to X and Y. Still we must acknowledge after all that the waste of competition has a real existence.

Another argument is to the effect that commercial companies may, in spite of extravagance of management, earn bloated dividends by what is practically a tax upon trade. This too no doubt is theoretically true. I can, however, recall but one instance- that of the Taff Vale Company-in modern English railway history; and here commercial competition has already done its work, and the Barry Company has taught its elder rival to modernize both the rates and the methods of working. Then, again, it may fairly be said that the natural tendency of a company bound to return to its shareholders twice a year a dividend at least not less than that for the preceding halfyear, is to fight shy of bold and radical concessions. For instance, it is quite arguable that third class fares at a halfpenny a mile might in the long run pay the company; undoubtedly they would be an enormous benefit to the community; but no railway company dare try such an experiment. Again, the objection is not without weight. Once more, however, it is more theoretical than practical; for, in fact, experience shows that State railways do not venture the reductions which theoretically they might be expected to make. Far and away the most sweeping reductions the world has seen have been those made by the highly competitive railways of the United States. The latest exploit of the commissioners of the State railways in Victoria is a proposal for the universal increase of the rate of charge. Similarly, the tendency of a State railway system ought to be in the direction of regarding the general good, and giving the blessings of adequate communication to all the parts of the country alike. Commercially-minded companies, on the other hand, must surely hesitate to extend their systems into poor and profitless districts; ccntent with the splendid profits of the main trunk lines, they will naturally-so one would reason a priori-decline to water their dividends by investing capital in new lines which can never pay more than a very moderate rate of interest. Again, the facts are the other way. That England led the world in railway extension sixty years

back is notorious; that the Cape and Australia lag behind even Argentina, much more behind the Western States of America at this moment, is equally obvious now.

Once again. Commercial companies will act from commercial considerations, and every merchant knows that the bigger the buyer the larger discount he will demand as his right. Translated into railway language this means the concession of cheap special rates for wholesale traffic between great centres, and the maintenance of a high standard of charge for the transaction of the general retail business of the country. Of course, the natural tendency of this is to make the great greater, and thereby the small smaller. And it is a common and, I think, a reasonable belief, that this tendency, if not indeed wholly mischievous, is at least of questionable advantage to the community. But once more it may, I think, be answered that the tendency is too strong to be resisted by any Government department. The Prussian State makes special rates just as freely as the North-Western Railway; the English War Office and Admiralty do not venture to place on their list of contractors the names of any except the leading and most powerful firms in their respective branches of industry. Moreover, whether the preference of one trade or trader, of one town or district over another, be justifiable or unjustifiable —be or be not, to adopt the legal phraseology, an undue and unreasonable preference is a matter involving careful and detailed consideration of all the circumstances of the individual case. As such it is eminently suitable for judicial decision. Now a court of justice can much more easily curb the action of a private corporation, however powerful, than it can that of a department of the Executive Government with a majority of the House of Commons behind it.

One more objection, and perhaps the most serious, has been kept to the last. Where a body of shareholders are so blind to their own interests as to leave the management of their railway in the hands of an incompetent and effete body of directors and officials, the public lacks definite and positively legal right of interference to prevent the service of the line becoming quite disgracefully bad. It is, I think,

undeniable that such cases have occurred and do still occur in England; and, further, that a Government department would not dare to treat any large section of the electorate with neglect as gross as that from which some parts of the country suffer at the present moment. But, after all, we must regard the interest of the country as a whole rather than any individual section of it. It would need a great deal of levelling up in services which only concern, perhaps, 5 per cent. of the community to counterbalance even a small amount of levelling down in the services given to the remaining 95 per cent. And experience goes, I believe, to show that the tendency of State management is towards uniformity indeed, but towards uniformity on a lower level than the average of private management. There is another point: The price of liberty is eternal vigilance!' and if the inhabitants of A, B and C—there is no need to mention names, they will rise instinctively before the mind of every reader-are suffering and some of them do suffer grievously-from the badness of their railway service in this free country, where, after all, public opinion is in the long run supreme and irresistible, they have mainly their own supineness to thank for it.

I have endeavoured to sketch the objections commonly made to private railway management, and to outline the answer which can be given to each. Let us now see, in the same general fashion, what are the main arguments advanced as justifying State ownership. It may be noticed in passing that, pro tanto, according to the extent and minuteness of the system adopted, some of these arguments apply to State control also. It is said in the first place that railways are a monopoly, and a monopoly of an article of public necessity; but this is a point I should wish to reserve for consideration at a later stage. Again, it is claimed that, if the credit of the State were behind the railways, the portion of the rates and fares which represents interest on capital could be largely reduced. The facts, however, do not bear out the statement. It is true that railway capital at this moment receives on an average within a fraction of 4 per cent., and that the State

can borrow money at something like 2 per cent. But the great railway companies can borrow practically as much as they please at almost the same rate 1. It is not a question of the price at which the company could raise the money to-day, but of the price which they had to pay when their lines were built originally. And when we remember that, even as lately as the Crimean War, the State issued consols at about 85, we can hardly admit that through lack of credit the companies have on the whole paid very dear for their money. At 2 per cent. the Exchequer must make up any possible deficiency of railway earnings; purchasers of ordinary railway stock can at present prices get in normal times about 3 per cent. for their money; but then they take the risk of a coal strike at any moment annihilating a half-year's dividend altogether. Economy of interest would then, I think, be something quite trifling.

There is the question also of economy in working expenses. I have already said that the economy secured by the abolition of competitive services would be very much smaller than the public seems commonly to suppose. I may add that the economies resulting from unity of management would also, I believe, be comparatively insignificant. In Ireland, with its fifty or sixty separate companies, each with its own board of directors, they would no doubt be proportionally great; but the whole working expenses of all the Irish railways put together are a mere bagatelle. In Great Britain the undertakings are already big enough to give every man as much as he can do, and for my own part I fail to see how the reorganization of the service would enable a single official to be reduced. On the other hand, everybody who has had experience of methods of business of public departments and private undertakings knows well that the former are more complicated and therefore more expensive. Nor is it generally believed that the State gets more work out of its servants than the private employer. Similarly, I think one might go through all the branches of railway expenditure and show that

1 London and South-Western 3 per cent. debentures have, I believe, been dealt in at 107.

in none of them, except possibly in that much magnified molehill, Parliamentary and legal expenses, could any reduction worth speaking of be effected.

Again, it is said that at present our railways are worked in the interests of the shareholders; the State would adopt a different principle, and work them for the benefit of the community at large. This sounds, of course, very nice and pretty. When we ask for particulars, however, of the improvement, we are generally informed that the Government department would improve the revenues by a series of judicious reductions in rates. Stated thus broadly, the claim would appear to be that, because certain reductions in rates, made deliberately by the skilled managers of existing lines, have proved to be profitable, all other reductions of rates, which those same skilled managers have ex hypothesi rejected as likely to be unprofitable, would in the future increase the net revenue of the State railways. The fallacy is obvious, and comes back really to the theory of the Irish apple woman who could afford to sell her apples at a loss because she sold so many of them. And it will not be forgotten that, while at the present time the railways shareholder pays the piper for unprofitable experiments, under a State régime the cost would fall on the taxpayer at large.

There is another point worth notice. If we can persuade our would-be reformers to descend from the general to the particular, we do not always find them agreed as to the principles on which the reform should be based. Liverpool, for instance, is the nearest port for the manufacturing towns of Lancashire. Accordingly, we find the mayor of Manchester telling a House of Commons' Committee that railways ought not to be permitted to 'deprive a town of the advantage of its geographical situation.' In other words, the distance carried is to be the governing factor in the rate. Other places—say, for example, Southampton and Plymouth-have behind them only thinly-populated agricultural districts. Their repre

sentatives, therefore, are equally persuaded that the true principle on which judicious reductions will be based is to be found in an approximation to the postal principle of one