Sir Albert Rollit.

323. Do you remember the question of the comparative cost of haulage in different countries being raised before the Joint Committee ?--Yes, it was raised before the Joint Committee, and also before Lord Balfour of Burleigh and myself.

324. I wanted to ask whether that subject of consideration was not excluded at any rate before the Joint Committee?-I think it was excluded before both inquiries; it was felt that to go carefully into the comparison would need so extended an investigation that it would sacrifice a considerable amount of time.

325. But I think from your experience you would admit that it has a very important bearing upon the rates question?-It would if it could be examined in all its bearings. The cost of land, the cost of labour, the value of capital, the value of commodities, and all sorts of questions would have to be considered before useful comparison could be derived.

326. But assuming that it is a very wide question, it still has a practical bearing upon the question of rates, has it not?-I think so to that extent.

327. I think under the Act of 1888, I forget under which particular clause, preferences to foreigners in respect of rates were prohibited? Under the 27th clause there is a provision to that effect, to which I will refer the Committee, with your leave.

328. Am I right in saying that those preferences, so far as your knowledge extends, still continue, especially in the sugar trade, have you had complaints as to that?-We have had complaints of preferences given to goods carried inland from seaport towns. I am not quite certain that the preferences are preferences as between foreign and inland raised goods, but they are preferences for goods imported inland from seaports.

Sir Albert Rollit-continued.

329. I think those complaints have been especially noticeable in the case of the sugar trade? Sugar is one of the commodities; there are many others.

330. From Nantes and viâ Gloucester as well? There are several others. I should not like to say that sugar was the most important or the most extensive.

331. Can you mention other articles?- Foreign grain and foreign meat, certain classes of fruits, and certain classes of hops.

332. I may take it that, as a general class, those are very frequently, at any rate, agricultural produce; you mentioned hops?-Those I mentioned are agricultural produce. A list was given by the Committee of 1882, Mr. Evelyn Ashley's Committee, and I do not think the position is materially modified since then.

333. I need not ask whether those differential rates in favour of foreign produce are prejudicial to our English producers; I think that follows? That raises a very wide question of free trade and protection which I am hardly capable of going into at the present moment.

334. But is it a question of free trade and protection; is it not rather a question of equality of rate?-It is a question of preference. Whether the preferential rate is an undue one is a difficult point to determine. I think there is a preference for articles imported from seaport towns inland, one of the reasons being that sea-competition materially affects the rates.

335. Would you suggest to the Committee that that is a thing that ought to continue or not? -Scarcely. I think I should be going beyond my function if I did. It is a very argumentative question; I should have to answer it at great length if I answered it at all.

336. I think you told the Committee in your evidence in chief that under the old law, at any

Sir Albert Rollit-continued. rate, the trader could dispute the amount of terminals charged, and that it was at least doubtful whether he could not dispute the rate on the ground of its want of reasonableness?—Yes.

337. Do you not consider that a maximum rate is perfectly consistent with the right of the trader to dispute the actual rate on the ground of unreasonableness that was so under the old law?-Under the old law what the companies could charge was a reasonable rate under the maximum generally; what they can charge now is the maximum, if my contention is right, as to the effect of the words to which I referred to the other day. Which of the two principles should be adopted by Parliament it is scarcely for me to say; but I will say this, that I think it would be a good arrangement that the railway companies should be able to charge a reasonable sum within the maximum.

338. And that is perfectly consistent with a Parliamentary maximum; it was, in fact, consistent with it previously, and it could be consistent with it again now?-It is perfectly consistent with the principle of a Parliamentary

maximum.

339. Would you quote those words again; I know you quoted them in your evidence-in-chief, but they have a very important bearing upon

this matter?-It is Sub-section 10 of Section 24

of the Act of 1888: "The rates and charges

mentioned in a Provisional Order as confirmed

by such Act shall, from and after the Act coming into operation, be the rates and charges which the railway company shall be entitled to charge and make."

340. As bearing on this question will you quote, if you have them accessible, the words of Section 92 of the Railway Clauses Act, 1845. I need not ask you whether those are important new words in the Act of 1888, Section 24, Subsection 10? I think they are important words, but there has been no interpretation of their effect, and I am not at all sure that my interpretation is the right one.

341. But, assuming that it is the correct interpretation, and I should agree with you that it is, those words introduce a very important change in the law against the trader?-If my view of their interpretation is the right one, it has that effect. I do not know whether it was the intention of Parliament that it should do so.

Chairman.

342. Was that a change that was clearly foreseen at the time?

Sir Albert Rollit.

343. You or somebody drew attention to the danger contained in those words at the time, I think?-It was referred to. I do not think I drew attention to it.

344. And I think someone pointed out at one of the inquiries, either yours and Lord Balfour's, or the Joint Committee, that those words might involve the very consequences which you now think they would involve?-I think it was pointed out before Lord Balfour and myself, but, like yourself, I am speaking from recollection and not from any actual information before me,

[Continued.

Sir Albert Rollit-continued. and I believe it was also pointed out before the Joint Committee.

345. Would you please now read to the Committee, as bearing upon the interpretation of Sub-section 10, of Section 24 of the Act, 1888, Section 92 of the Railways Clauses Act, 1845 ? -This is Section 92 of the Act of 1845: "It shall not be lawful for the company at any time to demand or take a greater amount of toll, or make any greater charge for the carriage of passengers or goods, than they are by this and the special Act authorised to demand; and upon payment of the tolls from time to time demandable, all companies and persons shall be entitled to use the railway with engines and carriages, properly constructed as by the said and the special Act directed, subject nevertheless to the provisions and restrictions of the said Act of the sixth year of Her present Majesty, intituled, an Act for the better Regulation of Railways and for the Conveyance of Troops, and to the regulations to be from time to time made by the company by virtue of the powers in that behalf hereby and by the special Act conferred upon them."

ask any question, to the Fourth Annual Report 346. Now I direct your attention, before I of the Railway Commission, dated 1878, from which I may quote to you the following passage, company may take must not exceed the maximum "It is well-known that the charges which a tolls authorised by its special Act. It has been less noticed that they must also be reasonable, and even where a company is empowered to charge any rate it thinks proper, as for the weight, generally 5 cwt., the power is not carriage of packages not exceeding a certain absolute, the charge must still be a reasonable sum. We have had from time to time complaints made to us of high charges on local it would not be well that this important statutory traffic, and it deserves consideration, whether qualification of reasonableness were made of practical value, and security taken for its being observed, by our being authorised to enjoin the reduction of unreasonable charges, just as we enjoin the reduction of unequal charges." That I think confirms your interpretation of the law, and suggests the remedy ?-I read that as throwing a doubt upon their powers.

347. So that it is quite evident that by some means or other a very important change, if your interpretation be again correct, crept into the Act of 1888 under some, but not much, remark? -That would be so.

348. Do you not think from your experience that, that Sub-section 10 of Section 24 of the Act of 1888, is a sub-section, which requires reconsideration and revision, having regard to your experience of its working, and to the doubt cast upon it, originally ?-I have said that my own personal view is that, it would be a good arrangement that the rate should be a reasonable one within the maximum. If that principle was to obtain in Parliament, and if the interpretation that I place upon Sub-section 10 is the correct one, then it would follow that there are a good many reasons for modifying that sub-section.

349. I want to direct particular attention to that sub-section. In order to show you, or to

confirm

Sir Albert Rollit-continued. confirm your opinion that the principle of a maximum is consistent with the obligation only to charge a reasonable rate, may I suggest to you that Section 31 is built upon that very assumption; because Section 31 enables you to conciliate, though not to determine, in a case of a rate, and yet that rate is assumably within the maximum ?-There are section after section in the Railway Acts which contemplate that the railway companies are charging, and will charge, something under the maximum. If it was not for that, there would be no reason for any question of undue preference or anything else. If they always charged their maximum, there would be no question of inequality or undue preference.

Sir Michael Hicks Beach.

been made by traders to the Board of Trade, 350. As a matter of fact, have not complaints under the conciliation clause, of rates unreasonable which were still within the legal maximum, and have not such complaints been considered by the Board of Trade in communication with the railway companies, and the traders eventually been relieved?-Certainly; the point being that the railway companies might, if they had been so disposed, have met the conciliation by saying, No, we will charge our maximum. But they have not met it in that way; they have said, We will charge something under the maximum.

Sir Albert Rollit.

351. As you said in your evidence about the operation of the conciliation clause, they have met very frequently the views of the Board of Trade? Yes.

352. Was not the principle you adopted in fixing a maximum to allow a margin not for any arbitrary charge on the part of the railway companies, but to meet contingencies and changes of markets and traffic and the like?-A margin was allowed to meet contingencies. As I said I think in my evidence in chief, we never contemplated that that margin would be availed of immediately.

353. I think you said, as bearing upon this subject, in your Report, that you had allowed "a reasonable margin of profit for possible changes of circumstances injuriously affecting the cost of, or the returns from, the carriage of merchandise by railway"?-That is in the Report.

354. I take that as a quotation from your Report? Yes.

355. Have there been any such changes of circumstances beneficial to the trading since your Report was published, and since you fixed the maxima, justifying the increases which have been made in the rates? The railway companies have pleaded that without any resistance from themselves, and with encouragement from themselves, the cost of labour has materially

gone up.

356. Is that the one circumstance that has altered? That is the main circumstance. There are other circumstances which have been laid before the Board of Trade; the cost of coal

[Continued.

Sir Albert Rollit-continued. varies very much, and sometimes the cost of steel rails varies very much.

357. But those changes have gone down, they have been in the other direction recently?As between August and now I should think the cost of iron has gone down, and the cost of coal is something lower.

Mr. Jacks.

358. As a matter of fact steel rails are cheaper now than ever in the history of the trade; you may take that as correct? I take it from you.

Sir Albert Rollit.

359. And on the other hand if there has been an increase in the cost of labour, the cost of produce and the margin of profits have both decreased?-I should think so.

stated that the railway companies have made 360. May I ask another question? You have

considerable reductions in the rates; have not those reductions been chiefly in Classes 4 and 5?We have no evidence to show that; what evidence there is before us goes to show that the reductions as from the January rate have been all round.

361. I was speaking of the previous reductions as from the 1892 rates?—No, I should think not. The evidence laid before us shows that the reduction applies to all classes.

362. Have you had an opportunity of inspecting both the old rate books and the new ones, to compare them?-No, I have not done that; I have seen an analysis of the new rate books; the Great Western Company have submitted a very elaborate analysis of the two sets of class rates.

363. Have you seen the rate book altered in red to show the differences?-No, I have not done that. Here I have one rate book (producing the same) for one not very large station; it is rather a bulky volume; it is very difficult to examine.

Sir Julian Goldsmid.

364. It would take you about a year to look through them all?—And more than that.

Sir Albert Rollit.

365. Have not the railway companies claimed, in the various evidence that has been given, to act upon the principle that they should fix the rate according to what the trade or traders could bear?-That has been the principle frequently enunciated. On one occasion when I was hearing a conciliation case I ventured to express my regret at the use of the phrase "what the trade would bear," because it seemed to have the tendency to put as much torture as the trade could endure, and I hoped the words used would be "the rate which the trade could properly and profitably pay," which is a different thing.

366. Would you even then approve of that principle; it being solely determined by the railway companies; is not that a one-sided view of the matter?-As an economist I should like to say that the prices of commodities had better be arranged between vendor and vendee.

367. But the principle as applied by the railway companies has been that they should

Sir Albert Rollit-continued. form the judgment as to what the commodity or the trade would bear?-They form the judgment in the first instance, but they certainly listen to remonstrances from traders.

368. But they fix the rate first, and hear the remonstrances afterwards?—I think they must do that; they must fix the rate in the first instance; something must be entered in the rate book, and that something is always liable to modification on representation from the traders.

369. But it may continue for a considerable period before the modification is made?-It is not altered immediately, and cannot be.

370. In the case of the rates, which have been revised even since January 1st, is it not the fact that the increases have been frequently over five per cent. that have come under your notice?— Since the final revision there have been instances of over 5 per cent. increase. Occasionally of course the railway companies have found (and this they admit) that the existence of a lower rate could not be maintained owing to a question of undue preference, and that they have been compelled to raise it above 5 per cent., but they have expressed the determination not to raise, except in special circumstances, any rate more than 5 per cent. above the rate of 1892.

371. My question is whether it has not been brought under your notice by the traders that rates not of the exceptional character you have mentioned, but rates generally, have been increased over 5 per cent.? Yes, that is so ; but I have not found a great unwillingness on behalf of the railway companies to further examine that allegation, and to endeavour if possible to remove the grievance.

372. Have the rates which had been increased over 5 per cent. been practically universally reduced to 5 per cent. ?-It is too early yet to say that; the 5 per cent. basis is not a very old one, it is only a few weeks old, and I could not inform the Committee whether the railway companies have universally reduced to 5 per cent., or whether there is still a remanent in which they have not reduced to 5 per cent.

373. I should like to ask you now about Clause 31, the conciliation clause, is it within your knowledge that it has had a large operation in America with regard to inter-state traffic particularly?—Yes; I have heard that it has been used, and in the reports of the Inter-State Commission you find references to it. I have not in my mind, at the present moment, the number of instances in which it has been used.

374. As showing the value and the practicability of its working, I should like you to tell the Committee exactly how you have worked it in England, what the forms have been, or what the absence of form ?-The Board of Trade receive a complaint from a trader; a copy of that complaint is sent to the railway companies for their observations. The observations and replies are passed backwards and forwards until it appears to the Board of Trade that the time has come when a hearing would be advantageous; then the parties are invited to be present at the Board of Trade round a table, and conversation takes place. The particular rules of legal pro

[Continued.

Sir Albert Rollit-continued. cedure are not observed, but the best that can be done is done to arrive at an amicable settlement; very often it succeeds; sometimes it fails.

375. In a large proportion of cases it has succeeded; the proportions of successes are great as compared with the proportion of failures. Perhaps you will give me, so far as you can, the average of success and failure ;-It is very difficult to analyse, because we hear sometimes nothing more of the complaint, and, although one might be entitled, without very much cen. sure, to say that that was a success, I do not like to put it so high. When one hears nothing more of a complaint one presumes the complaint disappears and the grievance no longer exists; but it is putting it a little too high to say to a committee that because you hear nothing more of a case, the case has been satisfactorily settled.

376. May I take it generally that both in the United States and in Great Britain and Ireland the clause has worked practically and well?-

Chairman.

377. Is it borrowed from the American law? -It existed in the American law at the time it was passed in England.

Mr. David Plunket.

378. Was it in the same form in the American law?-No; not the same wording quite. 379. But to the same effect?-Practically to the same effect.

Sir Albert Rollit.

380. I think the late President of the Board of Trade suggested it as from the American law? That may be so. I should like to answer your last question with some little figures as to conciliation cases. I find that there is one heading, and that is only rather a rough heading: "Cases settled more or less to the satisfaction of the complainants," 15 out of 52, in the first Report. Then the second heading is, " Cases in which no further communication was received from the complainants after communicating to them the explanations furnished by the companies," 25 out of 52. In the third place, "Cases in which the complainants were not satisfied owing either (1) to the Board of Trade deciding not to take any further action in receiving the companies' explanations; or (2) the decision of the Board of Trade being adverse; or (3) the complaints turning upon legal questions which the Board of Trade have no power to determine," 12 out of 52. In the second Report there are 21 in the first category, 11 in the second, and 23 in the third. In the third Report there are 13 in the first category, 12 in the second, and 17 in the third.

381. I think in America, I may take it, that the conciliation clause has a very marked success, which was the reason of its introduction here ?I have not that information in my memory at the present moment.

382. But I was going to ask you, I put that question first, whether the success of that clause in America has not been very materially conduced to by the inter-state law that all rates

shall

Sir Albert Rollit-continued. shall be reasonable; is that not so?-I do not know that.

383. May I quote to you from the Inter-State Traffic Law, that the Inter-State Commerce Act, 1886, of the United States says this

[Continued.

Of

Sir Albert Rollit-continued. of a very large number of commodities. course it can be done, but it would be a very serious work. I do not say that it cannot be

done.

Witness.] I have read it but I have not got it in my mind.

384. I think you carried out thus far that it was introduced into the Act of 1888 because it had had a marked success in America. Have you got it with you?-I am sorry to say I do not think we have got it. I can send for it to the Board of Trade.

66

385. I should like to put to you now whether I may take it as correct that this is the provision of the Inter-State Traffic Act, 1886, "All charges made for any service rendered, or to be rendered, in the transportation of passengers or property as aforesaid, or in connection therewith, or for the receiving, delivering, storage, or handling of such property, shall be reasonable and just, and every unjust and unreasonable charge for such service is prohibited and declared to be unlawful." May I take it that that is correct American law?-I will take it from you. I have not got the Act before me.

386. Can you say whether that Act has conduced to the better working of the conciliation clause; that pressure upon railway companies in America ?-It would strengthen the power of the conciliation under the conciliation clause if that provision existed. I will put it as high as that.

387. Now, if you have had such success in mediating, do you see any practical objection to your having the power to determine rates; in other words, do you see any objection, I will ask you first, to Clause 31, having given that a legal sanction?—I am disposed to think that the very strength of Clause 31 exists in its weakness; that, if whoever was appointed by the Board of Trade to conduct the negotiations under Clause 31 had power to determine a rate, the railway companies might not be so inclined to go before them as they are at the present moment; they would "If we are going to a court of law let us go to a court of law.'

say,

388. But do you not think that the section which I have quoted to you from the Inter-State Commerce Act, 1886, plus a sanction to Clause 31, would be a very effective way of dealing with undue rates? It would be very effective if the tribunal was efficiently and properly constituted.

389. Do you see any practical objection to some tribunal being devised in connection with the Board of Trade itself, having regard to your success as a mediatory body? That means that a State Department, with a Minister responsible to Parliament, and liable to have questions asked as to the operation of the tribunal every day, and to have attention called in Parliament and a Parliamentary expression of opinion uttered, is to fix the price

391. I know it is a distinct control, but I am only asking whether the control in France does not exist, and whether it is not practically effective? It would be effective. This particular point was considered by the Royal Commission in 1867.

392. I think it is important if you can kindly give us any result of what took place then?— The Royal Commission on Railways in 1867 (and there has been a good deal of change since then), that was the Duke of Devonshire's Commission, reported, mission, reported, "We do not consider that it would be expedient, even if it were practicable, to adopt any legislation which would abolish the freedom railway companies enjoy, of charging what sum they deem expedient within their maximum rates when properly defined, limited as that freedom is by the conditions of the Traffic Act."

393. That would appear to be inconsistent with the Fourth Report of the Railway Commission that the railway companies have not that right to charge what they choose within their maximum?-Yes; it would be so.

394. So that the basis of that clause in the Duke of Devonshire's Commission Report is not accurate if you compare the two?-I think it may be contended so.

395. And I do take it that you do not think the Board of Trade could deal with test cases that could be brought before it in this way?—I think the Board of Trade could do so; but it would be a very important alteration in our legal procedure that a Department of State with a Minister responsible to Parliament should fix the price of articles.

396. It would only incidentally fix the price; it would fix the rate, but only incidentally the price?-I mean by the price, the price of transport, &c. of the goods.

397. You, of course, recall the Board of Trade Arbitration Act, 1874?-Yes.

398. Under which the Board of Trade, have power to appoint arbitrators?—Yes; they have power to appoint arbitrators.

399. Could it not be dealt with in that way; the Board of Trade to appoint an arbitrator or arbitratiors permanently for a particular case for this purpose? There would not be precisely the same class of objections to that as there would be to an actual official of the Board of Trade acting. If anybody was to be appointed by the Board of Trade to do this important work, he should, in my opinion, be not a permanent servant of the Board of Trade, not one of the secretaries or clerks of the Board of Trade, but should be somebody selected as an independent arbitrator.

400. Would you see any objection to that course being adopted?-There would be less