all the different parishes or unions through which the line passes, the total annual value of the railway for purposes of assessment ought to be obtained; but the authorities do not, for the most part, proceed from any total. They merely form a conjecture as to the probable amount of value which belongs to that part of the railway which is in their parish. This has, no doubt, led to anomalous results. The net income of the railway companies in England in 1864 was 16 millions sterling, after paying all out- goings except rates, taxes, and Government duty. The local rates paid by them for that year amounted to ^527,123, or 3^- per cent. For the same year the local charges in England upon the income derived from landed property amounted to about 1 1 per cent., exclusive of the profits of farmers or other occupants using landed property for industrial purposes. Under the Act 21 & 22 Vic, c. 98, railways are to be assessed for rates levied under the Public Health Act, and for the local government of towns, in the proportion of one-fourth part only of the net annual value thereof. Only a portion of railway earnings was regarded as derived from the occupation of railways and stations, and the remainder has been left untaxed as the profits of their business. The Duke of Devonshire's Commission recommended that the Poor Law Board, or some other public authority, should make an assessment for rating the whole railway, and then divide the amount according to an equitable principle between the several unions or parishes. The incidence of taxation in reference to railway pro- perty varies considerably as between the several divisions of the United Kingdom. Eelatively to gross railway income, it is highest in Ireland and lowest in Scotland. THE TAXATION OF RAILWAYS. I7i The figures for each of the three countries in 1884 were as under : — Countries. Rates and Taxes. Gross Receipts. Percentage of Taxation on Gross Receipts. Totals and average . £ 1,664,660 187,997 85.034 £ 60,099,011 7,595.391 2,828,241 2.7 2.5 2.9 1,937,691 70,522,643 2.7 The railways of the United Kingdom are not alone in their liability to taxation. The same fate befalls the rail- ways of nearly every other country, although the returns of the amount of taxation levied are not in all cases so specifically set out as in the case of British lines. The following figures, however, show the amounts of taxation paid both absolutely and relatively to gross earnings, in the United States, in the Census year 1880:— Countries. Gross Earn- ings of all Railways in 1880 (1 dol. = 1000). Total Taxation, State and Municipal (1 dol. =1000). Percentage of Taxation on Gross Income. New England States Middle States Southern States Western States Pacific States .... Totals . $ 46,942 283,173 49,172 130,608 70,554 $ I,6oi 5.945 616 3,267 1,855 3-4 2.1 i-3 2-5 2.6 58o,450 13.284 2-3 It therefore appears that the highest taxation is levied on railway property in the New England States, and the lowest in the Southern States. In the former the taxa- tion is higher relatively to income than in Great Britain. In the Middle States, which embrace New York, Pennsyl- vania, Ohio, and Maryland, the average taxation amounts to 2. 1 of the gross railway income, which is .6 per cent. 172 RAILWAY PROBLEMS. under the average of the United Kingdom. Taking the United States as a whole, it appears that the taxation of the railway interest, relatively to its gross income, is .4 per cent, under the average of the United Kingdom. There has been a good deal of agitation in the United States, and not a little dissatisfaction on the part of the public, in consequence of the failure of a number of lead- ing railway companies to obtain patents for lands that have been granted to them by the State for constructive purposes. As examples, it may be stated that, at the end of 1882, the following lands were granted and patented respectively : — Railways. Lands Granted. Lands Patented. Union Pacific .... Central Pacific .... Western Pacific Kansas Pacific .... Denver Pacific .... Totals . Acres. 1 2,000,000 8,000,000 1,000,000 4,000,000 1,000,000 Acres. 2,000,000 1,000,000 500,000 1,000,000 50,000 26,000,000 4,550,000 Only about 17 per cent., therefore, of the lands granted to these companies have been patented, which means that only that proportion has become liable to taxation by State, territorial, or municipal authorities. In other words, the companies permit these lands to grow valuable by lapse of time and the sentiment of the country, with- out contributing to the maintenance of the public authority, or of the common institutions of municipal organisation by the aid of which such enhanced values are secured, so that this burden is thrown upon the legal owners of a moiety of the lands embraced within the limits of the railroad grants. This flagrant dereliction of obvious obligations on the part of the railways in question has recently been under the consideration of Congress. THE TAXATION OF RAILWAYS. 173 In practically every European country, as in Great Britain, the railway interest is subjected to local and imperial burdens, which vary according to the methods of taxation in operation and the manner of its incidence. Perhaps the most heavily burdened of all Continental railway systems is that of Italy, where the Government levy a stamp duty on every passenger ticket, which, on short journeys, is equal to an imposition of about 1 2 per cent, on the cost of third-class traffic. There is, besides, an impost of about 1 3 per cent, on goods traffic at high velocity ; so that the two items together represent an im- post of 25 per cent, for short distances, and thus compel the maintenance of exceptionally high fares. 1 Under section 38 of the General Railway Code of Prussia (1838), it is provided that railways should pay a duty to be graduated in_jpr oportion t o the profi ts_on__the-J:otal ca^ita r^su bsmbed, aJtejt-4eductin^__aJLJJie_-expe«sea_.^of repair, the co _ st of carrying-on the business, and the yearly_su^_to_be_apjpropriated fto the reserved fund. The amount of this duty was noTioDe fixed, however, until the seco nd railw ay-opened in Prussia should JTavftbgftn in operation for three years. Until then, it is naively remarked, that "the loss which the Post-Office revenue will evidently sustain through the railroads is to be com- pensated for by the services to be performed by the rail- ways in its favour." 2 Railways were, under the same code, exempted from trade taxes ; and it was specifically provided that the proceeds of the graduated duty, referred to above, should only be applied to indemnify the State for the loss of revenue occasioned by the railroads, and the redemption of the capital employed in the undertaking. Again, there is payable to the State by the Prussian Railways, an income-tax or duty upon the net p rofit on 1 " Giornale dei Lavori Pubblici e delle Strade Fedrate," an. vii. p. 73. J The services included the gratuitous transport of letters, cash re- mittances, post wagons, &c. , and persons furnished with post-free passes. 174 RAILWAY PROBLEMS. the share capital, after deducting management, mainte- nance, working expenses, reserve and renewal funds, as well as interest and sinking funds to pay off loans, before striking the dividend, upon the following rising scale, viz.: — When the net profit amounts to 4 per cent., . . fa thereof „ „ h over 4 to 5 per cent, fa „ » » )» » 5 *° P H fa »> » »> »» » B » nr >» This income-tax is to be applied by the State in buy- ing in the open market the shares of the company which pays it, and the interest and dividends on these shares are to be applied in like manner, the shares themselves being taken for ever out of course and deposited in the national debt office of the State, and thus, by degrees, the share capital of the company becomes amortised. ( 175 ) CHAPTER XIII. THE DISTRIBUTION AND COST OF RAILWAY LABOUR. In dealing with the subject of railway economy, there is perhaps no phase that has received from statisticians and economists so limited an amount of attention, relatively to its importance, as that of the results of railway working in reference to the numbers employed. There has, in truth, been a lack of definite statistical information upon this subject until quite lately. There is now, however, at command a sufficient range of facts to enable us to inquire into the more prominent bearings of the personnel upon the the character of railway administra- tion in all the leading countries of the world. 1 There is probably no other single industry that gives employment to so large a number in the principal countries of the world, regarded as a whole, as that of railway work- ing, unless it be that of agriculture. In the United King- dom, where the railway system as a whole found direct employment in 1884 for 367,793 persons, 2 it will, of course, be found that both the textile and mining industries give direct employment to an even larger number. But if we consider how many thousands are employed in furnishing 1 The data to be used in this chapter are obtained, in respect of the United Kingdom, from returns presented to the House of Commons, especially those of 1885 ; in respect of the United States, from the Census Reports ; and in respect of European countries, from the " Statistique de chemin de fer." 2 According to a return presented to Parliament on the motion of Mr. Broadhurst. 176 RAILWAY PROBLEMS. railway materiel, in addition to those directly employed in railway working — in building locomotives, manufacturing rails, chairs, and sleepers, furnishing stores and fuel, and in a thousand other ways — it will probably turn out that railways, as a source of human employment, are, even in an industrial and manufacturing country like our own, superior to all other sources whatsoever. This is still more strikingly the case in the United States. In that country the numbers engaged in railway operations can only be ascertained for census years, and therefore we are without any reliable information for a later date than 1880. But in that year the American railway system furnished direct employment to 418,957 persons, being an average of nearly five persons to each mile of line open. If the same relation of employes to mileage is assumed for 1886, the railways of the United States would employ at the present time not less than 630,000 workers of all kinds, which is a very much larger number than any other occupation employs, except agriculture. 1 So far as the data available enable an estimate to be framed, the total number of employes engaged in railway working in Europe and the United States of America was, in 1884, about as under: — United Kingdom . . . 367,793, or 19.69 per mile open United States . . . 630,000, ,,4.77 ,, ,, Continental countries . , 1,076,649, „ 13.6 ,, ,, This gives a total of 2,074,442 employes of all kinds, to which a few thousands more will require to be added for Scandinavian countries, that are not included in the European total. If we divide into this number the total mileage con- structed in the several countries to which it applies — that is, 227,450 miles — we shall find that the average number 1 The next most important industries in the United States are those of potton, which employed 185,472 hands in 1880, and iron and steel, which in the same year found employment for 140,978 hands. COST OF RAILWAY LABOUR. 177 of employes per mile of line open throughout Europe and the United States is about 9.1, or less than one-half the average of the United Kingdom. There must clearly be some good reason for this remark- able difference, by increase, on English railways. At a later period of our inquiry we shall find that this explana- tion lies chiefly in the greater amount of traffic to be dealt with. Another cause, specially applicable to the United States, will at once occur to those who have travelled in that country. There are comparatively few porters in America. There are nearly 50,000 in the United Kingdom. The system of dealing with passengers' luggage in the two countries is radically different, and tends to economy of labour in the United States. "Whether the American system is better, all things considered, we shall not now stop to inquire. In now proceeding to analyse the condition-of-labour question as it refers to railway working, we shall view the subject under two aspects — the first, that of the differ- ences that distinguish English railways from one another ; the second, that of the more prominent features of con- trast as between different countries. The first of these two subjects of inquiry may again be appropriately subdivided into the three several branches of— (1.) The numbers employed relatively to open mileage and gross earnings. (2.) The proportions of each description of employes relatively to the total on each line ; and (3.) The absolute increase or decrease of the cost of labour in relation to results. The first of these three points is clearly illustrated in the following table : — M 178 RAILWAY PROBLEMS. ~ oo CO ? 8 « I » 1 W § .1 w 5s ■*» R 6 | & t . £.5 d c3 ci 5 III 3s ii O " o ■ • Ii - g. 3 VO VO On u->00 OO N O MN rOOQ v© N to O i/>ro^ - xo'«i-c<)»o>0'^-'^-»o l O'r»o t5-\o fOHM Tf>0 "i O ^O W» f> X »*■ •«*■ I^OO 1#> \0 00 CT>OMor^roi/->'«i-" - >«* rovo mnm >o io CT> r^oo M u-> o N ~ W 0_ rh 0_^O_ O «~- fotots rovo" tTo'toM *• *r ** «jj «c *• O\oo oo TfTfO ^h too *« r^oo n oo Tfvo vO OvMi^C\N Ovo "00 r^O **» *•» q_t--N tJ- i/-> ro r^ *>. rj- ii CO COCO 0_ to ■<*■ l-l f/T H •"* hN H* O OWO C\ iO t^vO t^O^'- | 00r^O " lriTf 00 MtOO Tj-f)COO OMO "1O0O * "ICO to r>» f-»v© r)-vO « wr^ir^w C\ O VO flO O 00 Th N SO OnvO t^N t^iAiO^C^T}-"*! O tOlflffiN tOO tOOO N OWO mOO MO V — gg •o • 8 a> m o (-v J; 55 b g 50 S Bfci C °s aj S c b 3 1 "3 2 "C J3 tT . c can « 1 e c ® t? ^^ 5-§ ^ M g .2 3 § l M |» •o^3 ° "°5 '""'S inh^aogoooo s COST OF RAILWAY LABOUR. 179 It will be observed that the variations in the number of employes per mile of line open are much more con- siderable than those in the numbers employed per £1000 of gross earnings. This circumstance may be held to establish two points — the first, that there are great dif- ferences in the gross earnings per mile as between one railway and another ; and the next, that for this reason the mileage test is not a safe one to apply, since it is possible that on one line the amount of labour actually performed may be twice or three times that on another for the same open mileage. If we examine more particularly the returns that refer to the North British Railway, we shall see how far this principle is carried in actual practice. On that line the number of employes per mile open is not one-third of the number employed on the Lancashire and Yorkshire line, and yet it will be noted that the labour employed per ;£iooo of gross earnings is approximately the same in both cases. The lowest ratio of labour to gross earnings occurs on the South-Eastern line ; the highest on the Great Western and Southern of Ireland. As both of these are mainly passenger-carrying lines, it is evident that no principle or law, calculated to establish the ratios that should be apportioned to passenger and goods traffic, respectively, can be deduced from the figures. It is clear, then, that the relation of labour to results — whether the standard to be adopted should be gross earnings, net earnings, mileage open, tonnage and pas- sengers carried, or some other leading factor — has still to be placed on a scientific basis. There does not appear to be any reason, on the face of it, why, on two lines that have so much in common, as regards their traffic and their geographical position, and the cost and effici- ency of their labour, as the Great Northern and the North- Eastern Railways, it should require 5.69 employes to earn .£1000 in the one case, and only 4.85 in the other; iFo RAILWAY PROBLEMS. nor is it any more easily explicable why the Great Eastern should employ 5.61 hands to obtain the same result as the South-Eastern has arrived at with 3.87, remembering how much alike are the circumstances of the two lines. The matter is one that appears to be well worthy of a larger share of consideration from railway authorities. The average number of employes per ^"iooo of gross earnings on the railways of the United Kingdom as a whole appears to be about 5.4. 1 It will be noted in the immediately preceding table that most of the principal lines are under this average, from which it would seem to follow that the poorer lines employ a considerably larger number of hands to realise the same financial results. In the United States, the average number of railway employ '4s per £1000 of gross earnings appears to have been rather over 2.8 in 1880, which, assuming that all the conditions of the comparison are relevant and paral- lel, would seem to show a very considerably higher revenue in relation to employe's in that country. 2 In point of fact, it would appear as if, on American lines, it re- quired only about one-half the number to earn £ 1000 that is found necessary on English railways. This, again, is a matter that would seem to invite very serious considera- tion on the part of those who are charged with the administration of English lines. The next point to which we have undertaken to direct our inquiries is that of the proportions of each several description of railway employe's relatively to the whole. With a view to elucidating this problem, the following statement has been compiled from returns of railway 1 The total gross earnings in 1884 having been 67I millions sterling, and the number of employes 367,793. 2 In the Census year 1880, 418,957 railway employes in the United States earned a total of 580^ million dollars, or about 146 millions sterling. COST OF RAILWAY LABOUR. iSi labour presented to Parliament in each of the years i860 and 1884: — Statement showing the Proportions of each Description of the Personnel of the Railways of the United Kingdom in i860 and 1884. Number Employed Percentag e of Total ' in Year Increase or Employes iu Description. Decrease in 1884. i860. 1884. i860. 1884. Managers and secre- ) taries . . ) 162 191 + 29 O.15 O.05 Engineers 104 125 + 21 O.IO O.03 Superintendents 283 H3 - I40 O.27 O.O4 Storekeepers I50 105 45 O.I4 O.03 Accountants and ) cashiers . ) 144 147 + 3 O.I3 O.O4 Inspectors and time- ) keepers . \ 856 3.5i8 + 2,662 O.82 O.96 Station-masters 2,231 6,165 + 3,934 2.15 1.68 Ticket-collectors 400 2,060 + 1,660 o-39 0.56 Draughtsmen . 158 248 + 90 0.15 0.07 Agents 862 + 862 0.23 Clerks . 8,630 33,67o -t-25,040 8.31 9-15 •Foremen . 1,468 2,906 + 1,438 1.4 1 0.79 Engine-drivers 3,221 12,874 + 9,653 3.10 3-5o Firemen . 3.291 12,795 + 9,504 3-17 3-48 Guards 3,602 13.312 + 9,7io 3-47 3-62 Artisans . 21,303 55,940 + 34,637 20.51 15.21 Switchmen 3.762 19,012 + 15,250 3.62 5-17 Gatekeepers 1,988 1,605 - 383 1.91 0.44 Policemen 2,135 1,781 - 354 2.06 0.48 Porters 16,178 44,6i7 + 28,439 15-57 12.13 Plate-layers 6,358 29,820 + 23,462 6.12 8.11 Labourers 25,069 70,405 + 45,336 74.13 19.14 Goods managers "3 + 113 0.03 Telegraphs 3,754 + 3,754 1.02 Steam-boat service, ) &C. . . \ 6,041 + 6,041 1.64 Canals 1,963 + 1,963 o-53 Hotels and refresh- | ment-rooms . \ 2,518 + 2,518 0.68 Miscellaneous . Totals . 3.38i 40,317 + 36,93 6 3- 2 5 10.96 103,874 367,793 + 263,919 In this table there are several important lessons to be learned by those who care to undertake its analysis, and have the skill to read between the lines. It will be seen, 1 82 RAILWAY PROBLEMS. to begin with, that there has been a remarkable reduction in the relative numbers of prominent and highly-paid officials, largely as a result of the amalgamation move- ment that has been in progress during the interval. This reduction applies more especially to superintendents, who have fallen from 0.27 per cent, to 0.04 per cent, of the whole personnel, but it is also conspicuous in the cases of managers and secretaries, engineers, storekeepers, and accountants. Clerks, on the contrary, have increased from 8.31 per cent, to 9.15 per cent, of the whole. In reference to those classes of employe's that are engaged in actually working the trains — engine-drivers, firemen, and guards — their percentage proportions have been little affected in the interval; but it is otherwise when we come to deal with manual and lower-class labour. Labourers, as such, have declined from 24. 1 3 per cent, to 19.14 per cent., while artisans have fallen from 20.51 per cent, to 15.21 per cent., and porters from 15.57 per cent, to 12.13 per cent. Platelayers, on the contrary, have increased from 6.12 per cent, to 8.1 1 per cent., and switchmen from 3.62 per cent, to 5.17 per cent. The great diminution that has taken place in the number of level crossings appears to be reflected in the fact that gatekeepers have decreased from 1.91 to 0.44 — a fall of over 3.30 per cent.; while it looks as if law and order were more easily maintained now than formerly, when we consider that policemen have declined from 2.06 per cent, to 0.48 per cent. — a decrease, again, of nearly 400 per cent. The last point to which attention may suitably be called in this table is that of what we may describe as the minor and auxiliary departments of railway service. In the return for i860, no separate records were made of the now considerable numbers engaged in telegraph, steamboat, canal, and hotel and refreshment-room service. In the 1884 return, however, each of these sources of employment is separately considered, and they tend to COST OF RAILWAY LABOUR. 183 throw a curious kind of side-light upon the collateral aspects of our great carrying industry. That railway companies are also great carriers by sea is made abun- dantly evident by the fact that in this service they employ 6041 persons. We are without any record of the tonnage of steamships owned by English railways ; but the Board of Trade returns show that in the merchant service gene- rally one employ6 represents thirty-three tons of steam tonnage; and if the tonnage owned and worked by our railway interest were to be calculated at approximately the same rate, it would follow that they own not less than 199,353 tons in all. Since, however, a large proportion of the number returned as engaged in steamboat service is probably otherwise occupied than in the actual work of navigation, this calculation may be regarded as more curious than correct. A very interesting commentary on the treatment which the railway interest bestows upon our inland navigation is furnished by the fact that they only employ 1963 hands in working upwards of 1700 miles of canals that have come into their possession. In other words, they allow an average of 13 to 40 employe's — according to the extent and character of the traffic — for each mile of railway open, but they only give a fraction over one employ^ to each mile of canal. The cause and the effect are equally plain. Some railways have utterly neglected the canal traffic that has unfortunately come under their dominion, and have concentrated their energies on getting the traffic that would otherwise have been transported by, and is in its character essentially more suited for, canals on to their lines. In looking into the question of railway labour in rela- tion to results in the United Kingdom, there is one point that stands out very prominently, and demands a high degree of consideration. In i860, the railways of the United Kingdom employed ten operatives of all kinds per mile of line open; in 1884, the number had risen to 1 84 RAILWAY PROBLEMS. rather over 19 per mile open. In the interval, therefore, the relation of employes to mileage had just about doubled. The same tendency appears in the labour em- ployed relatively to gross earnings, there having been 3.8 employes for every £1000 received in i860, as compared with 5.4 in 1884. It is a matter of real concern that our railways should have had occasion to employ, in 1884, 40 per cent, more labour to earn £1000 than they did in i860. This increase, be it remembered, has reference to numbers only, and not to wages, about which we may have something more to say by-and-bye. The plea of rail- way directors, in answer to this serious increase of working expenses, would no doubt be that it had been entailed very largely, if not almost entirely, by the provisions which the Legislature has from time to time imposed with a view to the greater security of the travelling public. We shall not at present stay to examine this reply; but it behoves both the railway interest and the public at large to see that it is adequate to the gravity of the fact. With reference to the cost of labour — as distinguished from mere questions of comparative wages or earnings — we shall best elucidate this point by looking into the returns of some of our leading lines over a period suffi- ciently long to indicate the true course of events. On the London and North- Western Eailway, the total amount expended as salaries and wages in the coaching and police departments for the year 1876 was £399,542, and for the year 1884, &47S&7S- ^ n the same period, the number of miles run by passenger trains had increased from 15,577,000 to 19.747,000 miles. The average wages cost per passenger train mile was, therefore, only 5.8d. in 1884, as compared with 6. id. in 1876, being a reduction of about 5 per cent. In the merchandise department of the same railway, the amount expended in salaries and wages in 1876 was £697,188 for 17,006,000 train miles, being an average of 9.8d. per train mile. In 1884, the expenditure under the same head was £834,707, and the COST OF RAILWAY LABOUR. 185 number of miles run by goods and mineral trains was 18,437,000, being an average of io.8d. per train mile. It appears, therefore, that there has been an increase of about a penny per train mile in the goods, as compared with a decrease of only .3d. in the passenger department. This is not quite a satisfactory showing, and is all the less so considering how important a feature of the English railway returns goods and mineral traffic represents. The experience of the London and North-Western line is so fairly typical of that of the country generally that we need not further pursue this aspect of our inquiry. From the Eeport of the Tenth Census of the United States, we have collated, under eleven different headings, the total number of railway employes in that country, and compared them, as far as comparison is practicable with two sets of figures that are not strictly parallel, with the same data for the United Kingdom, in the table that follows. The result is remarkable. It does not, indeed, appear as if there are any two sets of figures in the whole table, except the first, that even approximately correspond, whereas most of the items are so widely divergent as to suggest that the items cannot in all, or even in the majority of cases, refer to the same elements. In a state- ment containing so many startling contrasts, we can hardly suggest any one that is more remarkable than the rest. If, however, we may mention the item that chiefly strikes our own mind, it is that of trackmen, of whom 6.47 appear to be employed per mile open in the United Kingdom, as against only 1.40 in the United States, in- dicating a very serious increase of difference in the main- tenance of English railways, which, however, is doubtless a function of the greater traffic. It will probably also be noted with some surprise that conductors are abso- lutely more numerous in the United Kingdom than in America. 1 86 RAILWAY PROBLEMS. Statement showing the Number of Employes of Different Descriptions on the Railroads of the United Kingdom and the United States, respectively, in 1880 {miles open in United Kingdom, 18,861 ; in United States, 87,782). Description. Total Numbers Employed ia the Numbers Employed per Mile of Railway Opened. United Kingdom. United States. United Kingdom. United States. General officers . „ office clerks . „ station-men . Engineers . Conductors . All other trainmen Machinists . Carpenters . All other shopmen . . Trackmen . All other employes Totals . 824 33,670 64,901 I 13,312 25,669 j 55,940 I 20, 842 s 52,635 3,375 8,655 63,380 18,977 12,419 48,254 22,766 23,202 43,746 122,489 51,694 O.04 I.80 3-47 0.71 i-37 2-99 6.47 2.82 0.04 O.IO 0.72 0.22 0.14 0.55 0.25 0.26 0.50 1.40 0.59 367,793 418,957 19.69 4-77 With a view to throwing additional light upon this subject, Mr. Findlay, of the London and North- Western Railway, has been good enough to have the personnel of that line classified for the author, as per the next state- ment, in order to allow of more ready comparison with that of the railways of the United States. Employment. United States Railways. London and North-Western Railway. Permanent way . Running department . Locomotive works Carriage works . Wagon works Joint lines . Various i 1 No. 122,489 79,650 89,714 127,104 No. 9,l8l 7,625 ( 7,502 ^2,903 ( i,397 { 7,000 l 3,633 Totals 4iS,957 59,8i5 1 Included under " machinists." 2 Platelayers, labourers, gatekeepers, and switchmen. COST OF RAILWAY LABOUR. i87 This table cannot, however, claim to establish an exact comparison, since the figures that refer to the English railway embrace general officers, clerks, and station-men in each separate class, while in the United States returns, all of these are entered under the heading of " various," together with a residuum of 51,694 other employes of whom no specific details are afforded. On the railways of India, which are, all things considered, perhaps the most economically managed in the world, the average number of employes of all kinds per mile open, in 1882, was 18.69, which is a much higher proportion, relatively to mileage, than that found for the United Kingdom, but still lower than that which obtains in the United States. The details are appended : — Statement showing the Number of Employes on the Railways of India on the 20th September 1882 (9936 miles). Departments. Operatives. Average Num- ber per Mile. Administration .... Traffic and telegraph . Locomotive, carriage, and wagon Totals . 11,625 35,6lO 85,068 53,435 I.I7 3.58 8.56 5-38 185,738 18.69 Of the above numbers, only 3796 were Europeans, the remainder being entirely natives. It is now worth while to examine the relation of em- ploye's to mileage open in the different leading countries of Continental Europe. This, happily, is not a difficult in- vestigation, since the railway returns of each European country embrace detailed statistics of the personnel, as divided into the two categories of salaried employed and daily wage-earners. The results for the year 1882 are as under : — iSS RAILWAY PROBLEMS. Statement showing the Total Number of Employes on the Railways of Conti- nental Europe, and the Average per Mile of Line Open and per £1000 earned. Countries. Salaried Employes. Daily Wage- Earners. Total Employes. Miles Open. Average Employes. Per Mile Open. Per £1000 Earned. Germany Austria . Belgium Denmark France . Italy . Luxembourg . Holland Roumania Russia . Switzerland . Totals and ) average ) ••»■■«■. I3L093 54,753 8,257 2,112 158,948 46,836 118 4,472 2,646 154,454 9,38o 172,898 98,082 37,804 4.405 84,044 24,857 6lO 9,634 4,281 61,019 5,946 303,991 152,835 46,061 6,517 242,992 71,693 728 14,106 6,927 215,473 15,326 21,910 12,151 2,090 1,005 17,684 5,693 92 1,132 861 14,478 1,673 14 13 22 6 14 13 8 12 8 15 9 6-3 6.6 7-i 8.9 5-4 8.7 7-i 5-o 573,o69 503,580 1,076,649 78,769 13-6 On comparing these returns with those that we have already given in reference to the United Kingdom, Con- tinental Europe, India, and the United States, the results come out as under : — . Countries. Total Employls. Average per Mile. United Kingdom .... United States ..... Continental Europe Grand total and average 367,793 418,957 185,738 . 1,076,649 19.69 4-77 18.69 13-6 2,049,137 10.5 There is a very considerable amount of instruction as to the comparative conditions of railway administration in COST OF RAILWAY LABOUR. 189 England and America to be got from a comparison of the numbers of employes on the leading lines of each country, relatively to the gross earnings. There is no question connected with railway working in which we shall find more signal and unaccountable variations than in this. The average gross earnings per employ^ on sixteen of the leading British lines appears to be ^195 ; the net earnings come out as ^93. On fifteen leading American lines, however, the average gross earnings per employ^ comes out as £320, or about 70 per cent, more than the aver- age of the United Kingdom, while the net earnings per employ^ are £ 144, or about 53 per cent, higher. It would be interesting, if it were possible, to discover exactly how these differences arise. The particulars of the two series are appended: — 190 RAILWAY PROBLEMS. r*o 8 'B £3 .5 b CO S> •J 00 ON Q O * <* CO « O\00 w N TfNO rj- N t^t^OOO CNOO OnOO O hc^ONNO W CO & c5 On "St V^J M « M ft M ** M |_| S* S 1 s H fi Pi I 00 bO wao hm tj-vo on -3- >-" u->oo « n ao li-* B S.3 t^tsOOO On O 00 VO N i^OvO tJ- CO >- ON On F o2 „_ M «>-iCMM«CJtNcOClMMCl>-< H s? SI 03 '0' bog *> 5 fc £ II ONNOO v> ONVO «m n OnOO OnOO *-" "*■ * VO l^OOO tj-uin w> i-^no On »o '-"«^-wiOi-">-"rO'H co >-« ih w On s? CM lit co ►« ro ^f- O no « M- »0 co "TO m on + I"" N n© 00 Oi Ov M "1 * fo * ionO «"> r^vo vo 10 t^ wiooiNinO O 'i- N no 00 >-« Jt^-q^M^ SO "3 £ » co CO t^ to 6" co cf tC cf w vO cf co of t-H s? NO H W w SJ CO l~» f^vO ** ** <- On t"» ii"> \r> ^-vO NO O NO * O00 TtNVONiOOvN t-^00 00 ON »" •* ON O CO 10 ON O CO ON NO 00 CHO MOO CO i- 00 NO *C8 B 1 N - a< O O OnO witoo COOnUM-i cooo CO Tf co VO MCn1COCN1»OI-ii-it1- CO "" *» CO s? m 9 t <0 1 > <& T3 "o a § .O eS gg^ 11 ' • 'Jill '*& ■ 3 •£ « to cj _- _ - . .«m -si ^gflO 1 £1 _C2 « _, _, .* .^, C\3 p q) Jr« 02 iiilaal •«oljlj 8 li *>.*.*> 8,2 ,2 15 ^5,2,2 ojiJ.>£ji OC!C5hli-]jggh!hlSlzi;cHO^ COST OF RAILWAY LABOUR. 191 S3 »9 r< « s 7-0 <* r* 00 ^ 00 ^ .£ ? ft «i e »s g 1 ^} is Si p» 'W § ►. ■ u< fc. a q W <»1 % »g .3 .§ t <% tJ- N vo r^ ►* mo\*0 irjioNmo vo OOO N ^VO MNfOO r}- uo Ov O •■" V© ► VO00 Ov •* vo «OvO VO ►" 00 rJ-VO tJ-vO vo VO vO WfOO >'lOvNT}-0\N O mtHO N VO w 1-1 OwO 0>Ov« 1-^ P» O00 MO*m . O VO M"1"10^ , ttN O\00 vo t>, tJ- t}- o\ 'NtnanxH ov r^ co 1000 n o ov 10 i-Too vo t^ O»o6"vo"oo"' tC t? 'f fO to ro o VO N ~ II O N Cwor^w o O t^t^o -*oo r^.»-» vo m rj-vo ►"• r^ o\ Tf own co r^vo >o >o >oo_ M *^vq_ co co 1- 1- t-».oo owo o wm i-C dvoo"od"oo t^vd"v6" vo ef o" cf o"oo" t-C ^ CNN0O O O* »OVO vo »O00 fOO C\N t^CONfl rovo NO** Tl-OO N J-^OOvocoi-iOC/l "3-00 < a ej « 08 I ( .•a »1 H e S ■3 S .3 T3 5 «« pq .a I o Ah a, O 2 *-* 6-1 X M C\ vo OsvO 00 00 o> i^ 00 0) p. M co f^vo vo tJ-OO 5 W S3 s? s? a H "*? i 1 S -8 CO00 N VO 00 rj- i-i n VO ■SwJ to | ■^- >i co M CO *+■ -tf- <♦ o E oo_ o^vq^vq^ vo f^vo CO EH vorC^f 1-T ef oovd" rC vo t^ ci - vo vo * CO N bo 9 rt i- © *> « q qv n- vo o CO OMJ»N fO d\ rA. nh I 4 -i 00 vo VO VO VO M Oft3 II ■LT, (vf XT, CvT oo" n" "3 | s? S^ s? ~ eg "H^rsTt- t^ w oo t^ N 5 Sot z; ti| WNvO >fl m oo ro CO VO ^1 >* Tf 1-1 CO ei © -« 1 be Si ? P.S 1 OONN m VO VO N VO •<*■ c5 oo iA vd do d 13 B > u fl H-( N m a NN *N 00 OvVO VO vo n A 00 vo a M Mm N Cf o" ■ o o a cj § g s? s? s? t, w " NM00 m o 00 N Ov 00 <» "»> ON"lN l^N O n oo oo co ^r*^; rf vo" iri pf oo" cf rf OO 5 a 3 §°1 oo vO o" •2 s C\"ii-i r^ ** ON VO VO M 55 ftq CO So "|> |S,| covo« i^i r^ i^oo M 00 vd « « Q t^. ti N t}- Ov ON O 00 N ■«*■ a O 2 3 E ■ '•5 a H 2 VO *Nlf) CO Cv N vO N "3 vO Ov O -i m NvD 00 1 p. vO ■* i- CO i- u-> vO 4 1 s? s? 13 So-S, to 1 vo m co * r^ ** & * 00 I a oo r^j-^vo O i^ c4 o\ M B 5 «1 ON CO « W M Tj- c^ pf CO w" CO i-T cf * M W CO . ."—«■*« . . , m ■ fc" l 1 00 . fi. . . a . . . to a, S 43 ■ "3 1 c S e8 ■e 1 o 3 1 1 i § 8" >> .3 « S"® «> g o « 3 o 0<1«PPh mPh COST OF RAILWAY LABOUR. 195 The figures that are embodied in this table are likely to reward the closest examination on the part of all who are interested in railway economy. They are likely to be especially fruitful of advantageous results if considered in relation to the traffic movement of the countries tabulated, 1 their gross and net earnings, 2 the mileage open, 3 and other statistical data to be found scattered throughout the present work. There may, however, be certain facts that will be difficult of reconciliation. One of these, lying on the surface, is the remarkable discre- pancy in the 'relative numbers employed in maintenance and transport, respectively, in Germany and Eussia. But similar cases might be indefinitely multiplied. The data already given may be supplemented by the following more specific details of the wages paid in Bel- gium, Germany, Switzerland, and France, to the principal classes of railway employes, as taken from the Eeport of the Eoyal Commission on Eailway Accidents : — Statement showing the Average Monthly Wages Paid to Railway Employe's in Continental Countries. Description. Average Wages Paid in Belgium, per Month. Germany, per Month. Switzerland, per Month. France, per Month. Drivers 4 . Guards Shunters . Sorters Signalmen Plate-layers £$, 4s. to £6, 8s. £3, I5s. to £4, 6s. £2, 1 8s. to £3, 6s. £2, 1 8s. to £3, 6s. £3» os. to £2, 15s. £2, 5s. to £3, 10s. £6, 5s. £3, 15s- \ £2, 15s. to ) \ £3> 10s. \ Do. 1 £2, 10s. to ) 1 £3, os. i 1/6 to 2/6 daily. £7 to £8 £4 to £4, 5 s - £2, 5s. to £3 £2, 5s. to £3, 5s. 2/6 per day £8 £2 to £4 2/6 per day Do. £3, ios. to £4 2/6 per day 1 Vide chap. xv. i 2 Vide chap. vii. 8 Vide chap. i. 4 In Belgium, Switzerland, and France, the drivers receive premiums for economy of fuel and oil, which vary from an average of about £10 in Belgium to £40, and even more, in France. 196 RAILWAY PROBLEMS. The foregoing figures would not, however, be complete, unless they were illustrated and supplemented by records of the hours of labour in each country, which, on the same authority, 1 are stated to be as under : — Description of EmployL Average Hours of Labour per Day in Belgium. Germany. Switzerland. France. Drivers . Shunters Guards . Signalmen Plate-layers . Sorters . 12 8 to 14 II » 15 8 „ 14 12 8 to 12* 9 to IO 9 .. 12 9 ., IO 12 „ 14 9 .. 12 9 » 12 12 to 14 14 » 15 12 „ 14 12 14 to 15 8 12 8 to 12 2 12 12 The last country to which we shall direct attention, in reference to the subject of labour cost, is the United States. The Census Eeports for 1880 furnish data which allow of the average rates of wages per month being estimated for each of the fifteen leading railways in that country. It will be noted that the highest average wages were paid on the Central Pacific and the Atcheson, Topeka, and Santa Pe" line, and the lowest on the Chicago, Burlington, and Quincy, and the Baltimore and Ohio. It is not a little remarkable that the average wages paid on one of these lines was more than double that paid on another. The details are as follow : — ' 1 Report of Royal Commission on Railway Accidents, p. 187. 2 8 hours at junctions ; 12 hours at stations. 3 Where a double personnel is employed, sorters, shunters, and signal- men are never employed for more than 12 hours. COST OF RAILWAY LABOUR. 197 Statement showing the Numbers el/Employe's on the Fifteen Leading Railways of the United States during the Census Year 1880, excluding General Officers and Clerks, and the Average Wages Paid per Month in each case. Railways. Number of Employes. Average Wages Paid per Month. New York Central .... Lake Shore and Michigan New York, Lake Erie, and Western Baltimore and Ohio .... Chicago, Burlington, and Quincy Philadelphia and Reading Chicago and North- Western Chicago, Milwaukee, and St. Paul . Chicago, Rock Island, and Pacific . Wabash, St. Louis, and Pacific Michigan Central .... Atcheson, Topeka, and Santa F^ Total and average . 25736 I3,O07 9,052 13,528 14,330 6,139 12,065 11,226 8,405 3,865 10,368 6,843 7,8oo 4,909 5,522 Dols. 41.72 41-95 48.12 43-94 34-76 63,21 3177 38.73 45.16 57-64 34-93 38.80 43-91 42.43 53-67 152,795 4I-I5 On comparing these returns with those that we have already given for the principal European countries, the absolutely higher rate of wages paid in the United States becomes at once apparent, the number of employes — exclud- ing those engaged in general administration, as in the returns for the United States — the total annual amount paid as wages, and the average annual wages paid per employd in the four chief Continental countries being as under : — Countries. Number of Railway Employh. Total Amount Paid as Wages. Average per Employe" per Annum. Germany France .... Austria-Hungary . Russia .... 289,005 239,885 129,464 203,251 ,£13,600,000 10,542,000 6,207,000 9,407,200 £47 44 48 46 198 RAILWAY PROBLEMS. The average wages paid to the same classes of labour in the United States being about £gg per annum, it follows that American railway labour costs more than double that of Continental Europe. This is a fact of great significance in relation to the subject of the costs of working, and the goods tariffs im- posed, as dealt with in other chapters of this work. The natural inference would seem to be, that as a result of requiring to pay so much more for labour, American railways would also require to impose much higher rates for transport. This, however, is very far from being the case. The average rate charged in 1880 for the transport of merchandise of all descriptions carried on the railways of the United States was only .64d. per ton per mile. This figure is believed to be about one-half of the average rate charged on the railways of the United Kingdom. And yet, as we have elsewhere shown, the railways of the United States are able, in general, to pay as good divi- dends as those of the United Kingdom, even with a much smaller average volume of traffic per mile of line open. With such facts as these staring them in the face, English railway directors can scarcely fail to admit that, so far as economy of working is concerned — disregarding for the present the almost equally important question of efficiency of service — the railways of the United States are in the front rank. , In the next table the relation of the personnel to the mileage of line open in different European countries is set forth :— COST OF RAILWAY LABOUR. 199 •p *. ■

£ ^ 1 5 2 «s» t, is S cq e- •S*< ii V H S © ©^ OO Tf O "*• O »n o±2 OvvO O "IN "1 t~» r» SPE 00 00 ioono : : : ct; : G ft. 2 J 3. 00" 10 ■T : : : rf : II 73 E" 1 U OO* 3 ^ I-* l>» f- s CO "" t! IN N a .3 a 03 iflN Ov | ON- NNONH 0>N(0 m O >>i! •>$• •«}• OvNCON'»i-Ti-coNiN* t»- H ^H '-• gd fi J.f s 13 s i *4-C\ wrtOOOOvwwN O t-^00 N co^O NMtl ON* co I CON (iHlniOONtiidn co £ id 00 N rf- u-> t}- t^ ■ >- cooo 11 tJ- 00 g> 000 00 +0»»0>0 N O Oi "1 >>!3 N00 r^Tj-rJ-Tj- ON '*•"-' "") co o< ^H r-» o> to 00 N vo O 10 fl O A 1 »C *d CO CO NN00 1OM NVO ^fO C\ C\ "■> iO«-r}-ro-"r^rf lOOO VO 3 3 t^- n « ovoo m Tfvo Tf ro co u-> uTt 10 10 ■ V to OS E 5 > s cS 1 1 .8, . . . T3 a 1 -5 ' bo 00 O ir t» *es >> a — M f 4 I flTi S!3«,"2' 3 , 'S H g-c =p8 S g 3.5 s 4*3 iji)"ii30es> 200 RAILWAY PROBLEMS. This table so far speaks for itself as to require but little comment. It will be noted that salaried officials prepon- derate in France, Italy, Switzerland, and Russia ; that daily wage-earners are a majority in Germany, Austria, Belgium, Denmark, Holland, and Eoumania ; and that the expenditure on personnel, relatively to the extent of rail- way opened for traffic, is highest in Germany, Belgium, and Eussia, while it is least in Denmark, Austria, Italy, and France. It is not necessary to pursue this subject further. The great array of figures that has, with infinite trouble, and the utmost care to ensure accuracy of details, been brought together, has sufficiently indicated the differences that distinguish the principal countries of the world in re- ference to their railway personnel. "We have also shown the vast importance of the subject, alike as regards the numbers dealt with and the great amounts expended in their maintenance. We are fully conscious that much more might have been made of this matter, which, indeed, is itself so replete with interest and economic value as to be worthy of a special treatise ; but it now needs that, so far as the present work is concerned, we should proceed to consider other railway problems that equally press for solution. 201 CHAPTEE XIV. ROLLING STOCK. Among the factors that determine the ultimate economy of working goods traffic, there are three that stand out with special prominence, namely — 1. The rate of speed. 2. The adoption of full train-loads. 3. The due relation of goods wagons to the extent of traffic. The two last-named considerations are sufficiently im- portant to demand careful analysis at the hands of all who would make themselves familiar with the problems which they present, and the conditions of their solution. Unfortunately, however, the data necessary to an entire appreciation of the questions set forth are not at command. We have not, in England, any details of the extent to which the wagons belonging to the several railway com- panies are utilised. We cannot tell whether the average train-load is made up of wagons that are half full, or three-quarters full, or whether the usual wagon-load is only one-quarter of the capacity. On a number of leading railways, there was for a long period, and still exists, a rule-of-thumb method of deter- mining the capital expenditure required for rolling stock, viz., that such expenditure should be approximately equal to the gross annual amount of the traffic. On many English lines the relation of rolling stock is higher, and 202 RAILWAY PROBLEMS. on others it is lower, than this ratio. The following statement shows the gross annual receipts of English railways, the total numbers of the rolling stock of all kinds employed by the railways, as such, and the percentage of the rolling stock on the total gross receipts for the period 1874-84. Years. Gross Annual Receipts from all Traffic (1=1000.) Number of Vehicles of all Kinds. Percentage of Rolling Stock on Gross Receipts. 1874 1875 1876 1877 1878 187Q 1880 1881 1882 1883 1884 £4S,I42 49,771 50,504 5 I ,° 6 3 51,069 5o,437 53,598 54.924 56,596 57,978 57,557 304,983 317,667 324,016 324,454 327, 104 329,213 337,751 347,662 363,290 389,782 411,188 O.63 O.64 O.64 O.64 O.64 O.65 O.63 O.63 O.64 O.67 O.71 It would be interesting to carry this comparison further, if we had at command the full materials necessary to that end; but in the absence of specific details of the proportions of railway companies' and private owners' wagons on the different lines, any attempt to compare one railway with another would only be apt to mislead. On some railways the wagons are almost exclusively the property of the railway companies ; on others, the wagons owned by private firms are probably as numerous as those belonging to the railways, as such. While the figures just quoted show that the percentage proportion of rolling stock on the gross receipts has in- creased within recent years, this may not necessarily mean that the proportionate expenditure on rolling stock has also been augmented. The cost of constructing roll- ing stock of all kinds has been materially reduced, as ROLLING STOCK. 203 between 1874 and 1884, and it is quite on the cards that the amount invested in rolling stock, relatively to the gross receipts, has not been sensibly raised. What that amount is, in the case of English railways, it is impossible to calculate. If we were to assume the relation of such cost to the gross annual income from traffic to be as above stated, the average would be found for 1884 to amount to about £116 per vehicle; but this is merely an empirical figure, and must not be received as of any real value. Utilisation of Wagon Capacity. In almost all European countries, except England, returns are kept of the total capacity of the wagons 1 belonging to the different railway systems, and of the proportion of such capacity utilised in the working of goods traffic. These data are important as enabling an estimate to be formed of the comparative economy that distinguishes the working of such traffic in each country. The following is an abstract of such returns, as appli- cable to the four principal countries that compete with Great Britain, distinguishing State from private lines. It will be observed that Germany appears to show the best results, with ninety-nine tons carried per ton of wagon capacity on the private companies' lines worked by the State, and eighty-eight tons carried per ton of capacity on the companies' lines under private control. The worst results appear on the State lines of France and on the State lines of Belgium. 204 RAILWAY PROBLEMS. Statement showing the Total Tonnage Capacity of the Wagons Owned by the Principal Railways on the Continent of Europe, with the Total Tonnage of Merchandise of all Kinds Carried by each, the Average Tonnage Capacity per Wagon, and the Tonnage Carried per Ton of Total Wagon Capacity. "gs Total Ton- f 1. Average Total Capacity nage of Tonnage Railways. of Wagons, Merchandise &° 1 Capacity Tons. Carried «g§- per (1 = 1000). Wagon. Germany — State lines 1,803,391 140,613 78 9-57 Private lines worked ) by the State . ) 194,987 19,348 99 10.05 Companies' lines . 269,257 23,846 88 9.62 Austria — State lines . 88,202 6,335 72 9.81 State lines worked by ) companies . ) 9,387 712 76 9-85 Private lines worked J by the State . \ 74,423 5,568 75 9.60 Companies' lines . 696,649 5 2 ,I39 75 10.23 Belgium — State lines . 432,276 21,968 5i 10.02 ' Companies' lines . 72,477 5,672 78 10.06 France — General State lines 85,640 3,008 35 8.41 General companies' lines 1,972,376 88,322 45 8.99 This condition of things seems to be all the more re- markable when we remember that on the Belgian lines the average length of lead is only 66 kilometres, as com- pared with 81 kilometres in Germany. It is undoubtedly necessary to get behind the facts in order to appreciate this anomaly. The truth is, that in Belgium there are many more private owners' wagons than in any other European country, and as these private wagons do not appear in the returns, they disturb, and practically vitiate, the comparison. Contrary to what might have been expected, there io ROLLING STOCK. 205 no European country that utilises its wagon capacity to the same extent as Eussia. The percentage of such capacity utilised in 1882 on the Eussian railways was 49.50 per cent, as compared with 45 per cent, on the German, 38 per cent, on the Belgian and Italian, and 27 per cent, on the Danish lines. The statistics of the average length of lead, and the average percentage of wagon capacity utilised for each Continental country are shown in the following table, alongside of similar returns for passenger traffic, for purposes of comparison : — Statement showing the Average Distance over which Passengers and Goods Traffic were severally Transported in Different European Countries in 1882, with the Percentage of Available Passenger Places Occupied, and the Percentage of Wagon Capacity Utilised. Countries. Average ' Distance Travelled per Passenger. Percentage of Avail- able Places Occupied. Average Length of Lead for Goods Traffic. Percentage of Wagon Capacity Utilised. Germany . Austria . Belgium . Denmark France . Italy Norway . Holland . Roumania Russia Finland . Switzerland kilometres. 30.02 46.77 20.92 29.40 33-54 48.32 29.15 28.25 75-13 106.45 37-48 22.01 per cent. 23.66 24.27 20.79 25.76 25-73 24.10 20.80 32.22 33-9" 25-25 30.93 kilometres. 81.74 81.IO 66.OI 64.18 II2.95 120.25 57-32 78.09 119.86 213.42 107.13 54-23 per cent. 45.04 45-" 38.20 27.09 3875 35-*9 33-89 37-12 49-5o 41.69 31-23 Avei •ages • 42.29 26.13 96.36 38.44 There is not a little reason to believe that the tare of the goods wagons used on the majority of English lines is much greater, by comparison with the live or paying load, than in the United States and some European countries, 206 RAILWAY PROBLEMS. which is sufficient, of itself, to account for the less remu- nerative character of the traffic, relatively to the tonnage carried and the rates charged. Mr. E. B. Dorsey sets this out in his paper on "English and American Eailroads," when he states that " the average English freight car, or, as it is called in England, goods wagon, carries a load of 8 tons, and weighs 5 tons, being 1.6 to 1, while with the American box freight car, carrying 50,000 lbs. (2 2 J tons), and weighing 23,000 lbs. (10 tons), the proportion is 2.13 to i. 1 This represents, in favour of the American system, an enormous economy of tare, and a consequent saving of the cost of working the goods traffic. The Continental practice is much akin to that of England. Few wagons on the Continent have a greater capacity than 10 tons, and in a number of countries they are under that figure. There is no exact mathematical for- mula of universal application, which fixes the relation of tare to carrying capacity, but, in a general way, the tare will be found to be relatively less as the size of the wagon is increased, and hence it may be presumed that Con- tinental traffic, like the English, is less economically worked than that of the United States. 2 The following tabular statement, which we have com- piled from the railway returns of the several European countries, shows the number of wagons owned by the railways, as such, on the Continent, both absolutely and relatively to the mileage open and the tonnage of goods traffic carried : — 1 Transactions of the American Society of Civil Engineers, vol. xv. p. II. 2 This question is more fully considered in the chapters that deal with the special characteristics of American and English railway working. ROLLING STOCK. 207 «ff -5? "J •2 g .S '8 * J |.s •"2 a. ^-2 « I, 1* S 4 .8^ -8 ° 00 S* 8 C s « a 3 Average Annual Tonnage Carried per Wagon. 00 10 On rovo WO vo ro N O t-» O t^ 10 vo Ov ro O t^vo 00 00 00 Ov ro t^t^ioro^Tj-rON *--. N row t>. of o» rovo 00 00 ro vo •* vo 00 H.S8 •s b ° $ S 11 EH «< 00 TTOOO «00lO*O\N t>.VO VO O vo rj- rj- N ONN NfO OWO Ti-VO 00^ *^vO -> 00_ vo q\vo Ov ro O vo ro ro T? t"^ *■ VO Ov 6" 3" « O rf IN ■<*■ Wagon Capacity per Kilometre Exploited. 00 IflMN t-^O lOTj-N rOOO O ON VON O WtsNOOIX) ro " Ov « 11 rj- 10 ro ■* d\00 Ov ro r>. vood Ov i-< vo tJ- vo w vo N vow totOTf m ro Average Capacity per Wagon in Metrical Tons. « NvO -+NO00 00 tJ-VO VO O 00 VO « O OvOvOvOvNOOOOvo ro N o» 0" *>»oo° 00 d i>. d\ b\ om>» d vo OO ON 00 M .t:.s a § a ftS H 10 m ro J* N OvOO 00 ON n r^vo rovo iflNOO Osh t^t^O >* Ovvo vovo t^ w OvO Ov vo N 00 voOO vo t-^oo" «J ro tF t?oo"o6" tFoo" t^ «o ov vOvOONOvvo mn^-m mm M 00 vo Ov N 1 of « nT VO O O ro VON Ov vo cv)^ vo rC ro 00 rot> 0) vo Ov t-C ro •<£ O . 00 vor}-roN ro o» O tt ro Ov r-^ O O 00 vO " ro tt m 1000 r}- Ov t-». N *^ t-^ ~ OsNvOOO vovo OvvO 11 l-~ voiodcvfrfoo cf tC t? vo rfoo rOOO vo «V1 N 11 M 4 N « ro vo w fO rj-vo Ov OwO rC Tfoo" VO vo ■* a 9 B \ a . Germany . Austria . Belgium . Denmark . France . Italy Luxembourg Norway . Netherlands Roumania Russia . Finland . Switzerland Totals and United Kingdo United States 2 o8 RAILWAY PROBLEMS. The remarkable differences found in these figures are more than sufficient to confirm the statement already made as to the great caution with which any returns of the relation of railway companies' wagons to the tonnage of goods carried should be received and considered. These figures would seem to show that France has nearly twice the number of wagons, relatively to the tonnage carried, that is owned by the German lines ; that in Luxembourg about three times the tonnage is carried annually per wagon that Germany or Austria can show ; that in the United Kingdom, where the average length of lead is perhaps shorter than that of any country in the world, the average annual tonnage carried per wagon is about ioo tons less than that of Continental Europe ; and that in the United States, notwithstanding the fact already stated as to the very much greater capacity of the wagons, the average annual tonnage carried per wagon is less than on the Continent of Europe. All these appearances, it need hardly be remarked, are more or less deceptive. Before any one of the figures could be entirely depended on, it would be necessary to know exactly the proportions of companies' and traders' wagons relatively to the tonnage carried in each country. And even then, the desired result could not be attained without taking account of the char- acter of the traffic carried, and the average length of lead in each country, since it is manifest that a wagon may,be more profitably employed in carrying a hundred tons of goods charged at a high rate than in moving twice that tonnage of minerals charged at a low rate, while a wagon that moved iooo tons a distance of ten miles would not have rendered the same amount of service as another that carried 500 tons for thirty miles. As already indicated, Eussia is distinguished by having at once the greatest length of lead among Continental countries, and the greatest utilisation of wagon capacity. Austria and Germany do not come far behind, while Belgium and ROLLING STOCK. 209 Italy are very much on all fours. It is, however, to be remarked that in the countries that have a large mineral traffic, which is generally carried in full train-loads, it might fairly be assumed that the percentage of wagon capacity utilised would be higher than in countries where such traffic is of more limited dimensions. Such does not appear to be really the fact. Belgium has perhaps the largest mineral traffic for its area of any country on the Continent, and yet, in respect of the test of railway economy under consideration, it comes some distance behind Austria, where the mineral traffic is relatively much smaller, and Russia, where it is very trifling in- deed. It may be remarked, by the way, that the poorer countries appear to take the greatest pains to secure full train-loads of passengers, the highest percentage of avail- able places occupied occurring in Denmark, Italy, Russia, Roumania, Finland, and Switzerland. If we proceed to examine the relative circumstances of the principal English lines in reference to the subject of wagon supply, we can hardly fail to be struck by the variations that are found to appear. These may be traced in the following tabular statement : — 210 RAILWAY PROBLEMS. S| ft d C3 U O 1 £ .B*t3 « s °« a I*, a boW S? Os rt- ro^O fO 0\>0 >0 OnOO i^OM "1 M t^^O tJ- co O 00 co ■<*■"■> ro ■<*- -I- ""> ■*vO M«5 MN ONOO O ON N (MMJN *+ 0\ r^OOO cOtI-O n "OO tJ- « OnvO >0 N N <-W U1N tOO ■* "">00 NO ""> ^O O N cfvO SJ M ""} "3- « w i-, cs vo i-i t^ N O OnnO MNO OvOO rOOO «*» oo mo io u-ioo no o\ t-^ *~» fi on no r-» n no>w*m n ON00 VO •-> MOM- On (^ ■«*• »~» ■«(■ f}00 >o N o*NC) rl-oo t-» t-» rj- N W 00 N o" o g p S • S. ,S -s -*^ i _e K « P* t -s ^►3 5 Bi^CG' J 3 c c X. MO * „ B B B fij! oj C O C C -f\ O T3 T3 T3 T3 ?; B B B B B S c8 C O O C JS m x « B^^ g | MW ,5 A > T3 §>£ -g 73 £ SH ~ 2 u a> H C «s =S rS O u ££ oo ROLLING STOCK. 21 1 With reference to the differences that appear in the annual tonnage carried per wagon, and the gross annual earnings therefrom, it is to be observed that the Midland and the Caledonian are perhaps the only two English lines which have adopted the policy of buying up all the private wagons on their system, and it will be observed that both of these lines appear to correspond very closely in the annual tonnage carried per wagon owned. There is, however, a great difference in the gross earnings per wagon as between these two companies, the Midland being £24 per wagon, or 55 per cent, higher than the Caledonian. This fact is quite in accordance with what is known as to the conditions of the traffic on the two systems, the Caledonian having generally a much shorter length of lead, and receiving for a great portion of its mineral traffic perhaps the lowest short distance rates in the world. There are other figures in this Table that require a good deal of explanation. In the case of the London, Chatham, and Dover line, for example, it appears as if each wagon carried 1093 tons during the year; but the fact is, that probably two-thirds of the goods traffic carried on this system, and especially the mineral traffic, is carried in private traders' wagons ; while, as regards the Taff Vale Company,, it is obvious that the traffic is chiefly carried in wagons that are not owned by the company. These and cognate considerations suggest whether the Board of Trade is not to some extent conveying a wrong impression when they publish, as they annually do, not only the total number of wagons owned by each company, but the average number per mile, without any explanatory or qualifying notes. According to these official returns, it would appear as if the average number of wagons used per mile of line open had increased from 20.60 in 1874 to 24.12 in 1884. An increase in the number of wagons per mile open is only what might be expected to follow from the great increase of traffic ; but since the increase of tonnage carried, as between 1874 and 1884, was not 212 RAILWAY PROBLEMS. less than 72 millions of tons, or about 40 per cent., it is probable that the increase of wagons was greater than the ratio indicated by the Board of Trade returns ; and, in any case, it is certain that the real number of wagons employed, and necessary for the actual requirements of the traffic, is not 24.12, as shown in the Board of Trade returns, but nearly, if not quite, double that per mile of line open. In the principal European countries, besides Great Britain, the wagons employed by the railway companies per mile line of open were, in 1882, as under: — Countries. Number of Wagons. Miles Open. 1 Average Wagons per Mile. Germany Austria .... France .... Belgium .... Italy .... 235, 708 172,996 222,232 50,164 57,495 21,785 12,603 16,578 1,885 5,871 IO 13 14 26 IO In the United States the railway companies owned, in 1883, 748,661 freight cars of all sorts, giving an average of 6.2 per mile of line. On the railways of British India, where the companies mainly find the rolling stock, the total number of wagons in 1882 was 44,255 for 10,144 miles of railway, being an average of nearly 4.4 wagons per mile. There are no means of arriving at a correct estimation of the total number of traders' wagons that are run on the several railways of the United Kingdom, and hence there is no method whereby we can judge of the extent to which economy is practised in the relation of this description of rolling stock to the traffic carried. On some lines the wagons of private traders are more numerous than the wagons belonging to the railway company ; on others, the wagons are nearly, if not altogether, the property of the railway. The enormous disproportion of the trafiic ROLLING STOCK. -»3 carried to the companies' wagons is exhibited in the table that follows, showing as it does that the Caledonian Railway, with a total traffic of less than 1 5 million tons, has within 6000 of the same number of wagons as the London and North-Western Railway, with a traffic of about 34 millions ; and that the Midland Company, with a traffic of 24I million tons, has 26,000 more wagons than the London and North-Western, with its total traffic of 34 millions. The effect of this state of affairs is, that if we were to divide the total number of wagons owned by each separate company into the total tons of traffic carried we should find the most remarkable differences. It would appear, for example, as if the wagons of the London and North- Western line carried an average of 694 tons per annum, while those of the Caledonian carried no more than 338 ; and so with the other lines. The real truth is, that there will probably be almost as many traders' wagons as there are wagons belonging to railway companies. This view is supported by strong presumptive, and by a con- siderable amount of direct evidence. The Caledonian Company, for example, arranged some years ago to buy up all the private traders' wagons on their system, so that now the whole of their traffic is practically carried in their own rolling stock. This, therefore, is a good case to adopt as a basis ; and by so using it we find that each wagon belonging to the Caledonian Company carried in 1884 an average of 338 tons of goods traffic of all descrip- tions. If we take this average, and apply it to the 259^ tons of mineral and goods traffic carried on the railways of the United Kingdom in 1 884, we shall find that it would require the employment of over 750,000 wagons, instead of the 454,945 wagons returned as owned by the railways, leaving a remainder of 301,000 wagons to be furnished by traders. It is obvious that this is a very rough and ready method of estimation. Averages do not settle everything ; and in the present case there are several other important elements to be taken into account, such as the general 214 RAILWAY PROBLEMS. length of lead, and the description of traffic carried. With reference to both of these points, the Caledonian Company occupies a somewhat exceptional position. The great bulk of its traffic is carried over very short distances, and about 80 per cent, of the whole volume of its goods traffic takes the form of minerals, which are generally carried in full truck-loads, and not, as in the case of other goods traffic, in smaller volume. If, therefore, the average annual tonnage carried per wagon on the Caledonian system is only 338 tons, we are justified in assuming that the average of the country as a whole, taking into account the much longer average length of lead and the more varied character of the traffic, will be considerably under that figure ; and if we put it at 250 tons, we are not likely to be above the mark. This figure, then, would lead us to the conclusion that there are not less than 1,037,000 wagons employed in carrying on the railway traffic of this country, being 582,000, or about 120 per cent., more than the total number owned by the railway companies. This circumstance supplies food for serious reflection. It must either be that the Midland, the Caledonian, and other companies that have purchased practically the whole of the wagons run on their system have pursued a right policy, or that the course persisted in by the London and North-Western, the Taff Vale, and other lines, of allowing the traffic to be carried very largely in the wagons' of private traders, is the right one. Which is it? There are no figures to show what is the real economic difference between the two systems. But if, as it is reasonable to suppose, a railway company gains considerably by getting the whole of the wagons into its own hands, that arrange- ment is likely to ultimately be the best for traders also. Every railway manager and engineer is aware of the great cost that is involved in sorting wagons, when there are hundreds of different owners to deal with. By having the wagons wholly in the possession of the railway com- pany, this cost is to a large extent obviated. On the other ROLLING STOCK. 215 hand, however, the private trader is often disposed to think that the possession of the rolling stock required for his own particular traffic gives him a greater control over the working of that traffic, and ensures in a higher degree the essential qualities of quicker transport and punctuality. There is something to be said on both sides, and if the problem had been easily disposed of, it would probably have been settled long ago. The complication that arises from traders' and com- panies' wagons being so mixed up as to render any intel- ligible analysis of the results of working goods traffic — so far, at least, as the relation of rolling stock to traffic carried may be taken as a basis — orginated in, and has been perpetuated by, the fiction which regards railway companies as toll-takers only. , Parliament has not provided that the companies are bound to carry the traffic themselves. On the contrary, it has enacted that when a railway is open any persons may use it with their engines and carriages upon certain conditions, and that the railway companies are themselves at liberty to carry the traffic in their own vehicles ; but if they carry it, they may levy tolls not exceeding the amount laid down in their special Acts. The companies, in fact, may elect either to carry the traffic and to provide the whole of the engines and carriages and wagons, or to allow traders to provide the wagons themselves, the company merely providing the locomotive power ; or they may leave the traders to provide both ; but they are not bound to provide accom- modation for the wagons or engines at the stations, or otherwise, except for the mere transit along the lines. Under their general Acts, ample powers are given to the railway companies to control the description and quality of wagons used by traders, and the regulations under which they may be run, so as to ensure freedom from accident; but there is no provision for ensuring that the movements of traders' wagons, when used, shall be 216 RAILWAY PROBLEMS. regulated, and delays prevented, with the same degree of care as is practised with the companies' wagons. The Royal Commission of 1867 recommended that " railway companies should avail themselves of every op- portunity of obtaining possession of the railway plant used on their lines." They added, that " it appears deserving of consideration whether the system of charging a mileage rate for wagons should not be modified, and a system of charging for the wagon by time, instead of by distance, be adopted in Acts of Parliament." There are several arguments of great cogency used both for and against the acquisition by the railways of the whole of the wagons that use their lines. These have been so admirably summarised in the Eeport of the Commission of 1 867 that we present them here in their entirety : — " On some of the older railways the owners of collieries continue to run over the lines with their own engines and carriages for short distances. This is, however, a very exceptional arrangement; but it is a common case on many lines for traders to provide their own wagons, the railway companies finding the engine power and treating them as their own wagons, and in such cases a deduction from the rate of about ^d. per ton per mile is made. "The conditions under which wagons belonging to traders are allowed to be used on railways has been, a matter of complaint. It is alleged that great detention of these wagons occurs on railways; and that whilst rail- way companies enforce with great strictness claims for demurrage when their own wagons are detained by traders, they allow no compensation to traders when long detentions have occurred of traders' wagons. " The railway companies, on the other hand, urge that traders frequently use these wagons as warehouses in which to store, upon the railway sidings, the articles they are sending, and that the delays occur more frequently upon the consignee's premises than upon the railway. ROLLING STOCK. 217 "The traders also allege that their wagons are very- little cared for, and often return in a very neglected condition; but the railway companies allege that the wagons are often of inferior quality, and ill adapted to the service they have to perform. Difficulties are also alleged to occur in the case of a break-down, or when repairs are wanted. The traders complain that the rail- way companies in such cases put the wagons into a siding and leave them there without giving the traders notice of the injury; and the railway companies allege that the traders make difficulties about paying for repairs. " It is quite clear that the use of private wagons, each. of which must be returned empty to its owner, causes much extra trouble and expense in arranging the trains- and returning the empty wagons, and that if all the wagons belonged to the railway a considerable diminution in the number of wagons now necessarily in use on the railways could be effected ; indeed it is alleged that one- third of the whole number might be saved ; but, on the other hand, individual traders might suffer from not being able to obtain all the wagons they might require to meet sudden emergencies, or a general briskness of trade. " It is shown that the profit obtained from a wagon fully loaded is very considerable. It is obvious, however, that the system of charging for wagons a rate per mile run by no means meets the justice of the case, as the cost of a wagon is estimated by time and not by distance. Thus companies have been formed for the purpose of letting out wagons and carriages at a yearly rate, and the rail- way companies make a daily charge for the demurrage to be paid on wagons detained off their lines. " It is obvious that a mileage rate is for long distances as much too high as for short distances it is much too low, the time for loading and unloading a wagon bearing no proportion to the distance run." ( 218 ) CHAPTEE XV. TRAFFIC CHARGES. One of the principal items of the cost incurred in working all railways alike is that which is generally spoken of as " traffic charges " — that is to say, the actual cost of carry- ing on the operations of railways, in their original and still principal function of common carriers. This item does not include any part of the expenses of laying down and maintaining the permanent way, nor of providing and keeping up locomotive power ; but is concerned only with the outlay incidental to handling the traffic, as such. It is, as might be expected, the most considerable item of any in the list of railway expenditure, and in the United Kingdom it usually represents about 30 per cent, of the total working cost. 1 It does not, however, amount to the same proportion of the whole in all countries. In Luxem- bourg it is only 14.20 of the whole, whereas in the neigh- bouring country of Germany it rises to 37.20 per cent., and in Holland, which is also close by, it is 36.18 per cent. Equally remarkable differences are to be found in the varying proportions which traffic charges bear to the total working expenditure on the railways of the United Kingdom. On the Great Western, for example, they only amount to 8.62d. per train mile, whereas on the London and North-Western they are as much as 12.2 id. per train mile. On the Midland they are 9-38d. per train mile, and 1 In the year 1 884 it was exactly 3 1 per cent of the whole. TRAFFIC CHARGES. 219 on the neighbouring Manchester, Sheffield, and Lincoln Jlailway they rise to 1 i.88d. per train mile. These varia- tions necessarily admit of explanations, more or less com- plete ; and considering the vast importance of the subject as a whole, it is desirable that it should be looked into rather closely. In order that the relation which traffic charges bear to the other principal items of railway expenditure may be appreciated, the following table has been compiled, showing, as regards thirteen Continental countries, the working expenditure of their several railway systems, under the four principal headings of general administration, main- tenance of way, traffic charges, and traction and material, or locomotive ppwer : — RAILWAY PROBLEMS. 1 fr l o 4 i v > o a o o o 1-1 f3 S > o X ft. w OOO 'tON'tN O N 00 00 vN •- ro MO Wm is rs\0 WN moo O Ov o pi | CD E 3 oi O OnOO VD lOOO SNN On N On O £vO I^N ON MlOiflM u-)>-VO i-i 5 "O^^t c ! 00 - *1 1 "1 *** K!*^ ^ ,£ TfcocKfft^Tf^i-r'sf rood m." ■<£ m NO DO a> g> e i C3 Li H C o a w Eh a> O « N - Mi-O OM OvO m Hi N Onn rooo CS IT) ►* 00 NJ 00 00 i-i.civc5od + *" rfu-'vo" fOM>d o\ rttON N («)«» N tON N N N On N 00 M E t 1 M «'N O On Q « tJ- tv O 00 O ThONN 2 "">» 00Ot)-OvN'-'"-iNNNN § **00 O C^>- mom nvo roioifl £ vd" ■* vO~ CvTt^-NtMrMTxoN'lOi-rfO N O o s o a a ■ g '3 "^3 s O N rr> ■- 00 00 000 Q MNO •* >0 O m N OvO i/ivovo Mm tJ-v0 vd »-< rj- roo oo m\o oo o on Tf tj-vo § vO_ t^ t£ no CO OnOO vo O O;00 P) CJ^ £ TfTfioN'sff^cTi-rTfrot^rfro Is ON CO d 1 1 1 B a a O III * m O lv m On «">vO O O * On >O00 t>. On r*5VO rOOO NNO OnnO 00 MO On t>. iovd OnOO* O *>. r>. »o rh Cvod CM m. On 6 D si b'N *ONNnO two !<>lfl"tNM 2 1 " 1 N00 On«-> On CM O »0 CM 0O UlM §*^-«CN^'%1-0 K CJ - tN) C5m.no rj-ioo 4 h «" h cm" ►** cn? i-T* to i~r m ■ bo m E a) > 5 o Germany . Austria- Hungarj Belgium Denmark . France Italy . Luxembourg Norway Holland Roumania . Russia Finland Switzerland TRAFFIC CHARGES. 221 A distinguishing feature of this statement is, that as re- gards most Continental countries, the locomotive power amounts to a larger sum than the traffic expenses. This is not the case on English railways. On the latter, as a whole, the average expenditure for locomotive power in 1884 was only 8.35& per train mile, as compared with g.gid. per train mile for traffic charges. In 1873, however, it was otherwise. Locomotive power then cost our railways as a whole n.09d. per train mile, or 2.74d. more than in 1884 ; whereas traffic charges amounted to io.25d. per train mile, as compared with 9.9 id. in 1884, being a reduction of .34d. per train mile. In other words, locomotive power has in the interval been reduced by 25 per cent., while traffic charges have only fallen to the extent of about 3 per cent. 1 The following table shows how the traffic charges per train mile have varied on the principal railways in the United Kingdom as between 1874 and 1884: — Comparison of Traffic Charges per Train Mile in 1874 and 1884 on British Railways. Railways. Traffic Charges per Train Mile in Increase or Decrease of Amount in 1884. Per- centage of Increase or De- crease in 1884. 1874. 1884. Caledonian .... Great Eastern Great Northern . Great Western . Great Western of Ireland . Lancashire and Yorkshire . London and North-Western London and South-Western London, Brighton, and ) South Coast . . \ Manchester, Sheffield, and j Lincoln . . . \ Midland North-Eastern . South-Eastern d. 9.28 II.64 IO.94 9-79 8.23 16.66 11.77 12.24 9-3° 11.78 11.55 9-3° 12.72 d. 8.50 IO.19 9-57 8.62 9-47 13.21 12.21 11.23 8.99 11.88 9.38 9.17 9.80 d. - O.78 - M5 - i-37 - 117 + 1.24 -3-45 + 0.44 - I.OI - 0.31 + O.IO - 2.17 - 0.13 - 2.92 per cent. 8 12 13 12 15 21 4 8 3 1 19 1 23 1 It is to be remarked, however, that, in 1873, locomotive charges were exceptionally high, owing to the high cost of materials and fuel. 222 RAILWAY PROBLEMS. It appears to be clearly proved by these figures that railway companies do not uniformly follow the same methods of procedure, and are not uniformly affected by the conditions of the labour market and the prices of commodities ; otherwise it would be difficult to understand how one line (the Lancashire and Yorkshire) could diminish its expenditure by 21 per cent., while another line (the Great Western of Ireland) advanced its expendi- ture by 15 per cent., in respect of precisely the same item. The truth is, that there is no branch of railway expendi- ture that offers so much scope for economy or extrava- gance, according as the directorate of a railway is disposed to look into the spending department closely, or allow a lax and largely unchecked control of minor outgoings to prevail. This is the veriest truism to all railway men ; but its range of application may be fitly illustrated by the ex- ample of one of our principal and most typical lines — the London and North-Western. On this railway the traffic expenses, in respect of the coaching and police, and the merchandise departments, respectively, were as under for the ten years ending December 31, 1885 : — Items. Coaching Department. Merchandise Department. Wages . Fuel, &c. . Clothing Printing, &c. Horses, vans, &c. Wagon- covers, &c. Joint station expenses Agents' commission Hoists, cranes, &c. Miscellaneous £4,294,876 1,128,500 216,358 299,621 380,528 239,474 £7,948,449 5I7,88o 13,800 181,757 1,828,434 264,014 174,202 57,185 484,661 Totals . • £6,559,358 £11,470,380 Now, it will be observed, as regards the most of these TRAFFIC CHARGES. 223 items, that they represent elements of a more or less elastic character. This will be fully demonstrated if we look into the various items in their relation to the train mileage run, or to any other good standard of comparison and analysis, for different dates extending over the de- cennial period to which our figures relate. It will be found, in fact, that the expenditure per train mile is not the same in respect of any one item for any two dates. One item that is calculated to excite surprise is that of fuel. The expenditure incurred on this account does not, of course, refer to locomotive fuel, which is provided for under the head of locomotive charges. The general ten- dency, however, in respect of all items, has been towards reduction within recent years. This tendency appears more especially in printing, horses and vans, wagon- covers, &c, and agents' commission, all of which are lower in amount for 1885 than for 1876, notwithstanding that in the interval the train mileage has increased by about six millions of miles, and all the other criteria point to an extended business. Wages form a remarkable ex- ception to the contrary. Since it happens that traffic charges may be either high or low, according as the administration is primarily in- fluenced by economical considerations or the contrary, it is important to endeavour to discover how far private companies' lines compare in this item with lines that are controlled by the State. The materials for such a com- parison are to be found in the railway returns of the chief Continental countries, and are presented in the following abstract. In a general way, it will be observed that there is not really much difference between the private and the State lines as regards Germany, Austria, Denmark, Holland, and Italy. In Eussia, however, the private lines run their traffic expenses up to 21.34 per cent, of the whole, as against only 11.83 per cent, on the State lines; and in Eoumania the State lines have also considerably the advantage over the others. France supplies an equally 224 RAILWAY PROBLEMS. notable example of the superior economy of State control ; but in Germany, on the contrary, the State lines show the higher percentage of the two. In considering these figures regard should, of course, be had to the general conditions under which the traffic is worked, and the descriptions of traffic that preponderate, in each country. Statement showing the Percentage Proportions of Total Working Expenditure of Continental Railways, incurred in respect of Traffic Expenses on State and Private Companies' Lines respectively. State Lines. Private Lines. Countries. Per Kilometre. Percentage of Total. Per Kilometre. Percentage of Total Expenditure. Germany Austria Belgium Denmark France Italy . Norway Holland Roumania Russia francs. 7,OI7 -3.272- 6.505 - I,86o 2,342 7,220 - 949 - 4,481 - 2,415 - 2,737 per cent. 37.80 29.03 25.96 29-33 27-57 35-98 24.56 36.90 22.70 11.83 francs. 4.476 -5.438^ 4.322 -2,901 8,524 4.704 - 3.948 -6,3x5 -3.619 _ 5.439 per cent. 35-30 32.54 32.79 27.OI 34-77 31.84 30-32 35-53 28.40 21.34 Briefly, the above figures show that the expenses in- curred in respect of working the traffic, other than loco- motive power (called in English Board of Trade returns traffic expenses), are higher on State lines in Germany, Denmark, Italy, and Holland, and lower on the State lines of all the other countries. Among the many items that have been added to the traffic expenses within recent years, there are two that Parliament has compelled railway companies to adopt in the interest of the public safety. The first of these is the block system. The second is continuous breaks. There is no record of the exact amount that these two systems have added to the working of British railways. TRAFFIC CHARGES. ? 225 The increased expenditure which they have involved can only, therefore, be arrived at by inference or calculation. The experience of the London and North-Western Bail- way Company is, however, set forth in one of their recent reports so specifically that we cannot be far wrong in accepting it as a guide to the experience of railways in general. The sum of .£750,000 had been spent upon the con- struction of block signals and stations by the company just named, up to the end of 1877. The expenditure on fitting continuous breaks (on the Clarke- Webb system) to the rolling stock of the same company had been about £100,000. 'In. addition to this capital outlay, the London and North- Western directors report that "the wages of the additional men required for working the block signals and stations amounts to £50,000 a year, which, with the interest on outlay, renewal, and maintenance of signals, stores, and other incidental expenses, represents an extra annual expense of little short of £200,000 per annum." Adopting these figures as a basis of estimation, it would appear that the additional capital expenditure entailed by the block system on the present railway mileage of the United Kingdom would be £8,601,000 sterling, or a fraction over one per cent, on the total railway capital expenditure of the country. Assuming, however, that the cost of maintenance of the block system was the same throughout the country generally as in the special case of the London and North- Western system, the additional annual expenditure in- volved would be a trifle over 2\ millions sterling, or roughly, about 6.3 per cent, of the total working expendi- ture of all the railways of the United Kingdom in 1884. Again, it has been stated that the cost of the general adoption of continuous brakes on the North- Western system has been about .£100,000. This amounts to P 226 RAILWAY PROBLEMS. about £60 per mile, and if the same average is adopted for the whole railway mileage of the three kingdoms, the total additional capital expenditure involved by this compulsory enactment would be ^1,13 1,840. The total additional expenditure necessitated by both requirements would, therefore, be not less than 9! millions sterling. That there are considerable reductions possible in the working of railway traffic is sufficiently obvious. Gene- rally speaking, it may be claimed that the lines that show the highest outlay under this head are the lines that afford the greatest facilities to the public. But a very great deal of such expenditure might be got rid of if there was less competition between one line and another for traffic that' is probably remunerative to none under existing con- ditions. ( 227 ) CHAPTEE XVI. EXTENT AND CHARACTER OF RAILWAY PASSENGER TRAFFIC. To most people the habitual use of the railway as a means of getting from place to place is so much a part and parcel of their everyday lives that they do not stop to inquire how our forefathers got along in the absence of railways, or what is the extent of this influence on the economy of their existence. A glance at these points may not in- appropriately introduce us to the more modern aspects of our subject. The retrospect need not necessarily be carried very far back. Up to the year 1830 the speed that could be main- tained in railway travelling depended mainly on the previous adoption of three mechanical inventions — the shoeing of horses, the application of steel springs to carriages, and the formation of roads of a homogeneous surface. 1 From seven and a half to eight miles per hour was then regarded as a fair stage-coach speed. The quickest travelling of that day was sixteen miles an hour. For a number of years after the first introduction of railways, the speed of travelling was limited to less than twenty-five miles an hour. By-and-by this speed was increased to thirty, and ultimately to forty, miles per hour. Under special circumstances, Mr. Crampton obtained over fifty miles an hour between London and Birmingham in 1 847, and Brunei ran on some parts of the Great Western 1 Edinburgh Review, 1876, p. 357. 228 RAILWAY PROBLEMS. line, some years later, at seventy miles an hour — a velocity equal to that of a swift on the wing. Nowadays most of our express trains travel at a speed of forty-five to fifty miles an hour, and some of them at a still higher velocity. The effect of the development of speed in railway tra- velling has thus been described by a recent writer of high authority : — • " The great bulk of railway passengers now travel by third-class carriages, and thus represent the wagon and cart, and the pedestrian, travellers of the days of coach- ing ; while the first and second class passengers may be compared with those who formerly made use of private carriages, postchaises, and fast coaches. We shall be far within the mark in assuming that each of these individual | journeys has been performed in one-fourth of the time that would have been possible in the absence of railways. Of course the mere number of journeys, irrespective of I their rapidity, would have been inconsistent with our industrial condition half a century ago. The increase of speed is one of the elements which have rendered possible j the actual number of journeys now taken, with which, as Nji fact, we have -to deal. " If we allow, then, that in each passenger journey taken on our railways in the past year, 1 forty minutes less time has been occupied than would have been consumed in the performance of such journey by the old methods, 'the aggregate of time thus calculated is somewhat more than 1,500,000 years, allowing a working year to consist of 300 days of eight hours a piece. The total number of persons occupied in professions, industry, and commerce in Eng- land is returned, in the census of 1871, as 6,637,331 persons. The returns from passenger traffic in England are something more than 85 per cent, of the total pas- senger income from the railways of the United Kingdom. 1 This applies to 1876, when 534^ million passengers were carried on the railways of the United Kingdom. In 1884, however, the numlcr carried had increased to 695 millions. EXTENT OF RAILWAY PASSENGER TRAFFIC. 229 This gives a relative aggregate of 1,275,000 years for the gain of England alone, which is equivalent to an addition of rather more than one-fifth to the working time of each industrial individual. Thus, as far as the time actually- occupied in travelling is an indication of the useful occu- pation of the productive classes in England, one-fifth has been added to the economic power of our population by the use of railways for passenger traffic ; a fact which may very well allow a very wide margin for travelling merely for luxury or for amusement." So far as these calculations describe the economy effected by the introduction and general adoption of railway travelling, they will, of course, be found to affect in the highest degree that nation in which the community makes the most general use of railways, and in the least degree the nations that show the lowest ratio of railway travelling to population. From this point of view, then, it is important to consider how far the different leading countries of the world have taken advantage of the opportunities for the economy of time and labour which the railway system has so bounti- fully placed within their reach. The first statement that we shall make use of for this purpose is one that shows the proportions of first, second, and third class travellers carried in each European country in the year 1 882 : l — 1 In the United States there is no such distinction of railway travellers, so that we cannot include that country in this table. 230 RA IL WA Y PROBLEMS. 00 00 $L >a 6 ^ I 5- eg 05^23 N to rovO r- t-» 11 W«l O O Ov vo Sci S boP VO r^OO 00 VO 00 vo vo 00 t-^00 VO 00 Ph <-' 00 'i-N O*^"-" "- 1 « to O tO00 O \0 - O fOlslsioO h « 10 C\ Ov 10 N to O N ♦« ■>*• N 00 VO O ON N*^tor^Tft\li-^i-it^-«N t^ T? CO Tl- 10 CO «i CO N 10 o\ N Tf VO 00 Tf M UIOV C\ vO 1 (OU1 t^ CO vo VO to rf . : m . Tf : : 10 3 00 •* 1-1 * Tf fi * VO » en a j3 C3 O O Tf-vO O fOOO f-» O N 1*1 N «* T3 N 00 00 OO VO tJ- rf vo CO00 CM CM ■* O E vO"-" — 0'-Ti-ovi/-iroN ON 73 A «# Tj- TJ-VO MOO ►■ MOO VO 00 H * CO Tf « W CO >-l ON 1 ** to IO ■ E p to 1 1 a Ph 73 « rl- N vo t^OO t^ t1- ro to 11 0\ «# VO O to c\vo »ooo o» vo r^vo vo to vo Ov N VO O ON CM O N Tl-tOO to CM ■ OOOlO hOO tT to Tj- Tf tM "0 a N VO VO u .0 a a & vo Tl- T]- covo — Ttoo 10 >o vo N CO mio w» wi t*» tJ- oi vo VO 00 1- VO CM ©> to t-» to VO 10 6 et «r »* m on Tl- CO 60 . eS • E • B > . 3 oj S £* T3 S § C * 60 a to 3 *S J2 a ►,&** . ....s . . g 3 "0 M a e« S & *~>"5 S '^'3 d| S « c4flge3C0> T3 eSOOo3.5s O h-» [5 P A S EXTENT OF RAILWAY PASSENGER TRAFFIC. 231 This table scarcely seems to bring out clearly the rela- tion of third-class passengers to the total travel that might have been expected for the countries tabulated. On the contrary, it is full of surprises. It shows that third- ». class travel is more general in the United Kingdom than in any other European country, the average of passengers of that class being 86 per cent, in our own land, as compared with only 69 per cent, for eleven Continental countries. It would, however, have been natural to look for the greatest amount of travelling of an inferior class in the poorest countries, where the people, presumably, could least afford to use higher-priced accommodation ; and in that case, Italy, Roumania, and Finland, which show a considerably higher percentage of superior travel than England, would have had their relative circum- stances reversed. There is, however, an adequate ex- planation, which will readily suggest itself. The Continental lines do not, as a rule, provide the same facilities as the English for third-class travellers; and then, again, in some European countries, it is only the better-off who travel at all, whereas there is none so poor in England that he does not sometimes make use of the rail. This latter argument appears to receive a most remarkable support from the statistics of travel in Euro- pean countries, relatively to population. It will be ob-~\ served that in our own country the number of travellers (1 is in excess of that of all the rest of Europe put together. 1 ^ This relation of population to railway travel is so interest- ing that we have thrown the returns for the principal European countries and the United States into the form of a short table : — 1 In this statement we have included France, which had a total of 204 million railway travellers in 1 883, bringing up the total of Continental Europe to about 662 millions, against a total of 695 millions for the United Kingdom. 232 RAILWAY PROBLEMS. Statement showing the Relation of Railway Travelling to Population in the Chief Countries of Europe in 1882, and in the United States in 1883. Countries. Population (1 = 1000). Number of Railway Passengers (1 = 1000). Number of Railway Travellers per Head of Population. United States 5 .152 269,583 5-4 Germany . 45. 2 34 232,564 5-i France 37,321 204,700 5-5 Belgium . 5.720 53,300 9-3 Russia (in Europe) 86,359 37,2IO 0.4 Austria-Hungary 37,800 47,412 1.2 United Kingdom 36,468 694,991 19 England 25,480 621,131 25 Scotland 3,661 54,305 15 Ireland ..... 5.327 19,555 3-6 It is clear, then, that the United Kingdom, and Eng- land and Wales in particular, are immeasurably in front of the rest of the world in reference to their habitual use of the rail. Scotland, however, comes greatly be- hind England, and Ireland a long way behind both. In no case are season-ticket holders included in this calcu- lation, otherwise the pre-eminence of the United King- dom would be still more manifest. The total number of travellers does not, of course, afford an infallible index to the amount of travelling done, since the average distance carried may be mueh less in one country than in another. But the position which we have already found England to occupy is certified, in a marked degree, by the following return of the average receipts from railway passenger traffic per head of the population in different countries : — EXTENT OF RAILWAY PASSENGER TRAFFIC. 233 Statement . showing the Total Receipts f rom Passenger Traffic in Different Countries, and the Average Receipts per Mead of the Population. Average Countries. Receipts Population per Head (£1 = 1000). (1 = 1000). of Popu- lation. £ t. Germany I2,2l6 45> 2 34 5-4 Austria-Hungary 4,827 37,800 2.6 Belgium . IJ05 5,720 5-9 France 13,425 37,321 7.6 Denmark 359 1,969 3-6 Italy . 3,176 28,459 2.2 Holland 1,073 4,225 5-i Roumania 335 5,376 1.2 Russia 7,229 86,359 i-7 Switzerland 1,094 2,846 7-7 United States 28,820 50,152 1 1.4 United Kingdom .... 25,160 36,400 13.8 It will be observed that although in the United States the number of railway travellers is only 5.4 per head of the population, asxjonipared with 1 9 in the United King- dom, yet the average expenditure per head is 1 1 .4s. as compared with 13.8s. in the United Kingdom. This fact may be taken to prove the much greater average length of journey in the United States, since the range of fares is not materially higher, if at all. There is, however, still another test to which the general incidence of railway travelling in different coun- tries may be subjected. The railways, as such, are not so much interested in the more general economic aspects of the question under consideration, as in the problem of how far they can develop traffic relatively to their mileage and their capital expenditure. The first of these two is a very important question, as bearing not only upon the point of how far the population of each country takes advantage of the facilities for locomotion provided for it, but also upon the further point of how far such facilities are equal to the requirements of each particular country. 2 34 RA IL WA Y PR OBLEMS. The United Kingdom has the greatest passenger traffic per mile of line open of any country in the world, and derives correspondingly large receipts therefrom. It will be observed in the following return that the number of passengers carried per mile was 37,000 in the United Kingdom, as against 28,276 in Belgium, 12,198 in Holland, 12,045 m France, and 10,571 in Germany, these being, in the order given, the next largest passenger- carrying countries relatively to their mileage. Statement showing the Number of Passengers Carried on the Raihoays of Different European Countries, and the Average Number per Mile of Line Open. Number of Average Countries Miles Passengers Passengers Open. Carried Carried per (1 = 1000). Mile. Germany 21,785 232,564 10,571 Austria-Hungary 12,603 47,212 3,632 Belgium . 1,885 53,300 28,276 Denmark . 926 7,037 7,599 France 16,578 204,758 12,045 Italy * . 5.871 34.271 5,712 Norway . 970 2,471 2,547 Holland . 1,406 17,151 12,198 Roumania 899 1,403 1,561 Russia 14,226 37,210 2,658 Switzerland 1.795 22,658 12,623 Totals and average . United Kingdom .... 78,944 660,035 8,355- 18,864 694,991 37,000 87,781 269,583 3,070 The United Kingdom, as we have already seen, differs from most other countries in respect of the average dis- tance over which each passenger is carried. There is, however, no standard by which we can test the average length of each passenger journey on British railways, owing to the absence of any record of the passenger mileage. In the United States the number of passengers EXTENT OF RAILWAY PASSENGER TRAFFIC. 235 carried one mile in 1880 was 5740 millions, and as the total number of passengers carried was 269J millions, it follows that the average length of each passenger journey was 21.3 miles. The highest average mileage was in the Pacific States ; the lowest in those of New England, as the following figures show ; — Statement showing the Number of Passengers Carried on the Railways of the United States in 1880, with the Numbers Carried One Mile, and the Average Distance Travelled by each Passenger. Group of States. Number of Passengers Carried (1 = 1000). Number of Passengers Carried One Mile (1 = 1000). Average Distance Travelled per Passenger, Miles. New England Middle .... Southern .... Western .... South-Western Pacific .... Totals and average . 52,156 175,276 7,463 22,86o 394 n.432 875,102 3,051,158 329,481 956,234 15,707 5",427 17 17 44 42 42 45 269,583 5,740,112 21.3 On the Continent of Europe the average length of journey varies from a maximum of 106.45 kilometres in Eussia to a minimum of 10.63 kilometres on the local lines of France. The following statement shows the average length of passenger journeys on the State and other lines of the principal European countries in 1882:— 236 RAILWAY PROBLEMS. Statement showing the Number of Passengers Carried on the State and Private Railways of Different European Countries, and the Average Distance Travelled by each Passenger. Countries. Germany — State lines . Private lines worked by the Companies' lines Totals State Austria — State lines . Companies' lines Belgium — State lines . Private lines Denmark France — State lines . State lines worked by companies Private lines . Local lines Italy — State lines . Private lines Luxembourg Norway . Holland Roumania Russia . Switzerland Number of Passenger Train, Kilometres. 5,558,195 485,000 923,696 6,966,893 241,680 1,965,796 1,018,271 97,020 214,810 260,919 57,599 6.443,988 105,202 807,195 1,656,091 6,713 62,218 484,582 105,336 3,961,112 498,772 Number of Passengers Carried. 184,636 14,745 33,l8l 232,563 4,954 42,256 47,986 5,313 7,3o6 8,553 3,446 182,863 9,895 18,115 34,27i 438 2,167 17,151 1,402 37,209 22,657 Average Distance Carried per Passenger, Kilometres. 30.IO 32.85 27.82 30.02 21.22 18.26 29.4O 30.50 16.84 35-27 IO.63 44-56 48.32 I5.OO 28.71 28.25' 75-13 106.45 22.01 ( 237 ) CHAPTER XVII. FINANCIAL ASPECT OF COACHING OR PASSENGER TRAFFIC. There are two aspects of the passenger traffic of rail- ways that appear to demand paramount consideration in any analysis of railway control. The first is that of how far there is adequate provision made by the rail- ways of the country as a whole for encouraging and developing traffic of this kind; the second, that of the return that is earned upon this traffic, considered per se. In some quarters there is a rather strong feeling that the railways of the United Kingdom are not over suc- cessful in either respect — that they do not give the utmost facilities for fostering a traffic which has had largely to he created, and that they give certain facilities that are not really required, in such a way, and to such an extent, as to yield returns the reverse of satisfactory to their shareholders. It is not quite so easy a matter as it might at the first blush appear to bring this question to the test of actual figures. The difficulty is very much increased in the case of the United Kingdom, seeing that, although the passenger traffic receipts are separately distinguished, yet the expen- diture incurred in working this description of traffic is not ascertainable. There are, however, several sides from which the problem may be attacked in such a way as to throw light upon its character and tendencies, if not quite to 258 RAILWAY PROBLEMS. lighten the darkness in which the present system of making out railway accounts is calculated to envelop it. The first of these to which we propose to call attention is that of the gross and the net passenger traffic per mile. In the early history of the railway system the pas- senger traffic was much more valuable than goods or general merchandise, and that notwithstanding the fact that the earliest railways were constructed mainly with a view to the transport of goods traffic. 1 In 1843, the gross value of the passenger traffic of England per mile amounted to .£1729, as compared with £792 for goods traffic. In 1869, the passenger traffic only reached an average of ,£1063 per mile, as compared with £1463 per mile for goods traffic. In 1884, the passenger traffic amounted to .£1370 per mile, and the goods and mineral traffic to .£2000 per mile. It is manifest, therefore, that a very radical change has come over the relative character and value of passenger and goods traffic within the last thirty years. This change has been increasingly marked within the last ten or fifteen years. In 1869, the proportion of the total receipts of our railways received from passenger traffic was 46 per cent.; in 1884, it had fallen to 42 per cent. There is, however, a somewhat remarkable difference in the relation of passenger to goods traffic in the three divisions of the United Kingdom. In England and Wales, passengers contribute 43 per cent., and general merchandise 5 7 per cent., of the whole gross receipts ; in Scotland, passengers only supply 39 and goods 61 per cent. ; while in Ireland, again, passenger traffic rises to 1 The original Stockton and Darlington Railway, the pioneer passenger line, was designed at first only for the transport of coal from the collieries in South Durham to the Tees ports. The sole object of the promoters of the Liverpool and Manchester Railway, as originally designed, was the transport of merchandise between these two towns. COACHING OR PASSENGER TRAFFIC. 239 55 per cent., and goods traffic falls to 45 per cent., of the total. For the reason already mentioned — the absence of any specific record of the profits derived from each of the two main sources of traffic — it is impossible to estimate the proportions of the total net receipts which they respectively furnish. In most European countries, and in almost all new countries in which the railway system has not reached a high state of development, the passenger traffic will generally be found to be the more important of the two. It would seem to be an almost invariable principle, in regard to railway affairs, that the goods traffic takes a rather longer period to mature, while passenger traffic undergoes immediate development. The United States would appear to be a singular exception to this rule. la that country, the passenger receipts averaged, in 1883, £428 per mile, against an average of ^1130 for goods receipts. The passenger traffic is thus infinitely the less important of the two, since the goods traffic yields about 170 per cent, more gross revenue per mile of line open. There is, as we have already seen, this further excep- tional feature about the passenger traffic of the United Kingdom, that it is larger in point of the numbers carried per mile of line open than that of any other country in the world. This might, of course, be almost expected, from the density of the population, but not to the extent that is really the case. Belgium is almost on all fours with England as regards density of popula- tion, and yet it appears that in England the number of passengers carried is nearly 9000 per mile open more than in Belgium. The differences that distinguish the several leading countries of the world, in reference to the gross receipts per train mile, naturally suggest the reflection whether there is any reason, in the nature of the case, causing ; 240 RAILWAY PROBLEMS. one country to be superior to another in this result, and whether there may not possibly be some defect of control or system to account for the lower range of train mile receipts in the United Kingdom. There are two obvious considerations that occur in examining this problem — the first, that train-mile receipts may be increased by higher fares, or by a large propor- tion of first and second class passengers; the second, that the same result may be produced by taking care to secure as far as possible full train-loads, or, in other words, to avoid running so many trains. There is not, perhaps, much reason, on the whole, to think that the passenger fares in England are greatly above the average of other countries. There is, however, no exact process whereby to put this matter to a test. The only reliable method of estimation would be to ob- tain from the railways of each country the total number of passengers of each class carried one mile, together with the receipts therefrom, and then divide the passenger miles into the receipts for each class, in order to get the true average fares per mile in respect thereof. But in the absence of this desirable standard of comparison the matter is left largely to conjecture. It is not so, however, with the proportions of pas- sengers that travel in different classes. This is given for every important European country, including our own, and we are thereby enabled to calculate the pro- bable influence of higher-classed travel in affecting rail- way passenger receipts. The first point that strikes an inquirer into this sub- ject is the remarkable proportion of increase in the receipts from third-class travel within recents years. In 1845, the total receipts from passenger traffic in the United Kingdom was about four millions sterling, of which only £622,000 were derived from third-class travel, being about 1 6 per cent, of the whole. In 1 8 6 1 , COACHING OR PASSENGER TRAFFIC. 241 passenger traffic yielded about g% millions sterling, of which 3-^ millions, or 36 per cent, of the whole, were earned by third-class travel; but in 1881, the porpor- tion of total passenger receipts contributed by third-class travel had advanced to 64 per cent. This movement is still making progress, as the following statement of the receipts from passenger traffic from 1874 to 1884 will clearly show : — Statement showing the Receipts from Passenger Traffic in the United King- dom, and the Total Percentage Proportions thereof Received from Third- Class Travel, 1 874- 1884. Years. Total Receipts from Passengers Receipts from Third-Class Passengers Receipts from First-Class Passengers Percentage of Receipts from Third-Class. (£1 = 1000). (£1 = 1000). 06 1 = 1000). 1874 £18,772 £10,523 £3,785 56 1875 19,364 I I,o82 3,982 57 1876 19,623 11,624 3,816 59 1877 19,846 ",934 3,669 60 1878 20,047 11,172 3,568 56 1879 19,340 11,921 3,219 62 1880 20,341 12,750 3,250 63 1881 20,689 13,232 3,138 64 1882 21,572 14,108 3,088 65 1883 22,059 14,703 2,998 6 7 1884 22,247 15,207 2,833 68 In some other European countries the receipts from the different classes of passenger travel are not distin- guished, so that a table that would show for all other countries figures corresponding to those above would be difficult to construct; but the information is given in another, and perhaps equally effective, form, in the pre- ceding chapter, where the percentage of third-class travel on the total is shown for each country. The extraordinary increase in third-class travel in the^ United Kingdom is due in great part to the better facilities afforded by the railway companies for passen- gers of this description, and these better facilities are 242 RAILWAY PROBLEMS. found alike in the speed of the trains, the number of trains available, and the accommodation provided in the v carriages. The English lines now, beyond all comparison, make the best provision for the lowest class of travellers, \ and their action in this regard has been rewarded by an / expansion of traffic which, a few years ago, would hardly / have been believed possible. The usual parliamentary fare in the United Kingdom \ is a penny per mile. Whether the railways in general have made any abatement on the statutory fares within recent years it would be difficult to determine from the limited data afforded on this point But that there has been a general reduction in the average amount paid for each third-class ticket is shown by the following table, which compares the first and the third class fares for a period of fourteen years, although it is to be noted that the reduction of .4s. in the former and of .yd. in the latter may be due to the shorter average of the journeys made : — Statement showing the Total Number of First and Third Class Passengers Carried in England and Wales in the Period 1870-84, the Total Receipts therefrom, and the Average Fares per Passenger. Years. Number of First-Class Passengers (1 = 1000). • Receipts therefrom (£1 = 1000). Average per Passenger. Number of Third-Class Passengers (1 = 1000). Receipts therefrom (£1 — 1000). Average per Passenger. £ s. £ d. 1870 27,682 3,329 2.4 199,133 6,177 7-4 1872 3 2 > OI 5 3,655 2-3 275,470 8,681 7.6 1873 3 2 .474 3,688 2-3 306,124 9,941 7.8 1874 33.099 3,785 2-3 325>655 10,523 7.8 1875 37,136 3,983 2.1 350,859 11,082 7.6 1876 36,786 3.816 2.1 383,191 11,624 7-3 1877 36,105 3.670 2.0 396,110 ",934 7.2 1878 34,737 3,568 2.1 411,683 12,172 7-i 1879 3 2 >59i 3.219 2.0 414,610 11,921 6.9 1880 32,097 3,250 2.0 450,677 12,750 6.8 l88l 3i,576 3.139 2.0 471,696 13,233 6.7 1882 30,777 3,088 2.0 497,124 14,109 6.8 1883 29,897 2,998 2.0 523,420 14,702 6.7 1884 28,234 2,834 2.0 537,582 15,207 6-7 COACHING OR PASSENGER TRAFFIC. 243 If the average first-class fare is assumed at 2d. per mile, and the average third-class fare at id., it would follow that the former represented an average of 12 miles, and the latter an average of 6f miles, per passen- ger journey. These averages, as we have elsewhere shown, are much under those of Continental countries and the United States. It is also to be observed that in the majority of Con- tinental countries, and in the United States as well, the average receipts per passenger carried have been reduced within recent years. The movement which we have already found to have been characteristic of English passenger traffic has, therefore, been a general one, and as, in foreign countries, it has been coincident with, and, created by, a lower tariff of fares, it is to be presumed that, in regard to passengers, as in regard to merchandise, the economies effected in the working of railways, and the greater volume of traffic dealt with, have enabled a lower range of fares to be adopted. 1 In the United Kingdom the average earnings per^ passenger carriage were reduced, between 1874 an d 1884, from £888 to £797, or 10 per cent. Concur- / rently with this movement, the number of carriages for each 1000 passengers rose from 20 to 22. It appears, therefore, that the increase in the number of carriages relatively to the number of passengers carried had some- thing to do with the decreased receipts per carriage, but a more potent factor is likely to have been the larger proportion of third-class carriages. The increase in the proportion of third-class passengers, to which attention has been directed, is mainly a product of the last decade. In 1845, the number of third-class passengers carried in England and Wales was only 39 per cent, of the total. But in 1861 the proportion had 1 The average fare per passenger carried in France was 2.5s. in 1872, and 2.O8. in 1883. 244 RAILWAY PROBLEMS. grown to 56 per cent. In 1874, as we have already- seen, it had not passed the latter figure, whereas within the next ten years 68 per cent, of the whole number transported were third-class passengers. In Eussia, the proportion of the total passenger receipts a received from third-class travel is larger than it is in the I United Kingdom, amounting, as it did, to 7 1 per cent. J in 1883. In Belgium, only 61 per cent, of the total) passenger receipts are derived from the same source, and in other European countries third-class travel contributes^ less than 60 per cent, of the total passenger receipts, as compared with 68 per cent, in the United Kingdom. For eight Continental countries, the proportion of the total passenger receipts received from third-class travel in 1883 was 5 4 per cent., as the following figures show : — Statement shoicing the Receipts from Different Classes of Passenger Traffic in Continental Countries (i fr. = iooo). Percentage of Total Countries. First Class. Second Class. Third Class. Totals. Receipts Received from Third Class. francs. francs. francs. francs. Germany 17.432 89,230 146,318 305,404 48 Austria 8,602 34,515 67,606 120,676 56 Belgium 6,670 9,893 . 25,900 42,624 6l France B distinction is made o n many line 'S. Denmark Do. do. do. , Italy . 15.659 28,630 34,942 79,400 44 Holland 4.746 9,504 IO,957 26,818 41 Koumania 1,232 2,327 4,149 8,373 50 Russia . 12,420 32,612 128,449 180,738 71 Switzerland . Totals . 2,233 9,427 15,678 27,338 57 68,994 216,138 433,999 791,371 54 These comparative returns suggest some interesting problems, both social and economic. Can it be that the nations of Continental Europe, which are generally much poorer than England, are, after all, accustomed to travel in a superior class ? Or is it that the English people COACHING OR PASSENGER TRAFFIC. 245 are more thrifty, and prefer to use the third class for economical reasons ? Or is it that the superior ( facilities for third-class travel in England attracts, while in other countries the absence of such facili- ties repels, travellers of humble means ? The last- named, we believe, will be found to be the true reading of the riddle. The system generally adopted on the Continent tends to force travellers into a superior class. Third-class trains are invariably extremely slow. Third- class carriages are, as a rule, extremely bad. Con- tinental nations, in a word, continue to follow a course that was practised in England for many years, but has now generally been abandoned — they have compelled their population to travel just as little as they possibly could, and have thus prevented that enormous expansion of traffic which the more wise and liberal policy towards third-class passengers adopted by English railways within recent years has done so much to create. If anything more were wanted to prove that railways can create, as well as nurse and facilitate, a traffic, it may be found in the following statement of the average of the passenger fares, the receipts per mile of line open, the receipts per passenger train mile, and the receipts per head of the population of England and Wales at intervals between 185 1 and 1884: — Passenger Receipts — England and Wales. Average Average Passenger Y H Average Fare Receipts Receipts Receipts " per Head. per Mile of per Passenger per Head of Line Open. Train Mile. Population. *. d. £ *. d. *. d. 1851 i ni 1.304 4 6J 7 71 1 861 1 4 1,240 4 4 9 7 1871 iof 1.363 4 oi 13 °i 1873 10J 1,501 4 3l 15 °i 1874 io| 1.535 4 4± 15 »4 1878 9§ 1,640 4 2i 16 2 1883 §| 1,669 3 9 16 5 1885 8$ 1,629 3 7 IS 11 246 RAILWAY PROBLEMS. Passenger Fares. It has already been admitted that, as compared with \ most Continental countries, England gives facilities for l passenger traffic that are much to be commended. But y the average range of passenger fares is still higher than in most Continental countries. This is not a new feature of English railway administration. On the contrary, it is one that has obtained for many years, although probably few are aware that the difference is so great as it really is. Mr. Edwin Chad wick gave the following as the average first, second, and third class passenger fares in the years and countries specified : l — Countries. Years. Average Fares per Mile. First Class. Second Class. Third Class. England . France Belgium . Prussia Austria 1857 1854 1856 1857 1857 d. 2.0I i-55 i-33 1.4 1.4 d. 1.41 I.I6 1.00 1.15 I.I d. .87 .84 •65 •77 •83 These figures do not, of course, equally apply to the present time, but perhaps the present relation of English fares to those of other countries will not greatly differ from that shown above. In other words, English fares are still generally 25 to 35 per cent, higher than those of Con- tinental Europe, and they are higher still when compared with the United States. The following statement shows the average receipts per passenger per kilometre on the principal Continental railway systems in 1883 : — 1 Evidence before the Royal Commission on Railways in 1866, p. 851 of Report. COACHING OR PASSENGER TRAFFIC. 247 Statement shouting the Average Passenger Fares in Continental Countries in 1883. Countries and Railways. Germany — State lines Private lines worked by State Companies' lines Austria — State lines State lines worked by companies Private lines worked by State Companies' lines Belgium — State lines Companies' lines Denmark .... France — State lines State lines worked by companies Companies' lines Local lines (private) . Italy — State lines Companies' lines Luxembourg Norway .... Holland . . Roumania .... Russia — Companies lines' State lines Switzerland .... Average Fare Paid per Passenger. francs. i-33 1.26 1. 25 2.85 1.38 1.99 2.67 0.80 o.73 1.19 0.82 1.68 0.69 2.36 2.31 0.56 125 1.56 5-97 4.87 4.86 Average Pare per Kilometre. centimes. 4-39 3-79 4-43 5-42 4.42 5-6x 5-46 3.81 4.04 4.18 3.89 4.88 4.86 6.49 5-30 4.80 3-69 4-38 5-53 7-95 4.68 4.88 5- 48 Average Passenger Receipts per Kilometre. francs. 9,826 6,136 6,8lO 3,782 1,923 6,382 7,324 I3,OIO 5,595 5,653 3,925 2,362 12,771 3,154 ",93i 8,830 1,850 2,282 13,737 6,377 5,793 8,018 9,963 According to the above figures, the lowest average fares on the Continent are found in Germany, Luxem- bourg, Belgium, and France, while the highest are found in Eoumania, Holland, France (local lines), and Austria. Between the maximum of 7.95 and the minimum of 248 RAILWAY PROBLEMS. 3.69 centimes per kilometre, there is a difference by increase of 1 1 6 per cent. This difference is to be ex- plained to some extent by the varying proportions of first and third class travel ; but even when this element has been fully regarded, there remains a very remarkable, and not easily explicable, difference. The general range of fares on the railways of France, Germany, and Belgium is, on the whole, pretty uniform. From this generalisa- tion the local lines of France are excepted. On these, the average fare per kilometre rises to 6.49 centimes. This is nearly 70 per cent, higher than the average found for the State lines. In all cases of difference, very much depends upon the extent to which first-class travel is resorted to. On fifteen of the leading railways of the United States, the average fare per passenger per mile in 1 880 was 2.43 cents, or nearly i^d. These fifteen lines carried 25 per cent, of all the passengers who made use of the railways of the United States in that year, so that the average is a fairly typical one. It is, however, made up of very variable elements. The lowest average fare is that on the New York Central, which amounted to exactly two cents (id.) per mile. The highest fare was 6.06 cents (3d.) per mile, on the Atchison, Topeka, and Santa Fe line. The former line carried 8,270,000, the latter only 359,000 passengers. On the Pennsylvania railways the average fare was 2.42 cents (rather under i^d.) per mile, which is just a fraction below the average of the fifteen lines in question. -, ( 249 ) CHAPTER XVIII. THE ECONOMICAL WORKING OF PASSENGER TRAFFIC. IT is a much debated question whether passenger traffic or the transport of goods is the more remunerative to a rail- way. It is an equally moot point whether the working of passenger traffic, at any rate in Great Britain, is as remunerative as it might and ought to be. One authority maintains that the transport of goods, and especially of minerals, is not only not remunerative, but is carried on at a positive loss. 1 Another authority makes the claim that goods, and especially mineral, traffic is the most lucrative, and that both are made to pay for losses incurred in passenger transport. 2 The problem that we have undertaken to consider in this chapter is, therefore, one of the most knotty and unsettled points in railway administration. The subject is rendered difficult and complicated by reason of the fact than in no country is there adequate data at command for its complete elucidation. All countries alike compile and issue returns of their gross earnings, which are separately distinguished as regards goods and passengers. All countries equally compile and issue returns of their working expenses and net earnings. But no country shows, as regards its total railway traffic, 1 "Railway Profits and Railway Losses," in the Edinburgh Review, 1876, p. 367. 2 Mr. R. Price Williams on "Economy of Railway Working," Proceed- ings of the Institution of Mechanical Engineers, 1879. 250 RAILWAY PROBLEMS. the proportion of working expenditure due to passengers as distinguished from goods ; nor is there any case within our knowledge in which the proportions of the net earnings severally due to goods and to passengers are separately recorded. It is, therefore, necessary to calculate — or more generally to guess at — the proportion of the total cost of working a railway that falls to passenger traffic. Whether that pro- portion is larger or smaller, whether the net proceeds are greater or less, we have no absolute knowledge. In other words, although we know the net profits derived from rail- way working, in reference to all railways and all coun- tries alike, we cannot specify how much passenger traffic has contributed, nor, for the matter of that, whether it has contributed any at all. There are, as might be expected, many essential differ- ences as between goods and passenger traffics. The latter is usually conducted at much greater rates of speed ; the trains are of a much more composite character, and are not generally so fully loaded. The permanent way requires to be kept in much better condition, with a view to greater security of life and limb. The ordinary station expenses are incurred mainly for passenger traffic, and so with the expenses incidental to the block system, to air-brakes, and to many other items of working cost. It will not, therefore, be expected that the relation 6f revenue to the nominal services rendered will be the same iii the cases of the two descriptions of traffic. If we bring this matter to the standard of weight carried, the difference becomes enormous. In 1884, the railways of the United Kingdom carried 695 millions of passengers, not including season-ticketholders, who — assuming that each made 200 journeys in the year — would bring up the total to 848 millions. Allowing, now, that fifteen passengers weigh one ton, this would represent not less than 57 millions of tons. For the transport of this passenger tonnage, the railways received, in round figures, 26 millions sterling, being an WORKING OF PASSENGER TRAFFIC. 251 average of about 9.1s. per ton. Now, we have good reason \/ s to believe, as we have shown in a previous chapter, that / the average distance over which each -passenger is carried in the United Kingdom is between seven and twelve miles, but certainly not more than the latter figure ; and if we take the mean of the two sums, we shall find that the - average receipts of our railways per ton of passengers were practically about a shilling a mile, as against an average of not more than 1 Jd. to 1 £ d. per ton per^^mile for goods traffic. On this showing, therefore, it costs approximately nine times as much to convey a ton of passengers as it \ does to convey a ton of minerals. One obvious reason for this fact, apart from the mani- festly different circumstances of the traffic in other respects, is the great liability that exists on British railways to dis- patch only partially loaded, and, in many cases, almost empty carriages. It is by no means an easy matter to determine the exact position of British railways in this regard. The Board of Trade publishes statistics of the number of passenger car- riages owned by each company, and of the total number of passengers carried, and it might be supposed that by dividing the one sum into the other we would get at the comparative economy or absence of economy with which the passenger traffic of each was conducted, as tested by the y number of passengers annually carried per carriage. But this standard of comparison is open to several manifest objections. In the first place, the result is liable to be affected by the comparative numbers of first, second, and third class carriages, and the proportions of first, second, and third class travellers. In the next place, it is obviously open to the limitations imposed by the average rates of speed. And, finally, it is necessarily largely, and indeed/ absolutely, qualified by the average distance over which] each passenger is carried, since it need not be pointed out' that a carriage that carried 10,000 passengers an average distance of thirty miles each would have rendered more 252 RA IL WA Y PROBLEMS. service than another that only carried 20,000 passengers an everage distance of ten miles. It is necessary to bear these considerations in mind in examining the following statement of the number of pas- sengers carried per carriage on the railways of the United Kingdom in the period from 1872 to 1885 : — Statement showing the Total Number of Passengers Carried per Passenger Vehicle in each Year from 1872 to 1885. 1 Years. Passenger Carriages. Number of Pas- sengers Carried (1=1000). Average Pas- sengers per Vehicle. 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 23,569 24.634 25,441 26,204 27,191 27,729 28,104 28,797 29,565 30,489 31,250 32,304 33,031 33,656 422,874 455.320 477.840 506,975 534,494 549,541 565,024 562,732 603,885 626,030 654,838 683,718 694,991 697,213 17,942 18,483 18,782 19,347 19,657 19,818 20,105 I9.54I 20,626 20,533 20,955 21,163 21,040 20,802 So far as they go, these figures would appear to show that there has been an improvement in the economy of passenger transport over these thirteen years. But it must not be forgotten that in the same interval the per- centage of third-class travel has increased from 55 to 68 per cent, of the total passengers carried. This fact becomes of paramount importance when we remember that, in a general way, a first-class carriage weighing seven tons will seat thirty-six passengers, while a third-class carriage will seat fifty, 2 and that the proportion of seats occupied in the latter is generally in excess of that occupied in the former. It is not, of course, pretended that the weights 1 This table does not include season-ticketholders. 2 This is the accommodation provided in the carriages on the North London line. WORKING OF PASSENGER TRAFFIC. 253 and capacities of carriages indicated are of universal application. These, indeed, vary as much as the types and weights of locomotives and wagons. But the figures may be accepted as expressing in a fairly accurate manner the relation of the capacities of the several classes of carriages to each other. On the main trunk lines, the average is sometimes higher, sometimes lower. On the Great Western broad gauge line, the greater width of the carriages necessarily affords greater accommodation. Per- haps it would not be far out of the way if we were to say that the average capacity of the carriages employed in European countries generally at the present time may be taken at 18 for first class, 32 for second class, and 38 to 40 for third class. 1 Although the returns made to the Board of Trade specify from year to year the number of passenger vehicles owned by each railway company, they do not separate the several classes. This is unfortunate for the purposes of our inquiry. If we were in a position to divide the num- ber of each description of passengers carried into the number of carriages provided for their use, we should be able, without much more trouble, to place our fingers on the weakest parts of the system of passenger transport. As it is, however, we can only deal with the figures as we find them, and if some of the conclusions founded there- upon should be necessarily more or less hypothetical, they will not be altogether unsupported by more solid foundations. We now come to compare the results of working the principal railways in Great Britain, from the point of view that we have just been considering. These are set forth in the following table : — 1 The earlier mail carriages on the London and Birmingham line only seated twelve passengers. Within the last thirty years, the average weight has been increased from 3J to 5^ and even 6 tons, and the capacity from 462 to 1000 feet. 254 RAILWAY PROBLEMS. £ .& .-=: »&1 MfOM O O 00 ■* N fOOO m vo fO w m MN •"tf'OO so LOO C\N"1t)-m as ro 00 r» OsvO *^ OssO O u">f»t^00 *>."1sO S? O "0 « 0g-c"S t- N^OnN tJ- N l^N « CsSO Os f^OO i/"> Os Os rj-00 00 'i" "■> cssO O « CS r^ ro 1-^ rOsD MOifiNiO rfoo 1-^00 sO O « «\T 'f vo" Os cT Os tZ \r>\& t^^O'S 'j-NiO O C q CsSO "tKNMfHOO +NO>OiO « N i/-)00 ■>*• t^ « so OS Ov r)-so sioO^O SO M ONfOt^N^NMOMnWIOO ^00 ^ MNN t-»sO N mvO OsOO O SO Os N Os r*sso w i-i r^so ^-NN iflN N so lots SO so Os "100 "1 Tf N oo ro u-> i/-> u-i « so Tj-fOO ^l-Tj-rororo OssO >O00 m inso O ►HioOsOOO N Os "■> ■- so ii O f^so O t~» O O flt^N t^^O "~< O io M SO C*l cf i-T ro ef •HH 5 -sM ' A A ° o ,-. o §"3.2 o WORKING OF PASSENGER TRAFFIC. 255 These figures show remarkable differences that are not in all cases easily accounted for. In regard to the numbers shown to have travelled for each carriage owned, the varia- tions may be explained by the qualifying circumstances already named ; but it may well be asked, Why should one company only earn £593 per carriage, while another runs up to £1004? — Why should the Brighton line show an average of £658, while the Chatham and Dover line, running through a great part of the same district, gets about £ 3 50 more ? The differences are not to be explained by the differences in fares alone. They may, however, be partly due to the greater proportions of first or third class travel, as the case may be. One fact that appears to be clearly brought out in the table just referred to is, that short distance travel is the most lucrative to the companies — that is to say, if the experience of the Chatham and Dover line, which has both the highest number of passengers and the largest gross earnings per carriage, may be accepted as worth anything. And this Company's experience appears to be confirmed by that of the Great Eastern, and, to a less extent, by that of the South- Western. On the Metropoli- tan line the number of passengers carried per vehicle is about 150,000, and the average earnings per passenger carriage is £2600, or about three times that of the great trunk lines. This is even more strongly corroborative of the circumstances we have just stated. The cause of the difference in favour of short journey lines is no doubt that carriages are not run empty, or nearly so, over very long distances, as they are apt to be in the case of the ' lines that go farther afield. On the Continent of Europe, a record is kept, not only of the number of carriages owned by each company, but also of the total number of places which they contain, J the average in each carriage, the proportion of places provided that have been occupied over the year, and the average number of places per kilometre exploited. 256 RAILWAY PROBLEMS. These interesting data we have compiled and collated for the principal European countries in the table that follows. f It will be noted that the average number of places pro- vided for each iooo passengers carried, varies from a minimum of 2.56 in Belgium to a maximum of 8.83 in Eoumania. When we further find that Eoumania had 32.2 per cent, of the total places provided occupied during the year, while Belgium only had 20.79 P er cent., it would appear as if the rolling stock in the former country were kept largely in reserve. The largest average of places per kilometre is provided by Belgium, where also is found the greatest density of passenger traffic : — WORKING OF PASSENGER TRAFFIC. *S7 ' .8 1 s; ^ 'OS > S E ■« £ M •s ^ 8 K «o s s * V « O ^ « s «> ^s ! tf - 1 M ^ I 5 s I as a ■* o S *> ° ^ 5- e Ss J * ■« s s -s "i s^ O . & "S <» ~» S fO ft ,3 05 f* ~ *s • * § «> ■** 8 I fc Hi *« s ?« 3 PL. ^25 a, o „ U) A* « X S 2 u->vO Oi N O. OvOO *MN m O - N vO O 00 \0 tots ro\0 OiN ifl>o vd tj-nutoo d d* d od "5 dwo >0 r-» Cn^O r^NOONOwiro \D N t^ t-» . l^ CM mco tsl On N On ro •>*• O "S ■ iJisMO N Mind N N N N N N N WrON rO -on mnh n no h moo *^ totsdi^dN i ')d'ofiN>"'4 M"K( MOmOui O00 \0 *fO 00 . ro N ON f^OO mM O Mt^O rOOO vO « on O lONMtsulO >-> — **l 3 a 2 "1 CN1 CM f^NN 'J-'^-— Tj- CM 00 NO O g II n tCt«)N^Tt cm rC w rC n* cm "iTj-m O n >-i ro M CM CM h lill ►* ^N tJ-00 M UIUIUIO ONONN i-< t~~ ro t~» CM ro* rovO 0> t-» O O 00 rj-mx) "ir^Tl-iriONro«" OnN &j* 8 - § 00 ►»"no' * * ro m n" d N d rCo QUI OfP On OnOO ro N rooo — vo »« vo »^ oo n m nm cm H m f^NO ^J- rh ro >- rrO mvO 00 N ^O00 t^Q - m & 1 1 3 § Q 0. -^ H *r» > m £ ■fe s © ■■r. I E s eg hi a Si 55 VOVO O O r-» CO O O O "tOvN ** I^0 0Cr>to000>->t^r-^0\NN O" *>. "J 1 N N »O00" COvO to ti. Tf IO M M M o\ S IP 00 mi-MN row O tMOiNO O 00 >0 ►"• ")t}-m IO00 "tOlNN »0 10 O" cT pi" 06" cft^rfiONOO' coao 10 cm cs >-< P» N 11 CO o* VO u to lfll»lN r-~ N NIOO CO 1O00 00 N « 6 « 6 d « 0* c> 0" « On 00 O = ,?£ co f^vO *♦*•»•< co>0 »ovo 00 N Tf-OOO t^O "t^-- ON00 vO ■* O N to 00" 'f •-<" \d" K 00 O xo — •_ to N O ^O <0 *~» 'tvO «■> O On^O w> f.00 :•*»- : Mm tf N *m tO 000 0000000 *s ■ h 2 j. •=8> •O ►* O 00 t}-i-<^«-' 'too >o torsos 00 to- - " fOsOv too t^ : '• hionoo 10 •-T to <-T " 06" »o »o CO S3 O O, O a) O •- OlO^-tON N N -30 1OM ►h to C?> O 00 Q\ On rj covO t-» — t»» Ovh o**o 00 i-^00 "*; "^^o. ■-J" eT of i-T t-C 10 i-T ■>« *j« * • 5 ••3 J C i H i .O >jT3 5 T3 73 S •* 3 S 8 S^giscg H 262 RAILWAY PROBLEMS. This table shows that the greatest number of passenger vehicles, relatively to the mileage open, is found in Belgium, where it is 1.62, being almost double the pro- portion found for Germany, and more than double that • found for Austria-Hungary. Belgium has also the largest number of locomotives and goods wagons per mile of line. The proportion of passenger vehicles per mile of line open is, however, 24 per cent, higher in England than in Belgium. With a total of 33,031 passenger vehicles, the United Kingdom possesses 3 1 per cent, of the total rolling stock of this description in European countries as a whole. There is, however, as we shall presently see, a great difference in the relation of the different classes of vehicles employed on British railways to the numbers carried and the profits earned. In the United States, where the passenger traffic is much less dense than in the United Kingdom, the average number of passenger carriages in 1883 was 6 per mile operated, 10 per 1000 train miles, and 18 per 1000 pas- sengers carried. The proportions, however, varied very much as between the different groups of States. In the New England States, the number of carriages per 1000 passengers carried rose to 31. In the Southern States, the proportion fell to 9. The Middle States showed an average of 20, and the Southern States an average of 1 3. The following tabular statement shows the details for each group of States : — WORKING OF PASSENGER TRAFFIC. 263 <» 00 8 00 v> !3 00 "i> 00 •5 <-* 8 * 8 55 *> tC - X c ® X £ c 11 pH C*-' Pi o 6 S « 9 S3 <3\ VO - 00 00 i-i 1-1 Tj- \o 00 00 10 « 00 M Is O VO 00 _. M VO i s & a A 8" 8 CO m •g .2 6 Q ^ PL) .8 8. 3 o .2 a "8 264 RAILWAY PROBLEMS. First-Class Traffic Returns. — It has now almost become an axiom with railway authorities that first-class passenger traffic, if it pays at all (which many affect to disbelieve), does not yield anything like the same profitable return as ^third-class travel. This problem is, however, involved in some obscurity, from which the most laborious and skilful attempts of economists and experts have not been able wholly to disentangle it. There are several points of view from which this com- plex and difficult question may be approached. The more prominent and obvious are : — The numbers carried relatively to the number of vehicles employed. The average gross earnings per vehicle. The first cost of the different classes of vehicles. The facilities and accommodation provided for diffe- rent classes of travellers. The rates of speed employed. But in order to understand how far each class of travel contributes to the gross result yielded by passenger traffic, it is necessary to possess details of the numbers of vehicles of each class. These details are not recorded in the annual reports of the Board of Trade, but they are to be found in the half-yearly reports of the different companies, and by dividing the numbers of first and third class vehicles employed into the numbers of passengers of each class carried, and the gross earnings therefrom, we find that the first-class vehicles do not yield anything like so good results as the more humble class. 1 But even if it were otherwise — even if the average result obtained from first-class vehicles was greatly superior to that obtained from third-class, it must not be forgotten that the cost of working first-class traffic is much greater. Mr. Price- Williams has calculated the expenses of « working first-class traffic at 73.2 per cent, of the gross 1 This subject is further dealt with in the chapter on "English Railwav Administration. " WORKING OF PASSENGER TRAFFIC. 265 receipts, as compared with 49.8 per cent, of gross receipts 1 expended in working third-class traffic. It is, however, / likely to be higher even than this. There are some elements in the working of first-class traffic that are so subtle and complex as to elude even the keenest observation. No one, for example, can say exactly how far express trains are run for the special benefit of first-class travellers. On most of the great trunk lines, third-class passengers may now travel at express speed, equally with travellers of the first class. But on many minor lines, and by certain trains on nearly all of the great trunk lines, this is not yet entirely the case. In so far, therefore, as the element of speed affects the cost of working, first-class traffic must be debited with a much heavier item than third-class. 1 The effect of speed upon the cost of working may be illustrated by the fact that an average passenger train, weighing 1 34 tons, and travelling at an average speed of' ^ 45 miles an hour, will do as much injury to a railway as/ ( a coal train, weighing 400 tons, and travelling at an/ • average speed of only 1 5 miles an hour. Mr. Price- Williams has analysed the first, second, and third-class traffic receipts and working expenses of the London and North- Western Eailway Company, with the following results : — Description. Gross Receipts G£i = 1000). Working Expenses G£i = 1000). Net Receipts (j£i = iooo). First class Third class . . . Total passenger traffic . ;£l,322 1,708 £968 850 ^354 857 3.030 I,8l8 1,211 From these figures he has calculated that in the case of first-class traffic the net receipts are only 26.8 per cent, of the gross, whereas in the case of third-class traffic they are 50.2 per cent. 1 As examples, it may be stated that there are seven express trains daily from Brighton to London to which no third-class carriages are attached. There are also four such trains daily between Dover and London, two between Paddingtou and Exeter, and many similar cases might be cited. 266 RAILWAY PROBLEMS. Apportioning the working expenses to the different classes of traffic in the ratio of the number of carriages of each class, Mr. Price- Williams has shown, by an analysis of the passenger traffic of the London and North-Western Eailway Company, that the net receipts per train mile were : — From first and second class traffic . . . 5?d. j „ third class traffic . . .is. 2^d. — while the net receipts per passenger were : — From first and second class 9|d. „ third class 6d. The data upon which these figures are founded would not be accepted as sufficiently conclusive by some authori- ties. Under any circumstances, however, it is clear that the much fuller train-loads usually got with third-class passengers, and the much less expensive character of the accommodation provided for them, should exercise a power- ful influence in the direction to which the calculations of Mr. Price- Williams point. With the cost of conveying traffic generally the question of tare has very much to do. In the case of the United States, the great reduction of the cost of transport that has occurred within recent years — a reduction that has induced great surprise, and even incredulity, in many minds in England — has been largely attributable to the reduction of tare relatively to the paying weight carried. There are, however, very few railway accounts that show the incidence of this factor, although it is to be presumed that it is not unknown to the gentlemen whose special business it is to control goods traffic. The railway accounts for New South Wales are an exception to the general rule. They show the exact proportions of paying and non-paying traffic, in the following form : — d. Average receipts per ton per mile for coaching traffic . 1544 Do. do., including tare . . 0.58 Average receipts per ton per mile for goods traffic . . 1.90 Do. do., including tare . . 0.41 WORKING OF PASSENGER TRAFFIC. 267 It would be interesting and valuable if the railway accounts of European countries were kept in such a manner as to bring out these results in the same form. There are several circumstances peculiar to English railways that should be considered in relation to the question of passenger traffic economy. One of these is the average rate of speed at which passenger trains are worked. Another is the number of trains provided to meet the traffic requirements. It is very well known that, as a general rule, the average speed of express trains, and the number of such trains provided between the principal centres of population in the United Kingdom, are much greater than in any other country in the world. Eailway managers profess that these are desiderata that the British public imperatively demand, and for this argu- ment they have ample reason. But if Englishmen will insist upon travelling at the rate of fifty miles an hour, and having more express trains than any other country, they must expect to have to pay somewhat more for the costly facilities thus provided. In reference to this subject the Eoyal Commission of 1 867 pertinently observed : — "There are many duplicate trains run by competing lines at the present time which, by agreement between the Companies, might be avoided. Thus the Great Western and the London and North-Western Eailway Companies run trains to Birmingham, which start nearly at the same time. The South-Eastern and the London, Chatham, and Dover Eailway Companies run trains between London and Dover which start together and arrive at the same time. So do the North- Western and the Great-Northern, between London and Manchester. In many of these cases one train would suffice to carry all the passengers. " It must, however, be borne in mind that in each of these cases, and probably in every case of competing lines, the second line between the places supplies accommoda- tion to an intermediate district which would be unprovided 268 RAILWAY PROBLEMS. with accommodation without it ; and that, if the through traffic is to be accommodated by means of fewer trains, it would be necessary that the return tickets of one line should be available by the other line ; that is to say, that the receipts must be divided. There is no doubt that this is the tendency of the railway management at the present time. It is quite certain that competition has produced economy of railway management, and that it has led to the rapid improvements in engines and permanent way which have taken place ; and, however desirable greater economy in the administration of railways may be, the present system depends so entirely upon the feelings and wishes of society, and on the desire of the railway companies to comply with those wishes, that we do not think tbat any advantage would result from the interference of authority in this matter. But one means by which any undue extravagance of railway companies or defects in the administration may be made apparent to the shareholders and the public, and thus stimulate economy, would be by a judicious comparison of the receipts and expenditure on one line with the receipts and expenditure upon other lines. Such a comparison can only be obtained by the several railway companies rendering their accounts to the Board of Trade on a uniform plan." These weighty remarks are, in the main, quite as true now as when they were written twenty years ago, and they really contain the pith of the whole matter. ( 269 ) CHAPTEE XIX. GOODS TRAFFIC. If there is any one feature of the goods traffic of our modern railway system that is paramount in its claims upon the attention of mankind, and absorbing in the interest which it is entitled to excite, it is the undoubted fact that it is the largest and most important business that has ever been carried on in the annals of the world. From this generalisation, agriculture may no doubt, in certain respects, demand to be excepted ; but as regards the great volume of materials dealt with, railway transport leaves even the business of husbandry far behind. Every other industry must " pale its ineffectual fires " before the gigantic operations of that system to which all are tributary and subordinate. The mineral industries are, as regards volume, of the utmost importance, but they are entirely overshadowed by the transport returns, in which they figure so conspicuously in all the leading countries of the world. We propose in this chapter to consider briefly how this great business of goods and mineral transportation is carried on, and the conditions of its development. To what test shall we bring, and how shall we adequately describe, the enormous magnitude of this carrying trade ? If we deal with weight alone, we find that on the railways N of Europe and the United States, collectively, the total volume of goods traffic carried in 1882 1 amounted to overy 1 This year has been adopted, because there are no later returns for some countries, and it seemed desirable to select a period that would apply to all countries alike. 270 RAILWAY PROBLEMS. a thousand million tons. 1 The total gross receipts from this traffic over the same geographical area amounted to 232J millions sterling, of which the United Kingdom took 16.7 per cent., the United States 36 per cent., and Germany about 14 per cent., these three countries being the largest contributors to the total. The imagination almost recoils from any attempt to grasp the relative proportions and importance of these figures. The total tonnage of minerals raised in the United King- dom — the greatest mineral-producing nation in the world — is about 1 80 millions a year. The railways of Europe and the United States carry more than syt times this volume of traffic. The total agricultural income from land in the United Kingdom is now calculated at about 50 millions sterling. The income of European and Ameri- can railways, in respect of the transport of goods traffic, is nearly five times that amount. Try it by what standard we may, and we shall find that the business carried on by the railways of the world is unique in its magnitude, its width of range, and its influence on the destinies of nations. And yet this huge development is only of comparatively recent origin. It is less than fifty years since the first railway that was established on a scale of any importance was opened for public traffic. Previous to that period the inland transport of goods and merchandise of every kind was effected either by canals, by pack-horses, or by wagons. But the absence of canal navigation in many important districts imposed upon them the necessity of employing horse-power alone. Dr. Lardner states that " a horse of average force, working for eight or ten hours a day, cannot transport on his back more than two hundredweight, and that he can carry this at the rate of only twenty-five miles a day over an average level country." Now, the total number of tons carried one mile in Continental Europe and the United States in 1882 was 60,815 millions. If we assume the average 1 Exactly 1,001,766,000. GOODS TRAFFIC. 271 length of lead in the United Kingdom to be thirty miles, the total number of tons carried one mile in this country would be 799 1 1 millions more. This gives us a total of 68,8o6J million tons carried one mile for Europe and the United States. To have conveyed this ton-mile traffic by horse-power would, therefore, have required the services of not less than 30 million horses, assuming each horse to work to his utmost capacity for 314 days out of the 365. In the United Kingdom, the goods traffic is divided, in the returns made by the railway companies to the Board of Trade, into the three several branches of — 1. General merchandise. 2. Minerals. 3. Cattle. In the United States, even this imperfect and halting attempt at a division of traffic is not attempted, except in the Census Eeports ; and as these are only drawn up once in ten years, and generally published two or three years subsequent to the date to which the figures apply, they ore not of much practical value. On the Continent of Europe, the classification of goods traffic generally adopted is — 1. Luggage (baggage). 2. Merchandise by quick trains (grande vitesse). 3. Merchandise by slow trains {petite vitesse). 4. Cattle. Each of these divisions of traffic leaves much to be desired. There would seem to be no insuperable obstacle in the way of adopting the United States Census classifi- cation, which provides for the quantities of each of thirteen different varieties of goods being separately distinguished, the more important being grain, cotton, live-stock, pro- visions, timber, coal, petroleum, iron, and manufactures. As regards the United Kingdom, the returns for the year 1883 — when the maxima were attained — were as follows: — 272 RAILWAY PROBLEMS. Statement shomng the Tonnage of Goods and Minerals Carried on the Railways of the United Kingdom in 1883. Countries. Minerals (1 ton = 1000). Merchandise (1 ton = 1000). Total (1 ton = 1000). England Scotland Ireland Totals 160,522 27,767 1,196 65,387 8,692 2,817 225,909 36,459 4,OI3 189,485 76,896 266,381 The total tonnage moved upon the railways of the United Kingdom in 1883 was j us t 24,516 tons less than the total tonnage moved upon the railways of the United States for the Census year 1880. But, while the total receipts from freight traffic in the latter year were ^83,229,000, or an average of 5.7s. per ton, the total gross revenue from the goods traffic of the United Kingdom was only ,£38,675,900, or an average of 2.93. per ton — a difference that is obviously accounted for by the much greater length of lead in the United States, which, as else- where shown, has been calculated for the whole of that country at an average of 1 1 1 miles, as compared with an average of probably less than a third of that distance in the United Kingdom. , The goods traffic of the United Kingdom is distin- guished by several features that are peculiar to itself, the more important and characteristic being — (1.) That the tonnage carried per mile of line open is larger than in any other country. (2.) That the gross receipts per mile open is greater than in any other country. (3.) That the proportion of minerals carried, relatively to the total tonnage, is also exceptionally high. (4.) That the average distance over which the traffic is carried is shorter than in most other countries. GOODS TRAFFIC. 273 Each of these distinguishing features is of greater or less effect in determining the conditions under which the traffic is worked, and ought to influence, if it does not, the rates at which it is carried. The incidence of the goods traffic, in relation to the open mileage of each leading European country and the United States, is set forth in the following tabular statement : — Statement showing the Tonnage of Goods Traffic Carried on the Railways of Different Countries, and the Average per Mile Open. Countries. Tons of Goods Traffic Carried (1=1000). Miles Open. Average Tons Carried per Mile Open. Germany ..... 183,808 21,785 8,447 Austria-Hungary 64,754 12,603 5,138 Belgium . 27,640 1,885 14,132 Denmark . 1,148 926 1,240 France 96,822 16,578 5,840 Italy 11,598 5,871 i,975 Norway 1,050 970 1,082 Holland . 5,939 1,406 4,224 Roumania 1,396 899 1.553 Russia 44,067 14,226 3,098 Switzerland 6,366 i,79S 3,547 Totals and average . United States .... 444,588 78,944 5,632 400,453 120,551 3,321 United Kingdom 266,381 18,530 14,376 It is not pretended that, because the average tonnage carried per mile of line open is higher in the United Kingdom, the cost of working the traffic should be correspondingly low, and the average net receipts cor- respondingly high. All other things being equal, the cost of working should certainly be diminished as the traffic is increased, because that cost is then spread over a larger gross income. But the circumstances of English s --- .-„-::i — j.t ff.:iii:.j - :-. wmm ■- irrtL riaal -.-„._; tgmmi ■ Mftaflp GCCr: TRAFFIC "5 Bdgmrn, witn £1936 per ante. Itai. . 1*4* - • France, „ 1824 „ , The receipts earned per mile of railway constructed in each European country and in the United States, respec- tively, are shown in the following statement : — MiUage of Rmdmmgt ComMracUd » Difenmt Cmadna, with TotmUmommt of Goods Tr&c, amd Total mmd Avenge BeeeifU Herefrom, nor Mdeof Emm, - 1 ■■■ Germany France . Switzerland Italy Holland . ■)■■■■& Norway . Ummwt Brnmn Ac - : wJi a- i a United Kingdom r:.-i5 ■A -' 5-- : - 5 5 -"- ISjfaj :._:c -i . 070 :± iz-. -■r- (.=, ■MS" ■M5S : ■ i,M* 674 M >fl :;-■:.:■:- ...... S6*9 M47 9«3 - - -'; £1,511 •-■-:-" I ,*S| 806 737 i«J 189 Ml £201,703 Although, as we have seen, the average receipts from \ goods traffic, per mile of line open, are higher in the United Kingdom than in any other country, the ease is quite different when we come to deal with the average receipts per train mile. It turns out, indeed, that, wiih A the exceptions of Luxembourg and Holland, the average receipts per train mile are less in the United Kingdom than in any other European country, and considerably under those of the United States. The following table 276 RAILWAY PROBLEMS. Statement showing the Mileage of Goods Trains in Different Countries, and the Total and Average Receipts per Train Mile derived therefrom. Mileage of Goods Gross Receipts Average per 1 Train iliie. Countries. Trains from Goods Traffic (1 = 1000). (1=1000). £ s. Germany 70,579 3 2 .9I4 9-3 Austria 29.713 18,249 12.3 Belgium 1 1,867 3.649 6.1 France . 55-734 3 . 2 36 10.9 Italy . 10,724 4,325 8.1 Luxembourg 433 91 4.2 Holland 1,400 912 13.0 Russia . 43,860 26,295 12.0 Finland 53i 187 7.0 United States 251,052 111,101 8.9 United Kingdom 126,672 37,670 5-9 Totals and ave rage . 602,565 265,629 8.8 To account for the differences that distinguish different countries, in reference to their train-mile receipts, is one of the most thorny problems in railway economy. The question is affected by many different considerations, but primarily and mainly by the character of the traffic carried, and by the average weight of the train. The receipts per train mile would naturally be expected to take a lower range in countries like the United Kingdom and the United States, where the greater bulk of 'the traffic is of a character that is regular and easily handled, such as minerals, lumber, grain, &c. But even this does not explain everything. It is a well-established fact, that in the United States the average ton-mile rates are much under those of the United Kingdom ; and after a very liberal allowance has been made for an increased weight in the load hauled, it still remains a problem how the average receipts per train mile in the United States come to be 37 per cent, higher than the average of the United Kingdom. The mystery is intensified when we GOODS TRAFFIC. 277 come to examine the average ton-mile rates of the different countries, as shown in the next table : — Statement showing the Total and Average Receipts from the Working of Goods Traffic in Different European Countries in 1883. Countries. Number of Tons Carried (1=1000). Number of Tons Carried One Mile (1=1000). Goods \ Traffic, Gross Receipts (£ 1=1000) Goods Traffic, Average Receipts per Ton. Average Receipts per Ton per Mile. Germany Austria Belgium Denmark France . Italy . Luxembourg Norway Holland Roumania . Russia Finland Switzerland Totals and ) averages \ 183,808 64,755 27,641 1,148 96,822 11,598 1.925 674 5.939 1,397 44,068 646 6,366 9.312,479 4,182,151 i,i3i.393 45,680 6,780,802 864,748 22,696 29,279 287,575 103,738 5,449,089 42,706 214.057 £ 32.914 18,249 3.649 263 3 .236 4.325 91 183 913 572 26,295 187 1,447 s. 3-58 5-64 2.64 4.58 6.25 7.46 o.95 5-43 3-°7 8.19 "•93 5.80 4-55 d. O.85 I.05 O.77 1.38 I.07 I.20 O.96 I.50 O.76 I.32 I.16 O.99 I.63 446,787 28,466,593 "9,324 5-34 I.OI Now, it is a fair presumption that the average receipts per train mile from goods traffic should be lowest where the average ton-mile rates were lowest, and highest where they were highest. This would undoubtedly be the case if all other things were equal. But as all other things are not equal, we find, among other apparently irreconcilable facts, that Austria-Hungary, which has a lower average ton-mile rate than France, has a considerably higher train-mile revenue, and that Germany has a higher train- mile revenue than Italy, although the ton-mile rate of the latter is about 40 per cent, higher. The explana- tion of these apparent anomalies will be found to lie par- tially in the fact that in some countries the ratio of empty 278 RAILWAY PROBLEMS. to loaded trains is much larger than in others. In Eng- land and Wales, for example, it may be assumed that the trains carrying mineral traffic almost always return entirely empty, whereas ordinary goods trains can often make up a return load. The average receipts from goods traffic per ton carried are also set out in the foregoing table. This is a function of the ton-mile rate and the average length of lead, but more particularly of the latter. Eussia, which has the longest average length of lead, has also, as might be expected, the largest average revenue per ton moved. The average length of lead, on the State and private lines, respectively, of the leading Continental countries in 1883 is shown in kilometres in the following table : — Statement showing the Average Distance over which Goods Traffic was Carried in the Principal Countries of Continental Europe in 1883. Countries. Average Length of Lead on Average of all Lines. State Lines. Private Lines Worked by State. Private Companies' Lines. State Lines Worked by Private Companies. Germany . Austria-Hungary Belgium Denmark . France — Lines of gene- ) ral interest \ Lines of local ) interest \ Italy . Holland . Russia 82.63 137-54 71.80 76.80 70.05 125.67 195-31 89.50 I08.71 69.96 IOO.49 43-43 50.06 119.96 20.49 120.25 88.33 213.92 46.92 33-41 72.00 81.74 81.IO 66.OI 64.18 H6.75 78.09 213.42 These figures show that the shortest average lead on the Continent coincides with the highest average ton-mile rates, both being characteristic of the local lines of France, on which the average ton-mile rate is more than double GOODS TRAFFIC. 279 that of Germany and Belgium. It doe3 not, however, appear that the longest lead is coincident with the lowest ton-mile rates, since Eussia shows the former and Holland the latter. There is, in fact, no evidence of any uniform relation of rates to distances, even in the same countries, although this is the broad general principle upon which railway managers generally profess, all other things being equal, to conduct their affairs. It has been stated that one of the most striking differ- ences that distinguish English from other railway systems, in the matter of goods traffic, is that of the greater propor- tion of minerals carried. The total quantity of minerals carried on English railways in 1883 was 189J millions of tons, being 71 per cent, of all the goods traffic carried. In the United States, in 1880, the total quantity of mineral traffic carried, including in this term not only minerals proper, but lime, cement, iron, and steel, amounted to 109 millions of tons, or 34 per cent, of the total. 1 The ratio of mineral to aggregate goods traffic in England was, therefore, double that found for the United States. At the same time, it is to be observed that in Great Britain, as in other countries, there are wide differences as between one company and another, in respect of the relative proportions of goods and mineral traffic which they severally carry. These differences may be appre- ciated by a glance at the following table : — 1 The quantities of mineral traffic carried on the railways of the United States in subsequent years are not available, so that we cannot make a reliable comparison for a later year than 1 880. 28o RAILWAY PROBLEMS. Statement showing the Tonnage of Merchandise and Minerals Carried upon the Fifteen Leading British Railways in 1883. Tons of Percent- Tons of General Total age of Minerals Merchan- Tons Minerals Railways. Carried dise Carried on Total (1 = 1000). Carried (1 = 1000). (1 = 1000). Tonnage Carried. I. London and North-Western . 27,IOI 8,652 35-753 75 2. Great Western 18,904 5,341 24,245 79 3. Great Northern 4,736 4,692 9,428 56 4. Lancashire and Yorkshire 10,405 4,8l2 15,217 67 15,431 10,009 25,440 60 6. North-Eastern 30,782 8,977 39,759 77 7. Manchester, Sheffield, and ) Lincoln . . j 6,411 4,463 10,874 55 8. Great Eastern 2,912 4,239 7,i5i 41 9. London and South-Western . 2,083 1,568 3,651 57 10. North British . 10,297 3,291 13,588 7i 11. Caledonian .... 11,986 3,2i8 15,204 80 12. Glasgow and South- Western . 4,IOO 1,035 5- 1 35 80 13. London, Brighton, and South ) Coast ) 1,654 890 2,544 65 14. London, Chatham, and Dover 1,469 708 2,177 67 15. TaffVale .... Totals . 8,986 435 9,42i 95 157,257 62,330 219,587 72 The maximum ratio of mineral to total goods traffic shown in this table appears in the case of the Taff Vale Company, while the two next highest are the Caledonian and the Glasgow and South-Western. The greatest absolute quantity of minerals was carried by the North- Eastern. The lowest proportion of mineral to other traffic appears in the case of the Great Eastern. There is another interesting aspect of this subject to which we may here direct attention. In some countries the larger proportion of the gross traffic receipts is derived from passenger traffic. In the United Kingdom, and more especially in England and Wales, the chief contributor to the gross revenue is the goods traffic. Of 71 millions sterling of gross receipts earned by the railways of the United Kingdom from all sources in 1883, 38! millions, GOODS TRAFFIC. 281 or about 5 5 per cent, was derived from goods traffic. The following statement shows how this result compares with that brought out for other countries on the Continent of Europe and for the United States : — Statement showing the Gross Receipts from Goods and Passenger Traffic, respectively, in Different Countries. Of which there were Received Percentage Total Grosa of Total Received Countries. Receipts From Goods Traffic (^1 = 1000). (j£i = 1000). From from Goods Passenger Traffic. Traffic. Germany £46, 191 £32,914 £13,277 71 > Austria . 23,594 18,249 5,345 77 > Belgium 5,476 3,649 1,827 65 » Denmark 654 263 39i 40 «- France . 44,638 3<>,236 14,402 68 > Italy . 7,736 4,325 3,4" 56 > Luxembourg 104 91 >3 88 > Norway 2,044 183 1,861 9 Roumania 925 572 353 62 Russia . 34,426 26,295 8,131 76 Finland 317 187 130 59 Switzerland 2,683 1,447 1,236 54 Totals anc I avei »ge • £168,788 £118,411 £5o,377 70 Nine European countries out of the twelve tabulated appear to have a higher percentage proportion of revenue from goods traffic than the United Kingdom. In the case of the United States, the preponderance of goods traffic receipts is almost equally marked, since 6y per cent, of the total gross railway income of 1883 was derived from that source. 1 1 The total revenue of all the railways of the United States from all sources was 807 millions of dollars, of which 544^ millions were derived from freight. ( 282 ) CHAPTER XX. RAILWAY TRANSPORTATION CHARGES. "It may be said, that, as Parliament has established limits to the tariff of railway traffic, so long as the com- panies keep within these, they should be subject to no interference. To this, however, it can be answered, that when those limits were fixed, the Legislature had no sufficient data by which an equitable amount could be established. Can it for a moment be maintained that if, by new inventions, railways could be constructed by the expenditure of half the capital sunk on those now open, and worked at half the present expense, the public would not have a right to demand a proportionate reduction in the carrying tariff V' 1 *> It is the aim of the trader and railway traveller, in regard to locomotion, as in reference to transactions that are deemed to come more strictly within the scope of commerce, to " buy in the cheapest market," and it appears to be equally the object and end of British railways to " sell in the dearest market," the services which they are called upon to render to the public. This condition of affairs necessarily places the railways, as a system, and the public, in an attitude of constant antagonism to each other. It is no doubt true that, up to a certain point, their interests are largely identical — that is to say, it is the interest of the railway companies to stimulate traffic in every possible way, and to afford such 1 Edinburgh Review, October 1846. RAILWAY TRANSPORTATION CHARGES. 283 rates as will bring on to their lines the maximum of remunerative business, while the interest of the traders lies in securing the lowest possible range of rates and fares, by enabling such charges to be distributed over as wide an area of business as possible. But there is, after all, another and a more obvious relationship between the two interests, which is not one of such strict harmony and identity. The trader is in- terested in obtaining as low a range of rates as possible, quite independently of the conditions under which the railways require to operate. The railway companies, on the other hand, make no secret of the fact that, in cases where there is little or no competition compelling a different course, their guiding principle is that of im- posing on the traffic just as much as it will bear. The enormous powers possessed by railway corporations, and their great and manifest liability to abuse, have led to restrictions being imposed on their rates and fares in almost every country in the world. These limitations, in the case of British lines, are expressly set forth in the various Acts of Parliament under which they have been authorised, and by which they are controlled. Traders, however, are not, and can hardly, perhaps, be expected to be, satisfied with these limitations. In many cases they claim that the maxima are too high ; in others, that they are habitually exceeded ; in others, again, that undue preferences are accorded to individual traders or districts. Now, we hear that terminal charges are imposed, which were neither contemplated nor provided for when the maximum rates were fixed ; and then, again, that the system under which rates are levied enables foreigners to compete successfully with home agriculturists and manufacturers. It is impossible that the infinitely varied and complex aspects of this most difficult question can be adequately considered in the course of a single chapter. The railway problem, however, would be very imperfectly presented 284 RAILWAY PROBLEMS. without some endeavour being made to set forth the con- ditions under which the reciprocal relations of railways and the public are regulated in this regard. The Royal Commission of 1 867 remarked, with reference to the clauses governing tolls and charges, that " there is not only a diversity in the amount of tolls for the use of the line, and in the rates, when the company is a carrier, but an imperfect enumeration, and often a diversity of classification, of the various goods to which the tolls apply. Thus, some important commodities are altogether omitted, and the class in which a particular article is placed in the Act of one company is not always the same as that in which the same article is placed in the Act of another company. In some cases, Parliament has taken advantage of the amalgamation of companies to bring all their powers as to rates and tolls into the Amalgamation Act ; this has been done, for instance, in the case of the Lancashire and Yorkshire Railway, and to some extent in the case of the London and North-Western Railway, whilst in other cases the toll clauses are scattered through the numerous separate Acts originally obtained by the com- panies which have since been amalgamated." As an example, it is stated that the Midland Railway Company has its power of levying tolls divided over three Acts. In one Act coals are classed in the lowest class, with a maximum toll of id. per ton per mile; in another Act they are classed in the second class, with a toll of 1 Jd. In one Act grain is classed in the lowest class but one, with a toll of 1 |d. ; in the other two Acts, it is placed in the next class but one, with a maximum toll of 2d. In the Midland Railway Acts generally there are four classes for merchandise and minerals ; in the Lancashire and Yorkshire there would appear to be eight, in the North-Eastern five, and in the London and South- Western three. The London and North-Western Railway Company appear to derive their powers from five Acts, in some of RAILWAY TRANSPORTATION CHARGES. 285 ■which the articles are placed in eight classes, in others in three or four classes. The Great Eastern Kailway Company has five Acts, in some of which the articles are placed in five classes, in others in four classes. The Great Western has thirteen Acts with toll and rate clauses. In one Act, the maximum toll for iron ore and pig iron is |d. per ton per mile, and in another it is i|d. In one Act grain is placed in the lowest class but one, with a maximum toll of id.; in another Act it is placed in a higher class, with a maximum of 2d. ; and in a third Act the maximum toll is 2f d. In one Act the articles are divided into eight or nine classes, in others into four. One Act enumerates twenty-two articles, another ninety- eight, and another 160. There is no need to go further, in the way of showing the confused and anomalous condition of the laws under which British railways levy their rates and fares at the present time. That system is, indeed, from first to lastf? a tissue of absurdities, inequalities, and contradictions. _j The majority of the Acts under which rates and fares are levied in this year of grace eighteen hundred and eighty- six were passed when the business of transport was much less understood than it is at present ; when many errors that have since been exploded by experience were firmly believed in ; when tariffs were based on an infinitely smaller volume of business ; and when the relation of working expenses to net receipts was entirely different to what it has now, in most countries, become. Notwithstanding these considerations, however, English railways practically work upon the same tariffs to-day as they did in the infancy of the system. In almost every other country, law, custom, or necessity have compelled railway authorities to adjust their rates to the altered condition of affairs. In the United States, as we have elsewhere shown, the average rates charged for goods traffic are not now more than one-half what they were fifteen year3 ago. 286 RAILWAY PROBLEMS. In Germany, Belgium, and France, like changes have occurred. England alone refuses to adapt her railway rates to the new regime. British railways alone seem unable or unwilling to realise that " the old order changeth, yielding place to new." As a result, English rates and fares are higher than those of most Continental countries, and very much above the average of the United States, at any rate for distances exceeding fifty miles. 1 Naturally enough, traders are wont to be discontented, as well as prejudiced, by this state of affairs. Not less unsatisfactory is the differences that distinguish English and Continental rates in the matter of system or method of arrangement. In England, " no general principle or system for fixing rates has been adopted on any railway." 2 In most Continental countries, on the contrary, the amount of each rate is a known quantity, as well as the terminal charge, if any ; so that there is no difficulty in ascertaining how much the transport of a particular commodity, for a particular distance, is likely to cost. Again, maxima are provided for on practically all Continental lines, whereas in Eng- land there are large tracts of railway over which no maxi- mum rates have ever been fixed. But, most strange and mysterious fact of all, the managers of English lines profess that they "cannot determine with accuracy the cost of conveying any particular kind of goods between two stations," whereas in the United States, and some other countries, this is exactly known. There is one point that is often made much of in dis- cussions of the average cost at which freight or passengers can be transported — that, namely, of the length of lead. In some countries, the information required in reference to this point is readily available. In the United States, 1 This is set forth in considerable detail in several recent publications, and notably, as regards Continental countries, in Sir B. Samuelson's " Re- port on the Railway Tariffs of Germany, Belgium, and Holland." a "Report from the Select Committee on Railways (Rates and Fares), 1882," p. viii. RAILWAY TRANSPORTATION CHARGES. 287 the average length of lead for freight tonnage varie3 from a minimum of 34.6 miles in the States of Louisiana, Arkansas, and Indian Territory, to a maximum of 166.9 miles in the States of Dakota, Nebraska, Kansas, Cali- fornia, Nevada, Oregon, and Washington. But in the former group, the proportion of the total ton-mile traffic of the United States in 1880 was only .08 per cent., while in the latter it was not more than 6 per cent. In the Central and Northern States, including New York, Penn- sylvania, Ohio, Michigan, Indiana, and Maryland, which contributed 20,416 millions towards the total of 32,348 millions of tons moved one mile in the year named — being over 60 per cent, of the whole — the average length of lead was 1 06. 1 miles, and this figure may properly be regarded as a fair average of the country generally. On the Continent, the average length of lead is less than in the United States, but greater than that of British railways. In Belgium and Holland, the distances traversed are, however, generally quite as short as in England, although the rates and fares are considerably lower. Inequality of Rates and Fares. The most material complaint made by the trading public, both before the Royal Commission of 1867 and the Select Committee of 1882, was, that the rates for convey- ance of passengers and goods are unequal on different railways, and on different parts of the same railway, and that, in consequence of these unequal rates, some districts receive advantages which place them in a better position for competition than others. The rights of the railway companies and of the public, respectively, in this matter are thus defined in the Rail- way Clauses Consolidation Act : — " And whereas it is expedient that the company should be enabled to vary the tolls upon the railway, so as to accommodate them to the circumstances of the traffic, but 1 288 RAILWAY PROBLEMS. that such power of varying should not be used for the purpose of prejudicing or favouring particular parties, or for the purpose of collusively and unfairly creating a mono- poly, either in the hands of the company or of particular parties; it shall be lawful, therefore, for the company, subject to the provisions and limitations herein, and in the special Act, contained, from time to time to alter or vary the tolls by the special Act authorised to be taken, either upon the whole or upon any particular portions of J the railway, as they shall think fit." The competition in the carrying trade between the rail-| way companies, and carriers on canals, roads, and rivers, as well as the whole coasting trade, had compelled the railway companies to reduce their rates in order to draw traffic on to their lines ; and in the opinion of the Com- mission of 1867, this had been an unqualified gain to the general public, however much the owners of the rival methods of conveyance may have been prejudiced. The! principle which is understood to govern a railway com- pany in fixing a rate is that of creating a traffic, by charging such a sum for conveyance as would induce the produce of one district to compete with that of another and a common market. Theoretically, no doubt this is quite correct ; practically, it means that the caprice of the railway managers shall determine what district shall flourish, and what district shall fade. The Continent and the United States ' are common markets for the wire trade of Ambergate or Manchester or Warrington. What inducements have the railways serving these districts given to either district to enable them to compete in those markets? London is the common market for some Manchester goods, which are also manufactured in other Lancashire towns, and yet the railways give such " special rates " that, instead of sending their produce direct to London, the firms in question find it cheaper to transport it by railway to Grimsby or Goole, and thence by steamer to London — an operation that RAILWAY TRANSPORTATION CHARGES. 289 rather reminds one of Dick Swiveller's performance of going several miles round to get across the street. Under the Traffic Act, the Court of Common Pleas distinctly recognised the right of a railway company to charge unequal rates (Eansome v. E. Counties Eailway). With regard to the common complaint that the system of unequal rates, in cases of traffic of the same nature carried from two several districts to a common market, has been so favourable to one district as to shut out the other, the Eailway Commission of 1867 pointed out that there could be no mean course between allowing the railway companies to charge what, rates they think expedient within a maximum limit, and requiring that a rate pro- portioned to distance, or at least an equal rate for equal distances, shall be adopted. ' " Many important districts," they stated, " have access to each other by navigable rivers and by the sea, as well as by railways ; and hence, if a uniform rate were made compulsory, it would prevent those districts which possess a water route as well as a railway from getting the benefit of the low rate they now obtain from the competition between the railway and the sea or river, and thus raise the price of the article to the consumer ; or else, it would act as a prohibition to the railway companies whose lines are in competition with the coasting trade from carrying certain classes of traffic, and in either case^ would check trade. Moreover, the competition which now exists between the produce of different places in a common market would be seriously prejudiced by uniformity of rate." Parliament has not only left the railway companies free to fix the rates, but has put no restraint upon the manner in which they may from time to time vary these rates. It was represented to the Commission of 1867, that it was a source of great inconvenience to traders, and in some cases attended with very serious loss, that rates were changed without any previous notice. The Commission T 290 RAILWAY PROBLEMS. did not think the suggestion that railway companies should be bound to give a very long notice to meet the convenience of persons who have entered into prolonged contracts, was well founded, as it was the obvious duty of such persons to guard, in the terms of their engagements, against a contingency known to exist. But, on the other hand, it is impossible to provide, in the ordinary current transactions of business, for a sudden change in the cost of conveyance, which may be a material item in the market value of a commodity. 'They therefore thought that railway companies should be compelled to give reasonable notice of any intention to raise their rates.) The Commissioners did not, however, consider that it would be expedient, even if it were practicable, to adopt any legislation which would abolish the freedom which railway companies enjoy, of charging what sum they deem expedient within their maximum rates when properly denned, limited as that freedom is by the conditions of the Traffic Act. The following table shows the maximum rates autho- rised to be charged in their principal Acts by the leading English railways, in pence per ton per mile : — Fish, Coal, Corn, Timber, Cotton and Feathers, Railways. Pig Iron, Iron Ore, Manufac- tured Clothing, and &c. Sugar, &c. Goods. Household Furniture. d. d. d. d. London and South- Western 2 3 3 5 Great Eastern l| to l£ 2 to 7.\ 2 toj2j 4 Great Western o£ „ 2 2 „ 3 2£ M 4 3 to 4 Great Northern . of » i| If M 2j 24 „ 3 3 .. 34 London and North-Western of „ 14 *4 ,, 2j 2h » 3 3 » 34 Midland .... I „ 2 2 „ 2i 3 r, 4 3 » 4 In spite of the obvious anomalies on the face of these rates, and in spite of the fact that no tribunal hitherto appointed to examine into the subject has been able to RAILWAY TRAFFIC CHARGES. 291 discover any principle upon which maximum rates have been fixed, or upon which the comparatively few articles enumerated in the special Acts have been classified, 1 these maxima still govern the imposition of traffic charges on all the leading railways of the United Kingdom. In more recent railway Bills, clauses have been inserted requiring each company, under penalties, to give detailed information as to all its rates. The Railway Commission of 1867 stated that, according to all the evidence brought under their notice, there was not any disposition " to afford personal preference for the special profit of individual traders ; " but that the distinc- tions in rates made by railway companies were " based upon considerations affecting the profit and interest of the railway companies themselves." The danger of preference arising under such a condition of things was fully recognised by the Commission, which recommended that the determination of rates should not be left to the good intentions of the railway companies, '\ but that " any course which is practicable should be taken to ensure these intentions being carried into effect." As the best means to this end, the Commission recommended that the public should have the opportunity of becoming acquainted with all railway rates, charges, and dealings," ^ so that the traders of each district, who might consider , that their district was unfairly taxed, might have an \ opportunity of bringing their grievances forward. But the Commission was scarcely consistent in its con- clusions on this matter. After pointing out that the several leading Acts of Parliament required railway companies to charge " equally to all persons, and after the same rate, whether per ton per mile or otherwise," and that it was required by law that " all traders should be charged the same rate," under the same conditions, they proceeded to remark that " unequal rates are the essence of the present 1 " Report from the Select Committee on Railways (Rates and Fares), for 1882," p. 7. 292 RAILWAY PROBLEMS. railway system, and as their discontinuance cannot be recom- mended, the remedy against unfairness or oppression must be sought in publicity." And then follows this somewhat remarkable non sequitur : ■— I " We therefore recommend that, in order to enable all persons to be in a position to ascertain with ease whether they are treated on an equality with others, it should be compulsory on the railway companies, under adequate penalties, to exhibit at every station, when required, to the persons using the station, a true list of the whole of the fares and rates charged from that station, and to give full information as to special contracts, rebates, drawbacks, and other deductions or advantages. The Board of Trade, or other Government department charged with the super- vision of railways, should further be empowered to require returns of all tolls and charges actually levied by railway companies, with full information as to rebates and de- ductions, or to appoint officers to examine the books of \ the companies." Again, the Commission pointed out that, " in order that the public may satisfy themselves that the rates are equitably charged, it is necessary they should know accu- rately the distances between the several stations. The . Eailway Clauses Act stipulates that the distances shall be legibly marked along the line, and that no tolls shall be payable unless this is done. But this provision is not a convenient one to convey the information," and, therefore, the Commission recommended that "railway companies should be required, under adequate penalties, to publish accurate lists of the distances between the stations on their lines." Many decisions have been given in the Courts relative to the much-vexed question of undue preference. One of the principal decisions bearing on this point is that of the Caterham Eailway Company v. the London, Brighton, and South Coast Eailway Company and the South-Eastern RAILWAY TRANSPORTATION CHARGES. 293 Kailway Company, where the Court of Common Pleas held that higher charges on one branch line than on another do not constitute an undue advantage per se. This view, however, was not supported by a decision given by Lord Justice Cockburn (Baxendale v. the Great Western Eailway Company), who held that if a railway company, as between two intermediate stations, charged a higher rate than was due to intermediate space, in pro- portion to the charge made on the entire line of railway, the Court would — if the disproportion were not justified by the circumstances of the traffic — interfere to set aside such an arrangement. Again, it was the opinion of the same eminent jurist, that if a railway company charged more favourable terms for a larger than for a smaller amount of traffic, " although the Court might uphold such an arrange- ment as an ordinary incident of commercial economy, provided the same advantages were extended to all persons under the like circumstances, yet it would assuredly insist on the latter condition, and would interfere in the case of any special agreement, by which the company had secured to a particular individual the benefit of such an agreement to the exclusion of others." If the decision of Lord Justice Cockburn were to be maintained in practice, no railway company would be in a position to do what probably every railway company in England does habitually at the present time, and has done since railways were in existence, viz., make differen- tial rates in favour of particular districts or individuals. The well-known custom of the railways is to profess to carry out the spirit of the law, which requires that they should treat alike all traders in the same description of merchandise in the same localities, but they make dif- ferential rates by allowing large rebates and discounts; and there is probably no company that has not got secret arrangements of this kind. The trading community of Great Britain feel dis- satisfied that they are charged higher rates than their 294 RAILWAY PROBLEMS. rivals abroad ; but this they might submit to with toler- able equanimity, if it could be shown, as the railway com- panies pretend that it can, to be necessary to the traffic. It is, however, the persistent evasion of the law, in regard to the several provisions made for their special protection, that traders are most concerned about. For there is not a single trader in the country who is not well aware that the railway companies do not, as required by the Traffic Act, avoid undue or unreasonable preference or advantage in favour of particular persons or descriptions of traffic ; that they do not, as required by the Eailway Clauses Consolidation Act, " charge the same tolls equally at all times to all persons ; " and that they do not, as required by the same Act, exhibit all charges actually made " upon one toll-board or more, in distinct black letters on a white ground," "in some conspicuous place on the stations or places where such tolls shall be made payable ; " and that they do not " publish accurate lists of the distances between the stations on their lines." In a word, the essential requirements of these general Acts are evaded on every hand. " Fbance. According to the law of France, the railway companies are bound to submit to the Government all rates and fares charged for the transport of passengers and goods. No alteration can be made in such rates or fares, after reduc- tion, for a period of three months as regards passengers, and of twelve months as regards goods. It is also required that the railway companies shall advise the Government as to every tariff modification, which must be advertised by placard a month beforehand. Should the Government make any alteration in a tariff, after it has been fixed by a company, the latter is bound to republish it ; and in the event of failing so to do, the company is liable for damages sustained by any carriers who may be injured thereby. RAILWAY TRANSPORTATION CHARGES. 295 It is usually arranged that the expenses attending the loading and unloading of wagons shall be borne and con- trolled by the consignees. There is generally, however, a small terminal charge imposed, which is always a fixed one, and therefore readily ascertainable by the freighter. Articles of light weight, in the transit of which speed is important, are conveyed at the speed of passenger trains (grande vitesse), while more heavy traffic is conveyed at a slower speed {petite vitesse). In 1866, according to the Duke of Devonshire's Com- mission, the charges made for transport were, according to class, as under : — First class Second „ Third „ Fourth „ >» » Fifth „ for 200 kilometres above 300 „ for 100 „ above 300 „ 2.47d. per ton per'mile. 2.i6d. „ „ 1.554 I.24& 0.93d. I.24d. o.62i In addition Jto these charges, is. 2d. per ton was required to be paid for loading, unloading, and station dues on small consignments, and g.6d. per ton on full truck-loads ; but when certain goods, in full truck-loads, were loaded and unloaded by their owners, they were subject to a terminal charge of only 3-84d. per ton. The following statement, calculated from the official railway returns for 1883, enables the above figures to be compared with the rates of the principal French railways at a recent date : — 296 RAILWAY PROBLEMS. Statement showing the Average Transportation Charges on the Leading French Railways. Tons Carried Total Average Railways. One Mile Receipts per Ton (1=1000). (1— 1000). per Mile. £ d. Nord 1,150.969 4,502 0.94 Est 845.255 3,409 0.97 576,079 3,o34 I.26 Paris and Orleans .... 1,071,093 5,009 1. 12 P., L., and M. 2,329,432 9,634 O.99 Midi Totals and average . 546,090 2,726 I.20 6,518,918 28,314 I.04 The conditions of the two sets of figures are, of course, not strictly parallel, since it would be necessary, to a just comparison of the two periods, to be able to show what proportions of traffic in each class were carried at the earlier date. But since the ton-mile or kilometric rate for all classes, up to 100 kilometres, was considerably higher in 1866 than in 1882, it is clear that the general range of rates must have been higher at the former period — most probably from 40 to 50 per cent. more. Germany. Under Sect. 26 of the Prussian Code of 1838, the rail- ways of that country are accorded, for the first three years after the opening of a line, the exclusive right of con- veyance on it, and the right to fix the prices for the trans- port of passengers and goods, providing (1) that they make known publicly the tariff, and intimate advances of rates, six weeks before they take effect ; and (2) that they forward, at their published tariff rates, all goods, without destinction of persons concerned. The rates and fares charged under this law were composed of two distinct items, the first being described as road-tolls, and the second as transport charges. The road-tolls were to be charged RAILWAY TRANSPORTATION CHARGES. 297 according to specific principles framed by the Council of Trade, and were to be revised at intervals of not less than three, nor more than ten, years. After the settlement of the road-toll tariff in this manner, the railways were at liberty to fix, at their discretion, the cost of transport for both passengers and goods ; but it was provided that if the profits from this part of the undertaking exceeded 10 per cent., the rates were to be so reduced as to bring the profits down to that level. The following figures show the ton-mile rates charged for goods traffic in the principal German States in 1863:- States. First Class. Second Class. Third Class. d. d. d. Grand-Duchy of Baden 2.20 I.67 I.4I Wurtemburg 2.20 I.67 I.09 Bavaria . 3-47 3-°5 I.09 Austria .... 3-63 2.68 I.67 Eastern Prussia . 2.20 I.67 I.4I Hanover .... 2.83 2.20 I.09 Rhenish Prussia . 2.36 I.67 I.25 The classification was as follows : — First class. — Manufactured articles, Colonial products, fish, &c. Second class. — Machinery, raw cotton, wine, crude metals, &c. Third class. — Coal, ores, building materials, pig iron, &c. On the German railways, it has long been a recognised principle of tariff construction, that the rates charged should be such as to develop the greatest possible amount of trade ; and hence, especially on the State lines, they have been very considerably reduced within recent years, according as the traffic has increased, and the working ex- penses have been reduced, absolutely and relatively. The following figures show the average ton-mile rates on the 298 RAILWAY PROBLEMS. principal German lines, for all descriptions of traffic, in 1883, as calculated from official returns: — Statement showing the Average Transportation Charges on leading German Lines. Railways. Tons carried One Mile (1 = 1000). Total Receipts therefrom (1 = 1000). Average Gross Receipts per Ton per Mile. Bavarian State . William of Luxembourg Conscription de Berlin Conscription de Hanover Rechts Rheinisch Links Rheinisch . Bergisch Markische 714,324 489,700 632,801 837,312 960,312 490,811 777,774 £ 2,881 1,580 1,847 2,679 2,741 1,624 2,619 d. O.97 O.77 O.70 O.77 O.69 0.79 O.81 Totals and averj m 4.903. 34 I5.97I O.78 The enormous reductions of rates that have, within recent years, occurred on the principal German railways are strikingly shown in these figures. The 4903 millions of tons of traffic transported one mile shown for the above seven lines, are approximately one-half of the total traffic movement in Germany for the year 1883. With reference to the other half, it is necessary to observe that the rates take a somewhat higher range. The average ton-mile rate found for the selected French lines is 33.3 per cent, higher than that found for the selected German railways. The six selected Trench lines, however, carried, in 1883, 10,350 tons one kilometre, out of a total of 10,937 ton-kilometres found for the country as a whole. Belgium. The history of railway tariffs in Belgium is very in- structive — scarcely less so, indeed, than that of the railway tariffs of the United States. RAILWAY TRANSPORTATION CHARGES. 299 Up to 1856, the tariffs were generally high, and the progress of the traffic was very slow, sometimes, indeed, showing an absolute decline. In that year, in spite of an increase of railway mileage, the quantity of traffic carried on the Belgian State railways was less by 104,000 tons than in the previous year. This led the railway adminis- tration to reconsider their tariff policy, and to adopt par- ticular contracts and special rates. In 1 86 1, the Government introduced the first regular tariff, with reduction according to distance. It embraced pit-coal, coke, coal-bricks, rough castings, flag-stones, building-stones, and lime. The results of this experiment were remarkable. The traffic rose 1 1.61 per cent. (427,000 tons) within a year. In 1 862 the special tariff became general — that is to say, it was extended to all goods of the third class. A tariff reduced according to distance was also made for the second class. The railways were worked under this rfyime during the years 1 862-3, and the first five months of 1 864. In 1 864, still more important reforms were decreed. All goods of the third class passed into a new class, at rates greatly reduced ; the greater part of second-class goods were ranked in the third, and a certain number of products of the first class in the second and third. The harimes of these two latter classes received the complement of reduc- tion according to distance ; and a reduced tariff was made for dbonncments, &c. The effect of these measures was to suppress almost the whole of the contracts and special tariffs, the rates of the ordinary tariffs being equal to, or even lower than, those of favoured ones. The results surpassed all expectation. From June to December the tonnage of heavy goods increased by 525,000 tons, which represents for a period of twelve months a total increase of 900,000 tons. It is equivalent to the mean increase of more than three years together. As to the receipts, the sudden change of which might 300 RAILWAY PROBLEMS. have reached 2,000,000 francs, this development of traffic maintained them at a normal level. In a report made by the Belgian Minister of Public Works in 1865, he remarked, with reference to these reductions of rates, that, since 1856, that is to say, in eight years — "(1.) The charges on goods have been lowered, on an average, by 28 per cent. " (2.) The public have despatched 2,706,000 tons more, while they have economised more than 20,000,000 francs on the cost of carriage. "(3.) The public treasury has realised 5,781,000 francs more, after having paid the cost of working and the interest of capital. "Being in this prosperous situation, the Government have asked if the time has not come to turn their atten- tion to the second part of the problem of cheap transport — in other words, whether it is not proper to apply to the service of passengers the principles which have given such satisfactory results to that of goods. " The Government is of opinion that facility and cheap- ness of travelling (ddplacements) are in principle as fruitful in benefits to all classes of society as the economical transport of goods can be for the producers and for the consumers." ' According to the Eeport of the Royal Commission of 1867, there were then on the Belgian Government rail- ways four classes of goods rates, viz : — d. d. First class . . 1.70 Third class . , . 0.89 Second class . 1. 16 Fourth class . 0.62 This was in addition to a uniform charge of is. id. per ton in all classes ; and iod. per ton for loading and un- loading. If collected and delivered, the charge was about 2s. 6d. per ton. Coals which were in the fourth class were carried specially for transit and export at «32d. per RAILWAY TRANSPORTATION CHARGES. 301 ton per mile, and occasionally at Jd. per ton per mile, including wagons. The following twenty years have not shown the same tendency towards rate reductions in Belgium as in some other countries. This, indeed, could scarcely have hap- pened, considering that the Belgian Government recog- nised and provided for the lowest practicable rates at so early a period, and may, therefore, be said to have led the way in a movement that has since been of general range and application. Austkia. The railway tariffs in Austria must receive the approval of the Ministry of Commerce and Public Works every three years. If the net profits from railway working exceed 15 per cent., the Government has the right to make such reason- able reductions in the tariffs as it may deem desirable. The mineral traffic of Austria-Hungary is not nearly so considerable as that of the other European States whose special circumstances have been considered. Nor is the tonnage carried so large, relatively to the mileage, and the cost of the installations. 1 This is, perhaps, the real ex- planation of the fact that the Austrian goods tariff rates generally take a higher range than those of either Germany or Belgium, as the following figures show : — 1 For the year 1882, the average tonnage of goods traffic of all descrip- tions carried on the Austrian railways as a whole was 5138 tons per mile, against 8447 tons on the German, and 14,132 tons on the Belgiau railways. 3C2 RAILWAY PROBLEMS. Statement showing the Total and Average Receipts from Goods Traffic on Austrian Railways. Hallways. Tons Carried (i = iooo). Total Receipts (1 = 1000). Average Receipts per Ton per Mile. Hungarian State railways . Elizabeth bhan Franz- Josef-bahn Nord-West-bahn . Austrian State railways Siidbahn .... Totals and average Miles. 536,652 263,269 133.059 215,676 660,265 717.784 A 1,232 1,123 662 1,040 3,026 2,849 d. 0-55 I.02 I.I9 1. 16 I. IO O.95 2,526,705 9,932 O.94 It appears that the Hungarian State railways have a remarkably low range of rates, averaging, off and on, about one-half those found for the other railways dealt with. This is accounted for partly by the greater average length of lead, partly by the lower first cost, partly by the greater proportion of petite vitesse, and partly by the greater economy of management. 1 The 2526 millions of ton- miles shown for the above six systems represent fully 60 per cent, of the total goods traffic movement of the empire in 1883, so that the average shown may be accepted as a fairly typical one. We have now seen, by a variety of facts, that the period between 1853 and 1863 marked a general movement in the direction of reducing the goods rates on the Continent. The movement applied equally to France, Germany, Austria, and Belgium. As an example of what was effected in this direction, it may be stated that up to the year 1863, the rate charged for all goods between the Prussian frontier town of Herbesthal and Antwerp was 1.03 francs per 100 kilogrammes; but in that year the rate 1 One example of this difference is found in the fact, that on the Hun- garian State lines the wagons were, in 1882, charged to within 55 per cent, of their capacity, while the general average found for the whole empire was 45 per cent. RAILWAY TRANSPORTATION CHARGES. 303 •was reduced to 63 centimes, or very little over one-half. Again, between 1852 and 1861, the mean rate per ton per kilometre on the German railways was reduced from 0.0854 francs to 0.0664 francs, while the mean of pas- senger fares fell from 0.0639 francs to 0.0570 francs per kilometre. This apparent reduction, however, appears to have taken place mainly as a result of a larger propor- tion of third-class travellers. There is no matter connected with our railway'adminis- tration that is of more real importance to the general public than that of being afforded facilities for a com- parison of one set of conditions and ona period with another, in reference to rates and fares. It would not be difficult to furnish data of this kind, if only it were in- sisted upon by the Board of Trade. The railway returns made to that tribunal already show the number of miles travelled each year by both goods and passenger trains, as well as the total weight of goods, and the total number of passengers carried. Since this information is already demanded, there cannot be any real difficulty in the way of going a step farther, and demanding that each company shall keep and furnish a record of the numbers of pas- sengers and of tons of goods traffic carried one mile, as is done in the United States and some other countries, and that, too, without any atttempt at compulsion. It is quite possible that railway managers might offer objec- tions to the demand for this information, on the ground that it would tell too much ; nor can there be any doubt that its effect would be to clear up a good deal that is now obscure as to the circumstances under which many companies carry on their operations. For it is obvious that if we had the number of tons, or passengers, carried one mile, and the receipts accruing therefrom, in reference to every railway company in the country, we should at once be able to arrive at the average ton-mile rate, and determine "whether that rate were raised or lowered, as between one year or another. We should equally be in 3 04 RAILWAY PROBLEMS. a position, with the returns of working expenses and net receipts already compulsorily made to the Board of Trade, to collate the net profit per ton per mile from one period to another, and by a judicious collation of allied and accessory facts, to put our fingers upon specific cases of extravagant charges, maladministration, and want of due economy. As the case stands at present, it is impossible for any one to determine whether the average ton-mile rate for the United Kingdom is higher or lower than it was ten or twenty years ago. The Board of Trade cer- tainly acquaints us from year to year with the total tonnage carried, and the receipts therefrom, and it is thereby possible to form an estimate as to whether the amount received per ton carried is higher or lower, from year to year ; but we cannot say whether it is more or less, in relation to the actual services rendered, seeing that the average length of lead, which is the true test, varies, or may vary, greatly from year to year, as to which, however, we are entirely in the dark. Eeference has already been made to the fact that the railway managers of this country profess that they are unable to furnish the exact cost of working any particular description of traffic. It would be extremely ungracious to suggest that it probably does not suit their purpose to know too much on this subject. But it is beyond all ques- tion, that if this item is not known on English lines, it is well enough known on foreign ones. It has been proved, for example, in the United States, that the cost of working goods traffic within the last few years has been reduced by one-half, and in some cases even more. We can hardly establish this proposition by returns that embrace the country as a whole ; but it will be a sufficiently near approximation to the general tendency of both tariff rates and working expenses within recent years if we quote the experience of one of the leading lines — the New York Central and Hudson Eiver Eailroad — which is set forth in the table that follows : — RAILWAY TRANSPORTATION CHARGES. 305 a « o 1 § ■4$ 00 S M 3* rO f 1 o "Si ^ 00 bo N M M r^ ro ro S).« r-» ov t^ CO ro tN » O d O b O © =! S i x> I CD GO Q * ro VO O Tf 00 A = « ro vo M Ov vo vo § O _ « M •" O O H K u © P-. a Si CO - a-" vo vO lO IO 1^ r^ M u 3 g ©» O Ti- 00 «N 00 Ov 1 g « Cvi ro O' O OV c-» 00 00 Ov 1^ ro 00 8 ro Ov S S ^ rO •<*■ t» 00 cS dl 00" dv t? vo 8" >2 II Ov CO vo . 00 ft vo vO_ q CO tN CO VO ro *c r^. IN O CO ** m «N 5 •K =* ■* ro 8 r^ Ov Ov N Sa- fes II 1 si rj- t ro CO N * rr r^ evi O m M * N M ^ d 0. * * * M 8 ro O Q Q ■*T 8„ Ov S CO 00 00 00 o_ Ov a 9 i 244 49.778 It will be noted that, even in reference to the mileage of single line open, there have been enormous differences of cost, the New England States showing the minimum of 39,205 dollars,and the adjacent Middle States the maximum of 72,098 dollars. The difference is largely a reflection of the superior strength and stability of the work executed in the Middle States ; but, as regards the Pacific States, the high average capital cost per mile of track has no doubt a close relation to the higher cost of labour and material. For the purpose of exhibiting in a compendious form the leading financial features of American railroads, and of indicating their principal tendencies within recent years, we have, in the following table, shown the principal data for the years 1872 and 1883 : l — 1 In the compilation of this table, we have made use of the data given in Mr. Giffen's valuable work on " American Railroads as Investments," as regards the year 1872. AMERICAN RAILROADS. 315 £.2 to 00 00 1 ■fli-NMNN O00O ^ » N Ul o_ •<*- ro q_ ►< tf\0 *fi mm >-T s? a o c o\o O 00 O * CMn fO On * ti <^«- fO«- - « cj\ • O • «o S? S| •N00 N- .1 w> i/-> ° — »- N N w> pi — O II 0\»W » H m > ^f rC rovd" N O ■* °* CT\ ^vO °* m m o 5Q ns. Ton-Miles. Miles. Cents. Pennsylvania 25,016 3,165,725 126 O.89 New York Central io,533 2,525,139 240 O.86 Lake Shore and Michigan 8,35o 1,851,166 222 O.76 New York and Lake Erie 8,715 1,721,112 197 O.84 Baltimore and Ohio 10,108 1,725,855 171 O.89 Central Pacific 1,829 449,580 246 2.49 Chicago, Burlington, and ) Quincey ) 4,948 I,I73,OOI 237 I. II Philadelphia and Reading 12,636 834,431 66 I.6I Chicago and North-Western . 5,328 8l6,739 153 1.47 Union Pacific 992 436,054 440 I.99 Chicago, Milwaukee, and St. f Paul i 2,927 442,907 151 I.72 Chicago, Rock Island, and ) Pacific ) 2,966 664,861 224 I.2I Wabash, St. Louis, and Pacific 3,919 947,369 242 O.80 Michigan Central . 3,656 727,254 199 O.80 Atchison.Topeka, and Santa Fe' Totals . 872 266, 1 74 305 2.09 102,801 •7,747,375 172 I.05 On seven of the principal American railroads, therefore, the average rate per ton per mile in 1880 was less than one halfpenny, while on one line — the Lake Shore and Michigan — it was only about three-quarters of that humble coin. This, be it remembered, was the average charge for all traffic, and not for one description only. It compares 320 RAILWAY PROBLEMS. very favourably indeed with the lowest European averages, which we have shown elsewhere (p. 277) to be o.76d. per ton per mile in Holland, and o.77d. per ton per mile in Belgium. So far as England is concerned, there is no clue, as we have elsewhere shown, to the average ton-mile rate ; but on the great coal- carrying lines, where the lowest rates are to be found, the average ton-mile charge for the transport of that mineral to the metropolis in full train- loads is as nearly as possible identical with the average of the United States railways for 1880, as applied to all descrip- tions of traffic. It is probable that the average ton-mile rate on English railways will not be much, if any, under i|d., which is just three times the amount charged on the principal American lines, as already ascertained. If the assumed English average were now charged on the Ameri- can railroads, the income of the latter, on the freight carried in 1884, would have been 200 millions sterling more than it really was ! It is not, however, to be supposed that all American railroads are alike. On local lines, with a short average length of lead, the average ton-mile rates are higher than on the great trunk lines, where the traffic is much heavier, and the length of lead much longer. This explains the fact that, if we take the average of a State, or group of States, we shall find the average ton-mile rates higher than on individual lines. In the States that have the shortest leads, the rates are the highest ; and hence, among the New England States, Rhode Island comes out with an average of 3.4 cents, while Massachusetts has only 1.6 cents per ton per mile. The average of New York State, taking both short and long lines, is, however, under |d. per ton per mile, and the average of the whole of the New Eng- land and Middle States in 1883 only amounted to 1.1 cent per ton per mile. On all railways alike, so far as the available data throw light upon the real facts, there has been a substantial reduction of rates within the last twelve or fifteen years, although, as will be seen from the AMERICAN RAILROADS. 321 following table, there are between the several States : large variations of charge as Statement showing the Number of Ton- Miles on the Railroads of the New England and Middle States of America in 1883, and the Average Rates per Ton per Mile. Number of Tons Gross Earnings Average States. Carried One Mile (1 = 1000). from Freight (1 dol. = 1000). per Ton per Mile. - Ton-Miles. Dols. Cents. Maine 159,984 2,776 i-7 New Hampshire 140,327 2,383 «.7 Vermont . /. 232,248 2,774 1.2 Massachusetts 1,015,644 16,492 1.6 Rhode Island .... 16,796 574 3-4 Connecticut .... Total, New England . 242,114 5,438 2.2 1,807,113 3o,437 i-7 New York .... 6,040,404 55,37i o.9 New Jersey .... 1,140,071 14,369 13 Pennsylvania .... 7,859.109 85,612 1.1 Delaware .... 14,146 488 3-4 Maryland .... 996,144 10,649 1,1 West Virginia Total, Middle States . Totals and average . 50,180 610 1.2 16,100,054 167,100 1.0 35,814,334 395,073 1.1 We have now to consider the twofold problem, Why has this been done, and how has it been done ? In examining these two points, we would ask the railway authorities of Europe to read, mark, and learn, with the closest atten- tion, the facts that we are about to state. It is not for a moment pretended that a sense of duty, or motives of practical benevolence, have been at the bot- tom of the revolution in railway rates that the United States have witnessed during the last few years. Ameri- can railroad managers are scarcely the men to allow either consideration to influence their command over the 322 RAILWAY PROBLEMS. almighty dollar. They are not, perhaps, in this respect either better or worse than their English and Continental congeners. Their motif in the majority of cases is iden- tical with that of which we are so fully cognisant in England — to impose upon the traffic as high rates as it will bear, and competition will allow them to secure. The latter is especially the determining consideration. Most of the great trunk lines in the United States are exposed to competition from other lines of railway, from canals, from lakes, and from rivers. This competition has com- pelled them to so set their house in order as effectually to meet it. They have met it in no half-hearted fashion, but with a measure of energy, capacity, and large-heartedness that will ever redound to their credit. It would be an easy matter to adduce statistical evid- ence of the effect of canal and lake competition in reducing the freight charges on the American railways. If we take the commerce of the city of St. Louis, as a case in point, we find that in 1871, 33.68 per cent, of the whole was received and shipped by river, and 66.32 by railway. In 1882, the proportion received and despatched by railway had increased to 87.14 per. cent., while that falling to river transportation had fallen to 12.86 per cent. Again, the receipts of grain at New York rose, between 1 87 1 and 1880, from 52 \ to 71 millions of bushels by canal, and from 34 to 95 \ millions of bushels by railway. There was, therefore, an increase of 36 per cent, by canal, and of 1 80 per cent, by rail. Corroborative evidence is furnished by the ton-mile movement of traffic on the New York State canals, and the New York Central and New York, Lake Erie, and Western Eailways, respectively. Between 1870 and 1880, the tons carried one mile on the canals only increased from 904^ millions to 1223^ millions, while the movement of traffic on the two competing railroads specified rose from 1668 millions to 4246 millions of ton-miles. It is clear, therefore, that canal competition has had a AMERICAN RAILROADS. 323 very great deal to do with the lowering of rates on the railways of the United States. In a scarcely minor de- gree, the rivalry of the railroads with each other have con- tributed to the same result. Neither cause is at work to any material degree in England, since canal competition has virtually been rendered impossible, by the control that has been acquired over the canal system by the railway corporations ; and the railways endeavour, in a great many cases, where there is a plurality of routes to the same centres, to arrange the rates on a common basis. But how, it may well be asked, has it been possible for American railways to make an annual concession equal to 100 millions sterling to the trade and commerce of the country, and yet maintain their solvency ? This is, in truth, at once the most remarkable and the most appa- rently incredible feature of the whole matter ; nor is the matter rendered more intelligible, on the face of it, when we find that, concurrently with this enormous reduction of traffic rates, the American railroads, as a whole, have increased their percentage of net receipts, or profit, on the cost of their construction, from 2.8 per cent, to 5.4 per cent., between 1871 and 1884. English railway directors and engineers are accustomed to observe — " Oh, yes ; we hear all that you say about the remarkable reductions of freight on American railroads, and it looks very pretty on the face of- it ; but before we accept it as gospel, we should like you to tell us how it is done." To answer this interrogatory satisfactorily would practi- cally involve a history of American railway development over the last fifteen or twenty years. The economy of which American railway administrators are so proud has not been the product of any one influence or improve- ment. But it has been mainly attributable to — (a.) The increase in the capacity of the goods wagons relatively to the tare. 324 RAILWAY PROBLEMS. (b.) The increase of the average load hauled per train. (c.) The increased duty got out of the locomotives. (d.) The better condition of the permanent way, and consequent economy of repairs. The type of wagon or car generally adopted on American lines is now very much larger than that of a few years ago. Until 1876, the standard capacity of the ordinary goods wagon was about nine gross tons. About 1877, the capacity was increased on several lines to twelve tons, and since 1879 there has been a further increase to about eighteen or twenty tons. The comparative weights of a Pennsylvania Eailroad box-car in 1870 and 1881 were as under : — 1870. 1881. Weight of car Weight of load . Totals . t lbs. 20,500 20,000 lbs. 22,000 40,000 40,500 62,000 showing for 1870 a live or paying load that was only 49.38 per cent, of the total, as against 64.52 per cent, of the total in 1881, or an increase of 15.14 per cent, in the latter year. This increase is so much clear gain to' the railway companies, since the road has been strengthened and improved to support the larger loads, and the wear and tear is not appreciably greater. Concurrently with .the adoption of a larger size of wagon, the live load been considerably increased. On the Pittsburg, Fort Wayne, and Chicago Railway, for example, the average load per wagon has been increased from 7.98 tons in 1867 to 10.65 tons i n 1 88 1, an increase of about 33 per cent. 1 We have next to consider the extent and the effect of 1 Official Report on the Internal Commerce of the United States for 1882. AMERICAN RAILROADS. 325 the increase of the average load carried on* American lines. The progress that has been made in thi3 direction is a matter of common knowledge in the United States. On the several divisions of the Pennsylvania Railroad, which may be regarded as a type of the practice of the, best lines, . the average number of tons hauled one mile per loco- motive increased from 2.1 millions in 1870 to 5.1 millions in 1 88 1, being an increase within eleven years of 143 per cent. 1 On the Pittsburg, Port Wayne, and Chicago Bail- road the average tonnage carried in goods trains rose from 102.8 tons in 1867 to 171.53 tons in 1881, being an increase of 66.9 per cent. ; and on the Philadelphia and Erie road, within the same interval, the average load increased from 118 to 275 tons, or 133 per cent. The increase of load over the whole of the principal lines may not be quite, equal to this high figure, but it has been of such general application as to have powerfully contributed to the result under consideration. The third means of increased economy that has been specified — the increase of duty got out of the locomo- tives employed on the American railroads — has almost been identical with, and consequent upon, the greater average weight of the trains already referred to. But it is not only that the locomotives have been designed and built to carry heavier loads ; they have also accom- plished a much greater average mileage. On the Pennsyl- vania Railroad, for example, the average distance covered by each locomotive in 1881 was 29,297 miles, as compared with 19,888 miles in 1870, showing an increase of 9409 miles per locomotive, or about 47 per cent. This, of course, represents the employment of a very much smaller ratio of rolling stock to freight carried. It is, therefore, clear that, measured by the ton-mileage test, which, is, perhaps, the best one that could be applied, each locomo- 1 See Mr. W. P. Shinn's Report on the Efficiency of the American Railroad System, in the Official Report on the Internal Commerce of the United States for 1882. & 326 RAILWAY PROBLEMS. tive employed on this important system was made to do 143 per cent more work in 1881 than in 1870. Surely this, of itself, is enough to convince the most sceptical as to the real import of the economies in question. But it is possible that railway authorities, who are little in love with American practices and claims, may be dis- posed to argue that this great increase of work per locomotive must have been attained at a very serious proportionate increase of cost in fuel and repairs. This has really not been the case. On the contrary, it is found, on the Pennsylvania line, that the average cost of repairs per locomotive, per 100 miles run, fell from 16.45 dollars in 1865, and 9.13 dollars in 1870, to 6.02 dollars in 1881, being, as compared with the highest figure, a fall of 10.43 dollars per 100 miles. If the same average fall had oc- curred over all the mileage open in the United States, it would mean that in 1883, when 389 millions of train-miles were run, the cost of locomotive repairs would be 40 millions of dollars less than it would have been in 1865 for the same train-mileage. Among minor sources of economy, but yet important ones, may be named the consolidation of connecting lines under one management, with the effect that, whereas, in i860, it rarely happened that 500 miles of railroad were under the same administration, the rule now is to have from 1000 to 3000 miles so controlled ; the running, of freight trains at higher rates of speed ; 1 the adoption of a system known as " running locomotives, first in, first out," under which, by having more crews than locomotives, nearly 50 per cent, more service is got from the latter, with less deterioration, due to frequent alterations of heating and cooling ; the running of cars through from the centres of pro- duction to tide- water without transhipment; increased terminal facilities ; and improved methods of signalling. 1 In 1867, it was believed by high railway authorities, and actually resolved on the Pennsylvania Railway, that the speed of goods trains should not exceed an average of 6 miles an hour ; but, with better pe: - manent way, 15 to 20 miles per hour has now become the rule. ( 327 ) CHAPTER XXII. COLONIAL RAILWAYS. 1 The subject of the railway development of our colonies is one of the greatest possible importance, not only to the inhabitants of " Greater Britain," but also, and in a scarcely less degree, to the mother-country as well. There are several reasons for this undoubted fact. The most obvious, and the one that is at once likely to occur to the mind, is that the mother-country has hitherto been, and is likely for a long time to remain, the chief source whence the colonies draw the materials necessary for the construction and working of their railways. But there is another, and perhaps a more paramount, reason than this, since every increase to the railway resources of our colonies provides them with additional facilities for opening up their immense virgin lands ; for promoting their population and prosperity ; for exporting their own produce, and importing that which Europe, and especially the mother-country, sends them in return ; and, finally, for supplying the inhabitants of these islands with the food which we are increasingly unable to grow at home. It is manifestly not an easy matter to compress, within the short space of time available, the salient features of so vast a question as that of colonial railway development. At the very threshold, we have to face the difficulty of how to treat the subject, which, to do it justice, should 1 This chapter was read as a paper at the Colonial and Indian Exhibi- tion on July 27th, 1886 — the Right Hon. A. J. Mundella, President of the Board of Trade, in the chair. An abstract of the paper, nearly two columns long, appeared in The Times, together with a leading article, commending its conclusions. 328 RAILWAY PROBLEMS. be examined from many points of view, and especially from those of the economist, the engineer, the investor, and the general public. If we take our fifteen principal colonies, including India, Canada, and the Australias, we find that they possessed a total of about 30,000 miles of railway at the end of 1884, being one mile of railway to every 269 square miles of area, and every 7379 inhabitants. In the United States, there is one mile of railway to every 25 square miles of area, and every 2321 inhabitants. In the United Kingdom, there is a mile of railway to every six miles of area, and every 2000 inhabitants ; and if we take the United States, Europe, and the British colonies together, we find one mile of railway to every 57.5 square miles of area, and every 2467 inhabitants. In considering the extent of railway facilities actually necessary to each colony, its natural resources must be duly estimated and allowed for. It is impossible that we can furnish a standard of adequate colonial railroad ser- vice based on European data, the circumstances of our colonies being as unlike as possible to those of Great Britain, or indeed any of the Continental nations, in respect both to area and to population. If we apply the test of area alone, the imagination almost refuses to grapple with the figures that describe the resources of our possessions abroad. The area of the British islands is about 75 millions of acres, of which' 50 millions are cultivated or cultivable. The area of our Australian empire is 1968 millions of acres, the greater part of which is believed to be capable of yielding excel- lent crops, alike of cereals and of tubers. In the Canadian North- West alone, there are 384 million acres of valuable agricultural land, the whole of which is admirably adapted for settlement and cultivation. In British India, again, there are close on 600 million acres of land under culti- vation, or capable of being cultivated, and much of it, under judicious irrigation, may be made to yield two, aud COLONIAL RAILWAYS. 329 even three, crops in a year. These are the territories that are, or that we would wish to see become, the wheat-fields, the grazing lands, the orchards, and the market-gardens of the mother-country. The problem that our own people have got to face, and which, sooner or later, is certain to press for solution, is something like this : England is now, and has for a num- ber of years been, increasingly dependent upon importa- tions of food from abroad. According to Sir James Caird's calculations, we imported in 1880 foreign food supplies of the value of 125 millions sterling, being roughly an average of rather over £4. per head for the whole population of Great Britain. Of this large item the United States are now supplying us with 28 to 30 millions worth per annum, or about 25 per cent, of the whole. But the United States are, in fiscal affairs, a hostile country, endeavouring as far as possible to exclude British produce by unfriendly tariffs. On the other hand, we have an empire of our own, outside the limits of these islands, that has an area of over 8 millions of square miles, and a population of nearly 300 millions — an empire that is not only ready, but eager, to trade with us in the most friendly manner, that pos- sesses an enormous wealth of virgin soil, an enterprising and industrious, if still somewhat sparse, population, and every necessary resource for meeting our requirements as regards food supplies, excepting only the means of bring- ing those supplies from their wheat-fields and grazing lands to the doors of the great consuming public within our own islands. Not only so, but our Australian colonies and the great North- West of Canada possess, as regards certain cereals, a more fertile soil even than the United States of America. In the latter country, European methods of husbandry have now largely become necessary, in order to meet the requirements of a more or less exhausted soil ; but in the Dominion and in Australasia there are still millions of acres that have never been scratched with spade or plough, and whence we may fairly expect in the 33o RAILWAY PROBLEMS. future to draw a large proportion of our outside food requirements. The question is now, therefore, presented, How much longer shall we continue to withhold from our own colonies the thirty millions sterling, or more, which we have now for many years annually paid to the United States for wheat and butcher meat ? The obvious answer to such a problem is, that we shall do so just as long as, and no longer than, the railway communication of our colonies remains inadequate and incomplete. If Canada and India had to-day solved the railway problem as effectually as the United States have long since done — if railway facilities were as abundant between the producers and the ports, and if the rates of freight were as cheap, and as entirely adapted to the development of the trade, there would be no need for the dependence upon Ameri- can supplies that now exists. It is not necessary that we should resort to any heroic remedies. No retaliatory fiscal duties, no protection, no reciprocity, no fair-trade nostrums are called for. The problem will solve itself by the operation of natural laws — by the capacity that the Anglo- Saxon race have ever manifested for adapting means to ends, and especially for ends that are so important to their com- mercial well-being as the acquisition of the home markets. It is important to remember that the average cereal crops of the United States have not within recent years been so large as formerly. 1 Whether this, is due to the increased depletion of the soil, or to the 1 The averages of four-yearly periods have been calculated from the Statistical Abstracts of the United States to be as follows : — Items. Average Yield per Acre in Bushels. 1862-65. 1880-84. Corn .... Wheat .... Buckwheat Rye .... 30.2 13-4 18.4 15.0 22.9 12.0 11 5 12.3 COLONIAL RAILWAYS. 331 "bringing under cultivation of less prolific tracts of land, or to less genial seasons, or to these and other causes com- bined, we need not now inquire. But, whatever the cause, the effect upon the chances and opportunities of the colo- nies, in reference to the home markets, can scarcely fail to be salutary. The strides that the colonies have already made in the direction of furnishing the mother-country with bread-stuffs are such as put even the fabled achieve- ments of the seven-league-boots entirely in the shade. Between 1868 and 1882, the imports of wheat into Great Britain increased from 798,000 to 3,115,000 cwt. as re- gards the Dominion, from 161,000 to 8,463,000 cwt. as regards British India, and from 327,000 to a maximum of 4,613,000, in 1880, as regards Australasia. The question of whether our own colonies can compete with the United States and Bussia in supplying the food requirements of the mother-country may be regarded as settled by these figures. But even supposing that it were not, it is clearly the interest and the duty of the mother-country to endea- vour, by every possible means, to solve it in favour of the colonies, whose chief want now, and for years past, has been the lack of adequate transportation facilities. The United States supply a notable example of what may be done for a country that is endowed with good natural resources, by the aid of ample means of trans- portation, and of how such facilities tend, both to the great increase of trade, and the cheapening of the cost of bringing together the two classes into which, for railway purposes, all mankind may be said to be divided, viz., producers and consumers. Again, the development of the foreign trade of the United States has been greatly helped by the low rates of freight which the greatly increased volume of traffic at command has enabled the railway companies to concede. This is a point of the utmost importance in considering the means of colonial development. Between 1870 and 1884, the railways of the United States had reducedtheir 332 RAILWAY PROBLEMS. freight rates by fully one-half over the whole of the enor- mous traffic which they carry. 1 In relation to this fact, we have shown in the previous chapter that, if the same average rates of freight prevailed at the present time as in 1870, the agriculturists and traders of the United States would have been paying a hundred million pounds sterling more than they actually are for railway transportation. Again, the stimulating effect of railway facilities upon the trade and commerce of a country has within recent years received a very remarkable illustration from the experience of our Indian empire. To go no farther back than 1880, it appears that the railways of India carried in that year less than io| millions of tons of goods and minerals, whereas in the year 1884, the quantity carried had advanced to over i6| millions of tons. In the interval, therefore, there had been an increase of 6 millions of tons, or 60 per cent., as compared with an increase of 1928 miles, or 22 per cent., in the extent of railways opened for traffic. It is a striking feature of the Indian railways, that not only have they always brought traffic with them, but the extent of that traffic has invariably exceeded the official estimates framed when the lines were projected. The railways have exercised an equally marked influence in assisting the development of the foreign trade of India. Between 1868 and 1884, the exports of British India rose from 5of to 88 millions, while the imports increased from 35! to 52I millions, and in India, as in the case of the United States, the increase of volume, taking the lower range of prices into account, has been much greater than the increase of value. The colonies and the United States have many things in common, but in nothing are they more alike than in the fact that agricultural produce, in one form or another, is the staple of their railway traffic. In 1880, the railways 1 The total number of tons moved in 1883 was 400^ million tons, and the receipts therefrom amounted to 544J millions of dollars. The average rate received over the whole was .64CL per ton per mile. COLONIAL RAILWAYS. 333 of the United States carried over 70 millions of tons of agricultural produce, out of a total traffic of 290 millions of tons, being close upon 30 per cent, of the whole freight carried. On the transport of this traffic from the place of production to the ports, the agriculturists of the United States are now paying about 30 millions sterling a year less than they would have required to pay at the rates of twelve years ago. As a result of this remarkable reduction in the cost of transportation, the agricultural exports of America have, since 1870, been more than doubled in value, and greatly more than doubled in volume. To our colonial possessions, these are facts pregnant with signifi- cance, proving, as they do, that if the maximum amount of development is to be attained in commercial and agri- cultural affairs, it is not enough to provide railway facilities, but they must be furnished at the lowest pos- sible price. The reduction of American railway rates has been the controlling factor, not only in regard to British imports of food supplies, but in the character and extent of British, and even European, agricultural depression. It is not unusual to hear it claimed that this or that country or community is so amply endowed with all the essential requirements of civilised existence — that it has such a wealth of both agricultural and other resources — as to be entirely independent of external commerce. It is not uncommon to find the United States quoted as an example of a country thus situated ; and probably, if it may be claimed for any nation that it has every resource within its own borders, that claim may be made on behalf of the North American Continent. And yet, as we have seen, the United States have developed an enormous export trade, which has entailed, and brought in its train, whether they liked it or not, and even in spite of their utmost efforts to the contrary, a corresponding develop- ment of imports. Now, our colonies, almost without exception, have an enormous surplus of produce to dispose of. In the meantime that surplus is mainly agricultural 334 RA IL WA Y PROBLEMS. By-and-by it will take other forms as well, and we may expect before long to draw from our colonial possessions, the great bulk of the raw materials of our widely-ramified manufacturing industry. But we may depend upon it, that the import of commodities will follow their export, and that the more the colonies send to us, the more we shall send to them. It is, therefore, a matter of vital concern to British colonial possessions, and not less so to the mother-country, that they should be furnished as speedily as possible, and on the greatest attainable scale, with the means of trans- porting their produce from their wheat-fields and their vineyards, their sheep-runs and their cattle ranches, to the markets of Europe. Need we add that without railways, the most prolific soil in, the world will fail to yield the best return — that is to say, the price of com- modities is generally determined by the facility and the cost with which they can be put upon the principal markets; and if railway communication is established throughout the colonial possessions, the prices of wheat, beef, mutton, and other produce grown for export, will be affected, not by merely local considerations, but by the quotations ruling in Mark Lane and Smithfield, plus the cost of reaching those markets. Having thus considered some of the more general economic conditions of the problem, the special circum- stances of colonial railways remain to be dealt with. There have been many different methods of financing the railways constructed in the colonies. Each has adopted the means that appeared best suited to its special circumstances. Some have sought to provide the " sinews of war " by a variety of processes ; but in all cases alike, the develop- ment of the railway system has been limited from the outset by the exigencies of finance. This is, indeed, the crux of the whole matter. It is not to be expected that a benevolent public will come forward and subscribe the capital requisite to build railways, with a prospect of only COLONIAL RAILWAYS. 335 receiving 2 to 3 per cent., in countries where the ruling rate of interest is double these figures. Nor is it a common experience that the public subscribe largely to newly-pro- jected colonial railways, even when they have exceptionally good prospects before them, since railway traffic takes a certain time to develop, and investors are not- content to wait for distant or hypothetical results. In order, therefore, to furnish the capital necessary for the railways already built, the colonies have been compelled — (1.) To obtain Government guarantees, as in India. (2.) To obtain direct State and municipal aid, as in Canada. (3.) To raise loans on European markets, as in the cases of the Australian colonies, and the Cape of Good Hope. v These three principal modes of procedure have been varied, according to the special circumstances of each country or colony. In some cases, the Government has constructed a certain proportion of the mileage of a great trunk line, as in the case of the Canadian Pacific. 1 In other cases, the aid furnished by the State has been limited to land grants. In other cases, again, both Imperial and municipal funds have been provided for the construction of railways of urgent necessity. As regards India, there are three systems of financing adopted — the first, that of the Bengal and North -We stern terms, whereby the rail- ways are constructed entirely by a private company ; the second, that of the Bengal Central terms, under which the State guarantees 4 per cent, on paid-up capital during construction ; and the third, that of the Southern Mahratta terms, which provide for the company receiving a guarantee of 3^ per cent., plus one-fourth of the net receipts, during the period of their concession or agency. In the case of 1 In this case, the Dominion 'Government constructed and transferred to the company free of cost 714 miles of road, out of a total of 3268 miles, in addition to donating 25 millions of acres of land, and granting a subsidy of 25 millions of dollars as a loan. 336 RAILWAY PROBLEMS. Australian and Cape Colony lines, the necessary capital has been raised by loans on the London money markets and by Government grants. One remarkable feature of the railway finance of the more important colonies is the ready acquiescence of the inhabitants to tax themselves for transportation facilities. Thus, we find that while the total expenditure incurred on Canadian railways, up to the end of the financial year ending June 30th, 1884, was 557 millions of dollars, the several Governments and municipalities had contributed 187 millions of dollars, or about 34 per cent, of the total. Of this proportion, the Dominion Government furnished 150 millions, and the Quebec Government over 14^ millions, while the municipalities, as such, contributed over 14 millions in all. In the Australian colonies, the same feature is characteristic of railway finance ; and it must be a source of satisfaction to these colonies to reflect that they are thus providing for posterity a heritage that will improve as years roll on, and which will enable them, at an early stage of their career, to dispense with that crushing burden of taxation, which dynastic and other wars have entailed upon European countries, without any similar set-off or compensation. One point that is of considerable importance, in refer- ence to the construction of colonial and Indian railways, is the rate of interest at which capital can be raised. In most cases of money being guaranteed or loaned for rail- way extension, the rate of interest has been higher than it should be, having regard to the generally profitable and safe character of the investment. Thus, we find that of 97 millions raised by the various guaranteed railway companies of India in 1879, about S^ millions were share capital raised at 5 per cent At the end of 1883, this sum had been reduced to 56! millions by a rearrangement of the capital expenditure ; but in both cases the rate was much higher than it should have been, having regard to the fact that the interest is paid in London ,a COLONIAL RAILWAYS. 337 sterling. In the case of Canada, the rate of interest would naturally be expected to be higher, but it is not, perhaps, so much so as most financial experts would look for, the rate varying only between 6 and 5 per cent, on the paid- up bonded debt of 109 millions of dollars. In the Australian colonies, the value of credit as an asset is being increasingly realised. New South "Wales, which had until lately to pay 5 per cent, on railway loans, has just borrowed 5J millions at 3J per cent, for railway pur- poses, which is about f per cent, less than the average rate of interest paid on railway loans in Great Britain. There has, necessarily, been a great diversity of expe- rience in regard to the cost of constructing Colonial railways, as might be expected from the varied character and cost of the elements that enter into such expenditure. In very few cases has land been an item of cost of any importance ; it has generally been given free throughout Australia, Canada, and British India. In this respect, therefore, the Colonial railways differ widely from those of older countries, and especially the mother-country, where the land has been estimated to have involved an average expenditure of ^4000 per mile. The principal items of outlay for Colonial lines are generally permanent way and rolling stock. These facts and considerations suggest whether it may not be advisable, in the case of new and sparsely populated countries, to endeavour to economise first cost by one or other of the several expedients that are so well known to railway promoters and engineers. In some countries, nar- row-gauge railways have been found to fulfil this condition, although the break of gauge is not to be recommended where it can possibly be avoided. In India, there were, in 1884, 10,737 miles of railway constructed, of which 7314 miles were built on the broad, and 3255 miles on the metre, gauge. 1 The cost of the former amounted to an 1 There were also 27^ miles on the 4 feet gauge, 91 miles on a 2 feet 6 inches gauge, and 50 miles on a 2 feet gauge. Y 338 RAILWAY PROBLEMS. average of £16,7 J 2 per mile, while the latter only cost £6895, the average cost per mile for the whole country- being ^"13,611. Again, in Canada, it has been deemed advisable, with a view to furnishing transportation facilities to districts that would not otherwise, in all probability, have acquired them so soon, to construct some hundreds of miles of narrow-gauge railways, in the back country beyond Toronto, which have cost an average of only £4020 per mile, as compared with an average expen- diture of about £8000 per mile for broad-gauge railways in the same province. In this case, the narrow-gauge railways, with an average net income of ^113 per mile, have yielded 4 per cent, on the cost of construction, whereas the broad-gauge railways, with an average net income of £250 per mile, have only yielded 3 per cent, on their capital cost. 1 There are, however, those who distinctly maintain that the narrow-gauge railways are less satisfactory than their rivals — that the cost of working them is relatively higher, that their capacity is much less, and that there is a heavier expense incurred for maintenance. These considerations were strongly urged before the Select Com- mittee on Indian Railways in 1883-84. 2 On the other hand, some authorities held that the metre-gauge should be used as feeders for main lines, and that the narrow- gauge is equal to carrying any traffic that it is likely, to be called upon to bear. On the Canadian narrow-gauge railways, the results obtained appear to have been very satisfactory. The net income per train-mile is stated at 40.16 cents for the broad, and 38.10 cents for the narrow, gauge, while the working expenses per train-mile are given as 69.44 cents for the broad, and 58.64 cents for the narrow, gauge. 3 1 Minutes of Proceedings of the Institute of Civil Engineers, vol. xlviii., p. 256. 2 Vide "Report," pp. 1684-87, 1739-46. * Minutes of Proceedings of the Institute of Civil Engineers, vol. xlviii., p. 256. COLONIAL RAILWAYS. 339 Figures like these, however, do not wholly settle the question. There are many other problems involved in the matter of gauge which are not to be solved by any one factor of cost. The opinion of the Select Committee of 1884 on Indian Eailways was that the metre or narrow gauge should, as a rule, " be confined to tracts of country where that system is already in successful operation, and to local lines where the traffic is likely to be so light that cheapness of construction more than counterbalances the undoubted disadvantage of break of gauge." It is pro- bable that this recommendation is, on the whole, a wise one. It is certain that, on the great majority of lines, the ultimate traffic has largely exceeded the most sanguine ex- pectations of promoters and builders. We are now using 40 to 50 ton engines, where 7 to 10 tons were deemed sufficient not so many years ago. In some cases, 90-lb. rails are being used where 56 and 72 lbs. were regarded as adequate within recent memory. And so with all the other conditions of railway working. In considering the subject of railway development in the British possessions abroad, one of the first points that arrest attention is the manifest difficulty of framing sug- gestions that will equally apply to the great diversity of conditions and circumstances that have to be taken into account. "We have, at the one end of the scale, British India, with her teeming population of over 200 millions to an area of less than a million square miles, and at the other, Western Australia, with a population of only 30,000 to approximately the same area. Between these two sets of circumstances there is a great gulf fixed, and where the conditions to be met are so varied and complex, there must needs be variety in the means of meeting them. Again, there is a very remarkable disparity between Indian and Colonial, and especially Australian, railways, in reference to the cost of working. In the one case there is the cheapest, and in the other perhaps the dearest, 340 RAILWAY PROBLEMS. labour in the world, as measured by the sum of money paid for a day's work. It is necessary to bear this quali- fication in mind, since it may easily, and, in point of fact, often does, happen that the highest-paid labour is the more economical in the long run. The cost of working Indian railways is much under that of working European or Colonial railways in general, and this explains, to some extent, the exceptionally low rate of tariff charges that obtains thereon. Mr. Eendel has shown that the average sum received for carrying a passenger one mile on the Indian State railways is -336d., while the cost of the service is .I74d., leaving a profit on the transaction of .i62d. For carrying a ton of goods traffic one mile the average receipts amounted to .gS6d., and the average cost of the service to 42od., leaving a profit of .$66d., or more than 1 30 per cent, on the cost incurred. 1 In Canada the freight rates also take an exceptionally low range. This is the result, in great part, of the competition that exists between the principal Canadian lines, and especially the Grand Trunk and the Canadian Pacific, for the trans-Continental traffic. On a great part of the traffic moved on these lines, the average ton-mile receipts are under a halfpenny, or about one-half the average ton-mile receipts from goods traffic in this country. It is a rule with some engineers that the cost of a railway should not exceed ten times the amount of its. gross annual revenue. Measured by this rough-and-ready test, our Colonial railways are found somewhat wanting. This is particularly the case in Canada, where the sum actually expended has been 125 millions, against the sum of 6j millions, represented by ten times the gross annual receipts. In India, on the contrary, the theoretical limit of expendi- ture is 163 millions, or 20 millions more than the actual outlay. Taking our eight principal Colonies together, the sum actually expended in railway construction has been 347 millions sterling, or 46 millions more than the theo- 1 Report on the Railways of India for 1877-78. COLONIAL RAILWAYS. 341 retical limit ; but this, after all, is no worse than the case of the railways of the mother-country, which, at the end of 1883, had cost 785 millions, against a theoretical limit of 682 millions, being 103 millions more than the figure at which they ought to stand. In the United States and in Germany, the actual cost of the railways built has been under the theoretical limit, while in France and Belgium the railways have cost slightly more. It is somewhat remarkable, however, that if we take the United States, Germany, France, and Belgium together, their railways had actually cost 2590 millions to the end of 1883, against a theoretical limit of 2603 millions, so that the two items were practically identical. The general principles that guide and control economical railway working are sufficiently well known to railway authorities, and need not be dealt with here at any length. One of the most important is that of securing a high range of gross earnings per train-mile, or, in other words, running full train-loads. Another is that of keeping the working expenditure low, relatively to the gross receipts. It is maintained by some authorities that the former should never be under 5 s. per train-mile, and by others that the latter should never exceed one-half, or 50 per cent., of the total gross earnings. In the case of the United Kingdom, the average earnings per train-mile are much below those of most other countries, chiefly because of inattention to the rule of running full train-loads. Over the last thirty years the maximum earnings per train-mile on British railways reached 5s. 1 i£d. in 1856, while the minimum amounted to 5s. in 1884. 1 The earnings have, therefore, varied within comparatively narrow limits, but with a tendency towards a lower rather than a higher level. On our Colonial railways, with the exception of Canada, the average range of ton-mile earnings are higher than in the mother-country, but still below the average of some 1 Since this was written the average train-mile receipts have fallen to 4s. iod. for 1885. 342 RAILWAY PROBLEMS. Continental countries. The highest train-mile receipts are obtained in India, where they amounted in 1884 to about 8s. gd. Cape Colony came very nearly up to the same average, with 8s. per train-mile. In the Australasian colonies, the average train-mile receipts varied from a minimum of 6.2s. in the case of Queensland, to a maxi- mum of 6.7s. in the case of New Zealand; but in all cases the average was higher than in the mother-country. It is, however, to be observed that, except in India and Canada, the average transportation rates are higher than in Europe, and much higher than in the United States, where the average receipts per train-mile amounted, in 1883, to 6.2s. for goods, and 6.7s. for passenger traffic. It is, of course, a moot point how far a high train-mile rate is compatible with affording the most ample facilities for traffic, and it is not fair to forget that the superior facilities, as regards the number and the despatch of trains, afforded in England, have much to do with the lower train-mile rates on English railways ; but in newer countries, where the traffic is not so liable to congestion, this is clearly a matter of less importance. The average gross and net earnings, and working expenditure, per train-mile, are shown, for the several leading colonies, below : — Statement showing the Average Gross Earnings, Working Expenses, and Net Receipts per Train-Mile in Different Colonies in 1884. Colonies. India * Canada 2 Cape Colony Victoria New South Wales New Zealand Queensland . South Australia . Gross Earnings. d. 96.80 S6.I5 96.OO 79-91 78.07 81.19 74-68 77.16 Working Net Expenses. Receipts. d. d. 48.82 47.98 43-40 12-75 63.30 33-70 53-62 26.29 47.61 3046 55-40 25-79 39-14 35-54 51-55 25.61 1 The rupee has been converted into sterling at its nominal value of 2s. 2 The dollar has been converted at its nominal value of 100 cents, or 43. 2d. COLONIAL RAILWAYS. 343 The working expenditure of a railway system is neces- sarily affected by economic conditions that are always more or less local in their application, such as the cost of labour, the price of fuel, and the relative cheapness or dearness of materials. The proportion of the gross receipts of a railway that is absorbed in working it, depends partly on these factors, and partly on the extent of the traffic carried. It is manifest that there may be an absolutely high range of train-mile receipts, and yet a very low range of net receipts, in cases where the traffic to be carried is exceptionally limited ; so that, to produce a relatively low working cost and a relatively high net income, there must be a conjunction of favourable economic conditions, as regards the cost of working and density of traffic. With the exception of India, all the British colonies of any considerable importance have not yet attained these favourable conditions to the fullest extent. They have to contend with higher-priced labour and materials, and a much lower relative volume of traffic, than obtain in Europe, and hence they require to expend a larger proportion of their gross earnings in the working of their railway systems. The following figures show the proportions of the gross receipts expended in working the railways of different colonies it 1 883-1 884: — Per Cent, of Gross Receipts. India 37.62 Cape Colony 64.80 Canada 76.50 Victoria 67. 1 1 New South Wales 60.98 New Zealand 68.24 Queensland 52.41 South Australia 66.81 In only two cases — those of India and Queensland — is the percentage of working expenditure under that of the United Kingdom, where this factor has varied from a minimum of 47 to a maximum of 55 per cent., over the 344 RA IL WA Y PROBLEMS. last thirty years. In the United States, which possess the greatest volume of railway traffic of any country in the world, the working expenses absorbed, in 1883, 63.8 per cent, of the gross receipts. With the exception of Canada, therefore, our colonies cannot be regarded as greatly transgressing the essentials of economical and successful working in this regard. In view of the importance of making every possible effort to extend Colonial railways, and so accelerate the development of the resources of " England beyond the sea," it is interesting to consider what are the limitations imposed upon the prospects of railways as investments by the extent of traffic available. For this purpose I have compiled a table which shows, as regards eight of our principal colonies, including India and Canada, the absolute gross and net earnings, the net earnings per mile, and the percentage of net earnings on capital cost. The main results brought out by this compilation are, that the net earnings vary from a minimum of £ 163.4 in the case of Canada, to a maximum of ^804.2 in the case of India, per mile of line open. Queensland, with an average net income of only £268.4. P er mile, succeeded in returning an average dividend of 4.04 per cent., and South Australia, with an average net income of ;£ 178.6 per mile, paid 2.77 per cent. ; while New South Wales, with an average income of £485.1 per mile, yielded an average return of 4.20 per cent. In the case of English railways, it requires a net return of over £ 1 770 per mile, or more than six times the avearge net earnings of the Queensland railways, to pay approximately the same rate of dividend — the average for the United Kingdom having been 4.16 per cent., as against 4.04 in Queensland. These figures suffi- ciently show that Colonial railway property is a very different thing from English, and that the two must not be tested by the same criteria. The details are appended herewith : — COLONIAL RAILWAYS. 345 Statement showing the Gross and Net Earnings, the Net Earnings per Mile, and the Percentage of Net Earnings on Capital Invested in Colonial Railways, in 1884. Colonies. Miles Open. Gross Earnings, j£l = IOCO. Net Earnings, ,£1=1000. Net Earnings per Mile. Percent- age of Net Earnings on Capital Cost. India .... Canada .... Cape Colony . Victoria .... New South Wales . New Zealand . Queensland South Australia Totals and average . 10,447 9,575 1,344 1,562 1,618 i,396 1,207 1,036 £16,279 6,680 965 1,898 2,o86 961 682 557 £8,401 i,565 338 624 785 305 324 185 £12,527 £804.2 163.4 251-5 399-5 485.1 218.5 268.4 178.6 £444-5 5-91 1-4 . 2.65 2.91 4.20 2.51 4.04 2.77 28,185 £30,108 — In Colonial railway construction, it is manifestly of importance, where the traffic has to be created, and the resources of capital are limited, to keep down expenditure as much as possible. This is not, however, always an easy matter, especially when the engineers are wedded, as so many are, to English rules and practice, and believe in solidity of construction rather than the opening up of as great a stretch of country as possible. The average cost of the railways built in our nine principal colonies, including India and Canada, amounted at the end of 1883 to £1 1,913 per mile, as compared with about ^"50,000 per mile expended on British railways, and £"i2,oog per mile expended on the construction and equipment of the rail- ways of the United States. The lowest average cost has been incurred in South Australia and Queensland, and the highest in Victoria and India, as the following table shows : — 346 RAILWAY PROBLEMS. Statement showing the Mileage of Railways Constructed to the end of 1884 in the Principal Colonial Possessions of Great Britain, with the Total Capital Cost, and the Average Cost per Mile. Colonies. Australasia — Victoria . New South Wales New Zealand . Queensland South Australia Tasmania India . Canada Cape Colony Totals and average Miles Con- structed. 1,562 I.32I 1,396 I.207 1,036 215 10,832 10,243 i,453 29,265 Total Cost Average Cost ,£1=1000. per Mile. £21,488 £13,757 16,915 I2,8lO 12,163 8,713 8,031 6,654 6,664 6,432 i,793 8,340 143,000 T 3,202 125,200 12,223 13,392 9,217 £348,646 £»,9I3 It is not, however, always within the power of an engineer to determine the cost at which a railway shall be made. If the alignment and gradients are easy, the number of bridges and viaducts few, and the price of the land nominal or nil, the cost of construction will necessarily be much less, even with the same gauge and weight of rails, &c, than in cases where the opposite conditions prevail. Then, again, the cost of equipment must be proportioned to the extent and character of the traffic. If the traffic is light, so also will, or should be, the cost of the rolling stock. A rule frequently adopted by railway engineers is, that the cost of the rolling stock should represent the equivalent of a year's gross earnings. On this basis, India should have fully twice the rolling stock for the same mileage as Canada, since the gross earnings of Indian railways are double those of Canada per mile of line open. Once more it will be obvious that the effect of building railways that are too light for the character of the traffic will be to greatly increase the cost of working, or rather COLONIAL RAILWAYS. 347 the expenses of keeping up the lines, so that the possible economy in first cost would be neutralised by the in- creased expense of maintenance. It is difficult to lay down a hard-and-fast rule on this point, since the traffic of to-day may be doubled, trebled, or even quadrupled in a few years' time, on the same lines, and hence the condi- tions to be met in the near future may be entirely different. Such has, indeed, been the experience of the United States and other countries, where a much more substantial roadway has been entailed by the growth of traffic. In each separate case, therefore, the promoters of a new line should consider, not only the traffic already existing, but the traffic that is likely to be created ; and this can only be measured by a due regard to the resources and population of the district through which the railway is to be carried. In all cases, the traffic is likely to increase from year to year, but its development must take a much longer period in some cases than in others. It is inevi- table that in a country like India, with a population of nearly 20,000 per mile of railway constructed, the traffic should grow more quickly than in a country like Canada, where there are only 470 to the mile. In practice, how- ever, it is found that even to this rule there are limi- tations. The extent of goods traffic is not always a function of extent of population. This is sufficiently proved by the fact that in India, in 1883, the total tonnage moved on 95 10 miles of railway was less than the tonnage moved in Canada on 7530 miles of railway, although the population of Canada in that year was only 7 \th of that of our Indian empire. In other words, there were 3 tons moved for every inhabitant in Canada, as against 0.05 ton per inhabitant in India. The necessities imposed upon them by the character of their traffic, and the competition which very generally obtains, have caused English railways to be worked much less economically than those of some other countries. In the colonies, however, those necessities scarcely exist as 348 RAILWAY PROBLEMS. yet, since the railway system has not been developed sufficiently to induce any competition worth speaking of. Hence, according to Mr. Rendel, the East Indian line, with a traffic equal to that on the London and North-Western, is able to carry both passengers and goods at about one- third of the North-Western cost. The secret of this superior economy in India is, that there are few trains run, and those trains are very full. As a result, the locomotive stock of the East Indian line is only about 600 engines, while the London and North-Western has three times as many, and the wagon stock of the East Indian is not more than one-fifth that of the London and North-Western line. Mr. Eendel has calculated that on the East Indian line the number of passengers in a train averages 260 or 270, as against about 50 on the London and North-Western, while the number of tons to a goods train will average 164, taking empty and full together, as against 70 on the London and North-Western. The construction of a railway may be regarded, in a general way, as calculated to open up a country to the extent of about twenty miles on either side. Beyond that distance, the cost of wagon transport becomes so high as to shut out agriculturists and manufacturers from com- petition with those who are within the twenty mile limit. If, then, we assume that the beneficial operation of railway facilities is bounded by this area, we shall find that, while the railways built in the United States would be equal to the opening up of about 5^ millions of square miles, or nearly twice the whole area of the country, excluding Alaska, the railways so far built in Canada are only equal to opening up about 400,000 square miles, or very little more than one-ninth part of the whole, while the railways constructed in India only provide for opening up about half a million square miles, or rather more than one-third of the total area of the country. With regard to the Australasian colonies, the case is even worse, since the railways constructed, up to the present time, amounting COLONIAL RAILWAYS. 349 to 7000 miles in all, are only calculated to provide facili- ties for 280,000 square miles, or ^th of the whole area of the country. It is a disputed point how far railway facilities con- tribute directly to the wealth and commerce of a country. But there cannot be any possible doubt as to the beneficial effect of railways in improving the value of land in new countries, that grow produce for purposes of export. Of this fact the United States supply a remarkable example. A recent writer says of Oregon, " that thirteen years ago, ft hardly exported any wheat to Europe, for lack of cheap transportation to the ship. The nominal price of farm land was then from 5 to 10 dollars per acre, but since railroads have been built, the value of improved agricul- tural land has risen to from 10 to 100 dollars per acre." The total area of the British colonies, including India, may be put down roughly at 8 millions of square miles, or 5120 millions of acres. If we were to allow ourselves to be persuaded that the ultimate effect of rail- way facilities would be to increase the value of this im- mense area by an average of only one shilling an acre, it would seem to follow that the Colonial landowners would thus be benefited to the extent of 256 millions sterling. The effect of railway development upon national trade and commerce, although perfectly obvious and appreciable, is not any more capable of being expressed in exact figures. The high economic authority of Mr. Gladstone has been given to the estimate, that out of a total increase of 162 millions in the exports of the United Kingdom, between 1830 and 1879, 5° millions may fairly be credited to loco- motive agencies, and 112 to liberating legislation, 1 or, in other words, only 30 per cent, of the whole is attributable to railway facilities. This is necessarily an arbitrary figure, but Mr. Gladstone gives reasonable, if not entirely ade- quate, grounds for his hypothesis ; and if railways have added 50 millions a year to the value of the export trade 1 Nineteenth Century, February 1880, p. 386. 3,0 RAIL WA Y PROBLEMS. of our own country, it is to be expected that they will exercise a similar influence in reference to the trade of other countries that have any considerable bulk of produce to export, and especially of such countries as the majority of the Colonial possessions, in which the agricultural sur- plus available for export is very large. There cannot be any doubt that it is the interest of a colony, both immediately and remotely, to make every effort to promote the extension of its railway facilities. For this purpose, it may safely venture to incur a debt that would not be justified for any other purpose. Not only so, but that justification would extend to the pay- ment, if needs be, of a higher than the normal rate of interest on loans borrowed exclusively for productive works. Search where we may, and in countries that have anything like the semblance of vitality, the effect of railways is the development of traffic and commerce. Throughout our Colonial empire, there are resources suffi- ciently ample and elastic to justify the view that this development will be rapid, and all but illimitable. But, taking the colonies so far as we have the data at command, we have as yet only one mile of railway to every 269 miles of territory, whereas the average of the United Kingdom is 6.4 miles of area, and that of the United States 25.0 miles, to every mile of railway. Is it quite beyond the bounds of possibility that our colonies may yet come up to the standard of the United States ? If that should ultimately be attained, our Colonial railway mileage will not be the paltry 29,178 miles at which it now stands, but 320,000 miles, or about eleven times as much. Population and capital appear to be the only desiderata necessary to this result, and these, we may depend upon it, will ultimately be forthcoming. Mean- while, the colony that succeeds (by taxing itself, by mort- gaging the future, or by any other means) in constructing the greatest railway mileage, relatively to its area and population, is likely to have the best start in the race COLONIAL RAILWAYS. 351 that our colonies must hereafter engage in for supremacy at home and commercial intercourse abroad. Appendix. The two tables that follow are designed to illustrate some of the preceding remarks, and especially to show the remarkable differences that distinguish the several Colonial dependencies of Great Britain in reference to the relation of railway facilities to area and population : — Statement showing the Area of British Possessions Abroad, and the Mileage of Railways Constructed in 1882-83. Mileage Average British Possessions. Square Miles. of Railways Constructed Area to each Mile of in 1882. Railway. British India .... 904,135 10,832 83 24,702 178 139 Cape of Good Hope 221,950 1.453 153 3,510,592 9,575 367 4,193 25 168 Trinidad i,754 58 30 British Guiana 76,000 5i 1,490 Mauritius 713 1 10 6 Australasia — New South Wales 310,700 1,365 228 Victoria 88,198 1,562 56 South Australia . 903,690 1,036 872 Western Australia} 1,000,000 "5 8,696 Tasmania . 26,215 215 122 New Zealand 105,342 i,396 75 Queensland 669,520 1,207 555 Totals and aven ige . 7,847,704 29,178 269 352 RAILWAY PROBLEMS. Statement showing the Population of the British Colonies in 1881, and the Mileage of Railway Constructed in 1882-83. Colonies. Population in 1881. Mileage of Railways Constructed. Population to each Mile of Railway. British India . Ceylon Cape of Good Hope Canada . Jamaica . Trinidad . British Guiana . Mauritius Australasia — New South Wales Victoria South Australia Western Australia Tasmania New Zealand Queensland . 202,694,981 2,758,529 1,249,824 4,504,319" 580,804 153,128 252,186 377:373 751,468 862,346 279,865 29,708 "5,7o5 489,933 213,525 10,832 178 i,453 9,575 25 58 5i no 1,365 1,562 1,036 "5 215 i,396 1,207 18,713 15,497 860 470 23,232 2,640 4,945 3,431 55i 552 270 258 538 351 177 Totals and ave rage 215,313,694 29,178 7,379 353 ) CHAPTEK XXLII. ENGLISH RAILWAY ADMINISTRATION. 1 There is no material interest that is of greater present and ultimate importance, in relation to the comfort, con- venience, prosperity, and general well-being of a nation, than its railway system. If that system is adequate in its resources, and efficiently administered, it is certain to be a main factor in assisting a country to achieve and to maintain a foremost place in the family of nations. If, however, the reverse conditions are in operation, no country can hope to fill that place in the world's economy to which it might otherwise attain. Regarded from this point of view, it is a matter of some importance to consider how far England is before or behind other, and especially industrially and commer- cially competitive, nations, in reference to its means of internal transport and intercommunication. English railways have a number of characteristics that distinguish them from those of other countries in a more or less considerable degree. The more prominent of these characteristics are an enormously high capital expendi- ture ; high rates of speed, and consequently quick trans- port and delivery ; a very large passenger traffic, relatively to area and to population; an exceptionally high range of rates and fares, &c. These phenomena are all more or less inter-related. The high capital expenditure compels a higher range of rates and fares in order to yield the 1 This chapter is largely made up of a paper which the author read at the Birmingham meeting of the British Association in 1886. Z * 354 RAILWAY PROBLEMS. same result on the same volume of traffic. The higher rates of speed that are characteristic of English railways tend to a higher average cost of transport ; and the quick- ness of despatch and delivery that English lines excel in compels the running of wagons and trains that are not so fully loaded as the average of other countries, and which, accordingly, fail to show an equally high range of train- mile receipts and net profits on the same volume of busi- ness, as if the Continental or American methods were more generally pursued. England, as the pioneer of railway development, has had to pay very dearly for her experience. We have had to pay an infinitely higher price for land than any other country, and we have constructed heavy embankments and tunnels to secure as direct routes as possible, where these would, in other countries, have been avoided by curves and steeper gradients. Then, again, English rail- ways have been constructed to stand a heavier traffic and a larger amount of wear and tear than the railways of any other country. The permanent way is heavier, there is a larger proportion of double line and siding accommoda- tion, and, finally, the expenses of the Parliamentary con- tests in which English companies have been involved have added enormously to capital cost, while millions have been dissipated in endeavouring to raise the necessary capital for lines that never have, and possibly never will, realise either the promises or the expectations of their speculative promoters. But manifestly these considerations apply almost ex- clusively to newly-constructed lines. They do not account for the increase of capital expenditure on already existing lines. That increase has within recent years been so serious as to deserve a much greater share of public atten- tion than it has hitherto received. If we take the country as a whole, we find that the average capital expenditure, per mile of line open, rose from £35,984 in 1872 to £42,561 in 1885. In the interval, the mileage of lines ENGLISH RAILWAY ADMINISTRATION. 355 open had been increased by 3355 miles, and the capital expenditure by about 247 millions ; so that the average capital per mile of new line would come out as more than £73,000, if the whole additions to capital had been devoted to that purpose. Between 1862 and 1872 the increase of line opened was 4263 miles, and the increase of capital expenditure was about 1 84 millions, representing an aver- age of rather over £43,000 per mile of new line. What has become of the enormous difference in the capital ex- penditure, as tested by the standard of new mileage opened, during the later of the two periods? This difference is equal to not less than £ 30,000 per mile of new line, and its effect has been, as already stated, to bring up the average capital cost of our railways, as between 1872 and 1885, by £6577 per mile of line open. The increase has been most marked in the case of the English and Welsh lines. In 1872 these lines represented an average capital of £42,500 per mile open. In 1885 the capital per mile open was within a fraction of .£50,000, so that in the interval there had been an average increase of about £7500 per mile ; and as the number of miles of line open in England and Wales at the end of 1885 amounted to 13,612, the total difference in the expenditure per mile, as between the two periods, amounts to not less than 102 millions sterling. Although we have not the accounts before us in detail, there can be little doubt that the chief sources of this very remarkable increase of capital expenditure have been the extension of station accommodation, the widening of lines and the increase of sidings, the purchase of addi- tional rolling stock, the installation of the block and air- break systems, and other measures, either compulsorily demanded or voluntarily undertaken with a view to in- creasing the efficiency of the service and the safety of life and limb. But none the less is the item a serious one, and its seriousness is increased rather than diminished when it is compared with the corresponding figures for other countries. In the United States, there has been a 356 RAILWAY PROBLEMS. much greater increase of traffic, as between 1872 and 1884, than in Great Britain, and yet the average increase of capital per mile of line open has been less than one-third of the increase that has happened in our own country. 1 In some Continental countries, an increase of traffic has been coincident with a decreased capital expenditure per mile of line open, in consequence mainly of the greater cheapness, within recent years, of all the materials of construction. To this latter source we should have been justified in look- ing for a diminished expenditure per mile of line open, on all railways — at any rate since 1879, when the era of cheap prices was fairly inaugurated ; but even since then, the capital expenditure of the railways of the United King- dom has been increased from .£40,518 to £42,561 per mile. This fact appears to show that, as regards capital cost at any rate, English railways have gained little from the lower prices at which all commodities have been procurable within the interval. If we take the North- Western Eailway as a typical example, we find that, during the ten years ending 1885, it expended over four millions sterling in additions and improvements to terminal sta- tions at London, Birmingham, Liverpool, and Manchester. This outlay has, no doubt, tended to the great advantage of the public, but those facilities may be too dearly pur- chased after all; and the public should not forget that they can hardly possess, at the same time, magnificent stations and cheap rates and fares. It is true that the two things may not necessarily be incompatible ; but it is also true that, if the public demand exceptional facilities, they must be prepared to pay an exceptional price for them ; and it is worth while pausing to consider whether we have not been getting too luxurious and exigeant in our require- ments. It is perhaps now too late to undo the mischief to which we refer ; but we are not too late to determine that railway companies shall not be encouraged in this prodigal 1 This is shown more specifically in the chapter on American Railways. ENGLISH RA IL WA Y A DMINISTRA TION. 357 expenditure on lines, the capital account of which ought to have been closed many years ago. This mortgaging of the future is not creditable to our appreciation of what is best for our present needs, or of what is most calculated to advance the interests of posterity. The first thing that strikes a casual inquirer into the economics of railway working is the enormous disparity that is found between the construction cost of different railways. At the one end of the scale, we have the Metro- politan Kailway, with a capital cost of over half a million per mile open; 1 and at the other, we have the Liskeard and Caradon line, costing less than £2000 per mile. Between these two extremes, there are all sorts of intermediate figures. The most expensive lines have been those con- structed in the neighbourhood of the metropolis. Four of the'm have cost over £ 140,000 per mile, viz. : — The Metropolitan .... £515,073 per mile. „ District 440.3H ,, „ „ North London .... 3 2 4>655 »> „ „ Chatham and Dover . . . 140,682 „ „ Of the main trunk lines, seven have cost over £50,000, and some over £70,000 per mile, viz. : — The Manchester, Sheffield, and Lincok £82,888 per mile. ,, Lancashire and Yorkshire 79,889 „ „ „ South-Eastern 59.149 ,. „ ,, West Lancashire . 58,400 „ I, „ Brighton and South Coast 55.887 „ „ „ North-Western 55.176 „ „ „ Midland . . . . 53,9o8 „ „ Of the other chief railways, the average cost per mile has been : — 1 Mr. Bell, the general manager of the Metropolitan line, has called my attention to the fact that this cost includes the Harrow extension, which runs through an open country, and consequently was not so expensive as the line from Aldgate to South Kensington, which cost £772,000, or the City lines extensions, which cost £1,264,000 per mile. 358 RAILWAY PROBLEMS. The Furness • £S°> 1 43 per mile „ Great Northern . 44.665 ,, „ „ North Staffordshire 40,609 „ „ „ Great Eastern 3 8 »238 „ „ „ North-Eastern 37.103 „ ,, „ Great Western 3 ,98i „ „ „ Taff Vale . 31,015 „ „ With these exceptions, and one or two others of minor importance, the average cost of the railways built in England and Wales has not generally been as much as .£30,000 per mile. The question here naturally occurs, What is the ex- planation of the enormous differences shown in these figures ? Is it due to the greater cost of the land, to the more costly gradients and alignment, to the more stable and expensive character of the works and ways generally, or to the acquisition of adjuncts that have been deemed requisite for the traffic, although not properly coming within the scope of a railway undertaking ? To furnish adequate replies to each and all of these inquiries would necessitate a very elaborate analysis of railway property generally. This, of course, cannot be attempted here. But it may be remarked that the nearer the railways approach the metropolis, and the greater their mileage within, or in the neighbourhood of, London, the higher becomes their average mileage cost. One cause of this is no doubt the more costly works involved to meet the special conditions of metropolitan working — especially the greater amount of tunnelling, and the more expen- sive station accommodation. Another is the very much higher cost of the land in the metropolis. Still others there are, which will occur to all who are more or less familiar with the question. It is, however, important to remember that although the capital outlay on English railways is phenomenally high, so also is the volume . of their traffic, and their average gross and net receipts per mile. The advantages possessed in this respect by English lines would enable ENGLISH RAILWAY ADMINISTRATION. 359 them, if properly administered, to yield quite as good re- turns as those of other countries that have a much lower capital cost. But the system pursued on our principal railways does not, as already indicated, seem to promote this result. We have at once the largest gross earnings per mile and the lowest train-mile rate of any leading country in the world. This fact when placed alongside the high range of rates and fares, gives the key to the whole situation. Perhaps the greatest defect in the administration of English railways is the practice which obtains of running only partially filled trains where full train-loads should be adopted. This is a defect that has been admitted most readily by railway managers themselves ; but they likewise seek to defend the practice on the ground that it is de- manded by the public, and that any departure from the now established usage would involve a withdrawal of facilities and conveniences to which traders would not care to submit. It is also urged that, in reference to the great bulk of the traffic, there is so much competition between the principal railways that if they did not each provide the best facilities within their power in the way of rapid de- livery, they would be left behind in the race. This is no doubt perfectly true as regards the general merchandise traffic, and it also applies in a large measure to agricultural traffic, and especially to live stock. But it certainly cannot have any bearing upon mineral traffic, which amounts to nearly 70 per cent, of the whole. There is no reason what- ever why mineral traffic should not be always, as it gene- rally is, carried in full train-loads. It seldom happens that a few hours more or less make any difference in regard to its delivery. It is not a perishable commodity, and it is one that lends itself most readily to the highest demand of economic working, viz., the adoption of full and heavy train-loads. In England and Wales the quantity of general merchandise carried by railway in 1884 was 64^ millions of tons, out of a total of 220 millions of tons, being just about 30 per cent, of the whole. It is in 360 RAILWAY PROBLEMS. respect of this proportion, therefore, that} there is, or is supposed to be, a great deal of leakage, in consequence of the absence of full train-loads. Mr. Grierson has admitted that in England the ordinary goods-truck is not filled to the extent of more than one-half its carrying capacity — that instead of carrying 6 or 7 tons, it i3 usual to carry only 2\ or 3 ; and hence we find trains carrying no more than 70 to 100 tons, when they might just as well carry 250 or 300. Obviously, if the rule were the other way, the train mile receipts, instead of being only 4s. iod. or 5s., should be double that figure; and as the cost of work- ing goods traffic decreases in an almost direct ratio with the weight of the train, or rather of the live or paying load, the adoption of fuller wagon-loads would give a much higher range of receipts in proportion to the ordinary working expenses. This, of course, could not be done with some descriptions of traffic. • It would be especially difficult with traffic to which the term perishable can pro- perly be applied, but such traffic forms but a very trifling part of the whole — probably not more than 10 per cent. ; and to the remaining 90 per cent, the system could cer- tainly be applied with great advantage. There are many points in respect of which English rail- ways would do well to take a lesson from their American congeners. If American railways have in some respects set a bad example — if they have incurred odium and be- come disreputable, from the operations of financiers and speculators, from the " watering " of their stocks, the installation of " rings," and other equally equivocal de- vices, — they have at any rate earned the gratitude of their shareholders in particular, and of the trading community in general, in consequence of the enterprise and capacity which have enabled them to reduce the average rates of freight within ten years by one-half, and their working expenses by a corresponding, if not still greater, amount. There are many English railway authorities who do not admit the possibility of such an achievement. They ask 1 ENGLISH RAILWAY ADMINISTRATION. 361 incredulously, having in view only their own experience, Where has any such reduction come from ? The economy that has undoubtedly taken place in American railroad transportation within recent years has been dealt with in previous chapters, and need not here be more particularly referred to, except to remark that the chief causes have been — 1. Increased capacity of freight cars or goods wagons. 2. Larger train-loads. 3. Better permanent way. 4. Increased efficiency of locomotives. In the case of most American lines the live load is much greater, relatively to the gross or dead load, than in this country. It is not an easy matter to state the average load carried on English lines. There are, indeed, no direct means of reaching this desirable item of information. But it is probable that it is considerably under 100 tons. This conclusion is based on a very simple arithmetical calculation. The total receipts from goods traffic in 1885 on all the railways of the United Kingdom amounted to .£36,871,000. The number of miles travelled by goods trains in the same year was 125,929,000. The average receipts per goods train mile would thus appear to have been 5.8s. Now, we have no direct clue to the average ton-mile rate on English railways, but if we assume that it is only id., we should arrive at an average of rather under 70 tons per train-mile ; and inasmuch as the average ton-mile rate is generally believed to be nearer 2d. than id., the average live load of a goods train is likely to be nearer 50 than 70 tons. If it were assumed that all trains return empty, this figure would require to be doubled ; but, while 90 per cent, of the mineral trains return empty, at least 80 or 85 of the ordinary merchandise trains find return freights. If, however, we assume that one-half of all the goods trains fail to find return loads, the average live load carried on our English railways would 362 RAILWAY PROBLEMS. be found to be considerably under ioo tons, and probably not more than 75 tons, even on loaded trains. It is interesting to compare this figure with those that apply to Continental countries and the United States. In those countries, as in Great Britain, the average weight of the loads carried on different railways is not specifically recorded. The process of statistical analysis may, however, give us some clue to such knowledge. By that process we can discover the average receipts per ton of merchandise or goods traffic carried in different European countries. 1 If, now, we divide the average gross receipts from goods trains per train mile, by the ascertained average receipts per ton per mile, we shall arrive approximately at the average weight of the goods trains of different countries, as in the following table : — Statement showing the Average Receipts per Train Mile, the Average Ton- Mile Rates, and the Calculated Average Live Load Carried per Train Mile in European Countries and the United States. Countries. Average Receipts per Goods Train Mile. Average Ton- Mile Rate. Total Tons Carried per Train Mile. s. d. Germany . Austria Belgium . 9-3 12.3 6.1 O.85 I.05 O.77 132 139 96 France 10.9 I.07 121 Italy Luxembourg Russia 8.1 4.2 12.0 I.20 O.96 I.I6 8l 52, 124 Finland . United States 7.0 8.9 O.99 O.62 86 173 United Kingdom 5-9 I.OO 2 70 This method of estimation, so far as we know, has never been applied before. It may be open to objection, but no other method appears to be at command ; and at any rate, so far as it goes, it shows that the average load carried on 1 This is done, of course, by dividing the number of tons carried one mile into the gross receipts from goods traffic. 2 This, as already stated, is an assumed figure. I ENGLISH RAILWAY ADMINISTRATION. 363 English lines is less than that of any other country except Luxembourg. When we come to examine the passenger traffic returns of English railways, we find that the train-mile receipts are much lower even than those from goods traffic, amount- ing to only 3.5s. as against 5.8s., the average of the whole traffic of both descriptions amounting to 4s. iod. per train mile. "Within recent years the train-mile receipts have shown a tendency to fall off. Since 1875 the average train-mile receipts of the United Kingdom, as a whole, have fallen from 5s. 7|d. to 4s. iod. The de- crease in the receipts from passenger traffic have been more remarkable still. The greater proportion of third-class or low-priced passenger traffic in the United Kingdom is likely to have something to do with the lower average receipts per train mile just alluded to. Those receipts are, of course, quite independent of the number of vehicles that may be made up in an average train, and are, in fact, nothing else than a function of the average number carried. There is no charge that has more frequently been levelled at our great English railway corporations than that of running a needlessly large number of almost empty or half-empty trains, and thereby working at a loss, or, at any rate, with a remarkably and quite unnecessarily attenuated range of profit, the enormous passenger traffic at their command. It is also made a subject of frequent animadversion that the third-class traffic, if not the goods traffic, is made to pay for working first-class traffic at a loss. In briefly looking into these several questions, we pro- pose to examine the relation of coaching stock to passenger traffic ; to show how far each class is remunerative ; and- to endeavour to ascertain how far the results prove the number of passenger vehicles to be below or above the standard of really necessary efficiency. 3 6 4 RAILWAY PROBLEMS. The average capacity of the railway carriages in this country is generally put at forty places per carriage. The average distance over which each passenger is carried in the United Kingdom is between six and seven miles. If a carriage were full at all times when it is in service, and were taken as running for only six hours a day, at an average speed of thirty-five miles per hour, it should in that period of time carry 1400 passengers, or 420,000 per year of 300 working days. The actual average number of passengers transported per carriage on British railways is not more than 22,000 per annum, or 60 per day. The meaning of this appears to be that passenger carriages are not now doing much more than one-twentieth of the work they might accomplish. Here there is a manifest waste of resources ; and it would undoubtedly be much to the advantage of railway shareholders, as well as of the general public, if things were differently ordered in this respect. This condition of affairs is not of recent origin ; it has existed for many years. But the evil is getting worse rather than better. Since 1874 the average earnings per passenger carriage have been reduced from £888 to £774, or about 1 3 per cent., as the following figures show : — Statistics of Passenger Traffic in England and Wales, 1S74-1885. Number of Gross Earn- ings from Total Number of Passengers Gross Earn- / Tears. Passenger Passenger ings per Carriages. Traffic 0£i = iooo). (1 = 1000). Carriage. 1874 21,148 £l8,772 4-23,084 £888 1875 21,838 19,364 45!,°33 887 1876 22,757 19,623 477,146 862 1877 23.154 19,846 490,352 857 1878 23,320 20,047 503,983 860 1879 23,877 19,341 503,653 8lO 1880 24,658 20,341 540,669 825 1881 25,542 20,690 56i,i75 8lO 1882 26,224 2i,573 586,690 823 1883 27,274 22,059 612,402 809 1884 27,905 22,247 621,131 797 1885 28,352 21,968 622,169 774 I ENGLISH RAILWAY ADMINISTRATION. 365 It is perfectly true, and necessary to remember, that this reduction of earnings per carriage has been coincident with a very considerable increase of third-class, and a consequent decrease of first-class, travel ; but, on the other hand, third-class carriages are, or should invariably be, fuller than first-class, and they also contain a considerably larger number of places — two elements that ought to fully compensate for the reduction in the number of first-class travellers. It is only necessary to add that the average receipts per carriage are, after all, higher in England than in other leading European countries, but this may be because passenger fares take a higher range. The averages for the chief European countries are as under : — Countries. Total Number of Carriages. Total Passenger Receipts (£ 1 = 1000). Average Receipts per Carriage. Germany .... Austria- Hungary Belgium t> France .... Italy Russia .... 20,843 7,607 3,386 18,004 4,943 6,696 £l 1,Ol6 4,827 1,705 13,425 3,200 7.IIO £529 633 5°4 745 648 1,020 There has hitherto been a great lack of knowledge in this country as to the extent to which the different classes of passenger traffic yield adequate profit to the railway companies. English passenger traffic differs from that of most of other countries in this respect, that the chief companies attach third-class carriages to almost every train. The accommodation provided for third-class pas- sengers in England is also much superior to what is found in other countries where there is the same distinction of classes. The effect of these two distinguishing features of the English railway system is that third-class carriages are much more, and first- class carriages much less, utilised than in other countries. The tendency appears to be to- wards an increasing use of third-class, and a decreasing 3 66 RAILWAY PROBLEMS. use of first-class, vehicles. But all the same, the leading English lines continue to provide a large proportion of first-class accommodation in every train, and it is no unusual thing to find the third-class carriages of express trains absolutely full, while first-class carriages are almost empty. The natural result is that third-class travel is a source of profit, while first-class travel is not. There are not wanting proofs of this fact. The coaching and passenger traffic returns of the London & North "Western Eailway Company show the following results for 1885 : — Description. First class . Second class Third class . Totals and average Number. 1,697 182 1,784 3.663 Passengers Carried. 2,170,442 3>7oo,459 48,978,129 Average per Carriage per Annum. 1,285 20,330 27,460 54,849,030 15,000 The receipts from each description of carriage have been as under for the same year : — Description. First class . Second class Third class . Totals and average Number. 1,697 182 1,784 3,663 Gross Receipts. £500.833 361,650 2,290,883 £3.153,366 Average, per Carriage per Annum. £295 2,OO0 7,280 £860 These figures are, however, affected by one important disturbing element. The first-class carriages are classed with composites, and as there is no record of the total number of composite carriages, nor of the proportions of ENGLISH RAILWAY ADMINISTRATION. 367 first and third class seats in each, it is impossible to fix how far the proportions of first and third class traffic may be thereby altered. In the case of the Midland Eailway, there is less difficulty in arriving at a correct estimation of the results of working first and third class traffic. On that line the composite carriages are separately distinguished, and if we allow that they should be apportioned in equal parts to the first and third class stock, respectively, the results will come out as follows : — Description. Number of Carriages. Total Passengers Carried. Average per Carriage. First class . Third class . Totals and average 786 1,729 1,528,786 30,717,762 1,944 17,765 2,515 32,246,548 12,821 With regard to receipts, it appears that the first and third class carriages, respectively, yielded the following averages in 1885 : — Description. Number of Carriages. Gross Receipts. Average Receipts per Carriage. • First class . Second class 786 1,729 £259,721 I,54I,5 I 5 £330 885 Totals and average 2,515 £1,801,236 £716 Each third-class carriage belonging to the Midland Com- pany appears to have conveyed 15,821 more passengers than the first-class, being an increase of 814 per cent. Each third-class carriage also earned £555, or 168 per cent, more income in the course of the year than carriages of the superior class. 1 It is important to bear these 1 It should be noted that these figures do not include season-ticket holders, from which the company earned a further sum of £19,877. Although this is only a comparatively small item, it introduces a disturbing element that must be taken into account. If, however, we assign the whole of the receipts from season tickets to first-class travel, the average receipts per first-class carriage would only be raised thereby to £353 per annum. 368 RAILWAY PROBLEMS. figures in mind in considering the cost of working pas- senger traffic. The first-class carriage, to begin with, costs nearly twice as much as the third, it is more expen- sive to repair, and it is run at greater speeds, where there are — as on the railways south of the Thames — express trains with no third-class carriages attached. But this is not all. The best and most costly accommodation is provided for first-class passengers at stations and other- wise; and if porters are not retained specially for first- class passengers, they at any rate give more conspicuous attention to that class. The same condition of things, more or less modified in degree, will be found to apply in the case of every railway company in this country. So far as passenger traffic is a source of net profit, that profit is contributed by the third class. The total receipts from passenger traffic in England and Wales amounted in 1885 to ,£21,968,000. But if the average receipts per carriage over the whole had been the same as in the case of the Midland first- class vehicles — namely, £330 — the total receipts from passenger traffic would only have been about nine millions. It is not necessary to be an expert in order to see that traffic so conducted must be attended with a very serious loss. The sooner English railways put their house in order in this respect, the better for themselves and for the country at large. It has been claimed by an American authority 1 that the American locomotive is a much more economical machine than the English, alike in respect of its earning capacity and its cost of maintenance. It is certain that within recent years the carrying capacity of American locomotives has been largely increased. The introduction of steel rails and a heavier weight of permanent way have enabled much more powerful locomotives to be employed, and have con- sequently led, in the United States, to the adoption of a 1 Dorsey on "English and American Railroads Compared." ENGLISH RAILWAY ADMINISTRATION. 369 much heavier average train-load. Thus, in America, the Pennsylvania Eailroad Company increased the average •weight of the load carried per train, between 1870 and 1882, from 112 to 186 tons, or 66.7 per cent. On the Pittsburg, Fort Wayne, and Chicago line, the weight of the load in the same interval was increased from 102 to 17 1 1 tons, or 66.9 per cent. And so with most of the other leading lines. 1 Hence the average gross and net earnings of an American locomotive have within recent years been largely increased. But in England, where the average weight of the load carried has not been materially increased, if at all, the average earnings of a locomotive have diminished. The following table shows this relation for the period 1872-85 : — Statement showing the Annual Gross Earnings per Locomotive in England and Wales for the period 1872-85. Years. Is umber of Locomotives. Gross Receipts from all Traffic (£1 = 1000). Average per Locomotive. 1872 1873 1874 1875 1876 1877 1878 1879 1880 l88l 1882 1884 1885 8,687 9,111 9,554 10,000 io,439 10,636 10,804 10,977 11,172 ",474 11,847 12,482 12,840 £43,376 47,061 48, 142 49,771 50,504 5I,o63 51,069 50,437 53.598 54,924 56,596 60,099 59,320 ^4,993 5,l65 5,039 4,977 4,838 4,801 4,727 4,595 4,798 4,787 4,777 4,8i5 4,620 Between the maximum of £5 165 and the minimum of £4595 shown in this table, there is a difference of £570, and it will be noted that in the year 1885 the earnings 1 Some interesting details bearing upon this point are contained in a report presented by my friend Mr. William P. Shinn to the reporter on the Internal Commerce of the United States for 1882. 2 A 37o RAILWAY PROBLEMS. were the lowest on the record except those of 1879. It is manifest that if heavier train-loads "were adopted, the earnings of English locomotives would be correspondingly increased. The locomotive earnings of the chief European countries besides our own are shown in the following statement : — Countries. Number of Locomotives. Total Gross Earnings C6i = iooo). Average Earnings per Locomotive. Germany .... Austria- Hungary Belgium France .... Italy Russia .... ",330 3,671 1,790 8,088 1,630 5.844 ^48,494 23,080 6,479 45.021 8,245 34,424 ^4,280 6,287 3,620 5,566 5,058 5.890 According to these figures, it would appear that, with the exceptions of Germany and Belgium, Continental nations possess a higher average locomotive income than England. This is certainly not due to a higher average range of rates and fares, but it may fairly be attributed to greater care in the economical working of locomotives, and especially to the running of fuller-train-loads. The element of speed has undoubtedly a great in- fluence on the average cost of railway working. There is, however, a want of specific data as to the precise effect of speed on the cost of working a train. It is calculated that on the majority of the English trunk lines the aver- age speed of goods trains is about twenty miles, and of passenger trains about thirty-five miles, per hour. Mr. Findlay stated some years ago that the average speed on the London and North-Western Eailway was 1 8 miles per hour for the former, and 30 miles for the latter. Some years previously the average speed was not so great. There was, indeed, a not uncommon impression that, beyond a certain limit, the slower the speed the greater the economy of working. One witness stated to the Royal ENGLISH RA IL WA Y A DMINISTRA TION. 37 1 Commission of 1866 that on the Great Northern line the best and most economical speed for all trains was about fifteen miles an hour ; but that the coal trains, not being able to get up the rise of the gradients as fast as the average time, ran down inclines at the rate of thirty miles an hour. 1 The same witness maintained that the loco- motive expenditure would be increased from y^d. to 8|d. or 9d. per train mile by raising the rate of speed from thirty to forty miles per hour, and that every other item of working expense would be more or less augmented (as the signals, permanent way, &c), because the higher the rate of speed, the better and more efficient must be the condition of the permanent way. In the United States there has recently been a very considerable augmentation of average speeds, especially for goods and mineral trains which are now run at fifteen to twenty miles per hour. 2 Experiments made with a " dynograph " car in the United States have shown that a speed of eighteen miles per hour for goods trains is more economical of fuel, and requires less power than a slower movement. 3 The opinions entertained by the earlier railroad in- quirers were decidedly unfavourable to high rates of speed, from the point of view of economy. Thus, Mr. Nicholas Wood sets out 4 that, at a speed of eight miles per hour, the cost of haulage would be -375d. per ton per mile; but at a speed of twelve miles per hour, this cost would be raised to .5d., and at twenty miles to 1.73 d. It was, there- fore, held that an increase of twelve miles an hour in the speed would cause an augmentation of 370 per cent, in the cost of haulage. The experience of later engineers have greatly modified these figures. There cannot be any question that the practice of run- 1 Report, Minutes of Evidence, p. 883. 8 Mr Shinn's Report to the Secretary of the Interior on " The Increased Efficiency of the Railroad System of the United States." "Report on the Internal Commerce of the United States for 1882," p. 301. 3 Ibid. * "Practical Treatise on Railroads," p. 616. 372 RAILWAY PROBLEMS. ning a great many only partly full express trains on all our principal lines has little to recommend it beyond public convenience. The railway companies have never yet shown what it costs to carry on their express-train traffic, as distinguished from the rest. It is not, however, too much to affirm, that when the wear and tear of the rolling stock and permanent way are considered, and the shunting and delay occasioned to the slower traffic, the express-train traffic is not adequately remunerative, if, indeed, it does not involve a real loss. In no other country are there so many express trains as in England, and nowhere else do trains generally travel at the same high rate of speed. On a survey of the whole matter, there would appear to be too much reason to believe that the financial position and prospects of English railways are going from bad to worse. Our railway boards have not, as yet, adequately realised this great fact, and have consequently done little or nothing to stem the tide of insolvency that threatens to overtake them, unless they mend their ways. In England alone, there were last year (1885) about 36^ millions of ordinary railway stock upon which no dividends whatever were paid. There were 14^ millions more upon which the dividends paid did not exceed 2 per cent. These two items together made up 20 per cent, of all the ordinary capital of English lines. Is this an adequate result for the finest railway system in the world — for the system that has the largest volume of both gross and net receipts, that has the cheapest materials of construction at command, and almost, if not quite, the highest range of rates and fares ? There can only be one answer to such a question. That answer will be more imperatively insisted on than it has hitherto been, if our railway boards should fail to meet their own interests, and the manifest requirements of the trading and travelling public, by sounder methods of finance and administration. ENGLISH RAILWAY ADMINISTRATION. 373 The following are among the sources whence economy in the working of English railways, and consequent in- crease of profits, or reductions of rates and fares, or both desiderata together, may be expected in the future : — (1.) The adoption of a slower average rate of speed for goods trains. (2.) The reduction of tare, so as to allow of a greater live or net load being carried, relatively to the weight of the vehicles employed. (3.) The adoption of heavier truck and carriage loads, or, in other words, the running of fewer empty wagons and carriages, and possibly fewer trains. (4.) The avoidance of duplicate trains from practically the same termini for practically the same destinations. (5.) An endeavour to redress the difference in the balance of goods sent in opposite directions. (6.) The transfer of a great part of the heavy traffic to the canals, or the increase in the number of special lines provided for such traffic, so as to get rid of the loss of time and capital involved in shunting to make way for the passenger traffic. (7.) The publication of railway accounts on a principle that would allow of the ton-mile rates being readily ascertained as regards both cost and profit. 374 ) CHAPTER XXIV. SCOTCH RAILWAY ADMINISTRATION. The first public railway constructed in Scotland was a tramroad, nine and a half miles in length, which connected Kilmarnock with Troon. Parliamentary sanction was ob- tained for this undertaking in 1808, and the line was opened four years later, the carriages being drawn by horses. The Carron Iron Company, about the same time, connected their works with their mines, &c, by means of a tramway; while so early as 18 10, it was proposed to connect Glasgow and Berwick by a horse-railway, and the ground was actually surveyed by Telford for that pur- pose. It was not, however, until 1826 that any railway of real importance was constructed in Scotland. In that year, the people of Edinburgh commenced a line that was designed to connect their city with Dalkeith, and it is worth noting that this line was worked by horses until 1845, when it was acquired by, and incorporated in the system of, the North British Eailway Company. Scotland, therefore, can claim a very early, and a not undistinguished, connection with the railway system ; nor has the prestige thus acquired been dimmed by the later experience and achievements of Scotch railway enterprise. In considering the special circumstances of the Scotch railway system, we are struck, first of all, with the extent to which centralisation and amalgamation have induced economy of working. There are only seven separate rail- way companies in Scotland, and one of these is of very SCOTCH RA IL WA Y A DMINISTRA TION. 375 little account indeed, while the traffic of another — the City of Glasgow Union — is worked by the several companies that make use of the line. The total mileage of the Scotch railways open at the end of 1885 was 2982 miles, of which 1800 miles were single, and 1 182 miles were double or more. This is rather over 1 5 per cent, of the total railway mileage of the country. Eelatively to area, Scotland is not so well supplied with railway facilities as England. Measured by the test of population, however, Scotland is in advance of the sister- country, having one mile of railway to every 13 10 inhabi- tants, while in England there is one mile of railway to every 2020 inhabitants. The Scotch railways carried, in 1885, 2 &\ millions of tons of mineral and 8£ millions of tons of other traffic ; while in England and Wales, the total volume of traffic carried on the railways in the same year was 219 millions of tons. As we shall afterwards see, the railways of Scot- land carry more goods traffic per head of the population than those of England. With regard to passenger traffic, it appears that in Scotland, the railways carried, in 1885, about 56 millions of passengers, being roughly fourteen passengers for every head of the population. In England and Wales, the number of passengers carried by railway in 1885 was 62% millions, representing an average of about twenty- three for every head of the population. In Scotland, however, the average receipts per passenger carried were higher than in England and Wales, amounting to 9|d. as against 8d. — which would seem to prove that the average length of journey was greater in the more hyperborean part of the kingdom. The principal passenger- carrying line in Scotland is the City of Glasgow Union, which, in 1885, carried about 4! millions of passengers, being an average of 640,000 passengers per mile. This, however, is far from equalling the density of passenger traffic on the Metropolitan Bail- 376 RAILWAY PROBLEMS. way, which, in the same year, carried about 56^ millions of passengers, being an average of about 2\ millions per mile. Season ticket-holders are not reckoned in either case. The number of passenger vehicles, and the average number of passengers carried in each, are shown for the several Scotch railways, as regards 1885, in the following table : — Relation of Passenger Vehicles to Passengers Carried. Railways. Number of Passenger Carriages. Number of Passengers Carried (1=1000). Average Number of Passengers per Vehicle. Glasgow Union 1 . Glasgow and South-Western Great North of Scotland North British .... Totals and average 1,219 685 227 213 1,415 I7,002 4,480 8,703 2066 1,488 21,994 13,948 I2,70S 9.IOO 6,938 15,544 3,759 55,733 14,826 Of the total ordinary capital embarked in Scotch rail- ways at the end of 1885, amounting to 33! millions, there were 7 millions upon which no dividend whatever was paid, being about 20 per cent, of the whole. In England and Wales, for the same year, no dividends were paid upon 36! millions of the total ordinary capital of 252 millions, being 14 per cent, of the whole. , The average cost of the Scotch railways has been con- siderably under that of the English lines. The highest average expenditure per mile has been incurred on behalf of the Glasgow Union line, in which case it amounts to .£183,571; but this outlay, high though it be, compares favourably with that incurred on behalf of the Metropo- litan and Metropolitan District lines, some parts of which have cost over a million sterling per mile. Why there 1 The passenger traffic on this railway is carried in the trains of the Companies using the line. SCOTCH RAILWAY ADMINISTRATION. 377 should be this serious difference of cost, is a problem well worth investigation. These several lines have much in common. They have all been constructed in the heart of large cities, and the Glasgow Union has had to acquire probably more land and property, for its extent, than either of the metropolitan lines. But, on the other hand, it has not involved any tunnelling to speak of, and it has not incurred any expenditure for rolling stock, which is a large item in the cost of the London lines. The details of the Scotch railways, as regards capital outlay, are shown in the following table : — Statement shouting the Capital Expenditure upon Scotch Railways to the End of 1 885, and the Average Outlay per Mile. Railways. Miles Open at End of 1885. Capital Average Expenditure Outlay to End of 1885 per Mile (£1 = 1000). Open. £38,705 £47,258 1,285 183,571 13,573 39,571 4,870 16,342 4,446 10,636 34,582 34,071 663 8,085. £98,124 £32,905 Caledonian .... Glasgow Union . Glasgow and South-Western Great North of Scotland Highland .... North British Portpatrick and Wigtown . Totals and average 819 7 343 298 418 1,015 82 2,982 The Scotch lines have apparently been smitten with the same fell disease as the English, as manifested in the increase of their capital expenditure on already existing lines. In 1872, the average capital outlay per mile of line open in Scotland was only £25,800, so that, between that year and 1885, the average capital expenditure had been increased by over £"7000 per mile. On analysing the accounts of the different companies, we find that the Caledonian has, in this interval, increased its capital expenditure from £"29,100 to £"47,258 per mile of line open. The North British has in the same period 378 RAILWAY PROBLEMS. increased its capital from £27,300 to £34,071 per mile open. In the former case, there has been an increase of about £18,000, and in the latter, an increase of about £7000 per mile of line open. The difference in the case of the Caledonian is very remarkable. The Board of Direction may be in a position to afford satisfactory evidence that this money has been wisely expended. Much of it has gone in providing increased rolling stock, as is perfectly evident by the fact that between the two dates the Com- pany increased their total vehicular stock from 29,644 to 46,053, the difference being mainly represented by the acquisition of the traders' wagons over the whole system. But even when this outlay has been most liberally allowed for, there remains an enormous balance, that causes the Caledonian to compare unfavourably with other lines, and especially with its neighbour and rival, the North British, in respect of which the Tay Bridge construction and dis- aster, and the Forth Bridge, now in course of erection, must have compelled an increased and readily appreciable capital outlay. It may be noted that, of the two great Scotch railways — the Caledonian and the North British — the former has the largest mineral, and the latter the greatest passenger, traffic. In extent of mineral traffic the Caledonian is only excelled by four English lines — these being the North-Eastern, the North- Western, the Great Western, and the Midland; while it carries, on less than one-third of the whole mileage of the country, about one-half of the whole mineral traffic. The gross earnings from railway working in Scotland varied in 1885 from a minimum of £285 per mile in the case of the Portpatrick and Wigtown line, to a maximum of £8982 per mile in the case of the Glasgow Union. The latter is almost entirely a passenger -carrying railway* and for that reason it is interesting to compare its gross mileage receipts with those of the two chief metropolitan railways, which possess much the same character. On the metropolitan district line, nineteen miles in length, the SCOTCH RA ILWAY A DMINISTRA TION. 379 total receipts in 1885 amounted to £"430,640, being an average of £"22,631 per mile. On the Metropolitan line, the average for the same year was £27,190 per mile, the mileage being 24 miles, and the gross receipts £65 3,000. The following statement shows the total and average gross and net earnings on Scotch railways : — Statement showing the Gross and Net Earnings from Traffic on the Railways of Scotland in 1885. Railways. Gross Earnings. Net Earnings. Gross Earnings per Mile. Net Earnings per Mile. Caledonian Glasgow Union Glasgow and South -Western Great North of Scotland . Highland .... North British . Portpatrick and Wigtown Totals and averages . £2,954,562 62,872 1,095,739 315,787 386,784 2,594,224 23,369 £1,461,565 46,016 532,U4 152,394 182,809 1,291,896 4,328 £3,6o8 8,982 3,194 1,060 925 2,556 285 £l,785 6,574 i,55i 5" 437 i,273 53 ^7,433,337 £3,671,122 £2,493 £1,231 In some previous chapters, we have referred, more or less incidentally, to the differences that distinguish the Scotch from the English railways, in reference to their administration and working. England has a higher aver- age train-mile income than Scotland, the figures for each country having in 1885 been as under: — Description. England and Wales. Scotland. Passenger trains .... d. 50.44 71.86 d. 46.37 63.OI It would appear, from these figures, either that the average load carried on the English lines was greater, or that the rates and fares were higher, than in Scotland. 38o RAILWAY PROBLEMS. The gross income per open mile of railway is also higher in England, as the following figures show : — Description. Gross Income per Open Mile in England and Wales. Scotland. Passenger trains .... 2,397 £978 1,476 From all trains together, the gross income in Scotland only amounted to ^2453 per open mile of line, as against ^■4315 in England and Wales, showing a difference in favour of England and "Wales of £ 1 860, or j6 per cent. Of the total gross receipts derived from railway working, Scotland has a much larger percentage from goods traffic than either of the sister countries. The difference is, how- ever, a diminishing, and not an increasing, one. In 1874, the Scotch lines drew 62 per cent, of their total receipts from goods traffic, as against 56 per cent, in England and Wales. In 1884, only 60 per cent, of the Scotch railway receipts were derived from this source, while the per- centage proportion drawn by England from the same source remained stationary. Again, of the total gross railway receipts, Scotland takes 52.1 per cent, for working expenses, as against 53.0 per cent, for England and Wales, and 56.2 for Ireland. In this respect, therefore, Scotland compares favourably with the other two divisions of the kingdom. The comparison is more favourable still if we extend it over a series of years. Between 1874 and 1884, the working expenses of Scotch lines were reduced from 56.8 to 52.1 per cent, of the gross receipts, as against a reduction from 55.4 per cent, to 53.0 per cent, in the case of England and Wales, and a reduction from 57.0 per cent to 56.2 per cent, in the case, of Ireland. SCOTCH RAILWAY ADMINISTRATION. 3 8r The sources of this diminished cost of working the Scotch lines may be traced in the following table : — Statement showing the Expenditure per Train-Mile on the Railways of Scotland for 1874 and 1884. Items. 1874. 1884. Maintenance of way . Locomotive power Repairs and renewals . Traffic charges . General charges . Rates, taxes, and duty Miscellaneous d. 7-79 9-34 3-37 9.07 1.18 1.66 1.69 d. 5-52 7.26 340 8.39 1.19 1.63 i-37 Tot als •' 34.10 28.76 Within the same interval, the working expenses of English railways were reduced from 38.52 to 31.98 per train-mile, or from £2294 to £2287 per open mile. The working expenditure per open mile does not appear to be nearly so high in Scotland as in England, which is no doubt mainly due to the smaller volume of traffic dealt with. In 1884, the two countries showed the following comparative figures : — Statement showing the Expenditure per Open Mile of Railway for England and Wales and Scotland, respectively. Items. England and Wales. Scotland. Maintenance of Way Locomotive power Repairs and renewals Traffic charges . General charges Rates, taxes, and duty Miscellaneous . ^409 609 212 729 152 7i £245 323 373 53 72 61 Totals . • £2,287 £1,278 The most remarkable feature in this statement would appear to be that of rates, taxes, and Government duty, 382 RAILWAY PROBLEMS. which amounts in Scotland to less than one-half the sum paid in England per mile open. Traffic charges also appear to be much less in Scotland — a fact that may be attributed in great part to the lower range of wages. The difference in locomotive power is probably a result of the cheaper fuel that most of the Scotch lines have at com- mand, and the slower rates of speed adopted. So far as the average receipts earned by the railway companies per head of the population enable a judgment to be formed, Scotland is not behind England and Wales in reference to the extent to which her people adopt the facilities furnished by her railway system. The pas- senger receipts per capita amounted to the following sums in the years named : — Tears. England and Wales. Scotland. Ireland. s. d. s. d. s. d. l86l 9 7 6 5* 2 7£ 1871 13 o± 9 64 3 10 1874 IS 8* 11 6J 4 4 l88l 15 9 12 1 4 5 1885 15 7 14 9 5 5 It will be observed that the progress of Scotland has been more steady and continuous than that of England ; and when the more rural character of her population is considered, the comparison would appear to be all the more in her favour. When the comparison is extended to goods traffic, Scot- land comes out better still, as the following figures show: — Years. Tonnage Carried per Head of Population in England and Wales. Scotland. Ireland. l86l 1871 1881 1885 3-79 6.18 7-94 7-95 5.12 7-75 9.00 8.91 O.29 0.54 O.69 O.76 SCOTCH RAILWAY ADMINISTRATION. 3*3 It therefore seems that a higher tonnage per capita is carried by the Scotch than by the English lines, and an in- finitely higher tonnage than is moved on the railways of Ireland. This fact is to some extent reflected, as we might expect, in the goods traffic receipts per head of the population, which amounted to the following items : — Years. Goods Traffic Receipts per capita in England and Wales. Scotland. Ireland. 1861 1871 l88l 1 885 s. d. 12 7, 19 8? 23 9 22 9 s. d. 12 5 18 7 22 10 22 t. d. i io£ 3 7 4 6* 5 1 Thus, although Scotland furnishes a larger tonnage per capita, she does not contribute a correspondingly higher range of traffic receipts, which may, of course, be due to several causes, but most probably to the lower average length of lead. The results obtained by the several Scotch railways, in reference to the economical employment of locomotive power, may be traced in the following statement: — Statement shoioing the Total Number of Locomotives Owned by Different Scotch Railways, with the Gross Annual Receipts and the Total Train- Miles Travelled per Locomotive. Railways. Total Locomo- tives. Gross Annual Receipts. £ 1 = 1000. Receipts per Loco- motive. Total Train- Miles Run in 1885. 1 = 1000. Average Train- Miles per Locomo- tive. Caledonian Glasgow Union . South-Western . North of Scotland Highland . North British . Portpatrick, &c. Totals and average 690 291 71 75 585 6 £2,954 63 1,096 316 387 2,594 23 £4,28l 3.766 4,451 5,160 4.434 3,833 12,452 4,564 1,473 1,673 11,682 180 18,047 1^685 20,757 22,312 19,970 30,009 1718 7,433 £4,327 32,026 18,641 384 RAILWAY PROBLEMS. The highest average annual receipts per locomotive were earned in 1875, when they amounted to £448 1. Over the last fifteen years, the lowest average was £396 1 per locomotive in 1879, and it is a hopeful feature that, although trade generally was equally depressed in 1885, the average was raised in that year to £4327, as above shown. ( 385 ) CHAPTER XXV. SPECIAL FEATURES OF IRISH RAILWAYS. No student of history can fail to be struck with the uni- formly dreary and depressing character of the record that sets forth Ireland's true place in the economy of nations. Her people are steeped in the deepest poverty. Her agriculture is perhaps more backward than that of any other country in Europe, notwithstanding her nominal affiance with a nation that has been the pioneer of the most important improvements in husbandry. Her industry has been hampered, demoralised, and blighted in a thousand different ways, until it is but the ghost of what it ought to be ; and this, too, in spite of her possession of considerable natural resources, and labour that is both capable and cheap. Of commerce, except in agricultural products, she has next to none, notwithstanding that she has a finer, larger, and better situated seaboard than almost any other European nation. It almost follows, as a necessary corol- lary, that her railway resources are behind those of Great Britain, alike in their extent and in their suitability to the requirements of her people. There are many features that distinguish, the railways of Ireland from those of the rest of the United Kingdom. One of the most striking of these is the fact that the Irish railways have cost much less to construct than either the English or the Scotch. There is no reason, on the face of it, why the construction of a railway in Ireland should cost only £14,000 a mile, as compared with £50,000 a mile in England and £33,000 in Scotland, yet such is really the 2 B 386 RAILWAY PROBLEMS. case. No doubt a great deal of the difference is due to the much greater extent of double mileage in England and Scotland. It appears that, at the end of 1884 — Of 13,340 miles constructed in England and Wales, 8504, or 64 per cent., were double or more. Of 2999 miles constructed in Scotland, 1161, or 38 per cent., were double or more. Of 2525 miles constructed in Ireland, 574, or 22 per cent., were double or more. There are, however, other, and even more obvious, causes than this for a lower first cost. The price paid for the land in Ireland has not generally been so high as in either of the other two countries ; and if the same price, or even rather more, has generally been paid for materials of con- struction, there has been less money spent in permanent erections, in rolling stock, in making arrangements for the collection and distribution of traffic, and in labour, which is a very important item in the first cost of all structures. Besides these items of difference, it is requisite to bear in mind that there have not been the same costly urban lines constructed in Ireland as in England and Scotland. If the cost of the metropolitan lines and termini were to be eli- minated from the capital account of our English lines, and that of the Glasgow lines and stations from the capital of the Scotch railways, the average cost per mile would come out as a much lower figure. The total capital authorised for Irish railway con- struction to the end of 1884 was rather over 40 millions sterling, of which 35! millions had been raised. Of the latter amount, 25I millions were stock and share capital, and 10 millions were loans and debentures. It is worthy of note, moreover, that a considerably larger share of the total capital raised for the construction of Irish railways is ordinary or unguaranteed capital than in the case of English and Scotch lines, the proportions being — 37 per cent, in England and Wales. 34 „ „ Scotland. 46 „ „ Ireland. SPECIAL FEATURES OF IRISH RAILWAYS. 387 This would seem to prove that capital, whether Irish or otherwise, had been put into Irish railways more readily, on the simple faith of the investment, as such, than in either of the sister kingdoms. The amount, of course, is absolutely a very small one by comparison ; but it is not relatively small, and especially when considered in refer- ence to the resources and wealth of the country. The Irish railways have scarcely justified this exceptional confidence in their dividend-yielding capabilities. They have, on an average of years, shown a better annual return than the Scotch lines, but a considerably inferior one to that yielded by those of England. They have also followed the same tendency as the English and Scotch lines, in reference to a lower rate of dividend over recent years. In 1869, the proportion of net receipts from the working of the Irish railways to the total share and loan capital was 3.58 per cent.; in 1876, it had increased to 4.14 per cent.; in 1881, it had fallen again to 3.29 per cent.; and in 1884, it had improved to 3.41 per cent. These varia- tions are not exactly reflected in the movement of English and Scotch railway earnings over the same period, so that it is worth while inquiring how it comes about that the Irish lines have turned out as they have done. The highest rate of dividend that has ever been attained by the Irish railways as a whole was that shown in 1 876, when the net receipts were equal to the payment of 4.14 per cent, on the capital invested. In that year there were 2157 miles of railway laid down in Ireland, at a total cost of 3370 London and Birmingham ..... 52,780 Great Western 55)33° Manchester and Leeds 59.8oo North Midland 45.79° Liverpool and Manchester ..... 49,320 Dublin and Kingstown 56,660 One of the most natural questions that can arise in considering these figures is that of how the large average mileage cost which they represent has been entailed. ESTIMATES COMPARED WITH RESULTS. 427 The answer to this query is not a simple one. The railway companies of the United Kingdom have not done much in the way of the publication of details of the cost of constructing their several lines. The promoters of many different railways have been ready enough to furnish esti- mates, on the authority of engineers of distinction, of the probable cost. Those estimates have, in the great majority of cases, been exceeded, some of them to a most serious extent, and hence the directors or promoters have not generally cared to put forward the actual facts, or, if they have been put forward, they have generally been obscured and overlain by irrelevant or supplementary details, from which the true cost can only be disinterred, if at all, with the greatest possible difficulty. It would be easy to multiply examples of the facts just stated. Three notable cases, however, must suffice — (1) the London and Birmingham Eailway, (2) the London and Brighton line, and (3) the Great Western Eailway. For the first of these three lines Mr. Robert Stephenson, the engineer, made the following estimate, which was sub- mitted to the House of Commons in the usual way, and on the faith of which much of the capital was subscribed: — Items. Total Cost. Average Cost per Mile. Excavations and embankments Kails, chairs, keys, and pins Blocks and sleepers . Ballasting and laying rails Fencing at £74° P er m de Water stations and pumps £179,000 250,286 350,574 212,940 102,960 102,960 76,032 250,000 3,600 61,000 16,000 294,648 - ;£r, 7 i8 2,275 3,187 i,936 933 933 740 2,273 33 555 '45 2,679 Totals . .£2,500,000 £22,727 428 RAILWAY PROBLEMS. In this case, the actual cost of the line was ,£5,923,000 to the end of 1842, being 137 per cent, more than the estimate furnished by Stephenson. The next case to which we shall call attention is that of the Brighton line, for which Mr. Charles Vignoles gave the following estimate in 1834: — Statement showing the Several Items of the Estimate made by Mr. Vignoles for the Construction of a Railway from London to Brighton. Items. Total Cost. Average Cost per Mile. Masonry (bridges and culverts) Laying railway .... Damages to property, &c. . Locomotive power and stock Total . £417.527 109,688 52,360 113,500 I7.305 228,006 48,750 25,000 37,000 20,000 108,922 £8 l35 2,193 1,047 2,270 346 4,506 975 500 704 400 2,178 £1,198,148 £23,963 In the result, the Brighton line cost £2,586,000, or 118 per cent, more than the price estimated by Mr. Vignoles for his line of just over 50 miles. 1 Since it was con- structed, however, the capital cost of the Brighton Com- pany has been raised to over 23 £ millions sterling. The third case — that of the Great Western Eailway, from London to Bristol, a distance of 115 miles — is an estimate made by a highly distinguished engineer, Mr. I. Kingdom Brunei. The details are as under : — 1 The London, Brighton, and South Coast Railway was not constructed by Mr. Vignoles, so that this estimate does not possess the same value that it would otherwise have done. It suffices, however, to show what a great engineer calculated that the line ought to cost. ESTIMATES COMPARED WITH RESULTS. 429 Mr. Brunei's Estimate for the Great Western Railway from London to Bristol. Items. Excavations and embankments Masonry .... Tunnelling Laying down railway Depots .... Locomotives and rolling stock Land and compensation 1 . Contingencies . Totals Total Cost. £487,500 459.725 279,195 630,40x5 57,000 57,ooo 280,000 249,180 £2,500,000 Average Cost per Mile. £4,239 3,998 2,427 5,478 496 496 2,435 2,166 £21,739 The actual cost incurred in this case to the end of 1842 was £"6,540,000, being £"4,040,000, or about 162 per cent, more than the original estimate upon which the line was authorised and begun. The problem that appears to press for solution, in regard to these several estimates, is that of how these eminent engineers were led so far astray in their calculations. There are several obvious causes for this result, and others that are not quite so manifest. It is probable, in the first place, that no one ever anticipated that the expenditure to be incurred in pro- curing Parliamentary sanction for the several schemes referred to would be as great as it really was. The Parliamentary expenses incurred in obtaining the Act for the Great Western Railway, as originally con- structed, amounted to £87,197, or about £775 per mile. For the London and Birmingham line the Parliamentary expenses amounted to £"72,868, or £"662 per mile. In many other cases, the cost of fighting for the Acts under which the lines were constructed involved a correspon- dingly lavish scale of expenditure. 1 Mr. Brunei mentions that this provides " a large overplus for contin- gencies upon the land." 430 RAILWAY PROBLEMS. From this serious burden, the railways laid down in Continental countries, and in the United States, have, happily, been delivered — the sanction in the former case being granted direct by a department of the State, without any necessity for the promoters to enter the arena of Parliamentary contests, while in the latter case there is no such limit imposed upon the construction of railways. There is, moreover, only too good reason to believe that the earlier railway engineers had no conception that the item of land would run up to such exorbitant sums as were actually paid, whether justifiably or not, by most of the companies promoting main trunk lines. "We have seen that Stephenson estimated ,£2273 as the cost per mile of the land required for the London and Birmingham line ; that Brunei calculated the land re- quired for the Great Western at £2435, including liberal compensation ; and that Vignoles computed the average price to be paid for land on the Brighton line at £975 without, and ^1475 with, compensation. There is not much published information respecting the prices that have actually been paid for the land acquired by railway companies. There is, however, a general im- pression that, in the great majority of cases, the companies had to pay prices that were tacitly understood, if not actually so expressed, as intended to buy off the opposi- tion of the landowners, as well as fairly compensate ,them for the compulsory acquisition of their property. Speak- ing of this subject, and especially of those who, at the outset, offered, or threatened to offer, a very stubborn resistance to the advent of railway enterprise, Mr. Dudley Baxter says : 1 — " They acquired the habit of being bought off at high prices, and of exacting immense sums for imaginary damages. The first Eastern Counties line was said to have paid £12,000 per mile for land through an agricultural country, being about ten times its real value. This habit , ] "On Railway Extension and its Results." ESTIMATES COMPARED WITH RESULTS. 431 of exaction has been perpetuated to our own day. As an everyday instance, I may mention that, only a few months ago, a gentleman of great wealth was selling to a railway company, which he had supported in Parliament, thirty acres of grass land, of which the admitted agricul- tural value was £100 an acre, and three acres of lime- stone, of which the proved value to a quarryman was ^■300 an acre. There was no residential damage, and the railway skirted the outside of the estate. The price of the whole in an auction room would have been about ^■4000. The proprietor's agents, supported by a troop of eminent valuers, demanded £2 5,000 ! " What the actual expenditure incurred in the acquisition of land by British railways — including therein, of course, the sums paid as compensation — has been, no one is in a position to say, simply because there is positively no authentic information on the subject. It has, however, been put at £4000 a mile by authorities whose opinions are entitled to weight. This means that in respect of the land acquired for the present railway mileage of the United Kingdom — which, at the end of 1885, was approxi- mately about 19,000 miles — the expenditure incurred would be about one-tenth of the total capital cost of British railways to #he same date, or, in more exact figures, j6 millions sterling ! It is only when we compare these figures with those applying to other countries that we come to appreciate how materially they have affected the question of ultimate cost. The Beport of the Tenth Census of the United States (1880) sets out in detail the items that make up the cost of railway construction in that country to that date. Of these items, that for land is one of the lightest, being only 103^ millions of dollars, or an average of £235 per mile, including the buildings erected upon the land. If we select as a typical example of high expenditure under this head, that of the New York Central Railway, 432 RAILWAY PROBLEMS. which passes through a densely populated district, and has been compelled to buy up large quantities of land in the neighbourhood of large towns, including the city of New York, we find that the average cost per mile for land purchase and compensation to the end of 1883 was 5618 dollars, or ^1124, being little more than one-fourth the assumed average cost of land in the United Kingdom. The difference in favour of Continental countries is quite as remarkable. In Germany, according to Dr. Lardner, 1 the average cost of land per acre was — On the Berlin-Frankfort line .... £69. 2 „ Berlin-Stettin ..... 46.0 ., Anhalt 63.0 „ Magdeburg-Leipsic . . . . 53.5 „ Saxon-Silesian lines . . . . 53.0 — which means that the average cost of land, as ac- quired for the earlier German railways, has been infinitely less than the corresponding expenditure in the United Kingdom. This, however, is an exceptionally favourable showing, even for Continental Europe. In some other countries the land has absorbed a much larger proportion of the total capital outlay. The expenses incurred in the construction of railways by the State in Belgium, up to the end of 1863, were as under, viz. : — Items. Expenditure. Percentage of Total. Price of land, compensation for crops, ) &c i Permanent way construction Materials — sleepers .... rails and fittings Fencing, planting, &c. Management to date of opening Totals . £1,063,129 26,739 2,682,743 283,010 1,218,875 7,704 II,o8l 20.0 0-5 50.8 5-3 23.O O.I 0.2 £5,293,284 99-9 1 1 "Railway Economy," p. 479. ESTIMATES COMPARED WITH RESULTS. 433 To the above sum must be added £1, 110,332 for stations, and £1,678,234 for rolling stock, making up, with £209,618 for general expenses, a total sum of rather over 8 millions sterling. The total mileage of railways belonging to the State at the above date was 466 miles, so that the cost of the land, including compensation, amounted to about £2280 per mile, or a little over one-half the assumed total for the United Kingdom. It is interesting to compare European and American experience in this regard with that of our great Indian dependency. We therefore append a Statement showing the Classification of Expenditure on Indian State Railways to 31st December 1882 (3426 miles). Items. Total Expenditure. Expenditure per Mile. Per Cent, of Total. Preliminary expenses Construction of line Ballast and permanenl Stations and buildings Steam-ferries Collieries Rolling stock Establishment Suspense account Receipts on capital ac deducted • , way count £648,982 485,706 10,953,863 10,777,178 3,298,994 129,379 34.003 1,022,012 » 4,084,198 2,940,522 i.5 8o »757 44,663 £189 142 3.197 3.146 963 38 IO 298 1,192 858 461 13 2 I 31 30 9 0-3 0.1 3 11 8 4 0.1 Totals and avera ge . £35.910,835 £10,507 99-5 The item of land purchase and compensation has not always, however, been unfavourable to the economical construction of English railways. In proof of this we may quote the case of one line, the Thirsk and Malton, 22| miles in length, where all the landowners, with two or three exceptions, agreed to give their land at £60 an acre, including tenants' damages, so that the total cost of 2 E 434 RAILWAY PROBLEMS. the line did not exceed £100,000, including stations, and every other item of expense except rolling stock. 1 There are many items besides that of land and parlia- mentary expenses that differentiate English from Con- tinental and American railways. It is obviously impos- sible to consider the whole of these in detail. All we can hope to attempt is to give a few suggestive facts as to their general scope and character. While the division of the mileage into the total capital paid up is necessarily the only practicable method of com- paring the cost of railways in different countries, without going into a very minute analysis of the several items of capital expenditure, there is probably no method of com- putation that more utterly fails to convey an exact idea of the facts that it is designed to elucidate. In the construction of a railway there are many different items of expenditure demanding consideration. The most obvious of these is, as we have seen, the cost of the land, and the next is the laying of the permanent way. But these are only the initiatory steps in the enterprise. After the railway has been provided for to this extent, there are the stations to be built, in accordance with the require- ments of the traffic, the sidings to be laid down, work- shops erected for the repair, and, in the majority of cases, the building of carriages and wagons, and the rolling stock to be provided and maintained. , Many railway companies do not, however, stop here. They have swollen their capital account to its ultimate enormous porportions by the erection of steel and locomo- tive works, by the purchase of canals, by the construction and equipment of steamers, by the acquisition of land designed for future extensions, by the erection and furnish- ing of large hotels, and by the purchase or construction of docks and harbours. Again, in some cases, although not in the United King- 1 Evidence of Mr. T. E. Harrison before the Royal Commission on Rail- ways in 1866, Minutes, p. 727. ESTIMATES COMPARED WITH RESULTS. 435 dom, railway boards have largely added to their capital expenditure by the purchase of coal lands. 1 It is probably in the furnishing of terminal facilities that the capital cost of a line is mainly increased, at any rate in the United Kingdom. This is a well-known fact to railway directors and managers ; but, in order to bring it within the cognisance of the general public, it may be well to give a concrete example of what, under the modern dispensation of affairs, the leading companies are required to do in this direction. The London and North- Western Railway had 1590 miles of open line in 1876, and 181 1 miles in 1885. The total capital created or sanctioned by the company in the same interval rose from 6g\ to 104 millions sterling. On the face of it, therefore, it might appear as if an additional thirty-five millions of additional capital had been provided for the construction of 221 additional miles of railway, which would represent the colossal average of over^ 1 58,000 per mile. But a great deal of the increased capital was expended, not on new lines, but on providing additional terminal facilities and other accommodation for the mileage already constructed. On analysing the accounts for the ten years in question, we find that the following expendi- ture was incurred over that period : — On London stations ,£846,710 „ Liverpool do. ••» 1,480,832 „ Manchester do 1,047,343 „ Birmingham do 748,954 „ additional engine-sheds, &c 165,219 „ widening lines 3,548,381 Total . . . ^I3.5'9 ; 694 The expenditure on widening lines may be readily appreciated as being a result of the greater number of 1 This is a frequent thing in the United States, where the principal lines often possess and work large tracts of coal. The Chicago, Milwaukee, and St. Paul Company, for example, raise half a million tons of coal annually from their own mines. 436 RAILWAY PROBLEMS. trains, and the additional traffic generally ; but it will probably be remarked, as among things not generally known, that the expenditure incurred within the same interval on already existing stations in London, Liver- pool, Manchester, and Birmingham was actually over four millions sterling, or fully half a million more than the outlay on widening the lines, &c, over the same period. The same growth of capital expenditure on already existing lines appears in relation to the rolling stock. In 1876 and 1885, the relation of locomotive engines to miles open was the same, namely, 1.28 per mile ; but, as between these two years, the relation of goods wagons to miles open rose from 23 to 25, and the difference would be paid for out of the increased capital expen- diture. It is amusing, not to say ludicrous, to compare the figures just quoted with those that illustrate the modest notions of the earlier engineers in regard to the same requirements. Vignoles estimated that the twenty-six stations that he proposed to allow to the Brighton line, as projected by him, would cost ,£20,000, and he allowed only £150 each for the twenty stations that he contemplated erecting along the line. The main stations at either end, includ- ing the land required for their accommodation, he reckoned at £5000 each, and a goods station at Shoreham was put down at £4000, while six water stations were calculated at £ 500 each. Brunei, again, was not much nearer the mark, since he only allowed £57,000 for the stations to be built on the Great Western line between London and Bristol ; while Stephenson, in estimating £16,000 for the station build- ings on the London and Birmingham line, calls up an irresistible smile in the light of present experience. Nor were these distinguished men more capable of prevision and foresight in reference to the demands that traffic was likely to make on rolling stock. Brunei ESTIMATES COMPARED WITH RESULTS. 437 estimated £57,000 for the rolling stock of the Great Western line, Stephenson £61,000 for the London and Birmingham line, and Vignoles £37,000 for the Brighton line. We cannot now separately distinguish the vehicles employed on the two former lines, as originally con- structed ; but on the Brighton line, instead of the 20 engines, 60 coaches, and 100 wagons estimated by Vig- noles, there are at present — 410 engines, 2223 passenger carriages, 594 other vehicles attached to passenger trains, 7081 goods wagons, &c, 445 vehicles not included in above, making a total of 10,343, which, assuming an average of only £500 per vehicle, would represent a capital sum of £5,171,000, or more than four times the amount calculated by Vignoles as the total cost of the line and its equipment ! 438 ) CHAPTER XXIX. ACCIDENTS ON RAILWAYS. The object of State interference with railway enterprise and administration, which we have already found to exist in all parts of the world, to a greater or less extent, may be regarded as threefold — (i.) To impose necessary restrictions upon monopolist powers. (2.) To preserve the public from exaction and injustice. (3.) To secure the safety of life and limb. The third consideration is the one that has invariably been regarded as the most weighty and important. Rail- way travelling is exposed to accident and mischance from a great variety of causes. To minimise these to the utmost possible extent is the principal aim of all well- regulated railway administrations, as well in their own interest as in that of the public, since, in every civilised country, the law gives redress against railway authorities for injuries to life and limb. This, therefore, is a question in regard to which the aim and the interest of the State and the railway world, as such, are identical ; and both have applied their joint wisdom and experience in order to bring the risk of misadventure within the narrowest possible limits, with results upon which both, and espe- cially the travelling public, are to be congratulated. The subject of accidents on railways is such a wide and comprehensive one, that it may be approached from many different points of view. We can only hope to ACCIDENTS ON RAILWAYS. 439 touch upon two or three. The first of these is neces- sarily that of the causes of accidents ; the second, that of their effects. The provision that the statute law of different countries has made for meeting, or rather avoid- ing, such accidents will also demand consideration. The railroads of the United States, being the largest system in the world, afford a very clear idea of the causes to which railway disasters are generally to be attributed. The following tabular statement shows the number of accidents of all kinds that have occurred on American railways during the four years ending with 1885 : — Years. Collisions. Derailments. Other Accidents. Totals. 1882 1883 1884 1885 Totals . 581 630 445 464 741 926 681 681 42 84 65 72 1,364 1,640 1,191 1,217 2,120 3.029 263 5.412 It is quite evident, from these returns, that the chief cause of railway accidents is defect of the permanent way, which, in the United States, accounts for 56 per cent, of all the accidents that happen. The accidents to permanent way are divided into five separate categories. These have been tabulated as under : — Years. Breakage of Rails. Rails Badly Placed. Accidents on Bridges, £ 3 s s £ 6 ■- -j S8 &o *6 "3 6 _g -s "? ° 3 — Si ■ C cS S ° 9 & £« *a i 9 H £ d. d. d. d. d. d. rf. d. London and N.-Western 6.07 7-86 2. ,34 12.21 1.88 i-SS 0.92 32.83 Midland 4.48 7.67 3-64 9.38 1. So 1.04 0.55 28.26 North-Eastern 6.I9 I0.75 4-35 9.17 1.96 1. 12 0.34 33-89 South-Eastern 4-97 8.6l 2.79 9.80 4.22 2.90 2.00 35.29 Great Eastern 4.98 8.56 2.6s IO.19 1.93 I.32 I.OI: 30.62 Great Western 6.90 7.69 2.43 8.62 2.23 1. 21 O.59 29.67 Great South and West ) of Ireland . \ 8.13 9.09 2-95 9-47 2.49 O.84 O.68 33-05 Lancashire and York- ) shire . . \ 6.23 8.IO 3-94 13.21 2.12 1-43 O.50 35-53 London, Brighton, and ) South Coast . ( 4.90 8.97 2.48 8.99 3-48 1.28 I.74 3185 Manchester, Sheffield, ) and Lincoln . \ 4-40 7-13 2.81 11.88 1.80 1.86 2.62 32.51 Caledonian . 5.04 8.13 3-99 8.50 1.65 1.20 I.62 30.13 Great Northern . 4.60 7.62 2.46 9-57 1.81 i-39 O.67 28.12 -Statement showing the Average Cost per Mile Open of Railways in the Principal European Countries, dkc. Years. United Kingdom. Germany. France. Italy. Belgium. Austria- Hungary. United States. £ £ £ £ £ £ £ 1872 35,984 33,260 19,944 21,028 9,938 1873 36,574 19,506 31,900 19,332 21,380 J II,2l6 1874 37,078 19,860 32,030 23,000 18,840! 12,114 l8 7 5 37,833 20,066 28,400 19,790 22,952 18,690 12,360 1876 39,OI2 21,082 27,960 19,745 22,690 18,520 12,090 1877 39,472 21,339 27,590 19,620 23,200 18,658 12,024 1878 40,301 21,157 26,976 19,400 23,320 18,541 11,690 1879 40,518 21,044 27,280 19,714 24,053 18,433 12,027 1S80 40,613 21,084 28,450 19,600 24,395 18,500 12,213 l88l 4I,OI9 21,165 28,255 19,663 24,435 21,850 12,634 1882 41,605 21,254 27,970 19,856 24,980 21,041 12,772 1883 42,OI7 21,236 27,700 19,434 25,265 20,897 12,875 1884 42,486 21,100 27,550 25,385 20,430 12,792 1885 42,561 * These figures are taken from the " Statistical Abstract of the Principal and other Foreign Countries," but they require some explanation that does not appear on the face of the returns, since the lower average cost per mile in 1884 is not accounted for by the lower cost of the railways constructed during the previous twelve months. TABULAR APPENDIX. 543 D. — Statement showing the Numbers of Passengers Carried on the Railways of different Countries, 1874-84 (1 = 1000). Ye a*. United Kingdom. Prussia. France. Austria- Uungary. Belgium. Italy. United States. 1874 477,840 109,570 121,117 41,955 45,164 27,320 190,000 1875 507,975 H5,393 I3'»3i2 41,348 49,056 27,951 191,000 1876 534,494 116,452 136,987 40,756 51,429 28,076 1877 549,541 114,805 138,839 37,856 52,000 28,055 1878 565,024 "3.792 152,806 38,7IO 53,502 28,954 1879 562,732 114,402 150,525 39,486 53.939 30,405 1880 603.885 124,383 165,105 40,455 56,306 32,491 1881 626,030 179,729 42,818 56,360 34,040 1882 654,838 194,872 47,211 57,239 34,372 289,030 1883 683,718 167,170 207,171 50,254 61,316 36,817 312,687 1884 694,991 64,460 ... 334,571 E. — Statement showing the Number of Tons of Goods Traffic Carried in different Countries, 1874-84 (1 = 1000). Years. England and Wales. Prussia. France. Austria- Huugary. United States. Belgium. Italy. 1874 160,921 39,950 200,000 1875 168,965 89,278 58,932 42,143 202,000 25,620 6,700 1876 173,691 91,354 61,837 45,056 20O.OOO 26,977 7,150 1887 178,871 92,557 61,608 49,271 27,OI7 7,486 1878 175,243 96,841 63,087 50,392 28,343 7,507 1879 179,676 105,114 68,987 52,976 30,062 8,372 1880 200,392 120,120 8o,774 54,354 33- 1 98 9,329 l88l 209,532 86,647 54-634 34,549 9,838 1882 217,494 88,745 64,754 360,490 36,503 IO,473 1883 225,909 89,056 70,942 400,453 37,090 11,905 1884 219.974 390,075 35,6o9 544 TABULAR APPENDIX. F. — Statement showing the Statistical Position and Financial Results of American Railxcays at the end of 1883. ,1. 2. 3- 4- 5- 6. 7- 8. States. Total Total Capital' Cost of Road and Equip- Cost of Road and Equip- ment per Mile Gross Earnings Net Earnings Percentage of Earnings on Cost of Road and (1 = 1000). ment (1 = 1000). (1 = 1000). (1 = 1000). Equipment (1 = 1000). (Col. 4). New England — miles. dols. dols. dols. dols. dols. per cent. Maine 1,161 41,890 41,185 35 4,866 1,377 2 New Hampton 893 27,207 26,952 30 4,162 1,203 4 Vermont 869 41,714 40,132 46 4,523 1,042 3 Massachusetts 2,278 195,624 184,227 80 32,661 8,595 5 Rhode Island . 147 6,907 6,260 42 1,490 486 8 Connecticut . 974 49,976 47,198 48 ",453 2,401 5 Middle States— New York 7,234 830,450 807,965 nil 71,694 25,656 3 New Jersey . 1,844 235.568 195,454 106 27,390 8,879 5 Pennsylvania . 665 823,786 471,900 709 111,842 48, 198 10 Delaware 220 ",958 6,434 29 739 194 3 Maryland 1,166 88,784 98,382 84 14,136 6,224 6 West Virginia 400 21,989 ^.SOS 43 922 308 2 Virginia . 2,808 196.435 167,855 59 13,984 520 North Carolina 1,617 44,4H 43,i88 26 3,426 873 2 South Carolina i,592 43,491 41,662 26 5,2iS i,5oi 4 Georgia . 2,887 73,9 2 9 64,689 22 9,526 2,934 5 Florida . 1,063 31,206 26,728 25 1,426 473 2 Alabama 1,892 70,845 63,354 33 7,363 2,228 4 Mississippi 75o 43.672 42,092 56 1,213 466 1 Louisiana x ,453 79,270 79,393 54 5,235 2,538 3 Tennessee 2,264 136,524 122,368 54 9,517 3,46i 3 Kentucky 2,535 168,516 141,795 55 ",555 4,660 3 W. "Wisconsin 6,297 222,640 221,506 35 27,469 11,014 5 Minnesota 5.273 3 I 9,442 307.956 58 25,681 10,020 3 Dakota . 237 8,766 8,766 37 Iowa 3.!94 116,802 109,055 34 6,317 i,995 2 Nebraska 2,841 208,412 169,256 59 21,648 10,916 5 Kansas . 3,734 165,021 161,627 43 21,453 10,029 6 Missouri 6,396 365.285 308,884 48 34,523 i5,i54 5 Arkansas i,o59 41,328 41,128 38 1,666 563 1 Texas 5,804 242,179 225,471 38 2i,459 763 Colora'1.. 2,198 97.173 89,305 40 10,888 3,43o 4 Wyoming 519 . 24,962 24,962 48 918 3>6 1 California 3.375 299,140 295. 137 »7 28,451 9,284 3 New Mexico . 880 89.791 59,40i 67 Arizona . 384 30,295 Utah . 1,285 40,428 39.973 3i 3,836 i,'853 5 Nevada . 502 27,133 23,794 47 109 19 Oregon . 1,021 65,608 67,264 65 5,946 2,896 4 Washington T. 37 885 885 23 117 68 8 TABULAR APPENDIX. 545 G. — Statement showing the Mileage and Cost of the Principal Raihcays in England and Wales, Scotland and Ireland, in 1884, with Average Capital Outlay per Mile Open. England and Wales. Total Average Railways. Mileage. Total Capital. Capital per Mile. Metropolitan .... 22 £",331,592 £515-073 Metropolitan District . 19 8,365,969 440,3H North London .... 12 3,895,866 324,655 Neath and Brecon II 1,590,967 144,633 London, Chatham, and Dover 179 25,182,140 140,682 Manchester, Sheffield, and Lincoln 316 26,192,698 82,888 Lancashire and Yorkshire . 496 39,625,014 79,889 South- Eastern .... 369 21,825,987 59,149 West Lancashire .... 17 992,797 58,400 London, Brighton, and South Coast 417 23,305, 85 55,887 London and North-Western I,8ll 99,923,707 55^76 Midland 1,388 74,824,762 53,908 Furness *34 6,719,222 50,143 Potteries, Shrewsbury, and North { Wales \ 28 1,392,464 49,73' Great Northern .... 785 35,061,843 44,665 Wrexham, Mold, and Connah's ) Quay .... | 16 701,972 43,873 Northampton and Banbury June- ) tion \ 15 619,788 41,319 North Staffordshire 193 7,837,552 40,609 Central Wales and Carmarthen ) Junction ) 13 494,500 38,038 Great Eastern .... 1,038 39,691,225 38,238 London and South-Western 722 27,758,237 38,446 North-Eastern .... 1,534 56,916,314 37,103 Brecon and Merthyr Tydvil ) Junction . . . . j 59 1,927,178 32,664 Rhvmney 42 1,385,419 32,986 Taff Vale . . . . . 93 2,884,407 3'.oi5 Great Western .... 2,301 71,287,997 30,981 Bristol Port, Railway, and Pier . 6 166,000 27,666 Isle of Wight .... 14 370,838 26,488 Somerset and Dorset . 9i 2,456,209 26,991 Manchester, South Junction, and \ Altrincham \ 9 216,666 24,074 Cleator and Workington Junction 21 466,608 22,219 East and West Junction 41 968,588 23,624 Mid- Wales 48 1,104,079 23,002 Cambrian 181 4,277,213 23,631 London, Tilbury, and Southend . 49 1,659,382 33,865 Maryport and Carlisle . 41 863,600 21,063 Manchester and Milford 4i 714,955 1 7,438 Ryde and Newport . . . 21 225,340 10,730 2 M 546 RAILWAY PROBLEMS. Principal Railways in England and Wales, gross and net earnings, 342 ; working expenses, 342. Taxation of railways, 163 ; United Kingdom, 167 ; United States, 171 ; Italy, 173; Prussia, 173. Terminal charges, 509; distinction of station and handling, 513; character of, 514; recommendations as to, 513; in Kempson's case, 514. Third-class passengers, number of, 230 ; increase of in United King- dom, 241, 242. Thirsk and Malton line, cost of, 433. Traffic, volume of, relatively to population, x ; cbarges, 218 ; on Con- tinental railways, 220 ; on British railways, 22 1 ; on North- Western Railway, 222 ; passenger, see Passenger ; goods, see Goods ; growth of, on New York Central, 305 ; goods on American railways, 319 ; goods, tonnage of, xi. ; cost and conditions of work- ing, 472 ; increase of passenger and goods, 543. Train-mile receipts in 1867, 101 ; train-miles run in Continental countries, 102 ; earnings, 102 ; expenditure of United Kingdom 1874-84, 115 ; expenditure on different English lines, 120; com- parison of mineral and passenger- carrying lines, 120 ; receipts of Continental countries compared, 482. , Trains, mileage of ou American lines, 132 ; on British lines, 131, 316 ; average weight of, 362, 484. Transport, cost of before railways, 1. Transportation charges, 282 ; requirements, standard of, xi. Trevithick's engine, 4. U. United Kingdom, extent of passenger and goods railway traffic, x ; net profits from railway working in, xvii ; value of land in, xix; of house property, xvii ; general characteristics of, xx ; safety of travelling in, xxi ; amount of ordinary capital invested in rail- ways of, 57, 93 ; gross receipts from, 93 ; annual increase of mil- age and capital in, 92 ; train-miles and train-mile earnings, 102 ; INDEX. 559 taxation of railways in, 163; employis on, 190; wages paid in, 192; rolling-stock employed on, 207; traffic charges in, 221; goods traffic receipts, 276 ; internal commerce of, 415 ; coal raised in, 417 ; value of railway traffic of, 420 ; accidents in, 443, 445 ; train-mile receipts of, 483; average cost per mile at different dates, 490 ; receipts per ton of goods carried, 487 ; volume of goods and passenger traffic at different dates, 492 ; ton-mile traffic of, 499. United Suites, beginning of railways in, 1 1 ; number of corporations in, 1 1 ; rapid growth of railway capital in, 28 ; extent of railway capital in, 55 ; dividends paid on railway capital in 1880, 57, 59 ; funded railway debt, 58 ; legal status of railways in, 72 ; gross receipts from, 93 ; train-miles and train-mile earnings, 102 ; number of railway companies in, 107 ; cost of locomotive power, 121, 124; system of working locomotives in, 139; cost and con- sumption of fuel on railways of, 152; taxation of railways in, 171 ; lands granted to railways of, 172; labour employed on, 176, 185, 191 ; numbers employed on, 197 ; average wages on, 197 ; rolling-stock employed on, 207 ; passengers carried, 235 ; general resume of passenger traffic in, 262; receipts from goods traffic in, 272 ; tons carried, 273 ; goods traffic receipts, 276 ; greatness of, 308 ; comparison of with British railways, 316 ; average train mileage in, 316; goods traffic on, 319; increase of loads, 325; yield of corn per acre in, 330 ; accidents in, 443, 445 ; cost per mile at different dates, 490 ; volume of traffic, 492 ; railway progress in, 493 ; rates and profits, 495 ; ton-mile traffic, 497 ; dividends, paid by railways, 499 ; terminal charges, 510 ; statistical position of, in 1883, 544. V. Victoria, area, 351 ; population, 352 ; extent and cost of railways, 345 ; earnings and working expenses, 342, 343. Vignoles' estimate for Brighton line, 427. W. Wages paid in England, 192 ; in Continental countries, 194, 195 ; in United States, 197. Wagon capacity, utilisation of, 203. Wagons, number of, employed on Continental railways, 207 ; on English railways, 210 ; in United States, 212 ; per mile in Con- tinental countries, 261 ; mileage per axle of, 258. Water supply, cost of, on American railways, 133 ; competition, 306. *' Watered" capital, 311. Way, permanent. See Permanent way. Webb, F. W., on economy of fuel, 149. 560 INDEX. Weight of passenger train, 482 ; average, of goods trains in United Kingdom, 484 ; of goods trains in different countries, 362. Western Australia, area of, 351 ; population, 352; mileage and cost of railways, 345 ; working expenses, 342, 343 ; earnings, 342. Working expenses, percentage of, on gross receipts for Continental Railways, 62 ; in Continental countries and British Colonies, 100 ; character of, 105 ; comparison of 1874 and 1884 as regards items, in ; as regards different railways, 112 ; percentages of, 1874 to 1884, for United Kingdom, 115; proportions of, in European countries, 220 : working railway traffic in different countries, cost and conditions of, 472 ; compared with gross and net earnings in different countries, 475 ; per train-mile on principal British railways, 542. THE END. PRINTED BY BALLANTYNE, HANSON AND CO. EDINBURGH AND LONDON. 3Bg tbe same Butbor. 448 pp., Price Ss. 6d. ENGLAND'S SUPREMACY ITS SOURCES, ECONOMICS, AND DANGERS. CONTENTS. niAr. Introduction and Outline. I. General Considerations. II. Industrial Distribution of Population. III. England's Agricultural Status. IV. The Depression of Agriculture. V. Peasant Proprietorships. VI. England's Food Supplies. VII. England's Economic System. VIII. The Commerce of England. IX. Mechanical Appliances and Processes. X. The Remuneration of Labour. XI. The Cost of Labour in Different Countries. XII. England's Textile Industries — Cotton. XIII. The Woollen Industry. XIV. Other Textile Manufactures. XV. Cost of Living in Different Countries. XVI. Taxation. XVII. Transportation Facilities. XVIII. Emigration. XIX England's Colonial Empire. XX. The Profits of Industry. XXI. National Wealth. XXII. Industrial Employment of Women. XXIII. Coal Resources. XXIV. Efficiency of Labour. XXV. Effects of Production on a Large Scale. XXVI. England's Future in Relation to the United States. XXVII. The Achilles' Heel of England. Appendix and Index. OPINIONS OF THE PRESS. " It is quite refreshing to see once more a reference to indisputable facts and experience, in order to refute the strange and fantastic doctrines, totally at variance with them, which are now unblushingly advocated in very high quarters." — Right Hon. E. P. BOUVERIK. 2 N "Mr. Jeans, who is already well known as an able writer on trade subjects, has here taken a wider view of our industrial and economic condition than he ha3 hitherto attempted. His aim has been to bring together as compendious a collection of facts as possible, and to show what light these throw upon many of the more pressing problems of the day. For this work Mr. Jeans is well fitted. He is a careful and patient investigator, who can convey his ideas in terse and vigorous^Janguage ; and he has also the rarer faculty of being able to weigh evidence judicially, and to marshal his facts and figures so as to make evident not only the magnitude and importance of each set, but also the bearing of each upon the others. . . . The work as a whole is a distinctly able one, which all who are interested in the industrial and economic questions of the day will find it to their advantage to read." — The Economist. " Mr. Jeans has given us a masterly review of the industrial situation, and those who would make themselves acquainted with the Condition-of- England question, would do well to study 'England's Supremacy.' They will find much of interest and instruction in its pages." — The Echo. " The task which Mr. Jeans has undertaken, and which he has per- formed with sound judgment, an unwearied assiduity in the collection and collation of facts and figures, and a clear and intelligent appreciation of economic laws, is to present a survey of the actual material and economic conditions of the nation, and to compare our resources and chances in industrial and commercial competition with those of other peoples, in order to show what is the position we actually occupy. . . . The book deserves recognition as one of the most valuable contributions yet made to the cur- rent controversy on trade depression." — The Scotsman. " People who are interested in the all-absorbing topic of depression of trade will be much assisted in forming an opinion as to some of its causes by a perusal of Mr. Jeans's work." — Chamber of Commerce Journal (London). " It is impossible in a brief notice to give any idea of the multiplicity of subjects handled by Mr. Jeans. Suffice it to say that, on such questions as peasant proprietorships, our food supplies, our taxation, emigration, manufactures, and so on, he is always thoughtful, and has something to say worth saying. ... A book to be commended without reserve to the notice and patient study of the political student. It is distinctly an addition to our best economic literature." — The Graphic. " In some respects Mr. Jeans has handled the subject of our commercial supremacy in a clearer and more succinct manner than many of his pre- decessors in the same field of inquiry. The work is a distinct credit to its author, and should have an extensive sale." — The Ironmonger. " England's Supremacy is entitled to a foremost position in the economic controversy to which so great an impetus was given by the appointment of the Commission on Trade, Mr. Jeans discusses every phase of the ques- tion, the Land Laws of England in relation to agricultural depression and peasant proprietary, the natural resources and means of movement of various competing nations, wages, and the cost of living at home and abroad, taxation, and the effect of standing armies on trade. These and other matters affecting England's supremacy in the markets of the world, and her prospects for the future, are discussed in a manner that leaves nothing to be desired." — Liverpool Daily Post. " In the book which he has just written, Mr. Jeans has set himself a •wide problem to solve : is England's sun setting, and her glory on the wane ? . . . His book will be welcome as sunshine in winter to those Englishmen who are so unfashionable as to cherish the ancient virtue of patriotism. . . . The work can hardly fail to go through many editions. On the whole, Mr. Jeans has produced a most instructive book, valuable alike to statesmen, journalists, or men of business." — Engineering. " Mr. Jeans has brought to his task an intimate acquaintance with the features of the world's commerce and industries, reinforced with official and other Special data respecting them. The result, to say the least, is an interesting book, and one which is not without special value to the students of subjects involving the world's material progress. It is a matter for congratulating the author that he has, withal, succeeded in clothing the whole with an atmosphere of general interest." — BradstreeVs (New York). " We fear this notice will convey but a very faint idea of the labour, patience, and diligence of which Mr. Jeans' work is a monument. . . . Nor can we help admiring his courage in tackling a subject so vast and difficult of condensation. To say that his book is an invaluable statistical compilation would l>e but a very inadequate definition. Much of the work he has done has never been attempted on such a scale before — to witness, statistics of labour and the cost of living throughout the world. A more interesting, more engrossing work it would be difficult to find." — The Engineer. "A valuable and ably written treatise. . . . We can honestly recom- mend all who are interested in the matter to read Mr. Jeans's work, for it contains a great mass of- facts and many sound opinions well expressed." — Nottingham Daily Guardian. " The author of this solid work has devoted himself to a rather large field of inquiry. He has set forth in a readable form a great body of facts, and his comparison of the conditions of the commercial and industrial competition between Great Britain and her rivals is interesting." — Daily News. " Not only does this volume deal with England's agricultural status, and the questions connected with agricultural depression, peasant proprietor- ship, and our food supplies, in which competition with the foreigner is increasingly difficult ; but it goes further, and investigates the prospects and conditions of our manufactures generally. ... A very comprehensive work."— The Field. " At a time like the present, such a work as this is a specially valuable contribution to the discussion of one of the most important subjects that concern Englishmen, and its wide perusal would have a reassuring influence on those whom bad times may cause to despair of their country's future." — Newcastle Daily Leader. " Mr. Jeans has succeeded in presenting his case as fairly, as ably, and as comprehensively as any one could desire." — Derby Mercury. " Whilst opinions differ amazingly as to the causes of depression of trade from which we are suffering, there is one point in reference to which com- mercial experts appear to be practically unanimous, and that is the immense advantage which foreigners enjoy in the cost and hours of labour. . . . Some useful and interesting statistics bearing on this question are con- tained in the newly published volume entitled 'England's Supremacy.'" — Birmingham Daily Post. " Within the compass of a single volume of some 450 pages, Mr. Jeans has- dealt with England's position among industrial nations in a very compre- hensive manner, and in a style which makes what would ordinarily be I dry book very pleasant reading. . . . We heartily commend the volum to our newly elected law-makers, and to all those who desire to becomi acquainted with our position as an industrial and commercial nation rela tively to other countries. . . . An admirable book." — Shipping World. " We rise from the perusal of this fascinating book with a distinct sens* of pleasure." — Colliery Guardian. " The author of this book is a gentleman who, from his official position has facilities for obtaining information upon such a subject possessed, perhaps, by very few of those who dilate upon politico-economic questions and we may thus recommend it as affording materials for arriving at a right judgment on a question which none of us can afford to ignore." — Iron and Coal Trades Review. ."'England's Supremacy' is heartily commended to the attention of business men, statisticians, legislators, and students." — The Beacon (Boston, Mass. ) " Mr. Jeans has, in this volume, made an effort to survey the industrial resources of England, that he may lay down economic principles. . . . He has, as was expected, paid particular attention to England's textile industries, ami is very cogent in the inferences to be drawn from a contrast of England's position with that of other countries. . . . He gives us chapters on taxation, on emigration, on England's Colonial Empire, on national wealth, on the industrial employment of women, on labour and the prices of labour in different countries, &c, and on all of these he brings to bear fresh facts from wide areas — from other countries in Europe — and presents them effectively. We should not forget to name his last chapter, headed significantly, 'The Achilles Heel of England,' which of course is Ireland. His survey of her, from early days, is true and touching." — British Quarterly Review. " The book is a useful magazine of important facts, and has been most carefully elaborated and compiled. Mr. Jeans is not merely a statistician, or a translator of statistics into words. He has a capacity for drawing sound inferences from the so-called facts of figures. ... In most instances, a careful and capable guide to sound conclusions. . . . Will well repay a careful perusal and even a lengthened study. "— Westminster Review. " Mr. Jeans has contributed to current literature a work which, while thoroughly readable and interesting, will take its place in the front rank on politico-economic subjects." — Gtasgoio News. " Mr. Jeans has considerably discounted the value of the Reports yet t be issued by the Royal Commission of Inquiry into the Depression of Tradt In a work entitled ' England's Supremacy,' he goes over all the ground thai can be covered by the Commission, and much additional ground besides. We shall be surprised if Mr. Jeans 's book does not prove to be of much higher present value, and of far greater permanent interest, than any report which can be expected from the Commission. . . . An extraordinarily wide and close survey of the commerce of the world, the results of which are recorded in a book which is clearer, more complete, and more exhaus- tive, than any work of a similar kind hitherto published." — Shields Daily Gazette. LONDON: LONGMANS, GREEN & CO. fc