PROCEEDINGS OF THE CANADIAN INSTITUTE. I25 



Eut the British people are moving. Some of the younger British poUticians have 

 been making a close study of the State railways of the continent; there is unrest 

 among the agricultural population, and manufacturers are awakening to the in- 

 justice of these intolerable discriminations in favor of their foreign competitors. 

 And once the British people are thoroughly roused to the existence of an injustice, 

 reform comes speedily and thoroughly. It may be that for the moment the British 

 people would not consider State ownership^ but we must remember that they have 

 taken over the telegraph service, that that service is operated as efficiently as the 

 postal service, and it is at least my conviction that before the world is much older 

 we shall have in Great Britain a formidable movement for State ownership of the 

 carrying corporations, and that public ownership rather than public regulation will 

 be the future railway policy of England. More than half a century ago, as far back 

 as 1844, Mr. Gladstone put through the British Parliament a measure, to take effect 

 21 years thereafter, declaring the right of the State to take over the railways al 

 such time as the people might determine to be propitious and advantageous, and 

 that the price should be 25 years' purchase of the " annual divisible profits estimated 

 on the average of the three then next preceding years;" and it is a noteworthy 

 fact that, notwithstanding this Act, some of the ablest advocates of State railways 

 in Great Britain counsel delay on the ground that the railway corporations have 

 such vast political power that they would force Parliament to pay for their roads 

 a price far in excess of their actual value. 



VI. 



Mr. Clement Edwards, in his new work on Railway Nationalization, makes an 

 interesting estimate of the possible financial results of State purchase of the British 

 railways. The profits of the British roads are put at £38,046,065, or 4 per cent, on 

 the capital invested. He believes that the State railway stock would be taken up 

 at 2 1-2 per cent, as a maximum. This would leave a margin of nearly i 1-2 per 

 cent, on the transaction. He estimates saving by unity of management at £10,- 

 000,000. Thus he would increase the profits from £38,000,000 to £48,000,000, and after 

 deducting 2 1-2 per cent., £23,775,000, to cover the interest on the Government rail- 

 way stock, he would get a net profit to the State of over £24,000,000. He would 

 thus be enabled to reduce freight rates by 20 per cent., absorbing £8,807,000, reduce 

 passenger fares by 20 per cent., absorbing £7,472,000, and use £4,000,000 to reduce 

 hours of labor and improve wages, and still have nearly £4,000,000 to provide for a 

 sinking fund and exceptional contingencies. Mr. Edwards adds : " The recoup- 

 ment from increased traffic could be used for still further reducing rates and fares, 

 and augmenting the sinking fund to facilitate redemption of purchase, remembering 

 always, however, that the lower the rates and fares are reduced to a certain point, 

 ?he greater the traffic, and the better for the nation." This is an optimistic calcula- 

 tion, but in sober truth it seems to be warranted by the experience of State operation 

 of railways on the continent. 



VII. 



A remarkable illustration of the effect of cheap fares on passenger traffic is 

 afforded by the introduction of the zone system in Austria and Hungary. In these 

 countries, under this system, one may travel first-class by fast express at a penny 

 and a third a mile, and third-class at less than a half-penny a mile. In Hungary, 

 for the four years from 1889 to 1892. the number of passengers carried increascLi 

 from 5,684,845 to 38,325, I5I," and in Austria, for the six years from 1880 to 1894. 

 the increase in the number of passengers ran up from 42,582,726 to 102,897.828, an 

 increase of 600 per cent, in Hungary and of 140 per cent, in Austria, as compared 

 with II per cent, increase in Great Britain. Then, while the Hungarian railways were 



