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THE 
 
 RAILWAY DEFENCE ASSOCIATION 
 
 St. Stephen's Chambers, Westminster. 
 
 in tire Hums* of Ifor^ 
 
 ON SECOND READING OF 
 
 THE RAILWAY AND CANAL TRAFFIC BILL, 
 
 March lJfth, 1887, 
 
 BY 
 
 The President or the Association 
 THE EIGHT HONOEABLE LOED GEIMTHOEPE, 
 The Vice-President 
 
 TnE EIGHT HONOEABLE LOED BEABOUENE, 
 
 AND 
 
 THE EIGHT HONOEABLE LOED BEAMWELL. 
 
 SonOon: 
 
 PRINTED BY C. F. ROWORTH, GREAT NEW STREET, FETTER LANE, E.C. 
 
s«\< Cd'W\'^A/\ 
 
|lailtu;tjr gjjefenee $.s.miation'. 
 
 SPEECHES delivered in the IIouse or Lords, on Second Reading 
 of the Railivay and Canal Traffic Bill , March 14 th, 1887, by 
 Lords Brabourne, Bramwell and Grijitiiorpe. 
 
 Lord BRABOURNE said: 
 
 He had been asked by gentlemen who represented a largo proportion 
 of railway capital to state their views upon this bill. Ho accepted 
 with gratitude, on behalf of the railway companies, the word of 
 caution which had just been addressed to them; and he could 
 assure their lordships that thero was no desire on the part of any 
 one in the railway world to discuss this question in anything but a 
 conciliatory tono, with a view to arriving at a friendly settlement of 
 the disputed points. He was happy to think that after what had 
 just been said, it would not be his duty to disabuse their lordships’ 
 minds of an idea, which seemed to prevail in some quarters out of 
 doors, that the railway companies were the natural enemies of the 
 public. He imagined that few would disagree with him when he 
 said that railway companies might be fairly considered as bodies 
 which had supplied a great public want, and that by means of 
 private expenditure they had relieved this country of a large 
 amount of public taxation. If we had applied public funds to the 
 construction of railways, it could hardly be doubted that a groat 
 weight of additional taxation must, during the last half century, 
 have been laid upon the peoplo. In that case the legislature would 
 have had an undoubted right, both legally and morally, to have 
 interfered with every matter relating to railway management and 
 regulation. But Parliament deliberately determined to trust to 
 private subscription and to private enterprise for the creation of a 
 railway system, and it followed that legal rights were acquired by 
 those who subscribed the capital, and promoted the enterprise ; and 
 V A 2 
 
4 
 
 Railway Hates Bill. 
 
 Parliament became bound to uphold and support the rights it bad 
 itself created, and upon the faith of which capital had been sub¬ 
 scribed and works of great public utility constructed. He did not 
 deny the power of Parliament to legislate upon the lines of this bill j 
 but he would urge that in considering the details of legislation they 
 were bound to keep three things specially in view. 
 
 The first was, that however much we might cry down railway 
 investors as people who would not have obtained the privileges they 
 had if things had been originally as they were now, we were deal¬ 
 ing with men who held capital which had been subscribed on the 
 faith of Acts of Parliament, and who had acquired definite legal 
 rights. The second was, that the average of railway dividends had 
 scarcely reached 4 per cent., and therefore it could not be contended 
 that railway investors had made enormous profits, or that they had 
 obtained under their private acts anything which had been of un¬ 
 fair advantage to themselves, or which had been unduly burden¬ 
 some to the public. The third was, that it was the direct interest 
 of every railway company to carry the largest possible amount of 
 remunerative traffic, and that any company which, by a prohibitory 
 tariff, excluded traffic or offended customers must be acting con¬ 
 trary to its own interests. The remarks he desired to make upon 
 the bill might be classified under three heads. These were—the 
 constitution of the court it was proposed to establish, the parties 
 who were to have the right to appear before the court, and the 
 manner in which they were to be dealt with by the court and other¬ 
 wise under the provisions of the bill. The bill professed to abolish. 
 the present commission, but so far as he could see there was 
 nothing to prevent the reappointment of the same persons as com¬ 
 missioners the day after the bill passed. Moreover, the ex officio 
 commissioners, who were to be judges, were only to bo called in 
 when required by the appointed commissioners, so that railway 
 affairs were still to be left to the discretion of three gentlemen, of 
 whom only one need be learned in the law. Why, he would ask, 
 were railway companies to be the only bodies in this country who 
 were to have a special tribunal appointed to see that they obeyed 
 the law? If the cases in which they were concerned were of 
 special importance, why not appoint two judges to try them, as 
 was done in the case of election petitions ? 
 
 The railway companies were desirous of having nothing better 
 and were entitled to have nothing less than the highest legal tri¬ 
 bunals to decide whether they were acting legally; and, moreover, 
 in these cases questions of law and of fact were so inextricably 
 
Lord Brabourne . 
 
 inixed up that it was almost impossible to separate them. There 
 was no reason why the disputes in which railway companies were 
 concerned should be settled in any other way, or by a less competent 
 tribunal, than were the disputes of the rest of the community. 
 
 As to the parties who were to have a right to appear before the 
 court, it was an old maxim of English law that a man must have a 
 personal grievance before he could summon another into a court of 
 law. But this clause directly controverted that principle, and de¬ 
 clared that an authority complaining of a railway company need not 
 show that it had been aggrieved by any action of that company. 
 The only protection which the bill gave to a company was that of a 
 certificate of the Board of Trade that the body making a complaint 
 was a proper body to make such complaint. This was quite an 
 illusory protection, and worse than the existing law, because at 
 present it must be shown that it was a proper case which an au¬ 
 thority desired to bring forward, whereas the bill only provided 
 that the Board of Trade should be satisfied that the complaining 
 authority was a proper body to bring it forward, so that, unless 
 they objected to the constitution or character of the authority, they 
 would never refuse a certificate. Then these authorities would 
 sometimes have rates to expend, to which tho railway companies 
 had largely contributed, so that they would be fought with their 
 own money. In other cases the authorities had no funds. The 
 only fair way in which to put this clause was to provide, first, that 
 the complaining authority should be bound to prove that it or those 
 whom it represented had been aggrieved by the action of the rail¬ 
 way company, and, secondly, that it should give security for its 
 share of the costs of the hearing and determination of the complaint. 
 There was much more to be said on this point, but he would leave 
 others to deal with the legal aspects of the case. 
 
 Now he came to the manner in which the companies were to be 
 dealt with, and he wished, first, to call their lordships’ attention to 
 the report of the committee which sat in 1885—a committee which 
 made a very exhaustive inquiry. That committee was composed of 
 twenty-seven members, of whom, he believed, only seven were rail¬ 
 way directors. It could not, therefore, be said that the railway 
 interest was over represented, more especially as when two draft 
 reports had been presented to the committee, that which was sup¬ 
 ported by the railway representatives was rejected. But when the 
 other and more hostile report had been considered and thoroughly 
 threshed out, let their lordships mark what happened. On the 
 general issue the committee returned a verdict acquitting tlxe com- 
 
6 
 
 Railway Rates Bill. 
 
 panics of “any grave dereliction of duty tovrards tlie public.” 
 Then, as regarded the special allegations against the companies, the 
 most important of them. altogether broke down. One contention 
 had been for equal mileage rates. The committee pointed out that 
 as regards the interests of the public, as much as that of the com¬ 
 panies, equal mileage rates were impracticable, and that their 
 principle was destroyed by the exceptions which those who advocated 
 it were themselves prepared to admit. As regards terminal charges, 
 which were stated to be unjust and illegal, the committee reported 
 that, subject to publication, terminal charges ought to be recognized. 
 As to preferential rates, the committee roported that they were 
 sometimes to the advantage and not tho disadvantage of the public; 
 that they wero only illegal when unjust, and when unjust the law 
 already provided a remedy. He mentioned these several conten¬ 
 tions because just as they had all failed when carefully investigated 
 beforo a committee, so it was probablo that if defects now sought to 
 be remedied were subjected to the same process they might be found 
 out to be no defects, or, at all events, to be exaggerated. There¬ 
 fore, he submitted that the proper course to pursue would be to 
 refer tho bill to a select committee, which would cause no real delay, 
 since it was very evident that in the present state of affairs any bill 
 which went down from their lordships’ house would have to wait 
 somo time before it could be considered in another place. 
 
 As to the clauses, he would mention the 9th, which, taken with 
 tho 17th clause, constituted the commission sole judge on all points 
 contained in tho special acts of the companies. The commission 
 would sit as judge and jury, just as the judges sat in the courts of 
 equity. "Why was the commission not to bo subject to appeal 
 similar to the appeals against the decisions of the judges ? No 
 doubt the commission was one of an extraordinary, character. It 
 cost the country about £10,000 a year in salaries, and the average 
 was eighteen cases a year. If it were to be a really strong court 
 and composed of judges of the High Court, he should not object to 
 tho limitation of the right of appeal, but two out of the three com¬ 
 missioners were to be laymen, and therefore he held that it would be 
 a monstrous thing to limit the right of appeal. The amount of 
 property placed under tho control of this commission was enormous, 
 and he thought tho commission ought to be a really strong court in 
 legal knowledge and ability, or else the widest right of appeal 
 should bo given. He came next to the 24th clause, which was the 
 most important in tho bill. This clause proposed calmly to set 
 asido all the companies’ special acts under which they had heretofore 
 
Lord Brabourne , 
 
 7 
 
 classified their traffic and settled their rates. As far as ho. could 
 read the clause the Board of Trade had tho power to reduce the 
 maximum rates just as it pleased. The special acts were the 
 charters of the railway companies, on tho strength of which their 
 capital had been subscribed. He did not wish to say one word 
 against the Board of Trade. In the debate in the House of 
 Commons last year there was a speaker who had said that tho 
 Board of Trade was a most incompetent tribunal to deal with these 
 questions. That speaker was Sir B. Assheton Cross. He (Lord 
 Brabourne) did not agree with that estimato of the Board of Trade. 
 In his official experience he had known much excellent work dono 
 by permanent officials, and he had no reason to doubt that those of 
 the Board of Trade wero as good as any others; nor did ho believo 
 that any President of the Board of Trado would seek popularity by 
 urging his subordinates to a reduction of railway rates. He ay as 
 ready to believe both the political and permanent element in tho 
 Board of Trade to be perfectly immaculate and entirely capablo. 
 
 But had their lordships any idea of the work which this clauso 
 would impose upon the Board of Trade ? Many of the companies 
 had somo millions of rates, and the work of classification and 
 arrangement of rates was one of enormous labour. He did not soek 
 to appeal to anything so obsolete as the observance of parliamentary 
 faith, but to the practical difficulties before them. The rates were 
 settled and determined by skilled men, the whole of whose time was 
 given to their classification. They had no possible motivo for in¬ 
 juring the public, and competition had shown them that they must 
 cut their rates as low as they could in order to carry the traffic con¬ 
 sistently with the traffic being remunerative. Interference with 
 those men was very dangerous, and could not be successful. He did 
 not say there was not room for improvement both in the classification 
 and the rates, but if by an arbitrary interference with managers of 
 railways their lordships altered rates sanctioned by acts of parlia¬ 
 ment so as to make traffic unremunerative, they would go very near 
 to the ugly word confiscation. It was absolutely impossible that tho 
 officers of tho Board of Trade, in addition to all their other work, 
 could do this work in the same efficient way in which it was now dono 
 by specially trained men, who devoted their whole time to its per¬ 
 formance. But even if they could do so there was an enormous 
 difficulty behind. Upon what principle were they to proceed? 
 Was it upon that of equal mileage rates ? That had been con¬ 
 demned by the Committee of 1882. Was it with regard to the 
 cost of service ? Was it with reference to the value of tho articles 
 
8 
 
 Railicay Rates Bill. 
 
 carried? Was the existence or non-existenco of competition to 
 be taken into account? No principle was indicated in the clause, 
 because, in truth, there was no one principle of universal appli¬ 
 cation in the matter. One principle alone could be applied, and 
 that was the principle of elasticity, the application of which was 
 absolutely necessary to the successful administration of railway 
 traffic, and which could only be applied by leaving a wide margin 
 of discretion to those most capable men who now acted as railway 
 managers. He would point out, moreover, that not only did rail¬ 
 way companies very rarely charge their maximum rates, but the 
 whole tendency of recent years had been toward reduction; com¬ 
 petition with other companies and with water traffic having secured 
 to the public the advantage of low rates. Any action of the Board 
 of Trade which would make traffic unremunerative would in the 
 long run recoil upon the public. 
 
 In section 7 of clause 24 it was provided that when the railway 
 companies and the Board of Trade had failed to come to an agree¬ 
 ment, a report should bo made to parliament, and the Board of 
 Trade might bring forward a provisonal order to force their 
 views upon the railway companies. The railway companies 
 would very much prefer that matters should not be brought to 
 that pitch, because in the case of a provisional order brought 
 forward by a government department there would be very little 
 chance of resistance. He believed that if the railway companies 
 were given time and opportunity, very few of those questions would 
 be left unsettled. He did not wish to deprecate the friendly inter¬ 
 ference of the Board of Trade, but arbitrary interference would 
 only lead to misfortune and confusion. By clause 27 any person 
 who fancied himself oppressed or treated unreasonably might 
 complain to the Board of Trade. There were a great many un¬ 
 reasonable persons who fancied themselves oppressed, and who now 
 came to the railway companies and had their grievances settled in a 
 quiet way. But now it was proposed that the Board of Trade 
 should hear their complaints ; and, what was worse, might appoint 
 and pay any other person to hear communications upon the matter. 
 The Board of Trade was but human, and there would always be 
 plenty of peojde anxious for such a job, whom they could be urged 
 to appoint. He thought that nothing but mischief would result 
 from such a provision, and the trouble which would be given to 
 the railway companies by this clause could hardly be conceived by 
 those who were unacquainted with the practical working of those 
 companies. All that the railway companies desired was to be 
 
Lord Brabourne. 
 
 9 
 
 allowed to settle their own differences with their customers without 
 interference, and if they acted illegally, then customers had their 
 remedy at law. As to the complaint that individuals could not 
 contend against the long purse of a corporation such as a railway 
 company, if the law was to be altered for this roason let it be 
 altered as regarded all corporate bodies, and not single out one in 
 particular. 
 
 Clause 28 provided for what was practically an unlimited power 
 to order returns from the railway companies. The roturns now 
 asked for by the Board of Trade imposed a great deal of labour on 
 the staff of the companies, and this further demand would be 
 attended with great inconvenience. Clause 29 contained provisions 
 of a most extraordinary character; it provided that at every station 
 of every company there should bo placed certain lists of their rates. 
 There was one company, whose terminus was in London, which 
 required no less than 1,500 books to keep its various rates. The 
 effect of this clause would bo that at each of the 670 stations on 
 this railway there would havo to be a copy of its books, and upwards 
 of one million books would be required to comply with this clause, 
 the information contained in which would never be of the slightest 
 use to any one. The railway companies were at present compelled 
 to supply all persons desiring to use the railway with the informa¬ 
 tion they required, and, on proper notice, to show how their rates 
 were divided, and what was the proportion which was a “ terminal 
 charge.” 
 
 With regard to the general objects and nature of the bill, it 
 appeared to him that the principle underlying it was the interference 
 by the State with one of the greatest industrial undertakings of the 
 country. No such interference could take place without running 
 grave and serious risks. If their lordships impeded commerce, 
 fettered trade, and imposed shackles upon industrial enterprise, 
 they struck at the root of that freedom of action which was the life 
 and soul of industrial success. (Hear, hear.) 
 
 As regarded success in an industrial enterprise, whether it was 
 the maintenance and management of a railway, the business of a 
 shipowner, or that of a merchant, success was more likely to be 
 achieved by the free action of those who had been trained to the 
 business, and whose interest lay in its development, than by the 
 hard and fast rule of government regulations or the restrictive 
 supervision of a government department. But here there was 
 something more in question than mere commercial success. The 
 principle of State interference was one which their lordships would 
 
10 
 
 Railway Rates Bill. 
 
 always regard with jealousy, but their jealousy would bo increased 
 when that interference took the form of encroachment upon legal 
 rights. (Hear, hear.) That was a dangerous principle, which might 
 lead to dangerous results. Up to the present time, whenever any 
 sound commercial undertaking had been projected in this country 
 there had been no want of capital to cany it out. This had been the 
 case because the public had confidence ; they believed that Parlia¬ 
 mentary faith would be kept. They had had some rude lossons in 
 recent years as to Parliamentary faith and the reliance to bo placed 
 on Parliamentary enactments. But if these lessons were to be 
 carried further, if people were taught that the conditions on which 
 they were to subscribe, and those upon which they had subscribed, 
 their capital were to be set aside at the first convenient opportunity, 
 for the sake of gaining popularity, the supply of capital might 
 be considerably diminished. Moreover, if they impeded trade 
 enterprise by restrictive legislation, it would not be long before 
 thoso classes who lived by manual labour would rise up against 
 that class of legislation which restricted the supply of one great 
 class of employment. They would have to reckon with other classes 
 also. If by that legislation the railway interest was going to be 
 attacked he wanted to know whether their lordships were going to 
 give any consideration to the claims of the railway shareholders. 
 It always seems to be forgotten that it was not the well-paid chair¬ 
 man or the holders of debenture and guaranteed stock, but the 
 holders of ordinary stock, who suffered from any diminution in the 
 earnings of the railway, and they had a right to complain if their 
 legal security was diminished, and if they were robbed by legisla¬ 
 tion of the dividends which they would otherwise have received. 
 It should be remembered that out of some eight hundred millions 
 of money invested in railways, something less than three hundred 
 millions were in the hands of ordinary shareholders upon whom 
 the burden of any loss of dividend would exclusively fall. 
 
 There remained yet a still more important class with whom they 
 will have to reckon. If any noble lord would look into the com¬ 
 plaints made against railway companies he would find that they 
 were not of overcharges upon the persons complaining, bxit they 
 were made for the most part by traders, because they alleged *the 
 charge upon the goods of somebody else was too low, and that this 
 somebody else was thus enabled to compete with them on equal 
 terms in the market. There was another aspect to this question. 
 If they were going to tamper with railway rates they would restrict 
 competition, and limit the area from which the markets were sup- 
 
Lord Braboume. 
 
 11 
 
 plied, and it would not be long before consumers lifted up their 
 voices against the rise of prices which would ensue. A great deal 
 was said about the railway companies enjoying a monopoly. They 
 were monopolists only in the sense that they had provided a hotter, 
 more convenient, and a cheaper method of transit than others, and 
 had thus driven other carriers out of the field as far as long routes 
 were concerned, and their very excellence was now usod as a com¬ 
 plaint against them. Moreover, there was scarcely a line anywhere 
 at the present moment to which there was not some competition 
 either by another line or by water. Railway companies frequently 
 incurred a large expenditure, and then in a few yoars Parliament 
 let in a competing company which rendered all their expenditure 
 unproductive. Therefore, railway companies had no real monopoly 
 —only a restricted monopoly, regulated by Act of Parliament, and 
 used in the interest and for tho advantage of the public. It might 
 be said that because he had criticised some of the details of this 
 measure he ought to move its rejection. That by no means 
 followed. Railway companies had no quarrel with traders, and as 
 sensible men only desired to see this subject dealt with in a 
 sensible manner; still less had they any quarrel with the public, 
 whose servants they were, and whom they desired to please. They 
 knew that there had been a demand from the public for railway 
 legislation, and they could not shut their eyes to the fact that 
 three governments had proposed legislation. Railway companies 
 were perfectly ready to remedy any complaints that might be well 
 founded, and to use their best endeavours to satisfy the public. 
 There were remedies for certain defects which the companies were 
 anxious for; they readily admitted that. The classification of 
 goods was, in a great measure, obscure and obsolete, and railway 
 companies were as desirous as any one else for its revision. The 
 uniformity of rates was, no doubt, a delicate and difficult subject, 
 but, wherever possible, companies had no objection, in all cases 
 where it could be done without sacrifice of their shareholders’ 
 rights, to rates being dealt with ; the consolidation of statutes was 
 also desirable, and the companies were most willing to promote it. 
 Moreover, as to terminal charges, they were ready to simplify tho 
 matter, and make it as clear as possible to the public. 
 
 There were many points in the bill which would be much better 
 discussed before a select committee than in the whole house. 
 He believed it would be found that those who represented rail¬ 
 way companies were most anxious and desirous to give every 
 possible assistance in the promotion of legislation settling all 
 
12 
 
 Railway Rates Bill. 
 
 disputed points. What the railway companies did object to was 
 that they should he continually harassed by unfounded complaints 
 and prejudiced by extravagant statements, which had been again 
 and again refuted. They asked, within the limits given them by 
 the acts of parliament controlling them, to be allowed the freedom 
 to act as they chose, and not to interfered with in their ma¬ 
 nagement of their own business. Above all, they asked not to 
 be continually exposed to harassing legislation and vexatious 
 enactments, which would have no other effect in the long run than 
 that of retarding the development of the industry and resources and 
 of restricting the prosperity of the country, while at the same time 
 they inflicted undeserved injury on men who had subscribed their 
 money to carry out these great undertakings in full reliance on the 
 honour, the good faith, and justice of the British Parliament. 
 
 Lord BRAMWELL said: 
 
 My lords, this is a bill with a great many miscellaneous provisions 
 in it, and I am far from saying that some of them are not good. 
 It is brought in under such auspices, and introduced in such a way 
 as to disarm opposition. I think we ought not to object to its being 
 read a second time, even if we thought that we could succeed in 
 preventing it. But there is one matter (although we shall have an 
 opportunity of considering it in committee) which I must mention 
 now, as it is of so much importance, having regard to the argument 
 which has been used, and I hope your lordships will allow me to 
 say a word or two. 
 
 My lords, the railway shareholders of this country have subscribed 
 eight hundred millions of money for the making of railways, and 
 they have done so upon the faith of a bargain—a parliamentary 
 bargain—made with the State, made with the public, made, if you 
 please, with parliament, that they should be allowed to make 
 certain charges. That was the bargain which they made when 
 they subscribed their money and got their act of parliament and 
 made their lines. My lords, it is now proposed to take that right 
 from them—not in so many words, because they are at liberty to 
 diminish their own rates if they please. If that diminution suits 
 the Board of Trade they will be allowed probably to do it them¬ 
 selves and not have it done for them. But if the rates which they 
 propose to establish are not acceptable to the Board of Trade, the 
 Board of Trade, by virtue of this act of parliament, may suggest 
 other rates, which certainly will not be larger, as the last noble 
 lord who spoke said, and which probably might be considerably 
 
Lord Bramwell. 
 
 13 
 
 smaller. And then the Board of Trade will bring their proposition 
 to parliament, and if parliament sanctions it, the rights of the 
 railway companies will he taken from them and something sub¬ 
 stituted. Now, I do not deny the power of parliament to do that. 
 Parliament, according to our law, is omnipotent. It could take 
 away an acre from every ten that your lordships hold, if it thought 
 fit to do so. It could reduce the three per cents, to two and a half 
 per cent. Parliament can do so, and I do not deny, therefore, its 
 power to take away that right, which at present the railway 
 companies possess, to make certain charges. But I do wholly and 
 entirely deny that parliament has reserved to itself as a part of the 
 bargain the power to do so. I wholly and entirely deny that there 
 is anything in the argument which the noble lord presented to your 
 lordships. I will undertake to say that no lawyer, when the 
 language ho relied on is considered, could agree with him; and I 
 hope I am not too sanguine when I say, if he will favour me with 
 his attention, that I hope to persuade him that there is no ground 
 for the arguments he used. 
 
 My lords, what is relied on is this: There is said to be a clause 
 in modern railway acts that “Nothing herein contained shall be 
 “ deemed to exempt railways from the provisions of any general 
 “ act now in force, or which may hereafter be passed in any session 
 “ of Parliament, or from any alteration under the authority of Par- 
 “ liament upon maximum rates and fares authorized by this act or 
 “ in the said recited act.” Now, if a railway company relied upon 
 the act which contained that clause as an act which precluded 
 revision of its rates, then this clause would be the answer—Do I 
 make myself understood?—“Nothing in this act shall prevent.” 
 Well, but this act is not relied upon. What the companies rely on 
 is not the particular act which contains that clause. What they 
 rely on is the act which gives them the right. I think I can make 
 myself intelligible to your lordships in this way. Take an illus¬ 
 tration. One of your tenants writes, “ May I plough up certain 
 meadow lands ?” which it is not in his lease to do. You say “ Yes,” 
 but with this provision, “Nothing in this provision is to prevent 
 me planting trees.” You propose to plant trees, and the tenant 
 says, “ "Where is 3 r our right to do it ?” The landlord says, “ When 
 I gave you permission to plough up meadow land I said there is 
 nothing in this permission to prevent my planting.” “ True,” says 
 the tenant, “but I do not rely upon your permission. What I 
 rely on is the right as the lessee under a lease.” So the railways 
 do not rely upon anything in the act which contains this clause to 
 
14 
 
 Railway Rates Rill. 
 
 prevent their rates being reduced. What they rely upon is the 
 act which gave them the right originally to charge those rates. 
 And this clause is only sensible and is only introduced for the pur¬ 
 pose of preventing a railway company from saying, “Now you 
 have passed this new act you have no right to reduce our fares in 
 any way.” I hope I have made myself intelligible, but the matter 
 is so plain that it is scarcely capable of argument. “ Nothing in 
 this act shall prevent it.” I do not rely upon the act. 
 
 How then did this clause come into existence ? I think I can 
 tell you. It came into existence by virtue of your lordships’ stand¬ 
 ing orders, and the first time that a standing order required such a 
 clause was in the year 1844; and down to the present time this 
 clause has always been introduced into acts of parliament which 
 gave railway companies power to make branches. I will tell your 
 lordships how it came to be introduced. It came to be introduced 
 for this reason. In the year 1844 an act of parliament was passed. 
 It was chap. 85. It is a public act, which contained this:— 
 “Whereas it is expedient that the concession of powers for the 
 “ formation of new lines of railway should be subjected to such con- 
 “ ditions as are hereinafter detailed.” It then proceeds to say, in 
 effect, these two tilings:— 
 
 After a certain time (now arrived in most cases) with respect to 
 all then future railways, when their annual net profits on the 
 average of three years have reached ten per cent., it shall be lawful 
 for the Treasury to revise the rates, so that, assuming the same 
 quantities and kinds of traffic to continue, the divisible profits 
 shall, in the judgment of the Treasury, be likely to be reduced to 
 ten per cent.: provided that no such revision shall take effect with¬ 
 out a guarantee (to be provided by Act of Parliament in each case) 
 of that rate of dividend for 21 years more. And further, that the 
 State might, after the prescribed period of 15 years, buy any future 
 railway for 25 times its average profit for the last three years; but 
 if that has been less, than ten per cent., then there shall be an 
 arbitration to determine what shall be paid for further prospective 
 profits. 
 
 At that time it was supposed that ten per cent, was not an un¬ 
 reasonable dividend. 
 
 My lords, that was the liberal, the fair and liberal, way in which 
 it was thought right to deal with the railway companies at that 
 time. Now, that was a provision which was contained in this act of 
 parliament. Then there was an option of purchase, at twenty-five 
 years’ purchase of the annual income of the railway company, the 
 
Lord Bramwell. 
 
 15 
 
 annual net income. And I have no doubt it was in order to prevent 
 new companies' saying, we are not within that act of parliament, 
 because we have come into existence since that act passed, and our 
 act by implication repeals it as to us, and there is nothing in our 
 act which limits our right to make more than ten per cent., and I 
 have not the least doubt that, to preclude that argument, was the 
 reason why this standing order was made, which says that every 
 railway act passed after this date shall contain a clause that nothing 
 in this act shall preclude the revision of the maximum tolls. I say, 
 therefore, if your lordships look upon tho clause that “Nothing in 
 this act shall preclude the revision of the maximum tolls,” constru¬ 
 ing it with or without knowing how it came into existence, it does 
 not bear the interpretation which the noble lord has put upon it to¬ 
 day, because nothing in the act is relied upon to prevent a revision 
 of maximum tolls. I say so confidently. I speak as a lawyer, but, 
 if I may venture to say so, it seems to me as a matter of plain sense 
 that the whole intention of the act of parliament, well, is the exclu¬ 
 sion of a conclusion, and it was put in simply to prevent railway 
 companies saying that you cannot claim to reduce our rates under 
 the Act of 1844, because there is a subsequent one which gives us 
 certain powers which are inconsistent therewith. I say then, my 
 lords, that this bill is a proposal to interfere with the right for 
 which the companies bargained when they subscribed their money 
 and made their lines, and I ask whether it is conceivable that people 
 would have been foolish enough to have subscribed the immense 
 sum of money that has been subscribed if they knew that tho tolls 
 which they bargained for could be reduced, and reduced at the 
 pleasure of anyone. 
 
 Now, my lords, this is an important matter, because it seems to 
 me, that it is not only of great interest to the railway shareholders, 
 but it is of great interest otherwise. My lords, I am not going to 
 talk about plunder or confiscation, for I am sure they are not in the 
 mind of the noble lord who brought this bill forward. But there is 
 no doubt that at the present time, to use a common expression, 
 there is “ plunder in the air,” and I ask your lordships not to set an 
 example of taking away from people lightly those rights which to 
 my mind they clearly have. I may remind your lordships that the 
 land is to be nationalized; leaseholds are to be enfranchised; copy- 
 holds are to be enfranchised, or the landlord is to forfeit his interest. 
 The tithe question is to be settled again, because it is inconvenient 
 for the farmer to pay the tithe for which the tithe owner bargained 
 when the tithes were given up. 
 
16 
 
 Railway Rates Bill. 
 
 And I do ask your lordships most carefully to consider—even if 
 the right exists—whether they will not be doing a gross injury to 
 the companies. But I also ask your lordships carefully to con¬ 
 sider whether there is any such right: whether something will not 
 be taken from the railway shareholders which belongs to them. 
 Anyhow, my lords, it is a matter of 'very considerable consequence. 
 I was told by one--than who there is no greater authority in this 
 country—that the great difficulty of finding capital—the noble 
 marquis will remember sitting on a committee in which the ques¬ 
 tion was, whether for the furtherance of some particular scheme 
 there should be power to pay dividends or interest out of capital—I 
 had the honour to be a member of that committee, and a witness 
 was called—whom I refer to—and he told me afterwards that the 
 difficulty of finding capital for matters of that description was the 
 general distrust which exists, and which I know does exist—there 
 is scarcely a thing which is not the subject of some desire to take 
 away from its owners that which the law has given to them. My 
 lords, it is said complaints are made—did anybody know a case 
 where complaints were not made ?—where people have to pay for 
 certain benefits which were not given to them; and if the result of 
 this bill should be to the railway companies to have five per cent, 
 taken off their dividends, there will be an application to take off 
 another five per cent., and therefore I venture to trouble your 
 lordships with this matter, because it seems to me not only of very 
 great importance to the railway shareholders, but of very great im¬ 
 portance as a matter of general interest. It may be thought that 
 I am interested in the matter. Yes; I am a railway shareholder, 
 but my interest personally is small. I am provided for as long as 
 I live, and before this scheme can be brought into operation, I 
 shall very probably be provided for in another way. The way in 
 which I am interested is the way in which thousands of others are 
 interested. We hope that we have made a safe provision for those 
 who come after us, but these proposals make us doubt whether we 
 have done so. I have troubled your lordships with these remarks, 
 although I might have made them on the bill in committee. 
 
 A word or two on other parts of the bill. Why are railways, 
 whose cases are much more important in amount than ordinary 
 cases in the courts of law—why are they to be referred to a tribunal 
 inferior to the best which can be found for them ? The onfy reason 
 given, as far as I can see, is the immense magnitude of the interests; 
 but that is the reason for giving the very best possible tribunal. 
 Take another thing. Questions of fact are not to be made subjects 
 
Lord Bramwell. 
 
 17 
 
 of appeal. Why on earth is that so I should like to know. 
 Questions of fact are always in our courts made subjects of appeal, 
 and have been so from all time. Why, what is the meaning of a 
 man moving for a new trial on the ground of the verdict being 
 against evidence, except that the facts are tried over again ? and 
 why, if when a blunder or mistake is made on a question of fact, is 
 an appeal not to be allowed in the case of a mistake or blunder in 
 a point of law ? I cannot see what could have been in the minds of 
 those who suggested this. Is it that the j udgos who try the caso 
 see the witnesses and hear them, and that, therefore, they are tho 
 best judges ? True, they are, and that is the rule that is acted upon 
 nowin the courts of law where an appeal comes before the judges 
 on matters of fact. I have a great many observations to make. I 
 have made eighteen notes of matters as to which your lordships’ 
 attention ought to be particularly called. Of course, I will not 
 trouble you with them now. I do not wish for delay in the inte¬ 
 rests of the railway companies. I should think for my own part if 
 any alteration should be made that it should bo done at once, and 
 that we should know the worst as soon as possible. But without at 
 all wishing to delay the settlement of this matter, I cannot but say 
 that to my mind it is impossible in a committee of the whole House 
 properly to deal with the question before it. Whether it would 
 take a very long time before a select committee it is impossible for 
 me to say, but the questions that arise upon this bill are of the very 
 greatest difficulty, aud therefore I think that they should bo dealt 
 with by a select committee. 
 
 Lord GRIMTHORPE said: 
 
 May I supplement the remarks of my noble and learned friend 
 (Lord Bramwell) on a historical matter ? He referred to the reasons 
 of the noble lord who brings in the bill for saying that the railway 
 companies have no locus standi against a bill of this kind. If you 
 put together the circumstances which my noble and learned friend 
 mentioned, they supply an argument which he did not complete, 
 though I have no doubt he had it in his mind. In 1844 these two 
 things happened. A bill was brought in by a committee presided 
 over by Mr. Gladstone and carried. This bill, which my noble and 
 learned friend referred to, says two things; first, that you may buy 
 the railways at a certain price, namely, for twenty-five times their 
 average profits for the last three years. Secondly, that on certain 
 conditions you may revise rates, that is, on condition of guaranteeing 
 the dividend of ten per cent, for twenty-one years. Then came 
 
18 
 
 Railway Rates Bill. 
 
 simultaneously at the end of the session a now standing order, prac¬ 
 tically as suggested by tho committee, which ho also read. Now, 
 then, just let mo put the two things together. The act says you 
 may revise rates and purchase railways on those terms, and then 
 the standing order, as interpreted by the noble lord (Stanley), is 
 supposed to say you may revise them on any terms. Now, is it con¬ 
 ceivable that any parliament in its senses could simultaneously do 
 those two things, or that if it had said that the standing order 
 clause was intended to supersede the general act passed at tho same 
 time, any shareholder would ever find a penny for them ? 
 
 The intention of this standing order clause plainly was to guard 
 against future companies slipping words into then.’ acts which they 
 might contend afterwards gave them some claim to exemption from 
 tho revision provided by tho 1844 act. That was the only way of 
 preventing it beforehand. Therefore-1 do not go quite so far as 
 my noble and learned friend in saying that that clause meant 
 nothing. Legally it does mean nothing; but morally, it meant or 
 was intended for what I say, and that is exactly the opposito to 
 what the noble lord who brings in this bill has assumed, having 
 read the standing order clauso alone without referring to tho accom¬ 
 panying facts and legislation. 
 
 I had better notice, however, one argument which I read some- 
 whero was used last year, but not in the House of Commons, as far 
 as I know. It was said that some government official who had had 
 to do with these matters declared that he had always intended 
 those standing order rovision words to have the effect which the 
 noble lord attributes to them. On that I have two things to remark. 
 If any such person did say so, he was playing a trick which is not 
 unknown to lawyers, of trying to get a future advantage by putting 
 in a few ambiguous words not calculated to excite alarm, and yet 
 ho was ignorant that the trick almost always fails, because the 
 judges properly hold that people’s property or rights are not to be 
 taken away or acts repealed by obscuro words. Therefore, if there 
 is any truth in that story, it is doubly discreditable to the hero 
 of it. 
 
 I say no more on that. But there is a little more history con¬ 
 nected with that act and clause. Complaints against railway com¬ 
 panies have been going on as long as my professional recollection 
 of them extends; certainly from the year 1846, when there was a 
 committee on them which has not been referred to, and which said 
 nothing to the effect now contended for. There was a celebrated 
 committee in 1853 which has been referred to, the committee which 
 
Lord Grimthorpc. 
 
 19 
 
 produced tho Cardwell Act of 1854, for preventing undue pre¬ 
 ference between either railways or traders. There was the Duke of 
 Devonshire’s Commission, which sat two or throe years running, 
 1865, 1866, and 1867. There was a joint committee of both Ilouses 
 in 1872; and a committee of the House of Commons sat through 
 1881 and 1882, and produced two largo volumes of evidence which 
 my noble friend behind me (Lord Brabourne) referred to. That 
 committeo listened to sixty-nine witnesses full of railway grievances, 
 and, I think, six defenders of tho railway companies, besides the 
 constitution of the committee, in which the railway people were 
 only a quarter of tho whole number. If from anybody in the 
 world you could expect to find a suggestion that a bill of this sort 
 should be brought in, notwithstanding tho Act of 1844, giving 
 practically the Board of Trade, with the nominal control of Parlia¬ 
 ment, the power to reduce rates, surely it would havo been from a 
 committeo composed in that way and hearing those witnesses. 
 But that committee said not a word in favour of any such mode 
 of dealing with the shareholders of England. The Duke of 
 Devonshire’s Commission also said not a word of tho kind. Yet 
 that commission was appointed specially to consider the question of 
 the purchaso of railways. If they could have found a way of 
 purchasing railways for the State profitably they were tho people 
 to do it. It was an unusually strong commission, and they not only 
 said nothing of the kind, but the contrary. 
 
 I need only quote these few words from their report: “It must 
 “ be recollected that tho companies are entitled to derive a benefit 
 “ from the rates assured to them by parliament, and the courso 
 “ suggested would be tantamount to transferring this benefit from 
 “ the companies themselves to individual traders, in order to add 
 “ to the profits of their business, established with a full knowledgo 
 “ of the system of railway rates: ” to which I add, that since that 
 time both rates and profits have been generally reduced very con¬ 
 siderably by competition, which used to be pronounced impossible, 
 but is now all but universal. And though tho profits on the average 
 are less than half of what the Act of 1844 allowed, the traders want 
 somo more of them, and this government brings in a bill to help 
 them to get it. 
 
 The Joint Committee of 1872, which invented the Railway Com¬ 
 missioners, had the same problem to deal with, and they came to 
 the same conclusion, and suggested no such powers as are now 
 asked for, to transfer the benefit of the authorized rates from the 
 companies to the traders in order to increase their profits. It is 
 
20 
 
 Railway Rates Bill . 
 
 perfectly true, that when two or more railway companies, against 
 oither or both of which there are complaints of inequality of rates 
 above the average, come for an amalgamation bill, the committee 
 can say : “Well, we shall not give you this bill unless you redress 
 those grievances.” That has happened over and over again. 
 Either by standing orders or by practice it is required that rates 
 shall be looked into on amalgamations, and what happens ? The 
 committee says: “We require you to modify such and such rates.” 
 And sometimes the companies volunteer it in return for some 
 advantages. But at other times they say they cannot afford it. 
 Then say the committee, “We shall not pass your bill,” and the 
 companies lose the advantage asked for, and go on as before. That 
 is no compulsory interference with existing interests like that pro¬ 
 posed by this bill. Therefore your lordships see that during forty- 
 two years from the time when Mr. Gladstone’s Act was passed, 
 down to Mr. Mundella’s Bill of last year (for oven Mr. Chamberlain’s 
 Bill of 1884 did not do this), nobody ever dreamed of that newly- 
 invented excuse that parliament had always reserved the right to 
 reduce railway rates on any but the terms of 1844. 
 
 I will just read one passage from the committee’s report, though 
 there is more that I should read if it were not so late :—“ The com- 
 “ mitteo have been governed throughout by the strongest convic- 
 “ tion that no stops should be taken by parliament which would 
 “ either induce so much as a reasonable suspicion of its good faith 
 “ with regard to the integrity of privileges already granted and not 
 “ shown to have been abused, or which would prospectively dis- 
 “ courage the disposition now so actively in operation to extend the 
 “ railway system. And however desirable it may bo that there 
 “ should have been the advantage of immediate uniformity, the 
 “ committee would have deemed it much too dearly purchased by 
 “ any enactment which, involving a degree, however small, of com- 
 “ pulsory and uncompensated interference with the powers of charge 
 “ accorded to railway companies, might have appeared open to 
 “ impeachment on the score of good faith.” 
 
 Who said that ? The committee of 1844, of which the chairman 
 was Mr. Gladstone, and doubtless those are his words. Now, my 
 lords, I will not say more on the subject of parliamentary good faith, 
 which my noble friend behind me (Lord Brabourne) said is becom¬ 
 ing an antiquated and obsolete thing. But I will say that to tempt 
 people to find you 820 millions of money, now producing barely 
 four per cent., by reason of universal competition, to make railways 
 on the terms guaranteed by parliament in 1844, and never since 
 
Lord Grimthorpe. 
 
 21 
 
 varied by compulsion, is an act of simple dishonesty and robbery. 
 That is the case which the noble lord and the government have to 
 face, besides those solemn words of Mr. Gladstone. The noble 
 lord may be a vory clever man, but he must be cleverer than I think 
 he is if he can do that. 
 
 Your lordships must see at once what will happen. If you can 
 revise rates ad libitum you can reduce the value of the railways for pur¬ 
 chase to anything you please, and then buy them as bankrupt. There 
 cannot possibly be anything more dishonest. I say no more about 
 that; but there is one thing more which has not been touched upon by 
 anybody yet. One of the most monstrous provisions of the bill is 
 that the Board of Trade, through the Bailway Commissioners, or 
 even any town council, may compel any company or companies to 
 spend any sum of money on any work that they liko to pronounce 
 to be necessary for facilitating public convenience. Do any of your 
 lordships know—some of you probably do know—the money that 
 some of the great railway stations have cost? Hundreds of thousands 
 of pounds. I have a station in my miud just now, a very inconvenient 
 one in some respects, now used by eight railway companies; and 
 therefore you may judge that it must be a very large and costly 
 one, and I believe 3,000 men are employed on the works there. 
 Ever since it became a large one, and indeed before, it has been a 
 problem how to get rid of a level crossing, with a canal below it, 
 and roads above it, and it cannot be done. That is to say, it cannot 
 be done except by wasting some—nobody can say how much— 
 money, for it would earn nothing more. The Kailway Com¬ 
 missioners under this bill may say it is extremely inconvenient 
 that this sort of thing should go on. And as that is a question of 
 fact, and not of law, it follows that these three commissioners, the 
 gentleman of legal experience, the gentleman of railway experience, 
 and the gentleman of nothing, may order any railway company to 
 expend any sum of money that they please. And how is it to be 
 done ? It is to be done by calling on the railway shareholders— 
 which practically means the ordinary shareholders, however tho 
 money is raised, because if it is by debentures, the ordinary share¬ 
 holders have to pay the interest—to find the money for improving 
 or rebuilding every station, and getting rid of every level crossing 
 in tho kingdom. 
 
 Just let me follow up my noble friend’s remark about the effect 
 of all this on the ordinary shareholders. Ho did not give the 
 calculation. The net profits of railways, as you may see in 
 Whitaker’s Almanack, are only 47 per cent, of tho gross earnings. 
 
22 
 
 Railway Rates Bill. 
 
 The ordinary shareholders hold 37 per cent, of tho whole capital. 
 If you multiply *37 by -47, and divide 1 by the product, you will 
 find that every penny taken off the gross income of the company is 
 very nearly sixpence out of the pockets of the ordinary shareholders; 
 and again therefore it follows that every penny that is given to 
 these honest traders, who covet nothing of ours but what they think 
 fair, as tho noble lord (Henniker) says, will be sixpence out of the 
 pocket of the ordinary shareholders of the companies. And then 
 wo are pronounced most unreasonable in objecting to being ruined 
 by such a court as that in what are called individual cases. Every 
 individual pickpocket or burglar has tho right to bo tried by tho 
 best judges in England, and the individual woman who brings a 
 mere commercial action for breach of promise of marriage may go 
 through all the courts up to this House if she is not satisfied. But 
 it is only by favour and in special cases that railway companies are 
 to have even one appeal, and never another without further special 
 leave; under the pretence too, as a kind of climax of absurdity, 
 that town councils and chambers of agriculture and commerce aro 
 not rich enough to fight them. I supposo wo shall soon have a bill 
 to deprive all rich men of tho right of appeal unless they guarantee 
 their opponents’ costs in any event. 
 
 In fact, railway companies are treatod throughout this bill as 
 hastes humani generis. Every kind of presumption is made against 
 them, and the burden of proof is to be on them to prove that they 
 aro not guilty. Tho noble lord near mo (Lord Henniker), for the 
 Chambers of Agriculture, wants what he calls a strong court. Yes; 
 strong enough to ride over the law and everybody, and an appeal 
 or two appeals from it when he thinks it wrong, and none when he 
 thinks it right. That is somo people’s idea of justico. At this late 
 hour I will say no more, except that three of the chief practitioners 
 in that court, including the present Attorney-General and even tho 
 late Secretary of the Board of Trade, have condemned its constitu¬ 
 tion (which may bo continued by this bill), as you may see in tho 
 evidence of 1882. I daresay that by stopping now I shall disappoint 
 a very important body who probably expect more from me. My 
 noble friend (Lord Brabourne) has spoken on behalf of the railway 
 directors, or rather a committee of chairmen, deputy chairmen, and 
 managers, which is called the Railway Association. I havo to 
 represent a somewhat different body, of which I was made president 
 two years ago, though I had nothing to do with forming it. To 
 speak plainly, as we have had to do before on this point, this body, 
 called “The Railway Defence Association,” was brought into 
 
Lord Grimthorpe. 
 
 23 
 
 existeiico becauso tlio shareholders in general had begun to find 
 that they could not trust tho railway directors and managers to act 
 for them collectively in matters of this kind. (Laughter.) 
 
 Yes, and they have said so in public. Each chairman and each 
 manager (who generally manages the chairman and has a largo 
 fixed salary) is always looking out for tho interests of his own com¬ 
 pany, and if he can by going to the Board of Trade secure some 
 nice little thing that his company particularly wants, they caro 
 nothing for even r body else. That is not only my opinion; tho 
 Committee of 1872 said practically the samo thing in these few 
 words:—“The real managers are far removed from the influence 
 « of the shareholders, and the latter are to a great extent a fluctu- 
 “ ating and helpless body. The history of railways shows how 
 “ often their interests have been sacrificed to the policy, tho specu- 
 “ lations, and the passions of the real managers.” (Page 29.) 
 I am far from meaning to express dissatisfaction with anything 
 said by my noble friend, who is a director. But directors do not 
 legally exist for the purpose of making bargains with the govern¬ 
 ment officials. They have not even power legally to consent to any 
 private bill affecting their shareholders without the concurrence 
 of a large majority of them, by standing orders first mado by 
 your 'lordships’ Ilouse long ago. And yet in this matter I 
 know that some of them have taken upon themselves to negotiate 
 about those matters without consulting their own shareholders, and 
 much less shareholders in general. Last November the noble lord 
 who brings in this bill sent us a message that he wished to see 
 some of our council about it, and afterwards put off the interview 
 sine die. And so he proposes to legislate away as much as he may 
 choose of thirty millions a-year of net profits without condescending 
 even to hear or see us. I doubt very much if the view which my 
 noble and learned friend and I have attempted to expound to your 
 lordships to-night has ever been laid before either this government 
 or the last. If that view is correct, then I say it is impossible for 
 this bill to proceed on its present lines without being exactly what 
 the noble marquis is reported in the newspapers a day or two ago 
 to have promised some of tho railway chairmen that it should not 
 bo, a measure of confiscation. My noble and learned friend has 
 justly warned your lordships that if you once begin legislation of 
 that kind on the pretence of a public demand for it, those demands 
 will not stop at railway profits, but will very soon embrace other 
 things which have been even less expressly guaranteed than they 
 have against compulsory interference. I hope those remarks of his 
 will make a due impression in the proper quarter. 
 
LONDON: 
 
 PRINTED BY C. F. ROWORTIT, GREAT NEW STREET, FETTER LANE- 
 

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