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 and which, in part at least, benefit from the speed and reliability which the railways are capable of achieving. Moreover, we should expect that, having been concentrated upon traffics matched to the advantageous features of rail transport, the system would then be operated so as to develop those features to the full. In all that follows, we shall seek to shows as quantitatively as possible, how far the system departs from this condition at present, and to decide what changes are necessary to put matters right. To this end, a first step is a detailed examination of the existing rail system, its pattern of traffic, and its mode of operation.

The most obvious ways of subdividing the railway business as a whole, for the purpose of detailed examination, are in relation to:


 * (a) units and sub-units of general managerial responsibility;


 * (b) functional subdivision;


 * (c) types of traffic;


 * (d) parts of the physical system.

No one of these modes of subdivision is, alone, sufficient to lead to understanding of such a large and complex business as that of British Railways, nor can any one of them be pursued in a manner which is completely accurate and reliable. For those reasons, some use has been made of all of them, so as to create a more detailed and reliable picture by the combination of several modes of study.

Subdivisions along the lines of (a) and (b) fall within the scope of normal accountancy. As has already been mentioned, however, railway accountancy has been limited, very largely, to global accounts for the railways as a whole. In consequence, very little information of the kind which could be derived by a thoroughgoing breakdown along the lines (a) and (b) was available, Moreover, because an accountancy system cannot be modified and extended so as to produce much more detailed results quickly, in an organisation of the size of the railways, the main attack on the problem was by subdivision along lines (c) and (d). To build the picture, however, it is convenient to start with the British Railways' accounts.

The figures presented are those for 1961 and, with minor exæptions, cost figures used throughout the Report relate to that year. The reason is that this was the latest year for which fully detailed cost data could be made available during the course of the investigation, and it was also the year in which tbethe [sic] special traffic studies were made.

In a situation as changeable as that of the railways, no year can be described as typical. The year 1961 was not a good one from the traffoc point of view, because the recession in the steel industry affected the latter part of it. In this respect, therefore, it was worse than 1963 but it was better than 1962, and it is not yet known whether 1963 will be better or worse. Also, although substantial economies were made in 1962, there were two increases in wage rates during tbatthat [sic] year which amounted to just over 9 per cent. and the working week was reduced.

It is known that the conclusions reached would all have been substantially the same had they been based upon figures for 1960, and there is no reason to think that they would be different were it possible to use figures for 1962 or the early part of 1963. Therefore, the Railways Board is satisfied that although the figures used throughout the Report are not, and could not be, completely up-to-date, they form sound basis for decision making.