CANALS AND THE STATE. T HE Economic section of the British
Association spent a whole day last week in considering the future of British canals. Most of the speakers were agreed that the future in question is a very promising one. The Governments of France, Germany, and Belgium have been so impressed with the anticipated gain to the trading com- munity from the improvement and multiplication of canals that they have already spent large sums on them, and contemplate spending more. One of the speakers described the opponents of this policy either as thinking only of the interests of the railway companies, or as objecting to the spending of public money in helping water traffic to "compete with railways constructed by private enterprise." It is only natural that a great railway company should resent the competition of a hitherto insignificant rival enabled by State aid to secure for itself a large part of their traffic. But before the advocates of State intervention could make out their case, the advantage to the public ought to be unmistakably established. The arguments commonly used to justify the State purchase of canals would equally justify the purchase of railways or coal mines. Naturally, therefore, they do not convince those who, like ourselves, look with great suspicion on all pro- posals for the transfer of private undertakings to public ownership. We have glowing pictures of the vast benefits to the community that would follow upon such a change, but these benefits are seldom expressed in figures. If we suppose that under State management our canals would once more be used for whole classes of traffic now carried by. the railways, what is there to prevent the use of private capital for the same purpose ? The answer usually given is that though the gain to the public will be immense, the public will not give enough for it to make it worth a private capitalist's while to provide it. It is conceivable that the State may go into business on terms that would not tempt private capitalists, but that should be only when the object is to give its citizens what they are too poor to buy for themselves, although it is of the first importance to their physical or moral health. But nothing of this kind can be pleaded in the case of canals. We concede that it is a pity that the railways were allowed to buy up a good many of them, and thus rid themselves of a competing industry which might have gone on carrying certain classes of goods at a lower rate. But this is not a mistake that can now be set right except by taking over the whole canal system—those belonging to the railway companies and those belonging to other owners--and reorganizing it at very great expense. We can see no promise of any certain profit following upon such a transaction. If there were such a promise, is it likely that no private companies would be started to reap the anticipated gains ? Joint-stock enterprise is not yet oxhausted. New companies are constantly being formed to work undertakings no more promising than the revival of canals as an instrument for the cheap carriage of heavy goods when quick delivery is not of the first importance. What stands in the way of such undertakings is the uncertainty that a large enough public would really avail itself of the advantage offered it. The railways have got an excellent start. We have grown accustomed to their use, and it takes a good deal of time to change the habits of whole classes of traders. The directors of the various railways would not sit still while this process was being worked out. They would at once begin to consider what changes they could make to meet this resurrection of an industry they had believed to be extinct. Rates would be revised, new methods of collection and even of cartage would be tried ; in short, all the expedients which an industry in possession of the field can employ against a newcomer would be freely resorted to. Nor would it be railway competition alone that might be expected. Com- mercial motors are as yet only in their infancy, and they too might be formidable rivals to the barges. These are only some of the obstacles which keep capitalists from availing themselves of the prospects held out by the speakers at the British Association, and why should they be less formidable when it is the State that has to overcome them ? The only reason that we can discover is that, while a, trader must always have a fair prospect of making Money, the State can afford to lose it, or at least to go very near losing it. But how does it happen that the State has this advantage over the trader ? Only becau,se it has the community to fall back upon. It can, in the end, make good its losses by fresh taxation. But if it were compelled to resort to this method, canal purchase would become simply a grant in aid of a public which wishes to have the advantage of water carriage without paying the market price for it. This is only our old friend Outdoor Relief, with the difference that it is given to a class which has no possible claim to it. It is a variant, in fact, of the common delusion that the purse of the State is supplied from a mysterious source which has nothing to do with taxation. In these days we may well wish that there were such a reserve fund. Unfortunately we have only to look at the Agues of each successive Budget to realize that it is only the latest invention of a school of politicians who hold that the money of the community cannot be better spent than in providing doles for particular classes of the community. We doubt, however, whether even they will think that the public which may be expected to use new or improved canals comes precisely under this category. Some of the speakers at the British Association seem to expect that all that the State need do to make canals profitable is to create a Waterway Board. Lord Shuttleworth pressed upon traders and their organizations the importance of urging this upon Parliament and on the Government. But a new Board will certainly very soon come up against the need of raising money from one quarter or another. Our canal system, we are told, is in a state of " arrested development." The moment the Waterway Board began work it would find that a barge-load of goods, starting from the Humber or the Mersey on its way to the Severn, might never get beyond the first stage of its journey. A barge designed to go through the locks or under the bridges of one canal might find that the locks and bridges of another canal present an insuperable barrier to its further progress. There is no such thing as " through tragic" in our canal system as it is. It would be easy to put this right by taking the best canal as the standard to which the others were to be brought up and making the necessary changes in the locks and bridges. Easy, no doubt, but hardly cheap. The good work expected from the new Waterway Board would depend on its being prepared at once to spend money freely. Even Lord Shuttleworth, who is anxious to minimize the absolutely necessary expenditure, admits that the first work of the Board must include the improvement of " one or two of the main routes of waterways." What this would mean in the long run we learn from the Report of the Royal Commission, published in the closing week of 1909. There is, it appears, a network of waterways called " the Cross," which connects the Humber, the Mersey, the Severn, and the Thames. The Commissioners calculate that to make the necessary improvements in these four great systems would cost seventeen millions and a half of money, and we should certainly be told, and probably told with truth, that to make the improvements piecemeal would be a much more expensive business than making them all at once. This is only a sample of the kind of appeals which would be made to Parliament every session not to incur that workt form of waste Which leaves a newly built ship to spoil for want of a final coat of tar.
In saying this we do not for a moment forget all that is said on the other side. Our only complaint against it is that it is addressed to quite another aspect of the question. That canals may be delightful things, that they are often so many paradises for birds, that they give opportunities for fishing and boating to many who without them would enjoy neither, that they minister or might be made to minister to the residential amenities of the districts which lie along their banks is quite true. Nor do we deny that canals might possibly develop a kind of carriage which would be a useful auxiliary to railways, or, as regards certain kinds of goods, even a cheap sub- stitute for them. All that we contend is that these are not proper objects for the lavish expenditure of public money, and that the changes recommended by the Royal Commission, and by many of the speakers at the meeting of the British Association, would in the end inevitably involve such an expenditure. They would be changes which would benefit particular localities, particular trades, particular places or persons, rather than the community. If the prospects we have described are a real picture of what may be hoped for from the im- provement of our present canals and the addition of new ones, a time will probably come when some rich men or some large syndicates will try the experiment for them- selves. If they do, and if it brings them in money, their success will no doubt be brought forward as evidence that the Government would have been well advised in anticipat- ing private enterprise and securing for the community the gains which are being reaped by the individuals whose courage and foresight have met with their natural reward. For ourselves, we shall not be at all disturbed by this seem- ing proof that our warnings were founded on an entire misreading of the future. Individuals may risk their money if they choose. The gain will be theirs and the loss will be theirs, and they have a right to set one against the other. With a Government other considerations come into play. They are the trustees of the nation, and a trustee's first object should be the security of the undertaking in which he invests his cestvilue trust's money. The distinction between the two cases is perfectly plain, and to ignore it would be inconsistent with every principle of sound finance.
Dealing with the question on the publication of the Commission's Report in January, 1910, we observed that if the Development scheme ever came into being and the State should decide for Englishmen how they ought to spend their money in order best to secure their material development, public money would be spent less disadvantageously on the rescue of canals from their present decay than on almost any object on which the money would be likely to be lavished. The cautious report of the Development Commissioners, recently published, shows that they are fully alive to their responsibilities, and are allocating the funds judiciously and with fore- sight. But so far as canal improvement is concerned, it is clear that their statutory limitations prevent them from rendering any substantial assistance, because no advances can be legally made from the fund to individuals or companies trading for profit. 'Unless and until the national associations which they suggest are formed, canal development will continue to depend on individual enterprise, a prospect which we are personally content to regard with equanimity.
Previous page
