SECTION VII. DIFFERENTIAL RATES ON THE CONTINENT.

In France, Belgium, and Germany, there are fewer ports competing with railways or with each other than in Great Britain. In each of those countries the principle of mileage rates has been nominally, and, to a large extent, in practice adopted. But in all of them causes similar to those which have here created so-called differential rates have been in operation. In each of them the fact of competition by water is recognised as a reason for charging reduced or special rates; such rates for export or import traffic exist, although the special rates for the latter traffic are fewer than for the former; and there are also special transit rates[22]. All these rates have been established after much consideration. Writing of the discussion of the subject in the Corps Legislatif in 1863, M. Aucoc observes in his well-known work, “Since that solemn discussion, the principle of differential tariffs has been placed beyond question.” He adds: “It may be well to mention also that, in the numerous judicial works on the working of railways, not only the legality, but the necessity and equity of conditional and differential rates have been almost unanimously recognised.”[23]

Take first the special rates in France. Wheat may be imported either viâ Marseilles, or viâ Rouen and the Seine to Paris, the distance from Marseilles being 863 kilometres, and from Rouen 134 kilometres. To compete with the sea and the Rouen route, the Paris, Lyons, and Mediterranean Railway Company charges for imported goods, special rates between Marseilles and Paris. These rates have been complained of as encouraging foreign trade. The answer, however, is that if not conveyed viâ Marseilles such goods might be conveyed viâ Rouen and the Seine to Paris. The general tariff rates on the French lines are based upon a uniform charge per kilometre, irrespective of any special requirements of the locality. In order, however, to remedy the disadvantages arising from such a system, and to meet the various circumstances and requirements of particular trades, numerous special tariffs are adopted with the sanction of the Minister of Public Works. These special rates are not, as is sometimes supposed, fixed upon any regular or uniform basis. Some are adopted for the purpose of developing a new, or increasing an existing trade which may be subjected to competition from other districts; others are established to meet competition by sea, canal, or otherwise. Under some circumstances reduced rates are arrived at by adopting computed instead of actual distances; the former being sometimes based on the distance by a shorter route either by rail, road or sea. But in some cases an arbitrary distance is adopted.

The French railway companies have special import and export rates for numerous articles in their classifications which are lower than the ordinary class rates to the port town, and occasionally lower than the class rates from intermediate stations; in which case the special import and export rates may apply. The following table is a comparison of a few import and export rates with the ordinary class rates. The latter, it should be observed, are, in some instances, based on computed, and not on actual, distances.

DUNKIRK AND PARIS.

Actual Distance, 304 Kilometres. Computed Distance, 267 Kilometres.

Classes 1 2 3 4 5 6

f. c. f. c. f. c. f. c. f. c. f. c.

Ordinary Class Rates 42·55 36·55 31·20 25·85 20·50 12·35

Import and Export Rates[24] 30·00 26·00 23·00 20·00 {18·00 12·00

{15·00

CALAIS AND PARIS.

Actual Distance, 296 Kilometres. Computed Distance, 267 Kilometres.

Classes 1 2 3 4 5 6

f. c. f. c. f. c. f. c. f. c. f. c.

Ordinary Class Rates 42·55 36·55 31·20 25·85 20·50 12·35

Import and Export Rates 30·00 26·00 23·00 20·00 {18·00 12·00

{15·00

BOULOGNE AND PARIS.

Actual Distance, 252 Kilometres. Computed Distance, 252 Kilometres.

Classes 1 2 3 4 5 6

f. c. f. c. f. c. f. c. f. c. f. c.

Ordinary Class Rates 40·30 34·75 29·75 24·65 19·60 11·80

Import and Export Rates 30·00 26·00 23·00 20·00 {18·00 12·00

{15·00

DIEPPE AND PARIS.

Actual Distance, 166 Kilometres. Computed Distance, 166 Kilometres.

Classes 1 2 3 4 5 6

f. c. f. c. f. c. f. c. f. c. f. c.

Ordinary Class Rates 28·05 24·75 21·40 18·10 14·80 9·80

Import and Export Rates 25·00 19·00 14·50 {10·75 9·00 7·00

{10.00

In some instances the special rates apply both ways, i.e., for import or export goods. But many of the export rates for certain articles are lower than the import rates; for instance, the rate for Cereals from Paris to Dieppe for export is frs. 7·50, while the import rate from Dieppe to Paris is frs. 9.

In addition to special rates for export and import goods there are also special tariffs for transit goods subject to special conditions which appear anomalous, and have given rise to complaints. The following is an illustration:—Both Roubaix and Rouen are spinning centres, and Epinal is a weaving centre. The rate for a 5-ton load of Yarn from

Kilometres. fr. cts.

Roubaix to Epinal 462 47·60.

Rouen to ” 537 57·40.

Antwerp to ” 467 37·0.

The rate for Yarn from Dieppe to Bâle, a distance of 716 Kilometres, is 47 frs. 30 cts. The explanation of these apparent anomalies is that the rates from Roubaix and Rouen to Epinal are based on the local ordinary tariffs; that the rate from Antwerp to Epinal is a special import rate; whereas the rate from Dieppe to Bâle is a still lower special tariff for transit goods. The following is an example of transit or through rates from a town in Italy to a port in France. The proportions of the receipts accruing to each Company and the rates charged for goods carried locally between the respective points are shown. It will be seen that the local rates from the frontier to Paris are in excess of the charges from Milan to Paris.

A. B. Ordinary Local Rates between the respective points.

Through Rates for lots of 100 kilos and above Through Rates for lots of 5 tons and above

In the proportions due to each distance.

From. To. Dist. in Km. 1st Class. 2nd Class. 1st Class. 2nd Class. 1st Class. 2nd Class.

f. c. f. c. f. c. f. c. f. c. f. c.

Milan Modane 238 22.14 18.42 22.14 18.42 40.89 36.03

Modane Frontier 12 1.15 0.95 1.15 0.95 2.90 2.50

Frontier Paris 672 68.10 57.25 53.50 46.55 94.20 81.00

922 91.39 76.62 76.79 65.92

Ceinture Railway — 15 3.10 3.10 3.10 3.10 3.10 3.10

Paris Havre 226 23.05 19.60 17.55 15.35 32.00 28.00

Terminal charges — . . . . . . . . . . . . . . . 1.90 1.90

Totals per 1,000 Kilos 1163 117.54 99.32 97.44 84.37 174.99 152.53

A.—The proportions accruing to the French Companies for lots under 5 tons remain the same for traffic from all the Italian stations named in the Tariff.

B.—The French Railway proportions for lots of 5 tons and above vary according to the distance of the Italian town from the frontier, as will be seen from the examples below:—

Goods from Cormons to Havre. 1st class. 2nd class. Goods from Oulx to Havre. 1st class. 2nd class.

P.L.M. 38.60 35.25 | P.L.M. 72.75 62.40

Ouest 8.45 7.80 | Ouest 15.05 13.05

In respect of traffic for intermediate places, the French railway companies may make higher charges than the rates for transit traffic carried over the same portion of railway beyond those places. But they may be required to charge the same sums for traffic to or from any intermediate place as they charge for import or for export traffic carried beyond.

In Belgium, also, differential rates are charged between certain places for export and for local consumption. The following are a few illustrations:—

For

For Export Local Use.

From To ————— —————

10 ton lots. per ton. 10 ton lots. per ton.

Coal Mons Antwerp Frs. 2·91 4·62

Jemappes ” 3·04 4·67

Charleroi ” 2·81 4·58

Fountaine l’Evêque ” 2·81 4·58

Bar Iron and Girders Liége ” 4·70 6·65

Charleroi ” 4·57 6·39

Marchienne ” 4·54 6·33

per 1000 kilogrammes.

Window Glass Charleroi ” 6·30 8·28

Neither private companies nor the State railways are permitted to make concessions of any kind, or to depart from the official tariff in favour of any particular firm or carrier. All general or special tariffs must be approved by the Minister, and published in the official paper, the “Moniteur.”

On the Prussian railways the maximum rates shewn in the tariff are actually charged. But exceptions are made where trade requirements, competition, and other similar circumstances appear to necessitate a departure from the official rates. It is not considered that railway companies are, in general, bound to adjust anomalies in the carriage charged for traffic arising in different districts, for one and the same destination, by reducing the rates from the more distant sending station. But for the sake of uniformity the rates are so adjusted if, for any reason, exceptional rates from any particular district have been adopted, and if they are lower than from intermediate stations nearer by rail to the same destination.

In Germany under the “Seehafen Ausnahme Tarif,” there are a very considerable number of special rates. For instance, the rate for grain from Bremen to Cologne, a distance of 324 kilometres, is 12 marks, while from Hemelingen, which is short of Bremen by six kilometres, to Cologne (318 kilometres) it is 15 marks 50 pfenning. For the purpose of stimulating the traffic from the Rheinisch Westfälischen District with the German North Sea Ports, viz., Emden, Leer, Papenburg, Bremen, Bremerhaven, the competition of the rates to the Dutch ports, to which the Rhine affords a cheap water conveyance, had to be taken into consideration. Accordingly from Essen to Bremen, 254 kilometres, the Amsterdam rates, which are lower than the tariff rates from Dortmund to Bremen, 237 kilometres, were adopted, although the traffic from Essen to Bremen has to pass viâ Dortmund, which is 17 kilometres nearer to destination. In another instance the German State railways give a rebate of 5 marks per truckload for coal exported from Hamburg.—“For consignments of coal for Hamburg and Harburg a rebate of 5 marks per 10,000 kilos. is made when proof is given that the coal is destined for export to Trannaine, places outside of Germany or for the German Baltic Ports.” In other words, a rate of 5 marks less is charged to Hamburg for coal for export than to the same place for coal to be consumed in the town.

Exceptional Tariff No. 2 consists of special rates for goods traffic between stations of the Royal Elizabeth Railway, &c., and Gustavsburg. They, however, are only in force during the period when vessels can ply on the Rhine, for instance:—For “Stückgut” or piece goods from Vienna to Gustavsburg the transit rate is 7m. 24pf. per 100 kilos. 1st class, and 6m. 60pf. 2nd class, and the local rates are 8m. 11pf. 1st class, and 7m. 73pf. 2nd class.

The effect of these special rates is to secure the traffic to the Bavarian State and Hessian railways, and prevent its passing over the Prussian and Dutch railways. The Rheinisch Westfälischen private railways grant contract (Abonnements Special Train) tariffs for the conveyance of coal from the Ruhr district to Nederlandish stations in fixed consignments of at least 200 tons, and not exceeding 300 tons. The adoption of these rates has principally been prompted by the competition of the water service on the Rhine. They include haulage to the sidings or depôts; and they are granted only to traders who contract to send at least once a week for one year a consignment of from 200 to 300 tons to Nederlandish stations.

Thus it will be seen that in Germany the carriage of traffic in large quantities is charged at special or reduced rates. A similar principle has been recognised in this country also. It was held by the Court of Common Pleas, in the case of Nicholson v. Gt. Western, that “Clause 31 of the Railway and Canal Traffic Act, 17 and 18 Vic., is not contravened by a railway company agreeing to carry at a lower rate, in consideration of a guarantee of large quantities and full loads at regular periods provided that the real object of the railway company be to obtain thereby a greater remunerative profit by the diminished cost of carriage, although the effect may be to exclude from the lower rate those persons who cannot give such a guarantee.” The effect of such a system, however, has been complained of by smaller traders as favouring the larger ones; and in this country, it is not in practice generally acted upon.

The basis of through tariffs between Germany and other foreign countries is the normal mileage rate to the German frontier; but with the view of encouraging the export trades, reduced rates are charged in favour of international traffic.

The Dutch are also desirous of developing their transit traffic; and with that object so called “exceptional rates,” based upon lower mileage rates than the ordinary tariffs, are charged from places of production in Germany to the Dutch ports. Thus, there are “exceptional rates” for, amongst other things, heavy iron and steel goods from manufacturing towns in Westphalia to Amsterdam and Rotterdam, and they are as much as 37 per cent. lower than the ordinary rates. These German-Dutch rates are invariably lower than the ordinary rates to inland towns lying between the forwarding station and the port. The following are some of the exceptional rates in force, compared with the ordinary rates to inland towns for shorter distances:—

From To Description of Goods. In lots of Distance (Km.) Rate per 1000 Kg. [25]

Marks.

Dortmund Amsterdam } Heavy iron and 231 6·30

” Rotterdam } steelgoods, bars, 10 tons 246 6·60

” Utrecht } sheets, rails 194 8·0

Essen Amsterdam } 199 8·20

” Rotterdam } Hardware 10 tons 214 8·70

” Utrecht } 162 8·50

” Gouda } 194 9·90

Rotterdam Dusseldorf } Coffee, rice, 10 tons 234 9·20

Utrecht ” } currants & sugar 182 10·60

Strasbourg Rotterdam } Machinery 5 tons 614 24·90

” Utrecht } 571 25·60

Mannheim Rotterdam } 499 18·40

” Amsterdam } Grain 10 tons 504 18·40

” Boxtel } 408 19·40

” Eindhoven } 388 18·60

Frankfort Rotterdam } 479 20·

” Arnheim } Skins 10 tons 376 23·80

” Ede } 392 24·70

Nuremberg Flushing } 715 31·84

” Arnheim } Toys 5 tons 606 42·60

” Helmund } 579 40·80

For traffic between Austrian and Hungarian towns and the Dutch ports in certain articles there are also so-called “Seaport transit rates.” For instance, for dried plums, apples and pears from Vienna to Rotterdam, the export rate for lots of 10 tons is m. 41·50 per ton of 1,000 kilogrammes, the local rate being m. 51·60 per ton; for wool from Buda Pesth to Amsterdam the rate per ton of 1,000 kilogrammes in lots of 5 tons, is export m. 67·0, local m. 81·30. These rates are only available for goods destined for export or import; and, as will be seen, they are considerably lower than the rates for the same description of goods for consumers in the port of shipment. There are also exceptional rates for goods traversing Germany to and from the German sea-ports and Austria and Hungary. The following is a comparison between the rates from Bremen to a station on the Danube, and the rates from the latter station to a station situated between that station and the sea-port:—

Distance in Kilom. Distance in Miles. Raw Cotton per 100 ks (2 cwt.) Tobacco per 100 ks (2 cwt.)

Marks. Marks.

Bremen—Regensburg 683 427 2·46 2·49

Nienburg—Regensburg 616 385 2·88 3·83

Difference in favour of

the longer distance (67) (42) 0·42 1·34

In Holland no scale of rates is universally chargeable. Each railway company is authorised by the Concession under which the railway was constructed, to charge certain specified rates. But, as in England, the existing rates actually charged are generally lower than the maximum; and the fixing of them maybe controlled by the State. By Article 31 of the Dutch Law the railway companies are required to carry all goods (not excluded from transport) and passengers at the rates set forth in the published tariffs, and under the conditions determined by the regulations, without unduly favouring special persons, Societies, Companies, or other bodies. By the existing law the railway companies are forbidden to make special arrangements for carriage at lower rates than those published in the tariffs, except in the following cases:—

(a). For the carriage of large quantities; (b). For the carriage of one or more truckloads of goods at stated intervals; (c). For the carriage of goods intended for charitable purposes or for exhibition.

Notice of such exceptions has to be given to the Home Minister. Those reductions must be available for all goods of the same class, to be conveyed on the same line, and under the same conditions; they must be immediately advertised; and they remain in force during the existence of the contract.

By the strict letter of the law it is provided that the same rates must, over the whole of the system of the railway, be charged by the company for the like article for the same distance. But, in consequence of the competition by inland navigation for traffic to and from places in Holland, and also by the Rhine, and through Belgium for German traffic, this requirement proved impossible to carry out in practice. The Government have found it necessary to allow the companies to enter into special contracts for the conveyance of goods on such conditions as they might consider it desirable to agree upon. Notice of any special contract must, as before stated, be given to the Minister of Commerce after it is entered into, and the official assent is subject to the company agreeing to enter into a like agreement with any other person. While such is the letter of the law, virtually enjoining equal mileage rates, the practice is altogether different. For any description of traffic, special agreements as to quantity to be forwarded and time of delivery are made. The great object is to obtain traffic. The published notices of such contracts contain, it may be added, no information which can be utilized.

The following is an illustration of the special contracts entered into and of the manner in which their existence is notified:—

[Copy of Special Contract.]

SPECIAL AGREEMENT for the carriage of slow train goods

from _______________________________________

to _______________________________________

between ____________________________________

on the one hand, and the General Goods Manager of the

Railway Company, at ______________________________

contracting in the name of the Direction of the above-named

Company (or Companies), on the other hand.

ART. I.

The first-named contracting party binds himself to have all the goods to be despatched or received by him during the current year, estimated at ______________________ truck loads ( ____________________ kilogrammes), from _____________________________ to ____________________________________________ carried over the lines of the ________________________________ Railways, in accordance with the conditions in Article IV. of the Law of Railway Companies (General Rules and Regulations), of 9th January 1876 (Gazette No. 7), and with the Special Bye-Laws in force for local traffic, as set forth in the tariff, for the conveyance of fast and slow goods over the lines of the ________________________________ ________________________________ Railway Company, approved by order of the Minister of the Interior, dated 1st March, 1877, and which tariff came into force on the 1st April, 1877. On the other hand the last named contracting parties bind themselves to carry the goods of the first-named contracting parties during the year 1885 at the reduced rates shown in the circular of the ________________________________ Railway Company, dated ________________________________ 1885. No use may be made of these rates for the re-despatch of goods at intermediate stations, so as to obtain a cheaper rate than the direct rate. Agreed to and signed in dupl. at ________________________________ th ________________________________ 188_ Contracting party No. 1. ________________________________ th ________________________________ 188_ Contracting party No. 2.

[Copy of Circular.]

________________________________________________________ RAILWAY.

The Direction of the ________________________________ Railway begs to inform those interested that the General Goods Manager ________________________________ of ________________________________ has been authorised to make special agreements for the carriage during the current year of large quantities of Goods, or for regular consignments of one truckload or more between Stations of the ________________________________ Railway, and between those Stations and Stations of the ___________________________ on the following basis:—

(a) For large quantities: Per 100 kilos. and 10 km.

In consignment of 10 tons in 1 cent. ” ” 5 to 10 tons 1½ cent. ” ” 3 to 5 tons 2 ” ” ” 100 kilos. to 3 tons 2⅓> ” with 8 cents per 100 kilos. terminal charges.

(b) For regular consignments in truckloads:

The charges as above for consignments of 10 and 5 tons.

Any fractional distances will be counted as for 10 kilometres, and the weight per 100 kilogrammes, without distinction for different classes of goods. Parts of 10 kilometres and 100 kilogrammes will thus be taken as 10 kilometres or 100 kilogrammes.

With these exceptions the General and Special Rules and Regulations of the ________________________________ Local Rate Book of 1st April, 1877, with the alterations and additions made therein later, apply to these contract goods.

Consignments of 5,000 kilogrammes will be treated in the same manner as goods of Class A, and consignments of 10,000 kilogrammes in the same manner as goods belonging to the Classes B, C, D, and the Special Tariff.

Further information can be obtained at all the Stations; or on application to the Agent of the ________________________________ Railway.

[Copies of Notices of Special Contracts.]

From the “Dutch Guide,” of 28th January, 1886.

Holland Railway Company.

A contract has been entered into for the carriage of a large quantity of goods over the Company’s lines.

Further information can be obtained at the Goods Office, at the Central Administration Buildings, Droogbak, Amsterdam. The ADMINISTRATOR. Amsterdam, 25th Jan., 1886.

From the “Dutch Guide,” of 25th February, 1886. Company for working the Dutch State Railways.

Various contracts have been entered into for the carriage of large quantities of goods on the Southern net of the State Railways.

Further information can be obtained at the Goods Manager’s Office, Moreelselaan, No. 1, Utrecht. The GENERAL MANAGER. Utrecht, 17th-24th Feb., 1886.

[Central Railway.]

A Contract for the carriage of cattle has been entered into. Further information can be obtained at the Goods Manager’s Office, Catharijne Kade 759, Utrecht.

The result is that a considerable portion of the traffic is carried under special agreements, under conditions such as the following, viz.:—

The sender agrees to forward between A and B special quantities, for instance:—

80 tons Soap,

10 ” Sugar,

5 ” Pepper,

5 ” Tobacco,

or to forward the whole of his traffic between C and D estimated at a specific quantity for a certain period, for instance:—

400 tons General goods,

10,000 ” Coal,

1,000 ” Coke.

In Italy, differential rates have been the subject of public inquiry, and the representatives of some local interests have asked for their abolition. But they exist; and the verdict upon them of the Parliamentary Committee of Inquiry in 1881 was: “It is indisputable that the system of differential rates has helped to strengthen and improve the national industries.”[26]

The fact of railways in other countries charging special rates for import, export and transit traffic, is, of course, not a proof of their being right in principle. But the foregoing information may correct loose assertions or suggestions that differential rates are unknown or rare elsewhere. It shows that the railway authorities and the Governments who control the rates in those countries, even while professing to charge mileage rates, have considered it necessary, with the view of promoting and protecting the interests of their trade, to charge differential rates.

In the United States, where there is much competition for the conveyance of long distance interstate traffic, and where remarkably low rates—“war rates,” as they are called—are charged, charges for intermediate traffic are not lowered proportionately. In that country differential rates have been much attacked; they have no doubt occasionally been imposed without measure or reason. But they still subsist, and are found useful. As an illustration it may be stated that, at the present time, the rates for the conveyance of flour from Minneapolis to Milwaukee, 335 miles, and to Chicago, 420 miles, are the same; while the rate to Duluth, 164 miles, is only 25 per cent. less.[27]