MR. GLADSTONE'S NEW SCHEME.

Lyttelton Times, Volume XXIII, Issue 1369, 7 March 1865, Page 2

MR. GLADSTONE'S NEW SCHEME.

(From, the Spectator, Dec. 17.) The Railway scheme attributed to Mi*. 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 prima facie difficult, perhaps even a little useless', to consider a project so dependent oil detail before he has explained his views, but the limits within which he can move, and the purposes for which only he mill move are capable of such sharp definition 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 Xiower 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 can therefore 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 prevention 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, moreover, 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 eent. 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 p&y? but thsn it borrows a.t thirty* years, or per cent., and the difference is all in its favour. Twenty-five years' purchase means 4 per cent., while Government can borrow at 3£. The difference of threequarters 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 willprevent 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 governing 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 all likely to be proposed, or even contemplated. There is an irrepressible instinct in the British mind which forbids any novel application of State power to internal purposes upon a scale so vast, and involving consequences so far beyond statesmanlike calculation. 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 Commons. 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,nottheState,wouldhavethe disposal of contracts; 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 England. 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. Par-1 liament 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 £ 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 railway 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 ■grfeater good could be achieved, and tbafrthe

obstacle to greater good is the excessive and tot reluctance of private proprietors to just reiuuta 1 lon "-continued exundertake any large or ion ineriment, to spend any money not certain to See adequate and immed,ate return. Especially are the companies unwilling to run the mk of those heavy reductions rathe price of their commodity which would bring Kithin 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, disinclined to try low rates for great masses of goods might not pay them better than high rates for comparatively limited quantities, whether, idl fact, three farthings are not worth more than a halfpenny. It is the belief of many economists that such rates, so far from diminis ing, would in a few years enormously increase the receipts from railways, but then shareholders want money now, and directors are as unwilling as other corporations to move out of their well-worn and 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 clmg so fondly as a normal rate for the carriage of goods the effect on trade and agriculture would be almost inconceivable. Not only would every branch of commerce involving the transmission of heavy weights receive a new impetus, 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 conveyed, 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 agriculture. 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 profitable 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 ot 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 enterprise more complete, to ascertain the extent to which railway's, whtls .;p&ying large dividends, can be made to contribute 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. Gladstone'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 shareholders, and the thinkers should be, as seems possible, all of one mind, the opposition of the Boards will not be of much political moment. Eor ourselves, we can only honour the courage which dares to disregard so completely the maxim " Quieta non rnovere" and ventures in the interest of the nation to bid a great coalition of interests listen to arguments which the nation itself has yet omitted ;o put forward.