wished new means of transportation before roads could be built by unaided private capital. Therefore it became customary for towns and counties to issue their own bonds in exchange for those of railroads to be built through their boundaries. Sometimes the roads increased the interest of these localities by surveying alternative routes through rival towns and counties for the purpose of getting these to bid against each other for the road. It is difficult to find statistics as to the amount of county and municipal bonds thus issued to aid railroads. The census of 1870 showed that there were then outstanding $185,000,000 of such bonds, but there is nothing to show how many had been previously paid off. Judging from the more or less complete records of New York, Massachusetts and Illinois, there is no question that our total county and town aid to railroads amounted to many hundreds of millions of dollars.

Coming to federal aid to railroads, we find that the Government has patented directly to railroads over 122,000,000 acres of the Public Domain, largely in connection with local railroads in the various territories or States. Its greatest contribution was that connected with the Union Pacific and Central Pacific railroads, which did not close until it had brought shame upon the nation. These roads were to build through 1,775 miles of wild and desert country. The Union Pacific was to run exclusively through United States territories, from Omaha to the California boundary, and was given: (1) a rightof-way through the Public Domain; (2) twenty sections, or 12,800 acres, of public lands for each mile of road; (3) loans of United States bonds not exceeding $50,000,000, secured by a second mortgage. Similar subsidies were given to connecting lines. The controlling stockholders of the Union Pacific organized themselves into

the Credit Mobilier, to which they awarded a contract to build and equip most of the road on terms which secured to themselves all important profits. To carry this through, Oakes Ames, a congressman from Massachusetts, distributed at par to his associates in Congress large amounts of Credit Mobilier stock, which within about a year had declared dividends of about 340 per cent. Ames said that he put the shares "where they would do the most good to us," and this was evidently so, for when all the iniquities of the operation were revealed by investigation, Congress voted that all congressmen concerned in the affair were "guiltless of corrupt acts or motives."

Thus we find that for one hundred and thirty years our federal, state, county, town and city governments have been building, owning and operating or lending money to or subsidizing all kinds of internal transportation projects; that this method of helping the people has often bred great frauds and scandals, and incidentally has given us much political experience from which we have learned many lessons which have led us to put new and stringent checks upon our public officials and bodies.

We have recently entered upon a distinctly new phase of government ownership and aid of internal transportation.

Roads: The development of the automobile for pleasure and business purposes has made it necessary to extend and entirely reconstruct our highways. This interests the country as a whole, rather than its former small road districts or other local units. The wear and tear upon these roads is very great, and make construction and repairs correspondingly expensive. They are used not only by the people and their families and guests in their pleasure automobiles, but must also solve questions of economic and industrial transportation resembling closely,

those which compelled our governments to develop internal transportation a century ago. Therefore the federal and state governments are uniting to build, at public expense and largely from the proceeds of long-time bonds, great interstate roads which will completely dwarf in every way the Cumberland Pike which dragged its slow length of construction over a third of a century. Likewise the state and county governments are jointly bearing the expense of their own great roads. As all these highways will be free, their cost will not be returned to the public treasury through tolls, but must be considered permanent investments through government for the people, which can be paid for only by the indirect benefits to the country, state or county as a whole, and to every person interested therein, in particular. There is no telling where this development will stop, because no one can foresee the transportation changes to be wrought by the automobile truck and possibly by the aeroplane. The first steam marine engines weighed a gross ton to a horsepower. The lightest aeroplane engines require less than 1-1000 of that weight to develop a horse-power. Government for the people must meet and provide for the economic changes which have and must come from such an economic advance in the development of power.

Canals. The Panama Canal followed closely the history of the Erie Canal. After private corporations had struggled for years to construct the Panama and Nicaragua canals, the United States stepped in and built the former and squelched the latter. While the canal tolls will undoubtedly, if continued at the present scale, eventually pay all expense of carrying on the canal and furnish a sinking fund to liquidate its cost, its true value is for the country in a military and moral way, and for the people in bringing our western and eastern coasts to

gether and our eastern and southern ports nearer to those of the Pacific Ocean in a commercial way. Here again we can afford to write off to profit and loss, if necessary, the whole cost of the canal and its management and maintenance, and make a handsome profit from its indirect advantages. New York State has recently spent over $100,000,000 in rebuilding and enlarging the Erie Canal, and this too must be paid for by indirect advantages, since all canal tolls have been abolished.

Railroads. The older forms of federal or state aid to railroads have passed, but the Federal Government is building and operating railroads in Alaska, and may have to extend this policy to other overseas possessions.

IV. PUBLIC UTILITIES

During the past seventy-five years, our cities have increasingly taken over the ownership of their waterworks and other similar utilities. New York and other large cities have found it necessary to build bridges and to give municipal aid in constructing subways. It is not necessary to go into details as to these present-day activities in purposive governmental business. We have become so accustomed to municipal water systems that we quite forget that this is pure paternalism, even if judged by the standards of a century ago. This is shown by the history of the Manhattan Company detailed on page 63 ante. In addition, New York City has issued several hundreds of millions of dollars of bonds to build municipally owned subways and bridges. It is impossible to tell what billions of municipal securities are now outstanding for the construction of these and other kinds of utilities which are strictly for the benefit of the people.

HOW OUR PURPOSIVE GOVERNMENTS HAVE DEVELOPED PUBLIC EDUCATION AND THEIR HUGE EXPENDITURES THEREFOR

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CHOOLS, colleges, universities and other like instrumentalities for extending education to the young and old belong among the purposive functions of our nation and States and not upon their constitutional or conductive sides. This is also true historically. The early English government, which had practically no purposive functions, took no direct interest in schools, either by making appropriations therefor or through exercising control, upon a larger or smaller scale, over the running of the schools. The local governments would not have trusted the central government to employ an army of men teachers and levy taxes to support them. That would have raised and turned over to the control of the King a large number of men fit for military service. Nor did the local governments of England see any reason why they should support schools, for there was no popular demand for public schools. In early England the Church had arrogated to itself substantially all educational functions, although there were some private endowments. Nor was there in Continental Europe any system of public schools as we understand it.

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In some of the American colonies there had been an honest effort to offer some facilities for education. vard was started in 1638, as a boarding-school-divinityschool college for the training of clergymen, and during their early years Harvard and Yale were the official