A SHORT t U TO THE NATIONALTSATION OF THE RAILWAYS.
TTIHE Government's Development Bill is from many 1 points of view a strange and puzzling proposal. None of its provisions, however, have proved so perplexing as the curious clauses designed to further the establish- ment of special motor roads in the United Kingdom,— roads which are to be reserved exclusively for motor traffic, on which there is to be no speed-limit, and, further, roads the users of which are to pay tolls to a Government Department. Again, these roads are to be bordered by strips of Government property, and those who obtain access to them are to pay for the privilege. In regard to these proposals, the motorists have one and all declared that they have no wish for special high-speed tracks, but would much prefer the improvement of existing roads for all forms of traffic. They did not quite like to " look a gift horse in the mouth," but they were not a little astonished to find that the Government, which hitherto had been supposed to be somewhat hostile to motorists, were giving them far more than they ever asked for. " What earthly reason can the Government have for suggesting the setting up of Brooklands racing-tracks throughout the United Kingdom ? " That is the sort of question which motorists have been asking since the introduction of the Development Bill. Another question has been largely asked :—" What is the use of reserving strips of land along these exclusive motor tracks ? It is impossible that any one would want to build villas bordering a road on which there is no speed-limit, and on which motors may run at the rate of a hundred miles an hour. The dust, the noise, and the danger would. make the houses built along them absolutely uninhabitable. The sites would be valueless for residential :purposes." In a word, the motive at the back of the pro- posals for motor roads has up to now remained a mystery.
Mr. Edward Bond, whose name will be blown to many of our readers as an ex-Member of Parliament and a barrister who has shown himself a vigilant and capable critic of Socialistic schemes, supplies us in our corre- spondence columns with what we cannot help thinking will be found to be the explanation of Mr. Lloyd George's sudden zeal, or we may say " overzeal," for the interests, or supposed interests, of the high-speed. motorists. What Mr. Lloyd George is doing in the Development Bill is not helping the motorists, but taking the initial step towards the acquisition of the railways by the State. Our readers' first thought will, no doubt, be that Mr. Bond. can only have discovered a "mare's-nest," so far-sought, not to say preposterous, does this suspicion seem. If, however, they will have the patience to look into the matter, we believe that they will agree with us that he has very considerable grounds for his suggestion. When Mr. Lloyd George was at the Board of Trade it was pretty generally understood that he had reached the conclusion that the time had arrived for the nationalisation of the railways, and that the epoch of private ownership had come to an end. It may be remembered, for example, that when the Chancellor of the Exchequer came back from his visit to Germany he expressed. his admiration of the Prussian railway system, and his envy of the Finance Minister of Prussia, who possessed so admir- able a source of revenue. But it is one thing to wish for the nationalisation of the railways. The bringing it about is quite another matter. To begin with, the finance of the operation presents under existing conditions almost in- superable obstacles. To buy up the railways as they stand would cost so vast a sum of money that it is impossible to expect that the public would agree to the necessary xpenditure, The book mentioned by Mr. Bord, entitled " The Essential Reform : Land Values Taxation in Theory and Practice," by C. H. Chomley and IL L. Outhwaite (Sidgwick and Jackson, ls. net), gives an ingenious, if pre- datory, suggestion for a short cut to railway nationalisa- tion which solves the mystery of the motor roads of the Development Bill. The book in question is a whole-hearted plea for the principles which underlie the Budget and for Mr. Henry George's plan for the nationalisation of the land. Such nationalisation, it is to be noted, is to be brought about, not by the purchase of the land from private owners, but by a system of land values taxation which will gradually absorb the site value of the land. It will be unnecessary for the State to pay anything for that which has already been taxed out of existence. The book also advocates very strongly the nationalisation of the railways. It does not, however, suggest that railway values are to be taxed out of existence. Another plan is proposed here, a plan by which they can be rendered value- less, or nearly valueless, and then be acquired by the State at a nominal figure. We will give this proposal in the words of the authors (the italics are ours) :— "The association of land values taxation with State enterprise in the shape of railway natiorni ;cation carries with it tremendous possibilities for the stimulation of industry and the enhancement of the production of wealth. The taxation of land values offers another means of mitigating the evils arising from the monopoly of the means of transport, apart from railway nationalisation, and one that might well precede that step. Once land values are taxed, there is no reason why the State by the construction of great national roads should not enable the people to a considerable extent to free themselves from the railway monopoly. When quick transit could only be achieved by engines running upon rails, and requiring elaborate precautions to prevent accidents, no effective competi- tion with the railway companies was feasible. But those conditions no longer maintain in view of the development of the motor. Therefore if great national roads were constructed over which motor traffic, at a high rate of speed, could be permitted, an effective com- petition would be set up against the railways. This would result in reduced freights and fares to public benefit, and consequently in an enormous reduction in the value of the railway monopoly, as can be realised from the effect of the motor competition on London railways. Precisely the same argument holds good as regards canalisation. Great waterways could be constructed by the State, and made free to all users were interest on capital cost met by levying upon land values."
It is almost impossible to believe that the similarity between the above passage and the clauses in the Develop- ment Bill dealing with the construction of motor roads is merely the result of coincidence. They clearly have a common origin. In other words, the mystery has been solved. The strange proposals to which we have drawn attention were not inserted in the Bill, as was at first thought, in order to give motorists who like to exceed the speed-limit an opportunity to rampage in comparative safety at the rate of a hundred miles an hour. They are intended. to act as the instrument for the bleeding of the existing railways to death. They are meant to cut off the margin of profit from the railways, and thus eventually to absorb the dividends on their ordinary stock. But this once accomplished, the taking over of the railways will be a very easy matter; The debenture stocks, and indeed all stocks, bearing a fixed rate of interest can be assumed by the State without any troublesome and vexatious questions of valuation. Note that under the explanation supplied by the book from which we have quoted. the provisions as to the strips of land along the motor tracks become quite intelligible. The Government land will be used, not for villa-residences, but for factories which will send their produce to market on motor-lorries rather than in railway trucks.
Believing Mr. Lloyd George to be an out-and-out railway nationaliser, as we do, we cannot persuade ourselves that the intention of the clauses was not that which we have described. But even if this were not so, the fact remains that the new motor roads can be used, and in all probability would be used, for the purpose of bringing about " an enormous reduction in the value of the railway monopoly." After all, motives in legislation are comparatively small matters. What we have got to consider is the effect of the thing pro- posed. For ourselves, we may say that we have no desire specially to favour the railways or to give them any unfair monopoly. For example, we should never dream of allowing the railways to claim that the public roads must be kept unimproved lest they should be used to compete with the railways. The railway shareholders must take their chance of all forms of legitimate competi- tion. What the railway shareholders have a right to ask, and what they will ask if they are wise, is that the resources of the State shall not be employed to destroy the value of their property. Every trader has a right to say that, unless there is some paramount consideration of utility or convenience, public money shall not be used to compete with private enterprise. The result of such competition must always be to kill private enterprise, for the State is a competitor who cares nothing about profit, and can make good any deficiency by dipping into the purses of those who compose the State, including, of course, the purses of those with whom it is competing.
Here we no doubt reach the essential and fundamental objection to all Socialism and State trading. Private enterprise will always do better,—be more profit-producing and more efficient than State action. The " Government stroke " is always a poor stroke compared with the strokes of those who are working for private profit. The true source of wealth, and therefore of the production and provision of those things which men need in order to conquer their natural condition of poverty, want, and savagery, is enterprise and energy. But enterprise and energy are the attributes of the individual who is working in his own interest, while lethargy, formalism, supineness, are those of State employment. The State cannot offer the fruitful and stimulating incentive of profit to those whom it employs. It must either accept the feebleness of the " Government stroke," or else have recourse to the whip and the methods of slavery. All the world over, even in so well organised a State as Germany, it is found that the private contractor can build a battleship at least twenty-five per cent. cheaper than the Government. This is a practical example of what we mean by the " Government stroke."
We desire to commend what we have written to the special attention of those members of the Liberal Party who are still uncommitted to Socialism pure and simple.
Surely they will not pass a Development Bill which is tainted by such tactics as those which inspire the motor- road clauses ! To hustle such a Bill through Parliament at the fag-end of the Session would be little short of madness. A measure of such importance requires minute and patient investigation. It ought not to be forced through Parliament with the covert threat that if it is rejected the Members responsible for such rejection will have to answer those who elected them for having withheld the flow of a river of gold which might have spread some of its benefits over their constituencies.
If we nationalise the railways, let us nationalise them in the light of day and with our eyes open, and not have recourse to the Machiavellian policy of first ruining the undertakings which we mean to acquire. The system of bleeding your victim as white as veal and then devouring him is, we believe, not unknown to the American Trusts and Combines, but assuredly it is one unworthy of an honest and upright State.
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