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hearings, Mr. Oishi, leader of the Progressive Party and chairman of the special nationalization committee, made formal inquiry on six points. Three of these questions and their answers are very interesting, as is one question that was not answered. Dr. Watarai gives these as follows:

Q. What danger is there in the present system of private railroads, regarded from the point of view of national defense?

A. (By Minister of War TERAUCHI.) National defense is defensive and offensive, and systematically related railroads are necessary not only to passive, but also to active protection. As concerns the first case, we have had a most unfortunate experience with the private roads; and in the other contingency, in which the cooperation of maritime interests is needed, the private roads have again proved themselves insufficient. It was further shown in the war with Russia that the operation of the private railroads, constructed with poor materials, was absolutely deficient.

Q. Does not the new loan of about a half billion yen mean too great a burden upon the State exchequer, which has already been exhausted by the war with Russia? Further: Will the flow of money to other countries be increased and our system of bank notes weakened?

A. (By Minister of Finance SAKAYA.) According to the investigation of the Minister of Communications, the State roads will yield 50 million yen annually to the State exchequer, when, after 40 years, the amortization of the railroad loans has been completed. Although an addition to the State debts is not pleasant to contemplate, one need harbor no doubts, for the loan in question is a productive one; there wi!!, therefore, be no burden upon the whole nation, because the accounting system used for the railroad loans will be separated from the general budget.

Q. After the actual nationalization, will the tariff rates be lowered, and will the present narrow gauge be replaced by the standard gauge?

A. (By Minister of Communications T. YAMAGATA.) The administration is planning a lowering of tariff rates, but it can give no further particulars concerning the exact rates; the question of the gauge is not yet ready for discussion.

Q. Do not the unremunerative lines included in the resolution have a bad effect on · State finances?

This question was not answered.

The question of the compensation given to the private owners by the Government is very interesting, but the reading of the law on this point is not quite clear. The writer consulted several authorities but did not obtain a translation that can be quoted. A careful study of the data, however, seems to warrant the statement that the substantial result was the taking over of all the obligations by the Imperial Government of Japan in the form of bonds or similar liabilities bearing a fixed rate of interest. The capitalization of all the properties was then determined on a 5 per cent basis, after deducting what might be called the funded obligations mentioned above, and, as the roads had earned an average of something more than 9 per cent for the three years preceding, this amounted to a very considerable profit to the private owners over the original cost of construction. The nationalization proceeded very promptly after the passing of the law, and in less than one year after the promulgation of the law all of the 17 roads had been taken over. The total construction cost (including amounts that had been expended during the interval while arrangements were being made to take over the roads) totaled $120,455,650 gold, and the final price paid amounted to $235,565,300-an advance of $115,109,650-thus showing an actual profit of about 95 per cent on the original investment, without consideration of return during the interval of private ownership. The above figures are taken from Dr. Watarai's data.

No loans were raised for the taking over of any of these lines, but the owners accepted Government obligations bearing 5 per cent for the entire amount. It was assumed, in the nationalization plan, that the

railways would self-amortize in about 40 years, but this anticipation is far from being realized for the reason that, although the lines have been fairly profitable, the progress of Japan has made it necessary to return to the property much more money than the profits have amounted to. This has been the usual result in all other similar situations. In other words, the railways of a growing country ordinarily require much more money put into them in the way of betterments and additions than it is possible for the most profitable to earn.

WIDENING OF GAUGE.

The gauge on the Government railways, private railways, and light railways is mostly 3 feet 6 inches. Ever since the ChinoJapanese war, and particularly since the Russo-Japanese war, there has been a very decided sentiment in favor of widening the gauge of the Government Railways to 4 feet 8 inches. Both commercial and military reasons are given in support of this, but the arguments for national defense form, no doubt, the main considerations. A short time before the beginning of the world war an Imperial Commission made a very careful study and recommended that the gauge on all lines be widened. The estimated cost was almost equal to the total capitalization of the railways at that time, or about $450,000,000 gold, and the program contemplated about 20 years for the making of the change. This length of time was later reduced to about eight or nine years, but this reduction of time involved no reduction in the estimated cost. This scheme, however, was not only for a widening of the gauge to 4 feet 8 inches, but was a most comprehensive program for actually reconstructing the most important lines by carefully worked-out grade and curve reductions, which would have resulted in high-speed railways through the rough country of Japan where the securing of such lines would be very expensive in any event. At present there is under consideration a much less ambitious scheme proposed by Dr. Shima, chief of the mechanical department, consisting of an ingeniously worked out arrangement for exchanging axles and wheels of the different gauges under cars in transit (mostly goods wagons), and widening the gauge by successive sections. The motive power and most of the passenger equipment would be changed permanently in progressive steps, but the exchange of axles and wheels under the goods wagons would extend over a very considerable period. This scheme contemplates a very small amount of betterment in the grade and alignment conditions but will mean only a fraction of the expense that would be involved in the more elaborate scheme. While the writer appreciates the rashness of hasty conclusions, still, in view of the recent developments in electrical construction and the dense population of Japan, he feels warranted in stating that a plan for high-speed electric lines along selected routes giving the ultimate result of paralleling the present steam routes has much to commend it, particularly when it is considered that the freight traffic of Japan is largely highly classified business and only a small portion is moved in commodity bulk. Further, allowance is to be made for the fact that the Japanese 3-foot 6-inch equipment is designed on the widest practicable measurements. The present equipment has a height of 12 feet 6 inches, which is equal to that on any British 3-foot 6-inch line, and a width of 8 feet 10 inches, which

exceeds that on most, if not all, British lines of that gauge. Some of the passenger equipment is 36 feet between truck centers and 56 feet between coupler knuckles. All of this indicates that the Japanese have gone to the limit in dimensions, and it is quite apparent that a plan designed to secure any substantial benefit as a whole must involve the grade and alignment improvements already mentioned.

JAPANESE RAILWAY POLICY.

The policy of the Imperial Government of Japan is for the Government to own and operate the trunk lines and all important branch lines. This policy has been consistently followed since the nationalization of the principal railways in 1906, and has involved the taking over of a number of the private railways since that time and the building of additional lines and extensions. The so-called private railways are all being gradually taken over; two of these, totaling 54.9 miles, were taken over during the year ended March 31, 1918, leaving only six private railway companies.

The building of the light railways is strictly regulated under the law referred to on page 152. One very interesting feature in connection with the payment of the guaranteed subsidies is that when paid the funds are taken from the Imperial Government Railway Department's budget, and not from the general treasury funds as would naturally be expected. There is probably good logic to support this procedure, in that these light railways are feeders to the main railways and all the business is a very short haul. The amount actually paid in subsidy for the year ended March 31, 1916, was $449,876.

GOVERNMENT CONTROL AND REGULATION.

The control of the financing, construction, equipment, operation, and rates of the private railways or light railways and of all the tramways is vested in the "general department" of the Imperial Government Railways. This regulation and control is very complete and painstaking in every particular, especially in what is included as cost of construction and also as to what standards of roadway and equipment shall be used by all these various classes of lines.

CONSTRUCTION PROGRAM.

For the future construction of the Imperial Government Railways and the light railways the Imperial Government has worked out a very carefully considered program and all construction must conform to this scheme. The "general department" of the Imperial Railways directly decides whether or not additional light railways or tramways shall be built. One feature kept constantly in mind is that no duplicating lines are to be built unless there is a local need for them. This is undoubtedly a wise policy, and a similar arrangement should be worked out for every country that has not yet measurably completed its railway development. Such a complete and comprehensive scheme should be worked out in China, where very great benefit would accrue.

IV. IMPERIAL GOVERNMENT RAILWAYS OF JAPAN.

EXTENT.

The preliminary data for the Imperial Government Railways of Japan for the year ended March 31, 1917, show a total of 5,856.6 miles of lines and a total of 9,029.2 miles of all tracks, or 1.54 miles of all tracks to 1 mile of line. As all the data for 1917 are not available, the data referred to hereafter in this report, except where so stated, will be for the year ended March 31, 1916.

The entire system is divided into five grand divisions. The eastern division, with headquarters at Tokyo, is composed of all the lines on the main island east and northeast of Tokyo, amounting to 1,846.0 miles. The central division, with headquarters at Tokyo, includes the lines between Tokyo and Mibara, amounting to 966.7 miles. The western division, with headquarters at Kobe, includes the lines between Mibara and Shimonoseki, as well as all the lines on the island of Shikoku, amounting in all to 1,274.1 miles. The lines on the island of Kyushu, amounting to 725.1 miles, form the Kyushu division, with headquarters at Moji; and the lines on the island of Hokkaido, amounting to 944.4 miles, form the Hokkaido division, with headquarters at Sapparo.

ORGANIZATION AND OPERATING METHODS.

The parliamentary head of the Japanese Government Railways is the Prime Minister. The administrative and operating head is the president, who has under his direction a complete organization, consisting of a general staff and a director with a complete division staff in charge of each of the five divisions above mentioned.

The system of operation is the departmental or branch method already mentioned, but there is superimposed the added feature of what might be termed a semimilitary organization. By this it is meant that each official is given a rank and grade, with the result that in every contingency there is a ranking official who will have authority to take action. The general administration, in charge of the president, has a vice president and a general staff divided into six departments, or bureaus, as follows: Secretariat, general administration, traffic, finance, engineering, and machinery and rolling stock.

The duties of the several bureaus are indicated by the titles, except the general administration bureau, which may be regarded as a commission for the control and regulation of the light railways, private railways, and tramways. This bureau consists of three members, one of whom is the director, one the secretary, and one an engineer. They supervise in every sense the actions and operations of all the above classes of railways, even to the extent of the specifications for materials and equipment to be bought.

The method of train operation is the typical "station-master method" in all details, and, with the conditions present and the help available, this is admittedly the eminently safe and proper arrangement. Outside of the Tokyo electrified district the signaling is all in accordance with British Board of Trade practice, but the lines as a rule are inadequately signaled. In the Tokyo electrified zone some automatic signals are installed, but these are somewhat out of date and include several kinds of signals. With the amount of traffic on the Japanese Government Railways and the small amount of signaling at present, there is every reason why the most modern method of signaling should be adopted for future work. It is important that these lines be adequately signaled as the traffic grows, and they will ultimately require very intensive signaling.

Another feature would be the extensive use of selective telephone apparatus for establishing central control-by this means retaining all the safeguarding features of the station-master method of train operation and still getting the permissible expedition of despatching methods.

TRAFFIC AND RATES.

The following table gives the performance figures of the Imperial Government Railways of Japan for the years ended March 31, 1914, 1916, and 1917:

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It will be noted that the passenger and freight earnings are very nearly equal. For several years past the freight earnings have been increasing faster than the passenger earnings, and, with the continuation of the industrial development of Japan, this in all probability

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