Edwin A. Pratt.

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THE LIBRARY

OF

THE UNIVERSITY

OF CALIFORNIA

LOS ANGELES



Irish RaiWays

and their Nationalisation



A Criticism

of the

Report of the Vice-Regal
Commission



EDWIN A. PRATT



SIXPENCE NET



IRISH RAILWAYS AND THEIR
NATIONALISATION



IRISH RAILWAYS

AND THEIR NATIONALISATION

A Criticism

of the

Report of the Vice-Regal Commission



BY



EDWIN A. PRATT

Author of

"Railways and Nationalisation,"

"German v. British Railways,"

"Canals and Traders," etc.



LONDON:

P. S. KING & SON

ORCHARD HOUSE
WESTMINSTER

1910



/ 1 i"^






PREFATORY NOTE.



In the course of some remarks he made in reply
to a deputation from the General Council of the
Irish County Councils which waited upon him, on
October 2ist, igio, with a view to urging the necessit)^
for carrying out the recommendations of the majority
of the Vice-Regal Commission on Irish Railways,
the Chief Secretary for Ireland spoke of the Com-
missioners' Report as *' one of the most interesting
documents he had ever perused. He was sure," he
proceeded, " when the people of England had time to
read it they would find it a very interesting and even
a remarkable paper."

It may, however, be doubted if the people of
England, even with Mr, Birrell's recommendation
before them, will so far overcome the popular pre-
judice against Blue Books as to devote to the Report
in question that close study which would alone
enable them to grasp the meaning, purpose and
possible results of the somewhat complicated and
certainly ill-digested scheme therein put forward by
the majority of the Commissioners.

All the same, it is most desirable that the main
issues raised by the Report should be clearly under-
stood, not alone by the English, but also by the
Irish people. Among these issues are — (i) The
taking, in Ireland, of the first step in the United
Kingdom in the way of railway nationalisation ;
(2) the important political considerations that might

40G065



vi PREFATORY NOTE.

be involved in the transfer of the Irish railways to an
Irish elected authority ; (3) the unsatisfactory nature
— should the principle of nationalisation itself be
approved — of the Majority Report scheme, with its
absence of definite figures and estimates ; (4) the
improbability of Irish traders and travellers deriving
any appreciable advantage from that scheme, even
if it should be found at all practicable; (5) the
obvious unfairness of expecting the State to acquire
the Irish railways and to guarantee interest on
capital without retaining control over their operation ;
(6) the doubtful character of the proposal — which
Mr. Birrell frankly described as "a stumbling-block"
— that the general taxpayer of the United Kingdom
should provide not less than ;r25o,ooo a year in
order that the Irish trader might obtain lower railway
rates ; and (7) the prospect for the Irish ratepayer
himself of having to make up, by means of a general
rate in Ireland, the whole of the ultimate deficiency
that might arise in the operation of the railways after
the Irish elected authority to be put in charge of
them had reduced their earning power by making
whatever concessions in rates and charges it thought
either fit or expedient.

In the circum.stances, and assuming that the Man
in the Street may still be reluctant to go through the
original Blue Book, I have thought a useful purpose
might be served if I offered for his acceptance, in the,
perhaps, more inviting form of a small pamphlet, a
digest of the main issues involved in a problem which
I have myself followed up with the greater interest
by reason of the fact that I was among those privi-
leged to give evidence before the Commissioners
during the course of their four years' inquiry.

Edwin A. Pratt.

November, 1910.



CONTENTS.



— ♦ —

Page

Prefatory Note v

The Vice-Regal Commission lo

Terms of Reference ......... id

Complaints Invited ......... ii

The Companies Exonerated ....... 12

Continental Conditions 13

The Colonial Example ........ 14

State Acquisition .......... 15

The Majority Report ......... 16

Number of Companies i5

Amalgamation .......... 16

The Majority Scheme 17

Terms of Purchase 18

Financial Proposals ig

The Government Grant ig

The Irish Ratepayer 20

State Purchase : Irish Control ...... 21

A Lesson from South Africa ....... 22

Disadvantages of Popular Management 23

Railway Rate Reductions 23

Economies ........... 24

Directors' Fees 25

Increased Expenditure ........ 26

Amount of Possible Savings 26

Outlook for the Traders ........ 27

Actual Effect on Railway Rates 28

Climbing Down .......... 2g

The " Helpful Fillip " Stage 29

A Vanishing Quantity 30

Majority Report Impracticable ...... 30

Irish Opinion and the Majority Report 31

The Minority Report 34

Minority View on Grievances 34

The Irish Railway Service 35

Minority Disapproval of State Purchase • • • • 35

Private Ownership Preferable 35

Australasian Railway System 36

Minority and Amalgamation 37

Self-Help for Irish Farmers 38

Economic Production 38



viii CONTENTS.

Page

Railway Rates for Agricultural Produce .... 38

Views of the "Irish Homestead" 39

The Butter Industry 39

Winter Dairying 40

Railway Rates for Butter 40

Conclusions 40

APPENDIX:

State Railways in New South Wales .... 43



Irish Railways
and their NationaHsation.



Not only has there long been in Ireland an active group of
advocates of some form of State ownership of the railways in
that country, but supporters of the nationalisation principle
in general have regarded Ireland as the section of the United
Kingdom in which a start could best be made with an
application of the principle they favour. They would try
their " 'prentice han'" on Erin, and then see what they could
do with England and Scotland. Lord Brassey, for instance,
speaking at the autumn meeting of the Association of
Chambers of Commerce at Liverpool, on September 19th,
1907, said, concerning the State ownership of railways : —

The capital value of the railways might be taken roughly at twice the
amount of the National Debt. To deal equitably with interests so vast
would be an operation which would heavily tax our financial resources.
Perhaps we might begin with State ownerstiip in Ireland. The financial
operation would be on a limited scale.

In addition to the financial consideration here suggested,
favouring a commencement with Ireland, it must be admitted
that in some respects the economic conditions of Ireland
are exceptional ; that the principle of State and local aid
towards the provision of railways, especially in necessitous
districts, has already been applied there to an extent unknown
in England and Scotland ; that there may well appear to be
an unduly large number of railway companies in so small a
country ; and that to begin with them would be a less costly
business than to deal with the whole of the railways in the
United Kingdom.

An intimation that the proposals in question were about to
assume a more definite shape and form than that of merely
academic discussion was conveyed in an article published in



lo IRISH RAILWAYS

the " Financial and Commercial Supplement " of The Times
of May 2ist, igo6, under the heading, "Irish Railways:
Prospects of Government Purchase." In the course of this
article it was said : —

For a considerable time past an agitation has been kept up in Ireland
in favour of the nationalisation of the railways. . . . Those who have
been working for the State control of the Irish railways are in a hopeful
frame of mind at present, owing to the action which the Irish Govern-
ment has recently taken. Mr. Bryce was not long in office* before a
scheme for the nationalisation of the Irish railways was formulated.
Not only is he sympathetic towards it, but the matter is receiving his
serious attention, and it is not improbable that one of the first important
Irish measures undertaken will be the purchase by the State of the rail-
ways. Nothing can be definitely asserted, but it is considered fairly
certain in well-informed quarters that the Irish Government intend to
deal with the matter, and that before long.

The Vice-Regal Commission.

The course actually taken differed somewhat from this
forecast. No measure for the State purchase of the Irish
railways was actually brought forward, but a Vice- Regal
Commission on Irish Railways was appointed by the Lord
Lieutenant, under date July 19th, 1906. It would appear,
therefore, that either the correspondent of The Times had
been mis-miormed by his " well-informed quarters," or the
fact of the Commission being appointed within two months
of the appearance of his article must have been not uncon-
nected with the " serious attention " which he said the
proposals in regard to railway nationalisation were then
receiving at the hands of the Irish Government.

Terms of Reference.

Certain it is that the terms of reference of this Com-
mission assumed, from the very outset, that the Irish railways
were in fault ; and, in view of the earlier statements by the
writer in The Times, as to the leaning of the Government
towards a nationalisation scheme, the impression may well
have been given that the Commission was really expected, if
it had not been actually designed, to collect evidence which
would convict the companies of various shortcomings, and
thus render the nationalisation idea easier of attainment.

The terms of reference, after directing the Commissioners

To inquire into the present working of the railways in Ireland,
including light railways, and to report how far they afford, separately or

* As Chief Secretary for Ireland.



AND THEIR NATIONALISATION. ii



in conjunction with otlier means of transit, adequate facilities for the
cheap and rapid transport of goods and passengers within the Island
and to Great Britain ;

proceeded : —

zc/mi causes have retarded the expansion of traffic upon the Irish lines and
their full utilisation for the development of the agricultural and industrial
resources of the country ; and, generally, by wliat means the economic, efficient,
and harmonious working of the Irish railways can be best secured.

To the first part of these terms of reference no exception
could be taken ; but the remainder evidently regarded it as
an absolutely uncontrovertible fact : (i) that expansion of
traffic has been retarded on the Irish lines; (2) that the
railways have not been fully utilised for the development of
the agricultural and industrial resources of the country; and
(3) that the working of the railways has been alike un-
economical, in-e^c\eni, and «07i-harmonious. It was thus
not a matter of ascertaining by public inquiry whether or not
the railways really had been guilty of these faults and short-
comings. The Commission was, apparently, to take it for
granted that they had.



Complaints Invited.

This putting of the railway companies " into the dock," as
Mr. Balfour Browne expressed it, in his closing speech
(January 29th, igog) on behalf of the associated Irish railway
companies, was followed by the issuing of a circular in
regard to which Mr. Balfour Browne further alleged that
the Commissioners

Began to rake the country for complaints against the railway com-
panies, and not against anything else. . . . Perhaps it was necessitated
by the reference, but I am bound to say, if you look at it, it invites
people from all over the country to come forward and make grievances
against the railway companies. ... It assumes the whole thing. . .
Every one of these topics is suggested to these gentlemen. I would
have come and given evidence myself with this brief in my hand. . . .
It sends out from this Commission a fiery cross all over Ireland, and I
say no wonder you got complaints.

In effect, no fewer than 248 witnesses were examined, the
Commissioners held g5 public and 56 private meetings, and
a period of four years elapsed between their appointment and
the publication of their final report.



12 IRISH RAILWAYS

The Companies Exonerated.

It cannot be suggested that there was inadequate oppor-
tunity for the bringing forward of any possible grievances;
but, although these were in no way lacking in number, a huge
proportion were of the most trivial kind, not able to stand
the test of investigation ; and, in the result, although the
Commissioners were divided on what became the main issues,
the companies were fully exonerated from the accusations
that had been made against them.*

Commenting on this particular outcome of the proceedings,
the Irish Times of July 26th, igio, said: —

The Commission began its inquiries by taking evidence against the
present management of the larger companies. It was suggested in
many quarters that this management was almost deliberately short-
sighted, extravagant, and unpatriotic. We maintained at the time that
this was an absurd and prejudiced view. . . . The Minority Report
states that little fault is to be found with the individual management of
the larger railways. The Majority Report, while condemning the
present system root and branch, admits that the methods which it con-
demns could hardly have been avoided by the companies in view of
their commercial obligations to their shareholders.

The chairman of the Midland Great Western Railway
Company of Ireland, the Hon. Richard A. Nugent, speaking
at the half-yearly meeting of that company on August 4th,
igio, said : —

Upon one aspect of the case the railway companies of Ireland have
ground for satisfaction. They have emerged from the long ordeal of

* The following examples, taken from the published evidence, are
typical of the grievances which were brought before the Commission : —

(i) A complaint that jd. was charged for the transport of 28 lbs.
of tobacco carried from Belfast to Monaghan, this being, the witness
said, at the rate of 46s. M. per ton, instead of the nominal rate
of i8s. 6d. per ton. (He had, of course, been charged the "small
parcels " scale, and not the tonnage rate for larger quantities.)

(2) A complaint by a witness that he had had a beast killed in transit.
Asked when it occurred, he replied, " About twenty-five years ago."

(3) A complaint that the railwaj' companies do not provide cases in
which dead pigs can be hung up in the vans, and so removed direct to
the markets.

(4) A complaint that the rate for Irish bacon from Enniskillen to
Liverpool was higher than that for American bacon from Liverpool to
Enniskillen ; though the witness admitted that if the Irish bacon were
packed in boxes, like the American bacon, instead of in bales, it would
go at the same rate. Asked why he did not adopt the system which
allowed of the better loading of the waggons, and thus secure the lower
rate, he replied, " The trade won't allow us."

For the reference in the Minority Report to the acquittal of the
companies, see page 34.



AND THEIR NATIONALISATION. 13

this inquiry with credit, and the complaints and ill-founded charges so
long made against them of mismanagement and exactions and of
retarding the expansion of traffic have been dispelled.

Whether or not, therefore, it had really been hoped to
base arguments in favour of nationalisation on the alleged
faults and failings of the railway companies, any possibility
of realising such aim was clearly nullified by the investigation
itself.

Continental Conditions.

Another respect in which the case against the railway
companies broke down was as regards a comparison between
Irish and Continental goods rates and conditions of transit.

Such comparisons have long constituted a stock argument
of the railway nationalisation party. For the purposes of the
Irish inquiry the Department of Agriculture and Technical
Instruction, with the approval of the Commission, sent a
member of their staff, Mr. Philip MacNulty, to France,
Belgium, Germany, Holland, Denmark, Austria and
Hungary in order to collect data as to railway transport
conditions in those countries. Mr. MacNulty brought back
a large collection of official tariffs, etc., and the Statement
he prepared, giving a digest of facts he had gathered concern-
ing the railway systems of the countries in question, is a
mine of information, of considerable value to students of
railway questions in general. Such students cannot fail to
be grateful to the Commissioners for having published these
results of Mr. MacNulty's great activity in Volume IV. of
their report.

But the direct bearing of all this information on the
question of Irish transport was open to very considerable
doubt ; and in the evidence which I myself gave before the
Vice-Regal Commission, in respect to Continental conditions,
I sought to show (i) that there is no similarity between the
geographical, economic, and general transport conditions of
Ireland and of Continental countries ; (2) that Continental
railway rates may be exclusive of services which are included
in the Irish rates; (3) that, for these reasons, there is no
basis for any fair comparison between Ireland and the other
countries in question ; and (4) that, in effect, Irish transport
can only be judged rightly from an Irish standpoint.*

These views were so far adopted by the Commissioners

* The same arguments equally apply, of course, to comparisons
between English and Continental railway rates and conditions.



14 IRISH RAILWAYS

that the majority say, under the head of " Information as to
Irish and Continental Goods Kates and Conditions of
Transit" :—

The considerations to be taken into account, and the differences in
conditions, are so great, so numerous, and so varied and involved, that
it would be very dilTicult to apply a common measure that could be
expressed in figures. We do not think any useful purpose would be
served by attempting to make a particular and detailed comparison
between Continental and Irish rates.

The Colonial Example.

It was, again, obviously hoped by the railway nationalisa-
tion section of the Commission that the policy to which
they had been more or less committed before the inquiry
opened would be supported by the example of Australasia,
where the railways are mainly owned and operated by
the Governments concerned. A number of witnesses having
personal experience of the administration and working of
these railways were examined. They spoke of the part
the lines had played in the development of the colonies;
they expressed their preference for State ownership over
company ownership, and, without necessarily having any
personal experience of Irish conditions, or taking into
account the fact that State purchase of a practically complete
network of railways in Ireland to-day would be a very
different matter from State construction of railways in
colonies unprovided, or inadequately provided, therewith,
they gave it as their opinion that the adoption in Ireland
of the Australasian system of State railways would be of
advantage to that country.

The majority of the Commissioners appear to have been
especially impressed by some evidence given as to the action
of the Victorian Government in constructing a line of railway
to an irrigation settlement of 3,000 people 200 miles from
the nearest terminus of the State railways, and they remark
thereon : —

Of course it is generally recognised that projects of this experimental
nature, with little certainty of success, and, in any event, taking years
to fructify, are not practicable under the system of private commercial
companies.

Here, however, the majority overlook the fact that, alike
in the United States and in Canada, private commercial
companies built in their pioneering days thousands of miles
of railways through virgin forests and across mountain ranges



AND THEIR NATIONALISATION. 15

where there were then no settlements at all, or likely to be
until the railways afforded transport facilities, the probability
of such projects " taking years to fructify " in no way checking
developments of private enterprise which will compare
favourably with anything that Australia and New Zealand
can show in favour of State action.

Comparison between the Colonies and Ireland must,
however, needs be futile because of the absolute dissimilarity
in their circumstances and conditions ; and, after all the
time spent in taking the evidence of these Colonial authorities,
the majority find themselves compelled to admit —

In comparing the Australian with the Irish railways due consideration
must be given to the varying conditions of the two countries, which are
in many respects so different that it would be misleading to apply,
without such consideration, any conclusions derived from the experience
of the one to the circumstances of the other.

This is equivalent to saying, in effect, that the example of
Australia, from which so much had been hoped, is found not
to apply to Ireland at all.

State Acquisition.

While the case against the Irish railway companies, and in
support of the nationalisation scheme, thus completely broke
down as regards the three grounds of (i) grievances ;

(2) comparisons with Continental rates and conditions ; and

(3) the Colonial example, the majority of the Commissioners
have nevertheless reported in favour of State acquisition, the
minority in their separate Report expressing themselves
directly opposed thereto. The general position was thus
summed up in a leading article published in The Times of
July 26th, igio : —

There are seven Commissioners, and they are divided as equally as
it is possible to divide an odd number. Four of them — Sir Charles
Scotter (formerly general manager and now chairman of the London
and South-Western Railway), Lord Pirrie, Lieutenant-Colonel William
Hutcheson Poe (an Irish landlord), and Mr. Thomas Sexton (well
known in Irish pohtics) — conclude in favour of the purchase of all the
Irish railways by the State. Three of them— Sir Herbert Jekyll
(Assistant-Secretary of the Board of Trade), Mr. William Mitchell
Acworth (a well-known authority upon railway affairs), and Mr. John
A. F. Aspinall (general manager of the Lancashire and Yorkshire Rail-
way) — report in favour of amalgamation into a single commercial
system of all the principal Irish railways by the voluntary action of
the companies, assisted by permissive legislation and by limited
financial aid.



i6 IRISH RAILWAYS

The Majority Report.

Failing those other reasons which, as I have shown, had
proved of no avail, the majority base their actual recom-
mendation of State purchase mainly on the ground that they
" consider it obvious that Irish development will not be
fully served by the railways until they cease to be commercial
undertakings,"

This remark, as j\Ir, F, W. Pim observed at the half-yearly
meeting of the Dublin and South-Eastern Railway meeting
on August nth, 1910, "appears to give the keynote of the
whole Majority Report." Later on the report further says
on the same question : —

It cannot be doubted that, so long as the Irish railways continue to
exist as commercial undertai<ings, it will be extremely difficult, if not
quite impracticable, for the companies to make such reductions in rates
as the economic conditions of the country require, without jeopardising
their capital.

The majority would, in fact, abolish the Irish railway
companies on the ground that the commercial principle, as
applied to their lines, is both unsound in itself and unsatis-
factory in its operation.

It is desirable to see how far these conclusions are
warranted by the facts of the case.

Number of Companies.

There is, undeniably, one weak point in the railway situation
in Ireland, and it is one that seems to be frankly admitted by
the railway companies themselves. Although the total length
of the Irish railways is only a little over 3,400 miles, the lines
are owned by thirty-eight different companies and operated
by no fewer than twenty-eight.

That these conditions call for change is common ground
in both the Majority and the Minority Reports. Where the
reports differ is in the particular form of the remedy they
think should be applied. Each favours amalgamation under
the control of a single body ; but the Majority Report
recommends public ownership by a popularly-elected body,
and the Minority Report advises a continuance of the principle
of company ownership.

Amalgamation.

In the idea of amalgamation of the Irish railways there
is nothing new. The Great Northern of Ireland to-day



AND THEIR NATIONALISATION. 17


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