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producing and testing its own stores, when such serious consequences depend on the skill and integrity of an examiner of contracts, and the goodness of the article requires the highest practical skill on the part of the official who passes it. There are articles such as those quoted, which can be easily tested by a moderate experience. What we manufacture requires a special and highly educated experience. Besides we have this advantage in producing arms and munitions ourselves. They are made on such exact patterns, that a flaw which escapes careful scrutiny, and can only be found out in use, is easily replaced from the stores where all the parts are precisely alike. In matters of the greatest importance, too, we cannot trust contractors. We cannot always escape heedlessness; we cannot always detect fraud. In that very Crimean war, owing to a serious oversight in the commissariat department, the army was brought into the greatest peril. We can exercise much more vigilance over processes which we ourselves superintend, than over products which are merely supplied by contractors, and inspected by our own experts, for a false finish, hiding serious flaws, may be given to goods. To avoid loss on their contracts, private firms would put upon us those failures which our more careful scrutiny rejects. Our process may be a little more expensive, but it makes up to the public in safety what it increases in cost.

It will be seen that in all this reasoning the question in debate is generally one of facts. It is not disputed, that in the supply of government stores, if one can rely on the integrity, the dispatch, the finish, the efficiency of what is supplied by public competition, there are very considerable advantages in procuring what a government wants by the ordinary course of trade. It is also probable that by making themselves the source of their own supply, the government cuts itself off from those economies and improvements which it is invariably the aim of competitive producers to accept and adopt. Practically the administration has a bottomless purse, or, at worst, in the matter of the public defences, an inexhaustible store of patience to appeal to, and people on whom economy is not enforced, rarely seek out economical processes for themselves. Now, in manufactures, economy is all but invariably coupled with improvement. The producer who

competes against other producers is, by the very law of his being, not content with doing a thing cheaper. That is at best his own look-out, and no one has reason to thank him for saving his own expense. What he has to prove to his customers is that he turns out a better article. So that, after all, efficiency is best promoted by purchasing under competitive contracts, and if the public safety is implied in efficiency, this competition, under proper restraints and conditions is, and always will be, the best guarantee of the public safety.

It has always seemed to me that that part of the defence of government manufactories, which insists on the difficulty of testing work done, is the weakest part of their case. It implies corruption or incompetence, or both. I will admit that it is difficult to provide against these risks, and I must allow that our system of giving government officials of all grades freeholds in their offices is a practice of very questionable wisdom. I am certain that no private trader could afford the experiment. In the government offices, forty or fifty years ago, there were all the evils present of a close corporation of self-elected officials. When I was a youth my father asked a friend of his, then naval lord in the Admiralty Board, to put me in the Navy office. He told my father that he could willingly do so, but that my life would be a burden to me if he did, for that the Admiralty clerks were a family party, who would endure no outsider among them, in an estate which was divided among a few families. So I never went, and a member of one of the families was put in. A quarter of a century afterwards, I had the melancholy satisfaction of getting my rival a sentence of penal servitude. My friend, Mr. Baxter, then Secretary to the Navy, was entirely convinced that frauds were common in the Navy contracts. He came to Oxford, and did me the honour to consult me as to how he might get evidence. I told him that I knew of a person here who was very experienced in the leather trade, and that I would get his services. My friend was so anxious about it that, though he was a devout Scotchman, he gave, to his own amazement, audience to the leather expert on the Sabbath. The result was, he discovered the fraud, saved the nation a quarter of a million, while the clerk expiated his political offence in a political livery.

I am convinced that it is well to circumscribe the functions of

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government. I am saying this not as a politician, but as an economist. I believe that by competition and scrutiny, the former as free as possible, the latter as rigid as possible, the country would be better served, and the necessary expenses of the state would be lessened. The weakness of the executive is so great, its exposure to perfectly sincere but very dangerous advisers is so constant, that it is best by far to confine itself to the function of a choice between rivals. Of course, under these circumstances, the whole difficulty lies in the inspection of contracts. In old times this used to be done in all which the government bought, by a jury from those city companies whose business was in early days associated with the mystery of which they are now ignorant members. In particular, the Merchant Taylors inspected the cloth purchased by contract for the forces. I do not select the Taylors invidiously, but they could hardly fulfil the function now, for I suspect that there is not a ready-made clothier among them, and this, I suppose, is what is meant by a Merchant Taylor.

But I cannot doubt that it would be possible to procure as I procured, for mere justice between contractors and the public, a competent body of persons who would undertake the test of all that is bought for the public service. Assuredly such persons with such aims would not only save the public purse, but would give a healthy stimulus to trade. Experience teaches us that protected interests have a sickly and costly existence. The statement is true of a government producer, as well as of a producer protected in an artificial price by government, for practically there is no difference between them. It is not reasonable to expect faithful service from an inspector of contracts, who is able and, as I know is, willing to blackmail the contractor. Such a practice is so common, that it forms, I am told by many manufacturers, who know about government contractors, a sensible element in the contract price. It may be that the act is a serious criminal offence. It is surely one which should be obviated, if it is difficult to detect it. Our forefathers were not always unwise in their processes. The government established, and the traders acquiesced in, a jury of experts. They did this, not only for purchases made on behalf of the Crown, but for trade carried on in the interests of the public. I think we might in a modified form, revert to their practice. It is the duty

of a government to prevent fraud, not only when itself is the victim, but when the people whose affairs it administers are defrauded. The discovery of the process of detection ought not to be difficult. I am convinced that its action would not be unpopular.

THE END.