New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-12-28
MUNICIPAL TRADING.
Safeguards Required for 1t and the
Advantages Derived.


/ town and district councils elective bodies.
/ which are compelled to render account OF
| their stewardship; and IL they attempt to do
/ much or manage the business interests Of the
community badly. they are exposed to distinctive
criticism and suspension from Office Mistakes
have been made by municipal hnanciers from ex-
/ cessive zeal in rivalling other councils and In
keeping abreast with the progressive tendencies
of local government: but there have been few
revolts against the policy Of colectivisIn.
The members Of the councils the trustees and
directors; the ratepayers are the shareholders in
municipal enterprises. The business could not
| go on IL the shareholders were dissatisfied with
/ the results. II the various municipal activities
| such as the ownership OF markets. tramways
| end improved estates and the operation OF the
LEGAL supplies OF water, gas and electric light and
| power. unremunerative. the reckless trus-
tees and directors would be held responsible for
unsound investments. and reformers and econo-
mists would take their places. The fact that
the development OF municipal socialism in the
English and Scotch centres OF population out
side London has been continuous, and that there
has not been. except IN few instances OF gross
| mismanagement. organized opposition TO 1t. IS a
decisive proof that the taxpayers interests have
been adequately protected
Such resistance as has been offered TO the ex-
pansion Of these municipal activities has come
were anxious to retain control Of tramways
gas and water supplies and to supply towns
and suburban districts with electric light and
power. Even the powerful assistance Of The
Tines has been OF little avail in reinforcing
these insincere opponents OF municipal trading
The joint committee OF the two houses OF Par
lament which has been Investigating this sub
ject has rendered partial report emphasizing
the obvious truth that no community ought to
be left in the dark respecting the practical oper
alton OF municipal enterprises and the liabilities
which are incurred by ratepayers- Sir Michael
Hicks Beach, who acquired a reputation
watchdog OF the national Treasury, has laid
stress upon the same point in admirable ad-
dress at Cheltenham. where a new town hall
has been opened. He has COntended that the
ratepayers should have as full an opportunity
for knowing what the local authorities are do
ing the shareholders in any well managed
public company. Sir Michael did not speak
critically in any spirit OF hostility to the
general movement OF municipal trading. for he
was markedly in sympathy with 1t. veteran
economist though he was He advocated safe
guards for regulating the movement such as
proper auditing OF municipal accounts by indie
pendent and unprecedented experts; the period
ical publication OF full and clear accounts OF
trading operations. showing profit and loss; the
provision for depreciation OF plant and repay
in every enterprise and investment and legisla-
ton for enforcing these obligations &c throw
light on the public business managed by the
local councils. These necessary precautions
indispensable. owing to the facility with which
figures can be manipulated so TO prove any
thing the reasoner calculator wishes to be-
lieve.
One Of the strongest arguments against the
new municipal enterprises is based upon the
vast increase Of local indebtedness. Some OF
the special advocates. who are interested in Sc
curing as much public work as possible for pri-
vate electric corporations. draw parallels be-
tween the growth Of local Indebtedness in the
United States and the recent abnormal expan-
sion OF municipal liabilities IN Great Britain.
They lay stress upon the necessity for placing
legal limitations upon the borrowing powers %
municipalities so that the future resources OF
communities may not be mortgaged pawned
in the financing Of sOcialistic trading schemes.
Limitations upon the borrowing powers of coun-
ellis would exercise without doubt salutary in
huence. but the restrictions should be imposed
in the interest of the ratepayers and not Of pri-
vate companies in quest OF public business. The
parallel moreover. between the local indebted
ness Of American and British cities is not so
direct as these special pleaders for private cor
pOrations make out The bulk of the increased
municipal debt in the United Kingdom repre-
SentS Investments in remuneTative services and
undertakings. with sinking funds for the grad
ual repayment of loans. Municipal trading is a
source Of profit after the interest charges are
met The capital required for it involves public
borrowing on large scale but it is not sunk
in unremunerative investments.
THE Municipal Journal" for example repro
duces Mr.. James Carriers tables showing the
estimated receipts in sixty-six English towns
from remunerative undertakings and the
amounts which are applicable for the reduc-
ton of the rates. Mr.. Carter is the borough
sible statistician. He sets down in columns the
proportion of profits from markets. gas. water
electric light. tramways and estates. transferred
to the borough or district fund during the cur
rent year. and estimates the amount in tho
pound available for the reduction OF the local
rates This amount varies from two or three
pence in the smaller towns to a shilling OF 10
or 20 pence in larger cities In Manchester the
profits transferred from the markets tranways
and gas services amount to f134OOO and this ia
equivalent to reduction in the local rates OF 10
pence in the pound. In Liverpool the amount
available for the lowering of the rates is f15O-
OSS. or 1112 pence in the pound. In Leeds with a
highly profitable tramway service. the reduction
is full shilling; in Nottingham it is 10 pence;
in Wigan 1t is a fraction over IS pence. and IN
Darlington 1t is 20 pence. In all these instances
no account is taken OF the gross profits OF the
municipal services. but merely OF the amount
available for the relief of the rates when the in
tsrest charges have been paid. the sinking funds
provided for and the proportions for deprecia-
+ioU Of oIar,