§ Commons' Amendments considered (according to order).
§ LORD BRABOURNE
said, that the great Companies did him the honour of placing their interests in his hands by entrusting him to conduct their case with respect to the Bill of last year. This year, however, he was incapacitated by severe illness from attending the Sittings of that House during the discussions upon the Bill now before their Lordships. He had, however, conferred with the representatives of the Companies, who, in accordance with his (Lord Brabourne's) advice, had agreed not to delay the Bill or to trouble their Lordships with Amendments such as they might have desired, but to submit to the present measure as a settlement of the question, with the exception of one single Amendment which he hoped presently to convince their Lordships was just and 1196 reasonable. He desired, however, to enter his earnest protest against this species of confiscatory legislation, which, unduly interfering with the management of a great and important industry, directly tended to paralyze commercial enterprize at least in one direction, to discourage the application of capital to railway development, and to diminish, if not destroy, that public confidence in the justice of Parliament, upon the faith of which so much capital had been embarked in railways. How did this matter stand? In the earlier part of the century, it was a question whether British railways should be constructed out of public taxation or left to private enterprize. After due deliberation by Parliament, it was determined to leave the construction of railways to private enterprize; and every British railway had consequently been constructed by the money of private individuals invested upon the security provided by a special Act of Parliament. This Bill, like others which had preceded it, cast Private Acts of Parliament to the winds, and proposed to entrust partly to a Public Department and partly to Commissioners that management of railway property which had been distinctly guaranteed by Parliament to the duly elected representatives of the Railway Companies themselves. It could not be said that railway shareholders had received any large or unreasonable dividends upon the capital which they had invested, or that the public had been aggrieved by the management of the railways. He was much afraid that the public and traders would not receive from this Bill the advantages which they expected. Hitherto the railways had been admirably managed by persons who were specially conversant with railway business, and he entered his protest against the interference with their functions proposed in this Bill. He might be told that he spoke only from a shareholder's point of view; but, in truth, he was much more largely interested as a landowner than as a shareholder, and, as a matter of fact, he had little personal interest in the matter, as he was but a small shareholder. On the other hand, he might retort that there were many gentlemen whose estates had been developed and improved and their incomes increased by railways constructed by other people's money, and who were now seeking, under the convenient 1197 shadow of alleged public convenience, to get a further advantage from the same benefactors. This was the last unkind word he had to say of the Bill or of its promoters. Though he was obliged to act the part of Cassandra with reference to this Bill, he sincerely hoped his prognostications might be disappointed, and that the measure, without deteriorating railway property, as he feared it would, might be productive of that advantage to traders and to the public which he was quite sure that its authors intended and expected.
§ On the Motion of the Earl of ONSLOW, Commons' Amendments to the end of Clause 4 agreed to.
§ Amendments to Clause 5 postponed.
§ Clause 17 (Appeals on certain questions to supreme court of appeal).
§ LORD HERSCHELL
said, it was his opinion that if this clause stood as it had come from the Commons it would not be long before their Lordships were asked to alter the law, and that those would be the first to ask for a change in the law who secured the passing of the Amendment in question. He did not ask their Lordships to disagree with it, but to take a practical course with reference to a matter that might arise under it. Conceivably the Court of Appeal in each country might take a different view on a given question, and the result would be that if there was no power of appeal beyond either of those Courts there would be a different law as between parties and railways in England, Scotland, and Ireland. He therefore moved to add the following words to the clause:—Provided that where there has been a difference of opinion between any two such superior Courts of Appeal any superior Court of Appeal in which a matter is pending may give leave to appeal to the House of Lords.
§ THE PRIME MINISTER AND SECRETARY OF STATE FOR FOREIGN AFFAIRS (The Marquess of SALISBURY)
thought the proposal of the noble and learned Lord a wholly reasonable one.
§ Amendment agreed to.
§ Clause, as amended, agreed to.
§ Clause 24 (Revised classification of traffic and schedule of rates).
§ LORD BRAMWELL
said, he begged to move that the Commons' Amendment 1198 striking out the words enacting that the Board of Trade, in making a classification of maximum rates and charges, should substitute for existing rates and charges such as were "upon the whole equivalent to such maximum rates and charges" be disagreed with, and that the words quoted, which were in the Bill when it went down to the Commons, be restored. Those who were interested in railway shares and stock had been warned not to dissent from the proposals of the Commons or something worse would befall them, and he thought that was quite possible, because he had noticed that in the discussions on this subject it never seemed for one moment to have occurred to anyone that the Private Acts of Parliament under which railways were made gave the Railway Companies certain definite fixed rights, and it seemed to have been considered that they might be dealt with as though the question now arose for the first time what their rights might be. By striking out the words above quoted, the Board of Trade, he contended, would be at liberty to make a classification of maximum rates which should not be equivalent to the existing maximum rates and charges; they might make a diminution of 50 per cent, or any amount, on those charges, and say such diminution was "just and reasonable." He contended that the words "just and reasonable" did not convey any more definite idea than the word "fair," which no one would again introduce into an Act of Parliament after the experience of the working of the Irish Land Acts. Who could say what would be "just and reasonable" for carrying a ton of coals 100 miles? It was a most unjust thing to Railway Companies that their rights should be taken away, and he left it to the judgment and discretion of the Board of Trade.
§ Moved, "That the Commons' Amendment to the Clause be disagreed with."—(The Lord Bramwell.)
§ THE MARQUESS OF SALISBURY
said, that if the Board of Trade had to decide what was "just and reasonable," the criticisms of the noble and learned Lord would be accurate; but the provision objected to by the noble and learned Lord was only a preparatory matter. 1199 To enable Parliament to decide, the Board of Trade was to submit its opinion to Parliament, and there was surely no harm in asking the Board of Trade to state what it considered to be just and reasonable. When it had done so Parliament would have an opportunity to decide again how far the provisions which were suggested were a breach of the original contract made with the Railway Company, and the noble and learned Lord would have every opportunity he now had.
§ LORD BRAMWELL
said, if the Board of Trade went wrong in this matter, Parliament might do the same, and he wanted to stop the thing at the outset.
§ On Question? Resolved in the Negative.
§ Commons' Amendment agreed to.
said, that he had been informed by the authorities of the House that he would not be in Order in moving the new clause which stood in his name on the Paper. Its object had been to provide that any difference with regard to remuneration or compensation between the Postmaster General and any Railway Company should be referred to the Commissioners instead of to arbitration. Although he could not move this clause, he wished to explain that it was merely on account of the technical objection.
§ Clause 25 (Amendment of 36 & 37 Vict. c. 48, s. 11, as to through traffic).
§ Moved, "That the Commons' Amendments to the Clause be agreed to."—(The Earl of Onslow.)
THE EARL OF JERSEY
, who had an Amendment on the Paper to strike out the words, "in respect of the same or similar services," said, he thought that Clause 29, which provided that the Railway Companies should state all the particulars of the through rate on both sides of the sea, would cover this question, and he did not propose to move his Amendment. He would, however, like some explanation from the noble Earl.
THE SECRETARY TO THE BOARD OF TRADE (The Earl of ONSLOW)
thought it was obvious that whether the consignors were foreigners or home traders it would be manifestly unfair to impose the same rates upon both parties, whether they sent a large or a small quantity of goods, or whether the goods 1200 were sent at regular or at irregular intervals. One man, again, might have a private siding, and there were many other cases in which the services to be rendered were different.
§ LORD HERSCHELL
said, he wished to call attention to these words as affecting particular ports, and especially the Port of Newcastle. The question was whether it would be a matter of discretion with the Commissioners; but he understood that there were grave doubts as to whether they would have any discretion in the matter. The Ports of Hull and Newcastle, and other Northern ports, had formerly been served by two different lines of railway. Though Hull was much nearer than Newcastle to Liverpool, the two railways had carried goods at equal rates. An amalgamation then took place, and the two lines became the property of the North-Eastern Railway Company. In the other House the question had been raised of the competition of the two Ports of Hull and Newcastle, and an endeavour was made by those who wanted that the rates should not be equal to get a clause inserted carrying out that view. He was not speaking on behalf of any Railway Company, but on behalf of the town of Newcastle. If this clause were passed as it now stood the Railway Companies would be unable to charge what for the moment he would call the lower rate, and if they were unable to do so, there would be no benefit to the home producers, but to one English port as against another. The question had been asked in the House of Commons whether these circumstances could be taken into account by the Commissioners, and it had been stated by the President of the Board of Trade that they could. For his own part, he confessed that he could not take that view; the words were absolutely stringent. The town of Newcastle considered that the effect of these words would be to deal a heavy blow at their interests, not to the benefit of the home producers, but that of Hull. That, of course, had not been the object of these words. He understood that the view of the Government was that the Commissioners would have power to consider such a case, and all that he now asked for was that it should be a matter to be so considered, and that there should be some elasticity given to the clause to allow the Commissioners to deal with 1201 such cases. At present he did not see how the Commissioners were to give any such consideration.
§ THE EARL OF SELBORNE
said, he agreed that the words were peremptory, but only with regard to the question of foreign merchandize; they would not prevent the Companies from charging the same rates on these two lines.
THE EARL OF ONSLOW
said, that it was specially provided in the first part of the sub-section that where there was a difference made between home and foreign traders, or traders of any kind, which would be likely to lead to undue preference, the Commissioners were to take into account whether such difference of treatment was intended to secure the interests of the public. If the noble and learned Lord would propose any words which were not likely to interfere with the general scope of the clause he should be happy to consider them. But if any part of the clause was omitted, the result would be that we should come to equal mileage rates. No doubt, as the noble and learned Lord argued, the effect in some cases might be to transfer foreign traffic from one port to another; but he agreed with the noble Earl behind him that of two evils it was better that the home trader should not be put to considerable loss than that a particular port should suffer.
§ LORD BRABOURNE
, in rising to propose at the end of Sub-section 3 of Clause D, after "railway," to add "the lesser distance being included within the longer distance," said, this was the one Amendment which the Railway Companies of England desired their Lordships to make; and he must all the more claim the indulgence of their Lordships, as much turned upon the construction of the clauses, and he was at a disadvantage, as a layman, speaking in the presence of more than one ex-Lord Chancellor and other great legal luminaries. The clause was, in its primary intention, directed against the admission of foreign produce at a lower rate than home produce was carried on the same line of railway. He was not going to say a word against that. But the words at the end of the clause went somewhat further. They empowered the Railway Commissioners to make different rates over the same line of railway; the same line of railway meaning, he believed, the same system 1202 of railway, or in other words all the lines under one Company. That would lead to mileage rates, which had been condemned by every Commission and every Committee which had sat on the subject. Some lines had difficult gradients, and were much more costly to make than others. Let him explain what he wished to convey to their Lordships by a simple illustration. Suppose that from the seat occupied by the Prime Minister at that moment one line ran to the right and the other to the left hand corner of the House. One might have cost double the other in construction, and its gradients might make the working more expensive. A higher rate might, therefore, have been authorized upon the latter, and this section as it stood would enable the Railway Commissioners to enforce an equal rate upon each. What he (Lord Brabourne) desired was to leave to the Commissioners the power to compel equality of rates upon the same line, but not upon different lines upon the same system. He spoke in the public interest as well as in the interest of the Railway Companies, for the section as it stood might have a somewhat different effect from that contemplated by its authors. He would give two instances; one of hardship which might be inflicted upon a Railway Company, and another in which the public might suffer. The Great Western Railway Company had lines in Cornwall where the gradients were bad and the working consequently expensive, therefore their Private Acts sanctioned a higher maximum rate on that part of their system than upon the flat and easy gradients of the Herefordshire part. But under this section the Commissioners might enforce an equal rate throughout, and inflict a manifestly unfair injury upon the Company. On the other point, the distance from London to Bristol by the Great Western was 120 miles—by the Midland Company's line 220 miles. Now, the latter competed with the former Company for merchandize traffic, and to do so were obliged to charge only the same rates as the competing Company. But suppose the inhabitants of Leeds, which was 180 miles from London by the Midland Railway, and the inhabitants of other Yorkshire towns on the same line came before the Commissioners to complain that they were charged higher rates for their merchan- 1203 dize than was charged to Bristol. The Commissioners could enact an equality of rates, the immediate effect of which would be to destroy the competition of the Midland with the Great Western Company—that very competition which had always been insisted upon as so important in the interests of the public. It would be said—"The Railway Commissioners will be able to judge of such cases as fairly as you can;" but that was not quite the point. A Railway Commissioner would, fairly enough, look first at the interest of the public, and would not, of necessity, weigh all the reasons for which a higher rate had been fixed upon one part of a railway system than upon another. Why should the Railway Commissioners have power to say that the rates which it was proper to charge on lines which were more easy and less expensive to make should apply to lines more difficult and costly of construction? But he (Lord Brabourne) had another objection to this section as it stood, to which he most earnestly invited the attention of their Lordships. Noble Lords who advocated the traders' interests asked, Why not leave this question open to the Railway Commissioners, as the question of terminal charges has been left open to the Board of Trade? He would answer that question simply and clearly. He believed the words to which he objected were introduced at the bidding of the noble and learned Earl opposite (the Earl of Selborne). He had asked the noble and learned Earl whether he would assent to his Amendment; but he said he did not think it would be right to fetter the judgment of the Railway Commissioners. With great submission to the noble and learned Earl, he (Lord Brabourne) must submit to their Lordships that this was a complete misapplication of terms. Every Court of Justice had got its judgment fettered. It could interpret, but it could not alter an Act of Parliament. But this was precisely what the section under discussion would permit this Court of Railway Commissioners to do; and at the very moment when they were limiting the right of appeal in this Bill, they were going to constitute the Railway Commissioners a Court of Appeal from the Board of Trade. Let him point out his meaning more clearly. By a previous clause in this Bill, every Railway 1204 Company had to go to the Board of Trade within a certain time, and to agree with the Board of Trade on its revised table of tolls. Whether they could agree or not, the Board of Trade had to come to Parliament, and get an Act of Parliament confirming its Provisional Order as to the maximum rates to be charged by the Company. Nor was this all. The Bill, as it left their Lordships' House, provided that the Board of Trade was to substitute for the existing maximum rates and charges such rates and charges as it would be just and reasonable so to substitute "as upon the whole equivalent to such existing rates and charges." But these words were struck out in the House of Commons, so that the Board of Trade had now a free hand to deal with the maximum rates and charges of every Railway Company with no principle laid down for their direction. Now, let their Lordships mark what this section would do without his (Lord Brabourne's) Amendment. It would leave the scale of charges, which had been revised and settled by the Board of Trade, after full inquiry and consideration, and which by this very Bill were in each case to be embodied in an Act of Parliament, to be re-opened and altered at the discretion of the Railway Commissioners. He ventured to think that neither the Board of Trade nor the Railway Companies ought to be exposed to such a state of things, which would unnecessarily invite litigation, and cause an undeniable clashing of authority. Why should the Railway Commissioners be made a Court of Appeal over the Board of Trade and the Act of Parliament? When the Board of Trade and the Act of Parliament had said to the Company—"This shall be your maximum table of rates," why should the Railway Commissioners be allowed to say—"A fig for your Act of Parliament, a fig for your agreement; we will alter your rates according to our idea of public interest and public convenience, in spite of all the considerations which may have guided the Board of Trade in their deliberate settlement of 'just and reasonable' rates." The words he proposed were taken from the American legislation of last year; and he moved them in the full belief that the public and the traders would in no respect suffer from 1205 an alteration which in common justice was duo to the Railway Companies.
§ Amendment moved, in page 16, Clause (D.), inserted by the Commons, to add, at the end of the clause ("the lesser distance being included within the longer distance").—(The Lord Bra-bourne.)
§ THE EARL OF SELBORNE
said, he must ask their Lordships not to agree to the Amendment of the noble Lord opposite. The clause was accompanied by every safeguard that would be required for the protection of the Railway Companies. If the words proposed by the noble Lord were introduced, an unlimited power of evading the object of the clause would be given to the Railway Companies. He therefore urged their Lordships not to accept the Amendment.
§ LORD HERSCHELL
said, that nobody seemed to consider the unfortunate British public, who, after all, had a great interest in the matter. He could not conceive anything more mischievous to the interest of the public than to insist on this system of equality. If this equal mileage rate were insisted upon, competition would be killed, a monopoly would be given to the lines with the shorter routes, and the British public would consequently suffer. He considered that the Commissioners could deal with the whole of this question. The words were that they—Shall have power to direct that no higher charge shall be made over a less distance than over a greater,and left them a discretion in the matter. If it were not that he believed the Commissioners would have a discretion he should certainly vote with the noble Lord opposite in the interests of the public.
§ LORD BRAMWELL
said, he would not say a word in favour of the Railway Companies, though they were to be fleeced to a certain extent. He wished to speak in favour of the public, and he would put a particular case. The Great Eastern Railway had a branch to Wisbech, about due north from London. It had also got a line to Ipswich. In making a charge for carriage from Ipswich it must bear in mind that it had the competing river carriage to London, and consequently that it could not charge more to 1206 those who were desirous of sending their goods by railway than would tempt them to do so rather than send them by the slower mode of the river. But the railway went to Wisbech and Lincoln. To Lincoln it had another competing line, but it had no competing line to Wisbech, and there it charged as much as it was allowed to do, bearing in mind the necessity of getting as much traffic as it could. Consequently it would charge more from Wisbech for the carriage than from Ipswich, supposing the distances were equal. A singular argument had been used by one of the most intelligent of our public men; it was that because a Company could afford to carry at a certain rate from one place it could afford to carry at the same rate from another place. What a Railway Company did was—it charged what it could where there was no competing consideration to induce it to diminish its charge, and charged what it could where there was that competing consideration, and the result was it could charge more where there was no competition. It had a perfect right to charge the larger sum; the law of the land gave it that right; and the only effect of the alteration, which would compel it to charge equally to both places, would be, not that it would lower the rate which was the more profitable in amount, not that it would lower the rates from Wisbech or Lincoln, but that it would raise that from Ipswich. The noble and learned Earl near him said that the reducing of rates by competition operated as a bounty. He had two answers to that. First, the other operated as a protection; secondly, the objection to a bounty was not its consequences but its cost. Was it not absolutely certain that if that clause passed as it stood the result would be, not that the high rates would be lowered, but that the low rates would be raised, and was it not a necessary consequence of that that the articles carried would be charged at a higher rate to the consumer?
§ EARL FORTESCUE
said, he was always very suspicious when he found those who were interested on the side of the monopolies dwelling on the advantages of competition. They knew in London how wide the competition was between the Water Companies, which at one time sold water almost below cost price. They began by a competi- 1207 tion injurious to shareholders, but ended by a coalition entailing a heavy tax on the public. He hoped that the Government would keep the Bill as it was, and not accept the advances of the monopolists, made under the plausible guise of competition and Free Trade. He protested against thus giving practical bounties to the Railway Companies to the injury of our shipping, which the former were allowed to underbid by their differential rates, and thus deprive the latter of their reasonable traffic.
THE EARL OF ONSLOW
said, many of the arguments which had been used would be admirably adapted to the second reading of the Bill, and others to a discussion on the question of bounties. He must take notice of one remark which had been made by the noble and learned Lord opposite, who said that the Railway Companies were there to be fleeced.
§ LORD BRAMWELL
said, what he meant was that the tenour of some of the observations showed a disposition to deprive Railway Companies of their rights.
THE EARL OF ONSLOW
said, he understood the noble and learned Lord to say that there was a disposition on the part of Parliament to take away something which Parliament had given. He did not deny that; but with regard to the particular clause the omission of which had been moved by the noble Lord opposite, he would point out to him that the whole object of this Bill was to leave the Commissioners as free as possible to deal with the subjects which came before them. The noble Lord said he was only asking their Lordships to agree to the same words that were in the American law. But that law especially laid down that it should be unlawful to do these things, whereas this Bill only said that discretion should be given to the Commissioners. If they could not trust the Commissioners whom they were about to appoint under this Bill they had better not have them at all. He maintained that the men appointed on the Commission would be worthy of confidence, and that it was undesirable to fetter them by putting into the Bill any words which would tie their hands.
§ On Question? Their Lordships divided:—Contents 18; Not-Contents 43: Majority 25.1208
The rest of the Commons' Amendments agreed to; and Bill, with the Amendments, returned to the Commons.
House adjourned at a quarter past Six o'clock, till To-morrow, a quarter past Four o'clock.