368 History of Inland Transport 



(a) rates and charges and (b) dividends paid or not paid ; 

 and (2) the general policy of the State towards the whole 

 problem of internal communication. 



As in the case of cost of land, of expenditure on Parlia- 

 mentary procedure, of capital outlay on construction, and of 

 any undue increase in cost of operation, the payments in 

 respect to rates, taxes and Government duty can be met by 

 the railway companies only by one or other of two expedients : 

 either by getting the money back through the rates, charges 

 and fares levied on the railway users (an expedient necessarily 

 curtailed both by legislative restriction and by the economic 

 necessity of not charging more than the traffic will bear), or, 

 alternatively, by leaving the railway investors with only an 

 inadequate return if not, in respect to a large proportion of 

 the capital, with no return at all on their investments. 



The system of assessing railways for the purpose of local 

 rating is one of extreme complexity. It grew out of the 

 earlier system of the taxation of canals, and, had the railway 

 companies fulfilled the original expectation of being simply 

 owners of their lines and not themselves carriers, the principles 

 on which the system was based might have applied equally 

 well to rail as to canal transport. But, while rail transport 

 underwent a complete change, there was no corresponding 

 adaptation of local rating to the new conditions, and the system 

 actually in force is the outcome far less of statutory authority 

 than of custom, as sanctioned by the judges who have 

 themselves had to assume the role of legislators while the 

 machinery of railway valuation differs materially in England 

 and Wales, in Scotland, and in Ireland. 1 



In England and Wales there is a separate assessment of a 

 railway for each and every parish through which it passes. 

 Such assessment is divided into two parts : (i) station and 

 buildings, and (2) railway line. The former, arrived at by a 

 per centage on the estimated capital value of buildings and 

 site, is a comparatively simple matter. It is in regard to the 

 latter that the complications arise. The main consideration 

 in each case is the amount of rent which a tenant might reason- 

 ably be expected to pay for the property assessed ; and such 



1 An excellent summary of the general position to-day will be found in 

 "The Rating of Railways," a booklet issued by the Editor of the "Great 

 Western Railway Magazine." 



