Conservative critics , as might be expected , could not refrain from twitting the Minister of Transport with his conversion from the tenets of " municipalisation " to those of the " public corporation " as a new model form of nationalisation ; but the necessity for the co-ordination of London passenger traffic has long been a matter of general agreement , and it is practically common ground that such co-ordination must involve , not only pooled receipts and unified management , but also some form of public control .sx Mr Morrison submitted that there were certain essentials in dealing with the problem :sx co-ordination must not be " a mere phrase covering up a mere deal between existing operators " ; the interlocking development of trams , omnibuses and tubes must be envisaged as a whole by a single " transport mind " ; consolidated ownership in such a vital public service as this must involve " public owner-ship for the public service for the public good " ; management must be efficient ; and the combined concerns must pay their way without any subsidy from the State or municipal funds .sx None of Mr Morrison's critics ventured roundly to propose that private enterprise should be given monopoly powers over the whole traffic of the Metropolis ; thus the issue is really confined to the question of the form which should be given to the authority ultimately responsible for this vast undertaking .sx Management by a single public authority ( the Minister went on to say ) had been ruled out by the Government because , apart from the fact that the London County Council had no desire to undertake the task , no single authority could be found to discharge this function .sx On the other hand , a joint municipal authority would involve grave administrative difficulties and would fail to meet the need of quick decisions .sx Hence Mr Morrison's final conclusion that the proper authority to be set up is a " business Board " of five members , incorporating what he defined as " an element of public accountability .sx " With the Minister of Transport's conclusion , in principle , we agree ; and the provisions which he puts forward in his Bill to give this principle concrete shape represent at any rate a well-considered attempt at a bold experiment in problems of finance and management whose technique has not yet been developed and whose results experience must necessarily put to the proof .sx In an article which we print on a later page we discuss in some detail the financial implications of Mr Morrison's scheme , more particularly from the standpoint of the investor in the existing transport undertakings .sx Here it is sufficient to say that from the point of view of public interest we are not wholly satisfied with the proposed basis for the acquisition of the municipal tramways ; there is a case for their transfer on the basis of an agreed number of years' purchase of previous net revenue .sx This and all the other financial arrangements which will govern the capitalisation of the new joint undertaking are points which will require the most careful scrutiny in Committee , but we can see no reason why the Bill should have been denied a second reading on that account ; for the machinery set up by the Bill , whereby terms of transfer are to be settled in the last resort by an arbitration tribunal , proceeding on principles laid down by Parliament , .sx seems , broadly speaking , to secure fair reconciliation of the interest of existing owners with that of the community .sx Instead of dwelling over-much on these relatively minor considerations , the public , whose travelling within the London Traffic Area reached in 1930 the astronomical figure of 4,000 million passenger journeys , will be inclined , and rightly , to focus its attention on what appears to us to be the essential point of controversy in this measure :sx does the scheme offer a reasonable guarantee of what may be described as optimum management in the general interest ?sx Let us consider in a nutshell what Mr Morrison has endeavoured to do .sx The system which he proposes to create , on the basis of a water-tight monopoly , is a compact " business Board , " whose autocratic powers are to be tempered by certain checks and balances .sx In the first place , the Traffic Advisory Committee is to be reformed and made more municipal in character , and is to act as a constant liaison between the Board and the local authorities .sx In the second place , though the Board is enjoined by Parliament to pay its way , fares and charges are to be subject to the ultimate authority of the Railway Rates Tribunal .sx Finally , the Minister of Transport , who is to appoint the membership of the Board and fix its remuneration , is to be answerable to Parliament for its doings and is to have , particularly in one crucial direction , important powers of intervention .sx Clause 21 of the Bill provides that the Minister may order the Board not to withdraw , or to restore , services which they desire to suppress or have suppressed , and that he may require the Board to provide new or improved services or facilities , provided that , in his opinion , the Board will not thereby be prevented from carrying out its obligation to be self-supporting .sx Here is disclosed an issue which appears to us to go to the root of the whole Bill .sx We need not necessarily contemplate the alarming vision of a Socialist Minister embarking , pour encourager les autres , on an extravagant rabbit-warren of unremunerative tubes for the benefit of London constituencies whose favours he might desire to court .sx The question obviously cuts two ways , for it might well be that an unimaginative and humdrum Board , concentrating only on obeying the behest that they must pay their own way , would fail to initiate schemes of transport development vitally required in the interest of the community as a whole .sx In these circumstances , those who agree with us in accepting the thesis that traffic in some areas of London may reasonably be required to con-tribute to the support of less remunerative but socially desirable facilities in other areas will concur in thinking that powers of initiation should repose with some authority overriding the business Board of management .sx But , if this be so , it by no means follows that the appropriate authority is necessarily the Ministry of Transport .sx To place upon the Minister such a responsibility appears to us to be a questionable step , involving the possibility of awkward " dyarchy " between a Government Department possessing Napoleonic powers to insist on facilities and an independent , judicial , non-political body , such as the Railway Rates Tribunal , established with full control over fares .sx It is not easy to see how this difficulty , which may or may not have serious consequences for the future of London transport , but which should certainly be faced to-day , is to be circumvented .sx The fact is that in creating this sort of public corporation , whose management designedly is deprived for good or ill of the stimulus of private gain and the pressure of shareholders' desire for profit , we are setting sail on uncharted waters .sx In the present circumstances the risks of the voyage , we think , must undoubtedly be faced ; there is no other alternative .sx The suggestion has been put forward that a greater measure of direct local government ( as opposed to ministerial ) control might be imported into the scheme by following lines somewhat analogous to those on which the management of limited liability companies in Germany is commonly organised .sx That is to say , the London Passenger Transport Board of Mr Morrison's creation might be required to act in the capacity of the Vorstand , or primarily managerial board , while the London Advisory Committee ( in present practice emphasis has to be laid upon the word " advisory " ) might be strengthened and given the functions of an Aufsichtsrat , or superior board , with powers ( defined by Statute ) of veto and initiation on certain specified issues of broad policy .sx This suggestion admittedly lets in once more an awkward element of " dyarchy , " but it is argued that the possibility of conflict between such a Vorstand and Aufsichtsrat is more remote than that of divergence between the Board and the Minister .sx The proposal , however , seems to offer no better prospect of completely satisfactory co-ordination between the interests of the public , the managerial task of the Board , and the responsibility of the Rates Tribunal .sx The problem must ultimately be solved in the light of experience gained in the working of the scheme .sx THE LIBERAL PARTY .sx LIKE an atom , of a structure not yet revealed to science , the British party system is succeeding in altering its characteristics , if not its mass , by a rapid increment of electrons revolving round the nucleus .sx To the Right there are the official Conservative ranks under the banner of Mr Baldwin and - across a none too clearly marked border- line - those Conservatives who follow the oriflamme of a .sx more adventurous Crusade .sx To the Left there is now a formal breach between the supporters of Mr MacDonald and the New Party led by Sir Oswald Mosley .sx In the political forces occupying ground mid-way between these extremes the events of the past week have served to reveal lines of cleavage somewhat more definite than had before been recognised .sx The Liberal Party has not " split " ( real anxiety on this score among its members in the con- stituencies will thereby be relieved ) , but it now comprises , for all practical purposes , three more or less definite groups ; and thus the Speaker is confronted in effect , though not in form , by no less than seven sections in the House .sx The Economist has never been disposed to apportion blessing or censure among the different elements of the Liberal Party , whose differences have long been overt and now seem irrevocable .sx The fate , however , of a party which has inherited a great history and traditions , which represents at least five million voters in the constituencies , whose leader is an outstanding international figure , and whose fifty-eight members hold the fate of the present Government in their hands , cannot be a matter of indifference to any intelligent elector in this country ; and it is pertinent to inquire precisely where the party now stands and how the latest developments have come about .sx Writing a week ago , we suggested that the split over the relatively unimportant question of University representation had evidently brought to a head the question of the leadership and cohesion of the Liberal Party .sx At the end of last week , if current rumour be correct , Mr Lloyd George was inclined to ask the party for a vote of solidarity on the proposal that there should be " co-operation " on terms between Liberals and the Government , for a more or less guaranteed period ahead .sx Whether such a policy , on any practicable terms , would have been endorsed by the party , will never be known ; for on Tues- day , when the adjourned party meeting was held , Mr Lloyd George appears to have asked for approval to a declaration of policy on the following lines :sx - That the party adheres to its policy as enunciated at Yarmouth before the last General Election .sx That the party has made no pact and seeks no pact with any other party .sx That the party's objectives will continue to be Free Trade , disarmament , electoral reform , economy ( including steps to remedy " all proved abuses in the expenditure of public " ) , a settlement of the Indian problem on Round Tables lines , agricultural development and the securing of values created by public expenditure , and bold measures , on familiar Liberal lines , to deal with unemployment .sx That in pursuit of these objectives the party is ready to support this or any Government that will carry out these measures .sx In the last sentence lies the rub ; and the proceedings on Tuesday appear to have disclosed the fact that , apart from Sir John Simon and his adherents ( apparently three of those present and possibly two of the absentees ) , whose attitude was that the Government should in general be opposed and , if possible , removed from Office , there was a .sx considerable section of the party which was by no means ready to give the leadership carte blanche to act on the basis of so vaguely worded a principle as that of " readiness to support .sx "