general principles, and fix standards. The executive work will be left to the new regional organisation which must be built up, on the nucleus of the existing organisation of such of the great companies as continue to exist.

In reference to the matter which is likely to rouse more public interest than any other, the revision of rates and fares, Parliament has, by an amendment of the Bill as originally introduced, provided that the Minister shall refer the question for advice and report to a Committee of five or six persons-a judicial member nominated by the Lord Chancellor; two representatives of trading interests nominated by the Board of Trade; and two or three members nominated by the Minister himself, one to represent transport interests, another to represent labour, and a third who may or may not be added at his own discretion. The Committee are to enquire and take evidence, publicly or privately as they may decide, and report to the Minister. But the Report will not be a public document, and the Minister will not be bound to follow the advice of the Committee.

It is to be remembered that, as has been said above, the entire scheme of the Ways and Communications Bill is temporary and transitional. The task assigned by it to the Minister is, in the first place, to transform the old competitive system into a new unified system, and then to prepare and submit for the approval of Parliament a scheme for the management of the unified railways hereafter. The country is committed to unification, which implies temporary nationalisation. To nationalisation as a permanent policy it is not committed. But the private and almost wholly autonomous companies, as they have existed hitherto, are things of the past. The management passes under the tutelage of the State. If the companies continue to exist, it may be that they will become, as in France, India, Holland, and formerly in Italy, lessees of the State, strictly controlled by the covenants of their leases. The advantages of some such system are obvious. There would be less danger of political interference with the actual management; and the lack of flexibility, enterprise and promptitude, commonly regarded as inevitable in a Government machine, would be avoided. On the other hand, railway history

shows no instance where the relations of lessor and lessee have been harmonious. In Italy, as has been said, they became impossible, and the lessor re-entered into possession. In France there has been constant strife between the Ministry, complaining that the companies were not living up to their obligations, and the companies, complaining that the Ministry was exceeding its functions. In India railway policy is at this moment in the melting-pot, and no one yet knows what new system will emerge.

There are two other methods by which it is possible for a public authority to retain full control, and yet at the same time to avoid the responsibility of direct management. In Germany, before the war, not a few of the great municipalities entrusted the management of undertakings of public utility, gas, water, electric light, tramways, and so forth, to a company in which the Municipality held shares sufficient to make it an important if not a predominating shareholder. The system is understood to have worked satisfactorily. The public authority protects the public and gives the company the benefit of its superior credit, while at the same time the benefits of private enterprise are preserved; and, what is perhaps even more important, the company organisation interposes a buffer which absorbs the shock of political pressure. The same system was introduced in Mexico, while Mexico was still an organised community, by Mr Limantour, the brilliantly able Finance Minister of President Diaz; and it worked successfully for a good many years. The Government acquired at small cost a holding of deferred common stock in the National Railroad Company, which, while offering no prospect of a dividend, gave them the majority vote in a stockholders' meeting. The Directors, an ordinary Board of business men, managed the undertaking, and were left substantially free to manage it, subject, however, to the knowledge that the Government could at the next annual meeting vote them out of office.

Canada is at this moment setting a new precedent. Since the early days of Confederation, the Dominion Government has owned and operated a railroad, the Intercolonial (about 1800 miles in length) in the Maritime Provinces. The management has been a byword for

extravagance. The fairly substantial earnings have been insufficient even to cover actual expenses. It is hardly disputed that this result has been due to political interference. More recently the Government itself built and has till the other day operated the National Transcontinental Railroad, from Montreal to Winnipeg, another 1800 miles. Concerning this railroad, one fact suffices. It was estimated to cost $35,000 a mile; it did cost $90,000, without providing anything for rolling stock. The Royal Commission, as has been said already, recommended that, in spite of this experience, the State should take control of another 15,000 miles of railway then in the hands of private companies. The Government has acted on this recommendation. It has already acquired the whole of the common stock of the Canadian Northern, with over 10,000 miles of line, thereby securing absolute control of the undertaking. It is at this moment negotiating terms on which the Grand Trunk and the Grand Trunk Pacific shall be taken over also.

The chief interest of this proceeding lies in the question how the Government proposes to manage this huge concern-with control of 20,000 miles of railway. The Commissioners, mindful of the baleful influence of politics in the past, proposed that the management should be vested in a body of Trustees, to be originally appointed in the Act of Parliament by name, but subsequently to be self-perpetuating; in other words, nominating their own successors, the Government having power to reject but not to change the nominees. This recommendation, deliberately designed to make the management independent of Parliamentary interference unless and until the system was altered by a new Statute, has not been accepted in full. But the Government and Parliament have gone a considerable distance in the direction proposed. By an Act just passed there has been constituted a Dominion Railway Company, with a Board of Directors composed of business men of high position, with powers of management as full as those vested in the Board of an ordinary commercial company. This Board is already managing the Canadian Northern; the two lines hitherto controlled by the political Minister of Railways, the Intercolonial and the Transcontinental; and the Grand Trunk Pacific. It is understood that it will assume the

management of the Grand Trunk also as soon as the negotiations for the transfer are completed.

Of course it will be said that this is only a paper protection against politics. The members are appointed by, and must take their orders from, the Government, under pain of dismissal. This is no doubt true, but it is, after all, inevitable. Parliament, as representing the public, is and must be supreme. If Members of Parliament determine not merely to settle broad policy, which they clearly should do, but to put their fingers into the actual management, which all experience proves they cannot do without disastrous results, and if they are permitted by their constituents to have their way, then it must so be. But Canada at least points to a way in which it is theoretically possible to get the advantages of State ownership without the disadvantages of State management. When the period of reconstruction is over, we may do well-substituting, to meet English conditions, say, six or eight companies for one single company-to consider whether we cannot follow the Canadian precedent of administration by boards of business directors. With this difference, however. In Canada the Government is the sole shareholder, and naturally therefore appoints the entire Board, and will take all the profits when there are any. Under Canadian conditions this was inevitable. But here in England things are different. If half a dozen of the great companies are kept alive during the transition period, it may prove desirable subsequently to bring them back to active life as operating companies, with Boards partly of official nominees, partly representative of the shareholders. In other words, to adopt a scheme similar to that of the German municipalities, by which the private shareholders are rewarded for successful management by some agreed proportion of the net profits above their guaranteed net income.

W. M. AcWORTH.

Art. 11.-RECONSTRUCTION IN THE UNITED STATES. WHEN the armistice of Nov. 11 brought the active war to a conclusion, the United States had not reached the climax of its military and economic effort. Nineteen months after the declaration of war America had increased its total armed forces on land and sea from 293,000 to 4,339,000. There had been transported overseas, by the joint efforts of the British and American navies, an army of 2,053,347 men, of whom 1,338,169 had been in action by Nov. 11. The economic mobilisation, which had proceeded but slowly during the first year of the war, was greatly accelerated in the early spring of 1918, and had nearly reached its culmination in November, although its results in the form of an abundant flow of all necessary supplies and munitions would not have been fully manifest until the spring of 1919.

The United States was hardly more ready for peace and the resumption of normal life in the fall of 1918 than it had been prepared for war in the spring of 1917. The American people as a whole had suffered but little; its losses, although distressing, were insignificant in comparison with those of its associates in the war. The war-time restrictions, relating mainly to food and fuel, had not been of such severity or duration as to cause depression. The rewards of labour and agriculture were greater than ever before in the history of the country; military service was still, to the majority of men in the army, a novel experience rather than an intolerable burden; enthusiasm for the war had not abated, but on the contrary had been greatly increased by the successes of the summer and fall; in short, the country was not tired but was only conscious of its rapidly increasing strength and was eager to exert it to the utmost.

The end of the war brought the nation face to face with a variety of problems, some of which, such as the military and economic demobilisation, the re-employment of labour, and the readjustment of industry, grew directly out of the war, while others were old problems seen in a new light or presented under greatly changed conditions because of the lessons and experiences of nineteen months. To this latter group belonged such Vol. 232.-No. 460.

N