262 STUDIES, SCIENTIFIC AND SOCIAL chap. 



carried by the railways, thousands of miles of railways 

 being made long before they would be wanted, involving 

 loss in a great variety of ways, and being, in fact, one of 

 the causes of recurring depression of trade. 



If, on the other hand, no such power had been given to 

 companies, but, when public opinion in any State or 

 country demanded a particular line of railway it had 

 been constructed by means of Railway Bonds created for 

 the purpose, bearing no interest and serving as legal 

 currency within the State till they were all redeemed and 

 paid off out of the profits of the line, then no speculation 

 would have been possible. It would have been no one's 

 interest to build unnecessary and unprofitable lines, 

 because so soon as this was done the bonds of the 

 particular line would have little chance of being 

 redeemed ; and as they would be a legal tender, they 

 would soon be all paid in as taxes, and the Government — 

 that is, all the taxpayers— would have to bear the loss. 

 This would check further railway-making for a time, and 

 thus prevent useless expenditure in the interest of 

 speculators and contractors. 



On the other hand, every railway that returned any 

 profits at all would steadily redeem its bonds, and then 

 the whole of the future profits would go to reduce taxation 

 or to make railway travelling free. It would thus be the 

 interest of every one that no railways should be made 

 that were likely to be worked at a loss, because that 

 would lead to a depreciation of the bonds, and thus be a 

 loss to the whole community. But it would be equally 

 every one's interest that all really useful and necessary 

 lines should be made, because, besides the direct benefit, 

 the bonds would be quickly redeemed and the profits of 

 the line would enable the general taxation to be reduced. 

 Water-works, gas-works, public parks, new streets, and all 

 similar improvements could be executed on a similar 

 principle, the only safeguard required being that no large 

 improvement should be undertaken in any town or 

 district till the preceding one had been completed and 

 had begun to redeem its bonds out of its genuine profits 

 or proceeds. 



