My subject is not one which admits of discussion except on very general lines. Our views on it must necessarily be formed under the influence of the opinions we hold as to the legitimate functions of the State. It has been truly said that no country has ever adopted State ownership of railways from theoretical considerations. In each and every instance there were some practical reasons, based on military necessities or concrete and pressing economic conditions to meet which State ownership was accepted, not as a system desirable in itself, but as an expedient which, in the circumstances, was considered to be the best practical solution of difficulties which stood in the way of the satisfactory development of railways. But whilst agreeing with this as a true historical statement, I doubt whether theory can be entirely excluded from a statement of the genesis of national railway systems. In a country where Individualist opinions prevail, as I think at the present time they do in England, no temptations, no pressure of circumstances short of extreme national emergency, would induce people to face the evils which the Individualist knows must result from the intrusion of State action into matters of trade. This is theory, although those who are influenced by it may think that it is founded on practical experience. On the other hand, those persons who wish to secure trading profits for the State even at the cost of taking commercial risks, or who, when difficulties and obstacles arise in commercial development, resort to the powers of the State to overcome them, either by the imposition of taxes on the general community in the interests of a class, or by handing over to State officials the direction of an industry, instead of relying on the skill, self-reliance, enterprise, energy, and character of the people, are Socialists at heart, whether they know it or not, and are actuated by the radical theory of a creed which, perhaps, most of them would disavow.
But, after all, the question is not whether State purchase would be a step in the Socialist direction, but whether it would be a step in the right direction. Why should we change? Are we suffering from intolerable evils from which there is no other way of escape, or is there some great national benefit to be derived from the change?
The general case for nationalization, as put forward by its advocates, rests on very few arguments, and it is not, I think, unfair to describe these as being mainly assumptions, the accuracy of which it is impossible to verify. I may summarize a few of these:—
(1) Government management would be more efficient and less costly than private management.
(2) Government management would primarily regard the interests of the community and of the country as a whole, and the substitution of that condition for the existing system under which the interests of private trading concerns take first place in the thoughts and efforts of those responsible for management would have the effect of securing a more equal and more satisfactory development of the resources of the country, and, as one writer expresses it with more than the usual proportion of assumption in his statement, trade would be stimulated under equitable, reasonable, and uniform systems of rates.
(3) The change would result in the removal of most of the serious complaints made against the existing administration of railways.
(4) Those who refuse to look upon the matter as mainly a commercial problem think and hope that new means would be found for the satisfaction of the social needs of the nation if the railways were at the disposal of the Government.
(5) Experience of the economy resulting from large combinations in other industries is invoked in support of the proposal to get rid of the separate administrations of private railways. It is said that the advantage of production on the largest scale by a single corporation in place of production by a number of smaller units is being verified by the experience of nearly every important trade and industry. The principle has been recognized in the history of railway development in this country by the amalgamation of large numbers of small railways into the great railway systems which we now see, and it is argued that a further step should now be taken in the same direction. But a step involving the creation of so great a monopoly as further large amalgamations would involve can only, it is thought, be taken by the State. In this country the largest railway system under one management is no greater than about 2,000 miles in length, whereas in the United States of America railway systems covering about 15,000 miles are now under the control of a single President and a Board of Directors. It is said, therefore, that modern methods of administration have made it feasible to direct the 23,000 miles of railway in the United Kingdom efficiently and successfully by means of one comprehensive organization, and probably if there is to be one organization there would be no difference of opinion that the single organization to own, control, and manage the railways must be the State.
Most of the principal objections are, I think, covered by the following list:—