Canadian Housing Bubble Not Happening

There was a very bad headline article picked up by the media today. A left wing group trying to make a name for it self came out with a 1st graders report on a potential housing bubble if rate rise sharply. That is the entire basis of the article. The facts are that the CD howe institue and CMHC have both not predicted a bubble. The facts are that we have seen mortgage rates go in the opposite direction, they are the best they have been and going even lower. The GDP in Canada has slowed, forecast is for a pause in the prime rate increases. We never had the US style mortgages in Canada. In fact we only had subprime lenders in canada for about 18 months before they were shut down and no longer doing any business in canada. Those mortgage repersent only about 5% of the total mortgage market. Fact RBC was just voted the 10th safeest bank in the world. Canada has a strong, safe banks with the best lending practices in the world. The housing market is balanincg to a healthy buyers market which is good for everyone. Take a breath, read past the headlines for the real truth.

The Accommodation of Smokers on the London and South Western Railway

While it is right to study the British railway industry in isolation, it should never be forgotten that its importance to Victorian society means that it can be held up as a mirror to it at times. For example, some railway companies in the late Victorian period encouraged the development of the temperance movement amongst their employees. This was following the nation-wide rise of the temperance movement. Further, before World War One there was an expansion of education and many in society saw it as a means of social improvement. Subsequently, the railway companies set up education courses for their staff to take advantage of the pro-education feeling in the nation and develop better employees. Lastly, in the 1990s smoking gradually became socially less acceptable, and as such by 2000 it was banned on all railway journeys. This was followed in July 2007 by its prohibition anywhere within railway premises. This change of the law was much to consternation of some of my friends.

I once suggested to one of my friends who smoked that he should actually write a history of smoking on Britain’s railways. While he had never complained about the ban on smoking within railway carriages, he has taken issue with the fact that he cannot smoke on platforms as they are not covered. He didn’t warm to the idea, and as such no work has been done on this subject. Indeed for this blog entry I thought I might give a short history of how the London and South Western Railway approached the issue of smoking on its trains and at its stations. The information has come from the various copies of the company’s rule books, appendices to the working timetables and bylaws that I have.

What surprised me when looking for rules on smoking in the documents, is that the 2007 law has returned the status of smoking on railway premises to its original state. A London and South Western Railway rule book from 1845 states that:

‘Smoking is strictly prohibited both in the carriages, and in the company’s stations. Every person smoking in a carriage or station is hereby subjected to a penalty not exceeding forty shillings; and every person persisting in smoking in a carriage or station, after being warned to desist by the Guard in charge of the train, or any officer of the company, shall, in addition to incurring a penalty not exceeding forty shillings be immediately, or, if travelling, at the first opportunity, be removed from the Company’s premises.’

So, smoking was banned everywhere within the railway company and the nuisance aspect of the habit comes through loud and clear. This is primarily as it is only later in the century that smoking became cheaper and accessible to a greater proportion of the population. As such, it was probably only been the first class passengers that could have afforded to smoke. This fact is reinforced by the hefty nature of the maximum fine, forty shillings, which would have been well beyond a week’s salary for many individuals. A low paid L&SWR clerk at the time earned approximately 19 shillings a week, a well-paid clerk earned double this. This indicates that even for the middle classes the fine would have been a great burden. Also, today the fine would be the equivalent of paying a maximum £161. Therefore, this suggests that it was only the richer end of society that were smoking, and that the fine was tailored accordingly.

This regulation was in place for many years as it was replicated word for word in the company’s 1864 staff rule book. The first sign of a change is found in an 1884 staff rule book as follows:

‘7. Every person smoking in any shed or covered platform of a station, or in any building of the company, or in any carriage or compartment not specifically provided for the purpose, is hereby subjected to a penalty not exceeding forty shillings. The company’s officers and servants are required to take the necessary steps to enforce obedience to this bye-law; and any person offending against it is liable, in addition to incurring the penalty above mentions, to be summarily removed, at the first opportunity, or from the company’s premises.’

It is uncertain what year that the L&SWR allowed smoking in some carriages, however I suspect the change occurred in the early 1870s. [Ed. I was helpfully informed by Jeremy (see comment below) that the railway companies were compelled by the 1868 Regulation of Railways Act to provide smoking compartments in all passenger trains. I have posted the rule in the comments section below.] The change came because smoking as a habit was becoming far more widespread due to the advent of the cigarette and the lowering of the price of tobacco. Therefore, the company must have felt obliged to provide provision for the increased numbers of customers who smoked, as it would be unseemly not to do so. This said, because of the harsh tone and strictness of the rule, it would seem to suggest that the company was merely accommodating the rise in the numbers of smokers who wished to travel; and there is no indication that it was seeking to encourage the practice. One transgression would be all it took to land you with a fine and removal from the premises.

Additionally, it should be noted that the L&SWR were able to make this change at the time as larger coaches with a greater number of compartments were being introduced. Subsequently, it was easier for company officials to designate particular compartments for smokers without disruption to other people’s journeys. Thus, the introduction of the smoking compartment was also aided by the advancement of railway design.

The provision of smoking compartments on the L&SWR was, therefore, set in stone by the 1880s because of these factors. They would be present on British railways until the 1990s. However, what changed around the compartments were the rules for governing how the railway employees should deal with those passengers who transgressed by smoking outside of them. For the next change in attitude we have to move forward to the L&SWR’s Bye-laws of 1906 which stated that:

’16. No person shall smoke in any railway carriage or compartment thereof not specially provided for smoking; or in or upon any part of the company’s premises where smoking is expressly prohibited by the Company; and no person shall smoke elsewhere within the Company’s premises if requested by any servant or agent of the company not to do so. Any person infringing or not observing this by-law and regulation shall be liable to the penalty prescribed by By-law No. 1; and any person who persists in so offending after being warned by any passenger to servant or agent of the company to desist, and fails to quit such carriage, compartment, or place immediately upon request by any servant or agent of the company, may, without prejudice to any such penalty be removed therefrom, or from the company’s premises, by or under the direct of any servant or agent.’

This was clearly a change in tone. The rules of 1845, 1864 and 1884, were very direct, strongly worded and the staff were to take the harshest measures to deal with those who broke them. While the ruling presented here is essentially the same as the 1884 one, the wording of this bylaw essentially instructs passengers to be warned that if they inappropriately smoked it may possibly land them with a fine (still up to 40 shillings). It is much less strict than earlier regulations.

What is also interesting is that at the same time the onus was on the staff to provide enough smoking compartments for those who required them. Rule No. 195 in the 1904 and 1912 L&SWR staff rule books stated that ‘Guards must, before starting, see that they have a sufficient number of compartments reserved for smokers...’ Thus, having enough provision for smokers is the responsibility of the guard, and by default the railway company. This demonstrated that no longer were smokers to be just accommodated by the L&SWR staff, as before, but that they were to be expected as passengers. This aligns well with the new, less harsh, tone of the bylaw of 1906. Because by the early 19^th century was smoking was a universal social activity, both the bylaw and the rule book indicate that the L&SWR directors and managers were obviously far more positive about those who chose to do it on the company’s premises.

As a postscript, in the 1934 Southern Railway (which took over the L&SWR’s territory in 1923) appendix to the working timetable, it shows how far railway companies’ attitudes had changed since the 1840s. It stated that:

‘Any person reported by a passenger, or seen to be smoking in a non-smoking compartment, must be politely informed that this is a contravention of one of the Company’s Bye-laws (No. 17 in the public timetable); and the passenger must be requested to desist from smoking or to change into a smoking compartment. Failing compliance, the name and address of the offending passenger must be obtained and the circumstance reported to the Divisional Superintendent.’

Thus, for those who smoked outside the designated compartments the Southern Railway imposed no fines and there was no ejection of the offender from company premises. Further, the tone of the instruction seems quite weak willed in comparison with earlier examples. The most that could happen is that those who transgressed the bylaw may have gotten a stern letter from the Divisional Superintendent (given gave their name and address to the company’s staff in the first place). By this time smoking was not perceived of as much of a nuisance as it had been in the past, and as such there was a far more relaxed attitude to those passengers who chose to break the rules. Therefore, the Southern Railway’s attitude was clearly shaped by smoking’s almost universal acceptance in society at the time.

Overall, the L&SWR’ rules, accommodations and attitudes to passengers smoking changed in line with the general shift away from it being the preserve of the rich, towards its almost universal acceptance within society. However, what is also important to note that the nuisance aspect of smoking, that some people do not want to inhale others’ smoke, never really went away. Smokers and non-smokers were always segregated. Indeed, as the evidence shows, railway companies always defended the rights of non-smokers to continue their journeys without being affected by those who wished to smoke, despite the habit becoming socially more acceptable over the period of this study.

Canada Mortgage Business Changing?

Having been in the Canadian mortgage broker business for 18 year now, one thing is certain change. This business is always in a state of change and will be. The choice is up to you on how to react and win. The lenders/banks will always be wanting us to be out looking for new business that they can have and call there own. If you have not been looking after your clients in a way that is adding tremendous value to them, there will be a tougher road ahead. More then ever i see the banks changing the value proposition to the customers. We need to be learning everyday and willing to change out thought patterns everyday to win. The mortgage battle is highly competitive and will be getting even more competitive. What are you willing to do today to add value to your customers?

How Will You Respond to Canada Mortgage Market Changes?

How's Your Hot Dog Business Doing These Days?
From Dreyer Group Mortgages




Good Morning,
I came across this little story and wanted to share it with you. It is amazing how our attitude truly determines our outcome. In addition, I have included some short points on how to thrive during a downturned market. I hope you find this information valuable.
If you have any clients you would like me to talk to regarding the current rate changes (whether they need mortgage financing or not), please feel free to pass along my number, I would be happy to help any way I can.
How's your hot dog business doing these days?
"A man sold hot dogs at the side of the road.. He was proud of his hot dogs and made a good deal of money selling his hot dogs. Every day, he would put out his signs, go out and yell from his hot dog stand, "Come and get your hot dogs! The best hot dogs in town!" And people came from all over to eat his hot dogs. He would have lines of people all day long. He loved selling hot dogs and believed they were delicious, fresh, and the best. He talked to his patrons and was grateful for them. And they loved this man.

Anyway, the man saved enough money to send his son to college and one day, the son came home and asked his dad what he was doing during the day. The man said that he was still selling hot dogs and business was booming. The son looked at him and said, "Daddy, what's the matter with you? Don't you know we're in a recession? No one is going to buy hot dogs. I can’t believe you're wasting your time and money trying to sell hot dogs. You need to cut your losses and close that stand."

Well, the man believed his son; after all his son was educated, in college, and certainly knew more than he. The man became a bit despondent, but did not want to close his hot dog stand because people came to him every day. They depended on him for their hot dogs. He continued to go to his hot dog stand, but he no longer put out his signs nor yelled about his great hot dogs; he did not talk and laugh with his patrons as much. "We're in a recession," he thought, "What is there to laugh about?" Little by little, the patrons stopped coming and the man sold fewer and fewer hot dogs. Then no one came and he had to close his hot dog stand. He said, "Well, my son was right."

Attitude is often times more important than fact. The man did not know that the country was in a recession and, therefore, continued to behave in a way which generated a profitable business. Once his attitude changed; his behaviour changed and then his business changed.


Five Simple Steps for Thriving through a Downturned Market

1. Get back to basics

Now is the best time to " Re-group, re-organize and re-view. Revisit the fundamentals that have already made your business a success. Revise your mission statement to stand for what your business is really all about. Re-organize processes to ensure you are as efficient as you can be. Revisit your team structure, salaries and model. Make changes to ensure you are on track to not only survive a downturned market but you have set yourself up to thrive. Practice the "Rule of Five": Every day, do five things that will move you toward your goals.

2. Clean house

This is a great time to clean up your messes. Now, when sales are slow, finish anything that is incomplete. De-clutter your office and organize your files. Make phone calls to bridge any disconnects that may have occurred between you and your customers. Magnify your success energy by focusing on what you want to happen, not what you are experiencing.

3. Focus on your connections and relationships

Now is the perfect time to forge new connections and strengthen long-standing relationships. Practice uncommon appreciation. Review your agreements with clients and confirm your commitment to them. Speak first and with integrity. Be impeccable in your communication. Have more one-on-one meetings instead of over the phone. Supplement emails with handwritten cards and notes. Be seen out in the community.

4.. Be smart with your money

Now is the natural time for small business owners and professionals to review their financials. Take a look at your cash flow. Collect on any outstanding accounts. Spend wisely and make cuts where needed. Make sure your bills are paid. Above all else, give more. Keep your energy flowing by finding a way to serve others – they will remember how much help you were when they need it most and reward you with business in the future.

5. Step back

Downturned times are ideal to practice stepping back in order to keep things in perspective. Instead of energetically aligning with all the fears, doubts, and anxieties associated with an uncertain market, step back and move to higher ground. Don't get caught up in others' panic. Soar above it all to a place where clarity can be gained and perspective maintained. While you're at it, take others with you. "When you lift up others, they will lift up you."

No one likes feeling uncertain about the future. Yet nothing is ever certain, whether or not we're in a good or bad market. By taking decisive action now, you can positively influence your future. When these time end, and they will, don't let your company be one that just managed to survive, let your company be the one that thrived! Excerpts from Jack Canfield Style
Your Friend in the Mortgage Business,
Jared Dreyer 604 649-5991

The Eras of Early Railway Managers

I have been writing my Podcast script and I have to say that it is going well. I suppose the natural upshot of thinking about my work so often is that I do develop new theories and ideas about it. At the end of the day this makes it all my blogging work worthwhile. My first Podcast will be on senior railway managers of the British railway industry between 1825 and 1870. A useful by-product of this work is that it led me to think about how who was a senior manager changed.

Now, I have talked in my blog before about how very early senior managers joined the railways after careers in three main areas of employment, the military, transport and engineering. Yet, what has struck me is that there were different periods when these types of managers occupied the most senior positions within companies. Engineers occupied the majority of senior posts when the industry was emerging. However, by the late 1840s they were then followed by the ex-military and pre-railway era transport men (such as canal managers and stagecoach proprietors) who took the positions over and rose in the hierarchy. Further, this ‘mixed-bag’ of managers was in turn usurped as ‘career managers’ came to the fore in the 1850s and 60s, most of whom started as clerks.

At the outset of the railways, engineers were the railway companies’ logical choices for the most senior managerial posts. They were educated, on-site and knew how to manage large numbers of men. However, as the railways moved away from requiring technical management, they turned increasingly to individuals who had experience of moving goods and supplies, and hence why those who had been in military or transport careers were employed.

However, this change was not principally because the services of engineers were no longer required. Many senior engineers stayed on in the railways to manage Engineering or Locomotive departments and developed long careers in the railways. The driving force behind the rise of senior managers who had had transport or military careers was the rise of the Traffic Departments themselves, which they administered. As the railway lines were completed attention turned increasingly to the operation of the line. Subsequently, this centralised the role of the movement of goods and passengers within railway company operations.

As such, this change meant that the needs of Traffic Departments increasingly determined the actions of the Locomotive and Engineering Departments. After all, if a Traffic Department need more locomotives its head would turn to the Locomotive Superintendent to remedy the situation. If the Traffic Department needed more sidings or an extra crane, the Traffic Superintendent would ask the Chief Engineer to oblige. Therefore, the Traffic Managers became central to company policy and the way that the strategic thinking developed (while of course under the gaze of the directors).

Subsequently, it is unsurprising that that in the 1840s and 50s the engineers, men with specialist skills, became increasingly restricted to careers within Engineering and Locomotive departments. However, it was the ex-military and pre-railway era transport men that benefitted, becoming senior managers within the industry in large numbers. Yet, these men were essentially usurped from this position by another unique group of individuals in the labour market, the clerks. This group had, by the end of the century, generated most of the country’s senior railway managers.

In the early days of the railway industry, clerks had never really been posted to any positions higher than ‘station clerks’ (early station masters) or to regular clerical posts. However, this move created an educated group of individuals, within all departments, that were all the time gathering experience of railway operations. Thus, as the companies grew they found that they had larger and larger numbers of individuals working for them that had experience of traffic management. This was something that none of their predecessors possessed, they having only had ‘transferrable skills’ from the military or the pre-railway transport industry. Thus, the companies increasingly did not look to external sources for managers. The result was that by the late 1850s and early 1860s internal labour markets fed more and more clerks up the company hierarchy. Subsequently, senior railway managers very rarely came from external sources, and almost certainly had begun their careers as lowly clerks. This was, in reality, a take-over by stealth.

This is only a brief survey of the ideas banging about my head, but suffice to say that they will be developed soon. I should also point out that while I have talked in absolutist terms in this post about the different eras, many of the lines between the groups of managers were very blurred in the Victorian period. More research needs to be done on this topic to really define more closley the changes in railway senior management.

Railway linkages in Railway Directorship

I thought I'd return to the work that I am currently doing on the directorships that the board members of the London and South Western Railway (L&SWR) held that were beyond the company. I think their may have been some misunderstanding over my post a few days ago on this topic. The directors of the L&SWR did sit on the boards of other railway companies before 1914. The figures for the L&SWR board members' external railway directorships are as follows:-

1880 - 2 directorships, held by 2 men (Average = 1/director)

1885 - 6 directorships, held by 3 men (Average = 2/director)

1890 - 7 directorships, held by 5 men (Average = 1.4/director)

1895 - 5 directorships, held by 4 men (Average = 1.25/director)

1900 - 2 directorships, held by 2 men (Average = 1/director)

1905 - 1 directorship, held by 1 man (Average = 1 director)

1910 - None

1914 - None

Firstly, the evidence suggests that the number of interlocking directorships with other railways were always small amongst L&SWR directors. Although, the fact that throughout this period the company only had 12 directors, clearly would have influenced this fact. Additionally, of the seven L&SWR board members that were on other railway company boards, only three, A.F. Govett, Arthur E. Guest and Capitan James Johnston, had membership of more than one railway company board. There can also be observed a trend in the figures of declining membership of other railway companies' boards by L&SWR directors, and after 1914 there were none.

I am uncertain why this may be so. However it has been posited by Geoffrey Channon that as the corporate economy developed, as more large business opened up their boards to new directors, railway company boards became less appealing. For most of the 19th century railways had been the only businesses where individuals could obtain directorships. Yet, as the economy grew, the increasing number of other businesses became more appealing for potential directors, and thus, fewer individuals sat on railway company boards.

What the evidence above doesn't show is that slightly more of L&SWR board member's external railway directorships were not on British railway company boards. In total, across all years between 1880 and 1914, L&SWR directors had positions on 11 railway company boards. Only 5 of these directorships were within British railway companies (the Whitby Redcar and Middlesbrough Railway, the Taff Vale Railway, the Cardiff, Penarth and Barry Junction Railway, the North Staffordshire Railway and the Great Northern and City.) However, the remaining 6 directorships were on the boards of railway companies operating overseas, with one in Spain (the Olot and Girona Railway), one in Mexico (the Mexico Southern Railway), two in Brazil (the Donna Thereza Christina and the Southern Brazilian Rio Grande Do Sul Railway) and two in India (the Pondicheri Railway and the South Indian Railway)

This possibly indicates that these directors ordinarily did not choose railway company directorships because of any immediate advantage for the L&SWR. The locations of these railways are so diverse that it is possible that the directors were simply on the board for their own advantage. Indeed, this borne out by the fact that the British railway boards that they sat on were firstly not linked with the L&SWR at any point physically, but also that they were generally small railways, insignificant in the highly developed railway industry. Thus, they would have little, if any affect on the L&SWR's business.

Increased Fares Means Increased Transport Poverty

While tackling the deficit, the coalition government has also wedded itself to the idea of decreasing the divide between rich and poor and increasing social mobility. Yesterday, on the 100 day anniversary of the coalition partnership, Nick Clegg said, "Our determination to fix the deficit is matched by our determination to create a more socially mobile society." Yet, the government still aspires to do this on the backdrop of savage cuts in every area from health to defence. While I am sure that they understand the inherent contradiction in trying to improve the lives of Britain’s poorest, while at the same time cutting their benefits and employment opportunities, I don’t think, with the level of cuts proposed, it can be done.

I am not alone though and the coalition’s proposed policies have been frequently attacked from the left, right and all those in between. There is an increasing body of comment and detailed statistical analysis in the blogosphere and elsewhere, that shows that if anything the proposed cuts will only serve to increase divisions in Britain between rich and poor. Kevin Meagher at Left Foot Forward recently quoted Danny Dorling, professor of Human Geography at Sheffield University, as saying that “Britain is a country pulling itself apart” along a North-South rich-poor divide (To be found HERE)Meagher went on to argue that the removal of Regional Development Agencies and their replacement with Local Economic Partnerships, will only exacerbate this divide as the latter will not have the scope because of their smaller sze to make an impact on the national economic imbalance. Indeed, he again quotes Dorling as saying that “The recession is exacerbating those [existing] differences and I suspect the dividing line will also move southwards as the government’s cuts take effect.”

Additionally, the TUC released yesterday a list that showed that cuts in education, health, housing, welfare and social care have the greatest impact on the poorest in our society. The 100 cuts that they can be found HERE. Furthermore, cuts in government run organisations and local authorities will disproportionately affect people above the north-south divide, as in these regions government is the largest employer. Therefore, the result is that the inevitable redundancies may lower many individual’s and family’s standards of living, and may even force them into poverty. These two examples are simply a small portion of the attacks on the government’s claims of fairness. Overall, my assessment is that the coalition government cannot really talk about ‘fairness’ and ‘social mobility’ when it is demonstrably true that their policies so far will only serve to breed inequality.

So what does this have to do with the railways? I have always been an advocate of the idea that there is a concept of ‘transport poverty,’ a divide between richer and poorer travellers. Many people are simply priced out of rail travel, and choose to make their journeys solely by car, because of their financial positions. This, therefore, has the obvious negative effects on the environment and the congestion on the roads, but it also disproportionately affects the poorest in our society. It was for this reason that I was pleased to see that in the Lib Dem manifesto there was a commitment to lowing fares. This was, however, watered down in the coalition agreement to simply a promise of ‘fair rail pricing.’ While less direct than the original Lib Dem manifesto, I originally thought, in the context of my own beliefs of course, that ‘fair’ meant exactly what it said on the tin; reasonable prices for all, which would subsequently increase accessibility to the rail network.

We have since learnt from the Secretary of State for Transport, Philip Hammond, that ‘fair’ is a word that can be twisted to mean whatever you want it to do. At the House of Commons select committee on Transport, in response to the question ‘You are committed to fair pricing. Fair to whom?,’ he stated ‘I think there are two aspects on this. First of all, there is the question of overall fairness policy on the railway and ensuring that any increases in fares can be justified in terms of improvements in the service that passengers receive. [....] It is not just about fares; it is about value for money for passengers. [...] It is about making sure that [passengers] are given proper information about the most advantageous fare available to them, that the information that is published is clear so that passengers can get the best deal that is possible within any given framework of any given fare structure.’ So basically, the coalition meant that prices would be ‘fair’ within the existing pricing framework. But then again, prices are not ‘fair’ if large numbers of people won’t use the railways because of the pricing structure, if the prices are some of the highest in Europe (in some places 60% higher) and if rail travel is therefore reserved for the better off half off society.

But rail prices, I suspect, are about to become more unfair. In years past the Train Operating Companies (TOC) have been allowed to raise ticket prices by the retail Price Index (now at 4.8%) plus 1%, a total of 5.8% this year. But it has been reported this week (To be found HERE) that in an attempt to reduce the £5 billion annual subsidy the Department for Transport (DfT) gives to the TOC’s, it may be ready to break this rule and allow the companies to increase the ticket prices by up to a possible 10%.

I think that this is a severe mistake for a number of reasons. If prices did rise by this much, a greater proportion of the population would be priced out of using rail travel. This would put greater pressure on the road and motorway network, increasing congestion on both long-distance and suburban routes. With increased car journeys being made this would, of course, be detrimental to the environment. The other possible implication could be that individuals would be more inclined to search for work in their locale, rather than further afield, because they would be unwilling to pay the higher train fares on long-distance journeys. Thus, this would also affect their economic situation. Lastly, it would increase the hardship on people who cannot, or do not, drive for whatever reason and who have no option to use the railways for work or leisure.

But, I do feel strongly that there are other ways to keep the level of the subsidy to the TOCs constant, while at the same time maintaining (or reducing) current fare levels. It is no secret that Network Rail, one of the biggest draws on the Department for Transport’s finances, is terribly managed. Figures put the cost of maintaining Britain’s railway infrastructure at 30-50% above continental networks. Yet if the management was improved, efficiencies made and the organisation was streamlined, then some of that saved money could be used to keep the cost of fares down and keep the subsidy at the current level. This would increase access to rail transportation and reduce ‘transport poverty.’

Given the Government's track record on fairness so far, I’m afraid all I can foresee is that the fares will go up as reported. However, this will only serve to increase the numbers of people who won’t pay the extortionately high price of railway travel, increasing the ‘transport poverty’ divide.

To direct a company, two companies...many companies

In my PhD work I have been thinking about what other directorships the L&SWR board members had. It isn't the most riveting subject. In fact it is quite dull. But, I can't always do everything that I want and a certain amount of mud has to be slung before I get to the gold at the bottom. However, one trend I identified struck me as interesting, as it reflected on the developmental state of the 'corporate' economy in Britain more generally. For this post I will use my research in combination with Geoffrey Channon’s, who's excellent book, Railways in Britain and the United States, 1830-1940, has become somewhat of a bible from me, although unfortunately their wasn't a Gideon-esque service giving them out, the cost of the book being £65.00. Anyway, I digress.

In 1880 a publication came out called the Directory of Directors (DoD), a title from which it wouldn't be hard to determine what its function was. It basically listed every director, of every company, and thus is invaluable guide to how different companies and industries, shared directors. As such, both Channon and I have used the DoD to determine how the board members of the Great Western Railway (GWR), in Channon's case, and the London and South Western Railway (L&SWR), in my case, shared directors with other businesses and sectors of the economy.

In short, we have both identified a pattern that I think represents the changing nature of the British corporate economy after 1900. Between 1880 both Channon and I have shown that the GWR and L&SWR's directors did not sit on many other boards. Now, our studies haven't presented the results of our research in the same way, but they can be compared. In Channon's case he identified that between 1881 and 1885, the majority of GWR directors (13 out of 21 - 61.9%) had no external directorships, with 5 (23.8%) having between 1 and 3, with only 3 having four or above (14.3%). Comparatively, my research has shown that in 1880 9 directors out of the L&SWR's 12 had no directorships (75%), with the remainder having between being on between 1 and 3 external boards. Similarly, in 1885 7 directors (58.33%) had no external directorships, while 5 had between 1 and 3 (41.67%). Thus, the period before 1900 can be considered one where railway company directors did not have many, if any, external directorships beyond their primary concern, the railways.

This is in stark contrast with the period after 1900. In Channon’s sample, between 1906 and 1910 only 4 of the GWR’s 22 directors sat on no other company boards. Yet, 10 (45.4%) had between 1 and 3 external directorships and 8 (36.4%) had between 4 and 6. A similar pattern was exhibited amongst the L&SWR directors. In 1910, 5 directors (41.67%) had no seats on external boards, 4 (33.3%) had between 1 and 3 external directorships and 2 (16.67%) had between 4 and 6. One, Lord Pirrie, sat on 12 company boards, mainly in shipping. In 1914, however, more L&SWR directors were seated on even more boards. Of them, 5 (41.67%) had between 1 and 3 external directorships, 2 (16.67%) sat on between 4 and 6 boards and another 2 had above 13. This left only 3 (25%) individuals who were solely L&SWR board members. In both the case of the GWR and L&SWR directors, most of the directors sat on external boards of companies that were not concerned with railways or transportation. Rather, these external companies were in the sectors of finance, industry and manufacturing.

Therefore, in the period after 1900 there is a clear change in the way that individuals chose to join company boards. For much of the 1900s the railway industry was the biggest, while others were still developing. Therefore, for an aspiring director the railways were some of the few companies on whose boards they could sit. Hence, many railway directors had fewer directorships. This trend may be also indicative of the nature of the business landscape in that many firms were family run and therefore may not have boards of directors. However, after 1900 the number of limited companies expanded, opening up the opportunities for individuals to sit on more boards. This is, therefore, reflected in the results above.

Lost Documents from railway's past

I thought that as I had collected so many documents from the history of Britain's railways that I would knuckle down and sort them out. Oh dear. I hadn't realised how many I had in my collection. I think we are looking at 100s of individual items, ranging from luggage labels through to policy documents, from instructional circulars to timetables. With it all laid out on my floor it all looked like a mess, although one of those messes where you know exactly where everything is. I realised I did not have time to sort and catalogue everything, so I decided to organise my largest collection. For any regular readers of my blog you can probably guess that this was my collection of London and South Western Documents, of which I have 100s.

As I went through the collection I noticed there is a distinct pattern in the material that has come into my possession through various means (ebay being the main culprit). Within a large organisation such as the L&SWR there were three main types of communication that occurred. Firstly, communication flowed from management down the organisation. On the L&SWR this was in the form of rule books, circulars, instructions, appendices to the Working Timetable and letters. Secondly, there was 'horozontal' communication between locations on the network, for example between stations, yards and offices. Some examples include letters, telegrams, train messages, waybills and wagon labels. I have plenty of documents that are examples of downward and horizontal communication. This isn't surprising though, as such documents are abundantly available on ebay and at ephemera fairs. Just have look at the 'paper ephemera' category on ebay (under Transportation and then Railwayana)

Yet, there is one flow of information from which I have very few documents. Communication up the organisation was vital to the functioning of the company. Information flowed from the station master, guard or engine driver to the management, it was then collated and strategic decisions regarding such things as investment, train times and efficiency were made. So documents that were used would include staff timesheets, station traffic returns, guard's report books, fuel usage forms and stores request forms. Yet, I have few documents of this nature, the sole examples being some unused forms for the hours staff members worked and a guard's report book. It is not very impressive really.

The reason for this disparity between how much material I have from each of the three directions of communication is simple. I have lots of material that ended up at stations, yards or offices around the L&SWR's network because these were places where they could be saved (or lost) easily. Imagine a absent minded clerk placing something in a draw and forgetting about it, a station master who knocked a form down the side of the desk, or even a porter who took his Rule Book home when it was superseded by a new one. It is these people's documents I have. But, a book that listed who worked at a station, or how many wagons passed through another or how much oil they used at a locomotive shed, went up the organisation to be assessed in a main company office and therefore took up space. This is why I have posted the two images above that were published in the South Western Magazine in 1917. They clearly show large data books and 'waste paper' being disposed of systematically. Once the information contained within had been extracted, the medium through which it came to headquarters was disposed of. Hence, this is why I suspect that the vast majority of these documents are missing from the railway ephemera market, and why I have only unused examples of upward forms of communication.

Thus, this is probably why many questions regarding the efficiency and performance of Britain's railways in this period may never be answered as location-specific data is scarce.

Railway silly stuff from the archives

This is from a London and South Western Railway Rule Book from 1845. I'm sure that you have read it with complete innocence!
Early Railway dance moves, from a L&SWR Rule book from 1868. Those Victorians certainly jived.
A contradictory one for 'Safe Asbestos' from the Southern Railway Magazine in 1924.

I'm always keen to have more silly (looking) stuff, so let me know!

A few thoughts on the Railway Company Staff Magazine

As I am sure that some of you will no doubt be aware, one of my great interests that I cannot satisfy within the remit of my PhD is the railway company staff magazine. In short, it just doesn't fit into my thesis. I can merrily quote from London and South Western Railway's staff magazine, the South Western Gazette and I have cited many details from it that that go towards any points I am making with regard to the management of the company. However, this isn't actually a study of the magazine itself. The only work that I have done on the SWG was for an article I wrote for the Historical Model Railway Society's Journal on the establishment and the first five years of the publication. But more needs to be done.
What is important to note about company staff magazines (from any industry) is that they do simply convey a chronological version of events within the company. Rather, these publications are usually written, managed, edited and produced by one group of employees within the company. Thus, in my article on the SWG and another by Mike Esbester on the Great Western Railway Magazine (GWRM) in the 1920s, we have both determined that these publications were produced by the Railway Clerks of the companies. Thus, the magazines reflected the views of these groups of individuals.

Subsequently, both magazines aligned themselves with management's goals, as clerks were the only individuals in the industry that realistically had a chance of rising that high in the organisation. This was far more blatant in the developed GWRM, which was trying to promote the GWR management's 'safety campaign.' Yet, in the case of the SWG this was more subtle, for example the editors placed the financial success of the company on page one. In addition, both magazines did not allow any criticism of the company's performance. Thus, in Mike's words, the staff that wrote and edited both magazines were 'socialised in the clerical-managerial context,' and this was expressed through the pages of the magazine.

More work needs to be done in this field, but it is interesting to think how past staff magazines may have the ability to tell the historian what railway company employees were thinking...

The worst railway campaign sticker ever - Surbiton

While on my way to see friends on Wednesday I did a stop-off in the dreadful Surbiton station toilets. However, this rather unpleasant ordeal was enlivened by the following sticker found on the hand-dryer. Obviously, someone had gone to the trouble of putting a sticker on. I just wonder if they had thought they had printed something off...and then when arriving at the targeted spot found that they had massively failed. Thus, they had to improvise, on the spot...

A Change of Policy (Again)

Such is life, that I have been assessing how I go about blogging. As many of you realise I started about a month ago the 'Turnip Rail +Documents' site to showcase some of the documents in my collection. Alas, this site was not successful, and pulled down the main site with it. Before the new site was established, a lot of people who went to the main site for the documents, went on to look at other articles I had written. Yet by separating the two it meant that the cross-overs diminished. Alas, after the past three days in which no one actually visited the '+Documents' site, I am throwing in the towel with regard to it and changing policy.

Firstly, I will not be producing a document every day. This isn't in any way because I don't like doing it, in fact, it has been a pleasant journey discovering some documents that I had forgotten I had. No, it is primarily as it is more time-consuming than I expected and subsequently I cannot afford the time. I am also running out of interesting documents to post. Secondly, everything is now going to be consolidated in one place on the main Turnip Rail site, so that I get all the traffic coming to one site and then people can explore my work. Thirdly, I am going to be try and be a bit more sporadic by positing interesting things I find on the web to do with railways (if I find them, of course). Finally, I will in the next weeks be introducing the Turnip Rail Podcast...Well, here's hoping...Hoperfully, this'll get the figures of Turnip Rail up again...

David

The Feltham Marshalling Yard - Railway Innovation and PhD Inspiration

On the British railway network there is one place that I love more than any other. It is a place I have been in contact with throughout most of my life, it is a place that has fired my interest in railways and it is the place that inspired me to start my PhD. Most people’s favourite railways spots are usually stations, places where they journey to and from daily, where they interact with the staff or have memories of sitting excitedly as a child waiting for the train to whisk them off on holiday, to school or the fair. My favourite railway location is somewhere that I have never seen, touched or heard operate in the flesh because it was scrubbed from the railway map in 1969, 13 years before I was born. (There is a video at the end of the post though) It is lost from railway history and in the minds of many is forgotten. I am talking about the Marshalling Yards at Feltham which is now a wasteland occupied by joggers, dirt-bikers and adventurers. The site of the yard isn’t strictly speaking open public, it being owned by Network Rail. But if you know where the rather large hole in the fence is, you can get in.

But why do I love this place? Well firstly, I used to live very near to the site and went jogging there myself. On a good day I reckon that I could do a circuit of the site in about 40 minutes. Further, I have to be honest that my interest in passenger traffic is close to none. I don’t know why this is really. I suppose I see it as mundane. Contrastingly, freight traffic has always struck me as far more dynamic, complex and industrial, and that has always appealed to me. Therefore, to have the overgrown site of the Feltham yard 15 minutes walk from my house was always fascinating and exciting (the overgrown state is shown). It was my fascination with the site that spurred my interest in doing a PhD on the London and South Western Railway (LSWR). I had never been interested in the LSWR before 2006 as I perceived the company as being a strictly passenger line. Indeed before that point, what had encapsulated me were the northern lines, particularly the London and North Eastern Railway (LNER). The discovery that the Feltham was built by the LSWR and was one of the most modern marshalling yards in the country meant that it became central in my mind when thinking about what PhD I might do.

As many of you now realise, my PhD has evolved to become a history of the quality of management on the LSWR between 1864 and 1914. While interesting to many business historians, it isn’t really the stuff that will fire the soul of many. The original plan that I proposed to my supervisor in 2006 was much more engaging. I was going to do a history of Feltham Marshalling yard from 1910, when the LSWR started thinking about it, up until 1969, when British Rail closed it down. After a bit of investigation it was clear that the material available would not be enough to satisfy even a quarter of the 90,000 words required for the PhD. As such my work evolved into a PhD on the LSWR’s freight services, something that again I struggled to find enough material on. Lastly, it evolved into what it is today. But the fires of interest never die and I do hope at some point to conduct a study on the Feltham Marshalling Yard’s history. However, for the rest of the blog entry I will detail some of its history and why it is important to understand its position within British railway history more generally.

The LSWR in the late 19^th century had freight traffic coming onto their network in the London area from four places. Traffic arriving from the London and North Western Railway came from Willesden Junction, trains coming from the Midland Railway originated at Brent, the Great Central Railway sent trains from Neasden and the Great Northern Railway’s trains arrived via the Widened Lines. There were also the the LSWR’s own goods flows origination from the Nine Elms Goods Depot. There were some facilities and arrangements to manage and marshal these trains before their onward journeys onto the LSWR’s network. There was a small yard at Brentford which received GNR trains and trip workings were undertaken between there and Willesden, Brent and Neasden. The company also maintained staff at Brent to marshal there wagons. However, all were ultimately unsatisfactory and what was needed was a facility that could efficiently sort wagons for LSWR destinations into complete trains more efficiently.

It was, therefore, in the early 1900s that the LSWR directors started to look for a site for such a yard. After considering a number of sites at Byfleet and at Feltham Junction, in 1910 the company’s directors settled on a site that was between the Feltham Junction and Feltham Station. (the new flows of traffic are shown above) The sale of 41.5 acres of land was confirmed in 1911, with additional land being purchased in 1915. The plans were confirmed on the 30^th March 1916:-

The National Archives - RAIL 411/271 – Traffic Committee – ‘30/03/1916 – 507) Feltham Marshalling Sidings – The General Manager submitted a plan shewing how marshalling sidings (15 down + 16 up) can be provided on the land near Feltham which has been specially purchased for the purpose + recommended that in the first place the levelling of the ground including the work of diverting and bridging over the river crane and covering in the mill-stream be taken in hand. – Approved’

Work, which included the diversion of three watercourses (including the River Crane) as well as the excavation of 120,000cu yd of material, started soon after with the help of around 200 German POWs. The first nine ‘down’ sidings, designed to relieve congestion at the Brent yard, were opened on the 9^th December 1917 and the LSWR’s staff were transferred from Brent. Between then and 2^nd October 1921, the yard gradually opened. In addition, plans for an engine shed were approved in December 1921, with it opening in March 1923. Within the yard there were 32 miles of track, with the longest siding being 1,662ft in length and the shortest being 1,331 ft. Once the yard was completed it was handling 2500 wagons a day. These were brought in by 50 down and 26 up trains, and being removed by 18 down and 46 up services. This was, probably, the busiest marshalling yard in the country at that time and it was said that after arrival a train could be sorted in 12 minutes. The reason for this quick turnaround will be explained below. (Faulkner & Williams, p.127-131)

So why was Feltham so important to British railway history? There are two reasons. The first relates to something that I have banged on about to the point of exhaustion. As has been discussed, in the late Victorian period the British railway industry’s profitability and performance dropped significantly. What the building of the Feltham Marshalling yard represents was the move that the LSWR, like other railway companies, made towards making their services more efficient. So, by reorganising the marshalling of freight trains, operations that in their previous form had been built up of many years without significant reassessment, the company was

effectively attempting to reduce their costs by improving smoothness of their operations. Therefore, if you go back to my article of last week in which I talked about the LSWR’s rebuilding of Waterloo and their Electrification project, it is clear that the building of the Feltham Marshalling yard was part of a wider corporate movement of effecting large changes within the company’s operations to improve its efficiency.

However, the second reason for the yard’s importance is a technological one. As can be seen on the plan above, the yard had ‘reception’ sidings, as well as a ‘marshalling’ sidings. This was because in-between these sets of sidings there were ‘humps.’ (shown below) Hump shunting had not been seen in Britain to a great extent beyond coal yard facilities. Yet, in America they were a regular feature of railway operations. When considering the organisation of yard the LSWR management was heavily influenced by American practice. Thus, they introduced this feature to Feltham. A train would arrive at the reception sidings and the locomotive would go to the Engine Shed. Then, a specially designed locomotive, the Urie Class E6, would arrive behind the train. It would then begin to push the train over the hump. At the top each wagon would be uncoupled and then would roll down the other side into a siding.

It was at this point that the yard’s second innovation would come into play. On the other side of the hump were the different sidings in which trains for various destinations would be assembled. This of course meant that the points would have to be changed automatically as each of the wagons was pushed over the hump. The innovation was that the points were electrically thrown by a central control tower so that the wagons could be marshalled automatically. In addition, there was the use of track circuits, whereby the controllers of the yard could monitor the journey of wagons once they had passed the hump. Further, there was extensive use of telephone communication across the yard. As such, the Feltham Marshalling Yard had an impressive array of recent technological devices to ensure smooth operation.

Therefore, on a technological level the Feltham Marshalling Yard signalled a new era in goods management as it was a departure from the previous ad hoc arrangements of the railway industry. It showed how after the turn of the century railway companies innovated for reasons of efficiency. It was a major step forward in British railway operations at the time and that is why I love it. I will, therefore, leave the last word to the Railway Gazette of 1919.

‘Thus, not only in its conception and design, but also in the possibilities which it opens up in the matter of future development of and changes in railway operation, we consider that the new Feltham Concentration Yard of the London & South Western Railway is considerably more than local interest.’(October 17, 1919, pp. 476)

To actually see the yard in operation, watch this World War Two propaganda video which was filmed there. (While the www.britishrailways.tv site says it is set in the ‘East Midlands,’ I, and another, have positively identified it as Feltham)

britishrailways.tv

Bibliography

Faulkner, J.N. & Williams, R.N., The LSWR in the Twentieth Century, (Newton Abbot, 1988) p.127-131

Harris, Michael, ‘Marshalling Yards,’ The Oxford Companion to British Railway History, (Oxford, 1997) p. 315

Klapper, C.F. Sir Herbert Walker’s Southern Railway, (Shepperton, 1973) p.66-67

Canadian Mortgage

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Good Afternoon,

There is a lot of misleading headlines in today's media regarding real estate sales. They are stating that sales are off by 45% compared to July of 2009. Now July of 2009 was a record month for real estate across BC. To compare to this July is unfair and unrealistic. So far this year we have had three major changes to Canadian financing put into effect by the government in April. These changes probably affected about 15-20% of the buying market in Canada, that can no longer purchase a home.( my estimate only) On July 1st we had the HST put into place on all new home purchases. 12% tax above the purchase price. In 2009, we did not have any of these factors in place. In my opinion the sales numbers are a normal reaction to changing conditions in the marketplace. The good news is that the market is still active and sales are still at good levels. We are now in a normal buyers market, which we have not seen for a long time. Couple this with low rates - we have a new 5-Year fixed rate special of only 3.89% and 3-Year Variable of 2.05% - and the market should still keep going strong.

Take a minute to see an interesting article below. Also, don't forget about our ipad contest running till September 15th. Email me now with the next person you know who has or needs a mortgage. My team will ensure they have the best rate and product.


China's latest export: home buyer

Half a world away, a handful of Chinese citizens are feverishly planning a Canadian real-estate shopping excursion.

A farmer, an engineer, a furniture maker and a caterer are among the 30 hopeful investors who have paid $5,500 each to take a real estate tour of Toronto and Vancouver in August.

This isn’t about tourism: Each of them expect to drop at least a half-million dollars on downtown condos during their 10-day visit.

While Chinese investors in Canada are nothing new, this delegation is thought by those in the industry to be one of the largest to travel in one group. The trip was put together by Ricky Zhang of TransAsia Investment Partners, a Chinese company that was created to help residents buy properties abroad, particularly in Canada.

He said it was difficult for investment groups to travel together before last December, because Canada and China didn’t have a deal that allowed large Chinese tours to Canada. But with a travel agreement now in place, he said interest has increased and Chinese investors are looking to spend heavily while abroad.

"With the rising risk of the bubble bursting in the Chinese real estate market, there is a demand for overseas real estate for diversification, safety and relatively high rental yield," he said.

"The purpose for this trip is to find good deals for immigrants and investors. We do not intend to bring speculators to Canada and, during the promotion events, we always highlight on the market stability as opposed to the great volatility in China."

To ensure investors are serious, he has deliberately set the price tag high.

"They stay in four-star hotels, eat $30 meals," Mr. Zhang said. "I am not sure if this is a really high standard in Canada, but in China it is only affordable by the upper class."

The Chinese government has discouraged its citizens from investing in local real estate, fearing that a surge of speculative buying could inflate a real estate bubble that would have dire consequences if the economy slowed.

In a sign the tighter lending standards are working, Chinese house prices fell by 16 per cent in June.

The restrictions are causing those with excess capital – a large swath of the rapidly growing middle class – to look overseas for safe havens for their capital. This is especially true as China’s export base continues to grow and foreign capital pours into the country.

"The fact is, China needs to be investing more of its capital abroad," said Patrick Chovanec, a business professor at Beijing’s Tsinghua University. "The fact that Chinese citizens have limited ability to invest abroad, even as they pile up earnings from exports, is one of the factors fuelling a real estate bubble within China."

Canadian real estate is seen as good value in China, even though 2009’s 5.2-per-cent year-over-year gain stoked fears of a bubble. But over the same period, prices in Hong Kong gained 27.6 per cent while those in mainland China gained 25.1 per cent.

Prices are expected to fall, however, as a flood of new listings and a slowdown in sales helps to cool what was a hot market. The Real Estate Board of Greater Vancouver said yesterday that sales fell 30 per cent in May compared with a year ago, while the Toronto Real Estate Board reported a drop of 20 per cent.

Support from foreign buyers could help to prop up the higher end of the market, agents suggest, because they tend to prefer properties that Canadians consider high end.

The group will visit two condo developers while in Canada – Tridel Corp., and Concord Pacific. Both have catered to foreign buyers, with several language options available on their websites, and multilingual agents to answer queries.

"You often hear they are attracted by the schools in Canada," said Jim Ritchie, senior vice-president of sales and marketing at Tridel. "The other reason tends to be that they want a place to stay when they are here, even if it’s not very often."

TransAsia Investment Partners plays up Canada’s education system in its promotional materials, and its representatives talked up the country’s universities during its information seminars show through the Yangtze River-Delta.

"Many of the visitors are upcoming immigrants or someone who is considering immigration," Mr. Zhang said. "Therefore, most of them plan to live there or send their kids to Canada for education. All the properties we will visit are near great schools and universities. There is still a significant portion of investors looking for safety and the rental income, but this group is smaller."

Barbara Lawlor, president of Baker Real Estate in Toronto, said about 10 per cent of her sales involve foreign buyers. She tends to work with international agents, rather than directly with the foreigners, as most tend to shop from their own countries and make the purchase sight unseen.

"Having large groups come through is an interesting development," she said. "Usually we deal with a buyer’s agent, but the investor portion of our market is constantly evolving as families emigrate and look for places to live."
(Source: Globe & Mail)


Jared Dreyer, AMP
604 649-5991
jared@dreyergroup.ca






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The Evasive Philip Hammond

I think I should keep returning to criticism of our new Secretary of State for Transport because at the moment I see little sign that he has anything pro-rail to say. Now of course this is because I am pro-rail and want him to do positive things for the rail industry. Truth be told, I can’t drive, so my view is naturally going to be skewed by my self-interest and I can’t expect every Secretary of State to naturally take the position that I want. This said, Philip Hammond has repeatedly shown himself to be ignorant of rail issues. Christian Wolmar, Britain’s most noted Railway commentator, recently did an interview with Hammond for RAIL magazine and came out with the conclusion that he was a man that saw everything through a car-shaped prism (RAIL 647 pp.44). Indeed, my own Blog entry of the 11th June showed that Hammond has a history of being a pro-car voice in parliament. Therefore, while I do suffer from an obvious bias in my perspective, I think that it is vitally important that railway commentators, journalists and anyone else with an outlet, criticises him and his policies so that he understands that the railways of Britain are not just an expense which has parts that can be cut, chopped and disposed of willy-nilly.

A few days ago I came across comments he gave to the Transport Select Committee on the 26th of July. His appearance in front of the committee was a good thing as it showed us how competent he was with his new responsibilities two and a half month in. I started to read the comments with an open mind, and I suppose I can’t be too harsh when critiquing his development. Before new government was formed he had never held a shadow transport brief and therefore his learning curve was naturally going to be steeper than other individuals who could have taken the job. This said, he does have the full resources of the Department for Transport, and serving under him are the former Liberal Democrat and Conservative shadow transport secretaries. So, it isn’t like he didn’t have any help, and he should, by now, be up to speed on the major and important issues facing the railway industry. I have to be honest; the man just came off as vague and evasive. This was shown particularly in reference to the questions he received regarding the rail industry.

Early in committee the chair asked Hammond ‘One of the commitments [in the coalition agreement] is, "We are committed to fair pricing for rail travel." It is a bit vague, is it not?’ Hammond replied that the government was facing a huge public deficit (yes we know that) and that ‘it is clear that we have to be prepared to look at all possible options in addressing the challenges of tackling fiscal deficit and also sustaining investment in our railways because it is clear that there are important investments in the railway, including investments that are directed at improving passenger comfort and passenger convenience, that it would be very unfortunate if we were to lose...’

So basically Hammond answered the question by not answering the question. So the questioner had another crack at him. ‘Q7 Chair: ....You are committed to fair pricing. Fair to whom?’ Again Philip Hammond did his best to avoid answering the question directly. ‘I think there are two aspects on this. First of all, there is the question of overall fairness policy on the railway and ensuring that any increases in fares can be justified in terms of improvements in the service that passengers receive. [....] It is not just about fares; it is about value for money for passengers. [...] It is about making sure that [passengers] are given proper information about the most advantageous fare available to them, that the information that is published is clear so that passengers can get the best deal that is possible within any given framework of any given fare structure.’ This is ridiculous. He is not only did not answer the question again, but he is also confusing quality of service with fairness.

Indeed, in the context of his recent RAIL magazine conference keynote speech, I think that he was avoiding the question because he has little intention of making rail prices ‘fair.’ He said that “we will face some stark choices, and it would be irresponsible at this point to rule out even considering an increased contribution from the fare payer as part of the solution to protecting investment in the railways.” If we consider that at the moment a large section of the population are priced out of using rail transportation because of the cost, and that the prices currently can in no way be considered ‘fair,’ then it seems that prices can only become more unfair. In the mind of the Hammond, putting fares up is all that can be done with them. Indeed, I think that the concept of ‘fair’ in the conventional sense does not seem to register with him. This was essentially because it was part of the Liberal Democrat manifesto to introduce ‘fair’ rail pricing, and hence why it made into the coalition agreement. For him, a dyed in the wool Conservative, fairness is not the underlying principal, the bottom line is. As such, Hammond avoided the committee’s question as he knows that it is a commitment that it is untenable to maintain. If only he’d have come out and said “yes, sorry, that one was the Lib Dems sticking their awe in…forget it,” then I might have had a bit of respect for him.

He was then asked about the cuts that would inevitably come, ‘The Department of Business, Innovation and Skills said last week that the UK needs to spend £42 billion per annum on infrastructure investment, including transport. How is that going to be achieved in current circumstances?’ Philip Hammond again didn’t answer the question effectively. He stated that there would be no reduction in any capital expenditure that had been pencilled in by the Labour Government. Yet, I think the word ‘pencilled’ is very telling. Combine this with the lack of specifics and there is a case for saying that he did not answer the question in full, again, because he knows that he cannot actually commit to cancelling projects that this point. This is another case where I’d really just appreciate some honesty from the man, yet, he says he will be keeping the investment. In no world is that really a reality and most rail commentators have pointed out the department will have to make cuts in capital expenditure.

Of course there is one area where costs could be reduced effectively, namely at Network Rail. NR does cost between 30 and 50 present more in maintenance per mile than continental railways, and Roy McNulty will report on how the not-for-profit organisation operates and can reduce the debt. At the RAIL conference Hammond said that he had received a ‘scoping study report from Sir Roy. I suspect that this gave him a number of preliminary conclusions about the state of NR’s finances. Yet, at the both the conference and in front of the committee he couldn’t give a cogent response to question as to where the NR may be scaled back. In fact there were no specifics. I’ll just post all of his response to the question here, so that you can get the full force of his evasion.

Q24: “Just thinking on my feet, it is not something that has been talked about actively in the department in the time that I have been there…Clearly, because of what I have already said about the way we will, in every day working terms, think about Network Rail’s debt, we will not be able to take the attitude that the previous administration did to ever rising Network Rail debt. We will have to look again at how we finance the capital investment in the railways. The mere fact that it may be borrowing by Network Rail does not mean we can ignore it. We will want to look at that as capital spending in the same way that we would if it was financed by public capital investment directly. That will mean that we need to look at the model once we have Sir Roy McNulty’s conclusions and hopefully have come to some conclusions before we begin the negotiations around the next control period, control period five.”

Did you read any ideas within that? No, I didn’t either. I find it hard to believe that a man who has been doing the job for nearly three months has no ideas whatsoever about where NR could make savings. I suspect that he is avoiding answering the question of where NR will have to cut back because to do so would reveal changes he wants to introduce that may actually go against the coalition and which would break promises. Either that or he is out of the loop to the point of incompetence.

You can read all of Hammond’s responses to questions HERE, but I suspect it won’t get you far because he never gives an informed response to a question regarding Britain’s railways.The reality is that he hasn't had that decency to tell the travelling public what he is really keen to do, put up fares and cut back services. He comes across as a man who is evasive but has an agenda that he is not keen to reveal. That, I’m afraid, is simply not good enough!

Philip Hammond's full keynote speech at the RAIL conference can be read in the latest issue of RAIL Magazine pp. 34-37.