MR. GLADSTONE'S NEW SCHEME. T HE Railway scheme attributed to Mr.
Gladstone ought to be discussed in essentials at least before the meeting of Parliament, if only to avert that surprised annoyance with which the nation always receives a project which is not visibly an embodiment of a slowly formed public desire. It seems prime e facie difficult, perhaps even a little useless, to consider a project so dependent on detail before he has explained his views but the limits within which he can move and the purposes for which only he will move are capable of such sharp defi- nition that it is possible to reason upon essentials, even before the Chancellor of the Exchequer has brought his marvellous power of statement to bear upon the particulars. In the first place, the powers legally vested in the Government for making a change in Railway management are sufficiently clear. The Railway Act of 1844, 7 and 8 Victoria, cap. lxxxv., contains a clause which, if we are not greatly mistaken, was suggested by Lord Dalhousie, but which was defended in the Lower House by Mr. Gladstone, conferring on the State the right of purchasing any railway twenty-one years old and constructed after 1844, whether its owners wish to sell it or not. The state therefore can legally, if Parliament chooses, commence in 1865 buying up all railways opened since that period, that is, in practice all railways except some of the trunk lines. The object of that clause, moreover, was stated in a speech of Mr. Gladstone when introducing it to be the preven- tion of any evils from monopoly, and as Parliament is the sole judge whether evils have or have not arisen from monopoly, it has a clear moral as well as legal right to act on its own precautionary reserved power. It has, more- over, the ability as well as the right,—a point upon which an extraordinary confusion seems to exist. The Act compels the State, should it at any time purchase a railway, to give the shareholders twenty-five years' purchase, calculated upon the average of market prices during the last three years. As a matter of fact, sound railway shares throughout the kingdom may be taken as being worth just twenty years' purchase, that is, the average prices of three years have always yielded within a fraction of 5 per cent. Consequently, remarks the Times, the State would have to pay the difference, viz., five years' purchase, and as Parliament will not pay the difference, there is an end of the matter. The Times, however, has formed its decision a great deal too hastily, and missed the most essential element in the question. The State has, it is true twenty-five years' purchase to pay, but then it borrows at thirty years, or 31 per cent., and the difference is all in its favour. Twenty-five years' purchase means 4 per cent., while Government can borrow at 31. The difference of three- quarters per cent. represents its own profit, and supposing it conceivable that it could purchase the whole railway system of Great Britain and Ireland, say a capital of four hundred millions, its profit would be rather less than three millions sterling a year, with possibilities of increase. We merely quote these figures to show that it is not the cost which will prevent any action under the clause, however vast, and not as advocating any change so wide in the administrative system of the country. Mr. Gladstone of course has no such idea in his head, but it is necessary that the truth as to the existence of pecuniary, or legal, or moral obstacles should be first of all made clear. The primary and demonstrable data of the whole business are that Parliament has the legal power to buy up the British Railways—the branches practically govern- ing the trunks ;—that it has the moral right to buy them ; that it can offer a price at which the whole body of shareholders will jump ; and that it can offer this price without cost and with pecuniary benefit to the taxpayers. The question to be considered therefore is not the legality, or the morality, or the possibility of such a transaction, but only its expediency. The purchase of the entire system may be put out of the discussion, simply because no such step is at till likely to be proposed, or even contemplated. There is an irrepressible instinct in the British mind which forbids any novel applica- tion of State power to internal purposes upon. a scale so vast, and involving consequences so far beyond statesmanlike cal- culation. The House of Commons would be too startled by the mere mention of such an enterprise to consider it calmly, and the nation is never less startled than the House of Com- mon. But even when discussing suggestions admitted not to be practicable it is as well to avoid talking nonsense, and nonsense is being talked very liberally on the matter. The " vast " suggestion, supposing it made, would not involve any necessary loss of revenue, any diminution in the range of private enterprise, any increase, dangerous or safe, in the sum total of State patronage. The lines need not, because owned by the State, be worked by the State, can be leased to private companies as easily as they are now constructed by them. The men would be different, the system the same, the change being only equivalent to that which has already occurred over and over again, viz., the transfer of each railway in turn from one body of directors to another, equally irremovable, equally independent, but under far stronger inducements to work the lines to a profit and far more stringent compulsion to consult the interests of the public. The lessees, not the State, would appoint, pay, and dismiss the armies of railway officials ; they, not the State, would have the disposal of con- tracts; they, not the State, would enjoy the distribution of all those prizes, posts, profits, and per-centages which some writers appear to imagine would suffice to corrupt all Eng- land. Even on this great scale the objection to be taken is only one of expediency, and the plan, if proposed, is sure to be something infinitely less gigantic than this.
Let us turn to the practical matter. Parliament having the power to purchase and lease out some one small net of railways, say in the North, at a price which will leave the State 1 per cent. profit per annum while enriching the shareholders, is it worth while for Parliament to exercise that new power simply as an experiment? It is stated, we believe justly, that Mr. Gladstone is more than half disposed to believe that under certain circumstances, such, for example, as the approval of a majority of both Houses, the consent of the Railway interest, and the adhesion of the bulk of economists, it might be very advisable indeed. He is said to entertain a conviction, the value of which it is for Parliament to consider, that the Rail- way system, as at present worked in this country, does not effect the maximum good to be expected from the enormous powers conferred upon the different Companies, that greater good could be achieved, and that the obstacle to greater good is the excessive and just reluctance of private proprietors to undertake any large or long-continued experiment, to spend any money not certain to produce adequate and immediate return. Especially are the Companies unwilling to run the risk of those heavy reductions in the price of their commodity which would bring it within the easy reach of the masses, which would, for example, enable the working poor of great cities to live ten miles out of them, and so prevent that tendency of blood to the heart which now threatens, if not suffocation, still disease. They are also, though not quite so strongly, dis- inclined to try whether low rates for great masses of goods might not pay them better than high rates for comparatively limited quantities, whether in fact three-farthings are not worth more than a halfpenny. It is the belief of many econo- mists that such rates, so far from diminishing, would in a few years enormously increase the receipts from railways, but the- *.Y shareholders want money now, and directors are as unwillike as other corporations to move out of their well worn 4o.- therefore easy grooves. Probably no company not backed by the State will ever try the experiment fairly, yet it is of the highest moment to the nation that it should be fairly tried. Suppose, for example, it were found possible to halve that penny per ton per mile to which railway directors cling so fondly as a normal rate for the carriage of goods, the effect on trade and agriculture would be almost inconceiv- able. Not only would every branch of commerce involv- ing the transmission of heavy weights receive a new im- petus, but new branches now shut up would at once be opened. Suppose, to put a case everybody can understand, heavy manure, chalk, or such like substances could be carried twice the distance for which they now can be profitably con- veyed, the radius of benefit from every chalk-pit, deposit of town sewage, or other collection of manure would be increased 300 per cent., to the indefinite benefit of agricul- ture. Entire branches of business which now await only the means of cheap carriage would at once be called into existence, while the power Of personal locomotion, the very life-power of civilization, would be enormously increased. The masses do not use railways to a tithe of the extent it would be profit- able to use them, cannot, for instance, go journeys upon the chance of work, cannot afford to work at a job more than walking distance from home. The natural flux and reflux of the population towards and from the temporary centres of occupation are checked, to the injury of every workman, who thereby forfeits new chances, and of every employer, who has to encamp instead of merely attracting his supply of labour. Imagine the difference to Lancashire if its hands could last year have sought work at four times the distance they were then enabled to afford! We do not argue that any of these advantageous results are certain, we do not know that the Belgian example, for instance, is worth anything, but we say that they are possible, and being possible are well worthy of an experiment, which, to judge from experience, the State alone can make. It has made two in the same direction already, viz., the transmission of all letters and all parcels of printed paper at excessively low rates, and with acknowledged and ever increasing success. Its object of course would not be to supersede in any direction or in any degree private enterprise, but simply to render the value of private enter- prise more complete, to ascertain the extent to which rail- ways while paying large dividends can be made to con- tribute to the general welfare of the country. That is a problem which demands solution, but which no company can be expected to solve, and if this is the meaning of Mr. Glad- stone's proposal, it demands and must receive an attention far more earnest than the City seems disposed to bestow. As for stifling it out of hand, as the Times seems disposed to do, the effort is simply a waste of power. There is an " interest " in England at least as strong as that of railway directors, viz., that of railway shareholders, and if the public, the share- holders, and the thinkers should be, as seems possible, all of one mind, the opposition of the Boards will not be of much political moment. For ourselves, we can only honour the courage which dares to disregard so completely the maxim "Quick non moven," and ventures in the interest of the nation to bid a great coalition of interests listen to arguments which the nation itself has as yet omitted to put fozward.
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