either in the shape of a better or cheaper service, or both; and that, even if our present imperfect Governments result in too many officials, it is no worse for the community that a certain number of persons (officials) with their families should be en- joying a decent livelihood out of the industry than that a number of other persons (entrepreneurs and large shareholders) should derive fortunes from the same industry. Further, they allege that no system of private enterprise combined with Government regulation (the usual suggestion for meeting a tendency towards monopoly) will be satisfactory, as it results in just that multi- plicity of officials of the most uneconomic nature, in that they do not produce anything, that is the bugbear of State control.
It is not for us to determine here which view is right; and the former, the anti-nationalization view, is certainly that expressed most frequently in the columns of the Press. Be this as it may, it is an undoubted fact that throughout the whole world in the United Kingdom as well as elsewhere the principle of public ownership, unpopular as it appeared to be in many quarters, was in 1921 steadily gaining ground, and it may be useful if we con- sider some of the developments in this direction and endeavour to find some guiding principles which account for its growth.
Factors making for Public Ownership. Prominent among these is the fear of combination among suppliers of services leading up to a monopoly, open or concealed, which, " human nature being what it is," inevitably results, sooner or later, in excessive prices being charged to the consumer. When this occurs, or tends to occur, in the case of a service vital to most sections of the com- munity, a Government, however hostile its individual members may be to further extensions of public ownership, finds itself compelled to make a public service of it. It may itself assume a monopoly of such service, as in the case of Italy and Uruguay, both of which countries, early in the present century, had nation- alized life insurance and made of it a national monopoly; more frequently, however, a Government in such circumstances starts a State-owned and operated service in competition with existing services, with the view of setting a standard of services and conditions and preventing prices from mounting beyond a reasonable basis. Coming under this head are the Common- wealth of Australia shipping line, the New Zealand and Queens- land State Insurance Departments, the hundreds of publicly owned grain elevators that are to be found throughout Canada, and, in the United Kingdom, the Imperial Cable Service.
The Commonwealth Government line of steamers (see also SHIPPING) was started by the purchase in 1919 by the Australian Prime Minister (Mr. Hughes) of the Strath Line of 13 steam- ships, and some other vessels. The Australian Government gave it to be understood that it established the line as a means to a special end, viz. the protection of the Australian shippers and public from possible adverse results of recent amalgamations of private shipping interests, and not with any idea of driving the shipping companies out of the field. One of the abuses against which the institution of a State-owned mercantile fleet was aimed was the rebate system adopted by some of the big shipping lines, whereby shippers who forwarded goods by any line outside the combine had to pay higher freights, these being charged in the first instance and a rebate allowed only, provided that the said line received all their cargo. In an official circular issued by the Manager of the Commonwealth Government line of steamers appeared the following passages:
" It is not the wish of the Commonwealth Government Line to originate a rate war. The freights charged are those current in the Australian trade at the time of shipment. Equal rates are quoted to all shippers, large or small, private firms or Government Depart- ments, and in the event of a reduction taking place while a steamer is loading all shippers will benefit by it alike.
" A cash discount of 5 per cent, off the net freight is given to shippers on payment of accounts. No primage is charged and no deferred rebate granted. . . .
" In the event of shippers taking advantage of the services of this Line, and being penalized therefor by the confiscation of accrued rebates by any Line through which they have shipped pre- viously, the Commonwealth Government Line is prepared to guar- antee them against such loss, if they will sign the annexed under- taking to give the Line the first offer of their future business."
The Commonwealth Government actively continued the de- velopment of its shipping business, by the construction of 18 new steamers, with the result that in 1921 it had a fleet aggre- gating 444,000 tons.
The point that the principal aim of a State-owned competitive undertaking was to protect the public from overcharge, was brought out by the Lieutenant-Governor of Queensland at the opening of the Queensland Parliament in August 1920 when, referring to the State Insurance Department, he said:
" While not intended to be revenue-producing, this office has since its inception shown a profit averaging over 60,000 per annum, and has at the same time saved many thousands of pounds to the insuring public. . . . Through the State entering into competition with fire insurance companies reductions in premiums ranging from 25 per cent, to 33 per cent, have been effected in favour of policy holders, which means approximately a saving of 20,000 to those who pay fire insurance premiums."
In the case of the Imp rial cable which links the United King- dom with Canada, West Indies and Australasia, the chief factor in building up a State-owned system was the value for political and defensive purposes of having a cable wholly under British control, and in its advertisements the Post Office boasted that " the Imperial Cable is Government owned and is the only Atlantic cable under purely British control." While the rates charged for ordinary telegrams were the same as for those sent by other Atlantic routes, the official advertisements stated:
" It is the only Atlantic route on which the deferred service at reduced rates has been restored. A deferred telegram to Montreal and other places in Eastern Canada costs 4d. a word: to Jamaica is.3d.aword: to New Zealand is. 4d. a word: to Australia Is. 6d. a word."
Here we have the case of a nationalized service affording more facilities than its privately owned competitor.
Another motive for the provision by the State of a service hitherto performed by private enterprise is that of protecting persons against the dishonesty of individuals in the shape of malversation of trust funds. As in many similar directions, New Zealand was the pioneer in appointing a public trustee, but in 1908, despite active hostility on the part of the legal pro- fession, such an office was opened in the United Kingdom.
Its purpose was described in the official pamphlet published by the Public Trustee Office as follows:
" The Public Trustee Act, 1906, was passed with the express object of enabling the public to guard against the risks and incon- veniences incidental to the employment of private individuals in trust matters, and it substitutes for them a trustee who will never die, never leave the country, and never become incapacitated, and whose responsibility is guaranteed by the Consolidated Fund of the United Kingdom."
Extensive use was made of this nationalized service, which exists in competition with professional people and companies performing the same functions (sec PUBLIC TRUSTEE).
Yet another circumstance which drives State or municipal authorities into public ownership is the fact that certain public needs exist which are not filled by private enterprise on account of their not fulfilling the first condition of private enterprise, viz. profit. It is this incentive, rather than those already referred to as governing Australia's action in acquiring shipping, that caused Britain, the United States and Canada during the war to build and operate State-owned merchant fleets. With the disappear- ance of the emergency created by the war, the British Govern- ment rapidly disposed of its merchant ships to private owners, and its action in this respect was in 1921 apparently being folio wed by the United States Government.
For the same reason as that already mentioned, viz. the failure of private enterprise to supply the need, the national authority has in many countries had to arrange for the construction of houses and to let them at uneconomic rents.
Sometimes a Government finds itself compelled to nationalize an undertaking by reason of the fact that a privately owned con- cern of public utility fails financially and, if the State did not take it over, would become derelict. From this cause the Canadian Government has of late years found itself constrained to become the owner of the greater part of the railroads in the Dominion, the only other railroad owner of importance (but of very great
