in their present owners, would be an unending task. If, ne the other hand, the State takes possession of the whole, aving the shareholders to look to it alone for proper mpensation, the thing becomes a matter of merely ternal administration.

Nor is it the railways only that are involved. Our vourite habit of deciding each question as it arises, pot in accordance with a definitely thought-out policy, mit on the narrow facts of the individual case, has nded us in an utterly illogical position in respect various other transport undertakings. About half canals of the country are in the hands of the raily companies; and in not a few cases the railway nals form the only access for the private canals to portant traffic points. The common belief that this ite of things is due to the superhuman cunning and ckedness of the railway companies is entirely unPported by history. But the fact remains; and e conclusion is irresistible that, if we are to have a gical organization of transport, the railway canals 1st be surrendered by their present owners and codinated with the remainder under a single unified aal department.

The same thing holds in reference to ports and docks. present we have three systems. Sometimes, as in ndon and Liverpool, the ports and the docks are both trolled by a public authority. On the other hand, netimes, as at Folkestone and Newhaven and some of Scotch ports, the railway company not only owns docks and piers, but is also the harbour authority. re commonly there is a mixed system, under which re is a public harbour authority, while some or all of dock accommodation within the harbour limits belongs railway companies, as is the case in the great ports Southampton and Hull and Newcastle. Now, no one uld attempt to defend such a system on abstract unds. Further, such a shifting of the old course of ffic as must be implied in the transition from comitive to non-competitive railways ought to be carried in the interest of the country as a whole; bearing mind, at the same time, the reasonable claim of each ividual port that it shall not be condemned to rvation. It would appear that only by entrusting

the matter to a single over-riding authority can this double end be attained.

OWN &

res

of

TOBE

Yet another argument may be adduced, which is noth without considerable weight. It will hardly be questioned fa by those who know what was happening in other countries that before the war English railway manage ment had got into a rut. There is no need to blame any one, or to specify particular instances. But the fact is that, even when reforms and improvements were accepted as desirable, they failed to get carried through, or at best were carried through in a half-hearted manner. One reason for this is easy to see. So long as railways were competitive, an enterprising manager knew that, if he disturbed old habits and established methods on his system, his staff might resist, and his traders might transfer their custom to a rival line. The result was something like stagnation. A clean break with the past has from this point of view considerable advantages Further, the English railways have not hitherto recruited for their service more than a few men of wide general education. Natural capacity is there in full measure But men who go to work as lads of fourteen or six teen-as has hitherto been the case with the great bulk of those from among whom administrative positions. have to be filled-cannot be blamed, if their vision is more circumscribed than that of a man whose education has been carried forward up to university standard. It may be assumed that public service, with a wide career open to those who 'make good,' will enlist men of the same standard as crowd at present into the examinations for the first-class Civil Service. And what ever anybody may think of Civil Service methods and the deadly influence of a purely office routine on organising efficiency, it cannot be denied that the Civil Service at the present moment can command the pick of the brains of the country.

For all these practical reasons the present writer is convinced that, things being what they are here and now, railway nationalisation, not necessarily as a permanent, but at least as an interim policy, must be accepted as the best course open to us at the moment. Even if we were to refuse to accept this theoretic

3

onclusion, we can hardly get away from the conviction hat the result is practically inevitable. Railway prodi rietors, who, if their property was handed back to them, hould be face to face with an almost hopeless financial ituation, naturally desire it. The organised working lasses are determined to have it. And where is an ffective opposition to come from? Mere mental hostility oes not command votes. The trading classes unquesonably dislike the idea of nationalisation. But they islike high rates still more. And it is clear that it is nly by the abolition of competition and the consolidaon of all the railways into one unified system or roup of systems that large-scale economies can be ffected. Unification on a non-competitive basis in rivate hands would never be tolerated by public pinion.

Tied

his

B

Proceeding, then, on the assumption that nationalisaon has to come, there remain for consideration two oints: How is the process to be carried through? and hat is the form that the new organisation should take? he Ways and Communications Bill, which has now assed through Committee stage in the House of ommons, as originally introduced gave the Minister owers by Order in Council to acquire railways and ther transport undertakings, and to operate them himelf or lease them to operating companies. But the hole of these powers were withdrawn before the econd Reading. As the Bill now stands, the position that the existing temporary possession under the Act f 1871 will continue for a further period of two years, ith, however, this important difference, that, whereas Il now the management and operation have, subject

the exigencies of the public service, substantially emained in the hands of the companies themselves, for he next two years the Directors and officers are required ɔ obey the direction of the Minister in reference to the ates and fares to be charged; the salaries and wages to e paid; the working or closing of any lines or stations; le carrying-out of alterations, additions and improveients; and the introduction of co-operation by running owers or common use of lines, of rolling stock, repair hops, etc. Any permanent settlement will have to be aade by Act of Parliament hereafter.

take

a

Ch

It is quite clear that all the above-mentioned alterations and rearrangements would never be made as a te temporary measure; they can only be introduced as part of a logically thought-out and complete scheme. Now, if a man, proposing to occupy a house, decided to pull down a wing here, to add on an additional storey there, and to rearrange the whole interior, common sense would dictate that he should come to terms with the owner before starting the work. It would seem that the Minister is in the same position here. His first task will be to make such a settlement with the proprietors as will leave him free to deal with their property as he thinks best. This can be done in two ways: by out-andout purchase, or by guarantee. A guarantee can two forms: a guarantee of an aggregate amount to a company as a whole, leaving to the Directors the apportionment among the different classes of stockholders; or a guarantee to each class of stock-holders separately. To an out-and-out purchase, implying the issue of many hundreds of millions of stock, with the possible liability of finding large additional sums in cash, A we may assume the Chancellor of the Exchequer would, in present circumstances, refuse his consent. There remains the guarantee. And the difference between the two forms is very much a matter of practical convenience; for to fix the amount of a guarantee as a whole, it would be necessary to estimate, with some approach to accuracy, the reasonable claims of the several classes of stock.

tio

et

DET

What the total amount of the guarantee is likely to be no one can estimate in advance. But certain broad considerations naturally suggest themselves. There will certainly be persons, representing a voting power by no means. negligible, who will urge that the purchase price of undertakings, which not only have no net revenue but are actually being carried on at a serious loss, should be a derisory sum. On the other hand, the English people are not only just but generous, and may be trusted to appreciate that English railway shareholders have deserved well of their country. They have invested a sum of 1,300,000,000l. of solid money-there is probably as little water' in English railway stocks as in any important class of investments in the worldand not only have they done this without State help,

but the State has been responsible for saddling them with a serious burden of unnecessary expenditure. They have never received more than a very moderate return on their investment; and they have provided for public se a transport machine which, with all its faults of luplication, and though not a little out of date, has yet roved itself so efficient that the strain of carrying 0 per cent. more traffic than it was ever designed for as failed to break it down.

There is also another consideration. Under authority f Parliament, given either directly or through delegation the Chancery Division of the High Court, hundreds of illions of Trust funds have been invested in railway ebenture and preference stocks. In equity no Governent can disclaim a responsibility for the result of its wn action. Nor could any Government afford to do so its own interest. It is difficult to imagine what would e the effect on Government credit of any attempt to eal harshly with the owners of Trust securities. On he other hand, all Trust securities are not in the same ass. A man who bought even first debenture stock of a reat company took a security inferior, as shown by he market price, to Consols, because he counted on ereby getting a better income. And the same applies, fortiori, to a man who bought second preference stocks some small railway. It would be unreasonable to ve to a man who bought such a stock-yielding, say, per cent.-when he might have bought Consols, a overnment guarantee of his full present income in rpetuity; for that would be giving him something ich at the outset he deliberately refused to pay for. Ordinary stocks stand in a different position. They e bought as much on the basis of prospective as of esent income. Expectations have been grievously dispointed; and, to some extent at least, the holders must pect to take the consequences. Their property has teriorated in value, not, broadly speaking, through any tion of the Government, but, like many other underkings, through the fortune of war. They have been by two things: a rise in wages, and a rise in the cost material. It may fairly be urged that the rise of iges would not have been so great as it has been, had at the Government interfered. But it cannot be denied