352 SECTIONAL TRANSACTIONS.— F. 



■with economic requirements ; in -nhich the users of the roads were a small and well 

 defined group, legitimately bearing the whole burden of road expenditure, raising 

 money from amongst themselves or borrowing at current rates of interest, and spending 

 in close relation to the gains to be derived from such expenditure. 



In the absence, however, of those strictly financial considerations which control 

 those responsible for a balance sheet, whether in public or private undertakings, there 

 is the possibiUty that resources will not be devoted in such a way as will reap a 

 maximum economic gain. So that there is a positive economic loss, measured by 

 the difference between that maximum net gain which would have accrued had 

 resources been appHed with a view to obtaining that maximum net gain, and 

 the net gain accruing as a result of applying resources in compliance with other 

 motives. 



I suggest that the ways in which a positive economic loss as defined above may come 

 about, may be classified under three main headings. 



First, in cases where the total amount devoted towards the provision of road 

 transport is either far beyond, or indeed considerably less, than that which would 

 have been apphed had genuine economic demand been properlj' reflected. Cases, 

 that is to say, on the one hand, in which it would have been to the interests of road 

 users to have been relieved of payments towards road maintenance and construction, 

 in spite of a consequential lowering of the standard of the roads ; or, on the other 

 hand, cases in which it would have been to the road users' benefit to contribute larger 

 sums towards the roads, since the benefit derived from the better roads which would 

 be the result of additional expenditure would more than outweigh the burden of the 

 extra payment incurred . 



Over-expenditure as above defined is likely to occur when, say, military, 

 administrative or other political considerations, such as the relief of unemployment, 

 lead to the provision of a road system which, however beneficial, does not bring benefits 

 commensurate with money expended. Whereas inadequate expenditure is likely to 

 occur as a result of a lack of organised representation of road users, or a lack of 

 administrative machinery to carry out the necessary works. 



The second set of circumstances in which a positive economic loss may result 

 occurs when the burden of maintaining and constructing roads is thro'mi indis- 

 criminately both upon those who make use of the road and those who make no use of 

 it whatever, or equally upon those who make considerable use and those who make 

 only a slight use of the roads in question. (In the first case we assumed road 

 users to be a clearly defined group, among whom all road costs were equitably 

 distributed.) 



In this case, by throwing the burdens of road construction and maintenance in a 

 manner unrelated either to benefits derived or costs incurred, the machinery of 

 Government has become an engine of wealth distribution, and certain road transport 

 operations are undertaken, which, but for the fact that part of their ' all-in ' costs 

 (including road costs) have already been paid for by others, would not have been 

 undertaken at all. And those to whom little or no benefit accrues, but who 

 nevertheless are called upon to bear a portion of the real costs of road transport, 

 suffer from taxation the character of which is definitely onerous. 



A third circumstance of Governmental control occurs, when, although there is a 

 perfectly reasonable and adequate total expenditure upon roads at any one time, and 

 the total burden apparently falls equitably upon road users and road users alone, 

 yet the allocation of the sums collected is not spent in such a way as to bring about 

 maximum economic advantage to the whole body of road users. One form of traffic 

 is favoured against another ; one geographical area is starved whilst another is over- 

 provided in the matter of roads. 



The consequences of this third form of deviation from strictly economic con- 

 sideration, are similar in character to those of the second. 



In the light of these possible circumstances, it is the purpose of this paper, first to 

 analyse the sources from which sums spent upon road construction and maintenance 

 in Great Britain since the beginning of the century have been derived ; and, secondly, 

 to examine the manner in which those sums have been expended. 



Discussion on The Value and Limitation of Costing in Industry and 

 Agriculture. — Mr. A. Cathles, Dr. J. A. Venn, Prof. J. H. Jones. 



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