expectation of promotion which formerly encouraged, in ever so slight a degree, the zealous naval officer. The country was persuaded into the belief that the considerable sum it had to pay for compulsory retirement would give a flow of promotion and younger officers. The reply is, that there is literally now hardly any promotion, and that in the year now elapsed only 1 flagofficer, 6 captains, 13 commanders, and 27 lieutenants have been promoted, and there have been 71 cadets entered; whilst 977 officers in the lower ranks pine hopelessly for expected advancement. And yet still the best men of all ranks are arbitrarily compelled to retire. Take two cases. Vice-Admiral Sir Henry Kellet is Commander-in-Chief in China,-no man more active, or, looking to his great reputation and experience in those seas, more difficult to replace. Yet on a given day he becomes sixtyfive, and his command ends, to the great loss of the country. In the spring certain information was required as to some of our ironclads, which were unjustly suspected. Captain Richard Ashmore Powell, who had recently served as Commodore in the Pacific, was an officer who had great general and special experience in the service and in command of ironclads. His opinion was justly looked upon as exceptionally valuable. He was appointed to the Vanguard,' to report upon that ship and others of her class. Within a month or two of his appointment, and before he had reported, he became fifty-five. He was anxious to serve, he is hale and active, and no better or more trusted officer exists; but the Admiralty, before they could receive a Report from an officer appointed by them a short time before, with the approbation of the profession, suddenly cut this experienced officer short in his career and send him into retirement. The command of the Channel Fleet itself—which was to be a school for admirals, as well as other officers and seamen—is given in a manner which shews that all the boast about obtaining an efficient list of flag-officers, by a costly and cruel retirement scheme, has ended without effecting the desired result. Mr. Childers's private secretary commands the Flying Squadron; Sir Sydney Dacres' flag-captain is appointed to succeed the ill-used Admiral Wellesley in command of the Channel Fleet, this officer having been constantly employed in good commands for many years past. 6 The whole profession is in a state of ferment. There is no longer the happy aspiration, Shall I live to fight a successful action? Shall I enrol my name on the record of fame? Shall I too achieve a peerage or Westminster Abbey?' but the sole question is, 'How soon shall I be forced to retire? how soon will will my neighbour be forced to retire? and which of the manifold schemes of retirement will be the most profitable? The Admiralty, as administered by Mr. Childers, has signally failed; but we hope to see, even if the Liberals continue in office, that the Navy shall again become an honourable profession, and not a grasping, cheese-paring trade. Unless this happens, and happens speedily, the public spirit which has animated in happier days our naval councils is gone for ever. ART. VI.-1. Report on Turnpike Trusts. 1871. 2. Return of Railway Amalgamations. 1868. 3. Annual Railway Statistics. Public General Acts relating to Railways. Tramways Act. 1870. 4. Gas and Waterworks Clauses Acts. 1847. 5. Reports on Telegraphs. 1871. 6. Local Government Bill. 1871. THE HERE is always danger that a new principle, when it has once found acceptance, will be invested with a degree of absoluteness and universality which no principle of human action can deserve; and that it will be applied without reference to the circumstances under which alone it is true, or to the modifications to which, under all circumstances, it is subject. And there is the further danger, that when this is found out, a re-action may set in against the principle itself, and cause it to be abandoned in cases to which it properly applies. The latter danger is, perhaps, the more serious of the two. Something of this kind seems to have happened in the case of one of the leading principles, if not the leading principle, of political economy; viz. the doctrine' that individual interest, if let alone, will do more to produce wealth than any organised action of Government,' and of the inference that this motive power, coupled with its natural governor, competition, is sufficient to regulate all cases where one man produces what another wants. The great masters of the science have, of course, always recognised, more or less distinctly, the limits of this principle; but in practice and common opinion it has often been carried too far. At the present moment we are exposed to all the dangers of reaction. There is a strong tendency on the part of the public to call for Government interference on all sorts of pretences in all sorts of cases, in many of which it can do nothing but harm. At such a moment it is not inopportune to endeavour to ascertain in one special and exceptional department of human industry how how far the above principle is applicable; what are its limitations; and, where it fails, what can be substituted for it. No one can doubt that there is a large and constantly increasing class of industrial undertakings, which are of the utmost value to the public, and which return ample profit to the capital and industry bestowed on them, but which yet are not and cannot be regulated by competition. It is a matter of some speculative interest to ascertain what these undertakings are, and what are the characteristics which they possess in cominon, so that we may be able to recognise and define them. It is a matter of much more serious and practical interest to ascertain what is the best way in which they may be managed and regulated so as to obtain the greatest possible advantage from them. It would be difficult and probably fruitless to attempt to deal with these questions à priori or by way of deduction. The more practical and satisfactory, though more tedious, plan, is to take the several undertakings of which we are speaking in detail, to ascertain their several characteristics, and then to examine the manner in which they have been hitherto dealt with, and the manner in which it may be possible to deal with them hereafter. The following is, so far as we can ascertain, a tolerably complete list of these undertakings:-Harbours and natural Navigations, Canals, Docks, Lighthouses, Roads, Bridges and Ferries, Railways, Tramways, Gasworks, Waterworks, the Postoffice, and Telegraphs. In some of these, e. g. Docks, Railways, Gasworks and Telegraphs, competition has been attempted; whilst others have either in the hands of private undertakers or of Government been monopolies from their commencement. But in none of them has competition proved to be successful, or even, in the long run, possible. It is of great importance that this point should be kept steadily in view, since it is only in those cases which competition cannot regulate, and in which monopoly is inevitable, that the questions we are discussing can arise. Is there, then, any general characteristic by which these undertakings, or others of a similar kind, may be recognised and distinguished from undertakings which are governed by the ordinary law of competition. It is not large capital, for though most of them require large capital, some gas and water companies, which are complete monopolies, have capitals of not more than two or three thousand pounds; whilst other enterprises, with enormous capitals, e. g. banks, insurance offices, shipping companies, are not monopolies. Vol. 131.-No. 262. 2 H It It is not positive law, for few of them have a monopoly expressly granted or confirmed by law; and in most, if not all, of the cases where such a monopoly happens to have been so granted or confirmed, it would have existed without such grant or confirmation. They all agree in supplying necessaries. But this alone is no test, for butchers and bakers supply necessaries. Most, if not all, of them have exclusive possession or occupation of certain peculiarly favourable portions of land,-e. g. docks, of the river-side; gas and water companies, of the streets. But this is only true in a limited sense of such undertakings as the postoffice, telegraphs, or even of roads and railways; and a mine, a quarry, or a fishery, has equally possession of specially favoured sites without generally or necessarily becoming a monopoly. The article or convenience supplied by them is local and cannot be dissevered from the possession or user of the land or premises occupied by the undertaking. The undertaking does not produce an article to be carried away and sold in a distant inarket, but a convenience in the use of the undertaking itself, as in the case of harbours, roads, railways, post-office, and telegraphs; or an article sold and used on the spot where it is produced, as in the case of gas and water. Again, in most of these cases the convenience afforded or article produced is one which can be increased almost indefinitely, without proportionate increase of the original plant; so that to set up a rival scheme is an extravagant waste of capital. There is also in some of these undertakings, and notoriously in the cases of the Post-office, of telegraphs, and of railways, another consideration, viz., the paramount importance of certainty and harmonious arrangement. In the case of most industries— e.g. in that of a baker-it would be easier to know what to do if there were one instead of several to choose from; but this consideration is in such a case not paramount to considerations of cheapness. In the case of the Post-office and Telegraphs, certainty and harmony are the paramount considerations. The inconvenience would be extreme if we had to consider and choose the mode of conveyance every tirae a letter is dispatched, or if a telegram sent from any one station could not be dispatched to all other stations. The following then appear to be the characteristics of undertakings which tend to become monopolies : 1. What they supply is a necessary. 2. They occupy peculiarly favoured spots or lines of land. 3. The article or convenience they supply is used at the place where and in connection with the plant or machinery by which it is supplied. 4. This 4. This article or convenience can in general be largely, if not indefinitely, increased, without proportionate increase in plan and capital. 5. Certainty and harmonious arrangement, which can only be attained by unity, are paramount considerations. These conclusions are neither as clear or as complete as could be wished. And though interesting in a speculative point of view, they do not lead immediately to any important practical consequence. But the further question which we proposed to consider, viz., what is the best mode of dealing with these undertakings, is one which has a direct bearing on many problemseconomical, political, and social-which are pressing for immediate solution. The two great alternatives seem to be: (1.) Ownership and management by Private Enterprise and Capital. (2.) Ownership and management by Government, Central or Local. In the former we include all cases in which those who undertake the work derive personal gain from capital which they invest in it; and in the latter all cases, whether of management by the central government, by municipal bodies, by local boards, or by public trusts or commissions, in which no private capital is invested, except by way of loan, and no profit made by indi viduals. Before entering in any detail upon the examination of these two alternatives, it will be interesting to see how they have been regarded by competent authorities in this country and in France respectively. The following are Mr. Mill's observations on this subject (Political Economy,' vol. ii, chap. xi. s. 11):— The third exception which I shall notice to the doctrine that Government cannot manage the affairs of individuals as well as the individuals themselves, has reference to the great class of cases in which the individuals can only manage the concern by delegated agency, and in which the so-called private management is, in point of fact, hardly better entitled to be called management by the persons interested, than administration by a public officer. Whatever, if left to spontaneous agency, can only be done by joint-stock associations, will often be as well, and sometimes better done, as far as the actual work is concerned by the State. Government management is, indeed, proverbially jobbing, careless, and ineffective; but so likewise has generally been joint-stock management. The directors of a jointstock company, it is true, are always shareholders; but also the members of a government are invariably tax-payers; and in the case of directors, no more than in that of governments, is their proportional share of the benefits of good management, equal to the interest they |