Morning journal and courier., 1884-09-04
HE STATE AND RAILROADS.

THE STATE AND HAAAAOADSs
 Mr Arthur T. Hadley of this city is the author of two interesting papers on Rail road Legislation in Italy, which have ap+ peared in the Railroad Gazette. A thorough inquiry has been made by the Italian gov4 ernment to determine the advantages and disadvantages of state management as op7 posed to private management of railroads The investigation was begun in 1878. It was continued during three successive minisi tries. It embraced every branch of the rail road problem. It ended in the conclusion that state management is more expensive and less satisfactory to the public than private management, and in the recommendation that the policy of absorption by the state of railroads under private or corporate manage ment be abandoned, and that all the state railroads be leased at fixed rentals or placed under corporate management with participa- tien of earnings. MT. Hadley makes clear and forcible summary of the main points of the report
 The commissioners found that most of the pleas for state management are based upon the idea that the state can perform many services much cheaper than they are per formed by private companies. They declared this idea to be mistake. The tendency is decidedly the other way. Private companies can do for their patrons good many things which the state cannot; but it is doubtful whether the state would be justified in doing anything of the sort which private compa- nies cannot. The state is much more likely to attempt to tax industry than to foster it.
 And when it attempts to tax industries it is more omnipotent and less responsible than a
 private corporation
 Comparing state and private railroads in different countries the commissioners found that the ratio of operating expenses to gross earnings is always greater on state railroads-averaging eleven per cent. more in all the countries compared. Mir. Hadley's summing up also includes the fol- lowing: The political dangers would be very great. Politics would corrupt the railroad management, and the railroad management would corrupt politics. These effects have already been seen in actual working. Changes of rates are made for the sake of influencing elections. A questionable experiment was recently made in Belgium in the matter of railroad tariffs; it had been adopted by the
 government as a means of currying popular l favor-a kind of bribery to which there is a great temptation. It would not be hard to l find similar instances in other countries on I both sides of the Atlantic
 Acting on the report Of the commission the | Italian government has decided to get rid of | it's railroads. The scheme is to have private companies buy the existing rolling stock out ! right at valuation and keep it in repair as a part of operating expenses. Then from the gross receipts a certain sum per mile is to be set apart for renewal of rails, and another l fixed sum for betterments while addition l al rolling stock is to be provided for in a manner analogous to our Gear trusts" For ordinary expenses and profits 621s per cent. of the gross receipts is allowed, 271a per
 cent. goes to the State for use of it's lines, and | the remainder is expected to cover the cost 1 of renewals, betterments and car trusts. l These are the percentages allowed on an as- sumed basis of $42, ,400,0 900 gross earnings l If the earnings exceed that sum 8 different
 division is to be made, and portion of the
 excess is to be applied to the reduction od 1 rates.
 This action of the Italian government if
 very important. It ought to have an i'm I pression on the people of this country who
 imagine that the government can do railroad l business better than private companies can