remove them from office. Practically, however, the difficulty of exercising this power is found to be so great, that it is hardly ever exercised except in cases of such flagrantly unskilful, or, at least, unsuccessful management, as would generally produce the ejection from office of managers appointed by the Government. Against the security afforded by meetings of shareholders, and by their individual inspection and enquiries, may be placed the greater publicity and more active discussion and comment, to be expected in free countries with regard to affairs in which the general government takes part. The defects, therefore, of Government management, do not seem to be necessarily much greater, if necessarily greater at all, than those of management by joint stock. : 'The true reasons in favour of leaving to voluntarily associations all such things as they are - competent to perform, would exist in equal strength if it were certain that the work itself would be as well or better done by public officers. These reasons have been already pointed out the mischief of overloading the chief functionaries of Government with demands on their attention, and diverting them from duties which they alone can discharge, to objects which can be sufficiently well attained without them the danger of unnecessarily swelling the direct power and indirect influence of Government, and multiplying occasions of collision between its agents and private citizens; and the still greater inexpediency of concentrating in a dominant bureaucracy, all the skill and experience in the management of large interests, and all the power of organized action, existing in the community: a practice which keeps the citizens in a relation to the Government like that of children to their guardians and is a main cause of the inferior capacity for political life which has hitherto characterised the over governed countries of the Continent, whether with or without the forms of representative government. other local taxes. In the case of these particular services the reasons preponderate in favour of their being performed, like the paving and cleansing of the streets, not certainly by the general Government of the State, but by the municipal authorities of the town, and the expense defrayed as even now it in fact is by a local rate. But in the many analogous cases which it is best to resign to voluntary agency the community needs some other security for the fit performance of the service than the interest of the managers; and it is part of the Government either to subject the business to reasonable conditions for the general advantage, or to retain such power over it, that the profits of the monopoly may at least be obtained for the public. This applies to the case of a road, a canal, or a railway. These are always, in a great degree, practical monopolies; and a government, which concedes such monopoly unreservedly to a private company, does much the same thing as if it allowed an individual or an association to levy any tax they chose for their own benefit on all the malt produced in the country, or on all the cotton imported into it. To make the concession for a limited time is generally justifiable, on the principle which justifies patents for inventions; but the State should either reserve to itself a reversionary property in such public works, or should retain, and freely exercise, the right of fixing a maximum of fares and charges, and from time to time, varying that maximum. It is perhaps necessary to remark, that the State may be the proprietor of canals or railways without itself working them; and that they will almost always be better worked by means of a company renting the railway or canal for a limited period from the State.' The following is an extract from an article on monopolies in the French Dictionnaire de Economie Politique.' Coquelin et Guillaumin. Paris, 1854. Vol. ii. Art. Monopolies, p. 224 :— 'In France the initiative and direction of all these works (i.e. harbours, internal navigations, roads, bridges, railways) belongs to the central authority, acting by means of a numerous and expensive body, the engineers of roads and bridges ("ingenieurs des ponts et chaussées"). Most of the great channels of communication are established at the cost of the 'But although, for these reasons, most things which are likely to be even tolerably done by voluntary associations, should, generally speaking, be left to them, it does not follow that the manner in which those associations perform their work should be entirely uncontrolled by the Government. There are many cases in which the agency, of whatever nature, by which a service is performed, is certain, from the nature of the case, to be virtually single; in which a practical monopoly, with all the pow-public, according to the schemes or designs of er it confers of taxing the community, cannot these engineering officials; the schemes which be prevented from existing. I have already are started independently of them are subjectmore than once adverted to the case of the Gas ed to their control; and it scarcely ever hapand Water Companies, among which, though pens that such schemes are accepted by the auperfect freedom is allowed to competition none thorities against their advice. The result of really takes place, and practically they are this régime is, that in respect of works of this found to be even more irresponsible and unap- character the spirit of enterprise is wholly disproachable by individual complaints than the couraged, and that scarce anything is accomGovernment. There are the expenses without plished except at the instance and by the imthe advantages of plurality of agency; and pulse of the body of official engineers, an imthe charge made for services which cannot be pulse which, for reasons which we have given dispensed with, is, in substance, quite as much under the title "Fonctionnaires," is incomparacompulsory taxation as if imposed by law: bly less powerful and less fertile than that of there are few householders who make any dis-free industry. Thus, none of the great imtinction between their "water rate" and their provements in artificial channels of communi cation, or in means of transport which have the advantages of Government management. been introduced within the last fifty years, have The chairman and officers of some of the originated in France-macadamisation of roads, great Joint-Stock Companies have a pride in railroads, locomotives, suspension bridges, the well-doing of their undertaking similar steamboats, &c,, all are the work of the free and independent engineers of England or to that of a public administrator, or a zeaAmerica. The monopoly of our official engi- ous town clerk. Again, Government manneers is as little adapted to improve and utilize agement is proverbially sluggish, is open to inventions as to start them. And although our Parliamentary and Municipal jobbing-is country is one of those in which industry is liable to be influenced by sentiment and immost highly developed, and in which a multi-pulse rather than by a cool consideration of plicity of the most perfect channels of communication-e. g. of railways-is the most necessary, we have remained in this respect far behind the United States, England, Belgium, &c. A further result of the French system is that the channels of communication are distributed over the country without any real proportion to the wants of its several districts, and that their expense, instead of being supported, as in England, by tolls levied on those who use them, and in proportion to the use they make of them, falls, without reference to the service rendered, on all contributors alike.' the wants to be supplied, and thus is not unlikely to select wrong fields for its energy. It is not likely that private enterprise would ever have undertaken the Caledonian Canal, nor will private enterprise undertake the construction of those great harbours of refuge which landsmen and philanthropists are urg ing on the Government, but which shipowners, underwriters, and sailors do not want, and will not pay for. But the far more important argument against committing all these undertakings to Government is, that Capital will find its own way and do what is wanted; and Government, whether General or Local, will not. It is obvious that the two writers have been influenced in the above observations by the different modes in which these enterprises have been developed in the two countries. The English philosopher has been struck by This is principally due to the activity the evils arising from the English practice of which individuals display in seeking their granting unrestricted monopolies to private own profit as compared with the sluggishpersons. The French writer, on the other ness of public governing bodies. To this hand, has been more alive to the want of en-action of individual interest special circumterprise which has followed upon the French practice of leaving such undertakings to be originated by Government. The observations of both writers are undoubtedly just; each from his own point of view, and any discussion of the subject will be imperfect which does not take both elements into full consideration. stances have in the course of the last and the present centuries largely contributed. The history of personal rights and property has, as Sir H. S. Maine tells us, been one of constant development, and, in earlier periods of our history, the community, as compared with the individual, played a larger part than at present. Accordingly, the earliest of the undertakings we are speaking of, e.g., the maintenance and improvement of our natural Harbours and Navigations, and the oldest of our Roads and Bridges, were origi 1. These enterprises fall into the hands of nally managed by public bodies. Towards Joint-Stock Companies, and Joint-Stock the end of last century, and the beginning management, as Mr. Mill points out, has by of this, various circumstances contributed to no means the advantages in energy and self-effect a change. In public opinion, and in interest over public government which enterprises managed by individuals have. Shortly stated, the following are the arguments in favour of Government or public management, and they are no doubt extremely strong: 2. There is greater unity in management and certainty in use. 3. The public get the benefit of any profit, either in reduction of price or in relief of taxation; consequently the interests of the producers and consumers is the same, and there is not the same temptation either to excessive charges or to needless investment of capital, as there is in the case of Joint-Stock Companies. On the other hand, we must not forget that if Joint-Stock Companies have some of the disadvantages, they have also some of the eye of the law, the weight attached to personal rights had become greater. Political economy taught the superior energy of individual enterprise. Capital accumulated and was seeking investment. Our laws of partnership, too, were altered, so as to enable the capital of many individuals to be united for a single purpose. And, lastly, engineering science made gigantic strides, and opened out the way for industrial undertakings such as the world had never seen before. Hence, for the last 80 or 100 years, the current has set in the direction of private enterprise, and by this means the country has been supplied with necessaries and conveniences which public management would never have afforded. Of late there has been somewhat of a reaction; there is now a disposition to strengthen and improve Local and Municipal Institutions, and to invest them with wider functions. It seems, probable, too, that this movement will increase. But it will be long before it does for us what private enterprise has done and is doing. Whilst, however, private enterprise has done so much for us, it must be admitted that there has been little thought or foresight about the ultimate results of the huge monopolies we have been creating. The few conditions by which Parliament has sought to restrict them have been useless, and, occasionally, worse than useless. And, looking to the difficulty there will be in setting matters right in the face of this gigantic Joint-Stock Company interest, it is not surprising that the public should sometimes be tempted to be ungrateful for what it has done for us, and to look upon it as a Frankenstein which it would be well to put out of the way. These general observations will be best illustrated and supported by a glance at the history of the several undertakings to which we have referred. 1. Harbours and natural Navigations.The improvement of these were among the first of large public works. They originated before the era of joint-stock companies, and, with the exception of a few small harbours owned by large landowners, are, and always have been, in the hands of some public body, i.e., either of a Municipal Corporation, or a Public Trust, or Commission, and not of profit-making companies. An evil of considerable magnitude has arisen in cases where the public body exercising this power is no longer the representative of the trade which uses the harbour, as, for instance, where the Town of Liverpool owned the Liverpool Docks, or where, as is now the case, the magistrates of Cheshire own the wealthy navigation of the Weaver, and pay out of taxes on trade what ought to be paid by the county rates of Cheshire. In such cases the locality is too apt to tax the trade of the country for its own benefit. But even in cases such as these, the sea-greatest of free traders generally limits the growth of the evil. If taxes are too high in one port, ships can, in most cases, seek another. There is one case in which the principle of placing harbours in the hands of a public trust has been recently applied in a very remarkable way, and with great success, viz., the improvement of the important navi gation of the Danube. This has been intrusted to an International Commission representing the different maritime nations interested in the trade of the Danube, and it has carried on its work so efficiently as to develop an enormous traffic. There is the greater reason for mentioning this case at the present moment, since it affords a precedent fer endeavouring to deal in a similar way with the still more important case of the Suez Canal, which is now in a very bad financial condition, and which, if it remains in the hands of a private company, is likely to suffer hereafter from all the evils of monopoly, aggravated by international jealousy. 2. Canals. These were amongst the first products of the new engineering era, and have been, and now are, almost entirely in the hands of joint-stock companies. They have, however, been generally superseded or swallowed up by railways, and are now of little importance. But for this we should probably have heard many complaints of their profits and charges. 3. Docks were also an early product of the engineering era, and, consequently, they were often made in the first instance by private capital. On a very rough estimate made from the share lists, it seems that the capital of joint-stock companies now invested in docks amounts to nearly 15 millions. From the limited area in each port available for docks, they are often, so far as the port itself is concerned, very special monopolies. But the sea, as we have said, is the greatest of free traders. The rivalry of other ports generally prevents any very bad effect from a dock monopoly, and rouses the trade of the port to put a stop to it when it becomes oppressive. Partly for this reason, and partly because it has been found that rivalry in the same port between competing dock and harbour authorities creates confusion, difficulty, quarrels, and expense, whilst harmonious arrangement is of paramount importance to trade, the tendency for the last 20 years has been to hand over the management and construction of docks to local trusts representing the whole interests of the port and making no profit. Thus docks made by private companies at Sunderland, Liverpool, and Birkenhead, have been in late years handed over to public trusts, whilst at Newcastle and Shields, at Glasgow and Greenock, at Dundee, Leith, Belfast and Aberdeen, and other ports, docks recently made have been constructed, and are managed by public bodies representing the dock ratepayers. There are some instances in which (as was formerly the case in Liverpool, and as is now the case with the Dock Company of Hull and with the Town Council of Bristol) actual legal mo- | turnpike-tolls, and to pay expenses out of nopolies have been improvidently given to rates. The importance of turnpike trusts is the owners of one set of docks, by means of diminishing yearly-partly for the above charges leviable by them throughout the reason, partly on account of the transfer of whole extent of the port; and the evil of through traffic to railways. The number of such monopoly is felt, not so much in ex- turnpike trusts, according to the last pubtravagant charges, as in the suppression or lished Return, was 952; their income taxation of rival docks. In such cases the 898,2891., and their capital debt 2,883,2807., true remedy seems to be never to allow any -a mere flea-bite compared with Jointmanagers of such undertakings to make Stock Company capital, and annually decharges except for the services they render, creasing. and never to allow any body to get a monopoly of the docks in any harbour unless it fairly represents all the trade of the harbour. 4. Lighthouses have now, for some years, been made by the Governments of all civilized countries. But in England, which was the first to build them, many of them were originally granted by the Crown to private persons with power to take tolls and it is only since 1830 that the lighthouses so granted have been bought up and placed under public control. Even now the coasts of backward Turkey are lighted by a French JointStock Company, and there are complaints of the profits it is said to be making. On the proper mode of managing lighthouses there is little to be said. It is admitted on all hands that they are necessarily a monopoly-that they must be in the hands of a central authority, and ought not to be a matter of profit to private persons. Whether they should be paid for in the shape of tolls on ships, or by the public exchequer, does not seem to be a question raising any important issue of economical principle. In both cases they are paid for more or less directly by the general consumer; in the one case, through the medium of freights-in the other, more directly by general taxation. The former plan has the practical advantage of affording a good test of the value of any proposed new works, in the willingness or unwillingness of the shipping interest, who are the immediate payers, to saddle themselves with the necessary tolls. 5. Roads. These were originally made by the local authority, i.e., by the parish. But under the demand for channels of through communication to be used by wheeled vehicles, and with the engineering improvements of the last century, the system of turnpike trusts grew up, a system under which private capital was obtained in the shape of loans secured upon tolls, and the management placed in the hands of a body of trustees, partly public, partly private. The tendency of late years has been to do away with this system-to improve Highway Boards-to place the whole of the roads under their management-to abolish Under these circumstances the management of roads calls for no special regulation. Turnpike-tolls are a nuisance; but they are in a fair way to be abolished, and all the roads in the kingdom are likely soon to be in the hands of local authorities and supported by local rates. 6. Bridges and Ferries.-These form part of roads, and have been similarly dealt with, except in certain special cases, such as the bridges over the Thames, which, as we know, have been originally built by private enterprise on the security of tolls, and which are now gradually being bought up by public bodies. It is not likely that many more bridges will be constructed on this principle. But if they are, it is obviously desirable that the concession should be for a limited term, and that in no case should it be accompanied, as has too often been the case, with a prohibition to set up another bridge or ferry within a certain distance, which, of course, has the effect of conferring a strict legal monopoly. 7. Railways.-These have all been made since the setting in of the engineering and joint-stock era, and are in the hands of Joint-Stock Companies. They are the great example, for good and for evil, of the jointstock system, and will probably prove its greatest difficulty. The subject of railways alone, if exhaustively treated, would far exceed the limits of an article; but there are one or two points which it is impossible to omit in dealing with the general question of industrial monopolies. The development of railway communication in Great Britain has been such as no Government management, however good, could possibly have produced. The number of lines, the number of trains, and the general comfort and convenience, are be yond those of any other country. If trunk lines had been laid out by Government, there would probably have been one main line to the North. There are now four. The capital invested amounts to 520,000,000%., and the number of miles of railway constructed to upwards of 15,000. * Report by Secretary of State on Turnpike Trusts (378.) 1871. Ireland, however, is the best instance of evil arising from numerous companies, competing, or rather fighting, with one another. In that country the number of original companies is 42, and of working companies 21, the mileage 2000, and the capital 26,875,0437.; so that the number of working companies as compared with capital or mileage is far greater than in England and Scotland. The average capital of lines worked by one company in the United Kingdom is upwards of a million, and of mileage 150, whilst in Ireland the same average gives 127,8007. capital and 95 miles to each working company; and it is notorious that the service is much worse than it is in England. There is no arrangement between companies whose lines form part of the same system. The larger companies fight with one another, and often oppress the smaller companies in the hopes of buying them up more cheaply. In the meantime the shareholders and the public suffer, and trade is paralysed. There are other complaints of the Irish system, but the greatest evil of all is the want of harmony, which cannot exist without monopoly. Competition has wholly failed. It is true | joint-arrangement, so that it is almost imthat it has been tried in the most foolish and practicable for travellers on one of the lines expensive way, through the medium of hap- to make free use of the others. hazard decisions of Parliamentary Committees; but it is evident that under no conditions could it have been successful or permanent. The waste of money has been great; and the result is and must be monopoly. Each great Company fights off, buys up, or amalgamates with, its original rivals, till it gets a district to itself; and it then makes alliances as to rates and fares with its great neighbours so as effectually to prevent competition. There may be an occasional struggle for some special local traffic, such as the recent fight for the carriage of coals; but the public are little interested in it, for it is sure to end either in the victory of one or other Company, or in an arrangement between them, and, either way, monopoly. There may be also, when two railways run trains to the same place, a competition in the speed of trains; but this is extravagant in cost and of doubtful benefit to the public. The extent to which amalgamation, and consequently monopoly, has been carried, may be seen by a Return moved for by Mr. Cave in 1868.* From this Return it appeared that in the seven preceding years upwards of 500 Bills had been passed, containing amalgamations or working arrangements. In 1866, out of 13,954 miles open, belonging to 353 original Companies, 12,221 miles were worked by 28 Companies. According to the Annual Railway Return of 1870, the number of original Companies is 450, owning 15,145 miles of railway; but the number of working Companies is only 103. Nor must it be supposed that it is the interest of the public to resist monopoly. Unity of management, through booking, correspondence of trains, are so important, that the public lose more by the division of authority and responsibility than they gain by competition. In general the large Companies possessing large districts serve the public better than Companies with small and divided or straggling districts, and when large Companies interfere with one another, the result is inconvenience, and not cheapness. The writer of this article has had much experience of a great railway, which in the course of thirty or forty miles cuts three other great railways at six several points. Where they would naturally compete with one another, they have arranged the fares. But at no one of the six points at which this railroad cuts the others is there anything like through-booking, or *Parliamentary Paper, No. 242, 1868. But But whilst monopoly is thus inevitable and desirable, it must not be forgotten that the interest of the Companies is to a certain extent only that of the Public. It is the interest of the Companies to develop traffic, so long as the development produces profit proportioned to the increased outlay. it is quite possible that developments may be required which would pay their own expenses and be very useful to the public without bringing an additional penny of profit to the Shareholders. For instance, local branches may be much wanted, the traffic from which would only pay their expenses by benefiting the district, but would leave no profit to the Company. And, again, as regards fares; it is much better for the Public that a hundred passengers should be carried for sixpence than fifty for a shilling. But it is easier, cheaper, and every way better for the shareholders to carry fifty for a shilling. Again, Companies have no interest, or too often think they have none, in uniting together and developing each others' traffic. Each Company is seeking to oust, to buy up, or to amalgamate with its neighbour on the best terms for itself, and does its best to keep its traffic from going on to its neighbours' lines. On all these points the action of Railway Companies may be directly adverse to that of the Public. But no effectual attempt |