The Sun.
London, England, 1845-03-03 00:00:00

REPORT OF THE RAILWAY DEPARTMENT OF THE BOARD OF TRADE

ON THE MANCHESTER AND LEEDS DISTRICT.

Railway Department, Board of Trade, Whitehall.
The Board constituted by Minute of the Lords of the Committee
of Privy Council for Trade, for the transaction of railway business,
having had under consideration the different schemes deposited
with the Railway Department for extending railway communica-
tion in the Manchester and Leeds district, have determined on
submitting the following report thereon for the consideration of
Parliament.
In this case, the question of preference between schemes proposed
fur co.npleting the railway communication, of a district in con.
nexion with an existing trunk line, and schemes similar in their
general object, proposed by independent companies, is so deeply in-
volved, that we think it desirable to commence our report by
quoting the following passage from our previous report on the
south-eastern district, in which the principles by which we have
been guided in such cases are fully stated
The list of schemes in this district shows that on the one
hand a very extensive and comprehensive system for the accommo.
dation of the whole Kentish and South-Eastern district, is pro.
posed by the south.eastern Company, in connexion with their
existing lines; while, on the other hand, the same or nearly the
same objects are proposed to be a•.tained by a number of new and
independent schemes.
" This renders it necessary that we should begin by an explicit
statement of the principles which have guided us, in this and simi-
lar cases, in forming an opinioa whether a preference ought or
ought not to be given, and if given, under what conditions and to
what extent, to lines for csmpleting the accommodation of parti-
cular Districts, which lines are in connexion with existing railways
in those districts.
"In this, as in every other case, we here endeavoured to keep
steadily in view the attainment I f the greatest amount of public
advantage. Ne have not recognised the existence of anything
like a vested right in existing Companies to be protected from the
same description of competition which they have the.nselvcs in-
flicted on canals and other existing modes of communication. Be.
yond, perhaps, a bare preference, in cases of absolt to equality,
due to the interests of shareholders, who themselves constitute a
Portion of the public, we have not considered that an existing
railway Company could claim any preference over other parties
proposing to effect the same objects, beyond that which might re.
suit from a•l identification of interest with the public.
"Considering the subject in this point of view, it appears to us
that, as a general rule, the most important point for the interests
of the public, is to secure the hes: permanent lines of railway
communication for the country at large and fur the wants of the
district. To sanction an inferior or unnecessarily circuitous line
proposed by an existing Company, or to reject one of decided public
and local advantage, proposed by a new Company, for the sake of
any terms that could he offered by an existing Company, would, in
our opinion, be, except under peculiar circumstances, unfair to.
wards the local interests thus sacrificed, and unwise as regards the
general and permanent interests of the public.
"We have, therefore, as a general rule, considered it as
an essential preliminary requisite, before entering upon the
question of giving protection to existing Companies by al..
lowing them to complete the railway communications of
particular districts, that the lines proposed by them shall be,
in all substantial respects, sound in themselves, and not inferior to
those proposed by any other parties.
" Assuming this to be the case, the question is at once raised
whether the public are likely to derive most benefit from competi-
tion, or from arrangements with the existing Company.
" With regard to the general principles which regulate competi.
lion in the case of railways, we bare little to add to the reports of
the Select Committee on Railways of last session, by whom the
subject was fullyinvestigated. The Committee state, in their Fifth
Report :

." When the lines are very short, the probability Is, that unless
charges be moderate, road traffic will revive, and in such cases the
public have a great degree of security, Again, as respects the car-
riage of goods, it is found in practice that by other channels of con-
veyance, such as canals, an effective control may, under certain
circumstances, be placed upon railway charges. But in considering
the case of passenger charges, and in all classes of lines, except
those which are so short as to be effectually checked by the ordi.
nary road, the Committee think that little can be permanently ex-
pected from the mere multiplication of railways in the way of secu.
rity for moderation of charge. There may be, indeed, indirect and
accidental competition between railways, which may cause cheap-
ness, and there may even be direct and brisk ccmpetition, with
great reductions of fare, for short periods. But in such cases of
competition, somewhat modified, as have hitherto occurred, the
themselves, the Committee cannot in all cases repose implicit filth
in it.'

" ' With regard to the check of competition by railways among
result has generally been increase of charge by mutual arrange.
merit or positive amalgamation of the competing Companies. The
experience of the past is, however, limited, and might not, if taken
alone, warrant any conclusive opinion ; but in looking to the
nature of the question itself, the Committee feel this difficulty,
that they cannot, in case of railways, anticipate any such facilities
in the introduction of new competitors as to check the proceedings
of the Companies actually in possession of the traffic ; that in fact
there is no district in which the traffic will support any consider-
able number of railways; that there is no case in which they can
imagine a likelihood of more than two, or at the very utmost, three
lines of railway communication, which could be so situated as to
compete with one another, and they cannot conceive that two
bodies, or even three, acting by compact executive boards, and
secure against the entrance of any other party into the field, will
fail to combine together. It is, therefore, their apprehension, that
in such cases, either the different railways will continue to be
worked, and then that extreme measures will be taken in con-
cert fur the purpose of paying very moderate dividends,
and it may be found that several capitals have been ex-
pended for performing the business which could have been
equally well, or perhaps even better, performed by one;
or a closer combination will take place among the Companiras---
they will choose the line upon which they can most profitably
carry the traffic, and will leave the rival line or lines unoc-
cupied.'

"The principle here etated,that competition loses more or less
of its value as a security for the public, when from the nature of
the case it is limited to two or three parties, who are constantly
urged by mutual interest to combine, has received abundant cor-
roboration from the experience of what has already taken place in
the history of railways.
" The following instances may be mentioned where railway
Companies, in a situation to compete, have, after a short time,
either amalgamated or combined together, so as to put an end to
competition :

" The Leeds and Selby with the York and North Midland ; in
this case the former line being virtually for several years shut up.
" The Birmingham and Derby with the Midland Counties.

" The Chester and Crewe with the Grand Junction.
"The Manchester and Birmingham with the Grand Junction.
" The Belton and Preston with the North Union.
"The Northern and Eastern with the Eastern Counties.
" On the other hand, we are not aware of a slight instance
which can be pointed out, in which the public are now deriving
any benefit from direct competition between two railways.
" In addition to the instances of combination between directly
competing Companies, recent experience has furnished numerous
instances of the tendency of smaller lines, originally sanctioned as
independent undertakings, to resign their independence into the
hands of powerful neighbours. We may mention, among other
instances of this tendancy, the amalgamation or lease of the Shef-
field and Manchester to the Midland and Manchester and Bir-
mingham.

" Of the Bristol and Exeter, and Cheltenham and Great Western,
with the Great Western.

"Of the Hull and Selby, and Manchester and Bolton, with the
Manchester and Leeds.

" Of the North Union with the Liverpool and Manchester and
Grand Junction.
" Of the Greenwich with the South-Eastern.
" Of the Sheffield and Itotheram with the Midland.
" Of the Chester and Birkenhead with the Chester ansl Holy.
head.

" Of the Bristol and Gloucester with the Birmingham and
Gloucester. Beside others that might be quoted.
" The same principle has received further elucidation from the
inquiries of Parliamentary Committees on former occasions, as
well as from the great body of evidence collected by the Commis-
sioners of Inquiry into the Sanatory Condition of Large Towns, in
regard to the operation of the principle of competition as com-
pared to that of well regulated monopoly in the analogous cases of
water and gas companies. Indeed it is too evident, as a general
proposition, to be disputed ; although great caution may be re-
quired in its application, and in discriminating those cases where
the ecmpetition is of a pure and simple nature, such as must even-
tually lead to a compromise, from those where a certain degree of
indirect and incidental competition may exist, from which the
public may expect to derive lasting benefit, either in the shape of
reduction of charge or of extension of accommodation.
" When an existing railway Company proposes schemes which,
although only partially sufficient for the fall accommodation of the
district, may yet be sufficient to prevent other parties from enter-
ing the field with further or improved projects in that district, the
arguments against the creation of a monopoly acquire additional
strength. The simpler case is, when, as in the present instance,
the existing Company comes forward with a complete arid cont.
prehensive scheme, and the question is reduced to this : whether
the existing Company is able and willing to offer guarantees for the
public advantage superior to any that can be afforded by a new
Company.

" Of the ability of the old Company to offer such guarantees
here can, generally speaking, be little doubt.

" telly. An established Cotnpany, which has a ♦aluable pro.
perty and large available income independent of the new scheme,
can, of course, offer a guarantee for the fulfillment of all that it
it undertakes to accomplish greatly superior to that of any new
Company, however respectable.

" This consideration derives great weight from the experience
which has been already afforded of the failure of many new Com-
panies to accomplish the objects for which they were incorporated.
We need on)), refer to the instances of the Eastern Counties
Company, which was incorporated as a line from London to Nor-
wich, and has never yet been carried beyond Colchester; of the
Northern and Eastern, which for many years stopped short of
Cambridge ; and of the Great North of England, which abandoned
the portion of its line between Darlington and Newcastle.

" 2dly. The traffic of a system of lines connected with one
another can always be worked more economically and con-
veniently under one uniform management than by independent
Companies. The Company which works the main trunk line, and
possesses the principal terminal stations, can run more frequent
trains, and make better arrangements for forwarding the traffic of
the cross lines, than it could afford to do if two or three separate
establishments had to be maintained, and the harmony of arrange.
ments depended on two or three independent authorities. Under
such circumstances a conflict of feeling and interest has almost in-
variably grown up, from which the public has suffered the most
serious inconvenience. When the traffic is large, this conflict has
frequently led not only to increased inconvenience, but to increased
danger; and where the terminus or a portion of the rails of one
Company have been common to the other, these results have been
greatly aggravated.

"idly. An established Company can always, if so disposed, offer
guarantees and advantages for a greater extent of railway than the
new Company, viz., for the existing as well as the projected lines.
When the existing Company is already in possession of the princi-
pal trunk of the district, the advantage of securing such guarantees
for the whole system, rather than for only a small portion of it, is
rendered more apparent.

" The Select Committee of last session, for reasons which are
fully stated in their report, attach great importance to the obtain.
ing of guarantees from existing companies, by voluntary arrange-
ments similar to those which they recommended, and which Parlia-
ment subsequently adopted in the case of new railways; and ex-
press a strong hope, ' that among the existing companies there
may be those which will be disposed to accede to arrangements,
resembling, in their general principle and effect, those which are
now proposed for new railways.'
" 4thly. Whatever guarantees may bo thus offered by existing
Companies, possess the double advantage, as compared with simi-
lar offers from new Companies, of coming into immediate opera.
Lion, and of being more certainly rendered effectual. An offer
from a new Company to bind itself to charge fares considerably
lower than those usual upon other lines, might readily be made,
In the hope of thereby securing their Bill: but the fulfi!ment
of it would depend almost entirely upon the eventual success of
the line, and its ability to perform its engagements. No Act of
Parliament could compel an insolvont concern to carry at as
low
rates, and afford as ample accommodation, as a prosperous under-
taking might be able to do. A moderate offer from an established
Company, who can be relied on to fulfil their engagements, is
therefore preferable to one apparently more advantageous from a
new Company.
among other
of
fealassot ;nsess‘iVoen,Coofncgl uivdiengthaatrtrheefeirmelnicoey
in;icFatoedr thl')eysethen Committee
to the schemes of existing railway Companies for supplying their
own districts, when such schemes are as good or better than that
of asy other parties, where no special reasons exist which should
induce us to look for advantage from competition, and where the
old Company voluntarily offers such guarantees as may reasonably
be required to protect the public against the possible abuses of aao.