Mind your own business: the case for municipal management

UC-NRLF

Mind Your

wo

smess

THE CASE FOR

MUNICIPAL

MANAGEMENT.

By R. B. SUTHERS.

One

Shilling

Net

ittj of a
4 (California

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MIND YOUR
OWN BUSINESS

The Case for
Municipal Management.

Mind Your Own Business :

The Case for Municipal Management.

BY

R. B. SUTHERS

IvONDON :
THE CLARION PRESS, 72, Fi,EET STREET, E.C.

I905-

BY THE SAME AUTHOR.

A MAN, A WOMAN, AND A DOG.

Cloth, 2S. 6d. ; Paper Covers, 6d.

The Westminster Review says :

"A Man, a Woman, and a Dog' is one of the most amusing
books we have ever read. Mr. Robert B. Suthers sees the
absurd side of things very keenly His onslaught on the
follies of vegetarianism will make even vegetarians laugh.
The humours of matrimony have never been better illus-
trated than they are in his exceedingly clever book."

PREFACE.

The object of the following pages is to
reply to the arguments commonly used against
municipal trading. The case for municipali-
sation is, of course, stated incidentally, but
no attempt has been made to cover the whole
ground. It would be a mistake for the reader
to suppose that all that can be said in favour
of municipalisation is contained herein.

A few of the chapters have already been
published in pamphlet form under the title
" Does Municipal Management Pay?" but
all have been revised, and some considerably
extended.

220828

CONTENTS.

PAGE.

THE CITIZEN AND THE COUNCIL 9

THE PRINCIPLE OF MUNICIPAL TRADING l6

THE FAILURE OF PRIVATE ENTERPRISE 24

THE SUCCESS OF MUNICIPAL TRADING 33

HIDDEN PROFITS 53

THE DEPRECIATION DODGE 59

THE MUNICIPAL DEBT BOGEY 65

THE AWFUL BURDEN OF HIGH RATES 79

THE RISKS OF MUNICIPAL TRADING 95

THE LIMITS OF MUNICIPAL TRADING 102

OUR BROTHER, THE SMALL PRIVATE TRADER I0g

THE PRIVATE TRADER^ DILEMMA Il8

MUNICIPAL TRADING AND HIGH WAGES 125

THE TYRANNY OF MUNICIPAL EMPLOYEES 132

THE PURITY OF PRIVATE ENTERPRISE 138

MUNICIPAL SOCIALISM AND COMMERCIAL MORALITY .... 147

TRIFLING FOOLISH OBJECTIONS 156

MUNICIPAL SOCIALISM AND CHARACTER l66

A PRACTICAL PROGRAMME 174

Mind Your Own Business :

Municipal Stepping Stones.

THE CITIZEN AND THE COUNCIL.

IF you have a few minutes to spare, I should TO the Man in
like to talk to you about a very important theStreel-
matter which concerns you closely.

You know what Municipal Government is.
You know what County Councils, Town Councils,
District Councils, and Parish Councils are. You
know that they are local governing bodies whose
duty it is to provide and manage certain services
necessary for public health and convenience.

You know these things, but I fear that many of
you have but a dim idea of the range and impor-
tance of those services. I am afraid that many
of you think that a local government council is
something apart from the people, something in
authority which can have little interest for you
personally. This is a great mistake.

" The municipality," says Mr. Lawrence Gomme, The Municipality
in Good Citizenship, "is the whole body of citizens isallthe Citizen$-
belonging to the town or city, not, as is too

CITIZEN AND THE COUNCIL.

frequently imagined and stated, the Council
elected by the citizens to conduct their affairs.
The area is the borough area, not the area of the
Council ; the property is the borough property,
not that of the Borough Council ; the executive
officers are borough servants, not servants of the
Council."

Not the Not the Town Councillors, but all the citizens

Councillor*. are the municipality.

It is all the citizens who provide the municipal
services. It is all the citizens who provide the
water supply. It is all the citizens who provide
and maintain the roads and streets. It is all the
citizens who own the municipal property, the
public buildings, parks, libraries, schools, docks,
and bridges. And it is all the citizens who pay
for these services.

The councillors are merely the representatives
of the citizens, elected by them to carry out
their desires.

Every citizen pays rates. If you do not pay
rates directly to the council, you pay them in rent
to your landlord, who passes on to the Council a
portion of the rent he receives from you.
Every Citizen is a You, then, as a member of a municipality, are
cTftafa' and an a!1 owner °^ property. Whether you get 2os. a
Employer. week, or £20 a day, you, as a citizen, are a land-
lord, a capitalist, and an employer of labour.

As such, you have certain duties and respon-
sibilities, and as a partner in the municipal firm
you have certain rights and benefits.

Do you ever realise how large a part of our
lives is ministered to by municipal service ?

10

CITIZEN AND THE COUNCIL.

Think, for instance, of the citizen of Glasgow,
who is generally considered to be the richest in
municipal institutions in the Kingdom.

A citizen of Glasgow may live in a municipal Extepl. of
house. He may walk along the municipal street, Environment,
or ride on the municipal tramcar, and watch the
municipal dust-cart collecting the refuse, which is
used to fertilise the municipal farm. Then he
may turn into the municipal market, buy a steak
from an animal killed in the municipal slaughter-
house, and cook it by municipal gas on a municipal
gas stove. For his recreation he has the choice
of municipal libraries, municipal art galleries, and
municipal music in the municipal parks. Should
he fall ill he can ring up his doctor through the
municipal telephone, or he may be taken to the
municipal hospital on the municipal ambulance
by a municipal policeman. Should he be so un-
fortunate as to get on fire, he will be put out by a
municipal fireman using municipal water, after
which he will perhaps forego the enjoyment of a
municipal bath, though he may find it necessary
to buy a new suit in the municipal old clothes
market.

In the midst of all this municipal happiness he
will probably fall down dead with astonishment
when he learns that Glasgow has no municipal
cemetery.

What is true of Glasgow is more or less true
of all our municipalities. Some localities have
developed municipal life in one direction, some
in another. Probably no two municipalities have
developed along exactly the same lines.

ii

CITIZEN AND THE COUNCIL.

Growth of You may get some idea of the extent and growth

Municipa isation. Q£ ^hese institutions by comparing the amount of
capital invested in municipal undertakings in
1875 and in 1900. In the first year the sum was
93 millions, in the last nearly 300 millions. In
1904 the total had reached over 400 millions.
General Statistics. In the United Kingdom there are 1,050 munici-
pal waterworks, 260 municipal gasworks, 162
municipal tramways, 334 municipal electricity
works, numerous municipal docks, piers and
harbours, and markets, and hundreds of municipal
parks and open spaces, libraries, museums, and
schools.

Besides the municipal institutions and services
common to most towns, you will find that individual
municipalities have undertaken services of a most
varied character.

Manchester Corporation, that is, all the citizens
of Manchester, are large shareholders in the Man-
chester Ship Canal, Liverpool and Glasgow provide
municipal lectures, Battersea has a municipal
young men's club, many towns provide municipal
concerts, Torquay owns a rabbit warren and makes
a profit on it, Colchester owns an oyster fishery, St.
Helens and several other towns have sterilised
milk dep6ts, Hull manages a crematorium, Don-
caster owns a racecourse, Bournemouth provides
golf links for visitors, Harrogate fireworks ; West
Ham runs a paving-stone factory, Bradford owns
an hotel ; scores of municipalities own property
of various kinds, while some of them run works
departments and directly employ thousands of
workers.

Individual
Developments

Municipal
Rabbits.

12

CITIZEN AND THE COUNCIL.

You must admit, then, that municipalisation
has its roots planted firmly in the life of the
people. So healthy is the tree to-day that new
branches are being sent out in every direction, and
there seems to be every prospect of its beneficent
influence spreading much further than our fore-
fathers could have anticipated.

The revival of the municipal spirit which has Municipal Habits
inspired all these undertakings has been most
noticeable during the last quarter of a century. The
massing of our population in large towns com-
pelled our rulers to grapple with the problems of
sanitation, building improvement, lighting, and
locomotion, which inevitably arise where people
are gathered together in large numbers.

Try to imagine the horrible condition of towns And a Century
a hundred years ago, when the gutters ran with
filth, when there were no paved streets, when
sewerage was a dream, and when there were no
public lighting, no refuse collection, no parks or
playgrounds, no police, no wide thoroughfares,
no baths, libraries, or art galleries, no pure water,
no cheap gas, no trams ; then ask yourself whether
there is any of the work done under municipal
management which you would like undone ?
Or whether you would not prefer to see an extension
of the principle ?

Now, the question of the extension of municipal Municipal

( ( j • , , . Extension a Vital

trading is one of the most important and Question,
vital questions of the day, and, as I said at first,
it concerns you closely.

During the last few years a dead set against
13

CITIZEN AND THE COUNCIL.

Powerful
Opposition.

Parliamentary
Inquiries.

Who the
Opponents are.

municipal " trading " has been made by a certain
section of the public.

The object of these people is to limit or curtail
the powers of local governing bodies.

So powerful is their influence that, in 1900, they
were strong enough to induce the Government to
appoint a Joint Committee to inquire into the
matter.

The Committee took some evidence, but did not
complete their investigation and issued no report.

In 1903 another Committee was appointed, but
as they had not sufficient time to go fully into the
question, they confined themselves to an inquiry
into the methods of municipal account keeping,
and issued a report thereon.

Thus, so far as Parliament was concerned, the
matter was shelved. But the agitators have not
ceased their attempts to poison the public mind
against municipal trading. The Press has been
flooded with free articles and letters showing that
municipal trading and debt are ruining the
country. Municipal " extravagance," municipal
" corruption," and municipal " losses " have been
dinned into the public ear at every opportunity.
Every rise in rates, every application for a
municipal loan, every reduction in railway divi-
dends has been made the occasion for an onslaught
on municipal trading. To its evil effects all kinds
of disasters have been attributed, from the depres-
sion in trade to the failure of the " Shamrock " to
capture the America Cup.

Chambers of Commerce, Traders' Associations,
Property Owners' Associations, Ratepayers' Asso-

CITIZEN AND THE COUNCIL.

ciations, company promoters, railway directors,
bankers, and The Daily Mail — all have joined in
the howls of execration and despair.

Eminent public men have lent their names
and influence to the agitators. Money has been
lavishly expended in the effort to warn the public
of the folly of municipal trading.

With what result ?

Instead of weakening the confidence of the
public, the campaign has strengthened their belief
in the advantages of municipal trading.

Judged by the amount of capital invested, pro-
gress since the agitation began has been much more oISXtionT1 by
rapid than at any previous period.

But the opposition is not dead, and never will
be dead so long as it is possible for a few private
individuals to make profits at the expense of the
community.

The question for you is : " Is municipal manage-
ment a good thing or a bad thing ? " If it is a
good thing, I presume that you would be in favour
of extending its scope. If it is a bad thing, it
ought to be limited, if not curtailed.

It behoves you, then, to examine the subject ™ueeQuestion at
carefully. The opponents of municipal manage-
ment say it is a bad thing, and if persisted in will
ruin the country. The only way of proving the
truth of their assertion is to study the facts.

So, if you will spare me a little of your time, I
propose to put before you the facts and arguments
used by the opponents of municipal trading,
and against them I will place the facts as to the
working of municipal trading undertakings.

You will then, I hope, be able to judge on which
side your vote and influence should be cast.

15

THE PRINCIPLE OF MUNICIPAL TRADING.

What is
Municipal
Trading ?

What is Private
Trading ?

FIRST, it will perhaps be useful to get a clear
idea of what is meant by municipal trading.
You know what private trading is. What
are the objects of a private trader ?

First, to make a living. Second, to get riches.
That is to say, he goes into business from a selfish
motive.

In pursuing these objects the private trader
benefits the public to some extent. But the
benefit of the community is not his ruling motive.
This result is only incidental.

Now, in the case of municipal trading the benefit
of the public is the ruling motive.

The difference is enormous, and it is important
that you should keep it in mind when considering
the arguments for and against municipal trading.

Take the case of the builder. Does the private
builder build houses in order to provide people
with healthy and convenient homes ?

No. He builds houses in order to make profits
for himself. It is the same with the coal-owner,
the butcher, the baker, the draper, and every
other private trader.

16

PRINCIPLE OF MUNICIPAL TRADING.

It is true that some people are supplied with Private Trade-
decent houses by private builders ; but an enor-
mous number live in unhealthy and inconvenient
houses, and some have no dwellings at all.

The private trader always pursues profits. That
is why he is such a dreadful failure.

The motive of municipal trading, on the con- M£™£|
trary, is public welfare. The benefit of all the Welfare,
citizens. That is why it is such a tremendous
success.

It is important to grasp the fact that the two
methods cannot be compared on the same basis.
The use of the word " trading " in connection with
a municipal service is really a mistake ; but, under
present conditions, it is almost inevitable, and we
must make the best of it.

When a municipality supplies water to all the Municipal Water
citizens, no one thinks of profits or losses, or talks
of the undertaking as a trading enterprise. Why ?

Because everybody realises that the supply of
pure water is a necessary public service, just as
everyone realises that the Army and Navy are
necessary services. We don't talk of the profits
or losses on the Army and Navy.

In the case of the Army and Navy, how is their
cost met ?

The citizens pay the exact sum required in the
form of taxes.

In the case of such municipal services as paving,
lighting, sewerage, street improvements, parks,
libraries, police, and education, the method of
raising the expenditure is similar.

PRINCIPLE OF MUNICIPAL TRADING.

Method of
Meeting Cost.

Municipal Gas,
Trams, and
Electricity no
Different in
Principle.

Free Trams.

The citizens pay the exact cost in the form of
rates. No one ever thinks of criticising a Town
Council because they make no profits on these
services.

Now, when we consider the question of municipal
trading in gas, tramways, and electricity, is the
principle involved any different ?

Not at all. The provision of gas, trams, and
electricity is inspired by just the same motives
as inspired the provision of roads, parks, libraries,
sewerage, police, and education. That is to say,
the benefit of all the citizens.

They differ from the other services, not in prin-
ciple, but in the methods by which their cost is
collected from the citizens.

The day may come when municipal trams and
municipal light will be just as free as municipal
streets and municipal libraries. That is to say,
a rate will be levied on the citizens for their upkeep,
and everyone will be free to use them as required.

We shall find that it will pay better to make them
free, just as it paid to abolish toll-bars on the
roads.

But until this time arrives it is convenient to
make charges for these services. We could not,
for instance, make municipal trams free unless the
municipality undertook to provide all the passenger
traffic — cabs, 'buses, and trams. Nor electric
light, while there are private gas companies
supplying the same district, although we have
made education in public schools free, notwith-
standing the existence of private schools.

18

PRINCIPLE OF MUNICIPAL TRADING.

If, then, charges must be made for these ser-
vices, does not this imply making profit or loss ?

It is clear that if the money received for tram "
fares exceeds the cost of running the system,
there will be a cash profit. Municipal manage-
ment will " pay."

If, on the other hand, the revenue is less than
the expenditure, the accounts will show a cash
loss. Municipal management will by its opponents
be called a failure.

Now, remembering that the object of municipal
trading is the benefit of all the citizens, let us see
how the question of cash profits and losses affects
the principle.

When cash profits are made by a municipal
tramway system, what becomes of them ?

Generally they are used to reduce the rates. m<> Gets the
That is to say, they go back into the pockets of Profits-
the citizens.

In the case of cash losses, the deficit is met by
levying a rate on all the citizens.

Thus, in the long run, the service is carried on at
cost price, just as the Army and Navy and the
paving, lighting, and drainage services are provided
at cost price.

A citizen of Manchester pays half-a-crown for
municipal gas, and the gas department makes a
cash profit of £60,000. These profits reduce the
rates by 4d. in the pound.

Thus what the citizen overpays in the form of Municipal
gas charges is returned to him in the form of reduced " Supplied
rates. He gets his gas practically at cost price.

PRINCIPLE OF MUNICIPAL TRADING.

Cash Profit

or Loss

only incidental.

Private Trade
must Make
Profits.

Difference Vital.

The custom of making a charge for these services
does not make them " trading "undertakings in the
same sense that a private tram, gas, or electric
undertaking is a trading enterprise.

In the case of a private trading enterprise,
making a charge is the essence of the transaction.
In the case of a municipal undertaking, making a
charge is simply a matter of convenience.

It is a rough method of administering financial
justice ; and although it seems to be the same kind
of transaction as paying the price charged by a
private profit-hunter, it is, in reality, quite different.

Does the private trader ever share his profits
with his customers ?

No. But he often makes them pay his losses.

If you ask, " Does a certain business pay ? "
it is generally understood that your question can
have only one meaning, and that is : " How much
profit in money do the proprietors of the business
make ? "

The question to be asked of municipal service,
is : "Do they add to the convenience, the healths
and the happiness of the whole community ? "

Immediately you understand clearly the difference
between private enterprise and municipal trading,
you will see that it is impossible to judge of the
value of municipal trading by the tests applied to
private trading.

The Smokeborough Working Man's Happy
Home Company, Ltd., may pay a 10 per cent,
dividend. The champion of private enterprise
would say that was a splendid example of the

'20

no

PRINCIPLE OF MUNICIPAL TRADING.

advantages of competition, and liberty, and
everyone for himself.

The Town Council of Smokeborough may build
the same number of houses and make a cash loss of
£100 a year. The champion of private enterprise
would say that was a striking illustration of the
evils of municipal extravagance, incompetence,
and corruption.

But does any sane person believe that the test Cash Profits
of cash profits is a true test of the difference in Test of Efficiency,
value of Smokeborough of the two undertakings ?

Notice, the value to Smokeborough. Not the
value to a few profit-makers. The value to all
the citizens of Smokeborough.

In the case of the Working Man's Happy Home
Company, Ltd., all that the shareholders would
ask would be : "Do they pay us good dividends ? "

In the case of the houses built by the Town
Council, the citizens would ask : " Do they add
to the health, the comfort, and the convenience of
Smokeborough ? "

They would ask the Happy Home Company, Hidden Losses
Ltd. : " What is the death-rate in your houses ? PrivateTradc
What is the disease -rate ? Are your houses
sanitary, airy, and convenient ? Are the rents
fair ? "

They would inquire whether any of the tenants
came on the rates owing to ill -health caused by
poverty due to high rents, or into the hospitals
through disease caused by living in insanitary
houses ; and they would ask whether the tenants
were able to produce wealth and use all their

21

PRINCIPLE OF MUNICIPAL TRADING.

faculties to their full capacity, or whether living
in the happy homes tended to deteriorate them.

They would find generally that in one or more
ways the Happy Home Company, Ltd., was
making profits at the expense of the tenants and
the citizens of Smokeborough.

Hidden Profits of They would build municipal houses, and they
Ser^cT* would gladly pay a cash loss of £100, because they
would know that the loss was being repaid over
and over again in the increased health and comfort
of the tenants, in decreased death and disease
rates, in decreased expenditure on Poor Law and
hospitals, and in the increased capacity of the
citizens for the production of wealth.

So in the case of municipal trams, municipal
gas, and municipal water. A Town Council may
make a charge for water to each householder, and
the revenue received may not be sufficient to carry
on the service.

But this does not prove that the municipal
water supply is a failure, or that the citizens lose
by it. The deficit is made up out of the rates
because the Council decide that these combined
methods of raising the expenditure are the fairest.
Municipal I do not say that it is impossible for municipal

WosTbie1101 trading undertakings to make real losses. No
supporter of municipal trading asserts that
municipal trading must pay under all circumstances.
An incompetent Town Council is bound to make
losses, just as an incompetent private trader is
bound to go to the wall.

But, given ordinary intelligence, municipal
trading is certain to beat private enterprise,

22

PRINCIPLE OF MUNICIPAL TRADING.

because private enterprise is handicapped by its Balance-sheets
narrow ideals of profit.

You will now see that it is necessary to know a
good deal more than the figures of a balance-sheet
before you can tell whether municipal trading
" pays " or not.

The argument that municipal trading is a
danger because it makes no profits is not relevant.
Municipal trading does not seek profits.

And, as it happens, it does make profits.

The argument that municipal trading is unfair
because it does make profits is also out of court.
I have shown that the essence of municipal trading
is the provision of a service, and that the making
of profits or losses is only one incident of the
undertaking.

To the private trader the making of profits or Private Trader

losses is a vital matter. He makes the mistake ith

of thinking the same motives induce a municipality Private Trading.
to provide a public service. Whereas the object
of a municipal service is not profits, but the welfare
of all the citizens.

THE FAILURE OF PRIVATE ENTERPRISE.
Private Enter- j j AVING got a clear idea of the principle

prise Claims to be • |

Sufficient. of municipal trading or municipal Social-

ism, we can now consider the arguments
of the champions of private enterprise, private
monopoly, and competition.

The first great argument is a direct negative.
There is no need for municipal trading, it is said,
because private enterprise is able to supply all the
needs of the community.

What are the needs of the public ?

Let us take the primary needs — food, clothing,
fuel, and shelter — and inquire how our private
traders have succeeded in supplying these neces-
saries of a healthy life.

Is it not a fact that a very large proportion of our
population have to live on food which when pure is
of a poor quality, is often adulterated, and in the
case of twelve millions is insufficient for the proper
nourishment of the body ?

Is it not a fact that the majority of our people
are insufficiently clothed ?

Is it not a fact that the whole nation is robbed
by a ring of coal owners, that the poorest people

24

FAILURE OF PRIVATE ENTERPRISE.

never have enough coal for warmth, and that
they pay higher prices than the rich, through having
to buy in small quantities ?

Is it not a fact that the overcrowding of the Claim Denied-
people, both in towns and villages, is the greatest
scandal of the time, and that in London people
have been compelled to go to the workhouse or
remain in the streets because there were no houses
to be rented ?

All these things are matters of common know- Common
ledge. In the mere necessaries of life competition preocve."ajes not
and private enterprise have miserably failed to
supply the needs of the public.

But the upholders of private enterprise and
competition deny that they are responsible for
this state of things. " Everyone has had the
same chance," they say, and " the poverty of the
people is due to natural laws."

They assert that private enterprise is always
ready to supply the demand for any commodity.

" If the people want food, fuel, houses, and
clothing, we can supply them and do supply
them," is their argument. " Therefore there is
no necessity for municipal trading."

These astounding statements are made by Even when
persons of high reputation, who are not supposed Demand Exists,
to be either physically or mentally blind.

Lord Avebury said, before the Joint Committee
on Municipal Trading, " that there really would
have been as much done in the way of housing the
working classes if the local authorities had done
nothing whatever in the matter, and it would have

25

FAILURE OF PRIVATE ENTERPRISE.

been done by private enterprise instead of being
thrown on the rates."

NO Room to Live. Another witness, Mr. William Shepherd, past-
president of the London Master Builders' Asso-
ciation, said municipalities ought not to build
houses for the working classes, because " private
enterprise will do anything that will pay, and
there is no difficulty in getting private traders
to do the work."

The private traders say they supply all demands
if the people are prepared to pay ? Is this true ?

Take the provision of houses. In the supply
of houses private enterprise has till recently had a
perfectly clear field. How have its champions
fulfilled their obligation to house the people
decently ?

The Housing Problem is the answer.

The Census returns show that nearly one-third
of the population live in an overcrowded con-
dition.

Overcrowding In London nearly one million people are illegally
overcrowded, over two hundred thousand are
packed in horrible block dwellings, nearly half a
million live three persons to a room, and thousands
live in still more crowded conditions.

Hundreds of thousands of these people are
overcrowded, not because of their poverty, but
because there are not enough houses for them to
live in. Mr. George Haw says, in No Room to
Live, " There are people to-day in our workhouses
who would come out to-morrow could they get
shelter elsewhere. But they cannot, even at
excessive rents"

26

FAILURE OF PRIVATE ENTERPRISE.

Here is a typical illustration of overcrowding.
The Rev. W. N. Davies, of Spitalfields, took a
census of some of the alleys in his parish. He
says : —

In one alley there are ten houses — 51 rooms, nearly all London,
about 8ft. by gft. — and 254 people. In six instances only do
two people occupy one room, and in others the numbers varied
from three to nine. In another court, with six houses and 22
rooms, there were 84 people — again six, seven, eight, and
nine being the number living in one room, in several instances.
In one house with eight rooms are 45 people — one room con-
taining nine persons, one eight, two seven, and another six.
For these 45 people there is one office. I have had men with
their wives and children, and with money in their pockets,
come to my door and appeal to me to find them rooms in which
to live.

Here is an extract from Mr. B. Seebohm Rown-
tree's evidence on the housing conditions of York : —

Whilst about 12 per cent, of the working-class population York,
in York are living in comfortable and sanitary houses, the
housing conditions of many of the remaining 88 per cent, leave
much to be desired. Sixty- four per cent, of the houses in
York have not more than two bedrooms.

York is a small provincial town in which there
is plenty of vacant land. " The cost of building,"
says Mr. Rowntree, " is lower than in many towns."
Yet the champions of private enterprise have failed
to house decently a large proportion of the inhabi-
tants.

The state of things in many rural districts is Rural Districts,
quite as bad. Hundreds of thousands of the
agricultural population have emigrated to the
towns during the last half-century, and one of
the chief reasons for the migration has been the
lack of cottages.

There is, then, a demand for houses, and people
are ready to pay for them. Why have the private
traders not supplied all the needs of the people ?

27

FAILURE OF PRIVATE ENTERPRISE.

Enterprise
Failed ?

In recent years the municipalities have been
awakened to the necessity of coping with the
evil, but they have not attempted to solve the
problem of housing, because public opinion is not
yet thoroughly alive to the danger to national
health of the continuance of such conditions.
Why has Private The champions of private enterprise put all
kinds of hindrances in the way of municipal trading
in houses. They have had no obstacles in their
own path, yet in one of the most important neces-
saries of life they have utterly failed to supply all
the needs of the people.

Next let us consider three services which in a
civilised community of to-day are as necessary
to a healthy life as the four already mentioned.
These are pure water, light, and means of loco-
motion.

Has private enterprise supplied these services
efficiently and sufficiently ? Are all our towns
and villages well supplied with water, with gas
and electricity, with cheap and adequate tramway
services ?

Everyone knows that the answer to these
questions is " No."

The fact is, that in nearly every case where the
municipality has undertaken the provision of
water, baths, gas, and trams, they have done so
because the private enterprise service was bad,
inefficient, and dear.

The supply of water has been municipalised
more than any other service.

Even the champions of private enterprise and
competition have been compelled to recognise

Also in Water,
Light, and
Locomotion.

insufficient

28

FAILURE OF PRIVATE ENTERPRISE.

that a plentiful and pure supply of water is abso-
lutely necessary for the health of the people. But
until last year there existed at least one flagrant
instance of the incompetence of private enterprise
to provide an adequate supply of this necessity.

Early in the last century the eight London London
water companies were competing with one another,
and the consumer got water at a reasonable price.
But the champions of free competition discovered
that they could fleece the people better by com-
bining to keep prices up.

The result was that the London water consumer
paid an exorbitant and increasing price for his
water, whether he got any or not. In some dis-
tricts the price per head was twice the amount
charged in provincial towns with a municipal
supply.

Not only were the charges high, but the water High Prices and
was often impure, and in three recent years untold Waler Fammes-
misery was caused in the East End because of the
short supply of water — in 1895 for 85 days, in 1896
for 64 days, and in 1898 for 114 days.

The efforts of London to obtain control of its
water supply were prevented for years by the
champions of private enterprise in the House of
Commons.

But at length even London was granted the c0»t of Freedom,
powers possessed by most provincial towns. The
citizens were permitted to buy out the water
companies at an enormous cost, and now the
water of London is under the control of the
Metropolitan Water Board.

29

FAILURE OF PRIVATE ENTERPRISE.

Thus in the largest city in the Empire, containing
in its water boundaries one-eighth of the popula-
tion of the United Kingdom, private enterprise
failed to supply the needs of the public in one of
the most important necessaries of life.

Municipal Gas
Statistic;.

London in the
Toils Again.

Although a large number of private traders
object to municipalities supplying gas, municipali-
sation of that service has grown apace during
recent years. There are two hundred and sixty
municipal gas undertakings, with 2,045,777 cus-
tomers, but there are still four hundred and fifty-
nine authorised private companies with 2,385,348
customers, chiefly in the smaller districts.

London, however, is in the hands of private
companies, and again furnishes an example of
private enterprise incompetence.

As the illuminating power of the gas is fixed by
Parliament, the companies are compelled to keep
up the standard. The citizens' chief cause of
complaint is the high prices charged.

A cheap supply of gas for light and power is of
the highest importance, but being in the grip of
monopolists London gas consumers are bled to
find profits for a few shareholders, and the in-
dustries of the Metropolis are considerably ham-
pered.

North of the Thames consumers have to pay
gd. a thousand feet more than those on the south,
simply because Parliament gave the private com-
pany the power to make this charge twenty years
ago. If the supply had been municipalised fifty

FAILURE OF PRIVATE ENTERPRISE.

years ago, like that of Manchester, the price would
be nearly half that paid to the private company.

The gas consumers of London lose a couple of Loses a Million
millions a year because they permitted this
monopoly to grow up.

It has been proved that municipalities can and
do supply better gas at lower prices than private
traders. Here, then, is another instance in which
private enterprise has failed to supply the needs of
the public.

Municipalities were not allowed to work tram- Municipal Tram
ways until 1896. Previous to that time they were
permitted to own the tramlines, but with one or
two special exceptions they were compelled to
lease them to private companies.

With all the advantages given to them by Par-
liament, the private companies did not supply
even the large towns with an efficient service.

For instance, at Liverpool the private company
persisted in retaining horse trams, they charged
high fares, and did not give an efficient service,
so that the public became greatly dissatisfied.

The same thing occurred at Manchester, where Failure of Private
the private company made enormous profits. EnterP"se-
For years the lowest fare was 2d., a striking
instance of private enterprise bad management.
As soon as the fares were reduced, owing to a
public agitation, the returns largely increased.
Thus it was proved that the company had not met
a demand which existed, and which they ought to
have foreseen.

FAILURE OF PRIVATE ENTERPRISE.

London once London also has been badly served by private

More' tram companies. Instead of being equipped

with l,ooo miles of tramways, London contains
only 115 miles. When the London County Council
came into existence there were thirteen companies
at work in different districts. They had con-
structed their lines regardless of public convenience.
All they looked for was dividends.

That their services were dear and inefficient
has been amply proved by the extraordinary
growth of the traffic in the forty miles now worked
by the County Council, whose efforts to further
improve and increase the tramway services have
been consistently thwarted by the champions of
private enterprise.

All over the country, since 1896, there has been a
tremendous increase in tramway traffic. This has
been entirely due to municipal action. Private
enterprise has once more failed to supply all the
needs of the public.

Ridiculous claim Accepting, then, the conditions laid down by
of Private ^e private trader himself, that he is always

Enterprise.

ready to supply a commodity if the people are
willing to pay, we find that there is no founda-
tion for the claim.

On the contrary, we find that private enterprise
has completely failed to supply several of the most
pressing needs of the community. It would be
easy to bring forward many similar examples of its
incompetence, but these illustrations will be
sufficient for our purpose.

32

THE SUCCESS OF MUNICIPAL TRADING.

THE champions of private enterprise expend
a good deal of energy in explaining to the p^phe
public that municipal management does Municipal LOJ«.
not pay. As Lord Avebury puts it, municipal
trading will " probably or certainly " lead to
" loss or bad service."

Now, when a private trader talks about a business
paying, he means only one thing. He thinks only
of the dividends received by the trader.

But, as I have shown, this test is much too
narrow to apply to a municipal service.

Lord Avebury, when putting the arguments
against municipal trading in trams, gas, and
electricity, before the Joint Committee, said : —

I think, as a general rule, a municipality is wiser not
to undertake the lighting. I might, perhaps, refer to the
very high authority of the late Attorney-General, Sir
Richard Webster, who said : " Whatever might be said
as to the profit made out of undertakings such as gas or
tramways worked by Corporations, his belief was that
if the matter was threshed out, it would be found that
the burden on the ordinary ratepayer was less where no
such risks were undertaken,"

Here we have one very high authority, Lord His
Avebury, knowing nothing about the subject "Authonty !

33

SUCCESS OF MUNICIPAL TRADING.

himself, relying on another very high authority,
the late Attorney-General, Sir Richard Webster.
™e Lord Chief j^g average person would naturally expect
"Belief." that Sir Richard's belief was founded on facts,

that Sir Richard was an authority on the subject,
and that Lord Avebury quoted him because he
knew Sir Richard was an authority.

I happen to have by me the speech of Sir Richard
Webster from which Lord Avebury quoted. What
Sir Richard did say was as follows : —

His belief was that if the matter were threshed out it
would be found that the burden on the ordinary rate-
payer was less where no such risks were undertaken.

Why did he That is where Lord Aveburv stopped. Then

Stop ? J

Sir Richard went on : —

Of course, he did not pretend to lay that down as a
fact from personal knowledge. >

Of course he didn't. He couldn't. Because
all the facts point the other way.

The above is a fair sample of the arguments
brought by the leading champions of private enter-
prise to prove the failure of municipal manage-
ment. Their very high authority is a man who
admits that he knows nothing about the facts.

As a matter of fact, municipal trading does
" pay," even in the limited sense understood by
the private traders. Many municipalities do make
" profits," and as people are still impressed by a
balance-sheet which shows a profit, it is useful to
be able to produce such figures from municipal
undertakings.

Let us study a few statistics.
34

SUCCESS OF MUNICIPAL TRADING.

A Parliamentary return issued in 1903 gives Official Statistic!,
particulars of the most important undertakings
of the municipal boroughs of England and Wales.

This return gives a fair idea of the magnitude
of municipal enterprise, and conclusively disproves
the argument that municipal management does
not " pay " in the commercial sense.

The undertakings referred to are : — Success of

Waterworks, Baths and Wash-houses, T,Si

Gasworks, Burial Grounds, Figures.

Electricity, Working-class Dwellings,

Tramways, Harbours, Piers,

Markets, &c., &c.

In these services the total capital invested was
£121,172,372.

The average annual income (for four years)
was £13,040,711.

The average annual working expenses (four
years) were £8,228,706.

Leaving an average annual net profit of Annual Profits

- 0 Nearly Five

£4,812,005. Millions.

Of these profits £1,264,544 was used to pay
interest to the stockholders, while £2,975,906
was paid into sinking funds which are used to
repay the capital borrowed.

Of the total capital £16,246,519 had already The Share of all
been paid back in this way.

Compare this result with private enterprise.
What would happen if the 121 millions were
owned by a few individuals ?

First, the charges for the services would be
higher ; second, the services would not be so

35

SUCCESS OF MUNICIPAL TRADING.

efficient ; third, the interest or dividends would

go into the pockets of a small section of the public.

Under Private Under municipal management the services are

Benefiuhe Fe°w. cheaper and more efficient than under private

enterprise, and a profit of nearly 4 per cent, on the

capital is made. But instead of going into the

pockets of a few people, the profits are used to

pay back the borrowed capital.

Under municipal management the 121 millions
will in a few years be repaid. The waterworks,
gasworks, tramways, markets, houses, piers, &c.,
will then belong to all the citizens, and having no
interest or sinking fund to provide, they will be
able to make the services still cheaper.

* * * * *

i.oso Municipal It is indeed a remarkable thing, that if municipal

Waterworks . , ,, , ,.

management is not an advantage to the public,
none of the 1,050 municipalities who own their
waterworks should apply to private enterprise to
be relieved of the burden.

The bitterest opponent of municipal trading
admits that it is wise to provide a sufficient supply
of pure water, even if there is a charge on the
rates for it.

So in many instances the municipalities are not
concerned to show a cash profit. The benefits
of a municipal supply are shown in the better
health of the citizens, and in the abundant facilities
for getting water for domestic and business pur-
poses.

Cash Profit.. But we are dealing with cash profits, and there

are some notable instances where municipal
control of the water supply has resulted in cash

36

SUCCESS OF MUNICIPAL TRADING.

profits which would make a private trader
envious.

There are two ways in which municipalities
deal with cash profits. Some reduce the charges
for the service, others use the profits to reduce the
general rates.

In Glasgow they devote all profits to making
the services cheaper and to paying back borrowed
capital.

Thus, since the Glasgow Corporation took over Glasgow's Cheap
the control of the water supply fifty years ago, they Munid^i.
have reduced the price of water from is. 2d. in
the £ rental to 5d. in the £ rental for domestic
supply.

Compare that with the price paid by the London
consumer under private enterprise.

On a £30 house in Glasgow the water rate
amounts to 12s. 6d.

On a £30 house in Chelsea the water rate amounts London's Dear

tO 30S. Water- Private.

On a £30 house in Lambeth the water rate is
£2. i6s.

On a £30 house in Southwark the water rate is
32s.

The London consumer paid from two to five
times as much as the Glasgow consumer. He
did not get so much water, he did not get as good
water, and a large part of the charges he paid went
into the pockets of the water lords, who took
over a million pounds a year in profits.

In Glasgow apart of the 5d. in the£ goes towards
paying off the capital borrowed to provide the

37

SUCCESS OF MUNICIPAL TRADING.

Municipal Pure
and Cheap.

Liverpool.

Manchester.

Bolton.

waterworks. Over a million pounds, one-third of
the capital, has thus been paid back.

Does municipal management pay ? Look at
Liverpool. The private companies failed to provide
an adequate supply, so the municipality took
the service in hand. What is the result ?

The charge for water in Liverpool is 6d. in the
£ on the rateable value.

For this small charge the citizen of Liverpool,
as Sir Thomas Hughes said, " can have as many
baths and as many conveniences as he likes, and
the same with regard to water for his garden."

In London the private water companies charged
high prices for every separate bath and con-
venience.

The water rate in Manchester is 8d. in the £ ;
in Southampton, where there has been a municipal
supply since 1420, 6d. in the £ ; at Hull, another
old-established municipal firm dating from 1447,
the rate is 155. a year on a £20 rental, and there is a
cash profit of ten to fifteen thousand a year.

Last year Bolton made £10,000 cash profits from
the municipal waterworks ; Birkenhead, £3,000 ;
Carlisle, £6,350 ; Darlington, £6,300 ; Leeds,
£15,000 ; Oxford, £5,7*5-

These few examples are clear proof of the benefits
of a municipal water supply, merely from the com-
mercial point of view.

Though the chief object of municipalities in
supplying water is not profit, but the welfare of
the citizens, the Parliamentary return mentioned
above shows that the 193 waterworks controlled

SUCCESS OF MUNICIPAL TRADING.

by the municipal boroughs made cash profits of
4 per cent, on the capital invested.
Does municipal management pay ?

* * * * *

Now let us look at municipal gas. I find from Municipal Gas
the last Parliamentary return (1903-4) that there
are 260 municipal gas undertakings in the United
Kingdom.

The capital invested is ^"37,103,279

Of this there has been repaid .£13,992,360

The income for the year is ^9,819,685

The expenditure for the year is £7, 1 82,008

The gross profit is ^2,637,677

Thus an average cash profit of 7 per cent, was
made by these municipal gas undertakings, only
six out of the 260 showing cash " losses."

Does municipal management pay ?

From another Parliamentary return I gather Profits

. , J LARGER than

that the 459 authorised private gas undertakings those of Private
made a profit of four and a half millions on a ComPames-
capital of nearly eighty-one millions. That is
equal to 5j per cent., or ij per cent, less than the
profit made under municipal management.

Not only did the private companies earn less
profit than the municipal undertakings ; they
had to charge higher prices in order to make the
smaller percentage.

The average price of the private company gas
is 2s. njd. per 1,000 feet.

The average price of municipal gas is 2s. 8d. But Prices LESS,
per 1,000 feet — threepence farthing less.

If the municipalities had charged the same price
as the private companies, they would have shown a
profit equal to 9^ per cent.

39

SUCCESS OF MUNICIPAL TRADING.

Does municipal management pay ?

Isn't it time we municipalised those 459 private
gas companies ? Then, instead of going into the
pockets of a few shareholders, those four and a half
millions would be added to the profits of two and a
half millions which now go into the pockets of all
the citizens.

After paying interest on capital and a large sum
in repayment of capital, there was a net municipal
cash profit of £967,194.
How Profits A good deal of this was used to reduce the

Reduce Rate,. general rates< por example ;_

Town, Grant to Rates Equal to

Manchester .............. ^70,000 . . $d, in the £

Leicester ................ 38,066 . . io|d<

Leeds .................. 28,740 . . 3|d,

Salford .................. 27,540 . . 7

Bolton .................. 20,000 . . 6|dr

Blackpool .............. 18,022

Wigan .................. 15,022

Rochdale ................ 1 3,000 . . 8-fcd.

Wallasey ................ 10,732 . . 7^

Warrington ............ 10,330 . . iojd<

Burnley ................ 9,000 . . 6|d,

Darlington .............. 8,500 . . i id.

Oldham ................ 8,497 • • 4id<

Stockton ................ 7,699 . . 9fd,

Borrowed Capital As in the case of water, all these towns are not
Paid Back. onjv paying lower prices for gas than a private
company would charge, but they are wiping out
the capital account. After a certain number of
years all the capital will be paid back, and there
will be so much more cash profit to reduce the
rates or reduce the charges for gas.

Here is an instructive illustration from Man-
chester and Liverpool — two cities, as regards
natural advantages for the production of gas,
practically on a level.

40

SUCCESS OF MUNICIPAL TRADING.

Manchester has a municipal gas supply. In Manchester and
Liverpool a private company owns the gasworks.

The following figures relate to the year 1897,
and were prepared by the superintendent of the
Manchester Gas Department.

The capital of the municipality was £1,833,852.
The capital of the company was £1,918,011.

The illuminating power of the gas was a fraction
in favour of Liverpool : Manchester 19 • 16 candle-
power, Liverpool 20*50 candle-power.

The net cost of production of gas in Liverpool
was 2s. id.

The net cost of production of gas in Manchester
was is. gd.

The price of gas in Liverpool was 2s. gd.

The price of gas in Manchester was 2s. 3d. Manchester,

The gross profit per i,oooft. in Liverpool was Municipal« **>

The gross profit per i,oooft. in Manchester was
7Jd.

Of these profits, Liverpool paid 8Jd. per 1,000
into the shareholders' pockets.

Manchester paid 3d. per i,oooft. in interest and
sinking fund.

Fourpence per i,oooft. went to reduce the rates.

Thus we find that Manchester produced gas at Half Manchester
less cost, sold at a lower price, and returned Q^|° the
half the profits to all the citizens.

The citizens of Liverpool paid nearly 25 per cent. AH Liverpool
more for their gas, and got nothing back in relief
of rates.

Moreover, the citizens of Liverpool had to pay
8d. a quarter for hire of meter.

41

SUCCESS OF MUNICIPAL TRADING.

In Manchester there was no charge.

In Liverpool a deposit of 153. had to be made,
and the gas user had to pay for fixing.

In Manchester the deposit required was only
5s., and fittings and fixings were free.

Municipaiisation Thus a small consumer in Liverpool, using
Benefits the Poor T)000ft. a quarter, would really have paid 33. 5d.
per i,oooft.

In Manchester he would have had to pay only
2s. 3d.

If the Manchester Gas Department had been
managed as badly as the private company at
Liverpool, the citizens of Manchester would have
had to pay in that year £152,349 more for their
gas.

Instead of which they made a profit of £70,000.

Does municipal management pay ?

*****

Municipal Turning to electricity and tramway under-

StatuS«.y takings, we find similar records of municipal
triumphs.

There are in operation, or in course of con-
struction, 334 municipal electricity undertakings,
and the amount of capital invested therein is
£32,000,000.

Of all the undertakings managed by the munici-
palities, electricity is likely to prove the most
profitable, and the ratepayers will have good
reason to congratulate themselves in the near
future on the enterprise and foresight of their
representatives in getting control of this industry.
Electricity is only in its infancy. As a motive

42

SUCCESS OF MUNICIPAL TRADING.

power, and for lighting purposes, it bids fair to its Future,
supersede gas, steam, oil, and everything else.

No wonder, then, that the dividend hunters so
savagely fight for its monopoly by private enter-
prise.

Long lists of municipal electric losses are scat-
tered broadcast amongst the ratepayers, and all
the terrifying arguments and corrupt arts of the
dividend hunter are used to frighten the citizens
into dropping this rich find into the hungry
maws of the private trader.

But municipal electricity pays. The Parlia- Average Profits
mentary return before quoted shows that an average
gross profit of 4 per cent, was made by the 102
municipal boroughs dealt with therein.

If you examine the list of municipal electricity
undertakings which show cash losses, you will
find that most of them are only in their first or
second year of working, and it is a well-known
fact that electricity undertakings are not expected
to pay until after this period.

Municipalities have to acquire buildings and sites,
and lay down plant, all of which takes time ;
but the interest and sinking fund payments must
be made whether there is any revenue or not.

It also takes time to work up the business.
Electricity is still a new and untried commodity
in many minds, and the innate British con-
servatism of our people makes them chary of
trying anything new-fangled.

But in many municipalities large cash profits are
shown, and the crowning proof of the better manage-
ment of the municipal undertakings lies in the

43

SUCCESS OF MUNICIPAL TRADING.

Price 20 per cent.
Less than Private
Enterprise.

What London
Loses by Private
Enterprise.

What Liverpool
Gains by
Municipal
Electricity.

fact that they charge on an average nearly 20 per
cent, less than private companies.

The following figures are taken from Garcke's
Manual of Electrical Undertakings, 1901-2 : —

Average price for current obtained by 43 private

companies 4-94

Average price charged by 97 municipalities . . 3-82

Percentage of profit made by companies 5 -oo

Percentage of profit made by municipalities . . 4-30

Thus the municipalities charged more than 25
per cent, less for current, while their profits were
only three-quarters per cent, less than those of the
companies.

In London the thirteen private electric lighting
companies charged in 1903-4 three-farthings a
unit more than the municipalities. They made
profits of £646,834, which would have been
reducing the rates of the citizens had they been
wise enough to get control of the whole Metro-
politan service.

In the provinces the municipalities charged fd.
a unit less than the private companies. Thus the
municipal customers saved nearly £900,000, not-
withstanding which the municipalities made ij
per cent, more in gross profits than the high-price
companies.

Look at Liverpool again. The Corporation
there paid a private company £400,000 for the
electric undertaking which had cost the company
only £250,000. That is to say, the municipality
had to earn interest and pay contributions to a
sinking fund on a dead weight of £150,000.

The prices charged by the company were
for lighting and 5d. per unit for power.

44

SUCCESS OF MUNICIPAL TRADING.

In spite of their heavy burden, the Corporation
have gradually reduced the charges to 3|d. per
unit for private light, 2d. for public light, and
2d. and id. for power, according to the quantity
used.

Thus under municipal management the prices
are 50 per cent, less than the private company
charged, and after paying interest and sinking
fund the Council is able to devote £10,000 a year to
the reduction of the general rates.

The story of Leeds is somewhat similar. The And Leeds.
Corporation paid £368,000 for a private undertak-
ing, giving the shareholders £170 for every £100.
Yet they were able to reduce the prices at once.
In two years they made a cash profit of £16,348.

I might quote many similar examples. Cash
profits, after payment of interest and sinking
fund, were as follows last year in —

Aberdeen £9,951 Birmingham.... £10,412 Electric shocb

Ashton-u-Lyne .... i ,270 Bolton 10, 149 j~ private

Belfast 6,094 Bradford 9,758 Enterprise.

Brighton 6,959 Glasgow 42,522

Bristol 8,207 Halifax 5,873

Edinburgh 23,997 Liverpool 31,301

Manchester 31,809 Nottingham .. 12,542

Portsmouth 4,000 St. Pancras . . 20,583

Does municipal management pay ?

The Tramway returns for 1903-4 show that the Municipal TV
number of tramway undertakings controlled by Stati8tic8-
municipalities in the United Kingdom was 162,
10 1 of which were owned and worked by the local
authorities.

The capital invested was £28,060,524.

45

SUCCESS OF MUNICIPAL TRADING.

Profits 8 per cent. The gross profits were £1,924,072, equal to 8
per cent, on the capital.

When the opponents of municipal management
are confronted with the facts about municipal
success in tramway undertakings, they are com-
pelled to understudy the ostrich. They bury
their heads in the sand, and, like a lot of indignant
Betsy Prigs, assert angrily that " there ain't no
sich thing."

For instance, Mr. Dixon Henry Davies, before
the Joint Committee on Municipal Trading, said,
" The fact that Glasgow has not got anything
like the mileage of tramways that Boston (United
States) has got, is an example of the fact that the
necessities of the community are nothing like so
well served by a municipality as they are by private
enterprise." This is what the champions of
private enterprise call argument.

Glasgow. The point is, " How do the municipal tramways

in Glasgow compare with the service previously
supplied by private enterprise ? "

From 1871 to 1894 a private company had a
lease of the tramways from the Corporation.

When the lease expired the Corporation tried to
arrange terms with the company for a renewal,
but the company refused to accept the terms offered.

Private Trains a Moreover, there was a strong public feeling in

Failure. favour of the Corporation working the tramways.

The company service was not efficient, it was dear,
and their bad treatment of their employes had
roused general indignation.

So the Corporation decided to work the tramways,
and the day after the lease expired they placed on

SUCCESS OF MUNICIPAL TRADING.

the streets an entirely new service of cars, cleaner,
handsomer, and more comfortable in every way
than their predecessors.

The result of the first eleven months' working Municipal Trams
was a triumph for municipal management.

The Corporation had many difficulties to con-
tend with. Their horses were new and untrained,
their staff was larger and unused to the work, and
the old company flooded the tram routes with
'buses to compete with the municipal trams.

Notwithstanding these obstacles, the Corpora-
tion introduced halfpenny fares, they lengthened
the distance for a penny, they raised the wages of
the men and shortened their hours, they refused
to disfigure the cars with advertisements, thus
losing a handsome revenue, and in the end were
able to show a profit of £24,000, which was devoted
to the Common Good fund and to depreciation
account.

Since then the success of the enterprise has been Remarkable
still more wonderful.

The private company, during the last four weeks
of their reign, carried 4,428,518 passengers.

The Corporation, in the corresponding four
weeks of 1895, carried 6,114,789.

In the year 1895-6 they carried 87,000,000.

Last year they carried 188,962,610.

In 1895-6 the receipts were £222,121.

Last year (1903-4) they were £717,893.

In 1895 there were 31 miles of tramway.

Last year there were 140 miles.

In 1895 there were 170 cars.

Last year there were 462 cars.

47

SUCCESS OF MUNICIPAL TRADING.

Fares 30 to so The citizens of Glasgow have a much better
per cent. Lower. servjce ^g^ ^g prjvate company provided, the

More Wages and f aF6S SLTQ from ^Q to 5O per Cent. loWCF, and the

Less Hours. men work four nours a day less and get from 53.
a week more wages and free uniforms.

The capital invested is gradually being repaid
out of the receipts, and in thirty-three years the
tramways will be free from " debt," and conse-
quently a still more valuable municipal asset than
to-day.

Three Y""' The gross profits for the last three years amounted
' to the colossal sum of £724,000;

Under a private company the citizens of Glas-
gow would be paying into the pockets of a few
shareholders £100,000 to £150,000 a year — even if
the private company charged the same fares and
paid as high wages as the Corporation, which
is an unlikely assumption.

Does municipal management pay ?

Liverpool. The experience of Liverpool under private

enterprise and under municipal management is
another exposure of the foolish statement that
municipal management does not pay.

Less fortunate than Glasgow, Liverpool had to
pay the private company £567,375 for the tram-
way undertaking, a sum which Sir Thomas
Hughes told the Municipal Trading Committee was
" a most unreasonable figure."

Notwithstanding this burden, Liverpool has
made a striking success of its tramway department.

A Similar Story. The f ares have been reduced to nearly half, the
wages of the men have been increased by 55. a
week, their hours are three a day less, the mileage

SUCCESS OF MUNICIPAL TRADING.

has been doubled, and a reserve fund of over half
a million has been built up.

In the last year of the company they carried
37,000,000 passengers.

In 1904 the Corporation carried 116,000,000.

The receipts under the company were £290,743.-

The Corporation receipts in 1904 were £547,624.

The gross profits in 1903 were £203,257, and £32,ooo Profits
after deductions for interest, sinking fund, and, 1903.
depreciation, there remained a surplus of £32,000
for reduction of the general rates.

Does municipal management pay ?

Denied control over her water and gas supplies,
London has at anyrate made a brilliant success of
the small section of tramways wrested from private
enterprise by the County Council.

The citizens of London have for eight years London's
owned 94 miles of tramways, 48 miles of which Municipal Trams,
are on the north of the river. The latter are leased
to a private company.

Twenty-four miles on the south of the river
have been worked by the Council for the last six
years.

The result of the first year's working of horse-
drawn trams was a net profit of £54,847, which
went into the pockets of the ratepayers.

The Council carried 6,500,000 more passengers
than the old company, they reduced the fares,
and they gave the men a ten-hour day, which cost
£10,000 a year more in wages.

Since then the system has been electrified, and
the benefits of municipalisation have been distri-
buted in various ways.

49

SUCCESS OF MUNICIPAL TRADING.

Reduce In the eight years the whole of the Council's
0 tramways have contributed £293,000 to relief
of the rates. They have also paid off £461,000 of
the " debt " or capital borrowed, and set aside a
renewals fund of £66,000.
Extra Wages. These enormous cash profits have been made

£30.030; Lower f. ... ,.,. ,t ...

Fares, £100,000 after giving better conditions to the men, which
per Year. cost more than £30,000 a year extra, after reducing

the fares and giving the public in this way more
than £100,000 a year, and after denying themselves
an income which might have been got from
advertisements on the cars.

Other towns owning and working the tramways
have had similar successes. To give the details
would be mere repetition of the facts given above.
Here are a few figures showing the cash profits
in certain towns for the year 1903-4, and the amount
in the £ by which these profits reduced the rates.

Q , _ Town. Profits! Rates Reduced by

Manchester

£2 ~,W

50 ooo

/ 4

3 J

fd

Liverpool

27 171

I :

K*

Glasgow

25 ooo

d

Nottingham
Salford
Hull

13,000 ..
12,000 ..
11.500 ..

3:
3:
ti

d.
d,

^.

Municipal

Markets.

Does municipal management pay ?

*****

The Times was good enough to admit that
"it is quite in accordance with the traditions
of our social history that local markets should be
under the control of the local authority."

But all our markets are not under the control
of the municipalities, as the citizens of London
know to their cost.

SUCCESS OF MUNICIPAL TRADING.

The Duke of Bedford levies a tax of Jd. to 4d. Duke-ridden
on every package which enters Covent Garden London'8 LoMCi-
Market, and the Duke in this way takes £15,000
a year out of the pockets of the people, for doing
nothing.

The result of the private monopoly of markets
in London is that there is a lack of facilities for
the distribution of food, and the price of the articles
goes up from 25 to 50 per cent., owing to the
number of middlemen needed to convey them to
customers.

Under municipal management many markets Municipal Profits,
not only protect the people from consuming diseased
food, they cheapen the articles, and they make
cash profits for the reduction of the general rates.

At Cardiff the municipal fish market has reduced
the price of fish by 33 per cent.

Last year Liverpool made cash profits of £16,000,
Derby £2,600, Manchester £14,000, Nottingham
£6,000, Stafford £100, Belfast £5,000, Bolton
£2,000.

The Parliamentary return already quoted
shows that 228 municipal boroughs own markets,
and have invested therein £6,181,080. The average
annual gross profit was £285,182, or 7 per cent, on
the capital still owing, nearly two millions of the
borrowed capital having been repaid.

Here, then, is another striking example of the
ability of municipal trading to show cash profits.

Does municipal management pay ?
* * * * *

I think the evidence I have given is sufficient
to prove that municipal trading can and does in

51

SUCCESS OF MUNICIPAL TRADING.

Municipal fi numerous instances " pay " in the only way that
Trading "Pay," the private trader understands paying— that is,

it shows cash profits.

In the next chapter I will deal with some other
aspects of this profits question.

HIDDEN PROFITS.

WHEN driven into a corner by the over-
whelming evidence of the commercial
success of municipal trading, the cham-
pion of private enterprise shifts his ground, and
often stands on his head.

He retorts : " Municipalities ought not to make Municipal
profits. If municipal trams are only a service,
they ought to make neither profit nor loss."

Now, I have already explained that the making
of cash profits or losses is only an incident in a
municipal service.

The cash profit or loss arises from the method
of making charges for the service.

It may be convenient to show a profit. It may
be convenient to show a loss.

If the tram fares cover the cost of the service and
leave a balance over, there is a profit which reduces
the general rates.

If the water charges do not cover the cost of the
services, there is a cash loss which is met by the
general rates.

" That's all very fine," says the private trader;
" but how are we to know whether a business pays

53

HIDDEN PROFITS.

or not, except by the profit or loss shown on the
year's working ? "

Ca«h Profits not We may test private business in this way, but
we can only test municipal trading by considering
all the facts, and all the facts concerning a municipal
service are not contained in the cash profits or
losses shown in the balance-sheet.

Let us take an illustration. Six years ago the
London County Council commenced to work 24
miles of tramways in South London. In North
London they own a system 48 miles long leased to
a private company.

Sir A. Henderson Sir Alexander Henderson, of the Great Central
S3KlrT"" Railway Company, said, " In North London, the
"Nothing." company pay the London County Council a sub-
stantial rent for the lines they lease, and make a
profit on the working. In the South, without rent
to pay, the profit is practically nothing."

Sir Alexander is a business man, a commercial
expert and chairman of an important railway
company.

Now, what are the facts ? All the facts.

From 1899 to 1903 the County Council trams
made profits of £72,900.

These profits remained after payment of interest
and sinking fund charges amounting to £180,000.

Remember, now, what I said about profits which
do not appear in municipal balance-sheets. Are
there any in this case ?

In the previous chapter I told how the County
Council had reduced the fares, increased wages,
and introduced other improvements for the benefit
of the people.

54

HIDDEN, PROFITS.

Are these not profits, just as much as the cash Hidden Profits
profits ? Let us see if we can set them out in
figures : —

Net cash profits for the four years £72,900

Extra wages and holidays to employes .... 120,000
Cheaper fares than Northern System 400,000

£592,900

Five hundred and ninety-two thousand pounds
is a substantial sort of NOTHING. And remember
these profits were made in addition to the interest
and sinking fund charges of £180,000.

Thus, if the trams belonged to a private com-
pany, they would have had a profit of £772,000,
and this, instead of benefiting the citizens, would
have gone into the pockets of a few shareholders.

Does municipal management pay ?

These hidden profits are never referred to by the
champions of private enterprise, but they always
make a big noise about a cash loss on any municipal
undertaking.

They take a cash loss as proof that municipal
trading is a failure, but they only deceive the
ignorant and unthinking.

Ask for all the facts, and see that you get them.

You probably know that ours is the worst
telephoned country in Europe. Why ? Service Bad,

Because a private company has had the monopoly,
and seeking only for dividends has utterly failed
to supply the public needs, and at the same time
has charged exorbitant rates for a bad service.

Only some half-dozen municipalities have been
allowed as yet to undertake this service. What
is the result ?

55

HIDDEN PROFITS.

Municipal
Telephones
Cheap and
Efficient.

Glasgow.

The " Paltry "
Profit Dodge.

The municipal telephones cost about half the
rates charged by the private company, and some
of them make cash profits.

Last year Glasgow made £3,650, Guernsey
(where there is a telephone to every 33 persons)
£200, Portsmouth £1,215 — after paying interest
and sinking fund charges.

Paltry profits, maybe ; but is it not better to pay
£5. 55. for a municipal telephone service than to
pay £10 to a private company, and get a bad
service into the bargain ?

The Glasgow Municipal Telephones got more
customers in two years than the National Telephone
Company got in twenty. So did Portsmouth and
Brighton. At Tunbridge Wells the Council in
six months had six times as many customers as the
company had secured in eight years.

A favourite method of opponents of municipal
trading is to take the net cash profits of a municipal
undertaking after interest and sinking fund have
been deducted, and then to talk of the "paltry "
profits.

To give a simple illustration : Suppose a private
tram company with a capital of £500,000 made a
profit of 5 per cent. They would quote it quite
correctly as a profit of £25,000.

Now suppose a municipal tram service with a
capital or " debt " of £500,000. The municipal
trams also make a profit of £25,000.

Out of that profit of £25,000 the municipal
service would have to pay (i) interest on capital,
£15,000 ; (2) contribution to sinking fund, £10,000 ;

HIDDEN PROFITS.

total £25,000, thus leaving nothing for relief of
the rates.

Lord Avebury would say that the municipal
service had made no profit, not even J per cent.

You can see that the profit is just the same in
both cases ; but when the whole debt was paid off
by means of the sinking fund, the municipal service
would belong to the people, and not to a few share-
holders.

Take another example — Leeds : Capital, The Trick
£1,108,000, net profits, £52,000, to relief of rates. Exposcd-

That is called a paltry profit of less than 5 per
cent. |

But Leeds made a gross profit of over n per cent.,
and if the trams had belonged to a private com-
pany they would have had £125,520 to distribute
to a few shareholders.

Instead of which £52,000 went to the relief of rates
and £73,000 was used to pay interest, sinking
fund, and depreciation charges.

Another variation of the argument is one used Lord
by Lord Avebury. "It is easy to show a paper insinuates
profit if you have a monopoly," he says. " I Cooked,
doubt very much whether there is any real profit."

Now, I daresay you noticed in some of the
examples of municipal trading I have given, that
after the municipalities took them over from
private enterprise there was immediately an
enormous development of the service.

This proves two things. First, that the private
enterprise supply must have been insufficient
and inefficient. Second, that the cash profits

57

HIDDEN PROFITS.

The Charge
Disproved by
Facto,

Paltry
Argument*.

shown by the municipalities were not " paper
profits," but real profits.

The municipalities did not need to fake the
accounts to show paper profits, for that is what
Lord Avebury's charge amounts to. The business
expanded so rapidly under their management that
they couldn't help making profits.

Does Lord Avebury really think that the
Councillors of London, Leeds, Manchester, Liver-
pool, Glasgow, &c. (some of them with reputations
equal to his own)— does he think that these men
conspire with the officials to deceive and rob the
citizens ?

Does he think that the citizens are so foolish
that they don't know when they pay lower charges
for municipal services than they did for private
company service ?

Does he think that the municipal employe"
only dreams that he is working ten hours a day
instead of sixteen, that he has a six instead of a
seven-day week, and that his wages are 5s. a
week more ?

Are not these paltry arguments for a banker
and scientist to use ?

Municipal trading results in loss. Municipal
trading makes no profits. Municipal trading
makes paltry profits. Municipal trading ought
not to make profits. Municipal trading is immoral
if it makes no profits, and it is also immoral if it
does make profits.

With such a farrago of impotent fumblings the
champion of private enterprise tries to demolish
the municipal stronghold 1

Is anyone deceived by such preposterous and
contradictory arguments ?

THE DEPRECIATION DODGE.

TV 7HEN some glib financier or statistical The Depreciation
\\ genius gets up on a platform and in-
forms his audience that municipal under-
takings are built on foundations of sand which
may at any moment be seized with creeping
paralysis, and precipitate the deluded ratepayers
into the gaping morass of bankruptcy, they are
apt to be duly impressed.

" What provision do I find," asks the orator,
contemptuously — "what provision do I find in
municipal accounts for depreciation ? A paltry
•0042693 per cent."

Depreciations and decimal points are such recon-
dite things to many people that they imagine a
man who talks of them so familiarly must know
what he is talking about.

This does not always follow. The champion
of private enterprise is so blinded by his own
point of view, that he is quite unable to understand
the difference between private profit methods
and public welfare methods.

For example, in The Windsor Magazine, Mr. J.
Holt Schooling, a statistical expert, wrote some

59

THE DEPRECIATION DODGE.

Mr. J. Holt
Schooling's
Ignorance of
Municipal
Principles.

Mr. Schooling's
Idea of "Proper
Depreciation*

What
Depreciation is.

articles on local Rates and Taxes, and illustrated
them by tables and diagrams in order to make
their meaning clearer.

Mr. Schooling doesn't understand the principle
of municipal trading, and judges its results entirely
by private enterprise tests.

Referring to the Parliamentary return from
which I have several times quoted, he says : " The
amount of depreciation put apart was £193,274, on
a capital of £121,170,000. Here and there,
no doubt, some of these businesses are worked at
a profit. But we are dealing with them as a whole,
in their various main groups, and it is abundantly
clear that these ' reproductive undertakings ' are
being worked year by year at a very considerable
loss. The so-called profit in some of them is merely
a nominal profit, which vanishes as soon as one
makes anything like a proper allowance for
depreciation."

Mr. Schooling accordingly draws up a beautiful
table, in which, after deducting what he calls the
" moderate amount of 5 per cent." for deprecia-
tion, he shows that the 1,029 reproductive
municipal undertakings referred to are making a
yearly loss of £5,486,945.

Mr. Schooling is a statistical expert.
What is Depreciation ?

If you have £1,000, and you go into the printing
business and spend £1,000 in machinery and
fixtures, you can understand that in time the
machinery will be worn out. It will be necessary
to buy new machinery and fixtures.

60

THE DEPRECIATION DODGE.

If you are wise you will set aside out of each year's
profits a sum called the Depreciation Fund.

Then, when the time comes to buy new machinery
and fixtures, you will be able to draw on your
Depreciation Fund for the amount required.

If you do not do this, but spend all your profits,
you will either lose your business entirely, or suffer
considerable loss through having to use worn-out
and obsolete machinery.

You will agree that it is a wise thing for a private
trader to have a Depreciation Fund. Does not
the same principle apply to municipal trading ?

Undoubtedly. If a private electric light works
depreciates in value, so must a municipal electric
light works.

Why, then, do not the municipalities make
" proper " provision for depreciation ?

They do. Every municipality which raises a
loan for any undertaking is compelled by law to Fund is.
set aside annually a sum sufficient to pay back
the capital borrowed in a certain number of years.

This sum set aside is called the Sinking Fund.

Now, private traders are not compelled to provide
a Sinking Fund.

The time allowed to municipalities by the
Government for repayment of borrowed capital is
usually fixed in this way.

If the machinery and plant to be purchased is The Sinking
likely to wear out in thirty years, the loan has to Fund is a
be repaid in thirty years. If in fifty years, the Fund,
loan has to be repaid in fifty years, and so on.
Thus the Sinking Fund provides a sum sufficient

61

THE DEPRECIATION DODGE.

How it Works.

to replace the undertaking at the end of the loan
period. It serves just the same purpose as a
Depreciation Fund.

For example. Suppose a Corporation borrows
£100,000 at 3 per cent, for a tramway undertaking.
They would have to pay interest £3,000, Sinking
Fund £2,100, to repay the capital in thirty years.

At the end of the loan period the Corporation
would have £100,000 in the Sinking Fund, and if
the undertaking has been kept in as good working
order as is usual with municipalities, they would
have into the bargain a valuable asset of almost
equal if not a greater value.

Mr. Schooling may know a good deal about the
customs of private enterprise; but how many
private enterprise tram companies set aside " the
moderate allowance of 5 per cent, for deprecia-
tion " ?

The Municipal Journal investigated the accounts
of twelve of them for 1903. These twelve systems
belong to the British Electric Traction Trust,
whose officials are always bragging about the
Sound Commercial Lines on which they are con-
ducted.

What do these paragons of private trading
allow for Depreciation ?

A beggarly ij per cent.

And Municipal. Twenty-four municipal tram undertakings, on
the contrary, had set aside 2f per cent., in addition
to paying contributions to Sinking Fund.

I have by me an analysis of the accounts of the
thirteen private electric lighting companies of

Private
Enterprise
Methods of
Depreciation.

62

THE DEPRECIATION DODGE.

London for 1903, and I find that not one of these
wealthy companies set aside 5 per cent.

The highest is only 3j per cent., and six out of
the thirteen did not set aside as much as I per
cent. !

A still more striking exposure of the absurdity Mr. Schooling
of Mr. Schooling's "moderate 5 per cent." %£"*** by
basis of depreciation is provided by the Parlia-
mentary Tramway Returns for 1903-4.

That official document shows that the 162
municipal tramway undertakings set aside for
depreciation, reserve, and renewals, in addition
to Sinking Fund, the sum of £479,430, and the
150 private companies set aside £134,215, and did
not provide Sinking Funds.

The municipal average is 3! per cent.

The private company average is only ij per Municipal

, Depreciation

C6nt- Higher than

It is clear, then, that there is no rule of deprecia- E.
tion which can be applied to all kinds of private
enterprise. The experts differ as to the amount
which ought to be set aside.

The municipalities, however, are compelled
to set aside Sinking Funds, so that they at any-
rate are in a safe position.

All this talk about Sound Commercial Lines is
so much sound and fury, designed to frighten the
ratepayers.

It would be a splendid thing for the opponents
of municipal trading if they could compel municipal
undertakings to set aside a Depreciation Fund
equal in amount to the Sinking Fund, as some of
them want to do.

63

THE DEPRECIATION DODGE.

By this means they would add a burden to the
undertakings which in many cases would wipe
out the cash profits.
The Object of the Then we should hear from Land's End to John
o' Groat's a wail of despair about the " Awful
Losses on Municipal Trading."

Lord Avebury and his friends talk about
" paper " profits, but I notice they never allude to
" paper " losses. Losses, they insist, are real.

It won't do. The argument of Mr. Schooling is
quite untenable. He entirely ignores the Sinking
Fund, and is completely ignorant of the principle
of municipal trading, and of the practice in private
trading.

The municipal undertakings are all right. Their
Depreciation Fund is a fixed payment, which
cannot be shirked. To make them set aside still
more would be contrary to reason and justice.

THE MUNICIPAL " DEBT " BOGEY.

H

AVING no solid arguments to bring against The "Bogey" of
municipal trading, some of the champions

of private enterprise exercise their inge-
nuity in the manufacture of " bogeys."

They remind me of a newsboy I once heard in
the Strand. The evening papers contained no
news of a sensational nature, so the enterprising
newsvendor invented some in order to hasten
the sale of his stock.

Rushing along the gutter, he cried in a hoarse
voice, " DREADFUL SUICIDE OF A SHIPWRECK.
DREADFUL— SUICIDE— SHIPWRECK." The people
stopped him and bought his papers. He was a
private trader, I may say.

In like manner these opponents of municipal
management try to get up scares to frighten the
people into buying their wares in the dearest
market — the market of private enterprise.

Their favourite bogey is MUNICIPAL DEBT.

FOUR HUNDRED MILLION DEBT.

THE BURDEN OF MUNICIPAL EXTRAVAGANCE.

LONDON IN PAWN.

ALARMING INCREASE OF MUNICIPAL DEBT.

Its

Manufacturers.

National Debt
and Municipal
Debt.

MUNICIPAL " DEBT " BOGEY.

This is the kind of headline we see in The Daily
Mail and other papers which fight for the dividend
hunter against the public welfare.

The increase of municipal debt is also a favourite
topic of company promoters, bankers, tramway,
gas, and electric shareholders, whose gains at the
public expense are diminished by every increase
in municipal management.

They are aided and abetted by ignorant writers
in the Press, who " snore and hiss " in the most
dreadful manner, hoping to hinder the progress
of municipal trading by describing spectres and
goblins which exist only in the imaginations of the
writers.

"Debt! Debt! Debt!" they cry. "Beware
of municipal debt ! Terrible increase ! On the
road to ruin ! "

A common method of the opponents of municipal
trading in presenting this bogey argument is to
compare the National Debt with the Municipal
Debt.

YEARS.

NATIONAL DEBT.

MUNICIPAL DEBT
(England and Wales).

1874-1875.... £755,000,000 £93,000,000

1899-1900 — £629,000,000 £293,000,000

Decrease £126,000,000 Increase £200,000,000
They announce these figures in awestruck tones,
much as the pothouse orator settles his opponents
by asking, " What did Gladstone say in 1870 ? "
And the pothouse orator's question contains about
as much reason and argument as the comparison
given above.

We had paid off 126 millions of the national
debt (we have put 200 on since 1899), and we had

66

MUNICIPAL " DEBT " BOGEY.

incurred 200 millions more municipal debt. Very
well. What of it ?

What has national debt to do with municipal why Compare
debt? In what does one resemble the other ? them?
Why should we be scared by these figures ?

The opponents of municipal trading never tell
us. They rely on the terrifying magic of the word
" debt " to paralyse the intelligence of the people.
They shout " Wolf ! " and expect us to run.

Let us see if there is a wolf. First, what is the
National Debt ?

We know what the national debt is. We know What the

.,,. , ,. 111, • • National Debt is.

that the 629 millions of national debt owing in
1900 had been blown to glory.

We know that we provide out of our earnings
some 25 millions a year to pay the interest and
sinking fund of the debt.

Now, what is the Municipal Debt ? Had that Whatth^
293 millions been borrowed for guns and explosives Debt is.
and armaments ? Had that money been blown
into space ?

Not at all. The 293 millions had been spent
in making roads, in constructing waterworks and
gasworks, in laying down and equipping tram-
way services, in building public offices, baths,
hospitals, asylums, workhouses, schools, bridges,
cemeteries, docks, harbours, piers, police stations,
sewage works, markets, libraries, parks, and
houses.

Have we anything to show for the national
debt?

Absolutely nothing except the glory, and the National Debt
shareholders in the national debt won't take Assets— "Glory."

MUNICIPAL " DEBT " BOGEY.

glory in payment for their loans. They demand
hard cash. Twenty-five millions a year.

The municipal debt to-day is 400 millions.
We " owe " 400 millions.

Do we " own " nothing ?

Solid Municipal The municipalities, all the citizens, own all the
roads, drains, sewers, public buildings, parks,
libraries, a thousand waterworks, two hundred
and sixty gasworks, three hundred and thirty-four
electricity undertakings, one hundred and sixty-
two tramways, two or three hundred markets, a
hundred and fifty cemeteries, forty-three harbours,
piers, and docks, numerous baths, wash-houses,
and working-class dwellings, thousands of schools,
and thousands of acres of land.

Which is the wolf ?

The national debt is a bottomless pit, into which
we pour millions of treasure.

The municipal debt is an acorn, out of which
will grow mighty oaks with far-spreading branches.

When we have paid off the national debt (if we
ever do), we shall have the bald satisfaction of
knowing that we are out of debt, and that we have
paid in interest many times the original amount
borrowed.

The Absurdity of When we have paid off the municipal debt, we
the Comparison. snall have a splendid property worth hundreds of

millions of pounds. And it will belong to all the

citizens.

Yet the opponents of municipal trading have the

audacity to compare the municipal debt with the

national debt.

68

MUNICIPAL " DEBT " BOGEY.

Let us go a little closer into the matter.

Mr. Dixon Henry Davies, secretary of the Mr. Dixon Henry

Davies & Fog.

Chesterfield Chamber of Commerce, read a paper at
the Society of Arts some time ago. Dealing with
municipal debt in the bogey way, he said : —

Well might a citizen in Manchester cry to his local
governors, " The State has chastised me with rods, but
ye have chastised me with scorpions," for while his debt
to the nation is only £16. 6s, gd., his debt to the munici-
pality is £29. is. 4d,

That is to say, each citizen of Manchester owes
to national debt shareholders £16, and to munici-
pal debt shareholders £29.

Mr. Dixon Davies asserts that the Manchester
man is to be pitied because his municipal debt is
larger than his national debt. Is he ?

If one man tells you that he borrowed £16 and Fireworks anj
spent it on fireworks, and another man tells you he Furniture
borrowed £29 and spent it on household furniture,
which man would you consider the wealthier ?

According to Mr. Dixon Davies, the man who
spent his money on fireworks is the better off,
because the sum he spent happens to be less than
the amount spent by the man who bought furniture;

And Mr. Dixon Henry Davies is a business man.

In respect to the £16 owing for national debt,
the Manchester citizen resembles the man who
bought fireworks. The £16 has been blown into
space. There is nothing left but the smell.

In respect to the £29 owing for municipal debt,
he resembles the man who bought furniture for his
house. He has spent the £29. But he has still got
the furniture.

MUNICIPAL " DEBT " BOGEY.

Manchester's Manchester has spent, or invested, seven millions

Municipal Assets. Qn ^ magnificent waterworks which supplies some
of the cheapest and purest water in the country.
Manchester has spent 2j millions on gasworks
which supply some of the cheapest and best gas in
the country. Manchester has spent i J millions in
equipping its splendid tramway system, Manches-
ter has spent a million on the finest town hall in
the world, Manchester has spent millions on sewage
works, free libraries, street improvements, picture
galleries, parks, and schools.

Manchester's Do these things exist, or have they been dissolved

like the baseless fabric of a national debt ?

Manchester's municipal debt is £29. That is
heavy. Mr. Dixon Henry Davies quoted it
because it was heavy. Why is it so heavy ?

Why so Heavy. Ten pounds of the £29 is due to the fact that
Manchester invested five millions in the Ship
Canal. Why did the citizens make that invest-
ment ?

Because private enterprise failed. Private enter-
prise sank ten millions in making the Canal, and
then they found themselves in a hole. Who got
them out ?

Municipal trading. Municipal debt came to
the rescue. The citizens of Manchester invested
five millions to save the private enterprise 10
millions from being absolutely wasted.

Manchester's total debt is 20 millions. What
does Manchester own ?

Assets Worth Manchester owns undertakings and property
t5hanMDe°bnt!more valued at 254 millions. Five and a half millions

MUNICIPAL " DEBT " BOGEY.

more than the debt. And this valuation allows
nothing at all for goodwill.

7s municipal debt a burden ?

Debt. Debt. Debt ! Lord Avebury and his
friends always shake their heads solemnly about the
alarming increase of debt. They never mention
the municipal assets.

Sheffield has a debt of £8,630,522. Twelve Sheffield's Debt,
pounds seven and eleven pence per head of the
population. What an awful burden !

But Sheffield also owns waterworks, tramways, sheffield-s Asset
electricity works, and markets worth £5,367,344. Q^llions to the
And Sheffield owns baths, libraries, museums,
dwellings, parks, buildings, lands, Street im-
provements, sewers, &c., worth £4,148,368. Total
assets £9,515,762, four millions more than the
debt.

It is rather curious, is it not, that bankers,
business men, and railway directors forget such
an important item as assets ?

The 400 millions of municipal debt is
the safest investment in the country. Not only
are these assets of sufficient value to pay off the
400 millions, but to provide also a substantial
surplus.

Wouldn't Lord Avebury and his friends be
glad to get the municipal undertakings for 800
millions, if they had the chance !

The opponents of municipal trading make a The Word
dishonest use of the fact that the money invested
in municipal undertakings is called " debt."

They know well enough that the municipal debt

71

MUNICIPAL " DEBT " BOGEY.
Municipal is no"more"and:just as much " debt " as the capital

" Debt * it really .

" Capital." invested in a private company.

For example. In Manchester the Corporation
owns the gasworks ; in Liverpool a private company
own the gasworks.

Up to 1897 Manchester had spent £1,833,000
on its works ; the Liverpool company had spent
£1,918,000.

The £1,833,000 spent by Manchester is called
" debt " ; the £1,918,000 spent by Liverpool is
called " capital." What is the difference ?

There is no difference except in name. The
Manchester " debt " is just as much capital as
the other.

How was the Liverpool capital raised ?

It was subscribed in sums of varying amounts
by individuals.

How was the Manchester " debt " raised ?
"Debt" and ^n exactly the same way. It was subscribed in

cCmpa?ed sums of varying amounts by individuals.

Suppose you had saved £200 and wanted to
invest it.

If you invested £100 in the Manchester Corpora-
tion Gas Stock and £100 in the Liverpool Gas
Company shares, what would be the difference ?

The company would " owe " you £100, just as
much as the Manchester Corporation owed you
£100, and in the balance-sheets of the two under-
takings your £100 would appear as " Liabilities."

The Liverpool Gas Company shares bear divi-
dends according to the profits made.

The Manchester Gas Stock pays a fixed dividend

72

MUNICIPAL " DEBT " BOGEY.

or interest. Any surplus profit goes into the
pockets of all the citizens.

Mr. Dixon H. Davies, Lord Avebury, Mr. J. Municipal
Holt Schooling, and the other brilliant business g
experts call the Manchester " debt " a burden on Private "Capital.
the Manchester citizens. It is not as much a
burden as the capital of the Liverpool Gas Com-
pany. Let us see.

Since the Manchester Corporation took over the
gasworks, they have handed over 2j millions of
profits for the relief of the rates.

That is to say, they have paid out in this way
about £5 per head of the population.

The Manchester gas " debt " is only about £4
per head.

So that the Manchester citizen has actually
received in profits more than the total gas debt.
In addition he has paid back half the debt, the gas-
works plant and machinery (which belong to him)
could be sold for a sum which would pay the
balance of the debt twice over, and he has been
supplied with gas at a lower price than the Liverpool
citizen.

Now, what is the position of the Liverpool
citizen who has no awful burden of gas debt ?

The Liverpool citizen has not received £5 in Man^he8ter
profits from the private gas company. He has Municipal Gas
paid a high price for his gas. And he does not Liverpool1?
own any gasworks. p5-w G-

No. The Liverpool citizens have paid into the " CaPita1-"
pockets of a few individuals more than the 2\
millions received by the citizens of Manchester.

73

MUNICIPAL " DEBT " BOGEY.

They have paid a higher price for their gas, and
they have not a single penn'orth of property in
the gasworks. They still belong to the private
shareholders.

Private "Capital" Well might the Liverpool citizen exclaim,
" Private enterprise hath chastised us with scor-
pions, but municipal management shall pour oil
into our wounds."

Afraid that the assurance that he is in debt may
not be enough to terrify the citizen, the cham-
pions of private enterprise emphasize his peril by
alluding to the ENORMOUS municipal debt, the
HUGE municipal debt, the terrible BURDEN of
municipal debt.

Is it a huge debt ?

Let us compare it with the total national wealth.
Municipal Debt Municipal debt, 400 millions. Total national
wealth, 16,000 millions.

That is to say, all this hullabaloo about burdens
is raised because we " owe " 400 millions — one-
fortieth part, 6d. in the £, 2j per cent, of our
national wealth— on account of municipal debt
borrowings.

And we don't owe it. We have assets which, if
sold, would wipe out the debt and leave a handsome
profit.

The Daily Mail, which hates municipal trading as
the owl hates the light, says : " The need is great
for some check upon this incurring of indebtedness
by local authorities. The Chancellor of the Ex-
chequer is vigilantly watched by Parliament
and public when he spends money. It is scarcely

74

MUNICIPAL " DEBT " BOGEY.

incorrect to say that no one watches and checks
the expenditure of municipalities."

These statements are, of course, the exact
opposite of the truth. There is a strong and
growing feeling that some check is required on
national expenditure, and everyone but The Daily
Mail knows that municipalities can only borrow
after obtaining permission of the Local Govern-
ment Board, and sums borrowed under the Public
Health Acts are limited to the assessable value
of the borough for two years.

What is wanted is more municipal borrowing. More Municipal

"Debt "Wanted.

If the municipalities are not allowed to borrow
money for trading undertakings, what will happen ?

Municipal " debt " will stop growing. Yes.
But will the public be any the richer ?

Suppose that municipalities wanted to borrow
20 millions for trams and electric undertakings
this year, and suppose that Parliament said, " No,
we will not give you powers."

The result would be that the 20 millions would And Less Private
be borrowed or subscribed as " capital," by private
enterprise. Municipal debt would be 20 millions
less, but private capital would be 20 millions more.

The profits on the capital would go into private
pockets. The services would be dearer and less
efficient, and the undertakings would never
belong to the citizens.

Consequently the checking of municipal debt
would be to injure the public welfare.

Sir Alexander Henderson and the expert
statistician, Mr. Holt Schooling, think they have

75

MUNICIPAL " DEBT " BOGEY.

produced a crushing argument against increase of
municipal debt when they tell us that the increase
is wholly out of proportion to the increase in popu-
lation, and that it greatly exceeds the increase in
rateable value.
Municipal Debt The rateable value of Manchester is 4 millions,

said to be Out of , J_

Proportion to and the municipal debt is 20 millions.
Rateable Value. Awful and alarming increase ! Debt five times
the rateable value ! shriek the Schoolings.

But why in the name of the gospel of getting
on should we be alarmed ?

What is rateable value ? It is the estimated
net value of land, houses, and property on which
rates are levied.

What Rateable You live in a house whose rateable value is £20.
Value is. You have invested in drainage, tramway, light,

garden, library, policeman, hospital, &c., £80,
four times your rateable value.

You have borrowed this £80, and you pay the
interest and a portion of the capital back yearly
out of your income.

Some of this income you get as profits from
part of the £80 invested.

Now, as a man of common sense, wouldn't you
be perfectly satisfied with the position of affairs so
long as you were able to pay your way ?

Your rateable value is £20. It was £18 ten years
ago, and your municipal debt was only £40. Were
you any better off ?

Not a bit. For £30 of the extra debt which
you owe now is invested in trading undertakings
which do not add a penny to your rates. On the

MUNICIPAL " DEBT " BOGEY.

contrary, they give you a profit to help pay the
rates on the other things.

The idea that municipal debt ought to increase The Argument
no quicker than rateable value is preposterous. Fallacious-

It is like asserting that a man cannot get a
larger income unless he spends all the increase on
the rent of a bigger house.

Suppose I live in a house or shop of £50 rateable
value, and I have £2,000 invested in a business.

I borrow another £2,000 to extend the business.
Meanwhile the rateable value of my shop has been
increased to £60.

Terrible increase of capital ! Alarming improve-
ment in trade ! Out of all proportion to the rise
in rateable value !

Isn't the argument ridiculous ?

The rateable value of the whole country has Security for
increased 50 millions during the last twenty years. Debt^Ae Total
But the national wealth has risen from 10 to 16 j;lcon?e of the
thousand millions, and the national income has
risen from 1,300 to 1,750 millions a year.

According to Mr. Holt Schooling's method of
argument, these vast increases are alarming and
terrible, because they are out of all proportion to
the 50 millions increase in rateable value !

What is the security for the National Debt ?
The taxes. Whence are taxes obtained ? From
the income of the people. That income depends
on their industry. So with municipal debt;

It is said that the security for the municipal
debt is the rateable value.

That is a gross mistake. The security for the
municipal debt is the industry of the people. The

77

MUNICIPAL "DEBT5 BOGEY.
Up with security is their total income, not the value of houses

Municipal Debt ^ buildings abne

Is it necessary to expose this bogey argument
any further ?

Remember, the greater the municipal debt the
less private enterprise there will be.

The greater the municipal debt the cheaper and
better the services will be.

The less private capital the less profits going
into a few pockets.

The less profits going into a few pockets the
richer all the citizens will be.

UP, THEN, WITH MUNICIPAL DEBT.

78

THE AWFUL BURDEN OF HIGH RATES.

ANOTHER argument of the '"orrible out- Municipal
rage " school is the assertion that municipal incVa"* Rate?
trading increases the rates.

" It is criminal," say the champions of private
enterprise, " to add to our municipal debt. Look
at the rates we are paying now."

Thus they try to make the public believe that
municipal debt and municipal trading are the cause
of high and increasing rates.

Their chief object is to persuade the people that
it is municipal trading in " reproductive " under-
takings like gas, trams, electricity, that causes the
rates to go up.

These undertakings yield cash profits. Hence
the anxiety of the champions of private enterprise
to relieve the citizens of the awful burden.

Is it a fact that municipal trading in these
undertakings increases the rates ?

The Parliamentary return quoted previously The Assertion
is the answer. That return showed that the Di«Proved-
municipal trading undertakings referred to made a
net profit of £378,821 after payment of interest
and sinking fund.

79

AWFUL BURDEN OF HIGH RATES.

This disposes of the misstatement that municipal
trading increases the rates.

By Facts. If we take the " trading " undertakings, and

leave out the baths and wash-houses, the cemeteries,
the working-class dwellings, and the piers and
docks, services which are not really " trading "
enterprises, the profits show a much higher per-
centage. Thus the waterworks made 4 per cent,
gross profit, gasworks 7 per cent., electricity supply
4 per cent., tramways 5 per cent., and markets 7
per cent.

How, then, can it be said that municipal trading
causes the increase of rates ?

There are thirty-two thousand local authorities.
Is it reasonable or honest to say that municipal
trading is the cause of the high rates because in
a few instances the undertakings show a cash loss ?

Ought Municipal Proved to be in the wrong on this point, the

Red^Rltfsof0 opponent of municipal trading tries another line

1 5 years ago ? of argument.

" You say that municipal trading pays, and that
it reduces the rates," he retorts. " Why, then,
have the rates gone up ? "

" On the municipalist's theory the growth of the
debt which has accompanied municipal trading
on a colossal scale should have led to a decrease
in the rates," says The Daily Mail, instead of
which " the rates in England and Wales in ten
years have increased 50 per cent."

But no municipalist ever put forward the theory
that the cash profits on municipal trading in trams,
gas, and electricity and markets ought to pay
for the cost of education, street improvements,

80

AWFUL BURDEN OF HIGH RATES.

sewerage, libraries, parks, hospitals, poor law,
asylums, bridges, piers, and all the other services
rendered by the municipalities.

What the facts prove is that the rates would be
still higher if it were not for the cash profits on
municipal trading.

An actuarial expert on The Times made a list of
a number of towns, with their rates in the £ paid
in 1886-7.

Then he made another list with the rates in the
£ for 1900-1.

He discovered that the rates had gone up, and
he discovered that in the same period the municipal
trading debt had gone up.

" It seems to me fair," he said, " to test these "The Times'"

. Actuarial Expert

municipal undertakings by the effect which is aays " Yes."
shown in the rates. Have these municipalities
been able to decrease their rates or have they
not ? "

It seemed to him fair ! An actuarial expert,
one who is supposed to be " skilled in computa-
tions."

A simple illustration will knock the bottom The Absurdity of
out of this expert gentleman's argument. the Demand.

Manchester's municipal gas provided cash profits
of £70,000 last year.

This amount makes the rates 5d. in the {, less
than they would have been if a private company
had supplied the gas.

Manchester invested £5,000,000 in the Ship Manchester Ship
Canal to save the enterprise from ruin. To provide
the interest on the debt, the citizens for years
paid a rate of is. in the £.

F 81

AWFUL BURDEN OF HIGH RATES.

Large " Debts '
and Large
Municipal
Trading means
Lower Rates.

Facts in Proof.

Thus we have an increase of rates, is. Decrease,
5d. Net increase, yd.

The actuarial expert of The Times would say
that this increase proved that the Manchester
Gas Department was a failure !

Could a ten -year-old school boy make such an
awful mess of a " computation " ?

If the contention of The Daily Mail, the
actuarial expert, and Lord Avebury were true,
viz., that municipal debt and municipal trading
cause high rates, we should expect to find that
those towns with large trading debts and
numerous municipal trading undertakings ought
to pay the highest rates.

We should expect to find towns with no trading
debts or small debts paying the lowest rates.

What are the facts ?

Just the contrary. The towns with the biggest
debts have lower rates than the towns with the
smallest debts.

Mr. Robert Donald showed in The Contemporary
Review that in 42 towns with big trading debts
the rates were 45. yd., in 32 towns with small
trading debts the rates were 43 yjd.

In Bath the trading debt was £237,867. Rates,
45. 2d.

In Edinburgh the trading debt was £2,022,620.
Rates, 2s. 8d.

According to The Daily Mail genius, the rates of
Edinburgh, with that enormous debt, ought to
have been eight times as high as those of Bath.
Instead of which they were is. 6d. in the pound
less.

82

AWFUL BURDEN OF HIGH RATES.

Look at the awful example of Darlington : — Darlington's

Municipal

1886-7. I900-I. Trading Reduces

T> , i TN i A r r Rates by 1/7 in

Total Debt .. £315,727.. .. £259,593 the£.
Of which the Trading

Debt was .. 163,055.. .. 101,223

Rates .. .. 55. 5d 35. iojd.

The opponents of municipal trading never
breathe the name of Darlington. The rates of
Darlington had decreased in the fourteen years by
is. 7d. in the £, yet there is no town of its size
in the country which indulges more in the dread-
ful vice of municipal trading.

Darlington owns gas, water, and electricity
works, markets, and tramways. Its profits on
these undertakings in 1900-1 were £12,312, equal
to a rate of is. 7d. in the £. Thus, without
municipal trading the rates would have been 55. 5d.
in the £, instead of 35. lojd.

Here, then, is an example where the rates were
actually less than they were fourteen years before.
But, generally speaking, rates have increased.

If the increase is not caused by the municipal
debt on municipal trading, to what, then, is it
due?

It is caused by the payment for municipal
services which are not trading undertakings.
That is to say, for what are called unremunerative
services.

If we examine the returns of local expenditure
for England and Wales for the two years 1884-5
and 1902-3, we shall get a clear understanding of
the true causes of high rates.

83

AWFUL BURDEN OF HIGH RATES.

The principal items of expenditure were as
follows : —

1884-5. 1902-3.
Million £ Million £

Sinking Fund and Interest . . 9-8 . . 20 • 3

Highways .............. 7-8 . . 10 • o

Education .............. 4-5 .. ii-o

Poor Relief .............. 7-4 .. 9 '6

Waterworks .............. 2 • o .. I • 7

Gasworks ................ 3*0 .. 5*4

Police .................... 3-5 .. 5-7

Sewerage, &c ............. 1*9 .. 4*0

Electric Lighting .......... — .. i • o

Lunacy .................. 1*7 .. 2 "j

Harbours, &c ............. 2*5 .. 1*9

Trams .................. • I .. 2 • 5

Lighting ................ -9 .. 1-7

Miscellaneous ............ 8-5 . . 15-5

Now, on all the " trading " undertakings
included in the above list, on trams, electricity,
water, and gas, there is a profit. The municipal
income from them exceeds the expenditure.
NO " Cash But there is no cash profit on education, no cash

Pront on police, no cash profit on sewerage, lighting,

Sewerage. Qr lunacy.

Education,

&c., &c. These are the items which have caused the

terrible increase in rates.

The waterworks, gasworks, tramways, and
electricity undertakings provided, in 1902-3, 18
per cent, of the total municipal income ; but the
cost of keeping them up was only 1 1 per cent, of
the total expenditure. But for this profit the
rates would be still higher.

AWFUL BURDEN OF HIGH RATES;

Is the matter clear now ? We cannot eat our
cake and have it. When the ratepayer grumbles
about high rates, does he ever ask himself which
of the municipal services he would like to abolish ?

Does he wish to stop poor relief ? Does he wish These Service.
to abolish the schools ? Does he wish to return (/nigh RaTel
to the filthy and insanitary conditions of a century
ago, when there were no rates for sewerage, and
lighting, and scavenging ? Does he wish to be
his own policeman and fire brigade ? Does he
want to drink disease-laden water ? Does he
want to banish parks, libraries, museums, and art
galleries ?

It is these services which have caused the increase
in rates, not municipal trading in trams, gas,
electricity, and water.

Education costs 7 millions a year more, highways
2 millions a year more, poor relief 2 millions a
year more, police 2 millions a year more, sewerage
2 millions a year more, lunacy I million a year
more, public lighting I million a year more, and
the interest and sinking fund payments n millions
a year more.

As regards the last item, it must not be forgot-
ten that the trading undertakings, gas, water,
electricity, and trams, pay their own interest and
sinking fund charges out of revenue. The increase
of rates under this head is caused by interest
and sinking fund charges on the debt for un-
remunerative services, highways, sewerage, edu-
cation, &c.

Of the total municipal debt (370 millions) of
England and Wales for 1902-3, 129 millions, or

85

AWFUL BURDEN OF HIGH RATES.

One Third the
Huge Debt not
a Burden, but
a Relief.

When is a Rate
High or Low ?

about one-third, was owing on account of trams,
electricity, gas, waterworks, and markets. And
not one halfpenny of this huge trading debt of
129 millions involved an increase in the rates.

All the increase was due to the other services,
not the trading services.

I think it ought to be sufficiently clear now that
municipal trading and the debt on municipal
trading do not increase the rates.

Yet there is no doubt that the rates in some
places are a " burden." There is a loud outcry
about high rates, and the opponents of municipal
trading do their best to make the ratepayers believe
that the limitation of municipal trading would
stop the increase.

They argue in this way : '* Look at Liverpool,
Leeds, or Manchester. They have municipal
trams, and electricity, and gas, and water, and
their rates are 75. or 8s. in the £. Now look at
Chowbent. They have no municipal trading, and
their rates are only 55. in the £."

They say that 8s. in the £ is a high rate, and 55.
in the £ a low rate.

But you cannot say a rate is high unless you
are comparing it with a low rate for exactly the
same services.

If I paid 55. for a hat, and you paid los. for a
hat, would it be correct to say that the price of
my hat was low and the price of your hat was
high?

It would all depend. If the hats were of exactly
the same quality, your price would be a high price
and mine a low one.

86

AWFUL BURDEN OF HIGH RATES.

But if your hat was twice as good in quality as
mine, it would be absurd for anyone to say yours
was a high-priced hat compared with mine.

The same reasoning must be applied to the rate
question.

If you are paying 53. in the £, are you getting
value for your money ? If you are paying los.
in the £, are you getting value for your money ?

It ought to be plain to the meanest comprehen- TowniVarym
sion that no two towns have exactly the same Municipal

J Requirements.

problems of municipal government to face. The
area of the towns varies. Flint has an area of
3,333 acres, and a population of 4,625. Folkestone
has an area of 2,481 acres, and a population of
30,690. Seven times the population on a less
area. How can you compare the sewage rates,
the street lighting rates, the police rates of two
towns like these ?

Leeds has an area slightly larger than that of
Manchester. But the rateable value of Leeds is
only 2 millions, while the rateable value of Man-
chester is 4 millions. How, then, can anyone
pretend to draw conclusions about " high " and
" low " rates simply by comparing the amount of
rate in the £ paid in each town ?

The rates of Newcastle are 55. 3d. in the £. The
rates of Manchester are 73. 8Jd. in the £. Is one
low and the other high ? Compare Rates.

How can we say, unless we know what the citizens
of each place are getting for their expenditure ?

If the citizen of Newcastle is getting value for
his 55. 3d. he ought to be satisfied, and if the citizen

Gateshead: No
Municipal
Trading, yet
Rates " High."

Darlington :
Large Trading,
yet Rates
"Low."

Nevertheless,
Rates are a
Burden.

AWFUL BURDEN OF HIGH RATES.

of Manchester is getting value for his 75. 8Jd. he
ought to be satisfied.

To say that towns with municipal trading
undertakings must have high rates, and towns
without must have low rates, is a statement which
could only be made by an ignorant expert of some
kind.

Gateshead has no municipal gas, no municipal
water, no municipal trams, no municipal electricity.
Its rates are 75. in the £.

Darlington has municipal water, gas, electricity,
and trams. Yet its rates are only 55. 6d. in the
£ ; is. 6d. less than Gateshead.

The opponents of municipal management are
killed by their own boomerang. Their arguments
about high rates are as foggy as their arguments
about the burden of municipal debt.

What you have to consider is, not whether your
rates are more or less in the £ than those of some
other town, but whether or not you are getting
value for your expenditure.

" All you say may be true," says the worried
ratepayer. " I understand now that municipal
debt is not a burden, and that municipal trading
does not increase my rates, but, after all — my rates
are ' high.' I can't afford ."

Ah ! That is a legitimate argument. The
ratepayer may have good grounds for complaint
about the amount of his income which is paid away
for municipal services. For the rates he is paying
he may be getting full value in municipal services,
but a man whose wife is in need of a new frock

88

AWFUL BURDEN OF HIGH RATES.

thinks he cannot afford to pay rates for municipal
sewers and libraries and concerts and hospitals.

But when you inquire into the matter, you Why ?
will find that it is not high municipal rates that
make him poor, but high private enterprise profits.

Not excessive municipal trading, but excessive
private profits.

Consider the case of a Glasgow citizen. The
chief items in his expenditure are house rent,
food, fuel, and clothes. Where does he purchase
these ?

From private enterprise.

The three next important items are water, light,
and trams. Where does he purchase these ?

From the municipality.

I have shown how the municipal management
of these services has reduced their cost by half.

Suppose houses, coal, food, and clothes were
supplied by the municipality, and that the reduc-
tion of cost was the same in these services.

Thus, a man paying £2 a week for rent, food,
coal, and clothes would then pay £i.

Would he grumble about high rates then ?

You don't hear the citizens of Glasgow com-
plaining about the high rates charged for trams,
gas, and water.

It is rent that takes the money — rent and Rent and Private
private profit.

If the ratepayer will go still deeper into the Rate8
matter, he will find that one reason why he resents
paying " high rates " is because he does not get
all the benefits for which he pays.

For example, of the 370 millions of municipal

AWFUL BURDEN OF HIGH RATES.

The Landlord's
Big Slice.

A Generous
Syndicate.

debt owing in England and Wales in 1902-3, nearly
44 millions were invested in highways and street
improvements.

Who benefits by street improvements ? Who
pays for them ?

We, the ratepayers and taxpayers, pay for them.
And when we have paid for them, the landlords
who own the lands and shops and houses in the
streets raise their rents.

We pay for the improvements, and then we pay
a fine to the landlords for improving their property.

Read this extract from The Great Problem of
Our Great Towns : —

Early in 1898 a powerful syndicate, with a capital of
a million sterling, promoted a remarkable Bill in Parlia-
ment. The promoters of this Bill were willing to under-
take, at their own cost, the " improvement " of a large
area in Westminster, to widen existing streets and make
new ones ; to drive a new thoroughfare. 9oft. wide, from
the House of Lords to Horseferry Road ; to pull down
the old houses and to build new ones. Moreover, they
offered to present London with a new Embankment (of
a sort) continuing the existing Embankment from the
Parliament House to Lambeth Bridge.

Why was this syndicate so generous ? Because
they knew that the effect of the improvement would
be to send up the value of the property built and
to be built on the area. They would have made
millions of profit.

This was such a good thing that they didn't
want to wait till the ratepayers had made the
improvement. They actually offered to do the
work for nothing (?)

So the improvements that we pay for through
the rates fill the pockets of the landlords and the
few dividend hunters.

90

AWFUL BURDEN OF HIGH RATES.

The land value of London is £16,000,000 a year, London's Land
and is increasing daily. This value is due to the ^Millions,
presence and industry of the large population living
in London. The landlords have not created one
single penn'orth of it.

Here is a shop in the Strand. A shop ! It
looks more like a rabbit hutch. Measure it.
Width, 9ft. ; depth i8ft.

What is it worth ? What would it be worth in
the middle of Essex ? About half -a-cr own a week.

The rent of the Strand shop is £500 a year. Ten
pounds a week. Eighty times as much as the
same space would be worth in Essex !

What is the cause of the difference in value ? who Made it ?

In Essex there are few people. In London there
are millions.

Did the landlord make the people and bring
them there ?

No, he didn't make the people, but he made the
laws which permit him to raise his rents as the
population increases, and the wealth made by the
people grows.

Did the landlord pay for the widening and
improvements of the Strand, which made it a
convenient street for traffic and marketing ?

No. The ratepayers paid, and are paying forwhoGet.it?
the improvements. The landlord sits still and
smiles, and draws the profits. The ratepayers
grumble at " high " rates, and listen to experts
and impostors who try to persuade them that
municipal debt and municipal trading are the
causes of their poverty.

AWFUL BURDEN OF HIGH RATES.

Other municipal expenditure has the same
effect. Every penny we spend on making our
towns more healthy, more beautiful, and more
convenient, increases the rents of the landlords and
makes it easier for dividend hunters to extract
huge profits from the people.

The municipal expenditure of London is 15
millions a year.
London Land If the people of London municipally managed

Values would . . , , f , , .

Pay ALL the the land of London, they would now have-
£16,000,000 a year with which to pay this
£15,000,000. There would be no rates at all.

Instead of which they give the landlords
£16,000,000 a year and pay the rates in addition.

The burden of rates ! What about the burden of
private profit, and rent ?

All the municipal services of the United Kingdom
cost but a paltry no millions a year. What
do we pay in rent ? 275 millions.

We get something for the no millions, but the
275 millions is mostly plunder, which we yield to
the landlords without a murmur. '

The terrible increase of rates and debt !

What about the terrible increase of private
profits ?

Rates in I have shown what a small proportion of our

N™t£»a\0?ncome total wealth is invested in municipal assets ; 6d.
in the £.

How much of our national income do we spend
on the upkeep of municipal services ?

About is. 3d. in the £. Sir Robert Giffen tells
us that the national income during the last twenty

92

AWFUL BURDEN OF HIGH RATES.

years has increased from 1,300 millions a year to
1,750 millions.

An increase of 450 millions a year. We are
earning in extra profits in ONE YEAR a sum greater
than the whole municipal debt piled up during
half a century!

National Income. Municipal Expenditure.

1,750 millions. no millions.

That is, we spend one-sixteenth of our income Only

1/3inthe£.

on such necessary services as sewerage, paving,
lighting, police, education, highways, hospitals,
and poor relief.

Is it extravagant ? Or is it mean and paltry ?

Would it be extravagant and expensive for a
man with £500 a year to spend £32, one-sixteenth
o* his income, for a policeman to protect his house
from burglars, for a fireman to protect his house
from fire, for a sanitary expert to keep his drainage
in order, for a medical officer to cure him when
suffering from infectious disease, for the provision
of light outside his gate at nights, for the run of a
library, for the use of a recreation ground, for
protection from private enterprise food adulterators,
and the score of other services now rendered
by the co-operation of all the citizens in a
municipality ?

As a matter of fact, our municipal goods are the
cheapest and best of all we buy.

Not a reduction of expenditure, but an increase,

Greater

is the great need of the time. We want better Municipal
houses, better streets, more light, more libraries, Badly" WarTted.
more parks, more concerts, more schools, more

93

AWFUL BURDEN OF HIGH RATES.

How to Get swimming baths, and cemeteries (to bury the ex-

the Money.

The rates are " high," not because the municipal
services are not worth the money, but because
the man who pays the rates does not get what he
pays for.

Rates are not high in relation to the value of
the services rendered. They are high in propor-
tion to the incomes of most of the people who
pay them.

The ratepayers' remedy, then, is not a reduction
or limitation of municipal management, but an
extension. Not a throwing off of the " awful
burden," but a redistribution of the pressure.

We must municipalise the land and the houses.
We must have that rent. We earn it. We must
have it. We must have municipal coal, we must
have municipal bread. We must have municipal
milk and meat.

We are going to have them.

The municipalisation of land values alone would
pay all the rates of to-day, and leave a handsome
surplus.

94

THE RISKS OF MUNICIPAL TRADING.

THE bogeys of municipal debt and high A New
rates having been completely discre- Bo8ey<
dited, the opponents of municipal trading
ask us to cower and tremble before a nice new
spectre.

Beware the Jabberwock ! The claws that
scratch, the jaws that snatch ! Beware the
MOTOR 'Bus, for which your trams will be no
match !

We are told that the motor 'bus is going to
supersede the tram. In a week, or perhaps a
month, all the tramways and tramcars in the
country will be fit only for the scrap heap. The
unfortunate ratepayers will consequently lose all
their money. Let them, then, be warned in time,
and stop municipal trading.

But the ratepayers are not so easily frightened.
They have heard those strident voices before.
They have listened to the cry of " Wolf " so often,
and have so often found that the wolf was a goose
that laid a golden egg, that their attitude is rather
one of expectancy and hope than of fear.

Is this another " wolf " of the municipal debt

95

Ratepayers
Ought Not to
Take Risks

RISKS OF MUNICIPAL TRADING.

tribe ? Is it really a Boo jura this time ? Or is it
only the same dividend-hunting Snark ? Let us
look it in the face and see.

The argument is that it is unwise for the rate-
payers to undertake trading enterprises, like trams
for instance, because in a few years a new invention
may displace them. Then the plant would have
to be scrapped. The money invested would be
lost, and the ratepayers would have to repay the
losses out of their own pockets.

What a gloomy outlook !

The dividend hunter says : " The ratepayers
ought not to take such risks. It is unwise. It is
reckless. It is cruel. Let me take this burden on
my shoulders. If I own the trams, and a new
invention ruins me, you will not be hurt. You
will lose nothing."

Noble dividend hunter ! He never mentions
that along with the risks he also means to take the
profits.

Is the outlook for the ratepayers so gloomy ?
I think not.

In the first place, the motor 'bus is not going to
supersede the trams. But let us suppose that it is.

Here is the position. The citizens of Glasgow
New inventions. haye investe(i two miHiOns in a tramway service.

A motor 'bus is invented which will carry the
passengers at a less cost than trams. What is
Glasgow to do ?

Are the citizens to open their doors to a few
dividend hunters and allow them to run the trams
off the streets ? Would it be wise ? Would it
be just ? Would it be sane ?

Nor Profits?

The Danger of

96

RISKS OF MUNICIPAL TRADING.

What ? After fighting the same dividend
hunters out of the city ? After establishing a
magnificent tram service, and improving the
conditions both for passengers and employes ?
After investing two millions of capital ?

Why should they ?

The naive suggestion of the dividend hunters
that they will be allowed as a matter of course
to pillage the citizens once more is worthy of
Huck Finn's Duke of Bilgewater.

If a motor 'bus is found to be a better and Municipalities
cheaper means of locomotion than trams, would New inventions.
not the reasonable plan be for the citizens to intro-
duce the new vehicle themselves ?

Couldn't they manage the motor 'buses just as
well as the electric trams ?

Most certainly. The idea that a municipal
service must be scrapped to clear the way for a few
dividend hunters is preposterous. It is funny.

What happens when a new invention supersedes
an old method ? Electricity as light and motive
power has been possible for thirty years.

Has electricity superseded gas and steam ? Has
private enterprise scrapped all its gas and steam
plant ? Are all the tramways and railways
electrified ?

You know that no such sudden changes are
made. The displacement of the old methods is
gradual.

The demand that municipalities must scrap
their tramways immediately a new method of
locomotion is discovered is a part of the campaign
of depreciation of municipalisation.

97

RISKS OF MUNICIPAL TRADING.

If municipalities ought to keep so close up to
date, why should not private monopolies be dealt
with in the same way ?

London's The omnibuses and the suburban trains of Lon-

PrivaTeent don have for years been the mock of the civilised
Enterprise world. The omnibuses are slow and cumbrous,

1 rams and Buses.

and noisy and uncomfortable, and dear, and not
always clean.

The trains are slow and dear, and filthy and
ill-lighted, and unpunctual, and overcrowded.
No provincial town would have suffered so long
the depredations of the dividend hunters who
have had control of the transit facilities (?) of the
Metropolis. The means of locomotion in the
capital of the Empire would disgrace the worst
Tammany-governed town in the United States.

They have been in the hands of private enter-
prise.

London County The London County Council, after long delays
£pToCvements. caused by the bitter opposition of the dividend
hunters, municipalised part of the small tramway
system and made extensions.

They provided a swift and comfortable service,
paid the workers higher wages, shortened their
hours of work, reduced the fares, paid interest and
sinking fund on the capital borrowed, and made
cash profits of £300,000 for the ratepayers in
addition.

What is the result ? The directors of the dirty,
overcrowded London Chokem and Robbem Rail-
way Companies are squealing like a lot of puppies
whose tails have been trodden on. " Our dividends
are going, owing to the unfair competition of the

RISKS OF MUNICIPAL TRADING.

municipal trams, which are paid for out of the
rates."

Are these statements true ? No.

The dividends are reduced because the dividend Private
hunters did not do their duty and provide an suSSed.
efficient service.

The municipal trams are not paid for out of the
rates. The tram profits reduce the rates.

Municipal trams were introduced because private
enterprise would not supply an efficient service.
They had their chance. The dividend hunters
have only themselves to blame.

Why didn't they scrap their plant ? A score of
years ago it needed scrapping.

The private companies didn't scrap their plant Because They
because their object is always profits. For the
convenience and comfort of their customers they
didn't care a red cent, so long as their dividends
came in regularly. They were too timid and
selfish to introduce cleaner, cheaper, and more
efficient services.

It would have paid them to do so, would it not ?
Handsomely. Where in the world is there a
" softer thing " than the carrying of London's
millions to and fro ? Yet these champions of
private enterprise and individual initiative have
so bungled the business that there is not a city in
the world worse served in the matter of locomotion
than the capital of the British Empire.

And these are the kind of people who want to
discourage the citizens from establishing efficient
services because new inventions might make their
plant obsolete in a few years ! The funny creatures !

99

RISKS OF MUNICIPAL TRADING.

Private Under private enterprise the people do not get

AfSdto'Adopt tne benefit of new inventions nearly as soon as
New inventions. tney wouid jf an our industries were municipalised
or nationalised.

Take the case of Telephones. This country has
the worst telephone service in the world, and the
dearest.

The reason is that a private company has had
the monopoly. If telephones had been managed
for the public benefit, instead of for private
profit, the whole Kingdom would probably be as
well furnished with this useful and necessary
means of communication as the Island of Guernsey,
where, under municipal management, there is one
telephone to every thirty-three inhabitants.
Telephone The National Telephone Company have been

perfectly satisfied. They have made large

dividends by selling a bad article at a high price,
and the public has been helpless. Why ?

Because we think it is unjust to drive out a
vested interest. And when we do at last decide
that we can stand it no longer, we handsomely
compensate the incompetent and wasteful mono-
polists for their losses. We are a generous people.

If it is unjust to deprive a few people of the right
to make profits at the expense of the whole nation,
how much more unjust must it be to inflict loss on
all the citizens of a town for the benefit of a
handful of dividend hunters ?

It would be unjust, and it would be foolish.
The benefits of new inventions can be diffused
by municipal ownership much better than by
private enterprise, and without causing the loss

100

RISKS OF MUNICIPAL TRADING.

and suffering inflicted by competition and dividend
hunting.

If electricity could be supplied only by munici-
palities, think of the enormous advantage that
would be to the whole people. It would be sup-
plied so cheaply — at cost price — that the poorest
would be able to use it.

Under private enterprise the use of electricity Private Company
is restricted because the private companies only Dear,
work the dividend -paying districts, and their
price is 20 per cent, higher than the municipalities
charge, even though the latter are severely handi-
capped by private-enterprise-made laws which
retard their development of this industry.

It is not municipal trading that prevents the Municipal
scrapping of old plant and the introduction of j^jjj.* ^ould
new methods, it is private enterprise. All the New inventions,
citizens could afford to adopt a new invention so
soon as it was proved to be an advantage. Private
enterprise can only afford to adopt new methods
after long delays, and then they generally benefit
but a few people. Under municipal management
the benefits could be enjoyed at once by all the
people.

IOT

THE LIMITS OF MUNICIPAL TRADING
MuniciPaii$ation A HUNDRED years ago, the suggestion that

a Century Ago. /\ , . . . .,

£— Y the citizens of our towns should provide
themselves with municipal water, munici-
pal gas, or municipal trams would have been
taken as certain proof of the lunacy of the
proposer.

The brilliant intellects which saw an irremovable
impediment to the introduction of steam loco-
motives in their inability to jump over bovine
obstacles on the line, would have perspired to
death if they could even have dreamed of a Town
Council providing Turkish baths for the people.
Recent We have moved since then. All these municipal

services are now as commonplace as the innate
conservatism of the British people, which, amid
all the shocks of the wonderful progress of the
nineteenth century, still survives with pathetic
obstinacy. Perhaps we feel dimly that it would
be unwise to lose the only attribute of Deity which
we possess. Our innate conservatism is the same
to-day, yesterday, and for ever.

Every reasonable person — and you, of course,
are a reasonable- person — admits* that municipal

- 102

LIMITS OF MUNICIPAL TRADING.

services are cheaper and more efficient than the
productions of private enterprise.

Everyone who looks can see that private enter-
prise is a dismal failure. Private enterprise does
not supply all the needs of the public. Why, then,
not widen the scope of municipal trading ?

If municipal gas, if municipal water, if municipal Why Not
trams, why not municipal coal, why not municipal
bread, why not municipal milk, why not municipal
houses, why not municipal beer, why not municipal
boots ?

And the answer of innate British conservatism
is that municipal trading may be very well as far
as it goes, but

How far does it go ?

With some people it stops at water. But it innate
does not stop at water. With others it stops at Conservatism-
gas. But it does not stop at gas. With another
class it stops at trams. But it does not stop at
trams.

One man objects to municipal libraries, another
to municipal baths, a third to municipal concerts,
a fourth to municipal gas stoves, and so on.

What are the reasons for these attempts to lay
down limits to municipal trading ?

The reasons are various, and often contradictory.

It is not only the out-and-out opponents of
municipal trading who raise objections to its
extension, but men who have done their utmost
to further the interests of all the citizens by
advocating municipalisation in many directions.

The commonest argument put forward by these
people runs somewhat as follows : —

103

LIMITS OF MUNICIPAL TRADING.

The "Natural" There is a class of undertakings, they say,
Aren't in which tend to become monopolies, and when these
Favour of are jn ^he hands of private traders the public

Limitation.

loses the benefits of competition, and has no con-
trol over services which are vital to the convenience
and health of the community. Such undertakings
ought to be managed by the community for their
own benefit.

In The Municipal Journal, Mr. Ed. R. Pickmere,
M.A., Town Clerk of Liverpool, lays down three
tests which ought to be applied to any proposed
municipal trading undertaking. They are : —

h$ Tests, i. Is the undertaking likely to conduce to the

re welfare an<^ advantage of the general body of rate-

interference with payers by whom the money required for the

"Property." j , i • ,. -j j -»

undertaking has to be provided ?

2. Is it in the nature of a monopoly, and not
likely to enter into competition with the ratepaying
traders of the district?

3. Would the carrying on of such an undertaking
by persons other than the Corporation unduly
interfere with the property and health of the
ratepayers ?

Using these tests with regard to water, gas,
trams, and electricity, Mr. Pickmere argues that
these services answer the questions in the affirma-
tive. They are " for the general benefit of the
community," they " tend to make the community
healthy and prosperous," and they " cannot be so
well and satisfactorily provided by any individual
or company."

Let us take, first, the argument that undertakings

104

LIMITS OF MUNICIPAL TRADING.

which tend to become monopolies ought to be
provided for the people by themselves.

A moment's consideration will prove to the HOW They
reader that we ought at once to municipalise Break Down'
(or nationalise) the drink traffic, the railways, the
coal mines, the insurance business, the shipping
industry, the telephones, the bread trade, the
milk supply, the houses, and the land, and heaven
knows how many other industries.

Many of these industries are practically mono-
polies. Competition in coal, beer, milk, bread,
railway fares, shipping rates, and insurance
premiums is largely abolished.

These are " natural " monopolies. Why, then,
do those who lay down the above principle, stop
at municipal gas or municipal trams ?

If we apply the test that municipal trading should Municipal
conduce to the welfare and advantage of the ^"SiiT
general body of ratepayers, we must arrive at the
conclusion that municipal trading can stop at
nothing.

We know that municipal water, gas, electricity,
and trams are better and cheaper than private
enterprise services of the same kind. Why should
we not get the benefits of municipal coal, beer,
boots, milk, bread, and insurance ?

If municipal gas, water, and trams are " in the
nature of necessaries," how much more in the
nature of necessaries are bread, coal, houses, and
clothes ?

Does not the argument apply with a hundred- If Necessaries,
fold force in the case of the latter services ? Fuel™1/"*1'

A man may do without gas, without electric Shelter?

105

LIMITS OF MUNICIPAL TRADING.

light, and without trams ; but he cannot live
without food, fuel, and shelter. These are the
primal necessaries.

It cannot be denied that the municipalisation of
these services would conduce to the welfare and
advantage of the " general body of ratepayers,"
because everybody requires food, clothes, coal, and
a house.

Mr. Pickmere's third question asks if the
provision of the services by private traders would
unduly interfere with the property and health of
the ratepayers.

Here the evidence is overwhelming.

The The private traders in houses and land kill

thousands and thousands of people every year—
in the slums. They interfere with the property of
the ratepayers by charging exorbitant rents. They
undermine their health by supplying inadequate
and insanitary houses.

The coal owners rob the poor of warmth, and
take twenty millions a year from the people, which
could be saved by municipalisation. The bread
merchants adulterate our bread, rob the people
by short weight and high prices, and kill their
hands by long hours, insanitary conditions of
labour, and low wages.

Supports K we are to municipalise all the industries

which interfere with the property and health of
the citizens, where are we to stop ? We cannot
stop at gas and trams.

Coming now to Mr. Pickmere's second question,
" Is the proposed undertaking in the nature of a

106

LIMITS OF MUNICIPAL TRADING.

monopoly, and not likely to enter into compe-
tition with the ratepaying traders of the district ? "
we shall find on examination that this test clashes
with the first and third.

If an industry as carried on by private traders
interferes with the health and property of the
ratepayers, are we to allow them to continue to
control it because a municipal service would
abolish the private trader ?

The question is : Which is the most important — The Public
the welfare of all the citizens, or the profits of a XvlteVrofits.
few private traders ?

By municipal is ation we abolish the private
trader in water, in gas, and in trams. Why should
we hesitate, then, to abolish the private trader in
coal and milk and bread ?

There is not a single argument which can be used
to support the municipalisation of gas, water, and
trams which is not also applicable to the case of
beer, milk, bread, boots, and houses.

The private trader is not sacrosanct. There is
no law of Nature which says that he must con-
tinue for ever.

The private trader is simply a trustee. By private Trader
tacit consent of the people he has appointed Must Go>
himself to the position of producer and distributor
of the necessaries of life. For thousands of years
he has been allowed to go about the business in his
own way, and to fix his own remuneration. His
own nest has been well feathered ; but how bare
and hungry are millions of the people whom it is
his duty to feed and clothe ? Is there any law,

107

LIMITS OF MUNICIPAL TRADING.

human or divine, which denies the right of the
people to dismiss this unfaithful steward ?

Surely the private trader has had rope enough.
It is time to hang him.

If we do not hang him by municipalising his
undertakings, he will hang himself — is now rapidly
proceeding to get the noose ready.

He will hang himself ; but he will be born again
in the form of a trust.
The In the United States they have already got him

in his resurrected form, and the last state of the
people is worse than the first.

Must we follow in their footsteps ?

There is only one alternative — municipal trading.
Is there any doubt which would conduce most to
the welfare of the general body of the citizens ?

308

OUR BROTHER THE SMALL PRIVATE
TRADER.

WHEN it is suggested that the principle of objections to
municipalisation should be applied to Municipal
bread, meat, milk, or boots, there is a
loud outcry from the small private traders.

In the case of gas or tramways there is usually
only one company supplying a town, but in the
case of milk, meat, or boots there may be
hundreds of individual shopkeepers.

" If these services are municipalised," they
say, " we shall be ruined. It is unfair to compete
with us with our own (the ratepayers') money."

First, let me take the objection that it is unfair
for a municipality to compete with the private
trader.

Is it unfair ? Why is it unfair ?

J . Is it Unfair to

The guiding principle of the champions of JjOBpJjk ™*
competition has been that competition is the law Trader ?
of life. Through competition, they say, the
people are provided with the cheapest and best
services possible.

Under the present system, is it not fair for one

109

THE SMALL PRIVATE TRADER.

Not on
Principles of
Free
Competition.

shopkeeper to set up in business next door to
another and try to take away his business ?

Is it not fair for a large and wealthy wholesale
company to open retail shops all over the country
and capture all the trade ?

These things are fair, and are done every day.

Now, if it is fair for one trader to compete
with another, or for a large company to compete
with the small shopkeeper, on what grounds do
private traders object to all the citizens competing
with them ?

I contend that such action would be perfectly
fair and just, according to the principles of com-
petition.

" What ! Compete with us with the ratepayers'
money ? Our own money ? What injustice I "
says the small trader.

No. The small trader is mis taken. The munici-
pality does not use their money, and would not
use their money under the supposed circumstances.

If the London County Council decided to open
1,000 bread shops, how would they raise the
capital required ?

Not by taking the ratepayer's money, or the
private trader's money, but by going into the
money market and borrowing on the credit of all
the citizens.

Suppose £100,000 were required. Not a penny
would come out of the rates. The credit of all
the citizens of . London is so good that they can
borrow all the money they want without any
difficulty.

no

THE SMALL PRIVATE TRADER.

Lenders know that the L.C.C. could produce A Municipal
and sell bread, and out of the revenue pay them Bl
interest. They would look upon the investment as
a certainty.

Not only could the L.C.C. provide cheap and
pure bread, and pay the interest on capital, they
could also pay back the capital in thirty years, and
probably make annual cash profits for the relief
of the rates.

Would not such an experiment be fair under A Fair
the rules of competition ?

Is it fair for ten persons to form a limited
company and do such a thing ? Is it fair for a
hundred or a thousand or ten thousand persons to
form themselves into the London Bread Supply
Company, Ltd., and open shops everywhere in
competition with the private trader with only one
shop ?

Certainly. Similar companies are formed regu-
larly.

Very well. If it is fair for a hundred, a thousand,
or ten thousand persons to do this, why is it not
fair for a hundred thousand, for a million, for four
millions ? Why is it not fair for all the citizens,
the municipality, to form themselves into a Bread
Supply Company ?

Answer, Mr. Private Trader.

Because it will ruin you ?

What ! Municipal trading beat the private
trader ? I thought municipal trading was bound Ruin the Private
to result in loss. I thought private enterprise
and competition could provide cheaper and better A«ainst-

TII

THE SMALL PRIVATE TRADER.

ALL the

Right™ T™ade
as a Few.

Compensation.

articles than any other system. Why, then, are
you afraid of municipal competition ?

And why should a company composed of all the
citizens refrain from opening bread shops because
it will ruin you ?

Does the company composed of ten persons, a
hundred, a thousand, ten thousand shareholders,
do they think of whom they are going to ruin ?
Do you think of the man across the road whose
trade you may ruin ? Isn't competition a blessing?

The private trader's argument won't hold water.
I assert that all the citizens have as much right
^Q un^ertake a business as any part of the citizens.
Just as much right as one man, ten men, or ten
thousand.

But, observe what a Christ-like attitude the
ratepayers bear towards the shareholders in an
industry which is taken over by the municipality,
or by the nation.

Instead of entering into competition with them,
and beating them out of the field, what is our usual
custom ?

We compensate them. We buy them out. So
tender are we of the vested interests of the few.

Rather than injure the rich man, we will heap
burdens on the backs of the poor for a generation.
When the gas service or the tramway service,
or the electricity service is taken over by the
municipality, the private companies are first
bought out.

London has just bought out the private water
companies, and paid them a handsome premium
for " disturbance." London could have obtained

112

THE SMALL PRIVATE TRADER.

a new water supply, and London would have been
quite justified in competing with the private com-
panies. But it would have been " unfair."

Private traders, then, are not ruined by munici-
palisation. The idea of the small shopkeeper
that municipalisation will ruin him is quite mis-
taken.

As a matter of fact, the private trader gets more
consideration from the municipality who abolishes
him, than from any competitor who drives him
out of the trade. From him they get no con-
sideration.

For private traders to fight against municipalisa-
tion is, then, a short-sighted policy.

One thing is certain — they have to go.

That is to say, they must either be abolished by
the merciful method of municipalisation, or by the
ruthless methods of the Trust.

The Trust is coming. The days of competition The Trust does
amongst a multitude of independent competitors Not ComPensate-
are drawing to a close. The principles of com-
petition have been undermined during the last
half-century, and now the foundations are begin-
ning to rock.

Competition is a failure. I have shown in what
way it is a failure. It does not supply the public
with all it needs.

Here is the situation. We have a country, and The Condition of
we have a people. We have land and machinery
and tools, and we have ability, if properly organised,
to provide everybody with a comfortable living.

Is this achieved under private ownership and
private enterprise ?

H 113

THE SMALL PRIVATE TRADER.

Far from it. It would be hard to imagine another
system which could make such a tragic muddle of
the business.

Instead of being well fed, well housed, and well
clothed, one-third of the people are in a chronic
state of starvation. They are ill fed, badly
housed, and wretchedly clothed. Consider these
facts, which I quote from Robert Blatchford's
« Britain for the British " :—

The " One-half of the wealth of the nation is held by

5.000,000 Rich. about 25>000 personSi»

" About 30,000 persons own fifty-five fifty-sixths
of the land and capital of the nation."

" Two-thirds of the national income is taken by
5,000,000 people, half of whom do no work at all,
while 35,000,000 people only get one-third."

" Out of every thousand persons, 939 die without
leaving any property worth mentioning."
The " Twenty millions of our people are poor."

20,000,000 Poor There are 7,979,967 houses in Great Britain.
Of these 5,055,645 are under £20 a year rent.

In London, the richest city in the world, ij
million people get less than a pound a week per
family.

The There is always a mass of unemployed. In the

Unemployed. Worst years there are nearly a million out of work.

At the end of 1904 7-6 per cent, of the trade

unionists were unemployed. These are the most

skilful and energetic workers in the world.

Do those facts bear out the claim of the champion
of private enterprise and competition ? Is that
the best we can do with all the natural and acquired
forces at our command ? Surely not.

114

THE SMALL PRIVATE TRADER.

Consider the following facts as to our capacity
for the production of wealth.

Prince Kropotkin, in Fields, Factories, and
Workshops says : —

If the soil of the United Kingdom were cultivated only Engiand Could
as it was cultivated thirty-five years ago, 24 million Feed
people could live on home-grown food. Herself.

If the cultivable soil of the United Kingdom were
cultivated as the soil is cultivated on the average in Bel-
gium, the United Kingdom would have food for at least
37,000,000 inhabitants,

If the population of this country came to be doubled,
all that would be required for producing food for 80,000,000
inhabitants would be to cultivate the soil as it is now
cultivated in the best farms of this country, Lombardy,
and France.

That is to say, if we organised agriculture, using
all the latest scientific discoveries for the good of
all, there would be no difficulty about a sufficient
supply of food.

In America, one man in one day can produce Factsabout
enough bread for himself for a year. Productive

Power of

In well-organised coal mines, 100 men extract Machinery,
yearly enough fuel to supply warmth for 10,000
families, 40,000 people, in a rough climate.

A girl in a cotton mill can turn out enough
calico in a year to clothe 12,000 people.

Twenty-five boys, working twelve hours a day,
make 2,500 dozens of socks.

One hundred pairs of men's fine boots can be
made by a handworker in 46 weeks. With
machinery they can be made in 37 days.

It has been calculated that ij million men 14 Million Men
could supply all the needs of 40 million people
by working eight hours a day for 300 days in a
year.

THE SMALL PRIVATE TRADER.

But Private
Enterprise and
Ownership
Block the Way.

The Justice of
Abolishing the
Private Trader.

We have an adult male population of ten
millions.

There is not the slightest doubt about our
possessing the power to provide a decent living
for everybody.

Private ownership and private enterprise have
woefully bungled the business. Is it unfair to try
a new system ?

Unfair ? What in the name of justice is fair,
then ? Is it unfair for millions to be underfed,
for hundreds of thousands to die because of the
insanitary conditions of private-enterprise houses,
and the inhuman conditions of private-enter-
prise industries ; for millions to be robbed of the
decencies of life by monopoly coal owners, and
landlords, and food adulterators ?

From the point of view of justice, whom are we
to consider most — the private traders, who are a
small class, or the people ?

Is it unfair to take away the living of the private
trader ? Then it is unfair to take away the
living of the unemployed, the twelve millions on
the verge of starvation, and the thousands slain
annually by poverty and preventable disease.

I say that the welfare of the nation must be con-
sidered before the profits of the monopolists, and
the wasteful freedom of the small trader. Under
the present system, a large proportion of the popu-
lation have so deteriorated in health and stamina
as to endanger the existence of the nation.

Who is responsible ? Private ownership and
private enterprise. Who made the slums ?
Private enterprise. Who builds jerry houses ?

116

THE SMALL PRIVATE TRADER.

Private enterprise. Who charges high rents ?
Private enterprise. Who adulterates our food
and poisons our drink ? Private enterprise.
Who pays starvation wages ? Private enterprise.
Who causes unemployment ? Private enterprise.

Private enterprise and competition are respon- He MUST Go—
sible for nine-tenths of the misery and suffering of an
our twenty million poor. But we must not
attempt to alter the conditions because the small
private trader would be ruined !

Nevertheless, the system is going to be altered,
whether the small trader likes it or not. The
Trust is on the doorstep. What is a Trust ?

117

THE PRIVATE TRADER'S DILEMMA.

Menace of the
Trust.

The Small

Trader's

Desperate

Struggle.

I SHOWED in the last Chapter that from con-
siderations of justice and the welfare of the
nation it would be perfectly fair to abolish
the private trader, and I said that whether he
liked it or not the private trader's doom is sealed.
If he is not abolished by the municipality, he will
be crowded out by the Trust.

Is there no need to fear the Trust ? If the
private trader thinks not, I am afraid he is living
in a fool's paradise.

Is it not a fact that in recent years many huge
companies have been formed which combine the
functions of manufacturer and retailer ?

Everyone must have noticed the growth of the
universal provider kind of stores, and the retailer
with " branches all over the kingdom."

One firm has two or three hundred tobacco
shops in London, Lipton's have more than three
hundred branch stores, a London meat company
has five hundred shops.

The restaurant business, the milk business, the
drug trade, the boot trade, and others are going
the same way.

118

THE PRIVATE TRADER'S DILEMMA.

The small trader is gradually being abolished.
Every year his struggle to make a living becomes
more hopeless.

Here is a significant resolution passed by Oxford
grocers last April : —

This meeting of the Oxford and District Grocers'
Association hereby expresses its great surprise and regret
at the fresh form of direct competition with the retail

trade now proposed by the Tea Company (Limited),

and protests strongly against such action, especially by
a firm with whom, hitherto, the trade has had such
friendly relations.

This firm is going to open about 400 shops.

The Cardiff Grocers say " the time has now
arrived when each grocer, as a protest, should
eliminate the sale of the company's goods from
his business."

Poor little grocer ! What chance does grit stand
against enormous capital ! The big tea trust
will answer the little grocer's protest by eliminating
him.

What is a TrUSt ? What a Trust

A Trust is a combination of business firms who
amalgamate for various reasons — to stop com-
petition, to cheapen production, and to bleed the
public.

Yes, to stop competition. The champions of
competition are finding out that competition
is not the law of life. They are finding out that
competition does not pay so well as co-operation.

They are finding out that competition means
waste — not cheapness, but waste. Waste of time
and waste of energy, and time and energy mean
money.

119

THE PRIVATE TRADER'S DILEMMA.

It Abolishes
Waste.

Small

Shopkeepers
are "Waste."

The British-
American
Tobacco
Trust.

They are finding out that it is wasteful to rent
two factories where one will suffice ; to lay down
two plants where one will do the work ; to employ
two men where a boy at a telephone or a printed
circular will get the same orders.

The Trust abolishes waste. The small, indepen-
dent private trader is often a wasteful item in the
cost of production or distribution.

In Chicago the Trusts wiped out 30,000 small
traders in seven years. Was that fair ?

It saved waste. The goods were produced,
and the public were supplied more efficiently
than before.

If there are fifty boot shops in a town, and
twenty are enough for the public convenience,
isn't it a wise thing to shut up thirty and save
the expenses — the rent, rates, salaries, wages,
and profits ?

Thirty shopkeepers are ruined ; but both the
public and the Trust may be benefited, the former
by getting a cheaper article, and the latter by
increased profits due to saving the expenses
of the thirty shops. There are not many trusts
in this country yet, but since 1886 nearly nine
hundred separate firms have been abolished, and
in their stead we have sixty or seventy trusts.

Remember what took place when the British
Tobacco Trust was formed. Its birth was due to
the attempt of the American Trust to capture
the trade in this country.

During the fight between the two giants the
retailer lived in clover. Each side bid for his
help, because just then he might have settled the

120

THE PRIVATE TRADER'S DILEMMA.

contest one way or the other, either by boycotting
the tobaccos of one trust, or by favouring those of
another.

The British Trust offered to divide amongst the its Methods,
retailers for four years one-fifth of their profits,
together with a bonus of £50,000, on condition that
the American goods were boycotted.

The American Trust replied with an offer of
£200,000 a year and their entire net profits for
the same period.

Then the combatants came to terms and joined
forces. Instead of two trusts there is now only
one trust, and the position of the small outside
manufacturer and the retailer is much more
precarious.

Early this year it was announced that the
British Tobacco Trust had reduced the prices of
certain tobaccos, not to the retailer, but to the
public.

" There will be considerable outcry in the trade
throughout the country," said the Press, "but the
public will benefit."

The public will benefit, and the Trust will benefit;
but the poor retailer. He doesn't matter.

Unfair ? The private trader talks about munici- j^e smaii
palisation being unfair ! What does he think of
the Trust ?

If you want to know what happens when a
trust with a lot of grit and " a desire to rise "
goes into business, you must study the American
Trusts.

In the United States every article of general
consumption is under the control of a trust.

121

THE PRIVATE TRADER'S DILEMMA.

The U.S.A.
Beef Trust

Its Enormous
Power.

Far-reaching
Influence.

Consider the effect of the Beef Trust, whose
operations have lately excited intense indignation
from one end of the States to the other.

This Trust has an absolute monopoly of some
of the most important industries in the country.

" It fixes at its own will," says Mr. Chas. Ed.
Russell, " the price of every pound of fresh, salted,
smoked, or preserved meat prepared and sold in
the United States. It fixes the price of every ham,
every pound of bacon, every pound of lard, every
can of prepared soup. It has an absolute monopoly
of our enormous meat exports, dressed and pre-
served. It has an absolute monopoly of the
American trade in fertilisers, hides, bristles, ham,
and bone products. It owns, or controls, or
dominates every slaughter-house, except a few
that have inconsiderable local or special trades. It
owns steam and electric railroads; it ownsthe entire
trolley-car service in several cities, and is acquiring
the like property elsewhere. It owns factories,
shops, stockyards, mills, land companies, plants,
warehouses, politicians, legislators, and Congress-
men.

"It can affect the cost of living in Aberdeen and
Geneva as easily as in Chicago and New York.
It has in the last three years increased, for its own
benefit, the expenses of every household in America.
It controls or influences the prices of one-half the
food consumed by the nation. It can make,
within certain limits, the price of wheat, of corn,
of oats, what it pleases ; it will shortly be able to
control the price of every loaf of bread.

" Its operations have impoverished or ruined

122

THE PRIVATE TRADER'S DILEMMA.

farmers and stockmen, destroyed millions of Its Ruthless
investments, caused banks to break and men to
commit suicide, precipitated strikes, and annihi-
lated industries."

Many of these people have been ruined by the
Trust because they were waste. They were not
needed. It is just as easy to buy beef now they
are not in the trade as it was before.

But mark the difference between the Trust
methods and municipalisation.

The Trust ruins the small trader, dismisses the
useless employe, and bleeds the public.

Municipalisation would compensate the trader, Munici
find other work for the unnecessary employes, ^ Treat A11
and give the public the benefit of the saving in
cost of production.

Would it not be better to be abolished by
municipalisation ?

I contend that it is not to the small trader's
interest to fight against the tendency towards
municipal trading. On the contraiy, it is to his
interest to support and further it.

Do the Cardiff grocers think the big tea company
will take any notice of their protest ?

Is it not more likely that when the tea company
have got their 400 branches into working order
they will extend the business ? Is it not more
likely that they will gradually include all groceries ?
Surely such a development will be the most
natural thing in the world.

What remedy, then, have the small traders ?

Their only hope is in municipalisation, and when
they fulminate against the wickedness and unfair-

123

THE PRIVATE TRADER'S DILEMMA.

Private Trader's ness of municipal trading, they are like a man in a
burning building who kicks the municipal fire
escape mto the street, and refuses to be saved
except by the private-enterprise staircase.

The staircase is in flames. The municipal way
is the only way of escape.

Over the actions of the Trust the small private
trader has no control whatever. But as a citizen, a
ratepayer, and a voter, he can, in combination
with his fellows, demand and obtain from the
municipality that consideration which is the due
of all citizens.

For him to oppose municipalisation is, then, an
unwise policy. His chances of compensation
from the Trust are almost nil. But from the
municipality he can be sure of obtaining fair and
just treatment.

His Extinction But whether the Trust will abolish the small
Gener'aT^ to private trader or not, I think I have given ample
Welfare. evidence to prove that the benefits of an extension

of municipal trading would far outweigh the incon-
venience and injustice felt by the private traders
whom it would be necessary to supersede.

124

MUNICIPAL TRADING AND HIGH WAGES.

D

0 you know what wages your milkman gets ? Low Wages of
I asked the question of mine one day, and Enterprise,
he told me, " A guinea a week."

Twenty-one shillings a week ! Three shillings
a day ! Threepence an hour ! Why, it is not the
docker's tanner !

Do you know what twenty-one shillings a week wtat Low
for a family of four means ? It means a jerry- Wage8 Mean-
built house in a dreary slummy district packed
with bricks and mortar. It means a cramped and
uncomfortable house or a couple of brick boxes
with slate lids. It means living in a place where
the flowers and plants and trees cannot exist, and
where sweet air and sunshine never make their
way. It means high rents. It means a hand-to-
mouth existence. It means pinching and penury.
It means mean and ugly furniture. It means
shoddy clothing whose touch denies. It means
adulterated food. It means hard work and little
pleasure. It means poor and sickly children. It
means irritable wives and bad-tempered husbands.
It means the public-house and drunkenness. It
means crime. It means pauperism and the work-
house.

125

MUNICIPAL TRADING AND HIGH WAGES.

" But the milkman's work is regular ? "
Yes, it is indeed regular. At four o'clock every
morning he has to turn out — Sundays and week
days — and not till six or seven o'clock at night is
his day's toil ended, except on Sundays.

gu^- we must not municipalise the milk supply,

Raises Wages.

because the workers would get higher wages !

Is this an argument against the extension of
municipal trading ?

Yes. Some of the champions of competition
object to municipal trading because under it the
workers get better paid than under private enter-
prise.

On the other hand, there are those, like Mr.
Dixon Davies, before the Joint Committee on
Municipal Trading, who assert " that the state-
ment that workmen are better paid by corporations
is an error."

What are the facts ?

in Support ^ *ew years ago the London County Council
adopted the following regulation : " The rates of
wages and hours of labour shall be those recog-
nised by and in practice obtained by associations
of employers and trade unions of workmen."

A similar regulation has been adopted by over
300 municipalities.

Now, the bulk of the workers are not in trade
unions, consequently they are at the mercy of
sweating employers.

But where the highest private enterprise wages
paid are below what is considered to be a " living
wage," many municipalities have adopted a

" minimum wage."

126

MUNICIPAL TRADING AND HIGH WAGES.

I daresay you have lately heard a good deal claim that Free
about the increase of wages during the last thirty Wages ""?«
years. The Free Traders say that this enormous
advance is entirely due to Free Trade, and that
there is nothing like Free Trade for improving
the position of the workers.

Is it as effectual as municipalisation ? Let us
see.

Between 1868 and 1901 the average wages
increased 15 per cent. ; that is, 33. in the £.

Now, remember the strikes and lock-outs, the
riots, the bloodshed, the loss of trade and wages,
the deaths, and all the suffering endured to gain
this paltry advance of 15 per cent, in thirty years.
Then consider the following facts : —

Under a private company the tramway employes Not to Good as
at Liverpool worked fourteen hours a day. Under
municipal management they work only ten hours a
day.

Under private management the wages averaged'
4d. per hour. Under municipal management the
wages average 6d. per hour, a rise of 50 per cent.

In addition, the men have free uniforms and a
benefit society to which the Corporation contributes
6s. 8d. for every £i contributed by the men.

In Sheffield, where the private company paid Facts
£100 for labour, the Corporation pays £165 f or

the same amount of work. Per Cent, by

Municipalisation.

In Bolton, where the private company paid
£100, the Corporation pays £137.

In Wallasey, where the private company paid
£100, the District Council pays £185.

127

Glasgow
Tramworkers :

Under Private
Company —

MUNICIPAL TRADING AND HIGH WAGES.

In Northampton, where the private company
paid £100, the Corporation pays £120.

In Birkenhead, where the private company paid
£100, the Corporation pay £315.

In Portsmouth, where the private company
paid £100, the Corporation pay £130.

In Sunderland, where the private company paid
£100, the Corporation pay £145.

When Manchester Corporation took over the
trams they paid increased wages amounting to
£60,000 a year.

Here, then, are a few out of many instances
where municipalisation has resulted in increases of
20, 65, 37, and 85 per cent, in the conditions of
labour as regards hours and rates of pay.

Is not that better than Free Trade ?

When the Glasgow tramways were owned by a
private company the condition of the workers
was pitiable. Read this quotation from a little
book on Glasgow Municipal Enterprise, by Mr. J.
Connell : —

Their hours of labour averaged quite fourteen per day,
and their wages did not average more than 195. per week.
On this they were expected to maintain a respectable
appearance, which many of them who had families were
unable to do. As a matter of fact, some of the guards
(conductors) were brought before police-court magistrates
because their clothing did not correspond to the standard
of decency which the situation called for. Even at the
small wages named no man could obtain employment
without depositing £2 as a guarantee against dishonesty.
The men were fined for reaching the destination of their
cars too late, for reaching it too early, for standing too long
at any one point, for not standing long enough at any
one point, and for a hundred-and-one other trivial offences,

That was the state of things that Mr. Dixon
Davies would describe as better than under

128

MUNICIPAL TRADING AND HIGH WAGES.

municipal management. What happened when
the Corporation took over the trams ?

The hours were reduced to ten per day — four less Under
than under private enterprise ; the wages were Municlpahsa
fixed at 243. a week, rising to 273. in two years —
53. a week more than under private enterprise ;
and the men were supplied with free uniforms.

Did the public suffer by this increase of wages
to the workers ? Not in the least. I have already
told you how the fares were reduced 50 per cent.,
and how large profits were devoted to the common
good.

What happened in London ? London Private

Consider for a moment the hours and wages ^B^*^.
of London 'busmen now under the private com- 16 Hours a Day.
panics. Their hours average sixteen per day.

Drivers are paid 8s. a day, conductors 6s.

So that the drivers get 6d. per hour and the
conductors 4jd.

These hours are inclusive of meal times, for
which the men may snatch about twenty minutes
in a day, but all the time they are in charge of the
'buses.

There are no holidays, no free uniforms, and the
week is a seven-day week.

The conditions under the private tramway LCC

company were nearly as bad. What did the Tramworkers*
' io-hour Day-

London County Council do ? Higher Wages.

They gave the men a ten-hour day ; one day's
holiday in seven, free ; and they advanced their
wages at a cost of £30,000 a year. For sixty hours1
work the men get more than they used to get for
eighty- four.

129

MUNICIPAL TRADING AND HIGH WAGES.

All the Citizens
must Not be
Sweaters.

Your
Responsibility.

With all these additional expenses, the Council,
as I have already told you, have made large
profits for relief of the rates, after reducing the
fares.

It appears, then, that municipalities do pay
high wages.

If you keep in mind that municipal services are
intended to conduce to the health and happiness
and convenience of the whole community, you
will see that, when a community becomes the
employer of certain of its individual members, it
is impossible for them to underpay and overwork
those employees as a private trader would.

When you ride on a private 'bus in London, you
may give a passing thought to the hard life of the
conductor who gets 4|d. an hour, who works sixteen
hours a day, who has five or six hours' sleep at
night, and who perhaps does not see his children
awake for weeks together. But you think, " I
can't help it, and it is not my business."

But you could not say this in the case of a munici-
pal tram. If the drivers and conductors were
worked sixteen hours a day for a few coppers per
hour, you would not then be able to say, " I can't
help it."

You, as a member of the municipality, are
responsible. This is your business, and unless
your sense of justice is completely dead you will
see to it that your employes are treated in a fair
and just manner — as men, not as material. The
tendency all over the country is for the munici-
palities to become the model employer.

The facts and figures given in a former chapter

130

MUNICIPAL TRADING AND HIGH WAGES.

showed clearly that the large majority of the
workers are paid very badly. People who are
not eaten up by greed acknowledge that the great
problem of this century is how to distribute more
equitably the wealth which we are now able to
produce in such abundance.

Here, in the municipalisation of necessary
services, the wage earners have a method by which imeprovaeyworkersf
they can better their conditions without the waste Conditions,
and suffering caused by strikes.

'3*

THE TYRANNY OF MUNICIPAL
EMPLOYEES.

The Dangeri of a rT~^HE champions of private enterprise profess
to see in the increase of municipal employees
a DANGER to the community.
A danger of what ?

The Municipal Employees' Association was
formed with the object of promoting and protecting
the interests of municipal employees. One of its
objects is to obtain a minimum wage of 303. a
week for adults in London and 28s. in large
provincial towns. Another is to obtain a forty-
eight-hour week for outdoor and manual workers.
Those are the dangers. It is feared that munici-
pal employees would use their votes to return
candidates pledged to raise wages and shorten
hours.
The Working For the working man to get 305. a week is a sin

CoantroiRhfshOwn in the cyes of the dividend hunters.

Life. For the working man to have any control over

the conditions of his labour is a crime in the eyes
of many employers and rich people.

One would think that the population of these
islands consisted principally of chattel slaves.

132

TYRANNY OF MUNICIPAL EMPLOYEES.

Why shouldn't the workers get the best possible
return for their labour ? Why shouldn't they
combine to attain their objects ?

Mr. Arthur Chamberlain, a brother of Joseph, Mr. Arthur
says that " it is an improper position for the ^°^rl ain
working man to be at once the servant of the "improper."
County Councillor as a workman and his master
as a voter."

Why is it an improper position ?

Is it an improper position for Mr. Chamberlain
to go into business for himself, and decide for him-
self how long he shall work and how much of the
profits he shall pay to himself as salary ?

That is another story.

Is it an improper thing for an employer to fix the
hours, wages, and conditions of his employees ?

Many employers think not. They are indig-
nant at the suggestion that they have no right to
carry on " their " own business in their own way.
They talk about the infringement of individual
Liberty and Freedom, and resent any attempt at
what they call interference with their rights.

Very well. If it be right for one man to carry If Right for an
on his own business in his own way, is it not right Employer, Right
for all men ? And if it is right for all men, why
is it wrong for the workers ?

But the working classes are in a majority, and
could outvote every other class. A most im-
proper position ! A witness before the Joint
Committee on Municipal Trading was quite
indignant because 60,000 workers could outvote
150 employers. " Parliament ought to regulate

133

TYRANNY OF MUNICIPAL EMPLOYEES.

the powers of municipalities," he said, " so that
there would be no abuses of this kind."

And this is supposed to be a Democratic country !
The interests of 60,000 men are to be sacrified
to the greed of 150.

The Denial of the The whole argument is inspired by greed, and

Seed anndiredby the love of that tyranny which the champions of

Tyranny. liberty pretend to hate.

The facts I have already quoted prove that an
increase of wages is absolutely necessary if a large
proportion of the workers are to be saved from
dangerous deterioration in health and stamina,
and those who oppose such a betterment of their
condition are not only enemies of the workers,
they are enemies of the nation and the Empire.

If the whole of the industries of a town were
municipalised they would belong to all the
citizens. Who, then, ought to fix the wages and
conditions of work, if not the owners of the in-
dustries— all the citizens ?

Would Municipal But at present only a few industries are munici-

Xmbine to Bleed Pa^SeC*' ^ ^ nOt P055^6 tnat *ne municipal

the Community ? employees will combine and send representatives
to the Council simply to increase their wages ?

The idea is absurd. The suggestion that the
workers would use their power to increase their
wages unduly is based on a complete misconcep-
tion of their character.

Remember, some advance must be made.
Remember, also, the advances that have been
made without causing a halfpenny extra expense
to the ratepayers.

Given fair conditions, the workers will be quite

134

TYRANNY OF MUNICIPAL EMPLOYEES.

content. There is not the slightest fear that they
would resort to any such dishonourable and
ruinous methods as the dividend hunters suggest.
Honi soit qui mal y pense.

On the contrary. Appeals for their votes to The Suggestion
further their own selfish interest fall on deaf ^dbg to the
ears. " I have always found the working classes "°n> A>J-
open to the loftiest ideals of British Citizenship.
They are animated by sentiments very far removed
from mere personal interest."

Those are not my words. That is the opinion
of the Rt. Hon. A. J. Balfour, M.P., twice Prime
Minister. Is it not a true statement of the facts ?

Although we abolish competition and sweating
under municipal management, we do not abolish
our common sense.

There are other voters, besides those employed
by the municipality, and their influence is quite
strong enough to prevent any corrupt practices
in favour of a certain section of municipal em-
ployees.

* * *

You who read this are perhaps a member oi
" that backbone of the nation," the middle classes,
and you may think that this is only a working-class
question. There, I think, you are mistaken.

I have shown that municipal trading reduces
prices, so that as a consumer you benefit con-
siderably.

For instance, on one of the London County
Council tram routes, a passenger saves £3. 2s. 6d.
a year in cheaper fares.

135

TYRANNY OF MUNICIPAL EMPLOYEES.

But the time is coming when your position as a
producer or worker will be detrimentally affected
by the Trusts.

The Trusts save waste.

One of the wasteful things the Trusts abolish is
middle-class labour.

When a number of competing firms amalgamate,
Middle Classes, they are at once able to dispense with the services
of numerous clerks, travellers, and canvassers.
What are these men going to do ?

It was estimated that 50,000 employees would
lose their situations owing to the big amalgama-
tion of American railways a few years ago.

Here is an extract from The Daily Mail : —

Trusts at once cut down their advertising and discharge
a number of canvassers. The American Tobacco Com-
pany, it is stated, got rid of 3,000 of its canvassers and
other employees when it secured its monopoly, Its twin
brother, the Continental Tobacco Company, telegraphed
the discharge of 350 men in one day.

We have had no such sweeping experience
here, but even our own little Trusts have already
economised in this direction. Facts of this kind
are not published from the housetops, but in my
own small circle I know of half-a-dozen men who
have either been dismissed or have had their
salaries considerably reduced by Trusts.

These men are often past the prime of life, and
find the greatest difficulty in getting new berths.

Will private enterprise help them ? Will the
growing custom of " young men only " help them ?

What can they do ?

As a mere bread-and-butter question, then, the
extension of municipal trading must appeal to the

"Too Old at
Forty."

136

TYRANNY OF MUNICIPAL EMPLOYEES.

middle classes. As citizens with votes, they have a
right to have their case considered by the com-
munity if municipalisation of any industry dis-
penses with their services.

They have no such right if private enterprise
in the shape of a Trust puts them into the street.

You will see, then, that an extension of municipal
management is the only means of protection you
have against the growing power of Combinations
and Trusts. Under private enterprise and com-
petition the wealth-earners must accept the wages,
the hours, and conditions offered to them by the
employers. They are slaves. Under municipal
management the workers have a voice in the
regulation of their own lives. They are free men.

Are free men a danger to the community ?

137

THE PURITY OF PRIVATE ENTERPRISE.

Corruption in
Municipalities

Private

Enterprise Not
Pure.

w

'HEN hurling their thunderbolts against
the municipalities, many opponents of
municipal trading always couple with
extravagance, " corruption."

If the municipalities are not already eaten up
with corruption, we are assured that an extension
of municipal trading would inevitably lead to such
evil and shady practices as would shock even the
proprietor of a Hooligan newspaper.

These paragons of virtue always imply that in
private enterprise we have a system of industrial
purity, and to lay hands on such a stainless
institution, save in the way of reverence, is dese-
cration of the most heinous kind.

Is the present system pure ? Is it a system
which breeds honest men ? Is it a system which
promotes truth, honour, courage, fair dealing, and
brotherhood ?

The very reverse is the case.

Far from being pure, the system is honeycombed
with corruption. Instead of encouraging honesty,
it compels people to be dishonest on pain of star-
vation. In place of brotherhood it promotes
strife, hatred, and all uncharitableness.

138

PURITY OF PRIVATE ENTERPRISE.

Everyone for himself. That is the principle of its Basic
competition. Six days shalt thou labour and do ^mwaL
all thou canst, but the seventh day is the Sabbath
wherein thou shalt do no one — but God. On the
seventh day it is prudent to throw dust into the
eyes of the Almighty, peradventure He find out
what you are up to.

Is not that the position ?

What can be expected from such a system ?
We say self-preservation is the first law of nature,
and generally speaking it is. Given, then, a system
under which each member of society can only
preserve himself by winning sustenance in a general
scramble for food, fuel, and shelter, what else but
fraud, cunning, and dishonesty can result ?

There is enough for all, if the bounties of Nature
were orderly distributed. In the private enter-
prise scrimmage some get too much, some too
little. And the dice are loaded against the man
with clean hands.

There is not an honest man in the kingdom. Makes Honesty
Honesty is impossible under a system of com-
petition and private ownership and private enter-
prise. There is not an honest man in the kingdom.
Soft you, indignant sir. Do you protest ?

From the richest to the poorest, is it possible to
find a single person who is not directly or indirectly,
a tyrant, a sweater, or a thief, or all ?

Look around you. Those clothes, my dear h procjuce$ ^e
sir. That shirt. How much did you pay for it ? Sweater
Ten shillings ? A fair price, no doubt. But how
much did the slave who made it get for her labour ?
Did she get a fair price ? I have read somewhere of

139

PURITY OF PRIVATE ENTERPRISE.

twelve shirts being made for two shillings. I have
read that such fine shirts are made in slums by
women who earn as much as eight shillings in a
week of 120 hours. My dear sir. You an
honest man. You f

And you, my dear madam. What a charming
blouse ! How much ? Really ! They are expen-
sive indeed. I wonder how much they cost for
making. Such fine work. Yes. I should think
they must get rich quick. They receive as much as
ijd. for making one blouse, and find their own
thread. Not guilty, madam ?

And the And you, my dear duchess. Do you, indeed ?

Gutomers Always make inquiries as to the conditions of
labour before you buy anything ? How thought-
ful of you. How extremely unselfish. It must cost
you a great deal more. But — pardon me — where
did you say you earned your income ? Oh, yes —
and rents. Fifteen per cent. ? Really. Very
good dividends indeed. What do the workers get ?
And what rents do your tenants pay ?

And you, Mr. Drudge. Sure you've always
tried to be honest ? I don't doubt you. But
touching that cap of yours (you always are touching
it). Do you know where it was made ? No ? I
do. It was made at Sweatem and Bleedem's.
There's one of his hands. Look — that pasty-
faced girl. The one with slow starvation written
on her figure. She is dying of cheap caps. You
an honest man ?

And so we might go on. Between those who
are dishonest by nature, and those who are dis-

140

PURITY OF PRIVATE ENTERPRISE.

honest because " they must live," there isn't
enough room for an honest man's shadow.

The commercial system is so saturated with Mostly

n i j

corruption that the whole population wink at
actions which would excite disgust in a nation of
pirates.

The gross dishonesties are acknowledged. They
are so gross that we are continually trying to
smother them by Acts of Parliament. Adultera-
tion bills, company fraud bills, and bribery bills
follow one another like a mourning procession, a
mourning procession which has lost the corpse.
The burying never takes place.

The burying never can take place so long as the
system is built on competition and devil take the
hindmost.

To say to the people " you must be honest,"
and then to place them in conditions where honesty
is impossible is sheer lunacy.

The man who gets rich, equally with the man
who gets all the kicks, is a victim of the system.
He must get, or — what faces him ?

A life of penury and toil rounded by the work-
house.

To escape that, what will men not do ? They The Bad Fruits
will lie, rob, cheat, praise God, preach brotherhood, sj
and slay their fellow men.

Consider some of the methods of this glorious
system of commercial purity.

There is lying.

There is cheating.

There is adulteration.

There is bribery.

141

PURITY OF PRIVATE ENTERPRISE.

There is fraud.

There is tyranny.

There is cowardice.

There is murder.

There is lying. Read the advertisements in
your newspapers, or go into the shops and listen
to the salesmen.

There is cheating. Look in your warehouses
and shops at the millions of imitation goods manu-
factured to make the purchaser think they are
what they are not.

There is adulteration. Is there anything that
is not adulterated ?

There is bribery. Try to find a business where
palm oil is unknown.

There is fraud. Read the accounts of criminal
prosecutions and think of the thousands of criminals
who are never prosecuted.

There is tyranny. Lord Penrhyn can do what
he likes with his own, can he not ?

There is cowardice. Think of the 20 million poor.

There is murder. See death rates of the workers.

Private Talk about municipal corruption I You couldn't

WorsTsyttem invent a system better adapted to the production

Possible. of roguery than the present competitive state of

society.

" If one inquires whether the morality exercised
in the conduct of business in this country is satis-
factory or not and answers this question from the
sources of information open to the public, I fear
that the answer must be in the negative," wrote
the Right Hon. Sir Edward Fry, late Lord of Appeal.

142

PURITY OF PRIVATE ENTERPRISE.

"Let me enumerate some well-known facts. Sir Ed ward Fry's

1. Over-insurance of vessels. We know the efforts
which have been made to check the evil, but he
would, I fear, be a sanguine and credulous man who
believed that the evil had disappeared ; and when
one considers how nearly this sin approaches to
the crime of murder, this consideration is startling.

2. The bad and lazy work too often done by those
in receipt of wages. 3. The adulteration of articles
of consumption. 4. The ingenuity exercised in
the infringement of trade-marks and the perpetual
strain exhibited by rival traders by some device
or other to get the benefit of the reputation or
name of some other maker. 5. A whole class of
frauds exists in the manufacture of goods, by which
a thing is made to appear heavier or thicker or
better in some way or the other than it really is.
The deceit is designed to operate on the ignorant
ultimate purchaser. Lastly, but not least, bribery
in one form or the other riddles and makes hollow
and unsound a great deal of business."

The fear of municipal trading " leading " to
corruption !

As to bribery, remember the verdict of the London Chamber
London Chamber of Commerce, who appointed * JKjJJ'JJj'."
special Committee of inquiry into the nature and Corruption in
extent of the evil. That committee reported as Enterprise,
follows : —

" Your committee conclude from the evidence
before them that secret commissions in various
forms are prevalent in all trades and professions to
a great extent, and that in some trades the practice
has increased, and is increasing, and they are of

143

PURITY OF PRIVATE ENTERPRISE.

opinion that the practice is producing great evil,
alike to the morals of the commercial community
and to the profits of honest traders. Many cases
have come before your committee in which traders
have believed (often; though not perhaps always,
without reason) that their entire failure to obtain
orders has been due to the want of a bribe . . .
The servant or agent who demands a commission
and fails to receive it not infrequently warns his
fellows in the same position in the trade against
the honest trader, who thus finds himself shut
out from dealings with the whole circle of firms."
Lord Chief Another judge, the late Lord Chief Justice

Justice Russe II on ,11,1 T i •»«•

Fraudulent Russell, startled the country on Lord Mayor s
Companies. ^y ^ ^g ^ addressing some withering remarks
to London's new chief magistrate on the subject of
company frauds. " A class of fraud which is
rampant in this community — fraud of a most
dangerous kind, widespread in operation, touching
all classes, involving great pecuniary loss to the
community, a loss largely borne by those the least
able to bear it, and even more important than this,
fraud which is working insidiously to undermine
and corrupt that high sense of public morality
which it ought to be the common object of all
interested in the good of the country to maintain —
fraud blunting the sharp edge of honour and
besmirching honourable names."

How rife this form of fraud is may be judged
from the figures given in the return of the
Inspector-General in Companies' Liquidation for
1902. The total capital involved in company
failures for the ten years 1892-1902 was 560 millions.

144

PURITY OF PRIVATE ENTERPRISE.

Five hundred and sixty millions ! More than
all the municipal debt of the United Kingdom.

Of this sum the actual money loss was 380 Company Los:
millions. Nor was this all. During the same ten

years 11.000 companies which did not go intotowho!e

,,..... . . , Municipal Debt.

actual liquidation, were for various reasons struck
off the register and ceased to exist. In many
cases they represented a considerable amount of
capital not included in the above total.

Opponents of municipal trading talk about the
" reckless trading " of town councils. A large
number of the failures enumerated above were due
to reckless trading of the worst kind, and much of
the capital lost was simply niched from the pockets
of trustful investors by bare-faced fraud.

Remember the Hooley booms, the gold mine
booms, the Jabez Balfour and Whitaker Wright
frauds, frauds which persons in high places did
their best to shield from investigation.

The public realises dimly that it is impossible
to reconcile its weekday practices with its Sunday
professions, and that to punish any but the most
flagrant and excessive departures from the golden
rule would involve the imprisonment of the whole
population.

We are all in the same boat, so we turn a blind _

Fraud Winked

eye to irregularities which in our hearts we detest. At.

Speaking at the annual meeting of the Incor-
porated Society of Inspectors of Weights and
Measures, Mr. R. H. B. Thomson said that " Tea is
the subject of more fraud than any other com-
modity." Mr. Spencer, the chief officer of the
Public Control Committee of the L.C.C., states
that many people receive only 15 J ounces instead

145

PURITY OF PRIVATE ENTERPRISE.

The Tea Scandal.

Dishonest Bakers.

Milk
Adulteration.

The System at
Fault.

The Remedy.

of a pound of tea, the remaining half ounce being
represented by string and paper.

It is estimated that in this way the public pay
for five million pounds of string and paper at the
price of tea.

How is it such wholesale fraud is permitted ?
The thieves are doubtless honourable men.
Religious and charitable and very severe on the
starving man who breaks the law to save his life.

But why do we allow it ?

A London baker told a House of Commons
Committee this session that 70 or 80 per cent, of
the London bakers habitually rob the public by
giving short-weight bread. " I did not like to be
an exception to the trade," he said.

Even in a favourable estimate of the honesty of
the trade it was admitted by another witness that
ten per cent, of the bakers were dishonest.

Then there is the milk trade. We pay at least
£200,000 a year for added water, and £90,000 a year
for extracted fat. Ten per cent, of the samples
taken are adulterated, and, according to some
medical experts, a pure milk cannot be bought.

I might fill a volume with similar facts. The
system of private enterprise and competition reeks
with corruption. Honesty under it is impossible,
and when men talk of municipal trading " leading "
to corruption, it is plain that the system has so
blunted their moral perceptions that they are
unable to gauge the depth of the degradation in
which they are plunged.

Municipal Socialism, on the contrary, would
provide an environment which would encourage
and promote the growth of moral activities.
Instead of leading to corruption, it would lead
away from it.

146

MUNICIPAL SOCIALISM AND COMMERCIAL
MORALITY.

FROM the " white lies " which are the current The Evils of
coin of commerce to the murder which is Enterprise.
excused because it is legal, private enter-
prise is the cause of more offences against the
moral law than any other of the influences by
which man is environed.

Can we possibly change for the worse ?

Opponents of municipal Socialism assert that
an extension of municipal trading will "lead "
to corruption.

But it is impossible to be led into a bog if you
are already in the middle of it. Out of it — yes.

I propose to show that while private enterprise
encourages immoral actions, municipal Socialism
would encourage moral actions.

That while private enterprise promotes lying,
deceit, fraud, bribery, corruption, and strife,
municipal Socialism would promote truth, fair
dealing, honesty, and brotherhood.

First of all, let us remember that at present
municipal Socialism does not exist. Municipal
services are not yet independent of private enter-
prise, and cannot be so long as private enterprise
is predominant.

147

MUNICIPAL SOCIALISM.

Municipal
Socialism the
Remedy.

The Odds
Against It
Heavy.

But Its Moral
Standard High.

Only 2\ per cent, of the whole wealth of the
nation is municipalised. It is plain, then, that
our ewe lamb will have to be very innocent and
very high-minded, and very honourable and angelic,
if it is to remain absolutely pure amidst such
dangerous and immoral surroundings.

It is as though a man had municipalised one
of his little fingers. Could we expect the little
finger to act up to the high standard of municipal
morality always ?

Hardly. The little finger does not rule the
whole man, but the whole man the little finger.

So in the case of municipal government. Those
who carry it on are, as to the greater part of their
lives, dependent on the sytem of private enterprise.

It is 40 to I against the principles of municipal
Socialism.

Very well. How do our local authorities come
out of the ordeal ?

I think any impartial observer must admit that
they come out of it very well.

Considering the tremendous conflict of interests
between private gain and public welfare, the high
moral standard of municipal government is
remarkable.

Thousands of men give unselfishly of their best
services for the public welfare, and not a breath of
suspicion has ever been or could be cast on their
motives.

Municipal scandals are not very frequent, and
when such are exposed what do we find is their
cause ?

Not municipal corruption, but motives of private

148

MUNICIPAL SOCIALISM.

gain. They are due, in short, not to excess of
municipal Socialism, but to excess of private
enterprise.

We do not find men descending to fraud in Scandals Due to
order to benefit all the citizens, but to benefit <^^Sh§li

themselves. Pub!ic Welfare.

Councillors do not give contracts to their friends
and wink at irregularities of all kinds in order to
benefit the public. The motive is always private
gain.

Jerry-builders, publicans, and slum landlords
do not capture a local authority so that they can
lower rents, or build healthy houses, or reduce
licences for the public benefit. Their object in
dominating the Council is to prevent municipal
progress, to nullify the laws which would protect
the citizens against their dishonesty, and to line
their pockets at the public expense.

To this kind of corruption the municipal bogey-
mongers are blind, except when some contract
" scandal " is exposed. Then they stick their
tongues in their cheeks, and mouth insincere
platitudes about " the purity of local government "
and " the customary high standard of morality,"
and " the necessity of purging our local institutions
of corrupt practices of this kind."

But they never suggest that the only cure for
the evil is an entire change in the system.

They never acknowledge that these corrupt
practices are the direct product of the institution
of private enterprise — which they are.

They always " fear that an extension of munici-
pal trading will * lead ' to corruption."

149

MUNICIPAL SOCIALISM.

Municipalisation
would Remove
Incentives to
Corruption.

Every Worker
Sure of a
Living.

Would an extension of municipal trading mean
more corruption ? What would be the result of
complete municipal Socialism ?

The principle of private enterprise is everyone
for himself ; but the principle of municipal
Socialism is everyone for the community.

The difference is radical. I showed in the last
chapter how private enterprise must lead to fraud,
deceit, bribery, corruption, and even murder in
the struggle for existence.

Municipal Socialism would entirely remove any
temptation to commit these immoral actions.
Why?

Because under municipal Socialism every person
who worked would be sure of a living. The
great fear of poverty and the workhouse, which
now incites men to such inhuman deeds, would
be lifted from every heart. There would be no
need to lie, and scheme, and cheat, and adulterate,
and bribe, and murder in order to live.

Becky Sharp said that " it is easy to be virtuous
on a thousand a year." What does that mean ?

It means that the thousand-a-year man is
beyond the temptations that surround the poor
man. There is no need for him to descend to the
mean shifts of the crowd in order to live.

But the thousand-a-year man is not safe. Even
for him there ever looms darkly in the background
that horrible fear of poverty, which urges him to
make still more, and more, and more money, lest
some day he too be dragged down into the abyss.

Municipal Socialism would fill up the abyss.

150

MUNICIPAL SOCIALISM.

Under municipal Socialism starvation would be Starvation
impossible, unemployment would be impossible, Imp°8slble-
sweating would be impossible.

Municipal Socialism would organise the pro-
duction of wealth, and so great is our capacity for
production that a famine, except by the " act of
God," would be impossible. Food, fuel, and
shelter, all the necessaries and luxuries of life, would
be produced in such great abundance that the
shadow of poverty would become a thing to make
jokes on, and the fear of the workhouse a dream of
disordered brains.

Everyone would be as free from anxiety as the
millionaire is to-day — more free.

In such conditions, what motive would there be
for lying, for deceit, for bribery, for fraud, for
adulteration, for tyranny, or for murder ?

Private traders adulterate their commodities.
Why ? In order to make more profit. They
" must live."

But under municipal Socialism the need for NO Need for
adulteration would disappear. The object of
municipal trading is to provide a service to con-
duce to the convenience, the health, and the com-
fort of the whole community. Adulterated goods
do not conduce to the health of the community.
Consequently they would not be produced. It
would not pay the people to poison themselves with
filth in the form of food, or degrade themselves by
making shoddy clothes or jerry-built houses.

Many people seem to be unable to imagine such
a complete change of circumstances. " More
municipal trading ? " they cry. " No, thank you.

MUNICIPAL SOCIALISM.

War Office
Scandals.

Not Due to
National
Management,
but Private
Enterprise.

Nationalisation
would Remove
the Opportunity
for such Frauds.

Look at the War Office, the remount scandals, the
jam scandals, the tinned-beef scandals. Think of
the millions lost by Government management of
army supply. That's what we should get under
municipal trading."

Here again the critics fail to see that all these
scandals are due not to national management, but
to private enterprise and monopoly.

Who supplies the bulk of the army stores ?
Private contractors.

Permanent Civil Service officials, over whom
Parliament and the people have practically no
control, are hand-in-glove with these vultures.
If a dishonest contractor supplies rotten food or
short weight, and gets paid full price, the fraud
is only possible because public interests are not
paramount in the management.

If the Army supplies were provided entirely by
Government factories such frauds would be
impossible.

Suppose a million pound tins of beef were
required. To whose interest would it be to send
out tins weighing 1202. instead of i6oz. ? No one
could possibly profit by such roguery if the beef
were grown and fed by Government, the meat and
the tins manufactured by Government, the rail-
ways and ships owned by Government, and if all
the hands through which the goods passed were
those of Government employees.

Eliminate private enterprise entirely, and the
motive and the opportunity for fraud are destroyed.

Again, pending complete nationalisation and
municipalisation, the amount of fraud and

152

MUNICIPAL SOCIALISM.

corruption in the public services must depend on the
efficiency and honesty of the control exercised by
those in authority.

In this respect the present methods of con-
ducting the national services cannot be compared
with those under which local authorities work.
Popular control of the expenditure of the great
spending departments has been reduced to a farce.

In the first place, Parliament consists principally Parliament

f - , . ' , No Control Over

of men whose mam object is to preserve the Spending,
privileges of the monopolists of land and capital.
The national welfare is quite a secondary con-
sideration. From them neither honesty nor
efficiency can reasonably be expected.

In the second place, the machinery of control
of the national spending departments is not nearly
so efficient as the machinery of municipal govern-
ment.

Millions of money are voted annually by the
House of Commons without a word of discussion.
Such a thing could not happen in a municipality.

Imagine the manager of the Manchester Gas Municipalities
Department bringing forward a scheme involving
the expenditure of a quarter of a million, and
imagine him getting it voted by a majority of the
Council without any discussion whatever !

Yet the Daily Mail — the efficient Daily Mail —
says that the control over national expenditure is
watched most carefully, while municipal expendi-
ture is entered on most recklessly !

The Manchester Municipal Gas Department is
managed by a committee of the Council, who
exercise a live and energetic control, while above

153

MUNICIPAL SOCIALISM.

Millions per
Minute Voted
Au tomatic ally.

Party Syitem
Responsible
for Waste.

No Party
Government in
Municipalities.

them there is the whole Council, by whom all
the transactions of the Committee must be passed.

But there is no Parliamentary Committee in
close contact with the War Office, or the Admiralty,
or the Post-office. These services are managed
practically by the permanent officials, and the
result is that they are hardly distinguishable from
private companies.

Estimates are brought before Parliament by the
representatives of the various Departments in the
House of Commons. These are supposed to be
" discussed," but the time allotted for this purpose
in a session is only 23 days. If at the end of that
time all the votes have not been debated the
remainder are automatically carried by the Govern-
ment in power, and in this way millions of money
are granted in. a single evening without any
question.

Again, the national services are inefficient
because of the party system. If, when a Con-
servative Government is in power, Conservative
members were to join the Opposition in criticising
the estimates and voting against them, the Govern-
ment would be compelled to resign. Thus a vote
for economy is a vote against the Government, and
rather than help defeat their own party members
prefer to condone extravagance and corruption.

There is no party government in our municipal
councils. Any member may vote against pro-
posed expenditure without being disloyal to his
party, and a proposal may be rejected without
causing a complete reversal in the municipal
policy.

154

MUNICIPAL SOCIALISM.

To compare municipal trading with the conduct Municipal
of the national services is, for these and other J^jjfolter
reasons, quite inadmissible, and the fear that an Brotherhood,
extension of municipalisation would lead to the
kind of corruption threatened is baseless.

Even to-day we find that the rough scramble
for existence does not entirely succeed in stifling
all the noble impulses in humanity.

Daily we read of acts of devotion and self-
sacrifice for the public welfare. Even a grinding,
grasping money-getter becomes semi-human when
he has made his pile. When he feels " safe " he
wants to do something for others. He does not
see that it would be possible to set free the same
impulses in everybody.

Municipal Socialism would remove all incentives
to corruption, and every step towards it will
reduce the temptations and the opportunities for
fraud.

TRIFLING FOOLISH OBJECTIONS.

Arguments /^VNCE upon a time somebody — I think it was

Answered Briefly ^J Ring james—gravelled aU the wise men by

propounding the following problem : " How

is it that if you place a fish in a brimming

bucket of water the water is not spilled ? "

Long and learned arguments were produced to
show cause why not one drop of the precious
fluid need be upset by the added weight of the
fish. But it never occurred to the savants to fill a
bucket with water and try the experiment.

Many of the objections brought against municipal
trading are posers of a similar kind. They sound
so impressive and awe-inspiring and conclusive
that the careless are apt to be misled, and to accept
as genuine arguments counterfeit coins which
break in two as soon as one commences to nail them
to the counter.

I will now reply briefly to some of those trivial
objections which look so impressive and important
until they are held up to the light of common
sense.

That Municipal *• It *s sa^ that if municipal trading increases,
Sus^Bad11 capital will be diverted from industry, the trade of

Trade.

156

TRIFLING FOOLISH OBJECTIONS.

the nation will suffer, and the unemployed problem
will be intensified.

Answer : When capital is invested in municipal
undertakings at least the same amount of trade is
done as when the capital is invested in private
companies.

For instance, London borrows five millions for
municipal trams. That amount is added to the
terrible burden of municipal debt, and according
to the argument five millions are diverted from
industry.

But they are not diverted from industry. They increase of

T t • t rr\i 11 1 tt i i j_ » Municipal

are employed in industry. The so-called debt "Debt "the same
of five millions is just as much invested in industry "^['^
as it would be if five millions of capital were raised
by the London Tramways Company, Ltd. Is it
not ?

The only difference is that the municipal industry
belongs to the citizens, and the profits thereof ;
while the private industry, and the profits thereof,
would belong to a few dividend-hunters.

Private enterprise suffers, but the total amount
of capital invested in industry is just the same in
both cases.

If there is the same amount of capital invested Only the Profits
in the municipal industry there will be at least the
same amount of employment. But, as I have to a Few.
shown, municipal trading means more employment.

Paying fair wages, reducing hours, and granting
holidays, necessarily involves the employment of
more workers. If one man works 90 hours a week
under private enterprise, it will take one and a half
men to do the same under municipal conditions.

157

TRIFLING FOOLISH OBJECTIONS.

Thus municipal trading does not harm industry.
It expands industry, and increases the number of
the employed.

2. It is said that municipal trading is bound to
"Experts." result in loss, because councillors are not " experts "
in the industries they manage for the citizens.

Answer : Municipal trading does not result in
loss. Municipal trading pays.

Are Private People who use this argument forget that there

D^recto^ are thousands of directors of successful private
Experts? companies who are not experts in the businesses

they manage. Is Mr. William Whiteley, the
universal provider, an expert grocer, cabinet-
maker, hosier, draper, tailor, dressmaker, cycle
and motor maker, horticulturist, and so on ? No.
He is a business man, and he buys brains just as
he buys muscle and material.

Cannot municipalities do the same ? That is
what they do. Town councillors get just as
efficient " experts " as the directors of a private
company. The managers of the municipal gas,
tramway, and water departments are as competent
and clever as the managers of private gas, tram,
and water companies.

Chicago has just decided by an overwhelming
majority to municipalise its tramway system.
Immediately after the result of the poll was an-
nounced the Mayor wired to the Lord Provost of
Glasgow : " Will you give the manager of your
municipal tramways a vacation of thirty days to
visit Chicago to confer with me ? "

Wasn't that a striking compliment to the
efficiency of municipal management ?

158

TRIFLING FOOLISH OBJECTIONS.

America does not ask for the help of Mr. Garcke,
the head of the private enterprise Tramway Trust,
or the manager of any private company. She
turns instinctively to the municipality.

Good management does not necessitate acquain- Experts Can be
tance with the technical details of a business.
General ability, common sense, and honesty are
the chief requisites. Expert brains can be bought.

3. It is said that municipal trading cannot be
extended because the councillors already have enough
work to do.

Answer : If municipal trading is considerably
extended it will be necessary, of course, to increase
the number of directors or councillors.

If, for instance, the bread business were taken That Municipal
over by the London County Council a Bread "stop for
Committee would be appointed. They would no Bobbmi-
doubt be chosen from the expert master bakers,
just as the education committees co-opt experts
in education to help manage the schools.

It seems to be supposed by some people that Absurd i
under municipalisation all the clever business men ^jjjj*"8
would be out of employment, and that all the More Managers
work of direction would be performed by the
present councils. But if we municipalised or
nationalised, say, Lipton's, Ltd., we could still
employ Sir Thomas Lipton to manage the business,
and pay him a handsome salary — perhaps not suffi-
cient to buy " Shamrocks " out of his savings ;
but the girls in the jam factories would get a living
wage, and we might have our yachts as well. Our
yachts.

159

TRIFLING FOOLISH OBJECTIONS.

That Captains of
Industry will Not
Work for
Municipal
Wages.

But They Do

Now.

Austen
Chamberlain's
Self-sacri ce for
the Good of the
Nation.

4. It is said that men who in private enterprise
are able to make enormous profits will not work for
a municipality for a comparatively small salary.

Answer : Such cases would be rare. The honour
and dignity of a municipal position outweigh
many of the attractions of money made in private
business.

A municipal captain of industry's place would be
absolutely secure, a permanency, with an assured
pension, and would carry with it many alluring
perquisites which could not be bought for £ s. d.

Working for the community, at a salary amply
sufficient to provide all the necessaries and luxuries
that a healthy man could desire, with no fear of
bankruptcy or poverty or the workhouse, with the
possibility of winning the respect and admiration
of all the citizens — what man would refuse such a
position on the ground that he might have made
more money under private enterprise ?

Are there not examples enough before our eyes
to refute this argument ?

The Prime Minister gets £5,000 a year. But is
that all his wages ? And does anybody suppose
that Mr. Balfour is " paid " by such a paltry
remuneration for the use of his unrivalled talents
for statemanship ?

How is it that we are able to command the
financial genius of Mr. Austen Chamberlain for a
mere bagatelle of £5,000 a year ? Or the organis-
ing ability of Admiral Sir John Fisher for £2,000 ?

Is it not because these men prefer to serve the
public for a small salary rather than devote
their energies to the sordid game of profit -hunt ing,

160

TRIFLING FOOLISH OBJECTIONS.

and that they are amply paid by the respect and
admiration of the people for whom they labour ?

Establish a system under which the goads of
hunger, poverty, and the workhouse were abolished,
and the spectacle of a clever man refusing to em-
ploy his talents for the benefit of the public because
the salary was too low would be impossible.

And if such clever, greedy gentlemen did exist,
could not the municipality do without them ?

5. It is said that the only result of piling up That Municipal
municipal debt is to burden the ratepayers of to-day p0estlrityne' '
for the benefit of posterity.

Answer : Municipal debt is not a burden, but a
paying investment. Municipal " debt " is only
another name for municipal capital, and if munici-
pal " debt " is a burden on the ratepayers of to-
day for the benefit of posterity, so must all capital
be a burden.

We cannot help working for the benefit of
posterity, just as our ancestors could not help
working for our benefit.

But who is posterity ? — that is the question.

When private individuals own the industries, 9s Private
we are working for the benefit of them and their
posterity ; but when all the citizens own the
industries, we are working for the benefit of all
posterity.

This objection arises chiefly from a misunder-
standing of the word " debt." Debt is something
that has to be paid back. But, as I have shown,
it is cheaper to have a municipal debt, and pay the
interest and sinking fund on it, than to pay dividend
on privately-owned capital.

L 161

TRIFLING FOOLISH OBJECTIONS.

The question is : " Do we need the things we
pay for by means of our rates, and do we need
the things produced by municipal trading under-
takings ? "
increase cf Debt If we need sewerage, paving, libraries, parks,

Not a Burden it , . „ ... ,,1,1

industry is schools, street lightings, hospitals, &c., then the
payment for these services cannot be a burden.
We can get rid of the so-called burden, but at the
same time we shall also get rid of the burden of
life. Must we die in order to prevent posterity
from benefiting by our industry ?

Again, do we need gas, water, trams, and
markets ? We do. Then how can the capital or
debt invested in these undertakings be a burden ?
We use them. We get all we can out of them. If
we leave something behind us for our children
shall we begrudge them the legacy ?

Municipal debt can only be a burden when a
town borrows money for a white elephant — for a
useless or unnecessary service. If the London
County Council borrowed a million to buy a dia-
mond mine, in order to make the Nelson Column
sparkle in the gaslight, that debt would be a
burden, because diamonds are not the kind of
luxury that London can afford.

But debt for all useful necessaries and luxuries
is not a burden, but a paying investment.
That 6. It is said that municipalisation causes " stag-

CauTeCsPaIisatlon nation."

Stagnation. Answer i If that is true, why is there such a great

outcry on the part of the dividend-hunters for the
limitation of municipal trading ? The complaint is
that municipalities are continually extending their

162

TRIFLING FOOLISH OBJECTIONS.

activities and encroaching on the domain of private Municipalities
enterprise. Does this look like stagnation ? {£SS£ uws.
Surely they mean staggeration !

We often hear of the check to the progress of
electrical industry caused by municipal stagna-
tion. Private companies, we are told, could
supply electricity much cheaper than municipalities.

But that is not true. Some private companies
may, because of their freer position, be able to
supply cheaper than some municipalities with
restricted powers. But, on the average, municipal
electricity is cheaper.

A five million pound company tried to
obtain powers to supply the whole of London.
Given such a large area they claimed to be able to
provide electricity cheaper than any of the com-
panies or municipalities now in the field.

Now, a municipality may not supply electricity
outside its own boundaries and so cannot produce
on so large a scale as a private company which
can cover half a dozen counties.

But is that a reason for making the private
company a free gift of a valuable monopoly ?

Not at all. The remedy is to give the munici-
palities power to combine and to supply electricity
outside their own boundaries. If the County of
London is a convenient area for electricity supply
then one municipal authority should be estab-
lished for that area. The London County Council
could produce electricity as cheaply as any private
company, and all the profits would go into the
pockets of the citizens.

163

TRIFLING FOOLISH OBJECTIONS.

But it is, perhaps, true that municipalisation

causes " stagnation " in one way. Stagnation in

the dividend-hunting profession. But that is an

argument for, not against it.

JJat. . 7. It is said that municipalisation will discourage

Municipalisation

Discourages invention.

Answer : The argument is merely an assertion,
without an atom of proof to sustain it. Is inven-
tion encouraged by private enterprise and private
monopoly ?

On the contrary, the inventor is the most
scurvily treated of all creators of wealth. Laws
made by the capitalists and monopolists rob him
of the fruits of his industry and cleverness after
a short term of years, ostensibly for the public
benefit, but really for the benefit of the capitalist
and monopolist, and if he happen to be poor, the
inventor's chances of reaping where he has sown
are still more meagre. Not long since an engineer
made some drawings of an invention of his own on
his employers' paper, and the employers tried to
obtain possession of the improvement by charging

inventor Not him at the police court with theft — of two sheets of

Encouraged Now ,, , . -1,1,1

notepaper. They actually claimed that by em-
ploying a man at wages they had a right to any-
thing he invented !

How many poor inventors are robbed in this
and similar ways ?

Then as to the adoption of new inventions. Is it
true that private enterprise stimulates the rapid
introduction of new methods ? On the contrary,
private interests are the great obstacles in the way
of the adoption of improvements.

164

TRIFLING FOOLISH OBJECTIONS.

What is the charge that figures most prominently
in the " Wake up, England " indictment that has
been brought against British traders during the
last few years ?

Is it not that they are slow to adopt improve-
ments ? Is not the dwindling of our foreign trade
said to be due largely to the reluctance of British
manufacturers to scrap their plant, to lay down
new machinery, to adapt their goods to the require-
ments of their customers ?

Now the municipality, or the nation, would not Only Under the

• » . j -i ,-t t i_ • i • Municipality Can

be deterred by the fears which prevent private invention be
enterprise and monopoly from adopting new inven- Stimulated-
tions. It pays private traders to buy a new
invention and destroy it, because its adoption,
although it would be a benefit to the community,
would reduce their profits. It pays private
monopoly to restrict a service (like telephones),
and to charge high prices, although the cheapening
and popularity of telephones would be of enormous
advantage to the whole people.

The municipality, on the other hand, could adopt
all useful inventions at once, because as they
would belong to the community, all the citizens
would benefit equally. Thus, instead of dis-
couraging, municipalisation would give a great
stimulus to invention.

MUNICIPAL SOCIALISM AND CHARACTER.

Stm D«!rP0ay Tr!HE Provision of public services by the
Freedom and citizens for the citizens is Municipal

Independence ? _ . . .

Socialism.

Many opponents of Municipal Trading profess to
be seriously concerned as to the bad effects an
extension of the principle will have on the character
of the free and independent Briton.

Some of them would go so far as to hand back
many of the municipal services to private traders.
If they had the power they would abolish the
1,000 municipal waterworks, the 260 municipal
gasworks, the 334 municipal electricity works, the
162 municipal tramways, and allow private
dividend hunters to supply these services.

John Smith of Oldham, they tell us, is (or was)
a free and independent citizen. Under the bene-
ficent system of Competition and Private Enter-
prise, John Smith, they say, has built up this
mighty Empire. Our enormous wealth, our
trade and commerce, and our free institutions are
due to the fact that in the past every John Smith
born in these fortunate islands had the opportunity
of developing all his faculties.

166

MUNICIPAL SOCIALISM AND CHARACTER.

Competition and Private Enterprise, we are told, Our Glorious
make it possible for every child to become Prime FSE^,""
Minister, if he has it in him. There is always room Dependence,
at the top. It is character that tells, and character, Self-reliance,
they say, is best developed in the free struggle for
existence. In the battle of life, those who win
the rewards are the men who possess, or who have
acquired, those qualities without which a strong,
an intellectual, and a happy Empire is impossible.

" If you had your way," they complain, " you
would destroy character, and consequently ruin
the Empire. If you had your way you would let
the municipality or the State do all those things
which have hitherto been done by the private
individual. This would make it unnecessary
and impossible for the individual to use his faculty
of initiative, he would become a cog in a machine,
he would never need to think, his brain would
become atrophied ; having no responsibility, his
moral nature would deteriorate, he would become a
spiritless clod, and, instead of being free and
independent and self-reliant, he would be a slave."

Are these statements true ? Is it true that the Are the People
mass of our people are free and independent ? Free ?
Is it true that they have complete control over
their individual actions ? Is it true that they are
free to use their faculties in what direction they-
please ? Is it true that they are able to initiate
anything they desire ? Is it true that they are
entirely responsible for their lives ?

Take John Smith of Oldham. Is he free ? Let The Case of
us see. Arrived at manhood's estate, what is his To-day""'
position ? He has to work for a living. Can he

167

MUNICIPAL SOCIALISM AND CHARACTER,

work at what trade he likes ? No, he cannot.
He may be able to go to a cotton factory, or any
trade he chooses, if there is a demand for his labour.
Does this demand depend on the free exercise of
his faculties ? Not at all. It depends on the
He u Not Free, factory owner. John cannot live unless some one
w^ kire him. Is some one compelled to hire him ?
No. Some one will hire him if he can get a profit
out of John's labour. Not otherwise. So that
John Smith is not free to live by his labour. He
is a slave of the landlord and the employer. He is
not free, he is not independent.

Let us look at John Smith in work. Has he
any control over the conditions of his employment ?

Over his hours, his wages, his holidays, his
surroundings ? In some trades a little, in others
none.

In some trades a little. How has he got that
little ? By curtailing the freedom and initiative
of his employer. By the help of Factory Laws,
every one of which takes away some of the freedom
of the employer. In some trades the worker has
no control whatever over his hours, his wages, his
holidays, or his surroundings. So that in the
latter there is no room for freedom and initiative
at all.

John Smith's freedom, then, as a worker, is a
very small affair. He has no control over the con-
duct of the business by which he gets his living,
and most often the nature of his work is of such a
kind that the free play of his initiative and inven-
tive faculties is impossible. He is a mere machine.

168

MUNICIPAL SOCIALISM AND CHARACTER.

His intelligence and his sense of responsibility are
quite undeveloped.

Now, it is a commonplace that if you want to
develop character there is no better way than by
engendering a feeling of responsibility. Make a
man feel that on his intelligence, his attention, his
application, his industry, depend certain results,
and you at once imbue him with a sense of self-
respect, you create a feeling of responsibility which
develops what initiative and invention there is in
him.

What was the great lesson taught by the Boer Time he Was ;
War ? Was it not that more attention must be
paid in future to the development of individual
intelligence ? That our system of burying the unit
in the company was not altogether right ? That
every soldier ought to feel his personal respon-
sibility, and be able to act on it ?

How much of this sense of responsibility have But impossible
the people under our system of Private Enterprise EiterpriT *
and Competition ? We have seen that in the
matter of getting a living, John Smith has little
scope for exercising this faculty. He is responsible
for nothing but the doing of his own work, too
often a mechanical operation that entirely deadens
all feeling of interest.

Imagine a man whose life is spent in carrying
bricks up a ladder. Has he a chance of developing
character ? So with millions of others:

The Competition and Private Enterprise cham-
pions are mistaken. They say : " You want the
Municipality or the State to do everything for
the workers."

169

MUNICIPAL SOCIALISM AND CHARACTER.

Workers simply
the Tools of the
Landlords and
Capitalists.

How to produce
Free and
Independent
Britons.

No. We want the workers to do everything
for themselves.

The fact is, it is the Competition and Private
Enterprise champions who want to do everything
for the workers. Or nearly everything.

The landlords and employers not only control
the conditions under which the mass of people
get a living. They also largely control the
activities of the people in their capacity as citizens.

Till recent years a working man was not free to
serve on his local Council. It was illegal. And
now that it is lawful, we find the champions of
freedom and initiative doing all they can to prevent
him from exercising his powers in that way. They
say : " No, we can manage these things much
better for you." Is not that strange conduct ?

The champions of Freedom and Competition
have kept the workers under in every way. They
have undertaken to find them work if they can
get a profit out of it. They have undertaken the
government of the Empire. They have managed
the municipalities.

And all this time John Smith's faculties of
initiative and invention, his self-reliance, his
intelligence, and his sense of responsibility have
been rustings

We Socialists say this is not well. Like the
champions of Freedom and Competition and
Private Enterprise, we believe firmly in the building
up of a nation of men of Character, we believe in
Initiative, in Intelligence, in Independence, in
Individuality, in Responsibility, in Self-Reliance,
and Freedom.

170

MUNICIPAL SOCIALISM AND CHARACTER.

And we say that the way to stimulate the ac-
tivity of these faculties, the way to encourage the
development of Self -Reliance and Responsibility,
the way to breed men of Character, is not by closing
up nearly all the avenues along which the people
may exercise their energies, not by limiting their
responsibility to a narrow sphere of monotonous
and oft-times degrading labour, not by depriving
them by plausibilities of their rights and duties
as citizens, but by widening their opportunities
of exercising their intelligence and thinking powers,
by insisting on their responsibility as citizens, and
by encouraging them to do for themselves what
they have so long permitted the champions of
Freedom and Competition to do for them.

We say to John Smith, " Up, arise out of your Mu
long sleep, and use the faculties which God has th'
given you. This long time you have been indeed
a cog in a wheel, a half-dead piece of material,
good for producing wealth for others to enjoy.
But now, like * Sentimental Tommy,' we have
found a way. Here at your hand is a path,
clear but narrow, hewn out of the solid rock of
oppression and domination by the toil and sweat
of many unhonoured pioneers of real freedom.
Up, plant your feet therein, ere the fissure be
closed by the watchful enemy. Crowd in by your
thousands until the press shall have thrust back
the threatening walls, and trampled them under
your feet to make a wide plain whereon you will
have room to breathe, and live, and straighten
your bodies.".^

You are the Municipality. All the citizens
171

MUNICIPAL SOCIALISM AND CHARACTER.

Not the Mayor, Aldermen, and Councillors only,
but all the citizens.

You have no " say " in tlle Dusiness by which
you get a living, but here you can have a " say."

Are there any slums in your town ? You are
responsible.

Are there any insanitary houses in your town ?
You are responsible.

Are there any foul and unhealthy workshops,
dairies, bakehouses, laundries, or slaughter-houses
in your town ? You are responsible.

Are there any factory chimneys belching forth
black smoke in your town ? You are responsible.

Are your streets badly paved, badly lighted,
dirty, and ill-kept ? You are responsible.

Are there any food and drink adulterators in your
town ? You are responsible.

Are there no free libraries in your town ? It is
your fault. Not Mr. Carnegie's.

Are there no parks or playgrounds in your town ?
It is your fault.

Have you no Municipal Band ? It is your own
fault.

Have you no Technical School ? It is your fault.

Have you a Municipal Gasworks ? It is yours.
See that the gas is good and cheap.

Have you a Tramway System ? See that it
belongs to the Municipality, and that the fares are
cheap and the wages high.

Does your Corporation employ labour ? Yes^?
Does it pay trade union rates ? Why not ? It is
your fault. You are a Sweater.

172

MUNICIPAL SOCIALISM AND CHARACTER.

Have you a Town Hall ? Why don't you use
it ? It is yours.

You are the Municipality. Responsibility

Here, then, are ways of creating a feeling of character.
Responsibility in the people. It is because we
Socialists believe that it is their duty to undertake
these responsibilities, and because we believe
they are capable of bearing these responsibilities,
and because we believe that in doing so they will
develop Character, that we advocate the extension
of municipal trading.

A PRACTICAL PROGRAMME.
Municipal T^HE reader is, by this time, I hope, fully con-

Sociahsm the J . .

Only Remedy. I. vmced of the benefits of municipal trading,
but if any doubts as to its advantages remain, I
should recommend him to dispel them by reading
"Britain for the British," by Robert Blatchford
(cloth 2s. 6d., paper 3d.), and "To-Day's Work,"
by George Haw (cloth 2s. 6d.).

Certain it is that there is no remedy for the
admitted evils of society that is not " Socialistic "
in method. No remedy is proposed by our
opponents. There is no other way but Socialism.
We hear a good deal nowadays about the
physical deterioration of the masses. Scientists
and medical men of great reputation have lately
begun to echo the note of alarm which was sounded
by the Socialists a quarter of a century ago. Some-
thing must be done.

Fiscal Quackery. Something must be done. Yes. But what
must be done ? The people perish for lack of
the common necessaries of life, food, fuel, and
shelter, and fresh air, and the statesmen offer as a
cure a Society for the Promotion of Gymnastic
Exercises, or wrangle as to the best fiscal methods

174

A PRACTICAL PROGRAMME.

of "adding a penny farthing a week to the working-
man's wages !

This is mere tinkering. It is worse than tinker-
ing. It is quackery. It will not do.

The Socialist remedy on the contrary, is radical
and easy to understand. We want to make our
people a nation. A nation of healthy, happy-
hearted men and women and children, and we
believe it can be done.

Hitherto the British nation has not existed.
There is no such thing. What does exist is a mob
full of the dread of poverty, scrambling madly for
the means of existence. For that scramble we
would substitute an orderly organisation.

" This our earth this day produces sufficient The Earth's
for our existence," wrote Richard Jefferies. [<>?!£ u
" This our earth produces not only a sufficiency,
but a superabundance, and pours a cornucopia of
good things down upon us. I verily believe that
the Earth in one year produces enough food to
last thirty." Why, then, have we not enough ?
Why do people die of starvation, or lead a
miserable existence on the verge of it ? Why have
millions upon millions to toil from morning to
evening just to gain a mere crust of bread ?
Because of the absolute lack of organisation, by
which such labour should produce its effect, the
absolute lack of distribution, the absolute lack
even of the very idea that such things are possible.

Lack of organisation is private enterprise and
competition. Organisation is municipalisation.

We have organised our street service, our water
service, our gas service, our tram service, our

175

A PRACTICAL PROGRAMME.

electricity service, our parks, playgrounds, and
libraries. Why not food, fuel, and shelter ? Why
not a municipal minimum of pure food, decent
dwellings, and sufficient coal for all willing to
work ? It can be done.

if industry were You, as a citizen and voter, have the power

Organised. now to make such improvements in the conditions

of our towns and villages that a generation hence

their most secret places might be exhibited without

shame.

Our municipalities are vested with wide powers.
All that is lacking is the will to use them. If you
want to abolish slums, to build decent homes, to
eat pure food, to enjoy fresh air, sunshine, and
music, to have economical and efficient services,
you must do the work yourself. You must take
an interest in these things. You must work for
them and vote for them.
HOW to get If you want these things you must not allow

Organisation. .

men with axes to grind to represent you on the
local councils. You must choose the right man,
and see that he does represent you. To vote and
go to sleep is no use. You must be vigilant
after the election. Your motto must be Nunquam
dormio. I never sleep.

Who is the right man ?
The Right Man The right man is not a slum owner, nor a jerry-

to Vote and .

Work for. builder, nor a sweater, nor a swindling contractor,
nor a tramway or gas or electricity company
promoter. The right man is not a member of the
Industrial Freedom League. The right man does
not go into the council to puff himself up with

A PRACTICAL PROGRAMME.

pride or to " make a bit," but to further the wel-
fare of all the citizens. The right man puts the
people before private profit. The right man has
an ideal, and will work faithfully and steadily to
accomplish his aims.

The right man will put in the forefront of his pro-
gramme the provision of work for the Unemployed.
Man cannot live without work (unless he beg or
steal). Private enterprise has failed to organise
the work of the country. The municipalities
must provide honourable work for every willing
man or woman, and pay them a living wage.
Until that is done, until every worker has the right
to live, it is hypocrisy to describe the people as
" a nation."

Mind, it will not be enough to provide temporary The
employment at useless work in bad times, and
to pay meanly for it. That is no solution of the
unemployed problem.

No. The municipalities must have powers to
provide useful permanent work for adequate wages.
Instead of the workers running after private
employers, we want to have private employers
begging the workers to leave their municipal
work.

The Unemployed Act is a poor thing, a very poor
thing, but it is a beginning. It enables the
Councils to provide farm colonies for the unem-
ployed, but does not allow them to pay wages out
of the rates. Matters cannot be left thus. Some-
thing more must be done. You can help, by
voting for the right man.

177

A PRACTICAL PROGRAMME.

The Housing
Problem.

Health.

Municipality —
the Model
Employer.

Education.

The right man will give the Housing Question
a good deal of attention. Every municipality
has the power to build houses, and every munici-
pality has the power to prevent the erection of
insanitary dwellings. Build plenty of decent
homes, and the jerry-builder and slum-owner will
die of neglect.

The right man will insist that the Council
carries out the provisions of the various Public
Health Acts. Insanitary streets, houses, and
workshops should be impossible. Adulteration
of food and drink should be sternly repressed.

The right man will agitate for an adequate
provision of baths and washhouses, of parks,
playgrounds, and gymnasia, of libraries, art
galleries, and museums.

The right man will try to make the municipality
the model employer. The municipal manual
worker should be treated as fairly and considerately
as the municipal brain wrorker.

The right man will vote for the direct employ-
ment of labour by the Council on all municipal
works. Contractors mean waste of public money
and often scamped work. If they are employed,
the Council should insist on a fair wages clause
being inserted in all contracts.

The right man will not be afraid of raising the
rates. He knows that rates can be reduced.

The profits on municipal trams, gas works,
markets, and electricity will go far to pay the
cost of the out-of-pocket services.

The right man will see that the Education Acts
are administered in the interests of the children

A PRACTICAL PROGRAMME.

and not of a sect. He will be in favour of providing
free meals for the needy.

The right man will work for the institution of
municipal Savings Banks, municipal Fire In-
surance, municipal Milk Depots, municipal Coal
Supplies, municipal Drink, municipal Farms,
municipal Bread, and municipal Hospitals.

In short, the immediate object of the right man The Municipal
should be to municipalise all those services which
are necessary to a healthy life. Food, fuel, cloth-
ing, shelter, — these are required by all, and no
man should have the right to deny them to any
worker.

Much may be done to-day. How much, depends
entirely on the citizens. If all that can be done
to-day were done, much more could be done to-
morrow. What the Socialistic spirit has already
done these pages in part tell. That little is still
enough to prove how effective an instrument for
the elevation of the masses municipalisation is.
We must not stop at municipal trams. We must
not stop at municipal gas. We must not stop at
municipal electricity. These are only stepping
stones. Not until we can say that poverty, and
disease, and unemployment are abolished out of
the land shall we have the right to discuss the
limits of municipal trading.

179

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