East Indian Railway: 1906 History of the EIR - Chapter XV
Note: This is a sub-section of the East Indian Railway
The History of the East Indian Railway by George Huddleston. Published 1906 by Tracker, Spins and Co
CHAPTER XV. COAL RATES.
IT will be remembered that in 1889 the Government of India claimed that coal, carried by the East Indian Railway Company, for the use of State Railways, should be charged at a uniform rate of 1-10th pie per maund per mile, and when General Strachey visited India this claim was very fully investigated by him. He examined the subject from a statistical point of view, and proved that there were very grave misconceptions as to the cost of carrying traffic by railway, and that the actual cost of transport, so far from being as low as 1/10th pie per maund per mile was then really about half-way between 1/5th and 1/6th pie.
But while this was his estimate of the average cost of carriage of all classes of goods, General Strachey recognised that the transport of coal justified the demand for a lower rate than the average and proposed a scale, varying according to distance, of 1/3rd to 1/8th pie per maund per mile, with a rebate of 5 per cent on the total freight charges, whenever more than 1.5 lakh of maunds were carried in any half-year. General Strachey, in making this proposal, firmly deprecated the Government suggestion that State Railways should be charged a lower rate than others. To quote his own words: "there is no sufficient ground for treating railways worked by State Agency differently from those worked by Companies."
Such was the position in the beginning of 1890, and it did not take long for the Government to recognise the soundness of the arguments put forward. The claim to the 1/10th pie rate was given up, and it was admitted that all railways, whether State or otherwise, should be treated alike. But during the discussion further developments arose, and the outcome was that the whole question of the coal tariff was placed before General Strachey, as Chairman of the East Indian Railway, and General Williams, then Deputy Government Director for Indian Guaranteed Railways.
These two jointly drew up a scale of charges, and recommended that they should apply to all customers alike, whether railway administrations in the hands of the Government, or Companies, manufacturing firms or exporters or other traders, and the Secretary of State, having accepted them, requested the Government of India to take the necessary steps to put them in force as early as possible.
Briefly stated the proposed tariff was as follows
(a) For all stations up to 400 miles 0.15 pie per maund per mile.
(b) For all stations over 400 miles, for the first 400 miles according to clause (a), for distances in excess 0.10 pie per maund per mile.
These rates were subject to a scale of rebates for large consignments, and certain rules were detailed as to routing and so forth. In accepting them the Board of Directors of the East Indian Railway wrote to the Secretary of State, on the 4th August 1891, in the following terms:—
"The Board readily assent to the proposals in question and trust that the important concessions to the public in respect of the coal tariff, which they embody, will be productive of much general advantage.
"The Board are fully impressed with the great importance to all Indian interests of increasing the facilities for the supply of cheap coal, and they look forward with much hopefulness to the early establishment of an export traffic of coal from Calcutta, the value of which it would be almost impossible to exaggerate, not only as regards the coal owners, but to all Indian industries, and they trust that their endeavours to realize such a result may receive the support of the Secretary of State and the Government of India.
"It will be the desire of the Board to carry out to the fullest extent, that experience may chew to be reasonable and practicable, the reduction in the charges for the transport of coal over the undertaking, and they quite recognise that the tariff, which it is now proposed to adopt, will be subject to reconsideration should this hereafter be found desirable."
Thus was this all important subject settled, not in India but in London, not on the narrow lines suggested by the Government of India, but on the broad principle that there should be no differential treatment of the customers of a railway, or, in other words, that a rate given to one should equally apply to all. The general effect of the new arrangement was to give a substantial reduction in the rates for all distances, amounting to about 15 per cent, and this required a corresponding increase of traffic to maintain the revenue at its former level, but at the time no uneasiness was felt, for, as the Chairman remarked, "the growth of the coal traffic leaves no room for doubting the early realization of the requisite increase and gives reasonable ground for expecting still further and more satisfactory expansion in the future."
That the expectations of the Home Board in respect to the growth of the coal traffic were fully realized is proved in a few words. In 1891 the freight earnings of the East Indian Railway from coal were little more than 63 lakhs of rupees, in the year 1896 they had risen to over 97 lakhs, and in 1901 to over 180 lakhs. This enormous expansion of traffic will be dealt with more fully in another chapter, suffice to say here that the scale of charges, drawn up by Generals Strachey and Williams in 1891 remained in force without material alteration for many years and was accepted, not only by the East Indian, but generally speaking by all the railways in India.
Naturally, as time went on and experience was gained of the practical working of the new coal rates, certain modifications were found desirable, but these, whether in the rules or in the rates, were all in the nature of concessions to the trade, notably an additional rebate of 10 per cent on coal exported by sea, together with certain other changes of rule introduced in 1895; but in the main the 1891 scale remained in force until 1902 and during this period the traffic developed more rapidly than the facilities required to deal with it could be introduced.
As early as 1893 there was under serious consideration a proposal to construct a short branch line, from Bally Station to a point on the river just below the Botanical Gardens, where it was thought that a coal jetty equipped with mechanical loading appliances would greatly facilitate the export trade, but like the Luff Point Scheme, which followed many years later, the idea was abandoned, after it had got as far as being recommended to the Government. Proposals of this nature and proposals actually carried out, with the object of improving facilities for dealing with the general expansion of traffic, and particularly of the coal trade, hardly come within the province of this chapter, and we may pass on to the next great change in the coal tariff inaugurated by General Sir Richard Strachey in 1902. It must not, however, be supposed that this last change was suddenly adopted, as some have thought, as a protective measure, because of the entry of the Bengal-Nagpur Railway into the Jherriah field; on the contrary, it had been contemplated for many years before that time, but various considerations necessitated delay; among these we need only mention the shortness of wagon stock, congestion of traffic on the running lines and inadequate shipping facilities.
During the whole period in which the 1891 tariff was in force the growth of the coal traffic was most closely watched, and, as early as 1896, further concessions were mooted, though it had not then been established that any grounds existed for reductions; on the contrary, the continued expansion of the trade during the previous five years supported an opposite view. Various aspects of the question were discussed from time to time, but, although minor concessions were granted, as for instance the reduction in the weight required to be put into wagons in order to obtain the "full wagon" rates, any substantial modification of the tariff had to be deferred. As a matter of fact, in 1898, the Board proposed, to their Agent in India, certain material reductions in charges from the Jherriah and Toposi branches, in order to place the collieries in those fields in a better position than they were, compared with fields nearer Calcutta, but these also were deferred because there was a rise in the price of coal, and the Jherriah field, as evidenced by the traffic carried, was in no way hampered by the charges in force. Beyond this, Colonel Gardiner, the then Agent of the Company, feared that to give a large reduction to the Jherriah coal-field, except as a part of a complete scheme, would raise an outcry from collieries lower down the line.
In June 1902, however, the Board of Directors revealed a complete scheme of revision, and in doing so pointed out that they had had the question before them since 1898, remarking that "until now circumstances have not admitted of action being taken in the direction contemplated." The tariff introduced in 1891 was reviewed, and it was shewn that, with the modifications from time to time introduced, it had been consistent with a great development of the trade. The rebate system was commented upon, and the opinion expressed that, so far as the ordinary coal traffic was concerned, it was not necessary or convenient and should not be perpetuated. Its abolition would benefit small consignors. But, for a variety of reasons, the special treatment of export coal was held to be established and a special rebate on such coal would therefore be continued.
The Board's proposal was to introduce the following tariff for coal in full wagon loads:—
- For distances up to 75 miles inclusive - 0.14 pie per maund per mile.
- Plus for any distance in excess of 75 miles and up to 200 miles inclusive - 0.12 pie per maund per mile.
- Plus for any distance in excess of 200 miles and up to 450 miles inclusive - 0.10 pie per maund per mile.
- Plus for any distance in excess of 450 miles and up to 1,000 miles inclusive - 0.09 pie per maund per mile.
A rebate of 20 per cent to be allowed on all coal exported, no other rebates being allowed.
These proposals were at once adopted, although it was estimated that the reductions involved a sacrifice of about 20 lakhs of rupees per annum. The benefit to the trade was as fairly distributed as possible to all consumers; great encouragement was given to long lead traffic and to the export trade, while in no case did the withdrawal of rebate on inland traffic cause hardship. On the contrary each consignor got the equivalent or more at the time of despatch, instead of several months afterwards, and the inconvenience of calculating rebate dues was at once put an end to.
The nicety of the calculations involved in introducing this revision of the coal tariff, its completeness and general suitability were entirely due to General Sir Richard Strachey, by whose hand the scheme was drawn up, and it seems evident from the trial already given to it that this tariff has proved an undoubted success.
In his address to the shareholders on the traffic of the first half of 1903, Sir Richard Strachey referred to this matter in the following terms:—
"I may be excused for taking this opportunity for formally repudiating the suggestion, recently made by the Agent of the Bengal-Nagpur Railway Company, that the introduction of the new coal tariff on the East Indian Railway last year was designed to prejudice the development of the coal traffic of the Bengal-Nagpur line. The suggestion appears to me to be so absurd on the face of it as hardly to have called for notice, but the boldness of attributing to the Board of this Company, the deliberate intention of sacrificing, for such an object, receipts amounting to some 20 lakhs of rupees in the year, is such, that persons having no knowledge of the facts might not unreasonably suppose that the suggestion could not have been made, unless it were based on some ground of fact. I therefore have thought it right to refer to the matter. The revised tariff, which was adopted with the objects I have mentioned, had the approval of the Government of India. The correspondence has been recently published in India, and will show that there was no sort of foundation for the imputation to which I have referred, which was put forward as evidence in relation to the project for establishing an export coaling station on the Hooghly, below Calcutta, with the merits of which, the motives that led to the reduced charges for transport on the East Indian Railway, could have no possible connection"
Recently a further scheme of reduced rates for coal has come under consideration, but it is hoped that before it is generally introduced the question of wagon stock, in which to carry any large accession of traffic, will not be lost sight of. If the rates are reduced before the railways are ready with a considerable increase to their facilities, there will be no benefit to the trade but rather the reverse. At the present time more wagons are in coal than in all the rest of the traffic of the East Indian Railway put together, that is to say, more wagons are loaded every day in the colliery district alone, than in all the other districts of the line taken together, and yet the railway is short of requirements.
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