complishing economies in consumption, a premium representing a part of the saving. They by whose care the rails, the locomotive, or the cars are saved for running use, or the expenses in any direction are reduced, are suitably rewarded. The employés thus encouraged are induced to study economy in the interest of the company, and this stimulus operates to induce each person employed to study how to augment the receipts or diminish the expenses. This is an idea which has not hitherto penetrated into the administrative spheres of the government of railways, and yet there is none more important commercially than this. It has been introduced into every department of business. One of the principles taught by political economy is that in the domain of labor, in that of industry and of commerce, the sphere of activity of the State begins nearly where the rôle of the individual ends, or where the activity of private industry ceases. Wherever, in the vast field of industrial action, individual efforts can be successfully applied, the Government should leave free room to that agency, and not enter into competition with it. If the State, in almost all countries, has constructed highways, canals, etc., it is because that at the time when these public works were executed, it alone was capable of undertaking them, and of managing them after their construction was finished. The association of capital, which, in more recent times, has created companies of great powers and credit, superior to that of many governments, was then almost unknown. The intervention of the State is unnecessary in the construction or management of railways, except in case of lines recognized to be of general utility, but with a small traffic, and consequently where the expenses of construction are such that private industry would not find from the profits of working them a sufficient reward for its labor and its capital. The role of the Government should be limited to exercise a control over its railways. From the point of view of political economy, the construction, the purchase, and the working of railways by the State was an economic blunder; it was, moreover, a hindrance to the freedom of industry. The Government administers, instead of operating in the interest of commerce and of industry; the agents of the State have not, in the conduct of affairs purely industrial and commercial, those qualities which private industry and individual interest alone can confer. It is claimed, however, that the management of railways by the Government would lead to a simplification of the rates, a reform of regulations, and a reduction of freights and fares. Now this simplification and reform of regulations may be obtained without recourse to the radical solution of the purchase and working of railways by the State. A reform of this kind was brought about long ago in Austria by an agreement between the numerous railways of that country, whom their own interests led to this progressive measure. As to a lower tariff, if we look at practical examples, the rates charged by the two Bavarian roads are no lower since the Government management took effect than under the former tariff. Moreover, even were the rates charged by the Government railways lowered, it would by no means constitute an economic superiority in their favor. The Government, in order to construct or to purchase railways, is obliged to appeal to the private treasury of the citizens; it contracts a loan, the interest of which can only be discharged by the levying of a tax. If, then, the State derives no net profit from the working of its railways, if it transports at the price it receives, the tax to be paid by the citizens will be augmented, in this case, by the entire sum necessary to discharge that interest. No such solution as that is admissible. Let it not be said that if the State effects, on the one hand, a lower price for transportation by railway, it may well, on the other hand, increase the tax upon the people, and that a compensation will be arrived at in that manner. This might be true if the increase of tax sustained by each citizen were proportionate to the use he made of the railway. Such a distribution of the taxes is impossible in practice, and it would happen that he who could make little or no use of the railway would pay the tax for him who constantly uses it, which would be a gross injustice. The State is obliged, in fairness, to impose such a tariff upon railway traffic as will enable it, by the aid of the profits real ized, to pay for the capital invested in the railways which it works. What, then, becomes of the theory of those who hoped that the Government, if it were to buy up all the railways, would carry for the public at the mere cost of working the road? From the moment that the railways should become the property of the Government and be managed it, they would become subject to political influence. The minister of the railways would find himself absolute master in questions which touch industry and commerce most intimately; he would dispose of one of the most considerable elements of national wealth-transportation; he would be chief of an army of functionaries scattered over the whole country, and in continual contact with the whole nation; the railways would pass very probably into the role of propaganda, or the means of yielding a pressure of political influence in the hands of the minister or of a majority of the legislative body. Who would occupy him self with the development of traffic, with the increase of receipts, with the curtailment of expenses, with the proper and economic use of the railway personnel? From that day, the railways would have lost their essential character, they would have ceased to be an industry, they would become only a burcau, and would constitute only one section of the more or less complicated machinery of the Government. AMERICAN TRADE WITH CHINA. [From the Bankers' Magazine, N. Y.] "THE Commerce of our Pacific steamers is made up of a larger variety of commodities than is by many persons supposed. From January to July the steamers bring principally teas and silks, and great expedition is used in the transport of these goods. Tea deteriorates with age, and the sooner a new crop can be put on the market, the better will be the tea, and the greater will be the proportionate profits of the shipper and consignee. When the steamer arrives at San Francisco, the railroad cars are drawn up at her side and the chests of tea or bales of silk are transported at once without the necessity of a second handling. The work goes on with great rapidity; in a few hours the transfer is complete, and the train is on its way to the eastward. It has the right of way over every thing but a passengertrain; nothing is allowed to stop or delay it. It contains from twenty-five to thirty cars; it climbs the Sierras, and winds through the snow-sheds; crosses the alkali plains of Nevada and Utah, and steadily ascends the long slope of the Rocky Mountains, till it halts at the water-shed between the Atlantic and the Pacific, more than 8000 feet above the level of the sea. Then down the mountains and through the broad valley of the Missouri, across the fertile prairies of the Mississippi, striking the lakes, and crossing the Alleghanies, the train comes at length to the seaboard. Twelve days suffice for the journey, and in one instance, a tea-train carried its cargo in nine days and a few hours from San Francisco to New York. "With the present system of commerce, a man may do four times as much business as formerly. A decade or two ago, it took the best part of a year to send a cargo of tea or silk from China or Japan and get the returns therefor; from six to twelve months' capital was locked up, and there was no way of releasing it. Now the steamers and the railway are able to deliver cargo in New York in twenty-eight days from Yokohama, and in thirty-three days from Hong Kong. If we multiply those figures by four for Hong Kong, and by five or six for Yokohama, we shall not be far from the best time of the old sailing-ships. "Nearly every steamer takes $1,000,000 or so in silver coin, chiefly in trade dol. lars. Mexican dollars have long been a well-known commodity, and are in constant demand; the trade dollar was created to supply this want, and is rapidly doing so." |