THE NATIONALIZATION OF RAILWAYS.
WHEN Mr. Asquith is not making the best of n, bad case which was not originated by himself but was forced on him by the left wing of his Cabinet he is quite full of common sense. His answer to the deputation of the Parliamentary Committee of the Trade Union Congress on Monday overflowed with it. It would not be easy to frame a series of ejaculatory questions which brought more con- fusion to the arguments of the deputation than those which were fired off by Mr. Asquith. It ought to be said, however, that the statements of the deputation actually courted these shattering questions. They . did very little credit to the Parliamentary Committee of the Trade Union Congress, who, though they could never make out a convincing case for the nationalization of railways, could accomplish, we should think, something better than the performance given before Mr. Asquith. Almost every assertion of the deputation offered Mr. Asquith an opportunity. He had really disposed of the contentions of his visitors by his sniping questions long before he came to his formal answer. We fancy that he must have enjoyed himself.
Take a few examples of Mr. Asquith's shots. Mr. Walkden, speaking for the Railway Clerks' Association, spoke of the pressure on employees "owing to the com- petition for high dividends." " What is the average rate of dividends P " interrupted Mr. Asquith. Mr. Walkden was compelled to supply the cold douche to his own heated rhetoric when he replied that the average dividend was 3.32 per cent. in 1908 and 3.67 in 1911. He triod to explain that the capital was " watered " and that the true average dividends were higher. But, as Mr. Asquith showed in his formal replylater, even if the capital was "watered" as much as was alleged the average dividend could not be returned at more than 4.3 per cent.—" not an extravagant return for a commercial venture which is attended with a great deal of risk, and in which, in many eases, ordinary share- holders have been kept for a long time without any return for their capital at all." Mr. Walkden went on to say that while the railway companies were making increased profits the Government intended to allow them to increase their fares. The advantage to the workers was thus to be neutral- ized. " That," he exclaimed, " is what staggers the workers." " Have you made allowance," interjected Mr. Asquith, "for the increased wages that are to be paid ? " Of course the deputation had not made allowances for that, or, indeed, for any other matter really essential to a discussion of the question. Mr. J. E. Williams, the General Secre- tary of the Amalgamated Society of Railway Servants, took up the running from Mr. Walkden. He indicated the low wages of railwaymen as the justification of • nationalization. " Is your contention," asked Mr. Asquith, " that if the State took over the railways it could both increase wages and lower rates of freight ? " " Yes," retorted Mr. Williams with magnificent disregard for the whole range of economics ; " that is our contention." But as it turned out it was not even then the whole of his contention. "Reduction of hours," he added, " would also be possible." He glided off to the subject of State rail- ways in other countries. Mr. Asquith pursued him with the question : " Do you think the men in those countries are better paid, or that they work shorter hours ? " Mr. Williams, not being able to say " yes," fell back on the argument that though foreigners might have worse wages and longer hours they had " other advantages," such as retirement allowances. Mr. Walkden, who had, perhaps, been pondering all this time the retorts he might have made to Mr. Asquith's fatal questions—how painful is one's esprit d'escalier !—here came to the rescue of Mr. Williams. He said that since railways had been transferred to the State in other countries they had been " much improved." " What is your evidence ? " asked Mr. Asquith. It is to be noticed that the deputation did not attempt to concern themselves with the improvement or otherwise of State-owned railways from the point of view of the public service. " Much improved " to them meant simply that the employees had exacted more wages from the State than they had succeeded in getting from private employers. We do not condemn the argument as such, of course, for we have the greatest sympathy with the desire of the workers to get as good wages as possible, but the argument cannot be considered separately from the other component parts of the problem. Otherwise it is seen out of all perspective and leads to false conclusions. We do not believe that the majority of workers, directly and indirectly concerned, have ever profited in the long run by the transference of private enterprises to the State. State-owned businesses are run at a higher cost, and higher cost means snore taxation, and more taxation means harder times for some one, if not in the form of reduced wages then in the form of dearer necessaries and higher rent. When Mr. Asquith asked for evidence that any railway was " much improved " since being taken over by the State, Mr. Walkden mentioned the " Western of France." It is true that the Western of France under State control has a heavier wages bill than it had when privately owned, but it has become a by-word in France for the increased number of accidents, for the unpunctuality of the trains, and for the losses caused to farmers and merchants by the delays in carrying freights. Mr. Asquith gave a compact and complete reply to the peculiar point of view of the deputa- tion when he said : " The notion that you can reduce fares and rates and shorten hours of labour and raise the wages of persons employed without paying for the capital value of the undertaking is to me an illusory notion."
By a beautiful undesigned coincidence another cogent answer to the arguments of the deputation was provided on the same day in Mr. Herbert Samuel's explanation in the House of Commons of the Post Office estimates. As he rightly said, the chief event of the year had been the transfer of the National Telephone Company's system to the State. The finance of this affair is still vague. No one knows exactly to what expenditure the State has committed itself. The price of the company's plant has yet to be determined by arbitration. If the judgment is unfavourable to the Government—arbitration is generally more lenient to the private person, who is presumed to have strong human feelings about his pocket, than to the highly impersonal " State "—it will nevertheless have to be accepted. Mr. Samuel admitted that the wages of the Company's servants have risen by about half a million since they became the servants of the State. Thus the State by this transaction is the loser in three distinct ways. First, the payment made by the Company for its licence has been abandoned in favour of a problematical profit ; the bird in the hand has been allowed to fly away, and we are all wondering what the value, if any, will be of the bird in the bush. Secondly, the plant of the Company has to be bought, and it may be that the purchase price will be very heavy. Thirdly, the wages bill has already risen half a million. As regards the State as a payer-out of wages Mr. Samuel made a statement which proved that the deputation to Mr. Asquith would have been greatly strengthened if he could have been one of its members. Ho said :- "That the Post Office, after all, is not such a bad employer of labour is, I think, evident from the improvement in the condition of the Telephone Company's employees who have been transferred to the Post Office. It is rarely that we have the opportunity of making an exact comparison between the conditions in State em- ployment and the conditions in similar employment outside. We have that opportunity in this case. The employees of the National Telephone Company numbered 19,000. On transfer to the Post Office they enjoy the conditions of Post Office servants of the same grade doing the same work. The consequence has been that in wages alone that staff aro now receiving £175,000 a year more than they would have received if they had remained with the Company, and owing to the shortening of the hours of work and the increase of holidays granted I have had to employ a larger staff, involving an increase in the wages bill of £32,000 a year. The pension rights granted to the Telephone Company's employees involve an increase to the amount of £201,000 a year when the pensions mature. So that altogether these 19,000 tele- phone employees benefit in money or in money's worth to the extent of £408,000 a year, or a sum of over £20 per person, or 8s. per week."
We wonder where Mr. Samuel supposes that this move- ment, which has begun in. such a thoroughly exhilarating manner, is going to stop. His estimates show an increase of £3,079,000, but he expects an increased revenue of £3,475,000. We venture to prophesy—we are only guessing—that his expectations will be falsified. If he turns out to be right this year it will become all the more difficult in future years for that very reason to resist the demands for more concessions to the employees. When a servant of the State is also a voter, he knows that ho is in a highly strategic position for putting pressure on the State. Reduced to its crude terms the whole plea of the deputation to Mr. Asquith was frankly this ; " Nationalize the railways, because then the employees will be able to squeeze the Government." The Government is bound to be a more accommodating employer than a private person. This is perfectly well known to Socialists, who do not see so far ahead as to consider that the total trade of the country will suffer if the Government as employer is a. bad trustee of the public money it distributes. In France the trouble between the Government and the State employees is never-ending. Prime Ministers have been ruined by the problem, but none has ever solved it because in any satisfactory sense it is insoluble. In some Australian States the attempt has been made to relieve Ministers of their embarrassment by appointing a Commission to run the railways. But any plan which requires a Government to seek refuge in this Spenlow and Jerkins business is self- condemned. If a Government wishes to be relieved of the odium attaching to a paymaster, the workers for their part under State control always wish to be relieved of the obligation to be industrious. No one, it is thought, can cheat the State by idleness. The " State " is only an abstraction. A correspondent supplied us last week with an exquisite example of " the Government stroke." In Australia building contractors expect a bricklayer to lay 3o0 bricks a day, but on a, Government job he is expected to lay only 185. Even three hundred and fifty a day is very easy-going and is the scale imposed by the trade unions. Four record-breaking bricklayers offered recently in Mel- bourne to lay 3,000 bricks each in eight hours. They bad laid 5,608 bricks in 31 hours when the union intervened and stopped this very invidious demonstration. Such is "the Government stroke" which Mr. Samuel—unwittingly perhaps—encourages and Mr. Asquith, when he is full of common sense, repudiates.
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