have been brought about by changes in the incidence of taxation.

52. The Suez Canal has been a remarkable enterprise in many ways, but chiefly because it has furnished the first instance of one of the world's highways falling into the hands of an association of private individuals: the peculiarities of the situation have become more striking since England, by the purchase of the Khedive's shares, became an important partner in a French commercial undertaking. The intentions of those who carried out this transaction1 were fully explained by Mr. Disraeli. "We purchased them (the shares) from high political considerations; and had it not been for these considerations, we should never have entered into these negociations. But having bought these shares, it became our duty to make every arrangement and take every precaution that the country should not be financially and commercially a loser." 2

How far the political object was a wise one, and how far it was promoted by entering into partnership with the owners of the Suez Canal we need not discuss, for to do so would take us beyond the economic principles with which we are dealing. But supposing for the sake of argument that the policy was wise, no real objection can be brought against the step of promoting the political interests of the country by this unusual method of investing national capital in a commercial undertaking.

It was of course argued that financial mistakes had been made in the actual purchase of the shares, but if this was so it was a blunder in management, not an error

1 39 and 40 Vict. c. 67.

3 Mr. Rylands, 3 Hansard, ccxxxi. 836.

23 Hansard, ccxxxi. 852.

:

in principle and financially the purchase has turned out better than appeared likely at first, as the additional strength the enterprise has received from the possession of such a wealthy partner, or the constant growth of trade has rendered it a very successful canal, a share in which is of far greater value now than in 1876.

On the other hand the criticism of the shipowners, who held that we were most insufficiently represented among the Directors, appears to have been justified by after events. It may be questioned whether any advantage has accrued to our commerce from our partnership in the canal, and great difficulty has been found by the government in trying to secure favourable terms for our shippers.1 But striking as the transaction was from its very magnitude, it is of comparatively little importance from our stand-point, as it was so unique in character that it is most difficult to interpret the precise economic principles it involved.

53. The most recent assumption of commercial functions by the State occurred when Mr. Fawcett arranged for the introduction of a Parcels Post. We have already had sufficient experience of the convenience it affords for national and international communication to feel that the step has been justified by its result. Considerable difficulty had been found in convincing all the railway companies that it was for their advantage to adopt the new scheme, but after an immensity of labour it has been brought into operation. Mr. Fawcett has so often led the opposition to State interference, that the

1 See the debate on Sir Stafford Northcote's motion regarding negociations with the Suez Canal Company, 3 Hansard, cclxxxii. 962 f. 245 and 46 Vict. c. 74.

M

fact that he introduced the bill probably disarmed much of the opposition which might have arisen; though it did not pass without a protest from Sir John Lubbock, who felt very strongly against the general principle of allowing governments to undertake business for the sake of profit." The supporters of the measure would have argued that the competition of the existing Parcels Delivery Companies would prevent the State from making any unfair use of the advantages they possessed. Those interested in the Parcels Delivery Companies feared that these undertakings would be ruined,2 and even hinted at claims for compensation :3 but there are no signs as yet that the State has secured a monopoly or that there is any danger of the business being conducted otherwise than in the interests of the public. It seems to be generally felt that there are great practical advantages in having this public service undertaken by public servants; in a large number of districts one or other carrying company was in possession of a practical monopoly, even though there is plenty of effective competition at most of the great centres of population; and there was sufficient excuse according to the principles stated above (§ 38) for trying whether the public would not be better and more cheaply served, when this business was carried on under the management of a public department.

54. The Seed Supply Act was an instance of the application of national capital to productive employment. The grave agricultural distress in Ireland in 1879 had left many unfortunate tenants without any means of procuring seed; and it was determined to grant £500,000 out of

13 Hansard, cclxxii. 2115. 3 Ibid. cclxxiii. 1347.

2 Ibid. cclxxiii. 871.

4 43 Vict. c. 1.

Nor

the Irish Church Fund for procuring them seed. could this be regarded as a mere measure of temporary relief, as there was every reason to believe that new and more vigorous varieties of the potato plant might have a greater immunity from disease in the future, and that this opportunity of introducing really good varieties should not be lost. The proposal was therefore made, and it was taken up by the government of the day, not so much with the view of aiding distressed individuals, as for the sake of increasing the future prosperity of the country by a comparatively small immediate outlay. It did of course confer an immense boon on the individuals who were permitted to take advantage of it, but their relief was not the primary object of the measure; though there was a good deal of discussion on the question how far these advantages might be extended, as it was obviously unnecessary to give a supply of seed to men who were so well off as to be able to buy really good seed for themselves. On this point Sir Stafford Northcote said "it would no doubt be a most advantageous thing for Ireland if they could supply the whole country with a fresh stock of seed. . . . It must ... be borne in mind that the effect of purchasing large quantities of seed to be sold to the purchasers on extremely lenient terms, must be to considerably increase the price of seed to other persons. . . . They knew what they were now proposing to do for the smallest class of owners, and to carry that undertaking further than the real necessity of the case demanded was to incur a very serious responsibility indeed."1

55. The Relief of Distress (Ireland) Bill was conceived in a somewhat similar spirit though it endeavoured to 13 Hansard, ccl. 655. 2 43 Vict. c. 4.

provide present relief and permanent gain by somewhat different means. Boards of Guardians were empowered to borrow for the purpose of granting out-door relief to able-bodied persons: loans might also be granted to the sanitary authorities and to landlords for executing works and thus employing labourers, while similar schemes might be undertaken by the baronial presentment sessions. No objection was taken to the principle of the measure; though the loans were to be granted on exceptionally favourable terms, and a public fund was to be held responsible for the difference between this low interest and a market rate. The objection taken was not as to the principle of granting this public subvention under the circumstances, but as to the fund which should bear the expense. Mr. Synan1 and several Irish members contended that it should be defrayed from the imperial treasury and not from the Irish Church Fund-a contention which is difficult to justify on the analogy of the case discussed above, (§ 48) and which hardly seems consistent with the view of the political relations of England and Ireland which these members commonly advocated.

56. In passing to consider those measures which affected the direction of private capital we may first notice a group of enactments which were intended to lead to the application of additional capital to land.

The Leases and Sales of Settled Estates Act 2 was intended to simplify the existing machinery by which leases and sales could be effected. The Court of Chancery often required to secure the formal concurrence of many people who had no substantial interest in the matter but whose 13 Hansard, ccl. 535. 2 37 and 38 Vict. c. 33.