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A Policy of Free Exchange: An Argument Against Socialism and Socialistic Legislation; Edited by: Mackay, Thomas
2 paragraphs found.
The Influence of State Borrowing on Commercial Crises, by Wynnard Hooper
V.12

Now, it is quite natural that new countries should be indebted to this country for the means of developing their natural resources. Simply stated, and ignoring for the moment the financial and commercial machinery by which the end is accomplished, Great Britain hands over to her Colonies and to foreign countries a certain amount of plant, machinery and materials every year, and takes in return a percentage of the profits they yield. That is the transaction in its essence, though it is obscured somewhat by the form it takes in practice. The question that arises is, Are there not serious drawbacks to the carrying out of this useful and, indeed, necessary transfer through the medium of extensive loans contracted by governments? There unquestionably are. First, public works carried out by governments are sometimes badly done, and are always extravagantly done. Secondly, the power of raising money for productive public works is sure to be employed sooner or later for non-productive works whose usefulness can be plausibly maintained. Thirdly, the public never troubles its head, when it is 'in a buying mood,' about works of any kind, but insists on regarding the loans as the obligations of a 'rich and progressive young country,' New Gerolstein, let us say, vouched for by that 'eminent house' X, Y, Z & Co. There is not much, therefore, to prevent the Government of New Gerolstein, with the aid of Messrs. X, Y, Z & Co., raising loans for any purpose it may think fit, including the reimbursement of Messrs. X for advances previously made, perhaps to provide interest on loans for 'productive public works' which have, quite unaccountably of course, failed to yield profits. To sum up, the process of equipping a new country with the appliances of a modern commercial and industrial community by lending largely to its government, involves waste of money and bad work from the commencement, and bad and, very possibly, corrupt finance eventually. It is almost an infallible way of producing a breakdown of the credit of the country concerned, unless it is conducted with more prudence on all sides than can reasonably be expected of human nature. And, as has been shown, the consequences of the breakdown in the credit of a country which has been a large customer for commodities is a sudden stoppage of demand for them, and a violent fall in their price, followed, of course, by forced restriction of production, loss of capital, eventual reduction of wages, and all that results therefrom.

The State in Relation to Railways, by W. M. Acworth
VI.34

In the next place, a public authority will naturally exercise control over the arrangements which involve the safety of the public, level crossings, height of platforms, methods of signalling and interlocking, methods of train-working, and so forth. It seems to me impossible to deny the justification for such control, but equally impossible to doubt that its practical working in England is far from satisfactory. A State department is almost bound to establish rigid codes of rules; it dare not lay itself open to charges of partiality and favouritism by varying its regulations to suit the infinitely various circumstances of practical everyday life. Regulations, therefore, have to be laid down more or less by a method of average; but an average can only be drawn too low for the top and too high for the bottom. We find accordingly, on the one hand, important stations left without safety appliances that in their case might fairly be called necessary, and directors and managers sheltering themselves under the plea that the Board of Trade does not prescribe their use as obligatory; while, on the other hand, petty railways in poor districts may be crushed by the burden laid upon them of providing even the average standard of safety appliances. Further, the Government officials are not responsible for commercial results, and cannot be expected to regard the shareholders' dividends, while they do incur a serious personal responsibility if they permit poor railways to forego the use of safety appliances merely on the ground of cost. Naturally, therefore, the average of demand will be fixed too high rather than too low. Theoretically, the result may be merely to reduce dividends, and what is money, says the common opinion, compared to human life. Practically, however, the result is to prevent the making and working of railways in poor districts altogether; in other words, to deprive the public of the almost perfect safety of even the most primitive railway, and to leave them face to face with the comparatively appalling risk of transit in stage coaches and carriers' carts *13.