“Grouping,” is the name of the familiar arrangement by which
collieries or works within a given area are charged equal rates,
and are thus enabled to compete on equal terms. In fixing the rates
for traffic carried long distances, grouping stations far apart is
carried out to some extent. For instance, the rates for tin plates
from South Wales and Monmouthshire to Liverpool are the same from
the works between Carmarthen on the west, and Monmouth on the east,
the distances varying from 160 to 206 miles. So, too, the rates
between Scotland and places in England, south of and inclusive of
Yorkshire, are divided into groups--22 in the former, and 39 in
the latter. Though the practice is not of the first importance to
railway companies, it is not without value to them. If “grouping”
were prohibited, and the nearest collieries or works could supply
all the coal or goods which were required, railway companies might,
in some cases, earn as much net profit on the traffic carried as if
grouping were adopted. No doubt, however, if the nearest collieries
or works charged the public enhanced prices, or if they could not
supply the commodities to the extent required by the public, the
railway companies would suffer. They would lose not only the traffic
which they might have carried, but they would also suffer from the
lessened prosperity of districts in which they had an indirect as
well as a direct interest.
The chief sufferers, however, from the giving up of “grouping”
would be the public; they distinctly gain by the practice, though
producers near great towns or sea-ports may lose the benefit of
“geographical position.” Collieries and works which are “grouped”
are enabled to contribute to the available supply. They enter
markets from which they would be otherwise shut out; the extent of
the trade is thereby increased; the price paid by the consumer may
be lessened. In fact, many traders admit, tacitly at least, the
value of the practice.
Public-domain text, read in full here on John Shaqi.
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