49 STANDING COMMITTEE B Thursday, 9th June, 1921.

[Sir SAMUEL ROBERTS in the Chair.]

RAILWAYS BILL.
[OFFICIAL REPORT.] CLAUSE 1.
—(Grouping of railways.)

(1) With a view to the re-organisation and more efficient and economical working of the railway system of Great Britain railways shall be formed into groups in accordance with the provisions of this Act, and the principal railway companies in each group shall be amalgamated, and other companies absorbed in manner provided by this Act.

(2) The groups to be formed shall be those specified in the first column of the First Schedule to this Act, and as respects the several groups the railway companies to be amalgamated (in this Act referred to as "constituent companies") shall be those set out in relation to each group in the second column of that Schedule, and the companies to be absorbed (in this Act referred to as "subsidiary companies") shall be those set out in relation to each group in the third column of that Schedule, and the companies constituted by such amalgamation are in this Act referred to as amalgamated companies:

Provided that the constitution of any group, and the constituent companies to be amalgamated in, or the subsidiary companies to be absorbed by, any amalgamated company may be varied in such manner as may, on or before the thirtieth day of June, nineteen hundred and twenty-two, have been propounded by any constituent company and approved by the Minister of Transport (hereinafter referred to as "the Minister"), and such variation shall be so approved, unless in the opinion of the Minister, after taking into account all interests affected, it is incompatible with such efficient and economical working of the railway system of Great Britain, but no such variation shall have effect unless approved by a resolution passed by both Houses of Parliament.

(3) On any such variation being approved by such a resolution, the First Schedule to this Act shall have effect subject to such variation.

Amendment proposed (8th June, 1921): In Sub-section (1), to leave out the words "Great Britain" and to insert instead thereof the words "England and Wales."—[Sir G. Younger.]

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Question again proposed, "That the words proposed to be left out stand part of the Clause."

Major BARNES: We are discussing an Amendment put down by a number of Scottish Members. The effect of it would be to take Scotland out of the purview of the Bill. To an average English intelligence, that would seem to imply that the Scottish Members and the Scottish railways did not want to be associated with the English railway system; but when the severe logic of Scotland is applied to this Amendment, it appears that it means exactly the opposite. They have a passion for absorption or amalgamation, and so far from wishing to be dissociated from the English railway system, their deep and undying desire is to enter into the closest relationship with it. They are all agreed on that. Indeed, as I listened to them yesterday there came into my mind the passage from "The Critic," in which it says that, "When they are agreed, their unanimity is wonderful." As I listened yesterday to that diapason of Scottish harmony, "deep answering unto deep" in a sort of grand and antiphonal chorus, I thought how pleasing it was to see brethren dwelling together in such unity. The pibroch was first sounded in the Lowlands by the right hon. Member for Ayr Burghs (Sir G. Younger). Then the strains were taken up on the banks of the Clyde by the right hon. Member for the Gorbals Division (Mr. G. Barnes); then across the Glens we heard the skirling of the pipes of Edinburgh; and last of all the Highlands joined in through my friend (Lieut.-Colonel A. Murray) who added to the strains. It was a regular gathering of the Clans. I do not think there has ever been anything like it in Scottish history since "Four and twenty men of the Clan McTavish Came marching down the Glen To plunder and to ravish"— to plunder the shareholders, and to ravish the traders of fair England. Up in the North Eastern district we have been used from time immemorial to repelling these Scottish raids. If you, Mr. Chairman, were to come with me into Northumberland, I could show you in our dales every one of the forty-five farmhouses into which we used to drive our stock, and tie them up for pur- 51 poses of defence, when these forays were on hand. Indeed, at one time we engaged the Romans, who happened to be in the country, to build a wall from the Tyne to the Solway Firth to keep the Scottish raiders out of England—a perfectly futile proceeding, and perhaps the most monumental example of Government extravagance the country has ever seen. They not only broke down the wall, but used the stones to pave the roads coming South, so as to make their journey easier. We always knew when to expect these Scottish raids. They always happened when the Scottish larders were empty. Indeed we have a very well known story called the "Dish of Spurs," which commemorates an ancient custom of the Scottish Lowlands. When the larder was empty, the good wife used to present before the Scottish laird a covered dish, and when he took the cover off he found on the dish a pair of spurs, which was an intimation to him that it was time to get into the saddle, and to cross the English border and replenish the Scottish larder. Times have changed, and manners, perhaps, have changed, but temperament and disposition and practice remain the same. I find that the reason for this concerted action on the part of Scottish Members in attempting to raid English districts, is precisely that of the past. The Scottish companies have issued a memorandum stating their position. In it, I understand, they say that their earnings have disappeared, and that being so, obviously their only course is to replenish those earnings at the expense of this country and of the traders and others interested in British railways. I want to oppose this Amendment from the point of view of the traders of the North Eastern district. I am not speaking in the interests of the shareholders of the North Eastern Railway Company. I have no doubt that their interests will be very well looked after. The interests of shareholders are, as a rule, not neglected in this House.

Sir FREDERICK BANBURY: They are in this Bill.

Major BARNES: It is in the interests of the traders in my district with which I am particularly concerned. We have a district of which we are very proud. It is a district in which we have built up very great industries, iron, steel, coal, 52 engineering and shipbuilding, and the prosperity of those industries depends greatly upon transport facilities in the first place, and secondly, the cost of those facilities to those engaged in the industries. For the moment I may appear to be speaking from a sectional and perhaps selfish point of view, but inside the general scope of this Bill I do not conceive it to be outside the proper function of any Member of Parliament to see that at least the interests of the district which he represents are safeguarded, having general regard to the interests of the whole. It is simply from that point of view that I am speaking. Inevitably, as things are carried on, there is competition between one district and another. I conceive that it is no part of the purpose of the Government or the Committee or of this Bill, to weight one district as against another by anything that may be done here. We are here to see fair play and justice done and to see that we do nothing which will throw an improper burden upon any district. These Scottish Railway Companies are perfectly frank. In the old days the Scots never concealed their coming; they came openly and took what they wanted with a high hand. They are prepared to do the same thing to-day. I have here a speech made by the Chairman of the North British Railway Company, and he used these words "We admit we ask the English trader to risk having to pay rather higher rates, but we do not ask the English Railway shareholder to give us one sixpence out of his pocket." The last few words, I suppose, are intended to placate the shareholders. I am not particularly concerned about their position, although even with regard to that it is perfectly clear that it may not be possible, under these high rates, to get out of the trader what is expected, and in that case the deficiency would have to be made up out of the returns of the shareholders. So that in one way or another, if the object desired by the Scottish companies is reached, deficiencies in Scotland are to be made up by payments taken either from the English trader or from the English shareholder. I am sorry that my very much esteemed friend the member for Central Edinburgh (Mr. W. Graham) is not here. He spoke in support of this proposal yesterday and everything that he says carries a good deal of weight in this Committee. What 53 he said was particularly interesting, because he is an expert on income tax, and this is a proposal in effect to raise Scottish incomes by lowering English ones. My hon. Friend endeavours to make his case stronger by resting himself on some statements which were made by the hon. Member for Ayr Burghs (Sir G. Younger) in which that hon. Member endeavoured to put a rosier aspect upon the conditions of the Scottish railway companies than has been put on it by the companies themselves. Taking into account the statements made about the earnings of the Scottish companies having disappeared, what miracle has happened during the past 2 or 3 weeks to change that state of affairs? If the basis of the original proposal was that the Scottish companies were not now in a sound financial position, and if that condition has been changed and the companies are now financially sound, what foundation remains for this proposal? Upon that point we should have a great deal more information before we come to a final decision. The Chairman of the North British Company is probably anxious that Scottish traders should carry on their industry under the best possible conditions, and he says that the complaint of the English trader is trifling compared with the gross unfairness of compelling the Scottish trader to pay much higher rates than his English competitor, and quite possibly ruining his trade thereby. As a matter of fact, at the present time, are the rates in Scotland equal to the rates in this country? Have the Scottish companies really made an effort to prove that, even with their higher rates, they cannot maintain themselves? In any event, "what is sauce for the goose is sauce for the gander." If Scottish traders are not going to stand up and see their industries handicapped and penalised, we on the North East coast are equally prepared not to have a situation of that kind. The business of the Committee is not to attempt to weight Scotland against England or England against Scotland, but to give a fair and proper decision. I have been speaking for the moment from what may be regarded as a sectional point of view. I will now rest my case on something bigger and broader. We are dealing in this Bill with one of the biggest questions with which any country can deal—the question 54 of railway organisation and administration. If there is one thing that has been brought before the notice of all men by the events of recent years, it is the extreme importance of a railway system in the economic and industrial life of a country. I am free to confess—perhaps I should do so with bated breath—that in my opinion in every country the railway systems should be unified. I do not hesitate to say that I believe in the nationalisation of railways. It is for that very reason I am opposing this Amendment. It is an extraordinary thing that an English Member should have to stand up in this Committee and remind the Scottish Members that Scotland is a nation, but that is the fact. I listened with amazement to such a proposal as this being supported by a number of Members who believe in, and who wish to see, a course of devolution which shall give Scotland the right to manage her own affairs and control her own conditions. I was amazed to hear them supporting a proposal which is going to associate perhaps the most integral and important part of Scotland's industrial condition for all time with English companies and English associations. Surely if Scotland is ever going to manage her own affairs, and control her own industrial conditions, it is of paramount importance she should control her own railways. From that point of view, I cannot understand the support which Scottish Home Rule Members are giving the Bill, and from that point of view I oppose the Amendment. It reminds one of the old transaction of which we read in the book of Genesis in which a birthright was sold for a mess of pottage. [An HON. MEMBER: "Porridge, you mean."] I think Scottish Members know the value of porridge, and are not likely to engage in a transaction of that kind. We have in front of us political developments which, in the opinion of all men, will tend to territorial devolution, and the Committee should hesitate profoundly before adopting a proposal by which the railway system of Scotland will be linked up with the railway system of this country. I protest against the swashbuckling spirit in which this proposal has been put forward. That wizard in Coalition making—and I do not think he ever displayed his wizardry to greater advantage than in the amazing coalition he has made over this Bill—threatened 55 the Government with the possibility of non-return at the next Election, if they did not accede to his request.

Sir GEORGE YOUNGER: I beg the hon. and gallant Member's pardon. I did not say the Government would not be returned; I said it would not be returned by Scottish votes.

Major BARNES: In either case it was a threat, and it was reinforced by my hon. and gallant Friend (Lieut.-Colonel Murray), who told the Minister of Transport, if he did not give way to this request he would not get his Bill. The Minister of Transport is the last person I should ever think of threatening. He does not appear likely to be influenced by threats, and so far as return at the next election is concerned I believe he is safely out of that. That is not going to affect him, and I am sure he will not be influenced by speeches of this kind. I am sure the Committee will not be influenced either, but will decide this question on its merits. The Bill, as it stands, is the considered opinion of the Government, and the considered opinion of the Minister of Transport. The whole question of grouping Scottish companies with English has been on the carpet for more than 12 months and has been considered from every angle. The Minister has come to his conclusion; that conclusion is in the Bill, and I invite the Committee to support it.

Mr. MURROUGH WILSON: The last speech, in regard to the North East trader more especially, was very interesting, because the speaker has shown there is unanimity on this point in the North Eastern District so far as traders and shareholders are concerned. I understand the hon. and gallant Member who has just spoken is strongly of opinion that the Scottish companies want something which the North Eastern railway shareholders have got to provide. There I absolutely and entirely agree with him. I have been given to understand that the North Eastern Railway Company, of which I am a director, has not from the Scottish point of view behaved quite in the way it should have behaved. We have been given to understand that the North Eastern Railway put themselves into the singular position of standing out from other companies in regard to the question of grouping. I think events have proved the wisdom of the attitude taken up by 56 the North Eastern Company. The position now is that, so far from the North Eastern Company being alone on the question of Scottish grouping, they are in absolute accord with all the other big railways of Great Britain. The other railways who are members of the Railway Companies' Association have accepted the Government Bill.

Sir F. BANBURY: No.

Mr. WILSON: With the exception, of course, of the right hon. Baronet, who is a regular exception.

Sir F. BANBURY: And other people, too. Has the hon. Member read the speech delivered at a meeting of shareholders by his own general manager in place of the chairman? Every word of that speech was in my speech to my shareholders, and it confirms everything I said.

Mr. WILSON: The right hon. Baronet is not quite following what I am driving at, and it is probably due to my fault. What I am trying to point out is that the North Eastern Company has not stood aloof on the question of amalgamation with the Scottish companies. The other English railways are also against that amalgamation, and instead of the North Eastern Company standing by itself in this matter, the position is that the other railways have seen the wisdom of their action and have joined with it. I ought to apologise for saying so much about the North Eastern Company, but it has, in a sense, been attacked.

Sir G. YOUNGER: Not attacked.

Mr. WILSON: Well, its action has been questioned. The way this company has always looked at it is, that there are considerable difficulties in the way. First, there is the general difficulty of geography. It is felt that if you had enormous lines, stretching from Inverness to London, on the one side, and from North of Aberdeen to London, on the other, it would be extremely difficult to conduct operations satisfactorily, and the system as a whole would suffer. It has also to be remembered that the conditions in Scotland are entirely different. The law is different, and the rating is different, and there are also all sorts of physical difficulties with which to contend. It is, however, a matter which really depends upon this Committee. If they think there are no insuperable difficulties, it is hardly up to the North Eastern to say 57 there are, but I hope the right hon. Gentleman in charge of the Bill, when he is answering this Amendment, will put forward his views in regard to the question of management and the difficulties to be contended with. I should also like him to go further and tell us, if this idea of Scottish and English companies being amalgamated materialises, what is going to be the effect on the large estimate of saving by railway companies which he has already given to the House? I think he put it at something like £25,000,000 a year. There are further difficulties, for you will require to have regional administration of some kind. It is almost impossible to administer these enormous areas without incurring heavily increased expenses. We have had a great number of figures given us showing what the position of the Scottish railways purports to be. I am rather at a loss to know what the real position is. We know that the Scottish expenses have increased between 1913 and 1920 out of all proportion to those on the North-Eastern, at any rate. Their expenses have increased something like 250 per cent., while ours have increased something just under 190 per cent. From that we can deduce the fact that there is going to be a very considerable deficit, which has to be made up from somewhere.

Sir G. YOUNGER: It has been made up from rates.

Mr. WILSON: I am glad, indeed, to hear it, but there is a certain point to be reached by rates, which the traffic can no longer bear. When amalgamation comes, if it does come, there are certain balances which will have to be adjusted in some manner, and we feel that the Scottish Members are looking to the North-East of England to make their deficit good. The hon. Member for the Ayr Burghs put it that there was no coupon which would cover his difficulties if some solution were not arrived at. I think it was rather reversing the old story we used to hear that a Scotchman, when he came out of Scotland, never returned to Scotland except to fetch his son. Now the Scottish Members are not to return to Scotland unless they are fetching the bawbees of the English shareholders back in their pockets. The fact remains that we think that there is to be some money to pay, and we want to know who is going to pay. They are three alternatives. One is that 58 the burden should be paid by Scotland, another is that it should come from the North-Eastern district, and the third is that it should come from the country as a whole. The latter alternative is a Government matter, and if they like to make arrangements, well and good, but from the point of view of the North-Eastern shareholder, we can see no reason why anything should be put on his shoulders. It is neither fair nor a businesslike arrangement. The Scottish Members went on to say that after all it is only a question of terms. That is a very easy thing to say, but what are the terms? We want to know exactly what the terms are. I understood the hon. and gallant Member for Kincardine (Lieut.-Colonel A. Murray) yesterday to ask whether the North-Eastern were prepared to admit the scale if they accepted Clause 6. I tried to put a question to him to elucidate what he meant, because I felt that he was putting the cart before the horse. If he means that the Scottish railways are prepared definitely to accept Clause 6 in the spirit and letter in which it is already in the Bill, I can safely say the North-Eastern Railway at any rate would willingly consult their partners in the group and give it their most prompt and careful consideration, and I am certain that the hon. and gallant Member will agree that we, like everybody else in this Committee and elsewhere, are only too anxious to arrive at a settlement which will be just and fair to all parties, but there the matter must remain so far as the North-Eastern are concerned, and until it is shown that the terms are a businesslike proposition and that any amalgamation must be on the market value of the companies concerned, I think we remain in the position in which we have been, namely, that the dangers are great.

Sir F. BANBURY: I should like to congratulate the hon. and gallant Member for Newcastle (Major Barnes) on his extremely able speech, and especially on that part of it which dealt with the habits and customs of the inhabitants of Scotland, because, having read with great interest Walter Scott and other historians, I confirm every word that the hon. and gallant Member said with regard to the customs in ancient days of the inhabitants of Scotland, which they have carefully committed to their 59 descendants at the present day, only, of course, in a different form. We had an example of it last night, when apparently some £500,000 was claimed, not really because they wanted it, but because it was their share as the proportion of some unknown figure which they had stated was the proper share that Scotland should have of any money which was going. There are two points, however, in the speech of the hon. and gallant Member with which I thoroughly disagree. I understood him to say that the grouping had been carefully considered by the Minister, and he apparently thought that finished the whole thing. I am surprised to hear that from him, because my recollection of him in the House of Commons is not that he accepts the ipse dixit of Ministers, or even their Bills, but that he generally finds himself opposed to them. Why, then, is there this sudden alteration, and why does he think that whatever the right hon. Gentleman proposes must be at once acceded to? Though I sit on the same side of the House as the right hon. Gentleman, I do not accede to that proposition.

Major BARNES: The point to which I was addressing myself was the pressure that was being put on the Minister, and my view was that, having come to a considered conclusion, he was not likely to be influenced by a threat.

Sir F. BANBURY: I have observed the hon. and gallant Member in the House of Commons endeavour to put considerable pressure on Ministers, notwithstanding the fact that he has been in a very small minority, and that his pressure has had very little effect. He also spoiled an otherwise extraordinarily good speech—the best speech I have ever heard him make, if I may say so—by saying that he was in favour of nationalisation. Really, if he was in favour of nationalisation, I do not quite see why he does not vote for this Amendment, which is to leave the Scottish railways out of the Bill, and if they were left out of the Bill, and Scotland became again a nation, it would be possible for him to advocate the nationalisation of Scottish railways. I am sorry the hon. Member for Central Edinburgh (Mr. W. Graham) is not here, because he made one or two important statements. Alluding to the fact that a 60 short time ago it was announced on the best authority that the financial position of the Scottish railways was not good, he said the position had become rosier. Why has it become rosier? I could not understand it, because one of two things must result: either the former estimate was wrong, or the present estimate is wrong.

Sir G. YOUNGER: The first estimate was wholly wrong. It was an estimate made before they knew anything about the arrangements with the Minister, either the £60,000,000 or anything else. It was an estimate as to what would happen in 1921–22, an unknown year, and not the normal year.

Sir F. BANBURY: I do not think the £60,000,000 has anything to do with it.

Sir G. YOUNGER: It has got a lot to do with it.

Sir F. BANBURY: As to the Scottish share of the £60,000,000, I presume they will not expect to get a larger share in proportion than the English companies. That has not been avowed at present. It may come later on, but at present I understand that my hon. Friend agrees with me that he would be content with his proportion of the share of the £60,000,000.

Sir G. YOUNGER: I said nothing of the kind. What I said was that the Estimate presented to me was an Estimate in regard to 1921–22. Everybody knows that a portion of the £60,000,000 would be available for dividend purposes in that year, but they did not know that when they made that Estimate.

Sir F. BANBURY: Then I withdraw my statement that I understood the Scottish railway companies would be content with their share of the proportion, and I start with the statement that they will get a larger amount, unless they take the whole, but even then the proportion that they will have is very little, and I know my hon. Friend is an extremely good business man. What has he just said? He has fallen into the trap, if I may say so, which a large number of directors have fallen into. The £60,000,000, he says, will be available for dividends.

Sir G. YOUNGER: I said "part of it."

Sir F. BANBURY: I did not catch the "part of it." I must be very deaf to-day.

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Sir G. YOUNGER: You have fallen into the trap now.

Sir F. BANBURY: No, I never do that. Part of it will be available for dividends, my hon. Friend says, but may I point out that the whole of that money will be wanted to put the property of the Scottish companies into the condition in which it was in 1913, and none of it ought to be spent in dividends? If any of it is spent in dividends, the shareholders will find that in two or three years' time they will be in a very parlous condition. Therefore, I do not really understand how it is the position has become rosier. My hon. Friend says the first statement was wrong. I accept that, but the second statement comes practically from the same sources, and if a man makes a wrong statement once, how am I to know he is not making a wrong statement a second time. Therefore what reliance can we place upon these estimates? I say we can place no reliance upon them at all. The right hon. Member for Gorbals (Mr. G. Barnes) advocated this proposal because he said the Bill would make for economy. That is quite wrong. The Bill will not make for economy. The Bill as it stands will cost the companies large sums of money and will not make for economy. As the hon. Member for Richmond (Mr. M. Wilson) said, somebody has got to bear the burden, and, undoubtedly, if this Amendment is carried, there will be a large burden cast upon someone. It is said it can be passed on to the traders. May I very humbly quote words from a speech made by Sir Alexander Butter-worth? He said you cannot compel a trader to send his goods by rail, neither can you compel a man to travel by rail if he has not got the money to pay the fare. That is absolutely true, and the idea that by raising rates you are going to restore financial equilibrium is, in my opinion, utterly fallacious. You cannot put either rates or fares beyond the point at which the public will bear them, and at the present moment I believe the rates and fares are as high as they can possibly be put. In fact, I am not at all sure that, if we wish to obtain a good and proper traffic, we shall not have to lower both rates and fares. Therefore, under those circumstances, as far as regards the financial position, I do not quite see what we are going to benefit by the acceptation of this Amendment. The Amendment is to leave out 62 "Great Britain" and substitute "England and Wales," and if that were carried, it would entirely alter the complexion of the Bill. It would not be the Bill which received Second Reading. It would have this effect also. I put to Mr. Speaker a question as to whether this Bill ought not to go to a Hybrid Committee, and I pointed out to him that it had always been held that where a Bill dealt with part of the railway companies or part of any other companies, and did not deal with the water, or dock, or railway companies as a whole, the Bill always went to a Hybrid Committee. Mr. Speaker held that this Bill really did deal with the companies as a whole, and that the leaving out of the tubes and underground railways was so small a matter that it did not amount to much, and that the other Clause, which puts the Great Western Company in an exceptional position, really did not apply. If you are going to leave out Scotland, that alters the position altogether. Then you have a Bill which only deals with a portion of the railways of the United Kingdom. Under these circumstances this Committee ought not to continue. This Bill ought undoubtedly to go to a Hybrid Committee where counsel could be heard; therefore, from that point of view, I do not think there can be any doubt that we should reject this Amendment. In regard to the position of the English companies my belief is—I am not quite sure that I am quite accurate—I have not been able to check the statement—that the North Eastern Company were not entirely alone when they objected to this particular form of grouping. If I am not mistaken the South Eastern, whether on the same grounds or not, also objected to the grouping which was arranged by—

Sir G. YOUNGER: That is not stated in the Association Minutes.

Sir F. BANBURY: Well, I am not quite sure.

Lieut.-Colonel A. MURRAY: The Hull and Barnsley and the Barry Railways objected.

Sir F. BANBURY: A sensible company, I believe, the Barry!

Sir G. YOUNGER: I do not know anything about that.

Sir F. BANBURY: It takes the view of the Great Northern Railway Company. 63 There was a great deal to be said for the views of the North-Eastern Railway Company. I am not sure that if I had been in their position I should not have done the same thing. What we had to consider, then, was whether we could not come to some arrangement between ourselves which would facilitate matters, and which would enable us, if possible, to a certain extent to share the burden with the weaker companies. I was in favour of that. I have not departed from that opinion.

Sir G. YOUNGER: Oh!

Sir F. BANBURY: Wait a minute; that was on the understanding that all this should be on a voluntary basis—quite a different idea from being forced into an amalgamation—or that the terms of the amalgamation should be settled by a tribunal of three—excellent men, no doubt—but that the terms of the amalgamation and alteration and arrangement of capital should be settled without our consent and knowledge. That altered the whole matter. I had some considerable experience in the old days in amalgamation, and I never knew an amalgamation which, when the directors had agreed upon it, was not first of all submitted to the shareholders for their approval. The owners were asked whether or not they agreed that certain things should happen to their property. Now they are not asked. Their property is taken from them. It may be that the proprietor of £100 worth of preference stock in the North-Eastern Railway Company will only get £80 worth of stock in the new combine, or that the proprietor of £100 worth of preference stock in the Great Central—which is not a trustee security—may get the same. We do not know. What, then, is going to happen? What will the owners of these stocks say when they suddenly wake up and see something of this sort has happened—that they are absolutely bound? Again, if I may agree with the hon. Gentleman who represents the North-Eastern Railway Company, what about the management? You have got a vast concern stretching from London to the remote end of Scotland. You will have one board of directors either in London or in York. Will they have any control over the matter? I do not think they will. It has been said in answer to that 64 that there are larger railways in America, but the whole system in America is quite different, and you cannot compare English management or English railways with American. What was in my mind when I agreed to the North British Railway Company joining in was not amalgamation, but a pooling which could be managed on terms. I do not think there would be very much difficulty in arranging that. I think a voluntary pooling could be arranged. That would avoid all difficulties which might arise as to the apportionment of stock. Consider also for a moment the actual position of these railway companies. For the moment I will deal with the Eastern group. The Eastern group consists of the Great Central Railway Company which has not paid any dividends on its ordinary stock for very many years, and none of whose securities, debenture or preference, are trustee stock.

Mr. MARSHALL STEVENS: Are we entitled, Mr. Chairman, to go into the grouping question on the Amendment as to whether or not Scotland shall be included in the Bill?

The CHAIRMAN: I have not thought fit to stop the right hon. Baronet up to the present.

Sir F. BANBURY: Take the case of the North Eastern Railway Company, the whole of whose preferential charges are trustee securities. The same applies to the Great Northern. The Great Eastern are chancery stock, which is practically, though not quite, the same thing. I am not sure whether the North British are trustee securities or not—[An HON. MEMBER: "Yes!"]—chancery stock, I suppose. I do not think there is much difference. How on earth is anybody going to arrange the amalgamation of these companies? What I suggest to my hon. Friend is this—I have suggested it to him privately—and to my hon. Friend who sits next to him. I did not meet with much encouragement. I suggested we should not think only of ourselves. [HON. MEMBERS: "Oh!"] The suggestion did not appeal to the Scottish instinct which is so predominant in my two hon. Friends. They very nearly told me—at least I understood the hon. Gentleman (Major Glyn) to say that all he cared about was Scotland, and if he got what he wanted for Scotland everybody else might go hang—

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Major GLYN: What I said was that I did not see why Scottish interests should suffer through a lack of the English companies to understand and appreciate the difficulties of the Scottish railways during the War.

Sir F. BANBURY: My hon. and gallant Friend is becoming a little more reasonable. After all, there is some good sometimes to be obtained from making a speech. If, then, what he says is so, why should not we join together in order to make some arrangement and some voluntary terms of pooling, which could be done, and leave out this question of amalgamation? I think, and I say it in all sincerity, it would have a very great effect in hastening the proceedings on this Bill. If something of the sort could be done, I should, on my part, be willing to consider it. I hope the suggestions I have thrown out will be considered, not only by my Scottish friends, but by the Government. I feel quite certain if they would show some signs of making some important Amendments in this Bill, we should be able to proceed very much more quickly with our deliberations.

Sir HARRY HOPE: Reference has been made by one hon. Gentleman to the action of our Scottish ancestors and a parallel drawn between those far distant times and the action of the Scottish people at the present time. It has been strongly argued that Scotland should not be connected up with the English railways. Some of these arguments were effectively met by the hon. Member for the Richmond Division of Yorkshire (Mr. M. Wilson) when he indicated that the action of the Scottish railways was very largely a question of terms. The right hon. Baronet who has just resumed his seat has also indicated that a system of pooling might be arranged by which connection between Scotland and England could be obtained. That shows that amongst the English railway leaders there is the feeling that the case for our Scottish railway companies is a sound and an unanswerable one. But the question is not one for the railway companies at all: it is a public matter of the utmost importance, both to the people of Scotland and the people of England. This matter has been discussed throughout the length and breadth of Scotland. It has been discussed in every chamber of commerce, at every confer- 66 ence of the great trades, by all those concerned with iron, coal, steel, agriculture; far more than that, it has been discussed in all its bearings in the council chambers of the great municipalities in the City of Glasgow—perhaps the most democratic city in this country—Edinburgh, Aberdeen, Dundee, Inverness, and Paisley—no mean city. In view of all this, I really wonder at the small dimensions of the case put forward on the English side. We Scottish Members know what the opinion of Scotland is on this question. The Scottish people are at our backs. They know the position of affairs in Scotland very well. They are of this unanimous opinion; in fact I do not think any Scottish Member here ever saw the people of Scotland so united and unanimous before on any single question. The people of Scotland know that in that country we have many sparsely populated and isolated districts in which the railway traffic is not great. The traffic in Scotland, in comparison with that of England, is in a ratio of 45 to 85. We hear it said that England will not in any way bear a share of giving to these districts an efficient and good transport service. We immediately reply: Then why should that part of the country served by the North British Railway or that part of the country served by the Glasgow and South Western and Caledonian Railway bear the whole brunt of providing an efficient railway system to these sparsely populated parts of the country? Remember, for one minute, what and where these sparsely populated parts of the country are. They are, of course, very largely in the Highlands and the Western Highlands. In the great North of Scotland territory there is much thinly populated country. The Highland railway line runs through a part of Scotland in which, of course, traffic is not heavy. We have that part of the Caledonian system and that part of the North British system to which bring civilisation and many facilities to the people. Remember what these West Highlands and Highland parts of Scotland have done in the past. Look at the map, and from the south let your glance go up the west coast. You see the territory of the Argyll and Sutherland Highlanders; then the territory of the Seaforths; and if you go further east to the Counties of Aberdeen, Banff, and Elgin, you come to the country of the 67 Gordon Highlanders. You may minimise the value of Scotland to the United Kingdom, but I do not know what the United Kingdom would have done without the men from those countries. It would be a wise policy for the Transport Minister not to look at this question from a sectional point of view. If his reputation is to stand the criticism of the future, it will depend upon whether he views this question from an English point of view or from a national point of view. If he looks at it from a national point of view, he will recognise that it is in the interests of the country to have uniformity of railway rates. We recognise that if Scotland is severed from England the traders of Scotland may not have the same low rates which the traders and the public of England will have. It is not merely the traders of Scotland or the travelling public who might suffer, but many other sections of the community. If the Scottish railways have to bear the whole burden of providing railway facilities to isolated districts, those companies cannot carry on their work with the same efficient management or by the same beneficial method. When I see anyone looking at this question merely from the English point of view, I urge that this is a question of very wide bearing to all sections of the community. The matter has been discussed by the British Chamber of Commerce, an impartial body, and the Chamber has declared that no scheme of grouping would be satisfactory which was not on sound financial lines, and that it would not be in the interests of trade as a whole if the richer railways of Scotland were grouped together and the poorer companies left to take their chance. I ask the Minister of Transport whether he is willing to accept that broader and higher aspect of the case. It has been said that this is merely a question of terms. I can say this: The Scottish Members want only fair and just terms, and, although this Amendment is not a substantive Amendment, and our proposals will come further on, I can assure English Members who wish to safeguard English interests, that if we can get that point settled the Scottish Members will look at Clause 6 in a way which will enable justice to be done to all countries. I appeal to the Committee to consider not merely the railway industry. Although I may be connected 68 with a railway company, I do not ask the Committee to look at this matter from any railway company's point of view. I ask the Committee to bear in mind that the whole of the trade and the welfare of the country depend on our having the best possible system of transport if our people are to be able to compete in international trade. The only way to ensure that is to link up Scotland with England on fair and reasonable terms.

Sir WILLIAM RAEBURN: Naturally there might be confusion in the minds of Members, because we have been talking about grouping, which comes up as an Amendment of ours later, and we have also talked about the exclusion of Scottish railways from the Bill. I shall address myself to the question of grouping, for I am not in favour of leaving Scotland out of the Bill if we can get anything like fair terms. We have been twitted about our seeming departure from the old Scottish tradition of "Scotland for the Scottish." I am not a Scottish Home Ruler, and I do not believe in Scottish Home Rule. We have a Union, and the people of Scotland and England are one.

Mr. MacVEAGH: You annexed England.

Sir W. RAEBURN: I recognise that it seems rather an anomalous position for Scottish Members to ask to be grouped with England. There are several reasons why I should have been rather surprised at England and Scotland wishing to be grouped. If we are grouped, those fine old railway terms, Caledonian and North British, may disappear. It may be that the management will be from London. When I found that not only did the railway companies with one accord insist on grouping, but when I realised the position of the companies if they were left out, and when I knew that the traders of Scotland almost with one voice strongly petitioned for grouping and strongly protested against Scotland being grouped by itself, there was nothing for it but that I should throw in my lot with them. What am I that I should take a different view? I am not a railway director, although I have large interests in many railways both in England and Scotland. I am interested as a trader, and I am connected with one of the largest dock systems in Scotland, which might be injuriously affected if the railways were affected. I look at the 69 question from a public point of view and not from the railway point of view. At first it was said that Scotland was to be grouped longitudinally with the English railways. Then suddenly we were told we were to be grouped, first of all in one group and then in two groups. I do not know what led to the change. It will not do for English Members to spread the fiction that we are going to dip our hands into their pockets. Nothing of the kind. I would be ashamed of my country if it proposed to do anything of the kind. The English companies have taken full advantage of their lower rates compared with the Scottish railways, and they do not mind their people coming up to some of our golf links and taking a day's enjoyment at rates which they would not accord to us if we came to their links. I think we can make a perfectly solvent deal with the English companies. I understand that negotiations are going on. If the North-Eastern Railway or the Great Eastern Railway want to do something, who shall say nay to them? Talk about the Scottish companies desiring grouping because they are in a parlous position! Remember that these Scottish railways were put in a very different position from the English railways in connection with the War. The application of an Eight Hours Act to the railways was arrant nonsense, because the very men who were presumed to benefit by the eight hours are weary of the system already. I do not know what form the present negotiations are taking, but I think we can show a perfectly good account on our part to those railway systems with which we want to be grouped, and I think it will be for them to say whether they are satisfied or not. If they are not satisfied with these proposals, surely some other proposal can be brought forward and dealt with. I think it would be suicidal, not only for Scotland but for the whole nation, if the Scottish companies were prevented from grouping with these English companies. The right hon. Baronet the Member for the City of London (Sir F. Banbury) has mentioned the idea of a pool. I put that to the railway companies weeks ago, and asked, could we not do what we did before the War and pool? I hope the Minister will take up that point. The hon. and gallant Member for East Newcastle (Major Barnes) asked, had a miracle happened to alter the position of the Scottish 70 companies when they were now coming forward and saying their railway systems were solvent? I think the Mover of the Amendment has explained very clearly the change in the position, and even if the railway companies themselves said to-day that their position was not strong, honestly speaking, I should not credit it. Sir Herbert Walker, speaking in regard to the solvency of railways in relation to the reduction of the scale of wages, refers to the position which will arise when wages have automatically come down, and he commends the Bill. He says grouping is going to be an advantage, and that the standardisation of stores, material, etc., will be for the benefit of the country. However much some hon. Members here may differ, I thoroughly agree with that statement, and if we are going to have grouping do not let us leave Scotland by itself. Let us have longitudinal grouping of Scottish lines with English lines. We know in Scotland how much we depend upon our railway system. Anything that injures it will injure the whole country. We are not asking any favour from this country. We want to come in on equal terms, and I think we can show that the position of our railways will entitle us to be grouped with English railways as much as are some of those English lines which are not so strong as the main lines.

Mr. WIGNALL: I have listened with great interest to the speeches made presumably in support of this Amendment, and I have been wondering what they really amount to. Not one single solid argument has been advanced why this Amendment should be carried. There have been plenty of arguments in favour of some other form of Amendment, and many as to the general purpose of the Bill. The hon. Member for Central Edinburgh (Mr. W. Graham) is undoubtedly the best Scottish Member in the House, but even he has proved somewhat of a mystery to me and to many of us. I followed him very closely, and failed to grasp any real argument why we should vote for this Amendment. They say it takes a Scotsman two days to see a joke; evidently the Scottish think it will take us four days to see a joke, for, unless this Amendment is a joke, I do not know what to make of it. We have listened to the battle of the directors and the shareholders. I am neither a director nor a shareholder, but 71 I am one of the travelling public, and the only other interest I am concerned with is the interest of the employés in the railway service. Various suggestions have been made as to sharing this £60,000,000, and I agree with the right hon. Baronet the Member for the City of London (Sir F. Banbury) when he says that any company which pays any portion of this in dividends is committing an offence. I have been very much refreshed also by the same right hon. Gentleman's advocacy of the pool. I wish he had advocated it a little while ago, but converts often come out in Debates in the House of Commons, and it is well that even now he is advocating the pool—for railway companies, of course. As to the other, we will not talk about it.

Sir F. BANBURY: Some of the railway companies, not all of them.

Mr. WIGNALL: So it is only a qualified support he will give even in this case. However, every little bit of good is worth having, and we are grateful for even the small concession the right hon. Baronet is making in this direction. What is bubbling about in my mind—[Laughter]—yes, there are a lot of bubbles, and some of them will be exploded before we have finished—is to discover what is the best course in the interests of the employés of the Scottish railways. Will it serve them better to be cut adrift from the scheme in the Bill and from the amalgamation, and allowed to go upon their own, or will it be better that they should be part and parcel of the scheme? I feel there should be some linking-up and that there should be a continuous service. As one of the travelling public, I feel the importance of that. I heard the right hon. Baronet comparing the railway service of America with the railway service of this country, but, not being a railway director or an expert, I am unable to understand the complexities of the case. I fail to see, however, why we cannot accomplish in this country what they have accomplished in the United States of America. That, however, is apart from the question we are discussing at the moment. The point which concerns me is, What real argument can be adduced for cutting off the Scottish railways? If any argument can be produced to show me that the service will be improved and the employés' inter- 72 ests better safeguarded in that way, I shall be disposed to support it, but such arguments have not been presented yet, and, in their absence, I do not see the wisdom of the course. What our Scottish Friend seemed to say is, "While we do not want this Amendment, we have put it down as a means to an end; as something which gives us an opportunity of discussion." I do not think they really want the Amendment to be carried. I hear them all assent to that, so I have converted the lot of them. I have accomplished some good to-day. When I started speaking they were looking as black as a dark night; now they are like a smiling summer's morn. Speaking as an individual, I am convinced that cutting the railway service of Scotland out of the Bill will be disastrous to the interests of the employés and bad for the travelling public. They are better served by being part of the whole concern, if the system of amalgamation is to be carried out.

Colonel GRETTON: The Committee is in rather an unfortunate position. We all know negotiations are proceeding to bring Scotland into the Bill in another form. This is a very important and weighty question, and it is quite reasonable that these negotiations should proceed. I suggest we have no need to spend our time here making speeches, and that it will be in the general interest to adjourn until we have got concrete proposals put forward. I therefore beg to move, "That the Committee do now adjourn till Tuesday."

The CHAIRMAN: I should like to hear the Mover of the Amendment upon that.

Sir G. YOUNGER: I should myself have proposed such a Motion in a very few minutes, had I not thought it desirable that every Member desirous of speaking should have an opportunity of doing so. This Amendment was only put down in order to raise the very important practical question of longitudinal grouping as it affects Scotland. I am very glad to see there are certain negotiations now proceeding outside, and I hope these will be brought to a happy fruition. I should have asked leave to withdraw and should not have taken a Division, because our object is to keep Scotland in the grouping and not to take it out. This was only a Parliamentary way of raising the point which my hon. Friend the Member for the Forest of Dean (Mr. Wignall) will 73 find is quite an ordinary way of carrying on business. Therefore, I shall be very happy to accept the Motion to Adjourn.

The MINISTER of TRANSPORT (Sir Eric Geddes): May I venture to make this suggestion? If the hon. Baronet could see his way to withdraw the Amendment which we have been discussing now, all the matters he wishes to raise could come in on another Amendment standing in his name further down, and thus we would not waste further time.

Colonel WEDGWOOD: We will not allow him to withdraw.

Sir G. YOUNGER: That is a reasonable proposal. I should not have taken a Division in any case. I shall be prepared to raise the question again, this discussion having been sufficient for the time being.

Sir D. MACLEAN: If this Amendment is withdrawn, I do not see how the discussion can be resumed on Tuesday, because there are Amendments next on the Paper dealing with railways other than light railways, and I think it would be better to keep this open for Tuesday.

The CHAIRMAN: I think the best way will be to adjourn the Debate to-day.

Colonel WEDGWOOD: It seems to me that these negotiations have been going on all the time we have been talking to-day, and that everybody has been talking against time so that these negotiations might be concluded outside. I submit that that is a gross waste of Parliamentary time and that we have been brought here on an entirely false assumption.

Major GLYN: In answer to the hon. and gallant Gentleman who has just spoken, may I say that that was certainly not the intention of Scottish Members. We were painfully aware that a large number of Members were unaware of the truth of the Scottish case, which is not a case for the railway companies but for the whole of Scotland and all interested in Scotland. We therefore felt it our duty to draw attention as strongly as we could to the position as affecting Scotland. This opportunity has been given by this discussion, and this very discussion has been helpful for the negotiations.

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The CHAIRMAN: Before I put the Motion to adjourn, it will be better for me to consult the Committee as to future meetings. My duty as Chairman is to see that the Bill is got through as quickly as possible, but, at the same time, it is my duty to see that all legitimate interests are guarded and Amendments properly discussed. If I could be satisfied in my own mind that there was a general disposition on the part of the Committee to make progress, I think it would relieve the position very much as to future meetings. Unless I have some assurance of that kind, I am afraid we shall have to meet both morning and afternoon. Monday is not a convenient day, but I do not know whether 4 o'clock on Monday would not be convenient for hon. Members.

Mr. STEVENS: We cannot get up from the country in most cases now in time.

The CHAIRMAN: I am the servant of the Committee, and shall do my best in the interests of the Committee and of the Bill. I should like to know what the Minister has to say.

Sir E. GEDDES: I am anxious about the time, and I hope, if the Committee will not sit on Monday—and I understand that it is very inconvenient—they will agree to sit morning and afternoon for three days a week. After all, the vast majority of the Committee and the House, I believe, think a Bill on these lines is essential before we rise. I beg the Committee to give me that amount of help, and let us try to get some sort of Measure through.

Major HILLS: I quite agree with the Minister that we have got to sit for more than a morning sitting only, but if we sit from 11 to 1, are we to sit from 4 to 6 on the same afternoon? [HON. MEMBERS: "2 to 4!"] I would much rather meet at 10, and sit till 1 or half-past 1. I have often proposed that before, and I believe it is the best suggestion, for it leaves Members free in the House in the afternoon; but I cannot pretend I have had any substantial support for it.

Sir F. BANBURY: I think we ought to meet at 10. It is very inconvenient to me, because, unlike some hon. Members, I always sit till the end. I did not get home this morning till 12.30, and therefore it is very inconvenient for me to come 75 down here at 10; but it is much more convenient to come at 10 than to come at 11 and sit till 1, and meet again at 2 and sit till 4. The result of that is that you cannot do anything else during the time that this Committee is meeting except attend to this Committee and the House of Commons. I put aside meetings from 4 till 6, because we really must attend to our duties in the House. It is not our fault that we are short of time. The Minister was appointed a year and a half ago, and he could have brought in his Bill long before now. At great personal inconvenience to myself, I am prepared to come at 10 and sit till 1 on Tuesday, Wednesday, and Thursday. I do not know whether the right hon. Gentleman will believe me, but it is really in his own interest that he should more or less meet the convenience of the Committee on this point. He is more likely to get the Bill through quickly.

Sir G. YOUNGER: I think we could do far more business sitting from 10 to 1.30.

Colonel WEDGWOOD: I would far sooner meet at 10 and sit till 1. I think the request to sit till 1.30 comes with a very bad grace from Members who have deliberately obstructed proceedings this morning, and I think this demand for excessive time for discussion of this Bill comes curiously from a Government which has deliberately dragged out the time of the Debate this morning in order to carry on discussions outside.

Lieut.-Colonel MURRAY: Why dock an hour off each day? If we sat from 11 to 1 and from 2 to 4, we should get four hours each day.

Sir F. BANBURY: You must do other things as well.

Sir E. GEDDES: I hope my right hon. Friend will not think for a moment that I am desirous of inconveniencing the Committee. That is the last thing I would wish, but there is a practical objection to sitting at 10. There are masses of Amendments, and the Department cannot get them until early in the morning. If the Committee sits at 10—and personally that would suit me better—we cannot be ready with the Amendments put down the night before. Each Mem- 76 ber has his Amendments in which he is particularly interested, but the Department has to have them all, and it would be very difficult indeed intelligently to follow the work if we sat at 10. At the same time, pressing the Committee as I am for greater time than they are giving, I would not let that stand in the way. But if the Committee decided to sit at 10, I should ask them to realise that we cannot have dealt with the Amendments put down the night before. All the same, 10 to 1.30 is not giving us the fullest possible time, and I will urge the Committee, on this important Bill, which I have not delayed intentionally—I think on the whole I have saved time by not bringing it in earlier—to give me four hours a day, namely, from 11 to 1 and from 2 to 4 three days a week.

Mr. INSKIP: I hope the Committee will meet at ten, and I think we should do more work if we sat till 1.30 than by sitting from 11 to 1 and 2 to 4.

Sir C. WARNER: I think we had better have a Motion that we should sit from 11 to 1 and 2 to 4 three days a week.

Sir F. BANBURY: The Minister will, I believe, agree to try 10.30 to 1.30.

Mr. DOYLE: I suggest that 4 to 6 would be a more convenient time.

HON. MEMBERS: No!

The CHAIRMAN: I must decide this as Chairman, and I suggest that, at all events, for next Tuesday the Committee should meet at 10.30 and sit till 1.30. I cannot take a division on it, but I will ask those in favour of adjourning now till next Tuesday at 10.30 a.m. to hold up their hands.

A show of hands having been taken,

The CHAIRMAN: The Motion is carried by a large majority.

Major HILLS: We could not get copies of the OFFICIAL REPORT of the proceedings of this Committee in sufficient quantities early this morning. Only 25 were in the Vote Office, and they were very soon exhausted. Perhaps you, Mr. Chairman, will say a word about it?

Committee adjourned at Eighteen Minutes before One o'Clock till Tuesday, 14th June, at 10.30 a.m.

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THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE.

Roberts, Sir Samuel (Chairman)

Bagley, Captain

Banbury, Sir Frederick

Barnes, Mr. George

Barnes, Major

Betterton, Mr.

Blake, Sir Francis

Carter, Mr. William

Davies, Mr. Alfred Thomas

Davies, Sir Joseph

Doyle, Mr. Grattan

Elveden, Viscount

Evans, Mr.

Fell, Sir Arthur

Gange, Mr.

Gardiner, Mr. James

Geddes, Sir Eric

Glyn, Major

Graham, Mr. William

Green, Mr. Frederick

Gretton, Colonel

Hall, Rear-Admiral Sir Reginald

Hannon, Mr.

Hills, Major

Hope, Sir Harry

Inskip, Mr.

Jackson, Lieut.-Colonel

James, Liuet.-Colonel

Maclean, Sir Donald

MacVeagh, Mr.

Mildmay, Colonel

Morgan, Major Watts

Morison, Mr.

Munro, Mr.

Murray, Lieut.-Colonel Arthur

Murray, Mr. John

Myers, Mr.

Nall, Lieut.-Colonel

Neal, Mr.

Nield, Sir Herbert

Ormsby-Gore, Mr.

Raeburn, Sir William

Renwick, Sir George

Royce, Mr.

Smithers, Sir Alfred

Spencer, Mr.

Stevens, Mr. Marshall

Taylor, Mr.

Thomson, Mr. Trevelyan

Ward, Colonel Lambert

Warner, Sir Courtenay

Waterson, Mr.

Wedgwood, Colonel

Wignall, Mr.

Wilson, Mr. James

Wilson, Mr. Murrough

Wilson, Mr. Tyson

Wood, Major Mackenzie

Young, Mr. Robert

Younger, Sir George

78