are not operated as economically as the privately-owned railroads of the United States. The comparison is based upon pre-war conditions. OPERATING RATIO AND FREIGHT RATES OF RAIL- Denmark (State Railways) 2.33 South Australia (State Railways) (d). 2.12 (a) Data for the United States from the Interstate Commerce Commission's Report "Statistics of Railways in the United States," 1914. Data for foreign countries from "Railway Statistics in the United States," 1918, as published by Bureau of Railways and Statistics, Chicago. (b) Data not available. (c) Includes 34,814 miles State Railways and 2,212 miles Private Railways. (d) For fiscal year 1914-1915. By reference to the above table it will be seen that freight rates on government-owned railroads of representative foreign countries during the year 1913-the latest for which authoritative figures are available— were from 55 to 220 per cent greater than the average freight receipts per ton per mile on the railroads of the United States. On the other hand, the operating ratio, or percentage of revenues absorbed by expenses was lower in the United States, notwithstanding its rela tively low freight rates, than in any of the foreign countries for which data are available. The comparative capitalization per mile of line shows that the railways of the United States are capitalized at $65,861; France (State Railways), $150,439; Germany (State Railways), $120,049; United Kingdom (Private Railways), $274,027; Austria (State Railways), $122,053. These are pre-war figures. The later studies of the Interstate Commerce Commission seem to show that the cost of reproduction of railway systems in the United States would be greater than the capitalization of these systems. It has been a favorite point with advocates of government ownership that in all countries the postal service is operated as a government monopoly. There is, however, a weighty reason why this argument cannot properly be adduced in support of a similar arrangement for railroads, telegraphs, telephones, and other public services. The postal service, except possibly in countries of very small area, should never be run with a view of making it a source of revenue. This, although a relatively new attitude toward this service, is nevertheless coming everywhere to be recognized. What the general postal service is really intended to do is to encourage communication between individuals, and to facilitate the distribution of newspapers, magazines, and books, as agencies for informing and educating the public. Within reasonable limits, what we demand of a postal service is not that it should be cheap but that it should be efficient; and, from the very nature of the undertaking, in any large country a great part of the mail must be carried at a loss. This is a situation which private enterprise cannot meet, for private capital will not knowingly enter an unprofitable field. If the government did not run the post-office, no one would run it, except in the paying centers or at paying rates. Moreover, we have excellent reasons for the belief that our post-office system is not so efficiently managed as are private companies doing like work. Aside from the general complaints of the last few years, a much more trustworthy proof is found in an investigation made by the Alexander Hamilton Institute in 1914 as to the relative efficiency and cost of the parcel post service and that of express companies doing similar work. In all respects except cost, according to the testimony of a large majority of some hundreds of shippers from all parts of the country, covering an average business of $118,000 per day, the express companies rendered better service than did the parcel post. The items of service covered such points as speed, convenience in pick-up and delivery, care in transit and handling collections, cost of insurance, tracing of lost packages, adjustment of claims. Even as regards cheapness, some shippers said that the post-office was unsatisfactory, since it took longer to prepare a package for mailing than for express, and if this is lost, the Post-office Department "fills out a paper and makes an attempt to locate it, but it never finds the goods." Even where the cost to the shipper averaged somewhat less, it by no means followed that the public gained, since the auditor of the Post-office Department acknowledged that there was no system of cost-accounting for the parcel post by which to judge efficiency of service in that respect. The railroads claimed that the low rates to shippers were made at the railroad's expense and it is impossible to tell from the records who paid for lessening the cost to the shipper. Until the Post-office adopts an accounting system somewhat resembling that of the express companies, it cannot properly claim even lower costs. Therefore, if the American people were thoroughly to understand the facts in the case and the consequences which would flow from the decision, it does not seem in the least degree likely that they would consent to abandon the ownership and operation of the great transportation systems of the country to the tender mercies of the government. This, as well as many other questions, cannot be settled upon any inherent principle of government, but must be decided solely upon the basis of expediency. There is always a danger, however, that sentiment, no less powerful for being ill-defined, will play too prominent a part in such decisions. For this reason, a purely dispassionate review of governmental action in similar cases is necessary, and such a review results in a low estimate of governmental efficiency. This should not be disheartening to those who understand that government exists to establish justice, not efficiency, although there appear to be many who invest government with a peculiar sanctity. The instinctive feeling of this group is that the government is, by its very nature, superior in its ideals and operations to the people who compose it, and in this notion we find a reflection of the old idea that the king can do no wrong. Forgetting that the work of government is done by men of fairly average capacity acting under the common motives that determine men's actions, to some degree these enthusiasts make a fetich of government, and every discussion of practical questions of this sort has to reckon with the groundless belief of this large group, noticed in the introduction to this chapter, that there is nothing the government cannot do if it chooses to undertake it. in any land, is not and cannot be a That government, in model for the "efficiency manager" is a commonplace to the thoughtful observer. Yet this in no way minimizes the ideals on which government is, or at least ought to be, based. There is no disparagement of those ideals when a citizen is intensely critical of what the government does. Our loyalty is to the ideal, not to the men who for the time being are its standard bearers. They may fail, because they are human; but the ideal cannot fail. This feeling that the ideal and the practice of government are never one is the thought which the founders of democracy expressed in the oft-quoted phrase, “Eternal vigilance is the price of liberty,”eternal and continuous vigilance, and a certain healthy discontent. Discontent with the operation of government is a normal and helpful function of life in democratic countries. It springs from two causes: first, extravagant hopes looking toward a far wider sphere of governmental action, which are by their very nature foredoomed to disappointment, and second, the more modest and reasonable hopes, which modern government has as yet not gone far toward satisfying. The wisdom of any system of government may be in good part judged by the provisions it makes for the economic advancement through their own efforts of those who are lowest in the scale of material welfare. tion is well governed, in other words, only when the function of government is wisely and successfully exerted for the amelioration of the conditions, physical, mental and moral, of the less fortunate classes of its constituent population. Opportunity for self help is best, though in times of calamity or in cases of the defective or most unfortunate, charity should be considered a function of the State. Great national wealth, even though |