that much the larger part of the rise only corresponds to the rise that has universally taken place under private employment. As for the rise in the cost of materials, Government action is in no way responsible for it.

Another matter will need consideration. The value of the shares of two companies, each paying the same dividend, may be very different. One company has its plant in first-rate condition, facilities provided in advance of traffic, and large reserves in cash; another company may only be paying its dividend by a process of what the American calls skinning the property. All this will have to be taken into account before fixing the guarantee. The conclusion of the whole matter seems then to be that, whereas the guarantee for pre-ordinary stocks can be fixed on general principles, that to be given to ordinary stocks must be a matter of investi gation and bargain adjusted to each individual case.*

Assuming the whole financial situation worked out and settled, and two years will not be too long for so complex a process, then-though doubtless in practice the two things will go on alongside-we come to the question of the reorganisation of the material property and the staff that must operate it.

The material property-dealing here with railways only-may be divided into two parts, the fixed and movable plant respectively. With regard to the former, the passing-away of a system of competition obviously implies an immense amount of reorganisation. In the first place, the small independent systems, the Hull and Barnsley, the North Staffordshire, the Cambrian and the like, will simply disappear. Further, the réseau

*Frequent reference has been made in the Press to the Act of 1844, which has been described as the 'Shareholders' Charter.' Briefly it may be said (1) that the Act is wholly inapplicable to existing conditions; (2) that in the whole course of public proceedings, ranging from the Royal Commission of 1865 down to the Rates and Charges Acts of 1891-2, it has been described or treated as unworkable; and (3) that, if it were applied,

the results would be disastrous to the shareholders.

In effect the Act

provides that the shareholders shall be given twenty-five years' purchase of the net profits on the average of the three years preceding the pur chase. If a purchase were made in 1921, the three years would be, 1918, showing a net profit substantially the same as the present guaranteed!

income, and 1919 and 1920, in each of which there will be a loss.

the 'network,' to use the convenient French phrase-of each of the great companies will have to be made into a real net, covering a certain definite region of the country, and no longer projecting, starfish-wise, into the territory mainly occupied by another. To make this scheme workable, there will be much physical rearrangement required. Junctions between rival routes that approach but do not meet will be made wherever traffic can be more conveniently served thereby; duplicate stations will be closed, sometimes very much to the convenience of passengers; exchange sidings, no longer required when the traffic is in one hand throughout, will be abolished, and so on. Another group of changes will be forced on by the immense increase in labour cost. When to man a roadside signal-box on a main line there are required, not two men each at 30s. a week, but three men each getting 63s., we must expect to see a great extension of automatic signalling. Again, in the goods yards and goods sheds mechanical appliances will be largely introduced to save man power.

Rolling stock will be pooled throughout the country; all private ownership of railway wagons will come to an end; wagons for the use of an individual colliery will be supplied out of the common stock from the most convenient point; and the appalling waste of capital implied in the construction of superfluous wagons and superfluous sidings to hold them, and of working expenses in the unnecessary sorting and hauling of mpty trucks, will be very largely reduced. For the irst time it will be possible to decide, after scientific study of all the factors involved, and free from the bstruction of vested interests, what is the type of vagon best suited for normal English traffic. To the ayman this may sound a small matter, but no railway nan will question that it involves a sum of money unning into millions per annum. Then there comes the question of standardisation. Every railway company as naturally and properly adopted the types of contruction which it believed best suited to the special ircumstances of its own individual line. But every aanufacturer knows what the economy of mass proluction means; he also knows that, though a standard rticle is always the result of compromise, the sacrifice

of some small amount of special adaptation is much more than compensated by the vast economy attained.

The reorganisation of staff is also in large degree a question of mass production. There are at present as many chief engineers as there are companies, each with his own staff of assistants, draughtsmen and clerks. A large part of their work can be concentrated in the office of a single engineer of standards' at headquarters. At present each chief engineer, to take one instance, designs his own bridges and puts out his own specifica tions for tender. In future, one must suppose, there will be in the office of the Engineer of Standards a Bridge Section, which will keep a set of standard specifications, one or other of which will be fit for adoption in all but exceptional cases, so that batches of the same type, identical in dimensions, rivet-holes and so forth, can be ordered at the same time. The same thing applies to rolling-stock construction. Individual companies have at the present moment sometimes from twenty to thirty different types of locomotives. A much smaller number of types-perhaps a dozen-might well suffice for all the t needs of the United Kingdom. If, instead of one company having to manufacture all the types that it needs, Crewe, let us say, were given an order for 300 of one type, while Swindon undertook to turn out the whole requirements of another type, it is easy to see what the resulting economy would mean.

Of course the programme here sketched implies not two years, but a very much longer time, during the whole of which the question, whether it is in the long run cheaper to work the existing plant to the limit of its useful life or to scrap it for the sake of uniformity, will constantly come up. But this is a problem that every manufacturer has to face every day in the week. And the Ministry can go ahead with the conviction that Parliament, which passed without a division the Second Reading of the Ways and Communications Bill, has definitely declared for a policy of unification, and will not revert to the picturesque diversity of the past.

Force of circumstances seems to prescribe, in principle at least, the interior organisation of the new Ministry, and the manner in which its central control will be exercised. The Ministry will settle policy, lay down

general principles, and fix standards. The executive work will be left to the new regional organisation which must be built up, on the nucleus of the existing organisation of such of the great companies as continue to exist.

In reference to the matter which is likely to rouse more public interest than any other, the revision of rates and fares, Parliament has, by an amendment of the Bill as originally introduced, provided that the Minister shall refer the question for advice and report to a Committee of five or six persons—a judicial member nominated by the Lord Chancellor; two representatives of trading interests nominated by the Board of Trade; and two or three members nominated by the Minister himself, one to represent transport interests, another to represent abour, and a third who may or may not be added at his bown discretion. The Committee are to enquire and take vidence, publicly or privately as they may decide, and report to the Minister. But the Report will not be a public document, and the Minister will not be bound to follow the advice of the Committee.

It is to be remembered that, as has been said above, ¿the entire scheme of the Ways and Communications Bill 8 temporary and transitional. The task assigned by it to the Minister is, in the first place, to transform the old Competitive system into a new unified system, and then o prepare and submit for the approval of Parliament a cheme for the management of the unified railways hereafter. The country is committed to unification, which mplies temporary nationalisation. To nationalisation is a permanent policy it is not committed. But the private and almost wholly autonomous companies, as hey have existed hitherto, are things of the past. The nanagement passes under the tutelage of the State. If he companies continue to exist, it may be that they will ecome, as in France, India, Holland, and formerly in taly, lessees of the State, strictly controlled by the ovenants of their leases. The advantages of some such ystem are obvious. There would be less danger of olitical interference with the actual management; and he lack of flexibility, enterprise and promptitude, comnonly regarded as inevitable in a Government machine, vould be avoided. On the other hand, railway history

shows no instance where the relations of lessor and lessee have been harmonious. In Italy, as has been said, they became impossible, and the lessor re-entered into possession. In France there has been constant strife between the Ministry, complaining that the companies were not living up to their obligations, and the companies, complaining that the Ministry was exceeding its functions. In India railway policy is at this moment in the melting-pot, and no one yet knows what new system will emerge.

There are two other methods by which it is possible for a public authority to retain full control, and yet at the same time to avoid the responsibility of direct management. In Germany, before the war, not a few of the great municipalities entrusted the management of undertakings of public utility, gas, water, electric light, tramways, and so forth, to a company in which the Municipality held shares sufficient to make it an important if not a predominating shareholder. The system is understood to have worked satisfactorily. The public authority protects the public and gives the company the benefit of its superior credit, while at the same time the benefits of private enterprise are preserved; and, what is perhaps even more important, the company organisation interposes a buffer which absorbs the shock of political pressure. The same system was introduced in Mexico, while Mexico was still an organised community, by Mr Limantour, the brilliantly able Finance Minister of President Diaz; and it worked successfully for a good many years. The Government acquired at small cost a holding of deferred common stock in the National Railroad Company, which, while offering no prospect of a dividend, gave them the majority vote in a stockholders' meeting. The Directors, an ordinary Board of business men, managed the undertaking, and were left substantially free to manage it, subject, however, to the knowledge that the Government could at the next annual meeting vote them out of office.

Canada is at this moment setting a new precedent. Since the early days of Confederation, the Dominion Government has owned and operated a railroad, the Intercolonial (about 1800 miles in length) in the Maritime Provinces. The management has been a byword for