Whatever the difficulties which have attended the development of British railways, the lines themselves have been spread throughout the three kingdoms to such an extent that there are now very few districts not within easy reach of a railway; while though the different lines are still owned by, altogether, a considerable number of companies, the physical connections between them and the arrangements of the leading companies, not only for through bookings but for through trains, supplemented by the operations of the Railway Clearing House, have brought about as close an approach to a really national network of railways, connecting all the different sections of the country one with another, as could well be expected in view of the lack of co-ordination when the lines were first called into being.

At the end of 1910, according to the Railway Returns issued by the Board of Trade, the "length of line" of the railways in the United Kingdom was 23,387 miles. By itself, however, this figure does not give an adequate idea of the extent of the railway system. This is better realised by taking the figures for track mileage and sidings. A far greater proportion of the railways in England and Wales than in any other country consists of double, treble or other multiple track, so that for one mile in length of line there may be two, three or more miles of separate pairs of rails, increasing the transport facilities in proportion. The percentage of single track to total length of line in various countries is shown by the following figures:—
COUNTRY.     PER CENTAGE OF
SINGLE TRACK.
England and Wales     33.0
Scotland     59.0
Ireland     80.2
United Kingdom     44.2
Prussian State railways     57.3
Germany (the entire system)     61.7
France (main line system)     57.0
{360}

"Track mileage" in the United Kingdom is shown in the Board of Trade Returns for 1910 as under:—
TRACK.     MILES.     TRACK.     MILES.
First     23,389     Ninth     24
Second     13,189     Tenth     14
Third     1,517     Eleventh     10
Fourth     1,192     Twelfth     7
Fifth     236     Thirteenth     5
Sixth     143     Fourteenth     4
Seventh     70     Fifteenth     3
Eighth     44     Sixteenth—nineteenth     1 each

Corresponding figures for the United States of America, taken from an abstract issued in July, 1911, by the Interstate Commerce Commission, give the following classification of track mileage, excluding yard track and sidings:—
TRACK.     MILES.     TRACK.     MILES.
First     240,831     Third     2,206
Second     21,659     Fourth     1,489

It will be seen from the figures relating to track mileage in the United Kingdom that there is at least one mile of railway in the United Kingdom which really consists of nineteen pairs of rails alongside one another, though counting, in length of line, as only a single mile. In the United States there seems to be no suggestion of any railroad having more than four tracks.

The length of track in the United Kingdom is 39,851 miles. To this must be added a further 14,460 miles, the length of sidings reduced to single track, giving a total, including sidings, of 54,311 miles.

Rolling stock was owned in 1910 by the different railway companies throughout the United Kingdom as follows: Locomotives, 22,840; carriages used for conveyance of passengers only, but including rail motor carriages, 52,725; other vehicles attached to passenger trains, 20,090; waggons of all kinds used for the conveyance of live stock, minerals or general merchandise, 745,369; any other carriages or waggons used on the railway, 21,360; total number of vehicles, excluding locomotives, 839,544. These figures are exclusive of about 600,000 waggons owned by private traders.[54]
{361}

The total weight of goods and minerals conveyed in 1910 was 514,428,806 tons, and the total number of passengers carried (exclusive of 752,663 season-ticket holders) was 1,306,728,583. The miles travelled were—by passenger trains, 266,851,217; by goods trains, 154,555,559; by mixed trains, 1,814,762, giving a total of 423,221,538 miles. It is difficult to grasp the real significance of these figures; but, taking the train mileage alone the total distance run by trains in the United Kingdom in 1910 was equal to nearly 17,000 journeys round the world, and to four and a half journeys to the sun.

The total amount of railway capital returned as paid-up at the end of 1910 was ￡1,318,500,000, of which about ￡197,000,000, or approximately fifteen per cent, was due to nominal additions on the consolidation, conversion and division of stocks, showing a net investment of ￡1,120,500,000. The gross receipts of the companies during 1909 were as follows:—
SOURCE.     ￡     PROPORTION TO
TOTAL RECEIPTS.
Passenger traffic     52,758,489     42.57
Goods     61,478,643     49.61
Miscellaneous[55]     9,688,433     7.82
    —————     ———
Totals     123,925,565     100.00

The working expenditure in the same period amounted to ￡76,569,676, a proportion to total receipts of 62 per cent. The net receipts, therefore, were ￡47,355,889, the proportion of which to paid-up capital was 3.59 per cent.

The average rates of dividend or interest alike on ordinary {362}and on all classes of capital paid in the years from 1900 to 1909, were as follows:—
YEAR.     ORDINARY.     ALL CLASSES.
1900     3.34     3.45
1901     3.05     3.33
1902     3.32     3.45
1903     3.30     3.44
1904     3.26     3.42
1905     3.29     3.43
1906     3.35     3.46
1907     3.31     3.45
1908     2.99     3.32
1909     3.15     3.39
1910     3.48     3.53

It is pointed out in the Returns, however, that on account of the nominal additions made to the capital of the companies the rates of dividend or interest given in the tables are lower than they would otherwise be. Thus the average rates of dividend or interest for the United Kingdom in 1910 calculated on capital exclusive of nominal additions would show: Ordinary, 4.28 per cent (instead of 3.48 as above), and "all classes" 4.15 (instead of 3.53) per cent.

These averages, nevertheless, allow for a large amount of capital on which the dividend or interest paid is either nil or substantially below the averages stated.

The rates of dividend on ordinary capital in 1910 were as follows:—
    ORDINARY.
RATES OF DIVIDEND OR INTEREST.     Amount of
Capital.     Per cent of
Total.
Nil     ￡67,358,262     13.7
Not above 1 per cent     29,427,057     6.0
Above 1 and not above 2 per cent     18,072,847     3.7
" 2 " 3 "     87,676,759     17.8
" 3 " 4 "     109,788,247     22.3
" 4 " 5 "     38,193,955     7.7
" 5 " 6 "     85,503,721     17.4
" 6 " 7 "     54,962,066     11.2
" 7 " 8 "     362,000     0.1
" 8 " 9 "     40,000     0.0
" 9 per cent     694,907     0.1
    —————     ———
Total     492,079,821     100.0
{363}

The various classes of capital on which the rates of dividend or interest paid in 1910 were either nil or not above three per cent may be shown thus:—
RATES OF DIVIDEND OR INTEREST.
DESCRIPTION OF CAPITAL.     Nil.     Not above
1 per cent.     Above
1 per cent
and not above
2 per cent.     Above
2 per cent
and not above
3 per cent.
    ￡     ￡     ￡     ￡
Ordinary     67,358,262     29,427,057     18,072,847     87,676,759
Preferential     16,607,907     631,967     2,296,250     103,019,553
Guaranteed     —     —     101,180     23,318,760
Loans and
Debenture Stock     558,782     676,789     4,666     189,122,426
    ————     ————     ————     ————
Totals     84,524,951     30,735,813     20,474,943     403,137,498
    brace
￡538,873,205

There are those who regard railway shareholders as "capitalists," and consider that the keeping of railway dividends at a low level, together with any depreciation in the value of railway stock that may result therefrom, are matters only likely to affect a comparatively few wealthy men, and not, therefore, of material concern to the country so long as the railways give the best possible service at the lowest possible rates. In the United Kingdom, however, the ownership of the railways is distributed among a far greater number of persons than is the case in the United States, where the control and the dividends of a great railway system may alike be in the hands mainly of a few financiers. That by far the larger number of shareholders in British railways have comparatively small holdings was well shown by a table published a few years ago giving the percentage of holdings of ￡500 or under by shareholders, exclusive of debenture-holders, in thirty-nine leading railways of the United Kingdom. An analysis of this table gives the following results:—
Number of
Companies.     Percentage of Holdings of
￡500 or under.
2     32 to 40 per cent.
10     41 " 50 "
8     51 " 60 "
9     61 " 70 "
7     71 " 80 "
3     81 " 90 "
{364}

It is true that many of the shareholders here in question might have invested in several companies, so that their ￡500 or less would not represent the full extent of their railway holdings. On the other hand, there is the fact that many of the single investments are those of friendly societies, trade unions, or other organisations representing the interests and dealing with the savings of a large number of members of the artisan class.

In any case, whether the railway shareholder be a capitalist large or small or only an ordinary thrifty middle-class person who has saved a little money which he seeks to put into something both safe and remunerative, the fact remains that since the advent of the railway era he is the person who, though supplying the means by which this huge system of inland communication has been brought into existence, has had the least consideration of all. The trader, the passenger and the railway servant have all been the subject of much legislative effort for the protection or the furtherance of their own interests, whereas the railway shareholder has been too often regarded with an absolute lack of sympathy, and treated as a person who must be severely restrained from becoming unduly wealthy at the expense of these other interests, and should be thankful that he is not deprived of his property altogether.

It has really seemed as though the aim alike of the State and of local governing authorities has been less to ensure to the railway shareholders, who have undertaken a great public work at their own risk and expense, a fair return on their enterprise than to extract from the railway system huge sums in the way of taxation.

What the railway companies have paid in the way of "rates and taxes" since 1894 is shown by the following table, which I compile from the Board of Trade Returns for 1903 and 1910:
YEAR.     AMOUNTS PAID FOR
RATES AND TAXES.     INCREASE (+) or
DECREASE (-) as
compared with
previous year.
    ￡         ￡
1894     2,816,000         —
1895     3,011,000     (+)     195,000
1896     3,149,000     (+)     138,000
1897     3,249,000     (+)     145,000
{365}

1898
    3,425,000     (+)     131,000
1899     3,582,000     (+)     157,000
1900     3,757,000     (+)     175,000
1901     3,980,000     (+)     223,000
1902     4,228,000     (+)     248,000
1903     4,493,000     (+)     265,000
1904     4,736,000     (+)     243,000
1905     4,933,000     (+)     197,000
1906     4,965,000     (+)     32,000
1907     4,863,000     (-)     102,000
1908     4,884,000     (+)     21,000
1909     5,010,000     (+)     126,000
1910     5,102,000     (+)     92,000

These figures show a continuous increase since 1894, with the exception only of the year 1907, when there was a decrease of ￡102,000 as compared with 1906, due to the activity of the railway companies in appealing against excessive assessments. The advance in the total paid in 1910 over the total for 1894 was no less than ￡2,286,000, or 77.9 per cent.

It should be remembered, also, that the figures given relate to sums paid for rates and taxes, and do not include the expenses incurred by the railway companies in respect both to their rates and taxes departments (conducted by highly skilled officers) and to litigation arising on their appeals against assessments they consider unfair. The total expenditure under these two heads has been estimated at over ￡80,000 per annum.

Since comparisons are frequently made between English and German railway rates, with a view to showing that the former are higher than the latter, it may be of interest to compare, also, the amount paid for taxation by the railways of the United Kingdom with the corresponding payments of the Prussian State railways. The length of line of the two systems is approximately the same; yet while the taxation of the British system comes to ￡5,000,000 a year, that of the {366}Prussian State railways is only ￡750,000 a year. Naturally, when a Government owns the railways, it is much more interested in checking excessive taxation of the lines by the local authorities than when the railways are owned by commercial companies; and one of the questions to which proposals in regard to the nationalisation of the British railways gives rise is whether, when the Government owned the railways, they would be willing to continue the payment from the railway revenues of all the taxation which local authorities are now able to exact from the railway companies. Presumably not; and in that case the trader, whether or not he got lower railway rates from the State, would probably have to pay higher local rates in order to make up for the tolls no longer levied, or levied only to a much less extent, on the railway traffic.

The growth in the payments made by individual companies for rates and taxes between 1902 and 1910 may be illustrated by giving the figures for the London and North-Western, the Great Western and the Midland Companies respectively:—
YEAR.     LONDON AND
NORTH-WESTERN.     GREAT WESTERN.     MIDLAND.
    ￡     ￡     ￡
1903     520,000     524,000     418,000
1904     572,000     558,000     435,000
1905     599,000     592,000     453,000
1906     603,000     621,000     475,000
1907     603,000     608,000     458,000
1908     610,000     638,000     436,000
1909     631,000     663,000     438,000
1910     638,000     669,000     456,000

In addition to the items coming under the head of "rates and taxes" the railway companies still have to pay to the Government the passenger duty of which I have spoken on page 263, their function here, presumably, being that of honorary tax-gatherers who are required to get the money from the British public in the interests of the national exchequer, and save the Government the cost and the trouble of collection. The passenger duty thus collected by them in 1910 came to ￡319,404, the total contributions of the railways to the public finances for that year being thus increased to ￡5,421,715.
{367}

The amounts paid in 1910 by some of the leading companies under the two heads in question may be shown thus:—
COMPANY.     RATES
AND TAXES.     GOVT.
PASSENGER
DUTY.     TOTAL.
    ￡     ￡     ￡
Great Central     149,899     4,156     154,055
Great Eastern     322,894     14,296     337,190
Great Northern     223,254     13,099     236,353
Great Western     669,330     29,640     698,970
Lancashire and Yorkshire     261,734     18,141     279,875
London and North-Western     638,443     50,359     688,802
London and South-Western     268,130     34,356     302,486
London, Brighton and
South Coast     209,491     31,617     241,108
Midland     455,759     16,423     472,182
North-Eastern     467,404     12,982     480,386
South-Eastern and Chatham     278,505     53,015     331,520
Caledonian     150,609     8,905     159,514
North British     129,486     8,721     138,207

The following table shows how the sum total of the payments both for rates and taxes and for Government duty in the years from 1900 to 1910 work out (a) per train mile and (b) per mile of open railway:—
    PER TRAIN MILE.     PER MILE OF RAILWAY.
YEAR.     Rates and
Taxes.     Govt.
Duty.     Rates and
Taxes.     Govt.
Duty.
    d.     d.     ￡     ￡
1900     2.24     .21     172     18
1901     2.39     .22     180     19
1902     2.53     .23     190     19
1903     2.73     .23     200     19
1904     2.86     .22     209     18
1905     2.95     .22     216     18
1906     2.87     .21     215     18
1907     2.72     .20     210     18
1908     2.77     .20     210     17
1909     2.86     .20     215     17
1910     2.89     .19     218     16

This question of the taxation of railways is a matter of material concern as regards (1) the direct results thereof on {368}(a) rates and charges and (b) dividends paid—or not paid; and (2) the general policy of the State towards the whole problem of internal communication.

As in the case of cost of land, of expenditure on Parliamentary procedure, of capital outlay on construction, and of any undue increase in cost of operation, the payments in respect to rates, taxes and Government duty can be met by the railway companies only by one or other of two expedients: either by getting the money back through the rates, charges and fares levied on the railway users (an expedient necessarily curtailed both by legislative restriction and by the economic necessity of not charging more than the traffic will bear), or, alternatively, by leaving the railway investors with only an inadequate return—if not, in respect to a large proportion of the capital, with no return at all—on their investments.

The system of assessing railways for the purpose of local rating is one of extreme complexity. It grew out of the earlier system of the taxation of canals, and, had the railway companies fulfilled the original expectation of being simply owners of their lines and not themselves carriers, the principles on which the system was based might have applied equally well to rail as to canal transport. But, while rail transport underwent a complete change, there was no corresponding adaptation of local rating to the new conditions, and the system actually in force is the outcome far less of statutory authority than of custom, as sanctioned by the judges—who have themselves had to assume the role of legislators—while the machinery of railway valuation differs materially in England and Wales, in Scotland, and in Ireland.[56]

In England and Wales there is a separate assessment of a railway for each and every parish through which it passes. Such assessment is divided into two parts: (1) station and buildings, and (2) railway line. The former, arrived at by a per centage on the estimated capital value of buildings and site, is a comparatively simple matter. It is in regard to the latter that the complications arise. The main consideration in each case is the amount of rent which a tenant might reasonably be expected to pay for the property assessed; and such {369}presumptive amount is arrived at in regard to the lines by calculating the amount of net earnings the railway is able to make through its occupation of the particular length of line that passes through the parish in question, and according to the actual value of such length of line as an integral part of one concern.

The extent of these net earnings is ascertained, in effect, by first taking the gross receipts on all the traffic that passes through the parish, and then making a variety of deductions therefrom. The cost of construction of the railway does not enter into consideration at all. The calculations are on what is called the "parochial earnings principle"—that is to say, the amount earned in the parish, and not the amount received from traffic arising in the parish. The railway company may have no station in the place, and the amount of traffic derived from the parish may be practically nil; but the assessment of the line, on the basis mentioned, is followed out, all the same.

The main principle is the same in Scotland and Ireland, but with this important difference in detail: that in each of those countries a railway is first valued as a whole, the total value being then apportioned among the several rating areas.

It will be seen that the taxation of a railway line—as distinct from that of railway buildings—is, to all intents and purposes, the enforcement of a toll, on all traffic carried, for the privilege of passing through the parish concerned; while there is no suggestion, as there was in the case of turnpike roads, that those who collect the toll confer an advantage on those by whom the toll is paid. The turnpike trustees did provide a road, and they were, also, under an obligation to keep it in order. The toll-payers thus got some return for their money, and, though the trade of the district, or of the country, was taxed, it was, also, directly facilitated by the toll-receivers. The railway company, on the other hand, provide and maintain their own road, without putting the parish to the slightest expense, yet the parish is authorised to levy upon them what is, not only a toll, but a supplementary Income Tax for local purposes, based on the principle of the profits the company are supposed to make in the parish, often only because, for geographical reasons, it is necessary their lines should pass through it in going from one part of the country to another.
{370}

On page 114 I have told how, in the early part of the sixteenth century, the local authorities of Worcester, Gloucester and other towns on the Severn sought to raise funds for their local exchequers by taxing the traders who used the river for the transport of their commodities; and I have further told how, in 1532, it was enacted that any person attempting to enforce such toll or tax should be fined forty shillings. But a practice held in the sixteenth century to be unjust in itself as well as prejudicial to the interests of trade, and penalised by the Legislature accordingly, is considered quite right and proper, and receives express legislative sanction, in the twentieth century, though the local authorities upon whom the toll-privilege is conferred to-day may do no more to help the railways than Worcester and Gloucester and the other Severn towns did to help the river traffic—and that was nothing at all.

One result of the power thus given to local authorities to bleed the railway companies as an easy and convenient method of providing themselves with funds is that in a large number of parishes throughout the country a railway company pays the bulk of the rates, even though it may not even have a railway station in the place.

In Chapter IV of my book on "Railways and their Rates" I have given a table showing that in a total of 82 parishes, divided into four groups, the proportion of local rates paid by the London and North-Western Railway Company ranges from 50 per cent to 86.9 per cent, although in 53 of the parishes the company have no station. In a further table I specify sixteen parishes in which the area of the same company's property ranges from four to fifty-eight acres, or from 1.3 per cent to 5.1 per cent of the whole of the land in the parish, while the proportion which the railway assessment bears to that of the entire parish ranges from 66.9 per cent to 86.1 per cent.

Being thus enabled to depend for the greater part of their revenue on railway companies, who are given the privilege of paying but are denied the privilege of representation or of having any voice in the way the money they contribute shall be spent, there are local communities which show the greater readiness to carry out comparatively costly lighting, drainage, education, road improvement or other such schemes because {371}it is a railway company that will pay most of the cost, the proportion thereof falling on the great bulk of the individual ratepayers in the parish being thus inconsiderable. Social reformers tell us of the improvements they find proceeding to-day in village life in England. What is happening to a large extent is that rural centres are providing themselves with urban luxuries at the cost of the railway companies—that is to say, at the cost either of the railway shareholders or of the railway users or both together.

The same tendency may, however, be carried further still.

On the occasion of the coronation of King George and Queen Mary, various local authorities had the less hesitation in voting supplies to defray the cost of fe............