Royal Alfred, built by the Duke of Somerset. | best men of all ranks are arbitrarily compel Repulse Achilles Royal Oak Duke of Somerset. Prince Consort led to retire. Take two cases. Vice-Admiral Sir Henry Kellet is Commander-in-Chief in China,- -no man more active, or, looking to his great reputation and experience in those seas, more difficult to replace. Yet on a given day he becomes sixty-five, and his command ends, to the great loss of the country. In the spring certain information was required as to some of our ironclads, which were unjustly suspected. Captain Richard Ashmore Powell, who had recently served as Commodore in the Pacific, was an officer who had great general and special experience in the service and in command of ironclads. His opinion was justly looked upon as exceptionally valuable. He was appointed to the Vanguard,' to report upon that ship and others of her class. Within a month or two of his appointment, and before he had reported, he became fifty-five. He was anxious to serve, he is hale and active, and no better or more trusted officer exists; but the Admiralty, before they could receive a Report from an officer appointed by them a short time before, with the approbation of the profession, suddenly cut this experienced officer short in his career and send him into retirement. เ The command of the Channel Fleet itself The Monarch' is the Duke of Somerset's also, and 'Glatton' and 'Hotspur' are the creation of the Conservative Admiralty. The 'Rupert' is, indeed, the only vessel which is the creation of Mr. Childers's Administration. For we have already discussed the monstrosities which, under the names of 'De--which was to be a school for admirals, as vastation,' 'Thunderer,' Cyclops,' Hecate,' Gorgon,' and 'Hydra,' disfigure alike the Navy List and the sea, and have been reported on so unfavourably by the Committee on Design, and none of which are yet ready for commission. We must, however, admit that this Government has done something to increase our gunboat classes. The 'Staunch,' built by Mr. Corry, is an admirable example, and some ten, at least, of a similar type are in course of construction which will do good service in the protection of our ports. We have not space to go into the evil effects of Mr. Childers's scheme of Naval Retirement. Suffice it to say that it has arrested all promotion, and entirely destroyed the spirit of just expectation of promotion which formerly encouraged, in ever so slight a degree, the zealous naval officer. The country was persuaded into the belief that the considerable sum it had to pay for compulsory retirement would give a flow of promotion and younger officers. The reply is, that there is literally now hardly any promotion, and that in the year now elapsed only 1 flag-officer, 6 captains, 13 commanders, and 27 lieutenants have been promoted, and there have been 71 cadets entered; whilst 977 officers in the lower ranks pine hopelessly for expected advancement. And yet still the well as other officers and seamen-is given in a manner which shews that all the boast about obtaining an efficient list of flagofficers, by a costly and cruel retirement scheme, has ended without effecting the desired result. Mr. Childers's private secretary commands the Flying Squadron; Sir Sydney Dacres' flag-captain is appointed to sueceed the ill-used Admiral Wellesley in command of the Channel Fleet, this officer having been constantly employed in good commands for many years past. The whole profession is in a state of ferment. There is no longer the happy aspiration, 'Shall I live to fight a successful action? Shall I enrol my name on the record of fame? Shall I too achieve a peerage or Westminster Abbey?' but the sole question is, 'How soon shall I be forced to retire how soon will my neighbour be forced to retire? and which of the manifold schemes of retirement will be the most profitable?'. The Admiralty, as administered by Mr. Childers, has signally failed; but we hope to see, even if the Liberals continue in office, that the Navy shall again become an honourable profession, and not a grasping, cheeseparing trade. Unless this happens, and happens speedily, the public spirit which has animated in happier days our naval councils is gone for ever. 1871. ART. VI.—1. Report on Turnpike Trusts. | characteristics which they possess in common, so that we may be able to recognise and 2. Return of Railway Amalgamations. define them. It is a matter of much more THERE is always danger that a new principle, when it has once found acceptance, will be invested with a degree of absoluteness and universality which no principle of human action can deserve; and that it will be applied without reference to the circumstances under which alone it is true, or to the modifications to which, under all circumstances, it is subject. And there is the further danger, that when this is found out, a re-action may set in against the principle itself, and cause it to be abandoned in cases to which it properly applies. The latter danger is, perhaps, the more serious of the two. serious and practical interest to ascertain what is the best way in which they may be managed and regulated so as to obtain the greatest possible advantage from them. It would be difficult and probably fruitless to attempt to deal with these questions à priori or by way of deduction. The more practical and satisfactory, though more tedious, plan, is to take the several undertakings of which we are speaking in detail, to ascertain their several characteristics, and then to examine the manner in which they have been hitherto dealt with, and the manner in which it may be possible to deal with them hereafter. The following is, so far as we can ascertain, a tolerably complete list of these undertakings:-Harbours and natural Navigations, Canals, Docks, Lighthouses, Roads, Bridges and Ferries, Railways, Tramways, Gasworks, Waterworks, the Post-office, and Telegraphs. In some of these, e. g. Docks, Railways, Gasworks and Telegraphs, competition has been attempted; whilst others have either in the hands of private undertakers or of Government been monopolies from their commencement. But in none of them has competition proved to be successful, or even, in the long run, possible. It is of great importance that this point should be kept steadily in view, since it is only in those cases which competition cannot regulate, and in which monopoly is inevitable, that the questions we are discussing can arise. Something of this kind seems to have happened in the case of one of the leading principles, if not the leading principle, of political economy; viz. the doctrine that individual interest, if let alone, will do more to produce wealth than any organised action of Government,' and of the inference that this motive power, coupled with its natural governor, competition, is sufficient to regulate all cases where one man produces what another wants. The great masters of the science have, of course, always recognised, more or less distinctly, the limits of this Is there, then, any general characteristic principle; but in practice and common opi- by which these undertakings, or others of a nion it has often been carried too far. At similar kind, may be recognised and disthe present moment we are exposed to all tinguished from undertakings which are gothe dangers of reaction. There is a strong verned by the ordinary law of competition? tendency on the part of the public to call for Government interference on all sorts of pretences in all sorts of cases, in many of which it can do nothing but harm. At such a moment it is not inopportune to endeavour to ascertain in one special and exceptional department of human industry how far the above principle is applicable; what are its limitations; and, where it fails, what can be substituted for it. No one can doubt that there is a large and constantly increasing class of industrial undertakings, which are of the utmost value to the public, and which return ample profit to the capital and industry bestowed on them, but which yet are not and cannot be regulated by competition. It is a matter of some speculative interest to ascertain what these undertakings are, and what are the It is not large capital, for though most of them require large capital, some gas and water companies, which are complete monopolies, have capitals of not more than two or three thousand pounds; whilst other enterprises, with enormous capitals, e. g. banks, insurance offices, shipping companies, are not monopolies. It is not positive law, for few of them have a monopoly expressly granted or confirmed by law; and in most, if not all, of the cases where such a monopoly happens to have been so granted or confirmed, it would have existed without such grant or confirmation. They all agree in supplying necessaries. But this alone is no test, for butchers and bakers supply necessaries. Most, if not all, of them, have exclusive possession or occupation of certain peculiarly | which can only be attained by unity, are favourable portions of land,-e. g. docks, of paramount considerations. the river-side; gas and water companies, of the streets. But this is only true in a limited sense of such undertakings as the postoffice, telegraphs, or even of roads and railways; and a mine, a quarry, or a fishery, has equally possession of specially favoured sites without generally or necessarily becoming a monopoly. The article or convenience supplied by them is local and cannot be dissevered from the possessor or user of the land or premises occupied by the undertaking. The undertaking does not produce an article to be carried away and sold in a distant market, but a convenience in the use of the undertaking itself, as in the case of harbours, roads, railways, post-office, and telegraphs; or an article sold and used on the spot where it is produced, as in the case of gas and water. Again, in most of these cases the convenience afforded or article produced is one which can be increased almost indefinitely, without proportionate increase of the original plant; so that to set up a rival scheme is an extravagant waste of capital. There is also in some of these undertakings, and notoriously in the cases of the Post-office, of telegraphs, and of railways, another consideration, viz, the paramount importance of certainty and harmonious arrangement. In the case of most industries -e. g. in that of a baker—it would be easier to know what to do if there were one instead of several to choose from; but this consideration is in such a case not paramount to considerations of cheapness. In the case of the Post-office and Telegraphs, certainty and harmony are the paramount considerations. The inconvenience would be extreme if we had to consider and choose the mode of conveyance every time a letter is dispatched, or if a telegram sent from any one station could not be dispatched to all other stations. The following then appear to be the characteristics of undertakings which tend to become monopolies: 1. What they supply is a necessary. 2. They occupy peculiarly favoured spots or lines of land. ́ 3. The article or convenience they supply is used at the place where and in connection with the plant or machinery by which it is supplied. 4. This article or convenience can in general be largely, if not indefinitely, increased, without proportionate increase in plant and .capital. 5. Certainty and harmonious arrangement, These conclusions are neither as clear or as complete as could be wished. And though interesting in a speculative point of view, they do not lead immediately to any impor tant practical consequence. But the further question which we proposed to consider, viz., what is the best mode of dealing with these undertakings, is one which has a direct bearing on many problems-economical, political, and social-which are pressing for immediate solution. The two great alternatives seem to be: (1.) Ownership and management by Private Enterprise and Capital. (2.) Ownership and management by Government, Central or Local. In the former we include all cases in which those who undertake the work derive personal gain from capital which they invest in it; and in the latter all cases, whether of management by the central government, by municipal bodies, by local boards, or by pub. lic trusts or commissions, in which no private capital is invested, except by way of loan, and no profit made by individuals. Before entering in any detail upon the examination of these two alternatives, it will be interesting to see how they have been regarded by competent authorities in this country and in France respectively. The following are Mr. Mill's observations on this subjeet (Political Economy,' vol. ii. chap. xi. s. 11): 'The third exception which I shall notice to the doctrine that Government cannot manage the affairs of individuals as well as the individuals themselves, has reference to the great class of cases in which the individuals can only manage the concern by delegated agency, and in which the so-called private management is, in point of fact, hardly better entitled to be called management by the persons interested, than administration by a public officer. What ever, if left to spontaneous agency, can only be done by joint-stock associations, will often be as well, and sometimes better done, as far as the actual work is concerned by the State. Government management is, indeed, proverbially jobbing, careless, and ineffective; but so likewise has generally been joint-stock management. The directors of a joint-stock compa ny, it is true, are always shareholders; but also the members of a government are invariably tax-payers; and in the case of directors, no more than in that of governments, is their proportional share of the benefits of good manage have in mis-management, even without reckonment, equal to the interest they may possibly ing the interest of their ease. It may be ob jected, that the shareholders, in their collective character, exercise a certain control over the directors, and have almost always full power to 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. '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 power it confers of taxing the community, cannot be prevented from existing. I have already more than once adverted to the case of the Gas and Water Companies, among which, though perfect freedom is allowed to competition none really takes place, and practically they are found to be even more irresponsible and unapproachable by individual complaints than the Government. There are the expenses without the advantages of plurality of agency; and the charge made for services which cannot be dispensed with, is, in substance, quite as much compulsory taxation as if imposed by law: there are few householders who make any distinction between their "water rate" and their 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 public, according to the schemes or designs of these engineering officials; the schemes which are started independently of them are subjected to their control; and it scarcely ever happens that such schemes are accepted by the authorities against their advice. The result of this régime is, that in respect of works of this character the spirit of enterprise is wholly discouraged, and that scarce anything is accomplished except at the instance and by the impulse of the body of official engineers, an impulse which, for reasons which we have given under the title "Fonctionnaires," is incomparably less powerful and less fertile than that of free industry. Thus, none of the great improvements in artificial channels of communi cation, or in means of transport which have been introduced within the last fifty years, have originated in France-macadamisation of roads, railroads, locomotives, suspension bridges, steamboats, &c., all are the work of the free and independent engineers of England or America. The monopoly of our official engineers is as little adapted to improve and utilize inventions as to start them. And although our country is one of those in which industry is most highly developed, and in which a multiplicity 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 advantages of Government management. The chairman and officers of some of the great Joint-Stock Companies have a pride in the well-doing of their undertaking `similar to that of a public administrator, or a zeaous town clerk. Again, Government management is proverbially sluggish, is open to Parliamentary and Municipal jobbing-is liable to be influenced by sentiment and impulse rather than by a cool consideration of 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 urging 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 origi1. 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 1 |