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museums, chateaux, Government offices^ parks and gardens. The State also owns railway lines, the exploitation of some of which has been conceded to private companies, while the State itself runs others, some of which it has built, others of which have been bought back from the companies before the expira- tion of their concessions. The buildings in which public services are housed might be looked upon as an active resource if, in drawing up the accounts of each of those services, they were debited with an annual rent. But such is not the case. The postal service, for instance, is not debited with the rent of the public buildings which it occupies, nor even with that of build- ings leased by the State in certain towns for the accommodation of posts and telephones. The postal service is not debited with the wear and tear of the telegraphic and telephonic wires, nor with the wireless telegraph stations which it uses every day. In fact, no accounts of this sort are kept for any of the public services. All the prefects and sub-prefects, the courts of justice, troops, occupy premises the rental of which does not figure in the accounts of any of the ministers concerned. The seashore and the dried beds of changing rivers are so little exploited that they need not be taken into account. Land and river communications might produce revenue worthy of figuring in a balance sheet, were tolls taken. The tolls which existed a few years ago have been abolished, and traffic is everywhere free; it is the budget which keeps up the roads, rivers, canals and ports. In the ports certain dues are levied on shipping for the profit of the State, the municipalities, and the chambers of commerce which have participated in the cost of the harbour works. Although some receipts are obtained from these sources, they do not represent realizable wealth. The forests of the State domain, however, are both productive and alienable. It is clear, never- theless, that they cannot be given up. Both from the point of view of health, and general security, they ought to belong to the community; but they are a realizable asset. Twice before, in 1848 and 1870, they were given to the Bank of France as security for loans to the Treasury. The value of the year's output figures in the budget of 1921 was estimated at 57 million francs. The chief national asset is formed by the main railway lines, which in 1921 had a length of about 50,000 km., and represent an installation cost of at least 25,000 million francs. In spite of the importance of the sums thus spent in railway construction the Treasury has derived no profits. It has to be remembered in this respect how great, in France and elsewhere, was the upset caused in railway administration by the war. Before 1914 the five private companies, the Eastern, the Paris-Lyons- Mediterranean, the Northern, the Orleans, and the Southern railways, had gross revenues which exceeded their expenses. The Northern, P.-L.-M. and Eastern even showed a profit both with their preference and ordinary shares. The Orleans and the Midi lines had to avail themselves of the guarantee of the State which made them a varying annual payment. The Western railway, exploited by the State itself, was in very much less favourable position. The proportion of expenditure to revenue was much greater than that of the least successful private worked line. War changed this situation profoundly. Part of the Eastern and Northern systems had been destroyed, and those two companies had had to spend vast sums in rebuilding their lines. Other causes had upset railway accounts. The Eight Hours' Day law had been rigorously interpreted and had led to a great growth in the staff. Excessive increases in salaries and wages had been made. In spite of raising the tariff, which had been done by decree on several occasions, a deficit was shown each year, that of 1920 being not less than 3,300 millions. A Convention had been signed between the Ministry of Public Works and the six railway lines, the State railway coming in on the same footing as the private companies, but this Convention had not yet been approved by the Senate. In theory it should do away with the deficit, as it enables tariffs to be raised until receipts and expenditure balance, and the companies making any surplus pay it into a common fund so as to equalize revenue. Meanwhile the railway companies were a heavy burden on the budget. It was indispensable that expenditures should be cut

down, and it was impossible to count only upon raising the tariffs to balance the railway budgets. For goods traffic of many sorts the existing rates were already prohibitive, and traffic of many kinds of merchandise had either slackened off considerably or had stopped. The scheme of having a common fund was there- fore far from being the final remedy for the present evil.

A few figures will show the contrast between the pre-war and the post-war conditions. The total length of railway lines exploited by the State and the five big companies was 41,000 km. The deficit in 1913 was 80 millions francs. In 1920 it amounted to 3,200 millions. Of the five private companies, gross receipts rose from 1,693 millions in 1913 to 4,467 millions in 1920. The net yield of 696 millions became a deficit of 1,081 millions. The charges of 986 millions added to this last fig- ure give a general deficit total of 2,067 millions. The working coefficient has passed from 59% to 124%. In 1921, therefore, this large railway system, far from producing revenue, laid a heavy burden on the budget.

As a matter of fact, when one comes down to analyse the actual elements of the real property of the State, there is noth- ing which corresponds to the fortune of an individual.

Railways, as we have seen, are not revenue-producing. The Western railway belongs to the nation. It consisted in 1921 of lines bought about half a century before, and of the old Western company system which was bought at the beginning of the 2oth century. It had for long shown a deficit. The Treasury had still annual payments to make to complete the purchase of the first State line, and to pay off the shares and stocks of the Western company, which would be finished in about 30 years' time, and to pay the 4 and 5 % interest on the bonds issued by the Treasury in order to meet the expenses of the system. The State was half proprietor of the lines leased to the five big companies, and would become again full proprietor within the next 30 or 40 years at most. It would then own some 40,000 km. of railway line which would have no more capital charges to support, since the stocks and shares would have been paid off. (The concession to the Northern line expires on Dec. 31 1950; the Eastern on Nov. 26 1954; those of the West and of the Orleans lines on Dec". 31 1956; the P.-L.-M. on Dec. i 1958; and the Southern on Dec. i 1960.) This was the situation in 1913, but since then the Northern and the Eastern companies had had to meet an expend- iture amounting to many thousands of millions, due to war damage: running costs had risen in a quite unexpected manner, and the situation was not the same as when favourable working costs made it possible to foresee the time when the companies, no longer availing themselves of the State guarantee of their interest, would in some cases share profits with the Treasury, or at any rate would be able to amortize their capital by the period laid down, so as to Jiand over their systems to the State between 1950 and 1960, free of all capital charges. It was impossible in 1921 to foretell what would be the results of the new convention, but at the best it would be a long time before railways ceased to weigh upon French finance. It would be a very fine result if they could only manage to earn enough revenue to balance their working costs and capital charges.

A close study of the proposed Convention shows that enough had not been done to provide for reduction of working costs. It only laid down that, when working costs move up, tariffs must follow suit, until expenditure is covered, but in that case Parliament will have to forgo its right of fixing maximum rates. If those maximum rates are prohibitive they will reduce or stop traffic, and the State will have to subvention the common fund of the railways. It is hoped to stave off this unfortunate event, by giving the railway companies a management bonus. First of all there should be a definite settlement of accounts during the war period. When this had been done it might be possible, with some modifications, to go back to the railway conventions of 1883, which really did encourage the railway companies to work their lines properly. The chief resource of the Treasury, there- fore, was in taxation.

IV. Foreign Trade and Exchange. One of the results of the World War was to extend the finances of the belligerents beyond