QUORUM. The minimum number of the

is

members of a committee or of any administrative body, whose presence is necessary to constitute a competent business meeting. The number constituting a quorum at the meetings of shareholders or directors in a company generally fixed by the articles. This use of the word quorum has arisen out of the terms in which commissions for holding sessions of justices were formerly couched. Of the whole number of persons holding commission as justices of the peace, only certain individuals were held to be competent to preside at sessions. were specifically named in the commission that was issued directing the sessions to be held, at which it was required that at least two justices should be present, of whom one must be of these persons; or, as it ran : quorum AB, vd CD, vd EF, unum esse volumus." These persons were usually termed "justices of the quorum." The quorum clause was omitted when the form of commission was revised under

These

40 & 41 Vict. c. 41 (1877). Since the beginning of 1878, the names of all the justices of the peace for the county have been inserted in a schedule attached to the commission.

249

leaves only one legitimate child, a third if there are two, a fourth if three or more; any number of grandchildren counting only for their respective parents. If he leaves no descendants, but ascendants in both lines, paternal and maternal, the disposable portion is one half; if in one line only, three-fourths. If he leaves neither descendants nor ascendants, the testamentary restriction ceases. Gifts inter vivos are counted as part of the quotité disponible and cannot prejudice direct heirs.

[Code Civil, arts. 913-919. See also BEQUEST, POWER OF; WILL, BEQUEST BY.]

T. L.

QUOTITÉ AND RÉPARTITION (Fr.). The two great divisions in the system of taxation in France. Impôts de quotité are based on tariffs, the yield of which can only be estimated approxi

mately, as is the case with the revenue from

stamps, successions, dividends and interests, customs duties, etc. In impôts de répartition and an assessment is made of the portion to be the state fixes the sum the tax is to produce, provided by each of the administrative divisions of the territory; first by the central authority among each of the departments; the councilgeneral of the department next divides the total sum between each arrondissement; the councils of arrondissement then subdivide their contingent among the communes ; and finally local councils in the communes assess each

property holder for his contributive share according to the land register book. Direct taxes are generally impôts de répartition, but the trade license or PATENTE (q.v.) is an exception, and the doors and windows tax is a mixed system; repartitive in the total but an impôt de quotité in the incidence, the portion to be paid by each landlord increasing not only with

the number of doors and windows, but also

with the population of the locality. A certain latitude is also permitted to the local authorities in the assessment of the mobilier, or tenants' occupation tax, provided that the total sum due by the commune is realized and not exceeded. The system of repartition has advantages for the prevention of fraud in countries with a rudimentary or defective administration, as the inhabitants exercise a control over each other, knowing that if some individuals do not pay their fair share of the tax, the burden will fall more heavily on themselves. On the other hand, this mode of taxation presents greater inequalities, as it does not follow the development or decline in the value of real property in the different departments or communes, and the balance can only be restored by a periodical general survey.

[Edouard Vignes, Traité des Impôts en France.P. Leroy Beaulieu, Traité de la Science des Finances.] T. L

RADMANNI. The rodknights or radchenistres of Domesday. These were free proprietors with considerable holdings, and their service was to ride as escort to the lord or lady of the manor, a duty which could scarcely be performed by men who were not of free condition. Maitland's Select Pleas in Manorial Courts, p. 78, show a rideman employed to enforce army service. The Gloucestershire liberi homines radchenistres (Domesday, f. 163) had villeins on their land, while in Worcestershire Lefric the radman held a hide and a virgate. Some, however, seem to have been unable to leave the manor, that is, to sell their holdings, and others were bound to render small predial services. Bracton, i. 279, classifies their tenure as petit serjeanty (see SERJEANTY, PETIT; MANOR).

R. H.

RAE, JOHN (1796-1872), probably a native of Scotland or the Orkneys, perhaps the father of Rae the arctic explorer, after pursuing in youth the vast design of "gathering together all that consciousness makes known to us of what is within and all that observation informs us of what lies without," into "a true Natural History of Man, by a sudden and unexpected change in his circumstances exchanged the literary leisure of Europe for the solitude and labour of the Canadian backwoods' (preface to New Principles). Here he composed his New Principles on the Subject of Political Economy, which was published at Boston in 1834.

The main purpose of the book is set forth in the title: Exposing the Fallacies of the System of Free Trade and of some other Doctrines maintained in the "Wealth of Nations." Distinguishing between individual and national wealth, Rae says it is easy to understand how one individual comes to get hold of a large share of the national means, but not "how a general increase of these means or instruments should take place without some accompanying discovery of an improvement in their construction" (p. 19). The national capital would not be much increased by the indefinite multiplication of flails (p. 20). To attribute the growth of wealth to parsimony would be like attributing it to population. Both are necessary conditions, but we need take no thought for their growth, provided that invention progresses (bk. i. ch. i.). "Invention is the only power on earth that can be said to create." Adam Smith's dictum that "the industry of the society can augment only as its capital augments," is combated

at length (ch. ii.). Rae instances the case of two brothers in the interior of Canada who, in order to get boots made on their own farms, were at the pains and expense of sending one of the young men to some distance to master the trade of shoemaking." Why should not government similarly introduce inventions? The argument for protection of infant industries (as we should now say) is forcibly urged by Rae in the second chapter of his first book.

The second book, of the nature of Stock, forms Rae's principal contribution to economics. He applies the term "instruments" to "all these changes which man makes in the form . . . of material objects for the purpose of supplying his future wants." A field is an instrument: so is the wheat growing in it; and bread, "until it is in process of consumption." Exhaustion is the "passage of things from the class of instruments into things which are not instruments" (p. 92). Instruments may be arranged in an orderA, B, C-determined by the period at which each issues, or would issue if not before exhausted, in a result equivalent to double the labour expended on it; order A doubling in one year, order B in two, and so on. The causes determining the amount of instruments formed by a society are enumerated as (1) the quantity and quality of the materials owned by it; (2) the strength of the effective desire of accumulation (a term adopted by Mill); (3) the rate of wages; (4) the progress of the inventive faculty.

The second and fourth causes are chiefly considered by Rae. He begins by showing that mere postponement-the arts of production being stationary-is apt to increase produce (ch. v. cp. Böhm-Bawerk on Roundabout Methods); then (ch. vi.) investigates the circumstances which determine the strength of the effective desire of accumulation, They are (1) the benevolent affections; (2) the intellectual powers; (3) His account of that preference for security. the present which cannot be ascribed to a "mere reasonable regard for their own interest "-Jevons' factor q as distinguished from p-deserves to be quoted in full: "The actual presence of the immediate object of desire in the mind, by exciting the attention, seems to rouse all the faculties, as it were, to fix their view on it, and leads them to a very lively conception of the enjoyments which it offers to their instant possessions. The prospects of future good which future years may hold out to us seem at such a moment dull and dubious, and are apt to be slighted for objects on which the daylight is falling strongly, and showing us in all their freshness just within our grasp. There is no man, perhaps, to whom a good to be enjoyed to-day would not seem of very different importance from one exactly similar to be enjoyed twelve years hence, even though the arrival of both were equally certain" (p. 120). The different degrees of strength of the effective desire of accumulation are illustrated by splendid examples taken from different ages and countries (ch. vii.). In China, for instance, "instruments are about the order D." But long extracts, such as those which Mill has made, would be required

to do justice to these concrete illustrations. In a later chapter (x.) Rae dilates on the progress of invention in language almost worthy of Bacon, The accumulative and inventive faculties are his main theme; incidentally he has enunciated some important economic principles. For instance, among the advantages of division of employments (p. 164), that no instruments lie idle; that among the conditions determining value distance in time as well as quantity of labour must in general be taken account of. One of his most remarkable theorems is that the consumption of articles of luxury-which is defined as "the expenditure occasioned by the passion of vanity"decreases with the reduction of cost. "Were pearls or lace to be got for one-tenth of the labour that must now be given for them, they would go completely out of fashion" (ch. xi. pt. i. ; cp. Sidgwick, Pol. Econ., bk. i. ch, iii. § 2 note; H. Cunynghame, Economic Journal, vol. ii. p. 37). The most original suggestion in the third book-which treats "the operations of the legislator"-is that by a tax on luxuries revenue might be raised without sacrifice to the consumer (bk. iii. ch. ii.).

John Rae, Statement of some new Principles on the Subject of Political Economy exposing the Fallacies of the System of Free Trade and of some other Doctrines maintained in the "Wealth of Nations," Boston, 1834. [J. S. Mill, Principles of Political Economy, bk. i. ch. xi.—Quarterly Journal of Economics (January 1897), "A Forerunner of Böhm - Bawerk," by C. W. Mixter. - North American Review, vol. xl. (high encomium tempered with, perhaps, just complaints of Rae's terminology).]

F. Y. E.

RAIFFEISEN, FRIEDRICH WILHELM (18181888), founder of the German agrarian loan funds, was son of the burgomaster of Hamm on the Sieg. Educated at home, he at first entered on a military career, which, through an affection of the eyes, he was soon forced to abandon. He then turned to official life, and filled several municipal and other public positions with great industry and distinction. The difficulties of the smaller agriculturists in 1846-47, which he attributed to their bad credit and consequent liability to extortion from unprincipled usurers, led him to establish in Meyerbusch and Heddersdorf, of which he was burgomaster, the first agrarian mutual loan societies which existed in Germany; and to the extension of these institutions he devoted all his energies both as propagandist and as organiser. He founded in 1878 a periodical entitled Landwirthschaftliches Genossenschaftsblatt as organ of such associations, in explanation and defence of which he issued several independent publications, the most important being Die Darlehensvereine (7th ed., 1889). He was also active in the sanitation of the districts with which he was officially connected. His labours so seriously impaired his health that he was obliged in 1866 to retire from active employment, but continued to superintend and improve

251

He

the institutions he had created, and also did good service in promoting the construction of the railway on the left bank of the Rhine. is held in grateful memory by the inhabitants of the Rhenish provinces, to whose material and moral welfare he so largely contributed.

The institutions founded by Raiffeisen were specially designed for the wants of an agricultural population. Their peculiar features will be best understood by a comparison with the Vorschussvereine created about the same time by SCHULZE-DELITZSCH, which are better adapted to urban communities. In these, loans are made for short periods, and the interest charged is as high as from 8 to 12 per cent. The members are shareholders and receive dividends. The managers are paid. The area over which transactions extend is unlimited. Nothing but

the financial security of a loan is considered; no account is taken of the use which the borrower makes of it, or of his personal character. All these conditions are changed in the Darlehenskassenvereine. Raiffeisen intended them to serve moral as well as economic ends, by awakening sympathy and fortifying the social ties between inhabitants of the same rural district. Only members of an association can obtain a loan; it must be sought for a definite productive object, and the association is entitled to ascertain that it is bona fide used for that object. It is a cardinal principle of the system that the operations of each association should be restricted to a small area, which, in Raiffeisen's opinion, ought not to contain more than 1500 souls. It is thus ensured that the members should know each other's character and circumstances-a condition necessary for their financial safety, the mutual liability being unlimited. Not more than 4 or 5 per cent is charged to the borrowers. No dividends are paid; any profits realised, after expenses are defrayed, go, not to the members, but to a reserve fund to cover losses; and when they exceed a certain amount, they are applied to purposes of common utility. The loans are for one or two, sometimes for five or even ten years; when there is urgent danger of loss, the loan may be called-in within so short a time as four weeks. The managing committees work gratuitously; the only salaried officer is an accountant (Rechner), who receives a small stipend. The principles on which Raiffeisen founded these institutions were at first much disputed, but have been vindicated by their success. They have effectually delivered the German agriculturists, especially the small and middling proprietors of land, out of the hands of usurers. According to recent accounts, none of them has become bankrupt; liquidations have been rare, and have not caused material loss to the members. They have extended from Germany to other countries, and are now numerous in Austria, Switzerland, and Italy.

To enable the different German associations to render mutual support, a Landwirthschaftliche Centraldarlehenskasse was established in 1876, which has its seat at Neuwied.

[For life, see Leisewitz in Allg. Deutsche Biogr., Schmidt in Handw. der Staatsw. ; for institutions, Marchet, "Darlehnskassenvereine," and Crüger, "Kreditgenossenschaften," in the latter work; Von der Goltz in Schönberg's Handb. der P. E., vol. ii.; Wolff, Co-operative Banking.]

[See BANKING; LAND BANKS, GERMANY.] J. K. I.

1

RAILWAYS.*

Railways, p. 252; Light Railways, p. 258. RAILWAYS. Though railroads in a rudimentary form date from the 16th century, while the history of steam-traction goes back to Cugnot in 1771, the entire existing railway system of the world has, with negligeable exceptions, been constructed, as far as England and the United States are concerned, within the last seventy years, and, as far as other countries are concerned, within the last sixty. In that time about 450,000 miles of line have been built, nearly one-half of which is in North America, the United States alone counting for over 180,000 miles. Europe has about 155,000 miles. The five great powers headed by Germany with 27,000, and finishing with Austria which has 17,000, average about 21,000 miles apiece, which last figure is also the total for the United Kingdom. British India and Australasia have 30,000 between them, shared in tolerably equal parts. The balance is mainly either in South Africa or in South America. The cost of the world's railways reached, in 1895, the total of £7,336,000,000, a figure of some interest when compared with the total capital of the commercial countries of the world, or with the amount of their national debts. Prof. Hadley says ("The Railway in its Business Relations," The Railways of America, London, 1890), the railway "probably represents one-tenth of the total wealth of civilised nations, and one-quarter, if not one-third, of their invested capital. It is doubtful whether the aggregate plant used in all manufacturing industries can equal it in value. The capital engaged in banking is but a trifle beside it. The world's whole stock of money of every kind -gold, silver, and paper-would purchase only one-third of its railroads."

The total sum is, however, made up of individual costs so completely different that no conclusion or average of any practical utility can be extracted from them. To attempt to base any practical conclusions on such an average would be as absurd as to average together a mile of a Devonshire lane, another mile of the Simplon or the Corniche Road, and a third mile of Oxford street. In England itself, whose railway capital averages £50,000 a mile, we have individual lines

1 Article dated 1900.

over

capitalised at from £2000 to £1,000,000 per mile. Nor can any one say how far nominal capital represents either actual expenditure or present value. For example, under the first head, the share capital of many American railways was originally issued for but a tithe of its face value. Against this, American railways every year spend out of revenue immense sums on what in any other country would be regarded as fair objects of new capital expenditure. Again, continental railway capital has already been in considerable measure paid off through sinking funds. Instances under the second head are, on the one hand, the great sums sunk in England in parliamentary contests, in lines to collieries and mines now worked out and abandoned, or, on the continent, devoted to paying interest at a high rate on capital, not only during construction, but during what is called in France exploitation partielle; and on the other, the immense appreciation in the value of the real property held by railway companies, both agricultural lands in newly-developed countries, and, still more, building sites in the heart of great towns, whether as old as London or as new as Chicago.

In England and the United States, which have between them half the mileage and half the capital of the world, practically the whole of the money has been found by private enterprise, in England controlled and directed throughout by public authority, in America left in the main unrestrained. In the remaining countries of the world railway capital has been provided, if not directly by the state, then in reliance on state assistance, usually in the form of a direct government guarantee. Belgium, the smaller German states, and our Australian colonies, may be taken as leading instances of government construction; France, and in a former generation India, as leading instances of government guarantee. Government aid may, however, also be given, and has been given in many other forms-loans on favourable terms as in Ireland, grants of land as to the Canadian Pacific, special exemptions from customs, taxes, and local rates, as in Austro-Hungary, subscription to shares, more especially deferred shares, as in many continental countries, or, finally, direct gifts of money, as has probably occurred in every country of the world with the exception of England in the limited sense of the name. Contrary to what might have been a priori expected, the railway capital found by unaided private enterprise bears interest at a lower rate than the capital raised on state security Railway capital in England earns on the average about 4 per cent, and in the United States only 3 per cent. On the other hand, in India the guaranteed dividends, owing to the depre. ciation of silver, work out to about 8 per cent, while in France two of the six great companies

Italy

are guaranteed 7 per cent on their share capital, which, however, is not a large portion of the total, two other companies 10 per cent, one 11 per cent, and one 13 per cent. The guarantee system often produces unexpected results; for example, in France the state prohibits railway competition; on the other hand, it has spent and continues to spend very large sums in improving internal water communication. Private carriers along these improved waterways, which are entirely free from toll, have of late years carried off so much traffic from the railways, more especially from the Ouest, which runs along the canalised Seine, as to deplete very seriously the railway earnings, and so to add to the amount which the state has to make good under its guarantee (see on this point more especially Ulrich's Staffeltarife und Wasserstrassen, Berlin, 1894, 8vo, and Colson's Transports et Tarifs, Paris, 1890, 8vo). has handed over its railways, which are also guaranteed, to two great companies-the Mediterranean and the Adriatic-operating the one along the western and the other along the eastern coast of the peninsula, but meeting each other at all the principal points, at Naples and at Rome, at Florence and at Milan. Consequently they are encouraged to compete with one another, but do so at the cost of the state. This Italian system is now well established. Within recent years it has also been followed in Holland. Of purely state lines, the Prussian railways not only pay their way, but leave a handsome surplus, so do the state railways of the Cape and Natal. The Belgian and Hungarian railway budgets about balance. But the general rule is, with unimportant exceptions, that from St. Petersburg to Sydney, state railway earnings are insufficient to meet working expenses and capital charges, and a deficit more or less large has to be made good at the expense of the general taxation of the country.

Turning from capital and finance to management and methods of working, the United States comes first as the country where railways are most independent in fact, though not in theory. In many states of the American union laws, whose constitutionality is in many instances more than doubtful, but which the state authorities rarely attempt to enforce, while the railway companies almost always disobey or evade them, appear to lay very stringent fetters on railway freedom. Practically speaking, however, an American railway company constructs a line when it pleases, where it pleases, how it pleases, runs what trains it likes at such times and speeds as it thinks proper, and, subject to the obligation which in America is regarded as arising at common law to treat all its customers equally without individual favour or preference, charges such fares and rates as the higgling of the

253

market may enable it to obtain. In England this freedom is very greatly circumscribed. Parliament decides whether, and under what conditions, a railway shall be built. The Board of Trade control over methods of construction and working has existed from the beginning, and since 1889 has become dominant. Rates and fares have always been subject to Parliamentary maxima, presenting throughout serious limitations in the case of passengers, though not often in the case of goods. Since the beginning of 1893 these limitations have become very stringent for goods also, while since August 1894 it has been practically enacted that, though goods rates may be reduced at the pleasure of the companies, they can never be varied in an upward direction. Still by the side of the continental companies, which as a rule cannot alter the timing of a single train, or vary a single rate of charge, or change in the smallest detail the construction and equipment of their lines, down even to the carpets and curtains in the general manager's office, without direct state authorisation, our English railways must be acknowledged to enjoy a large measure of freedom.

When we

pass from private railway undertakings to state railways the government naturally settles everything. But even here an important distinction must be drawn, and on the one hand in autocratic countries like Prussia we find voluntary railway councils, composed of merchants and manufacturers and the like, organised with the object of interpreting to the bureaucratic administration the wishes of the outside community, without, however, any power to make those wishes effective; on the other hand, in purely democratic countries like our Australian colonies we find semi-independent commissioners, imported as a rule from outside, and holding office for a fixed term of years, interposed to prevent the railway management being too sensitive to passing gusts of popular opinion, or too promptly responsive to direct political control.

This

In

The point where railways most definitely enter the field of economics is the matter of rates and tariffs. A word first as to the machinery by which railway tariffs shall be regulated. It may be assumed that even where railways are private undertakings, some measure of regulation by the state is practically, though not perhaps theoretically, unavoidable. regulation may take very various forms. France the control is purely administrative. The minister of public works, with the assistance of about 1000 trained subordinates scattered all over the country, and of a Comité Consultatif of fifty or sixty experts of high position, decides the propriety of every proposed new rate. In England we began by fixing parliamentary maxima, and leaving the companies free to vary their rates as they pleased within them, subject