It was at first proposed 'that the government should exercise control of the new consolidated system through the voting trust of the National, already in existence. But, eacoording to the valued opinion of American attorneys, who are specialists in affairs of this nature, it would have been attended with many objections of a legal character, and have proved a fruitful source of Accordingly, the consent of its three members was obtained, and the voting trust dissolved, an agreement being en tered into with Messrs. Speyer and Company whereby they were to secure for the govern ment 40 per cent or more of the voting shares. The report then enters into a detailed account of the steps by which this was successfully ac complished, 47% per cent of the shares being thus secured. It also goes fully into the ques tion of the probable earnings of the consolidated railways and of the issuance of treasury notes for $12,500,000, American gold, to pay for them. The advantages to the government, growing out of the control of the new consolidated system, is summarized in the report as follows: i. The having obtained by one stroke the control of the lines belonging to the National and International without losing control of the Interoceanic.
2. Having secured a considerable reduction in the total cost of the operation; and 3. The ability to effect 'payments in such manner as in no wise to disturb the equilibrium of the budget, and out of funds .which in the long run will be recovered by the state.
Repeated reference is made throughout the report to the railway situation in 'the United States, and it is obvious that American experi ence has influenced the Mexican govern ment in its new departure in the direction of state ownership. From a return prepared by the French Ministry of Public Works, it appears that there were in Mexico in 1870 no more than 349 kilometers of line; that in 1880 there were only 1,120 kilometers, while in 1890 there were 9,713 kilometers, in 1900 a total of 15,454 kilometers and in 1917 15,805 miles of railway in operation— now, as we have seen, all substantially under government con trol or presently to pass thereunder, as the re sult of the investigation and comparison of the advantages of private versus government own ership and operation set forth in Sefior Liman tour's report.
Australia, etc.— In Australia, state owner ship and control has since about 1860 been ab solute and universal. The latest available statis tics show 21,959 miles of line open. This includes about 2,500 miles of line in New Zea land. While there was at first some construc tion by private companies, every mile is now state railway. The figures intimate that there is no serious competition there.
South America and Africa.— In South America the governments generally own the lines. In Brazil, in 1915. there were 15,491 miles of line open. Of this mileage the state actually owns but a small part, but it subsidizes the rest and thus exercises an efficient control over all, which effectually prevents duplication and competition. In the Argentine there were reported in 1915 20,593 miles of road, mostly government lines. Chile in 1915 reported 3,949 miles open, of which 1,458 belong to the state. The French possessions and dependencies in North Africa reported, in 1900, a railway sys tem amounting to 4,628 kilometers in length, as against 3,595 in 1890 and 517 in 1870; British South Africa seems to have had, in 1900, nearly 6,000 kilometers of lines in operation. There were about 2000 kilometers of line open in the Transvaal at the commencement of the Boer war and about 400 kilometers in the Kongo in 1900. The total length of all operated lines in Africa, including the foregoing, the Egyptian lines (2,063 miles), and some little development in Portuguese East Africa, amounted in 1915 to about 23,472 miles, sub stantially all of which is government line. Com
petition and combination are, therefore, not open questions in Africa. The several European countries that have built the lines there either operate them directly or see to their operation on a strictly non-competitive basis.
Conclusion.— From the foregoing general view of railway history and development throughout the world, it appears that there is a universal and irresistible tendency in competi tive railways in the same territory to combine and to divide the territory between them; that attempts by legislation or litigation to prevent it have uniformly failed; that states which at first recognized and sought to enforce the prin ciple of competition between railways have one after another ultimately abandoned the attempt; that nowhere, except in the United States, is the principle of competition now recognized or still to be enforced; that railways in new countries or colonies of old countries, con structed during the last quarter of a century in the light of the experience of the older coun tries as to competition, have been constructed and operated from the start on non-competitive lines; that the amalgamation of parallel and competing lines is entirely consistent with good service, reasonable rates and adequate govern mental supervision and control; that where rail ways compete there is always an enormous waste of capital and effort and frequently poor service and high rates; that the tendency every where is to eliminate competition where any measure of it still exists; that government own ership is good or bad according to the point of view; that there is a strong tendency in Europe and elsewhere except in the United States and in England, toward government ownership and operation; that the governments of Europe, with 10 times the police power of our own, have long since abandoned all attempts to hinder and thwart the laws of trade and commerce by re strictive legislation, or to prevent the inevitable in railway development; that, instead of oppos ing this economic evolution, the most enlight ened European governments have on the contrary legalized it and seek to enforce and regulate it in the public interest; that the best and cheapest service is secured where competi tion is impossible and where the state puts the emphasis of its effort, not on interference with railway finance, but on securing good service at fair rates.
Bibliography.— Hansard, 'Parliamentary Pendleton, Our Railways, their Origin, Development, Incident and (London 1896); Paish, 'The British Railway Position) (London, 'The Statist,) 1902); Stevens, 'Investment and Speculation in British (London 1900); Picard, 'Les Chemins de fer francais) (Paris 1884) ; 'Nou veau Dictionnaire d'economie politique,> by Leon Say and Joseph Chailley (10th ed., Vol. I Paris 1900) ; Thery's 'Histoire des grandes Compagnies des chemins de fer francais) (Paris 1894) ; Journal Official) (Paris); Report of the Italian Parliamentary Commission of 1878 (Paris 1880) ; Cucheval-Clarigny, 'Les Chemins de fer Italiens> (Paris des Deux Mondes,> July 1884) ; English Consular and Diplomatic Reports, Prussian Railways (London 1902) ; 'L'Exploitation des chemins de fer de la Prusse depuis leur rachat par l'etat> (Paris, 'Revue des Deux Mondes,) May 1893) ; Haguet, 'Le rachat des chemins de fer Suisses et des consequences) (Paris 1902) ; Bell, 'Railway Policy in India) (London 1894) ; Re port of Senor Limantour, Secretary of Finance, on the Mexican Railway System and Policy (Public Document, 1903) ; Argument in the Supreme Court of the United States on the Appeal of the Northern Securities Company et al. v. The United States (by Charles F. Beach, Jr., October Term, 1903) ; Report of the English Parliamentary Committee on Railway Companies' Amalgamation, 1872 (Public Docu ments of the British Government).