budget, be it through false parsimony or better administration-we cared little which we were willing to upset our democratic institutions. This trend of thinking is patently evinced in the various proposals which have come before the public. It is urged that executive budget proposals should come before our legislatures with a strong presumption of inviolability encumbering them in the exercise of their right of final determination. Hampering legislatures which are the representatives of the people in the use of their conclusive judgments is incompatible with democratic institutions. Mr. Fitzpatrick's book coming at this time makes his discussions singularly pertinent. When for four years the world's horizon has been clouded ominously by the threat of autocracy, Budget-Making in a Democracy puts the question quo vadis very relevantly.

Mr. Fitzpatrick is an ardent supporter of the budget, but his logic comprehends more than simple parsimony, nor is he oblivious of democratic prerequisites. Briefly, Mr. Fitzpatrick's proposal proceeds from the basis "that the functions of the administration, including the executive, in budget-making is preliminary, preparatory, advisory, and the function of the legislature is determining and conclusive." The administrative departments prepare the budget proposals which finally come to the chief executive where, with the exception of the estimates of administrative commissions and the judiciary, they are reviewed and sent to the legislature. The budget proposals formulated in lump sums according to services or functions are presented to the legislature without any "artificial restrictions." Appropriations should be voted "continuing" as they correspond to "permanent" services. A discussion of budget proposals in the committee of the whole has a distinct advantage over floor and committee discussions. The public shall be invited to participate in legislative consideration. For purposes of adequate presentation and defense proper administrative officers shall have the privilege of the floor. To insure intelligent criticism the minority shall have power to collect information independently of administrative machinery and to summon administrative officers for interpellation.

Mr. Fitzpatrick's proposal is simple; it requires few legislative changes and no constitutional amendments. It is adaptable to national and state governments alike. Much illustrative material adds to an interesting presentation and all in all the book is one of the best contributions to the budget discussion.

UNIVERSITY OF CHICAGO

A. O. BRUNGARDT

Railway Rates and the Canadian Railway Commission. By D. A. MACGIBBON, PH.D. Boston and New York: Houghton Mifflin Co., 1917. Pp. xv+257.

Dr. MacGibbon's volume in the Hart, Schaffner & Marx series fills a decided gap in the literature of railway regulation. Conditions in Canada and the United States are so interdependent that neither can be adequately handled in isolation from the other, and a study of Canadian conditions is essential to a full view of American transportation problems. A reading of this book will strengthen the conviction that our past experience in control should be viewed as a tentative, formative stage of development, in which we have had an opportunity to clarify our views and to see what the demands of the problem are, but under limitations which have prevented the development of such a comprehensive, thoroughgoing, and adequate policy as the future will demand. Precedents should therefore be looked upon as valuable lessons rather than as rules for future procedure or bars preventing a future change of In the case of Canada this is due to several causes.

course.

In the first place, the Canadian railway systems, with the exception of the Canadian Pacific, have not reached maturity but are still in the stage of

straining their resources, with the formal approval of Parliament, to realize ambitious schemes. Not until the Grand Trunk Pacific and Canadian Northern have completed their transcontinental lines and normalized their expenditures and revenues can the full competitive and Eastern vs. Western rates problems be accurately appraised and reach a final disposition. Indeed, since the outbreak of the war in 1914, the weaker roads have become so enmeshed in difficulties that it is almost certain a radical Parliamentary solution of the whole problem will have to be sought.

In the second place, Canadian rates are controlled by water competition far more completely than are those of the United States, and if control should be extended to water rates the entire situation would be revolutionized.

In the third place, the competition of routes passing through the United States and of producers shipping from United States territory plays a far larger part in the Canadian problem than the corresponding Canadian competition plays in the problems faced by our Interstate Commerce Commission. This situation creates a twilight zone which demands international action for its proper disposition, and until such co-operation is established the Canadian Board is not free to treat rate questions on their economic merits.

With these qualifications the development of the principles of rate control seems to have been very similar in the two countries, and the Canadian Board (created later than our own) has found it possible to cite many precedents from this side of the border for its views of the merits of the cases before it. The development of principles has come through settling particular cases as they arose, and it appears that the smaller grist of cases in Canada, together with the limitations already mentioned, has meant a less complete working out of principles. In the matter of the level of earnings the importance of valuation is clearly recognized, but deficits have been so large that it has been possible to settle cases without committing the Board to particular rules of valuation.

The first part of the book describes the development of the waterway and railway systems of Canada, the general policy of government, and the machinery of public control, thus establishing the environment within which the Board of Railway Commissioners has worked out the rate rulings which are analyzed in the second part. One could wish that the law under which this Board acts had been presented more fully and explicitly, especially as the author later refers to it as limiting the scope of the Board's decisions.

The author takes fundamental rate theories for granted as having "been adequately enough explored" by other writers, and his own study merely shows them at work; the "value-of-commodity" principle, itself sadly in need of probing and analysis, is apparently taken as one of the fundamental theories. In style the book leaves something to be desired, but it will be a welcome addition to the literature of the subject.

J. M. CLARK

British Railways: Their Development and Their Relation to the State. By EDWARD CLEVELAND-STEVENS, M.A. London: George Routledge & Sons, Limited; N.Y.: E. P. Dutton & Co., 1915. Pp. xvi+332. Mr. Cleveland-Stevens' book, which is also a doctor's thesis of the University of London, undertakes to make a scientific study of the course of railway amalgamation in Great Britain up to the year 1900, utilizing the material in the Acworth Transport Collection at the London School of Economics. It is a careful study, well written and remarkably compact. The author notes the difficulty of giving statistical expression to the growth of amalgamation because of the varying import of different forms of control, and because neither capital nor mileage is an adequate measure of the importance of different combinations. He therefore concludes that maps are the best resource.

While the book is intended as a record of fact, the author presents certain conclusions which are of interest. The haphazard growth of the British railways has been an expensive luxury, but a fairly harmonious system has finally emerged, and "the public have undoubtedly gained in transport facilities by the existence of lines which would have been considered unnecessary if a comprehensive scheme of railways had been established in the first instance." As for the fact that English railways have cost more to construct than those of any other country, this is not the fault of the roads but of the system under which they were built. They were compelled to pay high prices for land, to "spend capital without regard to their ability to secure adequate return upon it," and were subjected to other burdens by legislature, government departments, and public opinion. The accounting methods in the matter of capital expenditures, to which American writers have been inclined to attribute some part of the large capitalization of British railways, are conspicuous by their absence from Mr. Cleveland-Stevens' treatment of this subject.

The author holds that the general effect of amalgamation has been to reduce charges, since the small, conflicting systems could not be operated efficiently. He points out that "the largest railway system in England has but a seventh part of the mileage controlled by the management of a great American company," and he holds that with proper decentralization of management combination could go considerably farther with resulting gains in efficiency. But whether combination is or is not destined to go to the limit, competition is not to be relied on as a controlling force, and a strong and permanent regulating body is needed. The Traffic Act of 1894, by making existing rates the presumptive standard in future cases, put an effective check on the competitive lowering of rates as well as on any possible monopolistic increases, and this step would perhaps not have been taken had there been at that time any active competition worth mentioning. Apparently there is more readiness in England than in America to abandon the remnants of competition, and the possibility of continued government operation might seem to be larger in England than in the United States.

From Isolation to Leadership. A Review of American Foreign Policy. By JOHN HOLLADAY LATANÉ. New York: Doubleday, Page &

Co., 1918. Pp. 215. $1.00.

In brief, clear, and readable form Professor Latané has outlined the main developments of American foreign policy. The origin of our policy of isolation, the formulation and development of the Monroe Doctrine, our attitude on arbitration and the "Open Door," and the events and forces which brought us into the war are all dealt with. Another section might well have been added on our doctrine of the "freedom of the seas." The author quite rightly emphasizes the fact that Washington warned only against "permanent alliances"

of the current European type, and that "neither Washington nor Jefferson intended that the United States should refrain permanently from the exercise of its due influence in matters which properly concern the peace and welfare of the community of nations." The United States may enter a League of Nations without endangering the essentials of the Monroe Doctrine, which is quite distinct from our policy of isolation. At a period when the United States has inevitably assumed a new place in world-affairs it is important for the average American to see clearly the principles for which we have always contended, and the reasons why we can no longer deny responsibility for much that goes on outside the Western Hemisphere. The book should be useful for college classes and for the general reader as well.