CHAPTER XIXConclusion

Gladstone’s Tribute to Hume

This wish of Sir Ralph H. Knox recalls to mind the tribute paid, in 1873, by Mr. Gladstone, to the memory of Joseph Hume, the first as well as the lastMember of the House of Commons to acquire a knowledge of the expenditures of the Government which was sufficient to enable the possessor to criticize with intelligence the details of the expenditures of the Government. Said Mr. Gladstone: “…and in like manner, I believe that Mr. Hume has earned for himself an honorable and a prominent place in the history of this country—not by endeavoring to pledge Parliament to abstract resolutions or general declarations on the subject of economy, but by an indefatigable and unwearied devotion, by the labor of a life, to obtain complete mastery of all the details of public expenditure, and by tracking, and I would almost say hunting, the Minister in every Department through all these details with a knowledge equal or superior to his own. In this manner, I do not scruple to say, Mr. Hume did more, not merely to reduce the public expenditure as a matter of figures, but to introduce principles of economy into the management of the administration of public money, than all the men who have lived in our time put together. This is the kind of labor, which, above all things, we want. I do not know whether my honorable and learned friend [Mr. Vernon Harcourt], considering his distinguished career in his profession, is free to devote himself to the public service in the same way as Mr. Hume did. If, however, he is free to do so, I would say to him: ‘By all means apply yourself to this vocation. You will find it extremely disagreeable.You will find that during your lifetime very little distinction is to be gained in it, but in the impartiality of history and of posterity you will be judged very severely in the scales of absolute justice as regards the merits of public men, and you will then obtain your reward.’”433

The British public, needless to say, still is waiting for the man, or men, who shall take upon themselves the invidious but honorable task of stemming the tide to extravagant expenditure, which, in Great Britain, as elsewhere, is the besetting sin of popular government. The British people still are waiting, though, since 1870, they have vastly increased the functions of the Government by nationalizing a great branch of industry, and therefore are more than ever in need of persons who shall emulate the late Joseph Hume.

In conclusion, let us compare with the testimony given in 1902, the testimony given in 1873, before the Select Committee on Civil Services Expenditure.

A Member of the Select Committee of 1873 asked Mr. W. E. Baxter, Financial Secretary to the Treasury: “Am I right in thinking that you do not agree with the Chancellor of the Exchequer’s declaration with regard to the Treasury? I asked him this question: ‘Then it is a popular delusion to believe that the Treasury does exercise a direct control over the expenditureof the Department?’ And the Chancellor replied: ‘I do not know that it is popular, but it is a delusion; I think that it would be much more popular that the Treasury should exercise no control at all.’” Mr. Baxter replied: “I think that the Chancellor stated it too broadly, and would, probably, if he had been Secretary to the Treasury for two or three years, have found that the Treasury did, in point of fact, go back to some extent over the old expenditure as well as try to stop increases.” A moment before, Mr. Baxter had said: “The most unpleasant part, as I find it, of the duty of the Financial Secretary to the Treasury is to resist the constant pressure brought day by day, and almost hour by hour, by Members of Parliament, in order to increase expenditure by increasing the pay of individuals, increasing the pay of classes, and granting large compensations to individuals or to classes.” The Chairman of the Committee queried: “And that pressure, which is little known to the public, has given you, and your predecessors in office, I presume, a great deal of thought and a great deal of concern?” Mr. Baxter replied: “As I said before, it is the most unpleasant part of my duties, and it occupies a very great deal of time which probably might be better spent.” At this point Mr. Sclater-Booth asked: “You spoke of the constant Parliamentary pressure which has been exercised with a view to increasing salaries or compensations, do you allude to proceedings in Parliament as well as private communications, or only to the latter?”Mr. Baxter replied: “I did in my answer only allude to private communications by letter and conversation in the House, because that was in my mind at the time. But of course my answer might be extended to those motions in the House which are resisted without effect by the Government, and which entail great expenditure upon the country.” Mr. Herman queried: “When you speak of the pressure put upon you by Members of Parliament for the increase of pay to classes, and the other points that you named, I suppose that you mean that it is partly party pressure, and that you are more subject to it at the present time than you would be if a Conservative Government were in power?” Mr. Baxter replied: “In my experience it has very little to do with party; men from all quarters of the House are at me from week to week.” “Do you mean to say that men opposed to you in political principles apply to you for that sort of thing now?” “Certainly I should wish it to be distinctly understood that they do not ask this as a favor; they do not ask favors of me. They simply wish me to look into the question of the pay of individuals and of classes of individuals, as they put it, with a view of benefitting the public service…. In very few instances since I have been Financial Secretary to the Treasury have I been asked by anyone to advance a friend, or to do anything in the shape of a favor. The representations are of this sort: ‘Here are a class of public officers who are underpaid. We wish you to look into the matter, and to considerwhether or not it would be advantageous to the public service that their salary should be increased.’ I look into it, and I say that I am not at all of that opinion, upon which my friend tells me that he will bring the matter before the House, and show us up.” “And the other evil is one which is rapidly diminishing, and, in fact, is very small now, namely, interference in favor of individuals?” “Very small indeed.”

To a question from Mr. Rathbone, Mr. Baxter replied: “I do not think that the representations in question have much effect; I only stated that the most unpleasant part of my duties was resisting the pressure brought to bear in that way.” Thereupon Mr. Rathbone continued: “They may not have an effect when the Government has a majority of one hundred or so, or when there is no election impending, but do you think they have no effect when, as we have seen in former years for long periods, the Government is carried on, whether by one side or the other, by a very small majority, or when an election is impending?” Mr. Baxter replied: “I have no doubt that they have had the effect in former times in those circumstances.” “Do you think they would be liable to have that effect again if either party should be reduced to that condition?” “It may be so.” “Can you suggest any mode of abating the Parliamentary pressure to which you have alluded, whether it be exercised by public motions or by private influence?” The Financial Secretary to the Treasury replied: “No; it is an evil very difficultto remedy. I think the better plan would be to inform the constituencies on the subject and let them know the practice which so widely prevails, in order that, if inclined to take the side of economy, they may look after their Members of Parliament.” A moment later, Mr. Sclater-Booth asked: “Do you not think from what you have seen of the public service, that the Treasury, existing particularly for that purpose, is the body which must be permanently relied upon to keep down expenditure?” “Decidedly so.” “Even the constituencies can scarcely, as a rule, be appealed to in that sense, can they?” “No; I attach very much more importance to the power of the Treasury than either to the action of the House of Commons, or, I am sorry to say, to the voice of the constituencies.”434

FOOTNOTES:419The subjoined statements, excepting the quotation from Mr. Austen Chamberlain, are taken from A. Todd:On Parliamentary Government in England.420Sir Charles Wood, first Viscount of Halifax. Private Secretary to Earl Grey, 1830 to 1832; Financial Secretary to the Treasury, 1832 to 1834; Secretary to the Admiralty, 1835 to 1839; Chancellor of the Exchequer, 1846 to 1852; President of the Board of Control, 1852 to 1855; First Lord of the Admiralty, 1855 to 1858; Secretary of State for India, 1859 to 1866; raised to Peerage as Viscount Halifax in 1866; Lord Privy Seal, 1870 to 1874.421Report from the Select Committee on National Expenditure, 1902; q. 2,516 to 2,605.422Who’s Who, 1905, Fisher, Wm. Hayes, M. P., Financial Secretary to the Treasury, 1902-1903; Junior Lord of the Treasury, and a Ministerial Whip, 1895 to 1902; Hon. Private Secretary to Sir Michael Hicks-Beach, 1886 to 1887; and to Right Honorable A. J. Balfour, 1887 to 1892.423Who’s Who, 1904, Murray, Sir G. H., Joint Permanent Under Secretary to the Treasury since 1903. Entered the Foreign Office, 1873; transferred to Treasury, 1880; Private Secretary to Right Honorable W. E. Gladstone and to Earl of Rosebery, when Prime Minister; Chairman Board of Inland Revenue, 1897 to 1899; Secretary to the Post Office, 1899 to 1903.424Report from the Select Committee on National Expenditure, 1902; q. 1,631 to 1,673, and 1,730 to 1,732.425Who’s Who, 1904, Knox, Sir Ralph H., entered War Office in 1856; Accountant-General, War Office, 1882 to 1897; Permanent Under Secretary of State for War, 1897 to 1901; a Member of the Committee which worked out Lord Cardwell’s Army Reform, and of the Royal Commission on Indian Financial Relations, 1896; Civil Service Superannuations, 1902; and Militia and Volunteers, 1903.426Report from the Select Committee on National Expenditure, 1902; q. 1,567 to 1,569, and 1,823 to 1,825.427Report from the Select Committee on National Expenditure, 1902; q. 2,081 to 2,084.428In 1905 Mr. Chalmers was made Assistant Secretary to the Treasury.429Report from the Select Committee on National Expenditure, 1902; q. 615 to 618.430Report from the Select Committee on National Expenditure, 1892; q. 2,406 to 2,419, and 2,502.431Second Report of the Royal Commission on Civil Establishments, 1888; q. 10,683 to 10,684.432Report from the Select Committee on Post Office(Telegraph Department), 1876; q. 5,397 to 5,600.433Hansard’s Parliamentary Debates, February 18, 1873, p. 632 and following.434Third Report from the Select Committee on Civil Services Expenditure, 1873; q. 4,672 to 4,768.

419The subjoined statements, excepting the quotation from Mr. Austen Chamberlain, are taken from A. Todd:On Parliamentary Government in England.

420Sir Charles Wood, first Viscount of Halifax. Private Secretary to Earl Grey, 1830 to 1832; Financial Secretary to the Treasury, 1832 to 1834; Secretary to the Admiralty, 1835 to 1839; Chancellor of the Exchequer, 1846 to 1852; President of the Board of Control, 1852 to 1855; First Lord of the Admiralty, 1855 to 1858; Secretary of State for India, 1859 to 1866; raised to Peerage as Viscount Halifax in 1866; Lord Privy Seal, 1870 to 1874.

421Report from the Select Committee on National Expenditure, 1902; q. 2,516 to 2,605.

422Who’s Who, 1905, Fisher, Wm. Hayes, M. P., Financial Secretary to the Treasury, 1902-1903; Junior Lord of the Treasury, and a Ministerial Whip, 1895 to 1902; Hon. Private Secretary to Sir Michael Hicks-Beach, 1886 to 1887; and to Right Honorable A. J. Balfour, 1887 to 1892.

423Who’s Who, 1904, Murray, Sir G. H., Joint Permanent Under Secretary to the Treasury since 1903. Entered the Foreign Office, 1873; transferred to Treasury, 1880; Private Secretary to Right Honorable W. E. Gladstone and to Earl of Rosebery, when Prime Minister; Chairman Board of Inland Revenue, 1897 to 1899; Secretary to the Post Office, 1899 to 1903.

424Report from the Select Committee on National Expenditure, 1902; q. 1,631 to 1,673, and 1,730 to 1,732.

425Who’s Who, 1904, Knox, Sir Ralph H., entered War Office in 1856; Accountant-General, War Office, 1882 to 1897; Permanent Under Secretary of State for War, 1897 to 1901; a Member of the Committee which worked out Lord Cardwell’s Army Reform, and of the Royal Commission on Indian Financial Relations, 1896; Civil Service Superannuations, 1902; and Militia and Volunteers, 1903.

426Report from the Select Committee on National Expenditure, 1902; q. 1,567 to 1,569, and 1,823 to 1,825.

427Report from the Select Committee on National Expenditure, 1902; q. 2,081 to 2,084.

428In 1905 Mr. Chalmers was made Assistant Secretary to the Treasury.

429Report from the Select Committee on National Expenditure, 1902; q. 615 to 618.

430Report from the Select Committee on National Expenditure, 1892; q. 2,406 to 2,419, and 2,502.

431Second Report of the Royal Commission on Civil Establishments, 1888; q. 10,683 to 10,684.

432Report from the Select Committee on Post Office(Telegraph Department), 1876; q. 5,397 to 5,600.

433Hansard’s Parliamentary Debates, February 18, 1873, p. 632 and following.

434Third Report from the Select Committee on Civil Services Expenditure, 1873; q. 4,672 to 4,768.

A large and ever increasing number of us are adherents of the political theory that the extension of the functions of the State to the inclusion of the conduct of business ventures will purify politics and make the citizen take a more intelligent as well as a more active part in public affairs. The verdict of the experience of Great Britain under the public ownership and operation of the telegraphs is that that doctrine is untenable. Instead of purifying politics, public ownership has corrupted them. It has given a great impetus to class bribery, a form of corruption far more insidious than individual bribery. With one exception, wherever the public ownership of the telegraphs has affected the pocket-book interests of any considerable body of voters, the good-will of those voters has been gained at the expense of the public purse. The only exception has been the policy pursued toward the owners of the telephone patents; and even in that case the policy adopted was not dictated by legitimate motives.

The nationalization of the telegraphs was initiated with class bribery. The telegraph companies had been poor politicians, and had failed to conciliate the newspaperpress by allowing the newspapers to organize their own news bureaux. The Government played the game of politics much better; it gave the newspapers a tariff which its own advisor, Mr. Scudamore, said would prove unprofitable. No subsequent Government has attempted to abrogate the bargain, though the annual loss to the State now is upward of $1,500,000.

The promise to extend the telegraphs to every place with a money order issuing Post Office was given in ignorance of what it would cost to carry out that promise. But the adherence to the policy until an anticipated expenditure of $1,500,000 had risen to $8,500,000 was nothing more nor less than the purchase of votes out of the public purse. Not until 1873 did the Government abandon the policy that every place with a money order issuing Post Office was entitled to telegraphic service.

When the House of Commons, in March, 1883, against the protests of the Government passed the resolution which demanded that the tariff on telegrams be cut almost in two, the Government should have resigned rather than carry out the order. The Government’s obedience to an order which the Government itself contended would put a heavy burden on the taxpayer for four years, was nothing more nor less than the purchase of Parliamentary support out of the public purse. No serious argument had been advanced that the charge of 24 cents for 20 words was excessive. The argument of the leader of the movement for reduction, Dr.Cameron, of Glasgow, was a worthy complement to the argument made in 1868 by Mr. Hunt, Chancellor of the Exchequer, to wit, that telegraphing ought to be made so cheap that the illiterate man who could not write a letter would send a telegram. Dr. Cameron argued that “instead of maintaining a price which was prohibitory not only to the working classes but also to the middle classes, they ought to take every means to encourage telegraphy. They ought to educate the rising generation to it; and he would suggest to the Government that the composing of telegrams would form a useful part of the education in our board schools.”

Parliament after Parliament, and Government after Government has purchased out of the public purse the good-will of the telegraph employees. Organized in huge civil servants’ unions, the telegraph employees have been permitted to establish the policy that wages and salaries shall be fixed in no small degree by the amount of political pressure that the telegraph employees can bring to bear on Members of the House of Commons. With the rest of the Government employees they have been permitted to establish the doctrine that once a man has landed himself on the State’s pay-roll, he has “something very nearly approaching to a freehold of provision for life,” irrespective of his fitness and his amenableness to discipline, and no matter what labor-saving machines may be invented, or how much business may fall off. To a considerabledegree the State employees have established their demand that promotion be made according to seniority rather than merit. In more than one Postmaster General have they instilled “a perfect horror of passing anyone over.” Turning to one part of the service, one finds the civil service unions achieving the revocation of the promotion of the man denominated “probably the ablest man in the Sheffield Post Office.” Turning to another part of the service, one finds the Postmaster General, Mr. Raikes, “for the good of the service” telling an exceptionally able man that “he can well afford to wait his turn.” The civil servants, in the telegraph service and elsewhere, to a considerable degree have secured to themselves exemption from the rigorous discipline to which must submit the people who are in the service of private individuals and of companies. Finally, the civil servants have been permitted to establish to a greater or a lesser degree a whole host of demands that are inconsistent with the economical conduct of business. Among them may be mentioned the demand that the standard of efficiency may not be raised without reimbursement to those who take the trouble to come up to the new standard; that if a man enters the service when the proportion of higher officers to the rank and file is 1 to 10, he has “an implied contract” with the Government that that proportion shall not be altered to his disadvantage though it may be altered to his advantage.

Public opinion has compelled the great Political Parties to drop Party politics with regard to the State employees, and to give them security of tenure of office. But it permits the State employees to engage in Party politics towards Members of Parliament. The civil service unions watch the speeches and votes of Members of the House of Commons, and send speakers and campaign workers into the districts of offending Members. In the election campaigns they ask candidates to pledge themselves to support in Parliament civil servants’ demands. Their political activities have led Mr. Hanbury, Financial Secretary to the Treasury in 1895 to 1900, to say: “We must recognize the fact that in this House of Commons, public servants have a Court of Appeal such as exists with regard to no private employee whatever. It is a Court of Appeal which exists not only with regard to the grievances of classes, and even of individuals, but it is a Court of Appeal which applies even to the wages and duties of classes and individuals, and its functions in that respect are only limited by the common sense of Members, who should exercise caution in bringing forward cases of individuals, because, if political influence is brought to bear in favor of one individual, the chances are that injury is done to some other individual…. We have done away with personal and individual bribery, but there is still a worse form of bribery, and that is when a man asks a candidate [for Parliament] to buy his vote out of the public purse.” The tacticsemployed by civil servants have led the late Postmaster General, Lord Stanley, to apply the terms “blackmail” and “blood-sucking.” The conduct of the House of Commons under civil service pressure has led Mr. A. J. Balfour, the late Premier, to express grave anxiety concerning the future of Great Britain’s civil service. It has led Mr. Austen Chamberlain, Representative of the Postmaster General, to say that Members of both Parties had come to him seeking protection from the demands made upon them by the civil servants. On another occasion it has led Mr. Chamberlain to say: “In a great administration like this there must be decentralization, and how difficult it is to decentralize, either in the Post Office or in the Army, when working under constant examination by question and answer in this House, no Honorable Member who has not had experience of official life can easily realize. But there must be decentralization, because every little petty matter cannot be dealt with by the Postmaster General or the Permanent Secretary to the Post Office. Their attention should be reserved in the main for large questions, and I think it is deplorable, absolutely deplorable, that so much of their time should be occupied, as under the present circumstances it necessarily is occupied, with matters of very small detail because these matters of detail are asked by Honorable Members and because we do not feel an Honorable Member will accept an answer from anyone but the highest authority. I think a third of the time—I am putting it at a lowestimate—of the highest officials in the Post Office is occupied in answering questions raised by Members of this House, and in providing me with information in order that I may be in a position to answer the inquiries addressed to me” about matters which “in any private business would be dealt with by the officer on the spot, without appeal or consideration unless grievous cause were shown.”

The questions of which Mr. Austen Chamberlain spoke, at one end of the scale are put on behalf of a man discharged for theft, at the other end of the scale on behalf of the man who fears he will not be promoted. The practice of putting such questions not only leads to deplorable waste of executive ability, it also modifies profoundly the entire administration of the public service. Lord Welby, the highest authority in Great Britain, in 1902 testified that it was the function of the Treasury to hold the various Departments up to efficient and economical administration. But that the debates in the Commons not only weakened the Treasury’s control over the several Departments, but also made the Treasury lower its standards of efficiency and economy. He added that in the last twenty or twenty-five years both Parties had lost a great deal of “the old spirit of economy,” and that at the same time “the effective power of control in the Chancellor of the Exchequer had been proportionately diminished.” In former times the Chancellor of the Exchequer had been “paramount, or very powerful in theCabinet.” Upon the same occasion, Sir George H. Murray was called to testify, because “in the official posts he had held, particularly as Private Secretary to the late Prime Minister, Mr. Gladstone, he had had frequent opportunities for observation not only of the reasons for expenditure, but of the control exercised over it in Parliament.” Sir George H. Murray said: “But I think the whole attitude of the House itself toward the public service and toward expenditure generally, has undergone a very material change in the present generation…. Of course, the House to this day, in the abstract and in theory, is very strongly in favor of economy, but I am bound to say that in practice Members, both in their corporate capacity and, still more, in their individual capacity, are more disposed to use their influence with the Executive Government in order to increase expenditure than to reduce it.” Sir John Eldon Gorst testified in 1902: “But although the Civil Service head of the office has a very great motive to make his office efficient, because his own credit and his future depend on the efficiency of his office, he has comparatively little motive for economy. Parliament certainly does not thank him; and I do not know whether the Treasury thanks him very much; certainly his colleagues do not thank him…. I think anybody who has any experience of mercantile offices, such as a great insurance office, or anything of that kind, would be struck directly with the different atmosphere which prevails in a mercantile office and a Governmentoffice…. I have no hesitation in saying that any large insurance company, or any large commercial office of any kind is worked far more efficiently and far more economically than the best of the Departments of His Majesty’s Government.”

Sir John Eldon Gorst might have added that the Civil Service head of a Department really had only rather moderate power to enforce economy. Before the Royal Commission of 1888, Lord Welby [then Sir Welby], Permanent Secretary to the Treasury, was asked: “But you would hardly plead the interference of Members of Parliament as a justification for not getting rid of an unworthy servant, would you?” Lord Welby, who had been in the Treasury since 1856, replied: “It is not a good reason, but as a matter of fact it is powerful. The House of Commons are our masters.”

In the hands of a commercial company, the telegraphs in the United Kingdom would yield a handsome return even upon their present cost to the Government. That is proven beyond the possibility of controversy by the figures presented in the preceding chapters. In the hands of the State, in the period from 1892-93 to 1905-06, the operating expenses alone have exceeded the gross receipts by $1,435,000. If one excludes, as not earned by the telegraphs, the $8,552,000 paid the Government by the National Telephone Company in the form of royalties for the privilegeof conducting the telephone business in competition with the State’s telegraphs, the excess of operating expenses over gross receipts will become $9,987,000. That sum, of course, takes no account of the large sums required annually to pay the interest and depreciation charges upon the capital invested in the telegraph plant.

On March 31, 1906, the capital invested in the telegraphs was $84,812,000. To raise that capital, the Government had sold $54,300,000 of 3 per cent. securities, at an average price of about 92.3; and for the rest the Government had drawn upon the current revenue raised by taxation. On March 31, 1906, the unearned interest which the Government had paid upon the aforesaid $54,300,000 of securities had aggregated $22,530,000, the equivalent of 26.5 per cent. of the capital invested in the telegraphs. Upon the $30,500,000 taken from the current revenue, the Government never has had any return whatever.

The nationalization of the telegraphs has corrupted British politics by giving a great impetus to the insidious practice of class bribery. It also has placed heavy burdens upon the taxpayers. But that is not all. The public ownership of the telegraphs has resulted in the State deliberately hampering the development of the telephone industry. That industry, had the Government let it alone, would have grown to enormous proportions, promoting the convenience and theprosperity of the business community, as well as giving employment to tens of thousands of people. In the year 1906, only one person in each 105 persons in the United Kingdom was a subscriber to the telephone; and the total of persons employed in the telephone industry was only some 20,000. On January 1, 1907, one person in each 20 persons in the United States was a subscriber to the telephone.

Under the telephone policy pursued by the Government, the National Telephone Company down to the close of the year 1896 for all practical purposes had no right to erect a pole in a street or lay a wire under a street. As late as 1898, not less than 120,000 miles of the company’s total of 140,000 miles of wire were strung from house-top to house-top, under private way-leaves which the owners of the houses had the right to terminate on six months’ notice. Inadequate as it was, the progress made by the National Telephone Company down to 1898 was a splendid tribute to British enterprise.

The necessarily unsatisfactory service given by the National Telephone Company, down to the close of 1898, created a prejudice against the use of the telephone which to this day has not been completely overcome. Again, the Government to this day has left the National Telephone Company in such a position of weakness, that the Company has been unable to brave public opinion to the extent of abolishing the unlimited user tariff and establishing the measured service tariffexclusively. On the other hand, it is an admitted fact that the telephone cannot be brought into very extensive use except on the basis of the measured service exclusively.

The British Government embarked in the telegraph business, thus putting itself in the position of a trader. But it refused subsequently to assume one of the commonest risks to which every trader is exposed, the liability to have his property impaired in value, if not destroyed, by inventions and new ways of doing things. In that respect the British Government has pursued the same policy that the British Municipalities have pursued. The latter bodies first hampered the spread of the electric light, in large part for the purpose of protecting the municipal gas plants; and subsequently they hampered the spread of the so-called electricity-in-bulk generating companies, which threatened to drive out of the field the local municipal electric light plants.

Very recently the British Government has taken measures to protect its telegraphs and its long distance telephone service from competition from wireless telegraphy. It has refused an application for a license made by a company that proposed to establish a wireless telegraphy service between certain English cities. The refusal was made “on the ground that the installations are designed for the purpose of establishing exchanges which would be in contravention of the Postmaster General’s ordinary telegraphic monopoly.” In order to protect its property in the submarine cablesto France, Belgium, Holland and Germany, the Government has inserted in the “model wireless telegraphy license” a prohibition of the sending or receiving of international telegrams, “either directly or by means of any intermediate station or stations, whether on shore or on a ship at sea.” In short, the commercial use of wireless telegraphy apparatus the Government has limited to communication with vessels.

In one respect the nationalization of the telegraphs has fulfilled the promises made by the advocates of nationalization. It has increased enormously the use of the telegraphs. But when the eminent economist, Mr. W. S. Jevons, came to consider what the popularization of the telegraphs had cost the taxpayers, he could not refrain from adding that a large part of the increased use made of the telegraphs was of such a nature that the State could have no motive for encouraging it. “Men have been known to telegraph for a pocket handkerchief,” was his closing comment. Mr. Jevons had been an ardent advocate of nationalization. Had he lived to witness the corruption of politics produced by the public ownership of the telegraphs, his disillusionment would have been even more complete.

From whatever viewpoint one examines the outcome of the nationalization of the telegraphs, one finds invariably that experience proves the unsoundness of the doctrine that the extension of the functions of the Stateto the inclusion of the conduct of business ventures will purify politics and make the citizen take a more intelligent as well as a more active part in public affairs. Class bribery has been the outcome, wherever the State as the owner of the telegraphs has come in conflict with the pocket-book interest of the citizen. One reason has been that the citizen has not learned to act on the principle of subordinating his personal interest to the interest of the community as a whole. Another reason has been that the community as a whole has not learned to take the pains to ascertain its interests, and to protect them against the illegitimate demands made by classes or sections of the community. There is no body of intelligent and disinterested public opinion to which can appeal for support the Member of Parliament who is pressed to violate the public interest, but wishes to resist the pressure. The policy of State intervention and State ownership does not create automatically that eternal vigilance which is the price not only of liberty but also of good government. One may go further, and say that the verdict of British experience is that it is more difficult to safeguard and promote the public interest under the policy of State intervention than under the policy oflaissez-faire. Under the degree of political intelligence and public and private virtue that have existed in Great Britain since 1868, no public service company could have violated the permanent interests of the people in the way in which the National Government and the Municipalitieshave violated them since they have become the respective owners of the telegraphs and the municipal public service industries. No public service company could have blocked the progress of a rival in the way in which the Government has blocked the progress of the telephone. No combination of capital could have exercised such control over Parliament and Government as the Association of Municipal Corporations has exercised. Finally, no combination of capital could have violated the public interest in such manner as the civil service unions have done.

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