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cities supplied more consumers and charged on the average lower rates than the private companies. Similarly, in the United States, a large majority of the water works are now owned by municipalities, while in 1902 the municipalities owned 815 out of the 3620 central electrical stations, employing 2467 out of the 23,330 wage earners employed, and supplying 195,904,439 out of the aggregate 2,507,051,115 kilowatt hours of power. At first blush, it would appear that the safest arguments for or against municipal ownership might be derived from a comparative study of municipal and private operation. Such, however, is not the case. Owing to the predominating importance of technical questions in such comparisons, none but expert engineers or accountants are competent to draw conclusions, and unfortunately the conclusions of the experts are in hopeless conflict. The expert representatives of the private companies return from their study of public management with their opinions unchanged; while the expert defendants of municipal ownership find in the results of English or American municipalization little but confirmation of their existing opinions. In fact, we are forced back upon more or less general considerations.

If we carefully examine the important arguments in favor of municipal management, we shall find that many of them assume that regulation of the character previously described is impossible. (a) The most emphasis is placed by defendants of municipal management upon the fact that private ownership in the past has resulted in widespread political corruption. No one, to-day, denies this truth. But never in the past have we attempted the kind of regulation which we may expect in the future, and which has already been started, though not perfected, in the states of New York and Wisconsin. This species of regulation contemplates a valuation of public and private plants, with prevention of stock watering and reduction of profits to a reasonable level. If we can sell or rent franchises (not give them away), prevent the capitalization of excessive profits, and keep dividends on a rational basis, the raison d'être of bribery and corruption disappears. Corporations cannot afford to pay bribes for the opportunity of earning reasonable profits.

(b) The second great argument for municipal management is that it will improve the public service by increasing its extent, dignity, and importance. This position is probably well taken. The supreme necessity for judicial purity has given us pure courts. The supreme necessity for decent management of public utilities, if they were undertaken by our municipal governments, would, it is probable, give us decent management. Certainly, at least, every one agrees that it would be suicidal to introduce municipal management without putting it on a civil service basis.

(c) The next characteristic of public industry is as often cited against as in favor of municipal management. Except for highclass salaried men, where the reverse is true, the State treats its employees unusually well, paying larger wages for shorter hours of labor than most private employers. This will appear as a virtue or defect, according to our viewpoint. If we believe that the State should be a model employer, and pay fair living wages whether private employers do so or not, this characteristic of municipal management will appear as a strong reason for its introduction. If, on the other hand, we concentrate our thoughts on cheapness of production, and neglect all considerations of the welfare of the producers, we must score a point under this head in favor of private operation.

(d) One of the strongest charges against municipal ownership is based upon the fairness and humanity which the State shows in dealing with its employees. It is charged that such treatment tends to corrupt the public servant, and to destroy his political independence, making him a subservient henchman and supporter of the administration under which he happens to be working. That there is danger of such "pernicious activity" on the part of office holders, no reasonable student of public affairs will deny. In the recent Chicago city campaign, when, as it happened, municipal ownership was the burning issue, the head of the police department attempted, and partially succeeded, in forcing almost the entire police force to work for the election of one of the candidates. But this candidate was defeated, despite the police, and the police official is at the present writing under criminal indictment.

This rebuke of police interference is of crucial import. It calls attention to the fact that American voters have learned to resent such interference. In scores of city elections in the last five years the independent political sense of the people has triumphed over office-holding cliques who attempted to perpetuate their sway; and not only has the electorate shown its ability to control the office holders, but with every year it has become more and more difficult for political bosses to dictate to the office holders themselves. Without civil service, of course, municipal management is unworthy of consideration. With it, however, the whole sting of this criticism vanishes. Not only will public employees cease to be of one political faith, but the better conditions of employment offered by the State will probably cease to make a petty grafter of the public employee. The reason for the last statement is plain. If the State pays $4.00 a day for carpenters, while private employers offer but $3.00, the $1.00 difference may have either of two effects: under the spoils system, it will go to indifferent or average workmen in the form of a pauperizing bounty; but under the merit system, it will bring to the State the best skill in the occupation. Better conditions of employment, where the merit system prevails, merely "concentrate competition upon efficiency."

Moreover, it may be remarked that it is not open to opponents of municipal ownership to assert that: "all this argument presupposes appointment by merit, but we have not yet succeeded in introducing the merit system." Such an argument may be turned against its supporters by the countercharge, which is equally true, that we have not yet succeeded in introducing the advanced form of public regulation which is the only salvation and the last defense of the adherents of private management. In point of fact, the whole discussion of municipal management presupposes certain reasonable improvements both in the character of public regulation and the character of the public service; for unless we can regulate public utility companies far more satisfactorily than we have done in the past, we shall unquestionably and inevitably come to municipal management.

(e) Finally, there is another fundamental characteristic of pub

ic management which we shall regard as a virtue or defect according to our political philosophy. Under private ownership, prices are determined by considerations of profit; and persons who cannot afford to pay the price of the service must go without it, although they may be sadly in need of it. Under public management, however, rates are determined by general social utility and are frequently placed at less than the cost of services. Where this happens, part of the expense of maintaining the industry falls upon the general body of taxpayers, and it must be remembered in this connection that probably a majority of the voters of the present time pay no direct taxes. To persons of broad social sympathies, confident of the honesty of democracy and anxious to turn the powers of the State to ameliorating the lot of the poor and unfortunate, this prospect of modifying charges by considerations of social policy offers no terrors. To reduce street-car fares, for instance, during the hours when our poorly paid workmen are riding to their work, and in general to adjust prices so as to subserve the highest social welfare, appears as an honorable opportunity, not as a dishonorable temptation. To persons of a harsher social creed and a more pessimistic social philosophy, however, the adjustment of rates to the greatest good of the greatest number seems pernicious and dangerous.

Whether public management can fairly be expected to be as efficient and progressive as private management is a question which does not lend itself to brief discussion. At present, however, we are unquestionably in an experimental stage; and it is desirable not only that the commission plan shall be given a thorough trial, but that public ownership and operation shall be tested under such conditions as to enable an intelligent comparison to be made with the results of private management. States having a commission empowered to enforce uniform accounting will constitute great economic laboratories in this connection during the next quarter of a century. In the end, however, it may be that less emphasis will be placed upon cost of service and more emphasis upon considerations of general social welfare than is now done. Even if it shall transpire that private management under a state commission is cheaper and more progressive than

public management, the latter will still have a strong case in the plea that it adapts the service to the greatest social welfare, abolishes the struggle between the franchise corporations and the public, dignifies municipal government, and, by enlarging the public interests of the people, breeds in them a finer spirit of coöperation and a deeper sense of social solidarity. At bottom this question is not so much economic as social; and in the end that method of management will prevail that best subserves the social wellbeing, not that method of management which is cheapest.

Municipal Home Rule. The problem of municipal ownership, as has been suggested, presents a contest between the highest form of regulation which we can reasonably expect versus the best species of municipal management which we are justified in anticipating. It is a conflict of potentialities. Whatever its outcome, there is one important step which should be taken at once: cities should be endowed with the power of introducing municipal management, if they wish to try the experiment. In many cities to-day private corporations have secured, often by bribery, perpetual franchises in which rates and other conditions are authorized that are manifestly unjust to the public. In such a situation the city can do nothing but condemn, or threaten to condemn, the franchise and property under its powers of eminent domain. Municipal ownership, or the threat of municipal ownership, under which the corporation might possibly acquiesce in reasonable regulation, offers the only remedy for this condition of affairs.

Worse than the above situation, however, is the utter helplessness of those city governments which can neither undertake the operation of public utilities themselves, nor regulate the rates and service of the private companies which control them; while the state legislature, which has retained the power of regulation, does nothing. This deadlock delivers over the city bound and captive into the hands of the corporations. Even if the city decides to sell or rent its new franchises, even if it prefers the conservative policy of private management, it cannot dispose of its valuable rights to the best advantage, unless it possesses the alternative of public management with which to force the hand of the corporation. It is sometimes thought that by offering franchises to the highest

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