Part 5

But the usual remark about the French railways is, "See how much better they manage these things in France. While our railway companies are all spending their money in fighting and in competition, and pay dividends of 4 or 5 per cent, the French railways have their routes settled by Government engineers, and pay 8 or 10 per cent." I am going to propose a plan for stopping all company fighting in England for ever: but--as to the dividend--it can only mean that, like any other Government monopoly, the French public are being made to pay more for travelling than they need.

As regards the interest of the public, the rate of dividend paid by a great railway company is of very small importance. For many years the South-Western Company paid double the dividend the Great Western did. How did this affect the work each did for the public--the conveyance of passengers and goods? Many common highways have been made by parishes and landowners combined for the public convenience; the capital so laid out paid no direct interest (the road was a highway, not a turnpike): how does this case differ from a railway that pays no dividend on the original stock? If the railway carried me from Exeter to London in five hours for thirteen shillings, what does it matter to me whether the company pays 2-1/2 per cent or 6-1/2 per cent to its original shareholders? In a very few small and special cases we have seen a railway line not pay for the working, and be closed. In a few other cases, where the dividend paid is less than 4-1/2 per cent, it is possible that the utility of the line to the public is less than the loss of the shareholders in a non-paying investment. I say this is a possible and conceivable case--in some very short lines or in some very thinly inhabited districts. Such cases I believe rare. Not rarely the initial cost of the line has been seriously increased by promotion, legal and parliamentary expenses, enormous sums extorted for land, severance, etc.; if these expenses can be done away with, these cases of railways constructed at a loss on the whole to the nation may be made fewer still.

The way in which the railway monopoly, the monopoly of the great companies, has grown up is noteworthy. To enable a company to take the land of a private man compulsorily a private Act of Parliament was necessary. The Parliamentary Committees then said, We will not enable you to dispossess forcibly private owners of their land for "a public purpose" unless you further shew that this includes a public advantage. Private owners were of course let in to show cause against a new railway; they always talked like Naboth (the Parliamentary Committees must have been wearied by the continual references to Naboth), but the genuine private owners sold themselves at the last minute; after they had pushed the company up to the highest bid, they well knew that this was above what they could get in the after arbitration, and "closed," withdrawing their opposition the last day in the Committee room. The opposition company, besides the grounds of insufficient need for a new line, etc., always supports and comforts the opposing landowners: but the great resource of the opposing company is to hire a landowner to oppose, especially a local attorney or agent who owns land proposed to be taken by the new line. Such an attorney, employed professionally by the opposing company, cannot be bought off at any price; he is a real Naboth, and in his character of a dispossessed landowner he will fight for the company every point that they cannot decently fight for themselves.

Opposing a railway bill in Parliament has thus become an art; so much so, that no independent small line can be made unless they can get the support of one (at least) of the great companies that are supposed to occupy the area. The lines made (economically often) by the great companies themselves are not primarily designed for the accommodation of the public, but for the private purposes of the great company; sometimes they are made merely to diddle another great company.

It is well to compare the law regarding making a new railway with that for making a new main-drain in the fens. In the latter case the new drain company receives extraordinary powers and may put a rate on the land benefited. In the case of a railway passing through a farm, the common estimate is that it adds a shilling an acre value to the rent of the farm; if there is a station on the farm it often adds much more to the agricultural value. Landlords are up to this: a landlord triumphantly told me, "I got £7000 from that company for cutting me up; but I would have given them £14,000 to cut me up more." (In this case, however, building value came in.) But the disgraceful squabbling of companies, who "sell" any owner without scruple when they come to terms among themselves, has disgusted landlords from actively supporting railway schemes.

A great deal of the opposition between rival companies has been from their point of view an error, as they have subsequently discovered for themselves. When the Great Western Company first opened their station at Basingstoke there was war between them and the South-Western, who thought all their London West-End passengers would transfer themselves to the Great Western at Basingstoke in order to avoid a cab drive from Waterloo to Paddington. Some passengers do so transfer themselves. But via Basingstoke a fine trade sprang up between the south of England and the Oxford and Leamington route, which far more than compensated the South-Western Company for the London passengers they lost at Basingstoke. So in a very few years there was peace at Basingstoke, and a through-carriage daily from Birkenhead to Southampton. I think it is impossible to estimate how much one railway company profits by the facilities afforded by all the surrounding companies. The loss at a limited number of competing termini is seen; the gain in the local and cross-country traffic is not.

I propose Free Trade in Railways. I mean that any person or company shall be free to make a railway wherever they please. They will have, before commencing the line, to lodge with the Board of Trade the cost of the land they take as valued in the National Rate Book, with the 30 per cent for compulsory purchase. They will not have to lodge the money where they have come to terms with the owner; and the Board of Trade will allow them to construct the line in reasonable sections. Having lodged their money, the company (or private speculator) will only have to go to work under the (amended) Lands Clauses Consolidation Act.

If this scheme were sanctioned we should have in the course of the next twenty years, as I estimate, £100,000,000 additional invested in England profitably--not under Government pressure, but by business men to get interest. Even where the new lines paid little interest we should get the accommodation of the public. We should have no big village without its railway; and we should have a great extension of private sidings. On the eastern half of England we might get a great number of narrow gauge steam trams running along the present trunk roads. (Suppose a steam tram from London to York by the Royston route, going through all the towns, running trams an hour apart all day, going eight miles an hour through the towns, sixteen or twenty miles an hour in the country, taking up and setting down everywhere, would it not pay?)

The only objection to Free Trade in railways is that it would injure the existing railway monopoly. Under this principle no monopoly ever would have been or ever will be put down. But I believe the existing great companies would very generally gain by Free Trade in railways.

For, first, few new railways would be in direct competition with the old. The old lines have level roads; they can run quicker and with less wear and tear than the new ones, which would generally have steeper gradients. The new Free Trade lines would be in the main a network in the interstices of the present lines. By this the existing companies would gain enormously; they would be the trunk lines which the network would feed. It is true that there would soon be a second line to Brighton; the present Brighton Company would possibly pay as good a dividend then as they do now. But if they did not, it would only show how they tax the public now as well as hinder trade. I am not bound to show that the monopolists would profit by Free Trade; I deny that the monopolists have any vested interest in their monopoly, or that Parliament, i.e. the nation, has made any covenant with them that their monopoly shall never be invaded.

I have suggested three great changes: (1) Perfect Free Trade at all our ports; (2) The exploitation of the land through the National Rate Book machinery; (3) Free Trade in Railways. Of these the last is clearly advisable, nor is there anything (in my opinion) to be urged on the other side. At the same time it is not less important than either of the two other suggestions. But the three would work best together--each aiding and reacting on the other; they would thus provide "progress" (which means comfort to all classes) in England for at least two generations of men. If there was no National Rate Book, the new railways would have to pay exorbitantly for the land they took up under the existing arbitration system; they would be relieved merely from the parliamentary opposition of other companies and of private individuals. The private owner must be deprived of his present privilege of parliamentary opposition, which gives him the power to extort an exorbitant price for his land--because a company can always oppose in the garb of some private owner whom they have hired.

A less but important branch of this reform is the narrowing of Government interference under pretence of protecting the public. Great expenses are thus thrown on railway companies. The companies cannot, therefore, charge increased fares, but such expenses diminish the number of new railway schemes brought forward. Nor do Government rules protect the public so well as the old plan (abolished by Chief-Justice Cockburn) of making the railway company pay for killing or injuring people. Now, after a great railway smash, the company comes forward and shows that there was no negligence on their part; that in the signals, breaks, etc., they had satisfied all the Board of Trade regulations, and the injured passengers can get nothing. The real way to protect the passengers is to allow the company to make their own arrangements, and to compel them to pay heavily for killing and maiming passengers. This is quite defensible in theory, as in the case of manslaughter by an individual we give him some punishment out of our civilised respect for human life, though he may have been little to blame. Great cost is thrown on railway companies (i.e. much injury is done the public) by standing orders (cast-iron orders) about gradients, etc. The company's solicitors order the company's engineer to comply with standing orders at all costs rather than introduce any special clause. The consequence is that we see much money spent and a most inconvenient level-crossing placed at the entrance to some large town, where a steep gradient for two hundred yards on a straight piece of road (to which there is no objection) would have avoided all difficulty. The responsibility in all such cases should be thrown on the company, and Government interference abolished.

7. REFORM IN LAND LAW.

The transfer of stock in the name of two trustees in the funds is done in a few minutes at small expense. The transfer of land in South Australia is done in a few minutes at small expense at the Government registry. The transfer of land in England requires an uncertain time and cost--usually some weeks, and 5 per cent on the purchase money; sometimes months, and 10 to 25 per cent on the purchase money. It is equally expensive and slow in the register counties of York and Middlesex. The Acts of Brougham, Bethell, Cairns, to facilitate transfer have not materially reduced the evil. In many cases, however much the land may be wanted for public or other purposes, the lawyers tell you that no title can be made without a private Act of Parliament--so effectually has the land been tied up.

The common idea is that this peculiar difficulty, delay, and cost in the transfer of land arise from the law of inheritance and the legal machinery of entail; but stock in the funds can be virtually entailed and made to "follow the estate," and yet this stock can be transferred just as readily as any other stock.

The explanation is known to every lawyer; but I have met with more than one Member of Parliament who, though blatant about entail, understood no more about the matter than a chimney-sweep.

The point is that, under English law, the trusts in the case of stock attach to the trustees, not to the stock; in the case of land, the trusts attach to the land itself as well as to the trustees. Hence, when I purchase stock of trustees I need not trouble about how they apply the purchase money; in the case of land I have to go into the whole title.

A simple illustration. I provide for a daughter £300 a year by putting £10,000 in the hands of two trustees in the funds. Should the trustees prove rascals, sell the stock, and decamp with the money, my daughter will lose everything; the purchaser from the trustees can hold the stock clear of all charges or liability. But if I provide for my daughter by charging an estate with £300 a year for her, then however wrongfully that estate may be sold, mortgaged, or otherwise dealt with, she gets safely her £300 a year. If the bank B has advanced money on mortgage on that estate, not knowing the existence of the charge of £300 a year for my daughter's benefit, the law simply says to the bank, "It was your business to know; you should have completely investigated the title before you advanced your money."

It follows, therefore, that if, with a Government Land Registry Office (say one for each county), you required the purchaser only to get in the legal estate, i.e. holding him not responsible for the trusts or the application of the purchase money, then land could be transferred exactly as money in the funds is now, in spite of all the complications of our law (or rather custom) of entail.

The law of entail in England (so called) is not what the popular orators suppose. The eldest son inherits really; that is, if there be no will, no settlement, or other disposition of the property. But there nearly always is. It is a very rare thing for the heir-at-law to take land (except some very small pieces) by the law of inheritance. As to entail, it is practically carried out by a continued system of surrender and re-settlement--a device of lawyers which is, in its historical development, an evasion (rather than a part) of the law. Nevertheless, I think it is a matter of importance that the shackles which fetter land should be loosened, and that the present powers of owners to tie up land legally should be very much curtailed. It is a sad proof of the way riches cling to the heart of man even when he is leaving this world, that, whatever powers of tying up land are sanctioned, an owner will usually exert them to the uttermost. He is leaving his property, but he will keep a hold on it fifty years after he is dead if he can. He will, after exhausting his powers in life interests, leave the residuum to an unborn child "in strict tail-male so far as the rules of law will permit;" and he will stick in a springing use to effect that, if his greatnephew, the Rev. George, should ever from an Anglican become a pervert to Roman Catholicism, he shall take no benefit under the will.

Now the fact is that all tying up is to the detriment of the public. No man can provide for all contingencies. Indeed he can see so little a way ahead that in a few years it frequently happens that all the careful provisions of the will are working exactly as the testator would have desired them not to work. Land tied up is always worth less to the owner because it is tied up; and we have seen that the interest of the commonwealth is the sum of the interests of all its component members. When you tell me that an estate is now of small value to its life-owner and unget-at-able for any public purposes, in consequence of a will made by a man who died twenty years ago, it appears to me that you shew me convincingly that we have not Free Trade in land.

I would propose that, either by will, settlement, or other instrument, an owner should be able to give any number of life interests, and nothing more; all trusts being placed outside the law. The first objection will be that if the powers of owners are so restricted, the desire for the ownership of land will be lessened: the value of all the land in England will fall. This might be so, I admit, to some extent; and it would favour the employ of the land for agricultural profit.

The next objection is that it would become necessary to give land (and money) directly to women without the intervention of trustees: that women do not understand business and require to be taken care of. My reply is that they always will require to be taken care of unless they are entrusted with the management of their own affairs. The loss to the nation, the expenses, the sacrifice of time and labour in trusteeships, have now assumed gigantic proportions. If women were given their own property to manage, some would (at first) fool it away: we know what high interest, adventurers, unprincipled persons, etc., can effect. But each woman defrauded or stripped of her property to starve would be a warning to all the rest: in a few years women would manage their property just as well as men. I believe they would manage it better. A smaller percentage of women would gamble on the Stock Exchange, the Mining Exchange, Austrian and Spanish lotteries, and horse-races; and a much smaller percentage of women would embark in desperate "business" speculations, heavy purchases of foreign produce, etc.

It should be noted that in cutting down the powers of owners to legally tie up, I do not interfere with honourable trusteeships of any kind not enforceable by law or in equity. Such exist now, and more largely than is generally supposed. The absolute devises and bequests to friends (not relatives) are often on private (not expressed) trust to provide for illegitimate children or numerous other purposes which a man may not wish to parade to his family.

8. EQUALISING OF TAXATION.

There has been no readjustment of the land tax for very many years. It is a property rate, and originally was rateably levied at four shillings in the pound. By the small increase in value of some land, the large increase in value of other land, since the days of Queen Anne, it has now become unequal in the highest degree. The farm A, gross rental £100 a year, has a land tax of £5 a year; the suburban estate B, gross rental £1000 a year, has a land tax of £2:l0s. a year. The land tax assessors were sworn in annually (twenty years ago, and may be still) to assess the tax equally, but it was perfectly understood that the tax was to be collected every year on the old long-standing assessment.

Suppose that the estates A and B above were reassessed, and that the land tax on A was put 15s. per annum, that on B £6:15s. a year. Land tax can be redeemed at about thirty years' purchase. The effect of the readjustment would have been to take about £120 from the owner of B and give it in a lump sum to the owner of A. It is probable that the present owners of both A and B (or predecessors under whom they claim) had purchased the estates A and B after the land tax had become fixed on them, and the amount of land tax would then have been fully considered in the price paid.

We see thus that in the case of the land tax, as we saw above of the tithe, and as is also the case in any tax permanently on, a disturbance of the existing taxation is inequitable. This point is so much misunderstood that I will give one more illustration.