The Londonderry sifter. (South Londonderry, Vt.) 1883-19??, 1894-03-16
THE
Londonderry Sitter.
So. Londonderry, Vermont.
Natural NIonopolics.

Natural Monopolics.
Is there such II thing as natural mo-
nopolyS Professor Richard T. Ely of
the Wisconsin university says there is,
and he undertakes to tell us in The
North American Review what tbs. Pro
fessor Ely's literary style is uncommon
ly clear and readable, q style so rare
among economic and scientific writers
that we are disposed to thank the pro
fessor especially for giving us an essay
we can understand without any trouble.
Competitive industries Professor Ely
classes as agriculture, manufactures and
commerce. But alongside these las
sprung up chiefly in the nineteenth cen
fury another class of industries that are
noncompetitive. These are such as rail
ways, telegraphs, telephones, canals, ir-
rigation works, harbors, street car lines
and gas works. He says there can be no
competition in industries of this class,
and that everything resembling compe-
tition is an illusion and temporary. The
noncompetitive industries now represent
at least one-fourth of the wealth of our
civilization. They are industries in
which. the whole public is interested.
They are conducted usually by private
corporations for their own benefit, though
in few cities there is municipal owner
ship of gas and electric light plants. The
policy of the government has been to
turn these industries over to private cor
porations and then attempt to encourage
competition, which in the nature of
things there cannot be.
The first result of this policy, Professor
Ely says, is wastefulness. He quotes
railway manager as saying that if the
railways of the United States were under
one system of control $500, 900, 900 would
be saved every year. The waste in gas
works and telegraph management under
attempts at competition is incalculable.
A second result of private ownership in
natural monopolies is the enormous
and unprecedented inequality of fortunes
in the United States" If the posteffice
business had not been taken possession
of early by the government, Professor
Ely says we would have had still
larger number of multimillionaires who
had absorbed to themselves the revenues
of the department. As it is, whatever
surplus there is, or whatever improve
ment in the service, the people get the
benefit of it.
A third result of private ownership of
these natural monopolies Professor Ely
declares to be the growth of artificial
monopolies side by side with the first.
They become so through favoritism
shown by the first class of monopolists.
He illustrates this by saying that in Chi
cago it costs so cents to ride from one
railway station to another. Only one
omnibus line is permitted to get at the
passengers; otherwise the cost would be
10 cents. A fourth result Of the natural
monopoly is that it forces all the COM
munity to be dependent on it. So long
as street car lines are in the hands of
private owners the inhabitants of the
cities must pay the fare and accept the
terms they demand. Residents of cities
frequently have to pay street car COM
panies to make extensions which would
be profitable to the street car, companies
without any bonus"
The people of the United States were depend
ent upon railway managers for cheap fares to
the Worlds fair at Chicago, which cost SO many
millions of dollars. In SO far as the railway
managers thought low fares meant increased
net earnings, they were reluctantly granted,
not otherwise No, not even as a matter of grace.
The people have built many OF these railways
in subsidies and land grants, but they had not
on that account any effective rights with re-
spect to rates. Their relation is one of depend
ence, and the railways exercise such paternal-
ism as they see fit, the people having aban-
doned the principle of self help in railway man
agement. Farmers are dependent on railways
to enable them to market their own products,
and, on the other hand, to bring them their
supplies, Workngmen by the hundred thou
sand are dependent upon these monopolies for
wages.
In view Of these facts and arguments
Professor Ely lays down the demand
formulated by those who wish change
of policy. 1t is that the government
should own and manage all the natural
monopoliss or noncompetitive industries
leaving competitive businesses, agricul-
ture, manufacturing and commerce to
private industry.