Municipal Ownership

public ownership of public institutions in towns and cities. In Great Britain the corresponding term is municipal trading. Public ownership is advocated by the socialists everywhere; but, as a matter of fact, it is a device rather of the mercantile or commercial element. It includes the ownership by the people of gas, electricity, street railways, waterworks, telephones, and other public utilities. The limit of desirable municipal ownership is reached only when the public owns all those agencies that are operated to best advantage by a monopoly.

Some kinds of service are natural monopolies. Rival telephone lines, requiring a business man to pay a charge to each in order to obtain complete service, are unwarranted. Rival gas companies tear up the streets, and lay parallel pipes, and, in the end, are not able to render as efficient service as a monopoly with an exclusive system of pipes.

The chief arguments advanced in favor of public ownership of municipal utilities are:

1. Better service. It is claimed that private owners granted a monopoly are not sufficiently sensitive to criticism. It is quite possible for a private monopoly well entrenched behind a franchise to ignore popular criticism.

2. Extended service. A private monopoly is little inclined to extend a street car line into a region that will not pay expenses. A private company is not willing to make the profits gained in a populous section pay the expense of operating in a sparsely settled portion of the town. To draw an extreme illustration from national affairs, a common carrier will not send a messenger forty miles into the mountains to deliver three letters for a total reward of six cents.

3. Lower rates. Experience demonstrates that private owners can operate at less expense than the public, but experience shows also that private owners are not disposed to give the public the benefit. There are notable exceptions; but ordinarily, when profits pile up noticeably, stock is watered and the public is called upon to maintain rates and pay dividends on additional stock. As Professor Parsons says of public ownership:

It does not have to retain lawyers or lobbyists or provide for the entertainment of councilmen, or subscribe to campaign funds, or bear the expenses of pushing the nomination and election of men to protect its interests or give it new privileges, or pay blackmail to ward off the raids of cunning legislators and officials, or buy up its rivals, etc.

4. Public revenue. The argument is simple. Public utilities owned by the public, well managed, yield profits that render ordinary forms of taxation unnecessary.

5. A casual examination of labor statistics shows that hours of labor are shorter and wages are higher under public than they are under private ownership.

6. City councils free from the selfish control of wealthy corporations. The brazen manner in which the "interests" assert themselves in council chambers is offensive and demoralizing.

As to the present prevalence of municipal ownership, it may be said that public waterworks are general. Of the fifty large cities in the United States, over ninety per cent own their own waterworks; nearly all the smaller towns are owners. A similar statement holds true for all English-speaking countries. Glasgow goes thirty-four miles to Loch Katrine for water; Manchester gets water from the English lake district; Liverpool and Birmingham bring water from Wales. In 1902 London bought out eight private companies. There are over a thousand public waterworks in Great Britain. The policy of municipal waterworks is well established in continental Europe.

Municipal gas plants have been tried on a large scale on both sides of the Atlantic. In 1904 the municipal gas plants of Great Britain alone had cost $185,000,000. The British Municipal Year Book for 1906 stated that, as compared with rates charged by private gas companies, the cities were saving consumers a total of $3,910,000 a year, that the authorities were paying higher wages for shorter hours, were extending the gas pipes more rapidly, and were turning a seven per cent profit into the city treasuries.

German gas plants are owned chiefly by the cities. Berlin owns four large gas plants.

In the United States city ownership of gas was begun by Richmond, Virginia, in 1853. Not all public plants have been successful. Owing to corrupt politics, public ownership in Philadelphia miscarried; toward the end the loss to the city mounted up to $245,000 a year. After struggling for fifty-six years the city leased its plant in 1897 for a period of twenty years. Hamilton, Ohio, has had difficulty in maintaining a public gas plant. Wheeling, West Virginia, had the usual tussle with city thieves, but in 1887 set the pace by supplying gas at seventy-five cents per thousand. The verdict of private gas companies is unfavorable:

Wheeling's gas plant is not an important factor in the well-being of Wheeling's citizens. What with fast meters, charges for service and meter-setting, absence of any gratuitous work, the admixture of fifteen-cent, eight candle-power natural gas, insufficient and irregular pressure, and general inefficiency in the complaint department, Wheeling gas is a dear commodity at any price.

For all that, the public is not disposed to return the plant to private ownership. In 1898 Duluth was paying $1.90 for gas. The plant was taken over and by 1905 the price for light and fuel had been reduced to seventy-five cents, with a still lower price of fifty cents per thousand for gas used in engines and furnaces. Bellefontaine, Ohio, and Holyoke, Massachusetts, are named as cities that have succeeded in conducting gas plants honestly and hence profitably.

Despite the fact that the public has been deluged with so-called "public ownership" literature calling attention to actual and alleged failures to stand off the thieves that beset city treasuries, the policy of public ownership is gaining ground. In 1900 there were fifteen considerable municipal gas plants in the United States; in 1906 there were twenty-five. Over a hundred small public gas plants exist in the United States and there are about a dozen in Canada.

The ownership of an electric light plant is a favorite form of municipal activity. It is easier to string wires than to lay pipes, and easier to install a dynamo than a gas plant. City councils are more willing to go into electric lighting than some other forms of public service. According to a special bulletin of the Census Bureau, there were, in 1902, 815 municipal electric light plants in the United States. The number is increasing. Detroit, Michigan, is considered the leading city in this direction. Frank Parsons, writing for the Encyclopedia of Social Reform, claims that both citizens and the city get cheaper service under public ownership. The price charged for arc street lamps by private owners before their plants were taken over, and the prices paid afterward were:

Publicly owned street railways appeal to workingmen who are required to pay two fares out of each day's wages and stand up both ways at that. Great Britain leads off in the movement for low fares. Glasgow, the second city in the island, not content with taking over the gas supply, cutting the price in two, and turning back a quarter of a million dollars a year into the city treasury, took over the street cars in 1892. Hours of labor have been shortened; wages have been increased; the fares have been reduced by a half; the lines have been extended; interest has been paid on the capital invested, and, at last accounts, the tramway system was paying $150,000 a year into the general expense fund of the city, all on an average fare of less than two cents. London owns nearly all of its tramways.

There were in the United Kingdom in 1906 175 systems of municipal tramways. They carried 1,529,596,438 passengers at an average fare of 2.01 cents. When American cities learn to run municipal affairs with British honesty there is no valid reason why American workmen may not ride for two and one-half cents, and still be contributing their mites to the support of city schools and city government. American cities have made little headway in acquiring street car systems. Proposals to that effect are fought most viciously. Cleveland made a notable effort for public ownership and low fare, but private owners made a staunch fight against the public. The well disposed were certain that the city would be saddled with a debt and they feared that the income from the enterprise might be stolen outright or dissipated in providing jobs for political hangers on and ward politicians. Public ownership was voted out.

There are other forms of municipal ownership. Telephones, bathhouses, marketplaces, harbors, quays, coffeehouses, restaurants, and even saloons are maintained by cities. A number of large cities have acquired title and have torn down the buildings in slum districts, and have put up tenements to let at low prices. Experience has shown that the denizens of the old slums do not remain; but, like Dr. Holmes' creeping things when a stone is raised, slink on to some other slum; and yet there is no reason to despair. The experiment of providing decent quarters is yet in its infancy.

Statistics of municipal ownership for Great Britain in 1902 make a brilliant showing:

See Socialism; Waterworks; Railways; Postoffice; Express; New Zealand; Glasgow; Birmingham