The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1901-03-25
CITIES WHICH NEEDLE
THE FAILURE OF OWN
ERSHIP IN ENGLAND.
over Four Hundred and Forty Million
Dollars of Public Debt Incurred
for Private

Robert P. Porter, in Boston Transcript.
The Royal Statistical Society of England
has taken up the question of municipal
trading with considerable statistical vigor
and with results that are we'll worth con-
sidering. To begin with. it is shown that
local Indebtedness has increased from
about $3.50. 900. 600 in 1875 to about double that
amount in 1855, while at the present time
it exceeds $500, OO. 600. Part of this debt
has been incurred for purposes for which
local authorities are bound to provide; part
for educational and recreative purposes,
and $40, 000, 600, or an amount nearly equiv
alent to the total municipal debt of the
kingdom twenty-five years ago. for trading
and similar purposes. This capital has
been invested in water works. gas works.
markets, tramways, electric light plants,
Quays and harbors.
The net practical result of this quarter Of
a century of municipal trading in England
seems to be that the income produced by
the existing municipal enterprises pays the
working expenses, the interest and INSTALL
ments of borrowed capital, and leaves a
profit of about y per cent. on the out
standing debt. Some public needs ought to
~ Oie VI oNBIiiNN " III ~
thorities. The difficulty. as brought out in
this discussion, arises as TO what is the
true boundary line which must be MAIN
tanned between public enterprise carried on
at the public cost and at the public risk,
and private enterprises carried on by indi-
vidual traders in partnership or in COM
panies. In England municipal ownership
has gone from water works to gas works,
and from gas works to tramways, and un-
less checked is likely to be carried TO an
extent that will practically destroy individ-
ual effort and enterprise. Lord Avebury,
in a recent paper read before the London
Chamber of Commerce, says that among
the businesses which various municipalities
are, in the present session, asking Parlia-
ment to grant them powers to undertake.,
are banking, pawnbroking, coal supply,
saddlery, manufacture of electrical fittings.
or the residual products of gas, and other
branches of trade and manufacture.
THEORY VS.. PRACTICE.
The theory of those who advocate the
extension of municipal ownership is that
If a profit can be made out of the general
supply of some commodity, why should
not the community realize that profit
itself? In theory this may be sound, but
in practice 1t would be utterly destructive
Of individual effort and a great injustice
to the taxpayer. On this point the Right
Hon. Sir Henry II. Fowler, president of the
Royal Statistical Society, says in his an
nual address:
ut must be borne in mind that the gen.
eral user cannot decide the question Of
municipal enterprise. Take two articles
which are perhaps in very general use,
tobacco and beer. If general user is to
be the test, it might be urged that public
bodies should become manufacturers of
tobacco and beer. They would be the
guardians Of the purity of both these
commodities, and possibly they might
carry them on so as to produce such a
profit as would be an advantage to the
If the price was higher than the actual
cost, the CONSUMERS of these articles are
taxed TO the relief of rates for the bene-
fit OF those who do not smoke, and who do
not drink beer. If on the other hand the
prices are lower than the cost price, then
the general rateDayers, including those
who do not smoke and who do not drink,
are taxed in order TO supply cheap to-
bacco and cheap beer for a section of the
community"
This applies with equal force to those
who use and those VINO do not use the
tramways. Why should those who walk.
or those who ride some other way, or those
who have no occasion to use a street-rail-
way be taxed 10 relieve those who use such
enterprises? The above figures also show
that capital Is required just the same for
municipal industries, and that this capital
- Va NA( - ~
becomes a charge on the property of the
entire community, and If ii Is not success
full the property of the taxpaye must pay
the loss. a margin of half per cent. can
hardly be considered a happy business re-
suit. Imagine If in addition TO present in
debtedness the property of some of our
| municipalities was also pledged for such
| enterprises as We find in operation In Eng
land, and for which. as / have shown, there
are now proposals before Parliament. Imag-
inc all these Enterprises managed by bodies
fof politicians having no personal pecuniary
interest. Sir Henry Fowler contends that
this question OF management Is a main
factor in the classification OF enterprises
which. in England. cannot be undertaken
by public authorities. The industrial sue
cess of England, and likewise of this coun-
try, whether il be manufacturing or COM
mercial. has been attained by individual
energy, impelled by the motive OF individ-
ual ambition and profit, and devOting time
and energy TO the most minute and con
tlnuous superintendent OF every detail.
And to these characteristics OF individual
management must be added the constant
discoveries Of inventions both in machinery,
manufacture, materials and distribution.
which render such enormous services TO the
trade of the country.
A NOTE OF WARNING.
In the English discussion of the ques-
ton before the Statistical Society the ques-
ton of competition with private traders
was brought out as Of great Importance.
The municipality. it was contended. taxes
the whole community. and In that taxa
ton includes the private trader. and there
fore in the case OF competition with the
trader he is compelled TO contribute TO a
fund which might be employed TO compete
with him in his own business. and so to
| destroy his trade. and not only Is the COM
Deting trader affected, but the general
| consumer may have to pay a higher price
in consequence Of the creation of a monop-
olv. This may seem strange when the plea
for municipal ownership SO often In the
United States comes from the anti-mOnop-
oliist. In England, however. the munich
palities, or rather an association OF the
permanent town clerks of municipalities.
have been politically strong enough 10 pre-
vent private capital from securing from
pa rlia menfarX acts for the nurnose of nro-