Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1907-02-03

to the single question Of the economy or
lack OF trading enterprises.
Erroneous ImpressioR Corrected.
The impression generally prevails in this
country and abroad that municipality con-
trolled tram lines, gas and electric supply,
water works, etc. In Glasgow, London and
other important cities show considerable
improvement in the matter OF economy and
efficiency over privately managed enter
prises Of the same nature. II will be a con-
siderable surprise 10 the general public TO
learn that the exact contrary IL the case.
Lord Avebury puts the matter as gently
as possible, but he says IN effect that the
public has been humbugged by methods Of
keeping accounts which will not bear In
vestigatlon. This Is a very serious charge
to make. but he produces indisputable
evidence in support OF his indictment.
MY fourth objection" he says, rs often
contested. II Is alleged that profts ARE
made. OF where municipalities have mon
opolles and can charge what they like this
Is in one sense the case. They take what
they choose out OF the profits OF the rate
payers and call It a profit.
I doubt whether they ever make proht
where they have not a monopoly. we
who are engaged in commerce Know that
success depends on close attention to de-
tails, on watching the turn OF the mar
ket, on giving mind and thought to busi-
ness. It is impossible for members OF
municipalities to do this, and conse-
quently municipal management cannot be
so economical OF so successful as private
| management.
But II is said that, as a matter OF fact
profits are made. In many cases, at any
rate the profits are imaginary. Too little
is allowed for depreciation, for rent for
legal and clerical expenses.
Experience in Lighting.
an many cases in electric lighting an
undue amount is charged to street light
| ing; In tramways too much is charged t.
street improvements; in housing schemes
| the cost of the land is sometimes taken
below the cost price, and so on.
"Still, taking the accounts as given, the
number of electric light undertakings
which have been working for twelve
months is 100. The capital expenditure
has been e12,5OO,0OO, on which a loss Is
admited/of e11,7O7.
"The amount put to depreciation, more
over. was only 100000, which is alb
surd; IL we ada the amount of capita
repaid-e205,00 0--the amount is still un
der per cent. which is certainly too lit
tie to write off in such business.
"The accounts of forty-eight municipali
ties working tramways show that onl1
thirteen make any contribution to thu
rates, seventeen make no depreciation al
lowance and only eleven over per cent
We all know how disastrous the steamer
of the London county council have beef
and continue to be.
SIt is no answer to say that privat
companies also make mistakes and los
money. No doubt they do; 1t is inevita
BILE and is an ADDITIONAL argument, not for
but against municipal trading; but tn
difference is that in one case they ar
losing their own money, in the other tina
of the ratepayers."
"It will be supposed that in the matte
of gas supply, IL in nothing else, munich
pal management would be able to com
pare favorably with private or compan
enterprise. Comparative returns withou
exception show the contrary.
Cost of Gas to Consumer.
It is necessary in fairness to make du
allowance in making comparisons 70
nearness to coal fields and the consequen
local price of coal. We find that in Mar
chester (municipalized) the price of gas
IS cents per 1000 feet. The South Metre
politan Gas company of London (privat
company charges 80 cents per 1,0O0 a
though the price of coal in London is cor
siderable higher than In Manchester.
The Manchester municipality reports a
annual profit to the city Of $4,000 on II
J gas works. II the London company charge
} the same price as Manchester its custom
ers would have TO pay $1,o4O.OOo more
year for gas. II Manchester charged u
: same price as the London company the
customers would pay $Se5,OOO year less ar
} the so-caled profit would be turned int
: a loss of $4,000.
: In Stafford, great suburb OF Mancheste
gas is supplied by a private company fC
. 8 cents per 1000 less than in the larg,
: city.
S Nottingham and Sheffield are IDENTICAL
situated as regards coal supply. In No
( tingham gas is supplied by the city:
9 Sheffield by a private company. Fiftes
years ago the price OF gas was the san
' in both cities. In Nottingham the prit
|, has gone up; in Sheffield It has gone dow
until now It is 50 cents per 1000 in Il
: former and 81 cents in the latter.
j Rates on Tramway.
, II is In the management OF tramwa,
that most credit is claimed for municip
9 trading experiments In Great Bntai
2 Lord Avebury analyses the so-called su
: cesses, and the result becomes quite a
: other story.
! There are in London two tramway ~
s TENS, one north of the Thames. the 9th
south Of the river, The county council b
a come possessed of both in 1900.
s The capital value was approximately Il
e same, s4.260.0O0 on the north. A.4SO.o 900 {
d the south. The council leased the northe
lines to a company and worked the sout
ern lines itself.
During the period. the council has ele
trifed the southern lines, which has slight
interfered with their working. but the I
suit Of five years operations Is instruetiV
- The fares have been the same on both.
The council figures out a profit for I
five years on its lines of S19.500. DUR
the same period the lessees OF the northe
lines have paid the city $s6sOoo But,
Lord Avebury points out. even the clair
of the council to a profit Of $11s. 800 will n
bear examination.
The auditor OF the Local Governme
Board has objected to the insufficieney
1 the sum set aside for renewals, etc. and
n the method by which only one-third OF (
n cost OF street widening for tramways
charged to tramway account. The 81
, set aside for depreciation is only IL I
cent. The sinking fund amounts to OF