778 TKANSACTIONS OF SECTION F. 



hoard of directors. If, on tho otber Land, permanent national interests are 

 involved, the Government can exercise its reserve power as a shareholder, can vote 

 the directors out of office, and so prevent the continuance of a policy which would 

 in its judgment he prejudicial to those interests, however much it might be to the 

 advantage of the railway as a mere commercial concern. 



The history whose outline I have now very briefly sketched shows, I think, 

 that whereas there is everywhere a tendency towards further State control, the 

 tendency towards absolute State-ownership and State-operation is far from being 

 equally universal. I shall have a word to say presently as to the reasons why 

 America shows no signs of intention to follow the example of continental Europe. 

 Meanwhile it is well to notice that American experience proves also the extreme 

 difficulty of finding satisfactory methods of control. Sir Henry Tyler said some 

 five-and-thirty years ago in England, in words that have often been quoted since, 

 ' If the State can't control the railways, the railways will control the State'; and 

 President lloosevelt has again and again in the last few years insisted on the same 

 point. ' The American people,' he has said in effect, ' must work out a satisfactory 

 method of controlling these great organisations. If left uncontrolled, there will be 

 such abuses and such consequent popular indignation that State-ownership will 

 become inevitable, and State-ownership is alien to American ideas, and might cause 

 very serious political dangers.' 



Perhaps some of my hearers may remember Macaulay's graphic description of 

 the passion that was aroused by Charles James Fox's proposed India Bill ; it was 

 described as a Bill for giving in perpetuity to the Whigs, whether in or out of 

 office, the whole patronage of the Indian Government. The objection felt by 

 American statesmen to handing over their railways to the National Government — 

 for I think it may be taken for granted that if they were nationalised it would 

 have to be wholly under federal management, and that the separate States could 

 take no part in the matter — is in principle the same. There are something like 

 a million and a half men employed on the railways of the United States, say 

 roughly 7 or 8 per cent, of the voters. Americans feel that rival political parties 

 might bid against each other for the support of so vast and homogeneous a body of 

 voters ; that the amount of patronage placed at the disposal of the Executive 

 Government for the time being would be enormous ; and that the general interests 

 of the nation might be sacrificed by politicianswanxious to placate — to use their 

 own term — particular local and sectional interests. How far this fear, which is 

 undoubtedly very prevalent in the States, is justified by the history of State 

 railways in other countries is a question exceedingly difficult to answer. Dealing 

 with State railways in the lump, it is easy to point to some against which the 

 charge would be conspicuously untrue. To take the most important State railway 

 organisation in the world, the Prussian system, no one, I think, can fairly deny 

 that it has been operated — in intention at least, if not always in result — for 

 the greatest good of the greatest number. But then Prussia is Prussia, with a 

 Government in effect autocratic, with a Civil Service with strong esprit de corps 

 and permeated with old traditions, leading them to regard themselves as the 

 servants of the king rather than as candidates for popular favour. An American 

 statesman, Charles Francis Adams, wrote as follows more than thirty years ago : 

 ' In applying results drawn from the experience of one country to problems which 

 present themselves in another, the difference of social and political habit and edu- 

 cation should ever be borne in mind. Because in the countries of continental 

 Europe the State can and does hold close relations, amounting even to ownership, 

 with the railroads, it does not follow that the same course could be successfully 

 pursued in England or in America. The former nations are by political habit 

 administi-ative, the latter are parliamentary. In other words, France and Germany 

 are essentially executive in their governmental systems, while England and 

 America are legislative. Now the executive may design, construct, or operate a 

 railroad ; the legislative never can. A country therefore with a weak or unstable 

 executive, or a crude and imperfect Civil Service, should accept with caution results 

 achieved under a government of bureaus. Nevertheless, though conclusions cannot 

 be adopted in the gross, there may be in them much good food for reflection.' 



