Present condition of the Italian state railways (II)

«The Economist»,23 dicembre 1911, pp. 1320-1321

One of the most serious complaints brought against the State Administration is the slowness with which alterations are made to meet the growth of commerce. The traffic on the Italian railways has increased very largely since the transfer of the service to the State. The total gross receipts, which averaged 327 millions of lire between 1902 and 1904, under the old management, amounted to 481 millions in 1909-10. The equipment, which was already very insufficient in 1902-4 in respect of fixed appliances, has not by any means increased as fast as the traffic. Signor Sacchi, the present Minister of Public Works, admitted last June, in the Chamber of Deputies, that there was urgent necessity for doubling the track over 1,600 kilometres of lines with traffic of from 25 to 45 trains per day. This, he said, would require 450 millions of lire, as soon as possible, but the State would not be able to assign more than the very modest sum of 15 millions of lire annually. A large part of the advances made by the Treasury to the Administration of the Railways has been spent on improving the rolling-stock. In this the Administration has not considered exclusively the real exigencies of the service. It has had, more or less with its consent, to obey the same political influences which, at the time of the Nationalisation Act, succeeded in obtaining a legislative preference for national industry, in addition to that of the existing high tariff. In the scramble for contracts many new works sprang up for constructing rolling-stock, and ever since then they have incessantly importuned Members of Parliament and Ministers to give them orders, using as an additional inducement the phantom threat of industrial unemployment. The rolling-stock of the railways has therefore grown out of all proportions, not only to the necessities of traffic, but also to the development of sidings. While the old companies possessed, in 1899, on an average, 62 metres of sidings for each empty wagon, 50 metres being considered necessary, in 1909-10 the proportion had been reduced to 25.10 metres for each of the 90,000 wagons forming the actual reserve of the State Railways. In spite of the fact that many wagons were forced to remain unused in reserve sheds, the late President of the Council, Signor Luzzatti, again yielded to the clamours of the vested interests, and promised the construction of 8,000 more wagons above the usual number, which is about 5,000 per annum. This new construction was, subsequently, owing to the objection of the General Committee on the Budget, reduced to 4,000 wagons, at an estimated cost of 29,000,000 lire, which might have been saved, according to the opinion of competent experts, by more efficient circulation of the existing wagons and better maintenance. About 15 per cent, of the wagons are always under repair, and the figure for passenger coaches is 33 per cent. I shall skim over the mistakes committed by the Administration of the State Railways (which are extremely amusing, except for the taxpayers), and shall confine myself to certain instances which have been constantly repeated in Parliament without meeting with any official denial. There are cases of old locomotives being newly painted and bought as new; 112 rail motors condemned one after another as useless, and converted into stoves; sleepers of concrete which broke when a train passed over, and others of soft deal, bought by hundreds of thousands, useless attempts to strengthen them being made by injecting creosote; the purchase of 15,000 kilogrammes of gum arabic, 200 kilometres of red velvet, a million file handles, and so on.

It has now been discovered that all these occurrences are the inevitable consequences of the excessive centralisation set up in the State Administration. A new law recently passed by Parliament has just made a radical change in the system set up in 1905, and remodelled several times since that date. Having destroyed with a fury, comparable to that of Attila, all the organs of the old lease holding companies, the Government now believes that it has made a mistake. In the new law, therefore, the Administration is trying to retrace its steps by modelling the State railway service, as far as possible, upon the old system, followed with very good results by the Adriatic Company. I believe, however, that the problem is not merely to decentralise the heavy and cumbrous machinery of the present State Administration. It is chiefly to discover whether the new organisation elaborated by the Minister of Public Works, Signor Sacchi, will succeed better than the present one in defending itself against the Protectionist and political forces which have hitherto been dominant, and are undoubtedly the principal cause of the bad administration of the railways and the shameless squandering of public money. It is no unreasonable estimate that the annual expense for maintenance of the Railways, for the replacing of the fixed equipment and rolling-stock has been increased by one-third in consequence of the preference given to national industry. To the open Protection resulting from Customs tariffs and the increase of prices established by law it is necessary, in many cases, to add fines for late delivery pardoned by the Government for political or electoral purposes. Moreover, the law has expressly recognised the principle that the Railways exist to give work to steel manufactories and Italian construction yards, and that the orders should be equally divided among the different producers of the same product. Combination of manufacturers and State contractors, which is forbidden by the law, is thus authorised and encouraged by the Administration of the State Railways. These factors add an enormous load of dead weight to the cost of materials and the working expenses of the Railways, but there are other considerations, on the revenue side, which tell in the same direction. Too many people travel free on the Italian Railways, and it often happens that all the first-class carriages are occupied by people who have not paid for their ticket, whether because they are employees, or on account of some other privilege. Free passes upon the State railways are distributed with astonishing liberality, and have become one of the most frequent methods of political corruption in the hands of the Government. There are passes of several kinds and every colour; for State employees, for high and low functionaries, civil and military; a special kind is reserved for journalists and friends of Ministers, who find no difficulty in posing as journalists. Deputies and Senators not only do not pay for their tickets by reason of their office, which, after all, would be reasonable, as they receive no pay, but they receive every year 18 free tickets, 12 of which are sent without asking, and this is quite unreasonable.

In the goods service the same disorder and disregard for business principles prevails. All organised political interests have succeeded in obtaining reduced rates. As many as 776 special tariffs and 1,569 items have been counted as in existence for the benefit of particular firms. The only rule which the Administration of the Railways has enforced upon the powerful interests which are combined against it has been to diminish the responsibilities fixed upon it by law. Every delay, every loss, and all damage to merchandise, are invariably considered by the Administration of the Railways as the result of force majeure, for which the Administration cannot be held responsible. When the excessive formalities which complaints have to go through do not suffice to tire the patience of the complainants, the judicial procedure, with its eternal delays and heavy charges, supervenes. On principle the Legal Bureau of the State Railways never gives way until after the most insistent proceedings, as it knows that it can fight longer than most of its opponents.

I may conclude this necessarily condensed article by saying a few words about the personnel. The position of the Railway employees has considerably improved ever since the rise of wages, for which the State agreed to pay before it took over the control. By the recent law new increases have been granted, especially to the lower and less well paid grades, to the amount of 21 millions of lire per annum. These increases were very fair and inevitable, since the small wages paid for 15 or 20 years past have become starvation wages, on account of the general rise in the cost of living. Even with the increases, most of the railway employees have not much cause to consider themselves privileged, in comparison with what they could get in the open industrial market. One problem to be solved was how to prevent the increased wages from diminishing the profits of the Railways. There were two alternatives. Either large economies could be made in other expenses, or the work done by each workman could be increased by improved organisation of work. A big industry under intelligent private enterprise would undoubtedly have solved the problem to its own profit and to the benefit of the public. Italy has failed piteously. She has only succeeded in increasing the total number of railway employees, who numbered 104,833 on an average between 1902-4, to 143,910 in 1909-10, the last year for which the exact returns exist. It is useless to retort that the increase has been mainly in the relatively unproductive central bodies of organisation and control, which usually fail completely to fulfil their function.