some time before its full effects are felt. We assert the the industrial and commercial interests of the countrys large, not those of a particular class, will suffer by th legislation proposed; and we make this assertion in go faith. But it is an assertion the truth of which cann be brought home to the masses save by experience; a experience, if sure, is slow. The time is not yet ripe; us have faith in our own predictions. A year hence it may be two years, the new taxes will have had time work, and their general effects may be perceptible. T we may go to the country with the tangible proof t all classes are suffering; now we can only assert t they will suffer, and assert it on grounds which we hardly expect the masses to understand. We are dou less at a certain disadvantage in attempting to judge question at this moment. During the next two mont many things may happen. On the one hand, the co plexion of the Bill may undergo a considerable chang On the other hand, events may indicate so great a massi of opinion hostile to the Bill as to make resistance a only feasible but even obligatory. But, with nothin but present facts before us, we are driven to the cond sion that, for the sake of the Conservative and Union party, as well as for the good of the State, a Fabi policy is the wisest policy.

The choice, as we began by saying, is a hard one; harder was never laid on the leaders of the Conservati party. That great pressure will be applied to force the into an attitude of stubborn resistance we cannot doub To renounce that attitude will give rise to great di satisfaction in certain sections; it will require coura to decline battle. Lord Lansdowne and Mr Balfour a at once courageous and cautious men; and we have th fullest trust in their judgment. We would not appe to advance a confident opinion; nevertheless, with suc lights as we have, we cannot avoid expressing the hop that, unless circumstances are very different two month hence from what they are now, they will prefer discretion to defiance, and a continuance of useful and vigorous life to the risk of irretrievable disaster.

THE

QUARTERLY REVIEW.

No. 421.-OCTOBER, 1909.

Art. 1-THE NATIONALISATION OF BRITISH RAILWAYS.

I question as to the desirability of the acquisition and anagement by the State of the railways of the United Kingdom has been more widely discussed during the past eighteen months than at any other period since 5, when the last Royal Commission on railways was ppointed. The principle of public ownership of railfays has always received a certain measure of support in general grounds; but since the end of 1907 a variety of circumstances have tended to place the question in a ery different position from that which it has occupied many years in the mind of the general public. Among the most far-reaching of these circumstances as the profound impression made on public opinion the contemplation of the consequences which would are attended the threatened strike of railway employés the autumn of 1907. Owing to the good offices of Mr Lyd George, then President of the Board of Trade, combined with the conciliatory attitude of the directors of the railway companies and the representatives of the ailway servants, a national disaster was then avoided; and it is now recognised that the intervention of the President of the Board of Trade in that controversy marked the beginning of a fundamental change in the railway policy of the State.

Another circumstance which has tended to bring this matter prominently under the notice of the public has been the example of foreign countries. We are not easily influenced by foreign example, but the fact that Italy, Switzerland, Mexico, and Japan have all national

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ised their railways in some form or other with past five years has made a marked impression public mind. Then there is undoubtedly a amount of dissatisfaction with the railway work th this country. It may be safely asserted that the a no railway system in the world which is not op ach some form of complaint; and it must be admitte railway business, which touches almost every mode of the community, is peculiarly open to criticism. grievances of traders and others are probably exagge but they are apt to be loudly voiced and thus prod T effect disproportionate to their real extent. The re of what may be loosely termed socialistic ideas is an influence which has kept the matter before the p and the Labour party has to some extent comm itself to the policy of nationalisation of railways, theory apparently that the State as an employer be more amenable to pressure through Parliament are the companies, and that nationalisation would fore mean shorter hours and increased wages for rai servants. The dissatisfaction of a large section of way shareholders with the position of the railwa dustry has also had considerable effect in drawing p attention to the railway problem.

The most important influence of all which has dire the attention of the public mind to the position of railways is the remarkable change which has come the attitude of the leading railway administration the country to each other. Briefly it may be said t the year 1908 witnessed the abandonment of the policy of indiscriminate competition and the substitut of the policy of co-operation and consolidation. Thei is being recognised both inside and outside railway cir that the application of the principle of unlimited co petition to the railway service of this country is i scientific and economically unsound; and enlighten public opinion is beginning to perceive that, if the ra ways are to render the utmost possible service to t community, they must be encouraged to surrender t wasteful policy of competition which they have hithert largely pursued.

A fairly strong a priori case can be made out for nationalisation. It does not seem to be an unreasonable

ption that one great central administration, having object the serving of public interests only, should e to offer a better and cheaper transport service icularly in view of the superior credit enjoyed by te-than could be afforded by a large number of ual companies each working independently and ted largely by motives of self-interest; and there oubtedly a good deal to be said in favour of the ent that the essential condition of efficiency and y can only be attained by the most thoroughcentralisation. The weight of such abstract conions is, however, seriously weakened when examis made of the practical working of the various ailway administrations throughout the world; and gnificance should be attached to the fact that no y has nationalised its railways on purely theogrounds. It will be found that this policy has ably been adopted under pressure of strategical, eal, or economic considerations.

he railway problem of every country possesses ar features; and that of the United Kingdom is inly not less complex or difficult than those of countries. But, though we cannot hope to learn to solve our difficulties by a mere inspection of the mer in which other countries have dealt with their sportation problems, it cannot be denied that their rience is of the greatest value in indicating some he difficulties which attend the public ownership of

ways.

The railways of the world may be roughly divided two groups, namely, (a) those which are owned administered by companies; and (b) those which owned and administered by the State. There are ards of 560,000 miles of railway in operation at the sent time; and of this total approximately 390,000 es are owned and worked by companies, the balance 170,000 miles being under State administration. It perhaps be a matter of surprise to many people to arn that more than two-thirds of the railway mileage the world is still owned by companies, but it is only ir to point out that of these two-thirds the United tates of America account for about 225,000 miles; so hat, apart from America, the mileage of the State

owned railways approximates to that of the privat owned lines.

Anglo-Saxon communities, as a whole, have not shom any great predilection for the public ownership of ways; but most of our self-governing colonies have bea compelled, principally from economic causes, to ad this policy, and it is to them that we must look f illustrations of the manner in which men of our ow temperament and traditions have solved, or attempte to solve, some of the great difficulties which beset thi branch of State administration.

Practically all the railways in Australia are owne and administered by the six States which constitute Commonwealth. Broadly speaking, it may be said the this policy was originally adopted from economic nece sity. Labour difficulties played a prominent part in th matter, but financial considerations were the determinin factors. Investors would not provide the capital require for the construction of railways, owing largely to the unfavourable prospects of remunerative traffic; and esc State therefore was practically compelled to undertake the construction as well as the administration of railways There are in Australia at the present time upwards 14,200 miles of State railways in operation, as compared with only 950 miles owned by companies.

From the point of view of the taxpayer, the railway of Australia cannot be looked upon as an unqualified success. Only one province, namely, Western Australia has been able to show a net profit on the working of it railways since their inception. The working of the other State railways has resulted in heavy losses to the various Governments. Thus, for the fifteen years to June 30 1907, the Victorian railways showed a loss, after paying working expenses, special expenditure and charges, and net interest charges and expenses, of 2,803,0717.; and the total net loss since the inauguration of the railways is estimated at not less than 9,000,000l. The accumulated deficit of the New South Wales railways is estimated to amount to a very much larger total. The Queensland railways have also proved a costly undertaking for the taxpayers. From 1865 to 1906 there were only two years in which these Government railways earned the full interest on the capital expended on their construc