IT remains to consider how far the State might itself advantageously undertake a certain portion of the field of industry. At present it works satisfactorily, as well as successfully from the economical point of view, the postal and telegraph services, and it has recently extended the postal service so as to include the transport of small parcels; that is to say, it has to a certain extent become, in conjunction with the railway companies, a carrier of goods. To be a complete carrier even of parcels, it should own the railways, their rolling stock and other adjuncts ; and the question arises, whether the Government might not undertake wholly the carriage of goods and passengers by purchasing the railways, and working them in the public interest? It is a kind of work peculiarly suitable for Government management, being largely of a uniform and routine character, not demanding from the general managers the complicated calculations and resources required in manufacturing industry, and for which work, however responsible or difficult, the Government could secure as capable managers as the companies. Besides, the

railway interest is of the nature of a huge though qualified monopoly; or rather there are as many monopolies as there are companies without competition. Hence the chief check on the monopolists' charges in freights and rates is their own sense of self-interest, which is by no means always coincident with the public interest or convenience. It is true that our great railway companies have not abused their position to the gross extent that the companies in the United States have done, but there have been abuses, and they are liable to abuse to a degree which would not be possible if they were under the control of the Government, with no other interest but that of the general public.

If the State undertook their management, the working expenses would probably be reduced by diminished salaries to directors for one item, and the gross receipts would probably be increased by the greater regard paid to the public convenience and comfort. For this would increase the number of passengers, while the amount of traffic would not be decreased by fairer freight, which would facilitate trade. The result would most likely be a fair balance of net profits beyond their present amount, which would be for the public benefit, and which might be employed to reduce taxation, or in other ways. The purchase of the railways and their adjuncts would, however, necessitate the borrowing of some 700 to 800 millions sterling, the interest on which could be paid by the profits resulting, with something left to help to extinguish the principal, it deemed advisable. And the disengaged capital of

the paid-off shareholders, what is to be done with it? As to that, it would partly go to fill up vacancies made in other investments by the Government borrowing for the railways, partly it might swell the general loan fund so that some of it would overflow into foreign investments, if there were not enough promising new enterprises at home; the total effect being most likely beneficial by calling forth extra savings. Or, the financial change might be less, as many of the shareholders might prefer to leave their shares under the Government management, that is, to lend their money, supposing they got their old interest or something near it, so that to the extent that they did so there would be a mere transfer of their credit to the Government instead of to the railway companies.

One result would be a great increase in the civil service of the State, and an increase of Government influence. There would be a number of appointments with varying salaries thrown open to the general competition of the whole nation, with a certain equalizing and diffusing of opportunities, wherein would consist its chief good result. It would be so far a carrying out of the St. Simonian ideal of awarding places according to talent, without regard to the favour or patronage of individuals. There would be abler persons filling the higher appointments than at present, because the ability of a wider area would be drawn upon.

And having gone thus far, is the State to stop or go farther and absorb all industries, substituting its own management for that of the private capitalist

or the company? This question the Collectivist or co-operative Socialist answers very confidently in the affirmative. All industries are to be absorbed one after another, or all together; the manufacturing, the mining, the carrying, the distributing (or shopkeeping), even the agricultural, the exporting and importing-all these huge provinces are to be annexed. Private enterprise, or exploiting for a profit as it is called, is to be extinguished, and the State or the collectivity is to be all in all, as well as the owner of all, in the sphere of industry. This scheme in its universality we have already examined and pronounced judgment upon; and there only remains to add a few words with respect to certain portions of it.

For many reasons every addition to Governmental management in the sphere of industry should be slow and tentative, of the nature of an experiment requiring a whole generation to read the resulting experience rightly and free from doubt. And the Government should make a long pause after the absorption of the railways before it took the much more responsible step of venturing into the field of production proper, because with all drawbacks the present system of private and individualistic enterprise has been fairly successful, and far more so than we could hope that Governmental management in general would be. We can see strong reason why the private capitalist who has made or inherited his place is a better man for it than the superior Government official, generally devoid of initiative, and with less keen interest and energy. The capitalist actual

or potential is under the keenest known stimulus to the efficient production and exchange of his wares, to the discovery and annexing of new markets, to the trial of new and likely enterprises by which he may make a fortune. He will find capital, he will undertake risks, he will finally succeed, if only he is assured of the fruits of his enterprise when successful.

In these ways capitalists have enriched the country by the establishment of wholly new industries which, would not have existed without them. Nor is there reason to think that Government in future, even with the command of scientific knowledge and inventive faculty, would be so successful in the creation and development of new industries as private enterprise urged to sleepless activity by the hope of a fortune, or of great additional profits.

The stimulus of private interest would be greatly weakened under complete State Socialism, and unless other motives which now are weak, such as benevolence, public spirit, honour, can be strengthened by opinion, by morals, or by miracle, or unless the latent ability in the "nouvelles couches sociales" which would be evoked and stirred to great activity by the career opened out for it would partly compensate, the certainty is that production would be less, and that there would be a diffused poverty, with a less reserve for disinterested intellectual needs. For these reasons, amongst others, the State should be slow and cautious in making an inroad into the territory of private productive enterprise, which moreover would be more contrary to traditional usage and sentiment in these countries than in others