,ril> W-t ^--f-'t i sl/sMi^i^ t^'m t m sw ii:\-l L »■.•;-'»•-•■,■ U'^lii^h 'V::->, 53W^!' mi: w ■'^ii. ■.'-,(; { ,. "^ '■-' : ■■ ■,'! ■ ir'.^r.-' *■■ y REESE LIBRARY UNIVERSITY OF CALIFORNIA ^■- OF T tx3:e COST OF MUNICIPAL TRADING, A PAPER READ BEFORE THE SOCIETY OF ARTS, LONDON, BY DIXON HENRY DAVIES, WITH THE DISCUSSION THEREON AND DIAGRAMS. THE ATTORNEY-GENERAL, SIR RICHARD WEBSTER, Q.C.M.Q., QX, M.R, IN the CHAIR. Reprinted^ with Additions from the Journal of the Society of Arts. CONTENTS. PAGE PAGE Lecture ------ I Discussion continued — Statistical Tables - 28 & 72 Sir Westby Percival 39 &67 Earl Wemyss - - - - 39 Discussion — Mr. John Burns, M.P. ,, Dundas Pillans - - 47 • 53 The Attorney-General - 29 „ Fairfield - - - ■ ■ 58 Mr. Brydges - - - - 31 ,, Sellon - - - - - 61 ,, Graham Harris - - 33 ,, Spencer Hall - ■ - 62 „ W. M. ACWORTH - - 34 ,, E. Garcke - - - ■ ■ 63 „ EwiNG Matheson 36 Maior Flood-Page - • - 66 ,, Sydney Morse - - 37 Mr. Davies' Reply - - ■ 67 Sir John Rolleston - - (i( 38 ,, „ Postscript - 70 C-i ^\ _I)^(.> Mestminstet : P. S. KING & SON, ORCHARD HOUSE, 2 & 4, GREAT SMITH STREET. TWO SHILLINGS, rtpt^f Rr.ESE THE COST OF MUNICIPAL ENTERPRISE. SYNOPSIS. General economical principles of limitation of State functions applicable to Municipal Government as well as Imperial: — Relative fiscal importance of Local and Imperial Governments — Repre- sentative check upon local expenditure inoperative and insufficient — Growth of proper Municipal .functions requires all the attention and resources of the Authorities — Repressive effect of Bureaucracy, lacking both the stimulus and restraint of private enterprise — Four arguments in favour of Municipalism: — (1) Cheap money; (2) Connnunity entitled to profit of communal service; (3) Sordid moti\'es of private enterprise; (4) Private Monopolies objection- able—Governments won't take a risk and can't invent, therefore Municipal enterprise tends to stagnation — Speculations on the results of such stagnation— Co-operative Societies — Trade Unions — Municipal interference with electricity — Its oppressive proceedings, analogous to the abuses of the old Corporations, therefore dangerous to our modern Municipalities themselves, for such a policy alienates public confidence — The warning of Milton. The laws defining the limits of State action, to the elucidation of which so much of the best thought, both public and private, of the present and the two previous generations has been devoted, have by this time received a fairly general accep- tance by our Imperial Authorities. It is now recognised that Parliament cannot itself initiate the energies of the nation, nor 174333 supply the spirit of iidveiiture. These developments aud qualities must be the product of the brains, and the enterprise of the peoide themselves. All that the Imperial Government aims at in this regard is the preservation of " the open door," the maintenance, that is, of a favourable medium of security and liberty within Avhich the free activities of an industrious and adventurous people can (whether at home or abroad) operate without let or hindrance. It is true that it is the fashion of certain speakers and Avriters who aim at cheap ])opularity by appealing to the shallower instincts of the uninformed, to disparage these doctrines of free trade, of fair field and no favour, but notwithstanding })roposals seductive to class interests, the preachings of Adam Smith, Stuart Mill, Cobden, Bright, and Herbert Spencer have taken such a deep hold of the intelligence of the nation that they may be said to have been adopted as fundamental maxims by Parliamentary economists of whatever political colour. There is a portion of the State, however, into which these important truths do not seem to have yet permeated. The local administrative authorities are as much a })art of the State as the imperial. They have similar rights to regulate the conduct and tax the pockets of the subjects as has Parliament itself. Indeed it is probably not generally recognised how large a part of the State these authorities constitute if measured by their relative fiscal importance. The charts marked 1 and 2 upon the wall show the relative amounts of the debt imposed upon the country by Parliament and the local authorities respectively, and the contrasted rates of decrease of the imperial, and the increase of the local burdens respectively, during the 20 years from 1878 to 1897, and Avhile the imperial debt has fallen from 775 to 641 millions (a deduction of 134 millions) the local debt has more than doubled itself hy an 3 increase of 138 millions, and it now amounts to tlie enormous sum of 252 millions, or, allowing for the accumulated sinking fund, 245 millions sterling:. The rapid growth of these local liabilities is still further illus- trated by another set of figures whicli are exhibited on chart No. 3, and which show that during the past 20 years the local debt has increased 120 per cent., and the annual amount of local taxation has increased 77 per cent, against an increase in the population (the paymaster Avho has to meet these increasing burdens) of only 23'6 per cent., and in the rateable value of his property of only 26*7 per cent. These figures relate to the whole of England and Wales, including the country districts whose authorities have hitherto been content, mercifully, Avith a much more modest conception of their functions than the municipalities. If Ave take the great towns by themselves (which should give us, on the principle that what Manchester and Birmingham think to-day England will think to- morrow, a more trustworthy indication of the future) the figures of the local debt appear to be more serious still. Well might a citizen in Manchester cry to his local governors " the State has chastised me Avith rods but ye have chastised me with scorpions," for Avhile his debt to the nation is only £16 6s. del., his debt to the nnmicipality is £29 Is. Ad. (see Chart No. 4). The comparison of the local with the National Debt is more startling when the relative ages of the tAvo are recalled, for Avhereas the vital need of the nation's defence, and other imperial necessities throughout centuries, are covered to-day by a debt of 641 millions, these local burdens, the creation of the last 30 years, already amount to 2.t2 millions. It must be remembered that the National Debt is not really a debt at all. There is no liabilit}^ on the State to repay the j)rineipal. The rcAcrse is the case AAdth regard to local debts. If 4 Avo except some few stocks whicli are ouly redeeaiable with the consent of the holder, these moneys are real loans, repayable at fixed periods whetlier the assets on which they have been expended continue to exist or not, and independently of the success or failure of the works for which thev have been raised, and thev constitute therefore a most serious and continuing hamper upon the taxable margin of the nation's resources, the margin which it is of high importance to conserve as far as possible intact as the nation's war- chest. Further, whereas the wisdom of the imperial legislators has been devoted throughout the late years of prosperity to the reduction of the country's liabilities on National account by the systematic redemption of the annuities, the local legislators have been steadily augmenting the liabilities of their citizens. To such an extent is this the case that if the same rate of decrease and increase are main- tained for another 20 years the local liabilities will exceed the National Debt. It is sometimes said that as these liabilities are imposed by representative authorities, the matter is in the citizens' own hands. But this does not seem to be a sufHcient answer. To a large extent the representative system, though existent in form, is, in practice, inoperative in regard to these local bodies. They are so numerous. In addition to IMunicipal Corporations, there are County Councils, Parish Councils, District Councils, Boards of Guardians, Scliool Boards, Highway Boards, Burial Boards, Harbour Boards, Vestries, Commissioners, and probably others. The consequence is that not one householder in a thousand understands the machinery by which he is governed, or can afford the time to find out how to exercise his franchise. All he knows for certain is that the rates orow heavier year by year, and that they nuist be paid, and he i)ays and grumbles. He does not vote. To such a state of wearied apathy have the voters been reduced that Ratepayers' Associations are common for the" purpose of checking the ju-oceedings of the elected 5 representatives, and a " Citizens' Sunday " has been instituted in London in order to arouse the enfranchised townsman to a better sense of his growing responsibilities. But, apart from this, the representative check would not be sufficient even if it were in operation. The House of Commons is also representative, and yet the power of Parliament to levy taxation is much more restricted than that of the local authorities. In the first place the imperial finance is really under the control of the Members of the House of Commons for the time being, because the liabilities of the year are (apart from war responsibilities of the past) provided for out of the taxation of the year as proposed by the annual Budget, whereas the local liabilities are mainly met by loans spreading over a period of 12 to 60 years, over which, once undertaken, the Councillors have no control. Besides, by the Standing Orders of the House of Commons, as is well known, no grant of public money can be made except upon the initiative of the responsible Ministers of the Crown, and after discussion in Committee of the whole House. The value of these restrictions is probably appreciated by no one so much as by the Members of Parliament themselves, for were it possible for a Member of the House to rise in his place, as a member of the London County Council frequently does, and advocate some grand new scheme involving the immediate expenditure of millions of public funds, our legislators would be the perpetual prey of a hungry pack of place seekers. Even as things are, it is rumoured that the life of a member for, say, a Dockyard constituency, is not an unburdensome existence. The member of a Corporation, on the contrary, has no such safe- guards on which he can relv. Probablv in business himself, and surrounded with business friends on whose goodwill he is to a greater or less extent dependent, he has constantly to run the risk of ofi'ending some of them if he affects a rigid adherence to economy, and the mixing up of his relations towards the working class on the 6 one hand as master (for the Corporation is often the largest employer of labour in the town), and on the other hand as repre- sentative, must make his position as guardian of the public purse a difficult one. Surely to leave the Corporations surrounded with these direct incentives to extravagance without any adequate check on their power to expand their functions and increase their borrowing is, to say the least of it, unwise. Let us for a moment consider the United Kingdom in the light of a Banking Company, with its head office at Westminster, and branches in every town. We find that at the head office the rule, founded on the experience of centuries, is that no loans are granted out of the funds of the shareholders, except upon the unanimous reconnnendation of the Managing Directors, approved at a full Board meeting, while the branches (which the Managing Directors never visit, and the affairs of which the Board give no attention to) are engaged on a polic}' of extension, to meet which loans are being undertaken equivalent to those at the head office, and threatening to involve the entire resources of the proprietors, without any of the restrictions which long practice had imposed upon the more responsible chiefs. Surely the shareholders should say to the Board, " You must give these local managers a line, a rule to limit their enterprising tendencies, and one rule would certainly be 'avoid trade risks.' Lend money upon sufficient security if you like, where you are sure of getting it back sooner or later in meal or in malt and in the meantime sure of getting a revenue upon it, but on no account embark the funds of the bank upon the chance of an adventure which may or may not succeed. Leave all such risks to your customers. Let them have the profits as well as the losses of them." If this would be sound policy for a bank finance, why is it not so for national finance? There are many reasons in favour of its adoption, 'i'he portion of the local debt at present invested in trade enterprises is, according to a recent writer,* about one-half of the total. The rest of the expenditure has been upon matters of public health, improvement of public streets, provision of public parks, and the like, which are admittedly unsnited to private enterprise. It is evident, however, that the debt cannot be pulled down on this side. The increasing standard of public comfort, the increasing demand of sanitation, and so forth, will continue to impose upon our local authorities duties of an onerous and costly nature, which are well within their proper arena. Indeed, is it not the constant cry that these duties are insufficiently attended to? Witness the clamour, often alas in vain, for the municipal dust cart. In a recent and most able paper, read before this Society by Sir John Wolfe Barry, a strong case was made out for the immediate expenditure of millions upon a new system of thoroughfares for the road traffic of London. The urban and suburban railways had been widened (Sir John said) at a total cost of some £60,000,000 sterling, while the pul)lic authorities had not spent a tenth part of that sum upon the not less important public highways. These necessities must continue to grow, and if for no other reason than that, these very important and increasingly onerous duties should not be neglected; it is desirable that whatever can be should be left to private traders. Where a tub can stand on its own bottom, do let it do so, if only because you have so many tubs whose inherent equilibrium is unstable, and which are bound to exhaust all vour collective stability to keep them right end up. The worst part of trading adventures for a Corporation is that there is no closing the capital account. Take the case of electricity. Corporations have hitherto only dealt with this great subject in a small spirit. The total indebtedness under this head in the last * Local Taxation and Finance. Blunden, p. 19. 8 published figures is only some three millions, so that there is yet time to pull up. But electricity is fast advancing into almost universal use for trade as well as private purposes. If the authorities retain possession of this industry and keep pace watli the needs of the future, they will have to spend 100 millions where they have at present spent one. Surely such a vista of capital commitment should give pause to the counsels of those adventurous spirits, who, with a vicarious enterprise, are so ready to land the ratepayers in further trading risks. It is submitted, however, that the financial aspect of this question, how fully soever we may comprehend it, in its prospective as well as its present condition, and serious as it undoubtedly is, does not itself constitute an adequate measure of the c\)st of municipal trading enterprise by any means. In addressing a deputation in 1893, the late Prince Bismarck used the following words: — " My " fear and anxiety for the future is that the national consciousness " may be stifled in the coils of the boa-constrictor bureaucracy, " which has made rapid progress during the last few years." The encroachment of municipal governors into the domain of conmiercial enterprise must restrict, and undoubtedly it does restrict and repress individual enterprise. It has this eflf'ect, not only by restricting the progress in the particular undertakings upon which it embarks, but also by hindering and obstructing individual specula- tion in other directions which the Corporation have not yet under- taken themselves, but which it or some of its members apprehend they may possibly in the future desire to undertake. It is not creditable to municipal enterprise that in no less than 104 cases local authorities should have obtained, and are holding. Provisional Orders for electric lighting without doing anything to carry the powers into effect. It is difficult to resist the conclusion that these powers have been taken for the dog-in-the-manger purpose of keeping Companies out, and so have had a directly retarding effect, restricting the growth of the towns in an important direction. No doubt many well-meaning people have come to look on nuuiicipal enterprise as the only means apparently available by which many useful public purposes can be accomplished, and doubtless the formation of Building Societies, Electric Companies, Railway Companies, and otlier private organisations, is a very difficult matter, but the very difficulty contributes both a restraint and a stimulus wdiich are highly advantageous, and the absence of which is one of the disadvantages municipalities labour under in embarking upon trade. Tt is not a good thing that capital should be had for the asking. " Borrowing dulls the edge of husbandry." When money in plent}' is to be had at 3 per cent., a rigid economy seems supererogatory. Again, if any portion of the community is so lethargic as to be incapable of making the effort necessary to set auy such concerns which it may require on foot in a legitimate manner by private exertions, they had better be left witliout them, and learn the consequences of laziness. It is a wrong principle to train people to suppose that they can sit still and that luxury and comfort will w^ait upon them. There are, however, four arguments commonly advanced by the supporters of municipal trading with which it may be convenient to deal here. First, it is said that a public authority can raise money more easily and cheaply than a private Company can, and that therefore to leave large undertakings in private hands is to sacrifice an economical advantaoe. Is there not a fallacy lurking here? Nothing for nothing is a sound rule. Depend upon it the astute persons who finance public loans take 10 care to exact the full market value of the risk they take. It the public authority pays less for money than the Company would, it is because the authority undertakes a higher obligation. The obliga- tions of a Company are devoid of personal responsibility, while the ratepayer has to repay his loans, as already pointed out, independently of the success or failure of the undertaking, and is in fact a shareholder in an unlimited concern. Further, the present credit of the local bodies is to a large extent the product of adventitious circumstances. It is not due to any improvement in the financial conditions of the bodies themselves, because no such improvement has taken place. Taxation is higher, and capital burdens heavier. It rests, on the contrary, on the thrift of the Imperial Government, which, by reducing the interest on its stock, has forced laroe amounts of money to seek a his; her return, and by annually purchasing and cancelling Consols has raised the price of these to its present level. If the National Debt Commissioners were to suspend the operation of the Sinking Fund, there is not a Corporation in the country that could borrow at 3 per cent. Besides, the cost of borrowed money is a very small element in the success of a trading concern compared with personal talent. If it were otherwise, we should have no new firms starting to compete with establislied traders. Indeed, the command of large caj)ital is frequently the ruin of a business. It leads to over-trading. So that, even if this advantage were a real one, and one to be per- manently reckoned on (w^iicli for the reasons given is at least doubtful), it is not of the importance commonly attributed to it. The second argument is that if a profit can be made out of the general supply of some commodity for the connnunity, why should not the connnunity realise that profit for itself? We seem to have heard of this system before, in a remote Island, w4iere we are told the inhabitants earned a precarious livelihood by taking in each other's washing. But the great difficulty of a Corporation 11 engaging in a trade is to hold the balance evenly between the rate- payer as projjrietor of the Corporation works, and the ratepayer as consumer. The two are not by any means identical. In Notting- ham, the Corporation makes a large profit out of its gas, and in one of the Committees of Parliament last year a prominent manufacturer spoke very bitterly of the feeling of the large gas consumers that they were charged unduly for their gas in order that the rates might be relieved. He stated that the profit on the gas was sufficient to defray the entire cost of the admirable Technical University of Nottingham, so that the large manufacturers were compelled to provide lavish educational facilities for the town out of their own pockets for no reason except that they were for the purposes of their business the largest gas consumers. In fact, such a process is, they complain, steahng from the rich to give to the poor. Again, in Sheffield, the Corporation have just realised a handsome profit out of the working of tlie tramways, and they propose to appropriate £12,000 of this profit to reduce the amount, which otherwise would have to be levied bv increasino- the General District Rate bv 2d. in the £. But the working class, who live along the tramway route, are up in arms at this proposal. They say that they are practically the sole users of the tramway, that a lowering of the District Rate means hardly anything to them, that the people who will benefit by that will be the rich property owners. In fact that such an appro- priation of the profits means a stealing from the poor to give to the rich. Suppose, in his bewilderment, the Town Councillor, thus attacked on both sides, says we will not make any profits at all " we will reduce the price or the fares, so that the profit shall be ex- tinguished altogether," this would still be unjust to the ratepayer who does not burn gas or does not use the tramway, for he will have been burdened with an additional capital debt for the purpose of subsidising his neighbour who has commercial needs that do not affect him. Such a ratepayer will say, " why should I be dragged willy-nilly into a huge trading venture, with a huge capital, in 12 which [ take no interest, and be called upon to elect Directors tor it, and otherwise spend my attention upon a thing which I do not understand? " The reasonableness of this will be understood from the case of the Liverpool electricity works where (the figures are quoted from a recent speech of tlie Town Clerk) the customers of the works only number ^^,000, whereas the entire population of the city, some 700,000 people, is laid under contribution or lialnlity to provide the capital and keep the works going, a disproportion which is surelv a stronii' aroument for the immediate disestablishment of electricity from municipal control. The third contention of the advocates of municipalism, is that the motives of private adventure are self-seeking and sordid, and contrast unfavourably with the disinterestedness of the Town Council. There is a great deal of cant, or at best ignorance, in this cry. Where is the inherent beneficence or nobility in those who merely adventure other people's money? On the other hand, no one who has seen the carrying out of a great public undertaking by private enterprise can have failed to be impressed by the high degree of courage, steadiness in adversity, tenacity of purpose, faith and loyalty which is required to steer it through the troubled waters of its early career. It is a mistake to attribute the motives of such individual adventure merely to pecuniary interest. The pleasure of accomplishing a great work of public utility and of deserving public fame, of vindicating the soundness of private opinions and hio;her considerations also enter laroelv into such motives. In fact the adventure becomes, as Leroy Beaulieu has put it, a refined species of sport. That this is so will be evident to anyone who has studied the account of Stephenson's great battle with Chat Moss, and the dogged and devoted manner in which the great engineer 13 was backed up by the capitalists and others who were associated with him. Such mercantile adventure affords a le2:itimate outlet for the sporting proclivities so firmly implanted in the Anglo-Saxon race, and one of the consequences of discouraging it, or limiting the opportunity for such adventure, will be to stimulate gambling of one kind or another. Ko doubt the reason why gambling is so ])revalent in the working class is that, as wage earners, they have no share in the risks of their business, and so have to seek other fields for the exercise of their sporting instincts. To fence off by the staves of oflScialdom field after field of enterprise from the adventure of the individual capitalist is to deaden commercial activity, and to atrophise those energetic faculties of our nation which hitherto have been the mainspring of its progress. In a recent letter to the Times Sir Edward Fry says : — " What is it that " has made Englishmen what they are but their passion for " individual freedom, their habit of acting on their own judgment " and their own initiative, and their dislike, I may say their scorn, " for the leadino- strino;s of official authoritv? Without that " freedom of individual action England can never continue to be in " the future what it has been in the past." Bureaucracy cannot create advancement any more than o-rammar can create literature, and for our municipal governors to afi'ect to sneer at the commercial motives of their citizens is, having regard to the mercantile author- ship of our Corporations, in as good taste as for a nouveaif ricJie to turn up his nose at the conunercial origin of his own father. Fourthly. It is sometimes urged that certain fields of commerce are necessarily monopolies, and that it is better tliat the Government should be a monopolist than a private person. There is some reason for this in such a case as the public supply of water, which, as a matter of common necessity, and one connected with vital questions of public health, may well be entrusted to the nianagement of the civic officers, more especially as it does not involve any manufacturing 14 risks, and cannot possibly be replaced by another article. But in other matters this cry of monopoly is only a pretence by which people are induced to concur in tlie municipalisation of various trading undertakings. That such concerns are bound to become monopolies in the hands of the Corporation may be admitted, for the whole power and authority of that body is used to defend them as such, nnd to prevent anyone else conducting a competing trade, which, but for the Corporation, they would be entitled to do, but to say that they are monopolies when they are in private hands is an abuse of the term. They are only monopolies so long as by reason of their efficient service, or of the apathy of the community, the public do not choose to make the effort necessary to establish a rival undertakino-. What ground is there for alleging that in private hands such trades are monopolies? Because of their magnitude or their territorial stability? This merely means that those who allege it, have not imagination sufficient to conceive Iioav such under- takings can be du])licated. In the thirties everyone believed that the trunk lines of railways were virtual monopolies. Had the present doctrine of the State traders then ])revailed, we should no doubt have had the railways in the hands of the Government. Does anyone believe that if that action had been taken we should have had bv this time four main lines of railwav runnino; from London to the North, and a fifth about to be opened, each indepen- dent of the other, and engaged in tlie keenest competition to improve and accelerate its service so as to obtain a larger share of the public patronage? Railway travelling between London and the North has reached a pitch of convenience and luxury, even to the third-class passenger, wliicli woidd never have been dreamed of even 20 years ago. A pitch of convenience incomparably superior to that of France, where the railways have been installed under Government auspices, and where the public are saddled with nearly 4 millions 15 sterling of guaranteed dividends to the Railway Companies every year. This state of efficiency never could have been reached by a Government railway department for the simple reason that Govern- ment never takes a risk if it can help it. Why should it do so? And yet risk taking is the parent of progress. Can anyone imagine a Civil Service Department recommending the construction of a new line of railway from Bedford to London at a cost of many millions, when the whole of the traffic authorities of the existing line of railway between the two points asseverated over and OA^er again that they were ready and able to deal with the whole of the traffic on that route, both existing and prospective? Of course the risk would never have been taken^ and the Midland Railway would not have been in London to-dav, and who can sav what effect that deprival would have had in retarding the general trade of the country? It may be guessed at from the single fact that the coal sent to London from collieries on the Midland system was, in the year 1867, 157,246 tons, in 1869, after the opening of the extension to London, the Midland carried 760,000 tons of coal to London, a tonnao:e which has o-one on increasino' ever since till it now reaches about three millions. Surelv this instance shows how serious must be the effect of restricting private enterprise, for the results of such enterprise, indirect, obscure, and not to be foreseen, are of much greater importance than the direct and calculable results. Another deficiency in municipal or Government enterprise is that it is non-inventive. A Government never invents anvthing, never itself starts anything new, and is very sIoav to adopt inventions of otlier people. The Post Office did not invent railways, nor telegraphs, nor telephones, nor bov messengers. They, with more or less reluctance, adopted these inventions from outsiders. Steam was not introduced into our warships till years after it had been used in the mercantile marine. Hydraulic lifts are conspicuous by their absence in the public buildings of London, and the Metropolitan 10 Police have not yet learnt the use of the telephone. It is natural that this should be so, for a Governmental Department (Avhether civil or municipal is immaterial) is in effect a huge machine in which the members are subordinated one to the other in an arranged succession like the parts of the machine. This gives stability and precision to the whole, it does not give individual freedom. Each member of the department must of necessity confine his activities to the particular channel assigned to him in the general design of the machine. He must on no account strike out a line of his own, neither can the machine itself operate except in its pre-ordained groove. It is obvious that invention, the initiation of new methods, whether mechanical or social, is not a crop that will grow in a soil of this kind. Such things are the product of free and independent thought. It is clear, therefore, that a system of bureaucracy tends not to progress but to stagnation; to the fixing, that is, of ideas at their existing level of development. It may be able to carry on a simple trade such as the supply of water, a commodity of universal necessity, which, therefore, needs no pushing, cannot ever be replaced b}^ the advancement of science, and can be manao;ed on a svstem of strict routine, l)nt in any branch of industry which is of a mobile character and which depends on the education of the public and the tempting of customers, the private ca|)italist who understands his own business and is free to conduct it in his own way, without having to reckon with the opinions of a host of other people who know nothing about it, nuist have an incalculable advantasre. To attempt to pre-surmise how this stagnating tendency, in- herent in numicipiil enterprise, will operate, nuist necessarily be to some extent s])eculative, and for sheer lack of imagination must fall short of the realisation. One probable effect may be noticed. 17 Oiu- municipalities, naturally on account of their democratic basis, and very properly on all accounts, take a great interest in the welfare of the working classes. They consider they best conduce to this welfare by supporting the regulations of the Trades Unions. There can be no doubt that these bodies have been of great service in raising the condition of the workmen, but it is equally certain that some of their methods are infected by gross economic error, and have tended not merely to the raising of wages, but to the restriction of the production per head. The prevalence of these errors, and the serious results of the recent industrial wars, in which the Trades Unions are ranged on one side, and the employers on the other, have set thoughtful men in all classes searching after some new form of industrial organism which will take the men out of the position of mere wage earners (to the conservation and protection of which position the efforts of the Trades Unions are directed) and make them partners in the whole produce of their industry. The germs of such development have already shown themselves in the co-operative manufactories, and in the labour partnerships which have (in some instances) made promising progress, with every indication of success in the removal of the fatal rivalries referred to. The evolution of such new collective fabrics, so devoutly to be wished by all friends of the working classes, and by all patriotic citizens, is just one of those improvements which experience and theory show to be impossible of development in the sterile medium of Government routine. Further, the action of the trading municipality, always insisting on Trades Union regulations being observed, not only in its own works, but even by the manufacturers or contractors who deal with it, does much to hamper the free spirit of experiment in these directions, and to retard the operation of those spontaneous tendencies which in an open market would work towards the accomplishment in due time of such new industrial plans. 18 There is no need, liowever, to draw upon the imagination to illustrate the deplorable effects of the enslavement of free ener2^ies which results from handiiiii' over an industry to municipal enterprise. We have an existent example of it in the state of the electrical industry. How is it that this country, which taught the Avorld the use of steam, should be so backward in electricity? How is it that whilst great systems of electrical power transmission are common in America, in Italy, in Germany, in Austria (constituting, as such systems do, an important new development in the division of labour, by enabling the small workman in a remote village to obtain his power on tap as it were, and so to produce almost as cheaply as can be done in the great steam workshops in the town), Englishmen are content with insignificant installations in monopolized areas. How is it that, while English machinery in the mechanical departments still holds its supremacy at home as well as abroad, in electrical matters we have to give place to other nations, and the whole of the plant for the electric traction of the underground railways of London is being ordered from America, and also that for the tramways of Leeds, Liverpool, Sheffield, of Glasgow, and of many more towns that can be named? Surely this state of things can only be accounted for by the unwise action of the Legislature in discouraging and restricting the enterprise of the capitalist, and in committing this promising industryto the sterile and monopolist hands of municipal enterprise. What is the history of this subject ? Parliament yielded to the fears of gas-owning Corporations (municipal adventurers are always protectionists of the most timid order), and the Electric Lighting Act of 1882 was passed. Under this Act the municipal authorities were enabled to obtain power to supply electricity under License or Provisional Order from the Board 19 of Trade; but private capitalists who might apply for such power" were subjected to two disadvantages; first, they had to obtain the consent of the local authorities; and, secondly, the municipalities could, at the end of the '21 years, step in and acquire the undertaking at the then value of its material effects without paying anything for compulsory purchase, or for prospective profits, or for the cost of pioneer and educational work. In efiect, therefore, municipal enterprise was encouraged to embark in this promising field, and every obstacle was thrown in the way of private enterprise doing so. The result was, of course, that the discouragements were too great for private adventurers to encounter, and they soon left the business alone. The municipal trader, in spite of the legislative encourage- ment, remained true to his tradition of taking no risks, and of avoiding new inventions. He sat doAvn, and did nothing, and the industry stagnated until 1888, only one Provisional Order having been granted in the previous four years. Parliament then thought it time to interfere, and passed an amending Act by which, Avhile the encouragements to the municipalities were not one bit abated, the obstacles to a private enterprise were partly removed by the extension to 42 years of the period during which the concern was exempt from expropriation by the authority. Still municipal enterprise stagnated, but commercial adventure made a fresh start, and almost all the existing electric stations were established in Loudon, in Liverpool, in Sheffield, in Nottingham, in Birmingham, and all over the country by Electric Companies. In many cases the undertakings of these Companies have since been acquired by the town before the right of compulsory purchase matured (at, of course, a handsome price, for a municipality can never drive a good bargain in an open market), and with the t.-irdy advent of the municipal tr.ider his monopolist tendencies beg.n to assert their mischievous influence. There is not of right any 20 monopoly in electric supply in this country. The first section of the Electric Lighting Act of 1888 reads as follows: — " The grant of authority to any Undertakers to supply • " electricity within any area, whether by License or Provisional " Order, shall not in any way hinder or restrict the granting of " a License or Order to the Local Authority or to any Company " or person in the same area." Whenever electric stations belonged to Companies, the Local Authorities were most anxious to take advantage of this Section and to promote competition. They readily gave their consent to two or more rival Companies working together in the same area. In London, for instance, there are two Electric Companies competing against each other in every parish, except the City, and in Westminster there are three. But what was sauce for the Com})Mny goose was by no means to be sauce for the Municipal gander. Wlien tlie means of insulating high tension currents became im])roved, and other scientific appliances devised, it Avas discovered that the parochial limits (which were fixed, we are told, in the time of Alfred the Great) did not form a scientific division for confining a peculiarly elastic and transmissible force. Some parties therefore proposed, in full reliance on the Section of the Act of Parliament above (|uotcd, to establish electric transmission systems on a much larger and more modern scale than has hitherto been known in this country, and, in consideration of the economies that would thereby be effected, to subject themselves to a maximum charge less than one-half the late which the Corporations were authorised to charge, and were as a general rule charging, for the electrical unit. This interesting and novel proposition was submitted to Parliament last year. No monopoly was sought for the Company, 21 who merely wished to trade in competition with any existing stations, just as a new railway seeks power to compete in the carrying trade. The right to disturb the streets was confined to cases where the authorities refused, unreasonably, facilities for the deliverance of the Company's wares through the Corporation's wires. The proposal was welcomed by the trading community, as one would have expected. The Chambers of Commerce petitioned in its favour, and no one opposed it except the municipalities. The nature of their objections is sufficiently indicated in the following recent resolution of the Municipal Corporations Association, passed in reference to this very Bill: — " That this Association affirms the principle that where " Local Authorities have, with the sanction of Parliament, '' established, or are in course of establishing, undertakings for " public benefit, and have not failed in their duties, it is not " right or expedient that powers should be granted to Com- " panics to compete with them." Surely here we see the municipal trader in his true colours. He does not wish to trade in the same way that any commercial man trades, facing difficulties as they come, contending with his rivals whomever they may be, adapting himself to new conditions, scrapping his existing plant as soon as it is superseded, and substi- tuting more efficient plant, often at great sacrifice. Your municipal trader wont hear of scrapping superseded plant. He wants pro- tection for the ratepayers' trade. If science has shown that he is on the wrong lines, and has made an improvident investment, so much the worse for science, which must go to the wall before the necessities of municipal trading. Science must wait until his machinery wears out. That will be quite time to introduce any- thing new. The Bill, however, having in principle received the approval of 99 a Joint Committee of the two Houses, was passed by the Select Committee of the House of Lords. At both these inquiries the Corporations were strongly represented, and clauses were inserted for the protection of their interest. Not content with this, however, these bodies continued their hostility, and took the course, unusual in the case of a Private Bill, of organising a strong opposition to its Second Reading when it reached the second House. There was thus presented the strange spectacle of the Corporations opposing the orantins: of facilities to traders whose advent to their town their own Chambers of Commerce were actively supporting, and whom the same Corporations would, as they candidly admitted, have themselves cordially welcomed had they appeared a year or two earlier before thev, the Corporation, had embarked in the electrical business. The opposition was conducted, not in the usual way, each town upon its own bottom, but by a kind of centralised union of Corpora- tions, called " the Municipal Corporations Association." This body raises its funds for such proceedings by a rateable levy over the whole of the affected towns, so that, although ostensibly pre- serving its local character the opposition is centralised, and rendered unamenable to local influence. Further, such an organisation wields a power which, for the purpose of a Second Reading opposition in the Commons, is most formidable. For the Association calls upon the Corporations all over the Kingdom to bring pressure ui)on their respective borough members, so that in this case, which could not affect the interests of a single person north of Barnsley, or soutli of Derby, the member for a borough in the north of Scotland, and the member for one in the extreme south of Ireland would be whipped, each by his own Town Clerk, to vote against this Private Bill. When it is borne in mind how great (and, speaking generally, justly great) is the Parliamentary influence of the Corporations, Avhose councillors are elected very often through the same organisations as are employed for the political elections, it can readily be conceived how great a bar to the initiation of an enterprise which 2;; requires Parliamentary sanction is the mere risk of having to face such an opposition. It is hardly too much to say that such a one- sided use of the united power of these local bodies (power granted, be it remembered, for the common good, not for the protection of selfish interests) for the purpose of stifling a new enterprise at its birth, and so securing for themselves a monopoly which they would not otherwise be entitled to, savours more of oppression than of fair dealing. Now, oppression is not to be tolerated on the part of our local bodies. If we were capable of tolerating injustice we should cease to be a people Avorthy of free institutions, and if the effect of the acquisition by the Corporations of these trading under- takings is to put partiality in the seat of authority, then the cost of municipal enterprise will be much more serious than any that has yet been contemplated. Surely the Corporations have forgotten the sins whereof they have been purged. It was because of the monopolies and restrictions which the old self-elected Corporations imposed on the trade of the towns that, strong as they were in Parliamentary influence (for the old Corporations actually elected the borough members themselves), they forfeited the public confidence, and they were abolished by the Act of 5 & 6 William IV., cap. 76, the I4th Section of which reads as follows: — " Be it enacted that, notwithstandinoanv custom " or bye-law, every person in any borough may keep any shop for " the sale of all lawful wares and merchandise b}^ wholesale or " retail, and use every lawful trade, occupation, mystery and " handicraft for hire, gain, sale or otherwise within any borougli." The consequence of this new policy of freedom for industry is the extraordinary growth of population and resources which has succeeded the reform. But the oppressive treatment of the electrical traders would seem to indicate a reactive tendency towards the old mischief again. 24 All this points to yet another danger of municipal trading, a danger, that is, to the stability of the municipal institutions them- selves. These institutions, which are the most ancient and, as they exist to-day since their constitution was broadened by the Act referred to, among the most efficient examples of the self-governing faculties of our race, are deserving of our uncompromising support. The towns are besides dependent upon them to an incalculable extent for some of the hrst necessities of modern life. It is there- fore a duty imposed on all, by self interest as well as by gratitude and patriotism, to fearlessly point out the insidious error which is creeping into the practice of these bodies, and to use every eftort to arrest it l)efore the decadence becomes irretrievable. It would be wrong to overlook the serious state of the municipal institution of America, arising, as competent advisers tell us, from the unlimited enlaro^ement of the functions of the Government. The consequence is that public employment is excessively multi- plied, and the municipal debts have risen to colossal dimensions. The affairs of the cities are left to professional politicians, and are conducted in such a nauseous atmosphere of class corruption and party trickery, that the better class decline to have anything to do with them. A distrust of the servants and representatives of the people is everywhere manifest.* We are a long way from such a state of things in this country, but can it be doubted that this ambition to embark in trade will be injuricnis to tlie Cor])orations, for their efficiency nuist depend not upon the profits which they may be able to make out of their various trading advantages, but upon the degree to which they can absorb into themselves the best energies of the most capable citizens? Is a course of action which puts them in competition with * See Lecky. Democracy aud Liberty. Vol. 1, pp. 80-86, ami American Authorities there cited. 2o their own traders, which results in the imposition of something like an octroi dutv upon a commoditv tliat is fast becoming the necessity of every manufacturer, calculated to secure the respect of the trading community? Further, is it calculated in the lonjj; run to secure the respect of the working class? The expenditure of public money in a district, the establishment of municipal works, tlie employment of large numbers of the ratepayers at municipal wages, these are very popular things while they last, but they are also very ditHcult things to stop, for they necessarily create in the minds of the more ignorant of the ratepayers false ideas of the function of the Local Government. How can you blame the wage earner if he comes to think that it is the duty of the municipality to find employment for him, and how can you blame him if, when the inevitable disillusion- ment comes, lie is disappointed and disgusted on finding that lie was mistaken? Municipal trading is thus infected with the communistic poison, it begins by alienating the confidence of the manufacturers, and ends bv alienating the confidence of the workmen from institutions which, so long as they confine themselves to their proper functions, are productive of such great good to the country. Surely, therefore, the Corporations would be well advised to confine their functions to those important public matters in which all their constituents are equally interested, and which must of their nature be performed by the ratepayers in common, and which involve no taint of partiality or suspicion of class bribery, such are the adminis- tration of justice and police — the care of the public health — the provision of parks and open spaces, and so forth. Let them leave to private enterprise whatever private enterprise will undertake, keeping themselves in an imjiartial position, so that they may secure the unsuspicious loyalty and obedience of all the traders to the regulations which they impose upon them for the protection of the common interest. Let them adhere to the doctrine affirmed by eminent Jurists, and which is embodied in the constitution of certain States in the American Union, that the sole and only legitimate end ^6 of Government is to protect the citizen in the enjoyment of life, liberty, and property, and when the Government assumes other functions it is usurpation and oppression.* A policy of antagonism to the trading Companies on the part of our Corporations would he an undoing of their own work. The immediate cause of these active commercial energies of which so much jealousy is expressed, is the liberty which has been secured to the individual in the towns by municipal institutions, " tliat liberty which is the nurse of all great wits," and for these institutions to interfere with and repress trading liberties is both unnatural and self- destructive. The followinii' words, addressed bv one of the iireat apostles of liberty to the Lords and Commons of England so long ago as the first half of the 17tli centurv, are still pregnant with wisdom worthy of the attention of our reformed municipalities on the eve of the 20tli: — " Ye cannot now make us less capable, less knowing, less " eagerly pursuing of the truth unless ye first make yourselves, " that made us so, less the lovers of our true liberty. We can " grow ignorant again, brutish, formal, slavish, as ye found us, but " then ye must first become that which ye cannot be, oppressive, " arbitrary, and tyrannous, as they were from whom ye have freed " us." t The statistical tables are the work of Mr, Ernest Davies, of the London Stock Exchange, and for them, and for many valuable suggestions on other parts of the pai)er, the writer exi)resses his thanks. The still larger contril)utions which have been levied on the Avorks of Herbert Spencer, of M. Leroy Beaulieu, and Trofessor Lecky, will be evident to any student of those distinguished authors. * See the Constitution of Alabama. f Areopagatica — Milton. 27 To them he, the writer, respectfully tenders his acknowledgments. To the Town Clerks of various Cities and Boroughs, who have supplied Statistics with the courtesy characteristic of their office, thanks are also due, and also to Mr. James Watson, the Actuary of the English and Scottish Law Life Office, for his kind advice and assistance; and in particular to Mr. H. Graham Harris, and to his firm, Messrs. Bramwell and Harris, of Great George Street, not only for most valuable aid on all points, but for the original idea of the Paper. c//A/?r / S.2. MIILIOK //»!//;» /4^ /^/ /^,f2 /SS3 /^f4 /^s ^w /f?^? fm i/f^S 'jf^& //sv m^ /^p.-j /<*;» /^9< /ff.9A /f,9? fH/ltlOZ/S I'M. 2m /MP£ff//U 2^0 ofsr . — — — — — — — — — — — ___ — — — — — — ■ — - — ■ 7*1 1876-1897 7i^ 72^ 7ffe 7M eii e& eea ^ . ^* __ -^ =^ ^ = ^ = ^ ^ ^ )ft_ rz: ; ; ~:~ — : ^ ; — ^ : sea 2ti! e£f 2'U ^_ 22f / 2M — — 1 — — --= — — — — — — -a,-* - — 1 — — — — /^ /eo / ^ - - ^ — — — - — — ■ m II— m — : i^ — :zi =1 =: — ^ z^ - — " _-. /Off 1 1 1 I 1 1 1 \ CHART 3 . nil ceNT ISO PROPORTIONATE INCRCASC OF RATES AND DEBT COMPARED WITH POPU LATI ON A ND VALUATION FOR 187 S a 1897 R £S P £ C Tl li' £ LY . ?eSn ISO >4(> t*o tuo 230 ZiO ZiO ?in rw too 2as 190 190 l/IO isp no no leo ISO /.^o ISO 140 IW no 130 no i?a 110 iin 100 ion so _az. ''0 70 an ,w w ■w tn 30 ?n 10 10 — rs „-,„ — 7r?i — , nna — 1 fitn 1078 ISO? POPULA TION VALUATION /fA res LOCAL DEBT CHART 4-. NATIONAL DEBT PER HEAD AS CO/HPARED W/TJi NET LOCAL DEBT PE/f HEAD OF ENGLAND AND tfALES THE METROPOLIS AND SIX PEPPCSENTATIVE TOIVNS FOR 1836-7. * _A\ iO M 23 29 78 2g 27 27 ze 26 f5 25 24- 2^ i3 23 J2 ■22 21 21 ZO 20 19 13 1? 'S n 16 16 15 15 /■» 14 13 /3 IP IZ II 1 // 10 W a 9 8 7 H 7 e 6 6 4- 3 ? 4 3 Z 1 [m;i »su MH miHIItl. KUfl-HI-ll n-nm 1 /l/'A >fPlim HiMMnmuUXSi umimiL. — DtST / C///IKT 5. /IMOI/Zir Of LOCAL 0£BT f£f> i/OO Of /r/ir£/iBL£ I^/ILU£ /i\f £/yei/t/vo /i/fo >y/iLfs THc Mer/foPOL/3 alh? s/x /f£P/f£S£//r/ir/y£ TOIV/rS. *■ ^ 600 (ffa seo SM S60 see ,ffv 220 /20 2C0 2ao /go /fO /60 /fO /4a /40 >?/> /oo /oo so /fi so 60 -^____ ■ — :^A5|^S2L / /Vf i>p/jm ^/£ci' £rt.ifA m/rrffrc/mmM 29 DISCUSSION. The Chairman said Mr. Davies had brought forward in a most attractive manner a subject wliieli, at first sight, appeared very dry, and had not only relieved it by pointed and humorous observations, but had presented some very serious points for consideration. As he was unable to remain until the close of the discussion, he would make a few remarks which occurred to him at once. The Tables on the wall would, he hoped, be reproduced in the Journal^ as they were verv valuable, but he thought their value would be enhanced by a further subdivision showing the amount of local debt which had been incurred for what might be broadly termed trading purposes. Whatever might be said as to the profit made out of under- takings such as gas or tramways, worked by corporations, his belief was that if the matter w^ere thrashed out, it would be found that the burden on the ordinary ratepayer was less where no such risks were undertaken. Of course, he did not pretend to lay that down as a fact, from personal knowledge, and therefore he thought it would be very useful if such an addition could be made to the Tables. It was the more important, because it was stated that, according to the most recent statistics, one -half of the total local debt was due to trading risks. Valuable as the paper was, he should have been glad if Mr. Davies could have drawn some more precise conclusions as to where the line should be drawn. He had indicated one limit, viz., that corporations should confine themselves to such works as sanitation, parks, open spaces, police, and possibly water; but those limitations might be further developed. He had the strongest feeling in favour of the main argument of the paper; indeed, he thought it might have been put even more strongly. Not only was the power of a corpo- ration to earn money as traders quite a modern development, but in the beginning of the reign it was contrary to law. He 29 DISCUSSION. The Chairman said Mr. Davies had brought forward in a most attractive manner a subject vvliich, at tirst sight, appeared very dry, and had not only relieved it by pointed and humorous observations, but had presented some very serious points for consideration. As he was unable to remain until the close of the discussion, he would make a few remarks which occurred to him at once. The Tables on the wall would, he hoped, be reproduced in the Journal^ as they were very valuable, but he thought their value would be enhanced by a further subdivision showing the amount of local debt which had been incurred for what might be broadly termed trading purposes. Whatever might be said as to the profit made out of under- takings such as gas or tramways, worked by corporations, his belief w^as that if the matter were thrashed out, it would be found that the burden on the ordinary ratepayer was less where no such risks were undertaken. Of course, he did not pretend to lay that down as a fact, from personal knowledge, and therefore he thought it would be very useful if such an addition could be made to the Tables. It was the more important, because it w^as stated that, according to the most recent statistics, one -half of the total local debt was due to trading risks. Valuable as the paper was, he should have been glad if Mr. Davies could have drawn some more precise conclusions as to where the line should be drawn. He had indicated one limit, viz., that corporations should confine themselves to such works as sanitation, parks, open spaces, police, and possibly water; but those limitations might be further developed. He had the strongest feeling in favour of the main argument of the paper; indeed, he thought it might have been put even more strongly. Not only w^as the power of a corpo- ration to earn money as traders quite a modern development, but in the beginning of the reign it was contrary to law. He 30 remembered arguing a case many years ago with regard to the duties and powers of a corporation which was contemphiting supplying gas to outlying authorities, and Lord Chief Justice Cockburu laid it down as an axiom tbat, except for statutory authority, a corporation had no power to make profits. That was not a mere accident owing to the want o£ development of modern enterprise, but was due to a sound system of political economy, that it was almost impossible to i)ut the burden of a trading undertaking on the right shoulders, and so to regulate the charge that you did not put a burden on those who derived no benefit. Some people still thought it would be well to have toll-gates, because then those only who used the roads would pay for them. But without going so far as that, everv one could see that it was extremelv dithcult to make the cost of an undertaking and the charge for it exactly balance; and he did not believe any corporation could so adjust its affairs that the burden should be borne only by those who used the undertaking, especially when, as in most cases, a sinking fund had to be provided for. It was a burden on the ratepayers of to-day for the benefit of those of the future. Again, the absolute necessity of inventive competition in this kind of undertaking was of great importance to the argument. He knew of nothing in which this was more marked than in connection with telephones, electric lighting, the supply of gas, and so on. History showed what difficulty there had been in introducing economic changes, and in inducing people to discard old machinery in favour of new even where there was the inducement of greater i)rofit. There was practically no inducement to a corporation to discard old plant and buy up new until it was worn out, and all history showed that to private enterprise and energy all the great inventions of the world were due. A great deal of cant had been talked about monopolies, and after all there was no greater monopoly than to give a corpora- tion the sole right of supplying electricity. No local authority would be likely to give its consent to a private undertaking SI supplj'ing electricity in competition with itself, but he was satisfied that competition was essential in connection with electric lighting as with any other question of supply and demand. Possibly a dis- tinction might be drawn in favour of water, and certainly drainage was a matter out of which no profit ought to l)e made. Everybody benefited when the health of a town was improved. He admitted that water was very near the line, and within certain limits every one ought to require about the same quantity. He would not go into questions which were extremely important and very far- reaching, and of which they did not know what the outcome might be, such as the evils whicii might be created by a fictitious rate of wages being establislied by municipal authorities as compared with the price at which honest contractors could get the work done. Those persons who had not had to do with practical business might say no harm was done by the present rate of wages being raised, but an end must come, and the general result on trade, and ultimately on the prosperity of the working classes would be harmful. One point which perhaps Mr. Davies had a little exaggerated was the ease in getting money on the part of the local authorities. Though they might raise it on lower terms than a private company, they had to provide for repayment within a certain time, which a company had not, and one thing must be put against the other, but that was a point which would bear a great deal of discussion. He concluded formally moving a vote of thanks to Mr. Davies. Sir Walter Prideaux here took the chair. Mr. Brydges said he should like to sav a few words on behalf of corjDorations. In the first place with regard to the comparison made between the local and the national debt it must be remembered that in the case of the local debt there was something to show for it, whereas there was nothing to show for the national debt; it represented hardly anything but the expense of a number of 32 wars which, however necessary, were only necessary evils. In the time of George IV,, after the Napoleonic wars, the national debt was something like £900,000,000 though it had been considerably reduced since; and it was not like a debt which had been incurred in the purchase of assets, tangible and to a certain extent realisable. With regard to the probable increase of local debt, Mr. Davies said if it went on at the present rate, in another 20 years it would equal the national debt; but it did not follow that because an increase had taken place in the past it would continue at the same rate in future. On the same principle, the national debt having been about £30,000,000 in the time of Queen Anne, an economist in the days of George I\^. might have said that in another 100 years it would amount to £127,000,000. Half the debt incurred by corpora- tions had been for purposes of sanitation, and, the towns having been put in decent order, it might be hoped that similar expenditure would not have to be incurred again. He did not understand how half the total amount had been incurred for trading purposes if half had been spent on sanitation. Four arguments in favour of municipal enterprise had been mentioned, and objections raised to each. As to the low rate at which money could be raised, it was said that was because corporations were found to pay their debts; if so, he thought it was a very good reason why their credit was good, and there was no blame to them for that. Then it was objected that the cost of borrowing money was of less importance than the employment of talent and energy. That seemed to be giving away the whole question, if it was meant that private companies could secure superior talent, but he should think a corporation might engage persons equally talented with those who served a private concern. Then it was objected that corporations could not earn a profit because the}' paid higher wages, they could make a certain dividend and yet increase the wages to some extent. There was a growing feeling in favour of raising the minimum rate of wage, and he thought it was to the credit of corporations that they had done 33 somethino; to realise their ideal. Then it was said there was no motive, as in the case of private enterjjrise, and there was a sort o£ sneer at corporations being disinterested. No one supposed a town council was disinterested on its own account, it acted as trustee for the ratepayers. Then with regard to monopolies, he always under- stood that the principal objection raised to them was that the public suffered, and, in fact, the charges of gas and other companies had to be regulated by Parliament. In many cases corporations had done good work by taking over the undertakings of gas and water companies, and he did not believe any complaint had ever arisen in consequence. With regaid to the rise in the rates, Mr. Davies seemed to think there was an unlimited power of borrowing, but that was not so. In the first place there was the power of the electors, and many candidates put in the forefront of their addresses that they were advocates of strict economy. Gentlemen mio;ht lauo'h at that, but verv manv had been elected who acted up to principle. No doubt there was a strong tendency in human nature to spend other peoples' money freely; but there was also a tendency in many men to abide by their principles. And if that were not enough security, it must be remembered that every loan had to receive the sanction of the Local Government Board. If there was any question about the expedience of the expenditure, a local inquiry was held. There was no danger, therefore, of money being borrowed recklessly without the sanction of the ratepayers. Mr. Graham Harris said the paper was a very good one — too good, in fact, for there was too much in it to be appreciated on merely hearing it. It was a big subject, which tempted one into all sorts of bye-paths, but he admired the way in which the author had kept to the main road. With regard to Sir Richard Webster's suggestion that a note should be added to the paper giving the proportion of debt incurred by different municipalities for purposes ?A other than drainage, pnbhc parks, &c., &c., he thought it would be verv useful. He noticed that Manchester had the biggest municipal debt, and he should imagine a large part of that was due to the Manchester Ship Canal. Whether that was a trading concern or not, he would leave to the shareholders to decide. His firm were engineers to the particular electric undertakings which had been referred to, and three Bills were coming before Parliament this year, one of which he might specially refer to. That was the Leicestershire and Warwickshire Bill. The proposal contained in this Bill was to supply electricity from a central station on the coal-fields over an area of nearly 1,300 square miles, for lighting power, and any purpose for which it could be used; and having regard to Avhat was being done in Germany, xVnierica, x4ustria and Italy, it was quite certain that it could be supplied at something like one-fourth the rate at which it ■was sold at present. The total area in that district, at present supplied by the municipalities who were opposing the Bill and stirring up opposition all over the kingdom, was under four square miles, and the wliole work might be done by one small engine working continuously. They had 730 customers, but the whole population was counted by hundreds of thousands. The suggestion of the municipalities was that the company should be prevented from supplying that area, and that all the millions of people in the area, including their 730 customers, should be prevented having electricity at the price the company were prepared to supply it at. This was a serious matter, especially having regard to the difficulties with which English manufacturers were at present contending as against foreigners. Mr. W. M. AcwoETH thought it was hardly fair to blame corpora- tions for claiming a monopoly. They were highly organised bodies, and they knew that even the lowest organisms had an instinct of self-preservation. Now anybody who knew the working of a corporation, as distinguished from a private trading body, knew 35 that if a corporation had not an absolute monopoly it was bound to go to the wall. He had received a document which seemed very germane to the question before them, viz., a summary of which appeared in the Times that day. It was issued by the School Board for London, and had reference to a conference on assessment matters. He received it as chairman of the Finance Committee of the Metropolitan Asylums Board, a body of which not one ratepayer in a hundred had ever heard, though it was responsible for an annual expenditure of a quarter of a million. The document pointed out that public bodies had to pay 10 per cent, more than a private individual whenever they sought to acquire land, and that they were at a similar disadvantage when making contracts for building. For the latter statement various reasons were given, and he might add one whicli was put to him by a gentleman who had done work in bricks and mortar for the ratepayers of London certainly to the extent of a £1,000,000, if not more. He said when he made his estimates for any public body he always assumed that his workmen would do less work for a contractor working for a municipality than for a private owner; he did not know why they should, but experience proved that it was so. The London School Board had spent about £6,000,000 in buildings, the body he represented about £3,000,000, and he believed 10 per cent, was a modest estimate of the difference in cost, and that more than wiped out the advantage of which they heard so much, of raising money cheaply. He had lately read the proceedings of the Committee on the Bills to which Mr. Harris referred, and he found there were two points made by the municipalities. One was that they were entitled to a monopoly, because it was in the interest of the ratepayers that they should have it. They always made that assumption but never attempted to prove it. The other point was that they owned the roads, and that nobody else ought to be allowed to interfere with them. It had just been decided by the Court of Appeal that this claim by the municipalities was a mistake, that they did not own their roads, but ?yC^ only had a certain qualified control over the surface, and when an electric company without any right whatever pulled up the road and put in a main two feet deep, the municipality had no right to follow them. They were told that if the municipality only dealt with the roads, they would not be so constantly pulled up as they were by private bodies. It might be so if all municipal matters were managed by one committee ; but, as a fact, he was informed that the main street of an important town was pulled up three times in one year — by the sanitary committee, the gas committee, and the water committee of the same corporation. He thought if the result of this discussion was to lead people to go behind some of these claims and examine the grounds for them, it would be greatly in the public interest. Mr. Brydges said municipal debt was not likely to increase as fast in the future as it had done in the past, but if so, he did not know what would become of the development of electricity. Here they were told that municipalities had invested three millions in electric undertakings; in America in electric traction alone not less than fifty millions was invested. If the municipalities were going to keep this business in their own hands, and were not going to increase their debt, he did not know what would become of the industry. Mr. EwiNG Matheson said it was a pure fallacy to say that corporations could borrow more cheaply than other people because they were obliged to pay their debts. They ran risks which often doubled and sometimes trebled in effect the interest they paid. The Manchester Ship Canal was largely contributed to out of the rates, and as it cost vastly more than was anticipated the money raised by the rates had to be doubled. He knew of a considerable town in the north, which built a large reservoir for a water supply, costing a quarter of a million. They thought it cheaper to do it themselves, because they could borrow cheaply, but when it was finished and the water was let in it all ran out at the bottom, because it was made cheaply. After ten years delay it was put right at a cost of another £250,000. If a private company had done the work they would have had to bear the loss instead of the town. The risk was not always directly in money, but sometimes in the use of obsolete machinery. Some towns had constructed or acquii"ed electric installations incapable of performing the service required of them, but if a private company attempted to compete the whole power of the corporation was used to prevent them. If it were the other way, and a private company hnd an obsolete or insufficient plant, the corporation would go to Parliament with a very strong case for setting up a private undertaking. The question in towns was often in the hands of officials, who liked to magnify their position and keep out other people. Mr. Sydney Morse agreed with the Attorney- General that it would be well if the author could have given one or two suggestions as to how the question could be dealt with practically, as it would be a burning one in the next Session of Parliament. No less than seventy municipalities were applying either to Parliament or the Board of Trade for powers to trade in electric fittings, thus coming actually into competition with private manufacturers; and in addition to that a large number of Bills were coming forward in which municipalities were seeking to become trading corporations. Manchester was proposing to inaugurate a system of tramways within sixteen adjoining districts, in which it claimed that no company whatever should have a right to put down or work tram- ways. The Manchester corporation did not s;).y they would make all necessary tramways, but only those should be made whicli they approved. The practical point was how was this question to be met? One wav was to oppose these Bills in Parliament, and he was glad to hear that the Attorney- General was oj)posed to this kind of thing. As Parliament had already permitted local authorities to undertake certain work it was no use proposing an absolute negative, 88 and the more difficult question remained, to what extent should they be authorised; and they could only o;o on the lines, how far it should be allowed. That raised a very difficult question, and he would ask all tliose present, and those who attended the adjourned meeting, to endeavour to give some assistance on that point. It must be admitted that no municipality ought to be authorised to do work for the benefit of other people at the cost of the ratepayers. They ought not to encouiage expenditure on behalf of one section only of the rate^^ayers, and they should be confined strictly within their own area. If there were a scheme proposed in London which would greatly benefit Islington, it was not right that tliose who lived in Kensington should be heavily rated for the purpose. Health was a matter in which all were deeply interested, and therefore, there could be no question with regard to sanitation, but when it came to carrying on a big undertaking all over the country it was a different thins;. If Manchester o-ot a line of trams to the bis; towns surround- ino; them thev would want next to come to London, and loo^icallv there was no reason why they should not. In the City of London they were going to fight this matter out to the bitter end, and he hoped that ever^^one would do their best to get Members of Parliament to take the right course in this matter, and prevent the further exten- sion of a very dangerous principle. Sir John Rolleston desired to thank Mr. Da vies for his valuable paper. He was in close association with a community in which a large and important section were pressing forward doctrines of a contrary nature. It had a population of over 200,000; a large section— in addition to the nationalisation of the land, railways and so on — were bringing forward a programme for the municipalisation of all industry. This of course encouraged the corporation to enlnrge its system of municipal trading. In that town none of the great public works — water, gas, or tramways — were due to municipal initiative, but to jn'ivate enterprise. He must except 39 electricity, wliicli the corporation took in hand after several companies had applied to the Board of Trade for licenses. The first Act was obtained in 1879, bnt nntil 1894 no electricity was supplied, and then it was at 6d. per unit. Since the promotion of the Bill to which Mr. Harris had referred, there was a prospect, howcA^er, of the price being reduced. The borough was the head- quarters of the boot and shoe trade, in which thousands of people were employed, and most of them supported these schemes, though a little reflection mio^ht teach them to think that, if that industry had been left to the municipality, not one pair of boots would have been made, or a shilling invested in the manufacture. The discussion was adjourned until the 9th February, 1899. CONTINUATION OF DISCUSSION. The Chairman (Sir Westby B. Percival) said this was a special meeting, called to give a further opportunity of discussing the paper on " The Cost of Municipal Enterprise," by Mr. Davies. Sir Richard Webster was unable to be present that evening, and the duty devolved upon him, therefore, of presiding. Those who had heard the paper read would admit that it opened in a very able manner a most important subject; and he hoped they would have that night champions both of what might be called the progressive policy of municipalities, and those upon the other side. He would first call upon Lord Wemyss. Earl Wemyss said he thought it would be well if some practical turn could be given to the discussion by passing a resolution emphasising what was in the paper, as coming from such a 1)ody it would be a material interest on the question in which they were all interested. He, therefore, drew up the following resolution: — " Having regard to the numerous Local Bills now before Parliament, 40 containing provisions for trading by municipal authorities, it is desirable in the interests of the ratepayers and of national progress that such powers should be suspended until a joint committee of both Houses of Parliament, or until a roval or other commission has inquired into this matter, and defined the extent to which municipal trading shall be sanctioned by the Legislature, and that a petition to this effect be presented to l)otli Houses of Parliament." However, he was informed that resolutions were not possible at these meetings, but that it was competent for the Society itself to meet and petition in the sense of the motion. He hoped the Society might be induced to do so, and that the end of the discussion would be a petition on behalf of the Society practically embodying what was in the resolution. He had always been an individualist. He believed in individual enterprise, and that neither State nor municipalities should interfere or meddle with enterprise. It was individual enterprise that made the country what it was, and tlie danger thev ran at tlie present time Avas that State or municipal interference would unmake what had so satisfac- torily been made up to the present time. What did they owe to the State and municipalities in tlie way of successful enterprise? Take some of the most important — steam, lighting, and water. When he was quite a bov he recollected hearing that a grandfather of his used alwavs to 2:0 bv water to London from Leith, and was sometimes becalmed for 14 days opposite his own house on the Firth of Forth. Now thev went asainst wind and tide the whole journey in 00 or 06 hours. Was that due to the municipality of Leith or even to that of London? No, but to private enterprise. Then again, take travelling by land. As late as liis Oxford days he used to go from Edinburgh to London shut up in a state box on wheels, where he was kept for 48 hours, only getting an occasional walk of a ({uarter of an hour. Now he got into the train at London at 2.30, and landed at his own home at 10. oO, and could dine on board on the road. They did not oAve that to the State or to the 41 municipnlitv, l)ut alDSolutely to vinfetterecl liberty of private enter- prise. You could 2;o on in that way, and refer to all that steam had done in setting millions of hands at work in the cotton or other trades, but they did not owe it to the State or to the municipalities. Taking lighting again : going back to his youth they had tallow dips and snuffers. Now every little cottage had its paraffin lamp, and you had electricity in every possible form of lighting, and if the municipalities did not interfere the probability was that within a generation the electric light in many districts would be burnt even in the cottages which used to be lit by the old cotton wdck. So far from owing that to the State, all that the State had done with regard to electricity was to try and stop it, and it had succeeded in stopping it more than it would ever succeed in any enterprise of that kind. It stopped it completely in 1882, and a committee had to be called together to amend the Bill which had stopped electricity. Coming now to water : they heard a great deal about the w^ater in London, He found no better water than he got in London, and always had an abundant supply. There was a great outcry on the part of the London County Council, who proposed, if they were allowed by Parliament, to spend 50,000,000 of money, and to rival Manchester bv brinoin"- water from Wales. Whv ? Because through the waste of people in the eastern districts, and because of this exceptional year there was a scarcity of water. He had an estate in Perthshire, and during the last summer every drop of water had to be carted from a pond. But he looked upon that as exceptional. He was not going to spend a lot of money in bringing water from the Grampians. By the Report of the Commission over which Lord Balfour presided, it appeared that the present water companies, with the little additions such as they could make, would find water enough for 12,000,000 of people for 40 years. Those who managed these things in London denounced the water com- panies as a monopoly, but it was not the State that brought the Avater to London, it was the Companies which were denounced for 42 makiiiii^ such profit as they Avere allowed to do under their xA.cts of Parliament. If it had not been for them they would now have been drinking Thames and Lea water flavoured with cats and dogs plus the sewage of 4,000,000 or 5,000,000 of people. The other night he went to the Palace Theatre and saw a wonderful photographic exhibition, which included Lord Kitchener arriving at Dover as he walked oti" the quay that very day alongside the Mayor of that Borough. He thought to himself was it to the Mayor of Dover that they owed all those wonderful photographic things Avhich showed all that passed, and other scientific developments, by means of which they could now really physically see through the human body? Was it to munici- palities that they owed such strides and signs as those? No. Science discovered and invented things, and then a few men formed a little body and exploited it to make money for themselves in the first place, but no doubt what they were doing tended for the good of humanity. That was the way the world progressed, and must progress if the State and municipalities did not step in and put a stop to all this sort of thing. Invention was as yet not in its infancy, the only thing wdiich could stop it was municii^al trading, as soon as a thing succeeded putting out their hands and taking- possession of it. What was at the bottom of all this, more or less, was the wish to make the State and the municipality omnipotent, and to put the individual under the heel of the State. Last Summer, some members of the St. James's Vestry, of which he was a member, tliought it would 1)0 desirable, in the interests of the ratepayers, to establish an Association, and he got them to call it the St. James's Anti- Socialist Association, and that there must be no mistake as to what Socialism meant, he drew u[) a manifesto, but their being only just born, they thought that what he had written was too strong meat for babes; but he hoped it wouhl not be too strong for the digestion of such a body as he was now addressing. In that he pointed out that the whole tendency of Socialism, as the German writer Lieberer 43 liad remarked, was to make the State omnipotent; of course, the State embraced municipal bodies. He said — and this Avas the key to all these socialistic questions —Socialism means State omnipotence. Whenever a Bill was brought into Parliament by which a munici- pality tried to take possession of any enterprise, they had merely to put the test to it, was it a step in the direction of State omnipotence? One point he put in the paper he referred to was this — '' All this means State omnipotence, or a step towards it." That, he believed, would be the ultimate end of this interference with private trade and enterprise. It would be the most backward step which could be taken. Major Flood Page had written an admirable letter to the Times, in which he showed that at the present moment there were 70 Bills before Parliament by munici- palities, all of them trying to grasp and make themselves manu- facturers of everything connected with electricity — and if with electricitv, wdiv not with everythino- else? There was a movement now, and there had been a petition headed by a member of Parliament, on the subject of bakeries. It was proposed that all baking should be done hy the State, and it was said that the primary cost would be .€11,000,000, plus all other expenses. There was a complete system of municipal bakeries for the wdiole of London, for which it was said £10,000,000 would be recpiired, exclusive of the ground value and compensation which would have to be paid for the disturbance of existing property. Supposing these gentlemen succeeded, there would be no private bread-making, it would all be done by the State; then the men would strike for higher wages, and the public would be starved out, because there would be no means of getting bread. The only way to prevent starvation w^ould be for each person to keep a supply of sea biscuits, or peas and beans. Such a scheme as that would be open to any amount of abuse in the hands of those who were now pressing it forward. He would ask whether in the past the success of municipal trading had been so 44 great as to be encouraging with regard to the future. He held that there ought to be a series of Parliamentary returns up to date which would give the debtor and creditor account of all the trading by municipalities in the United Kingdom. They knew that in the case of gas the Parliamentary returns showed that in the great majority of cases private enterprise got a great many more cubic feet of gas out of a ton of coal than a corporation did, and his belief was that if they went through water undertakings or anything else they would probably find the same result. As to the ratepayer it cost him what was shown on the diagram, but he had a double risk; lie had the risk in the long run of having to pay a great deal more, and he stopped progress, or if ])rogress went on and some trading concern were bought to-day by a municipality, and an invention came out to-morrow which rendered it absolutely worthless, then all the debt was so much dead weight on the unhappy ratepayers. A further objec- tion was that it might be a fertile source of jobbery and of bribery, and the establishing of municipal as opposed to market wages. If a man for his election to the House of Commons gave a pot of beer he Avas liable to be sent to prison, but if he brought in a Bill which took away the property of the few and gave it to the many he became a popular candidate and was safe in his seat. If this went on the ratepayers would be saddled with a lot of things wdiich would be no use to them in the long run, and in connection with which there would be any amount of malversation and jobbery, besides the evils which would come through the choking up of enterprise. What was the remedy? The remedy was a very simple one if the peoj)le who had it in their hands would exercise it. It all lay with the ratepayers. He once met the late chairman of the London County Council, Dr. Collins, at a country house, and, in conversation with him after dinner, he said, " You want us to do nothing!" " Oh, no," he said, " I beg your pardon, I want you to do a great deal ; I want you to keep our closets and our drains in good working order." On the strength of that they became ver}' friendly, and next day they 45 visited a private natural history museum containing a large number of interesting objects. In walking about this museum he was very much struck bv somethins: in one of the cases, and took Dr. Collins to see it. He said, " This is the London ratepayer," and this object was a stuffed donkey ! What its previous history was, whether it was a processional donkey or not he did not know ; but there it was — an absolutely perfect representation of the assinine being, the London ratepayer, who submitted to being taxed in every possible sort of way, with the results which were shown in his attitude, for he was on the ground with his fore-feet doubled under him, evidently crushed by the weight of municipal trading and taxation, when he could verv easilv have throAvn the whole burden off. That was a happy illustration of what was coming. He did not believe the ratepayer would rouse himself. Some years ago they had a meeting in the Guildhall in Sir Joseph Savory's time to establish the Rate- payers' Defence Association. It was established, and they had branches in some parts of London in 1893, some of which he addressed. No, they did not care, and the thing had dropped. He was very much afraid they could not trust the ratepayers generally to be active in their own defence. Another difficulty was that the question of taxation was not brought home to them that governed, for they were governed now by numbers, and by a system of com- pounding, and the mass of working men did not know what their rating was, and it was their power which supported this system of going in for trading and taxation. If that were done away with, and the Avorking man knew what legislation meant, he believed there would be a very different state of things. What could be done was only what was being done there, having able papers read and discussions upon them, which he hoped would lead, through the Press, to the formation of more instructive public opinions. But he wanted something practical, such as was suggested by Major Page in his letter, that there should be a joint committee of both Houses of Parliament, to put a limit which municipal trading should not 46 pass. Two friends o£ his were once having a conversation, one of whom was a very unattractive-looking man, and his friend was speaking of how London houses were infested with bugs, and this gentleman said, "Oh, bugs never touch me;" to which his friend replied, " Oh, but even bugs must draw the line somewhere." He wanted a Royal Commission to draw a line across which the municipal trading bug should not pass. He held in his hand a paper from the London Chamber of Commerce, which recited in the first place what the Bills were to which he had alluded — that they authorised corporations to manufacture, purchase, sell, or let meters, lamps, accumulators, dynamos, and other matters or things required for the purpose of the order, and to acquire, work, and use patent rights, &c. Could they have a greater blow to progress than that — the actual right to seize patent rights. Forty of the Bills before Parliament contained a clause to that effect, and yet they called themselves a free people. Then they Avent on to show that the Chamber of Commerce should f)etition against these Bills, and he hoped not only they, but every Chamber of Commerce in the kingdom would do the same, and the Society of Arts also; and that eveiy trader who had a federation should not only, in the interest of himself and his trade, but also in the national interest, petition Parliament in the sense proposed in the resolution. After that. Government and Parliament would be obliged to stop and not listen to the would-be municipal traders, but to the voice of reason, and in the future, as in the past, they must have progress as the residt of freedom. He believed in the liberty in all things — liberty to work for what hours, what wages, and for whom they liked, whether in the form of a Trades Union or not. He believed in libertv of trading. He resigned his seat for Gloucestershire in 1846 rather than vote against Corn Laws. He believed in private enterprise, not in State interference, or in the State making contracts for men. The contracts made for the State were always made in the interests of the many, as against the justice for the few. That was his 47 experience of" Parliament in its woridng. He bad struggled for liberty all his life. He had not long to live now, but what time and health he had he would still give to this purpose, believing that liberty was tiie only thing worth living for. It was thnt which had made the nation and State, and municipal inroads on liberty would unmake it. He hoped when he passed away his epitaph would be — " He loved liberty." Mr. John Burns, M.P., said the noble lord, with the characteristic intrepidity and demagogic irreverence, harl departed from the subject of the paper read at the last meeting, and had embarked upon a series of observations about the growth of socialism and the danger which w^ould accrue both to the people and the nation if nmnicipal socialism was not retarded. He would venture not to follow the noble lord into the narrow paths and bye-ways through which he had diverged, and which otherwise might have been an interesting discussion. He intended to deal with the paper which had been read, and incidentally to take one or two of the noble lord's arguments, and said that much what he had said was irrelevant, and, generally speaking, was archaic, where it was not absolutely worthless. For instance, Earl Wemvss said — what did we owe to the State? He would like him to put that question to the House of Lords to-morrow morning in secret session, and he would be told — of course in private session — that the State had given them that power which they undoubtedly exercised; it had given to the order to which he belonged a great deal, and it was because the State had been used by a class unjustly for the expropriation of the people as a whole in the interests of a section of the classes that the community as a whole wanted to resume re-possession of that instrument of State, in order to do for the nation what it had hitherto done for the class. The noble lord said what had the State done for steam ? That had as much bearing on the present debate as if he w^ere to ask how much wages the car- penters got for building Noah's Ark. and, with regard to electricitv, 48 the same argument applied. Then he came to water and said he was satisfied with the London water supply. The firemen in the Minories that day were not, and the people in the East-end of London had been considerably disappointed with the London water supply. The noble lord said they wasted it. That was an exparte statement, probably coming from a director or share- holder, and it came with peculiar bad grace from the repre- sentative of a class who taunted them with being the great unwashed, and would not give them water to make them clean. He did not see that the defence of the London water supply as it existed helped Earl Wemyss much, and if that was the only argu- ment he could bring against the municipalisation of water supply he was in poor straits. He would suggest to him that if what he said were true it was an indictment against the common sense of the most practical people on the whole foce of this earth. He said we were rapidly going to dissolution because municipalities were assumins; duties which should be left to the individual. He ouffht to know that the answer to that was that those eminently practical British people had in the course of the last two centuries taken from private enterprise 800 waterworks in England, Scotland, Ireland, and Wales, beginning with the Plymouth Municipal Waterworks, in the time of Sir Francis Drake, and not in one instance had they abandoned municipal water supply and returned to ])rivate enterprise. The fact that they had held on to a municipal supply was evidence that the British people believed tbat if it was right to help monopolies for the benefit of a few individuals it was doubly welcome and beneficial when its advantages accrued to the whole community to use that power. He asked what had the State done. He ought to know they were indebted to the State for life, liberty, and property. They were indebted to it for national defence, and if the exigencies of national defence compelled men to submit to discipline and co-operation, and by military cohesion to do that what would be futile if attempted by an individual — if it was right for f ■^\ 49 destruction it was right for the arts, for the art of industry, for any municipality to take up any industry which tliat community cared to undertake. The noble lord said the time had arrived when the people should band themselves against the exaction by municipalities. What were the facts? Whether a man were a Conservative, a Liberal, a Radical, or a socialist in public life, but he found that the necessities of modern life, modern industrialism, and national interest compelled either the municipality or the State to resist monopolies using their powers and carrying the power of capital too far. Socialism was called into existence less by an extensive desire for socialism as a theory than to use it as a matter of defence forced upon the community as a last resource against the exaction of the private enterprise, and the tyranny of monopoly pushed too far. If Earl Wemyss feared the growth of socialism, as he did, it syn- chronised with, and was proportionate to the way in which the gains of industry and monopolies had called socialism into existence, by the way in which they had pushed the tyranny of private property too far. There were 800 waterworks, 250 gasworks, 50 tramways, 100 electric ligliting companies, 12 docks, and so forth under municipal control, with the result that the capital value of the property owned by the different municipalities in Great Britain was equal to £500,000,000. He was not frightened by diagrams. It was said that figures never lied, but liars sometimes figured. The people through their local authorities had £500,000,000 worth of capital property for which they had contracted loans of £250,000,000, as the diagram indicated, but not a word was said about the assets. When he came to an analysis of the objections of municipal enterprise, he found it was not against the loans as a means of securing better assets, but it was simply the matter of the loans taking no notice of the assets at all. He saw the other evening that Sir Richard Webster talked about municipal enterprise creating a fictitious rate of wages. It had done no such thing, and it was only the uninformed who made that allegation. He might take the 50 London County Council as an instance, as be happened to be tbe author of that verv much debated trade union clause. What did it consist of? The London County Council (and 300 local authorities had followed its example) — bad news for Earl Wemyss, but excellent for the community and the workmen, though bad for the contractors who made the Embankment — adopted this regulation: " The rate of wages and hours of labour shall be those recognised by and in practice obtained by as- sociations of employers and trade unions of workmen." What a revolutionary document ! What a most mischievous doctrine that the rate of wages in practice obtained and agreed on by associations of employers and workmen should be subject to so much impotent discussion on behalf of the noble lord and his supporters! He saw in the paper that a great deal of maladministration in the United States was due to the spirit of municipal enterprise which prevailed. As one who had been to America, and the noble lord would probably approve of much that he said in the teeth of the American people about the way in which greed, jobbery, and maladministration were rampant, but he might tell him that neither he nor the reader of the paper could put down to socialism or municipal enterprise anything like the jobbery and maladministration that there prevailed. Malad- ministration existed in America simply because of private enterprise, and that persons like Andrew Carnegies, Rockefellers, J. Goulds and Vanderbilts bribed judges, squeezed senators, and purchased legislators. What for? In the interests of the community? No, but to extend the tyrannical influence of private property still further, and in so doing they were debauching the community and demoralising the State. Wherever you went, municipal enterprise undertaken in America, either in water, electric light, or tramways, there you had the beginning of good government, and it was from municipal enterprise and to its success in England and the absence of jobbery and generally of real administration, that the Americans were following our example, and were beginning to set the crooked 51 ■psLths straight. When the reader o£ the paper attributed to the State and municipalities the defects which were patent to any observer in America, he was very far from the mark, and was certainly not speaking from actual experience as everyone could affirm. Mr. DAViEssaidhe had quoted his authorities; he did not speak from his own observations, but from the writings of American observers. Mr. John Burns said his advice to Mr. Davies was to abandon those authorities henceforth, to throw those political Jonahs over- board, and make a trip to America himself, when he would come to the conclusion that every competent observer in America had come to. Then, the noble lord asked if municipal trading would pay. Was it likely that Scotch Conservative aldermen in the City of Glasgow, retired captains of industry, would be in favour of municipal enterprise unless it did pay? The answer to that was that there municipal enterprise gave 50 or 60 gallons of better water per head to citizens for 6d., but London people had a worse quality and less of it for Is. 2d. With regard to gas. Lord Wemyss ought to know, as every engineer did, the number of 1,000 cubic feet produced by a ton of coal; although it varied, it was all over the country practically about the same, and where the municipalities produced a rather less quantity they did it because they preferred a better quality and higher candle-power than the average private companies did. Where that did not prevail it was on account of better wages, shorter hours, and fewer accidents than the private gas holding shareholders could show in London that the difference between the two Avas accounted for. The noble lord said the time had arrived when the ratepayers should be aroused, and with the next breath he doubted if it could be aroused, because he knew, as well as anyone, that they could not arouse the ratepayer in London, 52 or anywhere else where any public policy was detrimental to his interest, and they would only regret municipal enterprises when they ceased to be profitable. He was one of those socialists who believed in making municipal enterprise pay wherever it could. To hear the noble earl speak, one would think that the 800 water- works had been taken from their private owners by force of arms, but he saw^ that every one of them had been compensated, not only up to the market value, but over the market value. He knew full w^ell that, whenever, in any instance, where the State or municipality had superseded private owners in this country, no harm had been done to the people who had been dispossessed. Take the case of the tramways. The London County Council paid them £800,000 for plant w^liich really was not worth more than £50,000. The company got w4iat the House of Lords itself declared to be not only a full price, but a generous price, and, in every case where compensation had been awarded, no one had been despoiled. It was said the House of Commons had a great duty passed upon it to throw^ out these 70 Bills. The House of Commons would do no such thing; the House of Lords might attempt it. He presumed the noble earl wanted an inquiry to put an end to municipal enterprise, but he could assure himself of this fact, that the House of Commons had ceased to be a chapel-of-ense to the London Stock Exchange, and tlie House of Lords would cease to be some day an appendage of the big landlords of this country. Slowdy, but surely, the people were coming by their own. They were using the local authority as an instrument of spreading over the many what monopoly had hitherto given to the few, and they w ould carry that some day to the depression of the House of Lords, of which the noble earl was so distinguished a member, and would sweep it away, because it represented nothing but property — nothing but mere money. Hitherto the function of the State had been used for robbing the people, and it was because the people wanted the State to be the protector and defender of the people that 53 municipal socialism was going on. The noble earl was a mere Dame Partington with a broom trying to rush back an ocean which was now at his feet, and if he did not mind it would soon be up to his neck, but in the interests of liberty he trusted would not drown him. Lord Wemyss said he should like to ask Mr. Burns Avhether it was his view that all private property, what he called the instruments of production, should be in the hands of the State or the muni- cipality ? Mr. Burns: Yes. Mr. DuNDAS PiLLANS Said he felt sure that very seldom within that hall had a speech, similar to that which they had just listened to, been delivered; an admirable speech of its kind, and most valuable to those who took the opposite view, because it disclosed, in all its naked hideousness, the policy the speaker had persuaded the people of this country to adopt. It was a speech, however, unappropriate to the occasion; it should have been delivered either in Trafalgar Square or under the Reformers' Tree in Hyde Park. They were there for the purpose of following up the debate so ably opened last week, and to discuss a matter which, however much their opinions might differ, they would all agree was of the greatest public importance. It was a matter which did not only affect one class of the community, but everyone, and the poorer classes to a greater extent than the richer, because any municipal expenditure must ultimately press heaviest on those who had least money to spend. He would attempt to bring back tlie debate to common sense, and to avoid flights of rhetoric, of which Mr. Burns was a past master. It seemed to him the subject presented itself from two different points of view. In the first place it might be considered from the purely business standpoint. Could enterprises involving 54 profit-earning be conducted as profitably and economically under Government administration as under private control. He had had considerable knowledge of various forms of business administration, which might be divided into three classes; first, business under exclusively private control; second, those conducted by joint stock companies; and third, those conducted by municipalities or the Government, and he submitted that those three forms represented three degrees of efficiency and economy. Where personal supervision directed a business you had the greatest efficiency and success. It was notorious that the master's eye had a great effect in obtaining the utmost possible work with the least degree of expenditure, and, therefore, you frequently found businesses which prospered under private control when converted into joint stock companies sliowed a billing off in profit and not unfrequently reached a stage when a liquidator took them in hand. Why was this? Because, after all, success in business depended on self- interest, that was the only sound principle on which business could be conducted. It was manifest that with a co-organisation the motive of self-interest was distinctly weakened; the officials had not the same personal interest in the concern as if they were the owners. They had considerable interest, because if the company were not a success thev would not receive their salaries. But when they went further and placed the business under municipal or State control the motive of self-interest became eliminated to such a degree that it might be put out of the question; whether the business succeeded or not the salaries would be paid because they had the purse of Fortunatus to fall back upon; the wretched ratepayer would be called upon to pay whether the business were successful or not. In the case of a company it would bo wound up, but in the case of a municipality or State the salaries would be continued to be paid. Therefore, on the face of it, it was fairly arguable that an organisation under State or municipal control was the most wasteful, extravagant, and least successful of any, and they knew frojn some oa practice that that was so. It had been discovered in the building of ships that the Government got much better value for their money if they put those enormous contracts into the hands of private traders instead of building them in State dockyards. As a member of the municipality of Richmond in the neighbourhood of London, first as a Councillor and afterwards as an Alderman, he found the greatest extravagance was to be feared where a business was organised under the control of a small locality, because there you had certain circumstances which tended to increase the danger of corrupt administration. There was always the tendency of town councils to indulge in experiments at the expense of the ratepayers. The town councillors all knew each other; they were companions and friends, there was always a tendency to play into each other's hands, and one great point which came under his notice was that there was a principle adopted for giving contracts for work under the town council to keep the business in the locality; a sort of spirit of local patriotism existed, and there was a tendency on the part of members, without any intention of corruption or jobbery, to give contracts to their friends, and to keep the business in the locality. This tended to extravagance, because it was manifest the wider the area of contracts and tenders the greater must be the efficiency and economy. Another great difficulty which prevented municipalities carrying on on business lines. They were often told that places like Glasgow were verv successful in administer! nff Avaterways, tramways and so on, but there was no guarantee that in drawing up their balance sheets any allowance was made for depre- ciation of plant, and he was not aware whether, in Glasgow, they had debited against their equivalent for the rates which would be charged in the event of the tramways being under private enterprise. There was no audit corresponding to the audit which companies' affairs were subjected to for the purpose of laying them before shareholders' meetings. When they were told about the wonderful profits which the Glasgow tramways claimed to have made, it was almost incredible 56 that it could be true. It was alleged that they had not only reduced the hours of labour and increased the wages, but they had increased the profits. Before these statements were accepted, they ought, as business men, to be satisfied that they had debited against their income all those matters which would have been debited if it had been a private concern. Then, coming to the other branch of the subject, and considering it from the ethical point of view, the evils that municipal trading had shown were very much more serious. Mr, John Burns had asserted that eight hundred waterworks had been taken over by municipalities, and that they had all been managed without the slightest corruption, and with due regard to the welfare of the district. Mr. John Burns said he did not say so, but it was a curious fact that no corruption had yet been proved. Mr. DuNDAS PiLLANS Said thev must not onlv take into consideration the actual facts, because they knew that within recent periods there had been a disclaimer with regard to the Works Department of the London County Council which had thrown considerable suspicion on that illustrious body. When a new idea was first put Into action the greatest amount of public interest centred In the new experiment, and it Avas only in the nature of things probable that those managing the concern would be exceed- ino-ly careful what thev were about. But as time went on, knowlno^ as they did the condition of things which existed in the condition of these enterprises, he feared that public interest would be considerably aroused, and by degrees other factors would come Into operation, and it would be found, as it was always found, that abuses crept into public departments. One great danger was that the employes of a municipality were also voters, and there was a tendency on the part of a representative to make things pleasant for those who elected them. If they could tell the people that they had been able 57 to raise their wages, and to shorten their hours, there was a great attempt on the part of representatives to do these things, forgetting they were not there for the purpose of paying fancy prices to labourers, but they were sent there as trustees of the public to administer public funds, and to conduct the business entrusted to them precisely in the same way as they would if they were private persons eiu ploying these same people. He recollected in a recent election for the London County Council, in going through the borough of Southwark, seeing on the hoardings posters appealing to the electors, to vote for so and so, who would pay the scavengers the wages of 25s. a week. That was a serious element of corruption and a source of danger which thinking men would do all they could to guard against. There was a theory now abroad that by the direct employment of labour they could save the profits of the contractors, and save those profits for the community. He believed that to be a great delusion. The contractor was a man who knew what he was about; he understood his business and knew how to obtain the maximum of labour from the men under him. It is all very well to flatter the working-classes and tell them the State is going to restore to them what they have been deprived of. That w ill do for the Reformers' Tree, but was not suitable to an intelligent audience. It would ht much better to tell the working man that he had no more claim to consideration by the municipality with regard to wages or hours of labour than anv other class of the community. The contractor had no such sentimental influences at work. He appointed a foreman who would get the utmost possible work out of the men, as it was only right he should. The British working man was a very good fellow, but he needed a lot of looking after. They found the greatest difficulty at Richmond to persuade the British workman to do a fair day's work for more than a fair day's wage. It was a very difficult thing, in view of the omnipotence of the ballot-box, to get any foreman to properly superintend work, and make the men do a honest day's work. As soon as their fore- 58 man tried to clo what a contractor's foreman would have done, the men immediately came before the Surveyor's Committee, and held the foreman up to execration as an oppressor of the poor. He himself had been taken in like that several times. He used to boil over with indio-nation at the treatment received bv the labourer at the hands of the tyrannical foreman, until he learnt better by experience. The consequence was that jobs lasted twice as long as under a contractor, were worse done, and cost a great deal more. It was very undesirable to increase the power of a bureaucracy as he knew through liaving lived for some years on the Continent, especially in Italy. There was no greater danger to the community than that it should be overridden by bureaucrats. There was no more objectionable person than a man who got into a uniform, and swaggered about lording it over his fellow creatures, and he wanted to prevent the progress of that sort of thing in this country. They hold all their greatness mainly to the spirit of independence and individualism, which was characteristic of the English character, and he trusted they would adhere to that faith. That had made the country great, and that only could keep it great in the future. Mr. Fairfield said interesting as Lord Wemyss's address was, the most important remark he made w^as the practical one that they should try to get the Government to hold an inquiry on this matter; but a great many statements had been made as to the profits of municipal experiments, and Mr. Burns' speech showed the absolute necessity of getting the facts and figures. There was a formidable table on the wall which showed £250,000,000 of municipal debt which had been piled up within the last few years, half of which admittedly had been spent for " sanitat " which could return no profit to the ratepayers, and they wanted to know about the other half. It was that expenditure which had arisen so much of late years since a wave of socialism had come over the House of Commons. Mr. Burns said there was £500,000,000 of assets to put 59 a2:ainst that, and thev wanted to know if there was any truth in that assertion, or whether a great portion did not represent a net loss, consisting of waste material, enterprises which had since become obsolete, with which the ratepayers were now saddled. They also wanted to know the facts about the Glasgow tramwaj^s and other things; whether it was really denied that the private company which had been superseded paid £30,000 a year rent which was thrown away when the tramways were municipalised. They also wanted to know a great deal about the ins and outs of the London County Council. Lord Wemyss, who was an individualist, was not in the habit of running to Parliament for protection, but in this case Parliament was responsible for the evil- of which they complained. Mr. Balfour's answer was that the ratepayers could alter it if they pleased. That was true in small areas and to a certain extent, but the growth of modern cities had altered the whole phenomena of local self-government. The ratepayer to-day Avas powerless, he was a helpless unit, it was so in London and in New Zealand, and Mr. Burns must know from his journey to America that it was oidy in the large cities that municipal corruption was rife, and that these views prevailed. Li the small municipalities administration was pure. He had lived five years in the West in cities of 2,000 or 3,000 inhabitants, where the ratepayers could take an active interest in local matters, and the administration there was as pure as anywhere else. The success of local government was in inverse ratio to the size of population. What did the people of Manchester know about the agenda paper which came before the City Council every day ? The men who had to deal with it ought to have a salary of £1,000 a year eacli, but these gentlemen were busy pro- fessional business men, and the result was that these proposals to municipalise everything fell into the hands of committees, and were carried without the knowledge of the ratepayers. That was why they asked for a Parliamentary inquiry. He denied that these things were successful. This assertion that municipal socialism paid came from Mr. Burns and a small section who thought with him, but tlie great majority who had been active in advocating municipal socialism did not take the trouble to declare that the thing paid on its merits. They said it ought to be based on higher considerations than £ s. d.; there ought to be a great ethical moral, and there was a justification for these schemes which did away with ordinary business considerations. Mr. Burns asserted that they paid, but he should prefer to see a balance-sheet. Many monopo- lisers boldly asserted that the scheme they advocated did not pay, and ought not to pay. They were benevolent, philanthropic people, who said it was their dutv to 2:ive 2:ood waoes to the workino- man, to make his life better, and his horizon brighter, and more purple- tinted than it was before, and that that sort of thing did not pay. Apart from the question of debt, there w^is the question of the growth of municipal liureaucracy, which was a terrible danger in this country. Tiie Government had already called into existence an enormous State bureaucracy in the shape of school-teachers as salaried State officials, who were banded together in a trade union, whose main principle was self-interest in raising the salaries and increasing the privileges of its members. Added to that, there was the approaching threatened bureaucracy in administering an enormous mass of the ratepayers' money, which Avould l)e a formidable political danger to this country. That municijial bureaucracy already had a trade union, and they claimed for them- selves not the right to compete with private traders, because they did not want to compete — Lord Farrar once, in a moment of economic remorse, challenged the London County Council tc compete with the contractors by doing work with outside bodies — they did not want to compete, they wanted a monopoly. All these cor})oration officials who Avere able and energetic men, very probably some of tlie most respectable men in the kingdom, and amongst their merits they had that of producing large families, who, as they grew up, Avould all want offices found for them, so that 61 there was a terrible temptation to jobbery of various kinds, and, as this was increasing every day, he thought it w^as high time that Parliament should inquire into the matter. Mr. Sellon said as he read the paper he did not consider it was an indictment of municipalities as such. The average man took the view quite rightly that it was too late to attack the whole principle of municipalisation. He certainly held that it had thoroughly justified itself with regard to certain classes of commodities, and that it was o;ood for societv at lar^e that these commodities should be provided by the municipality and not by private enterprise. On the other hand he believed the average man held, and probably even Mr. Burns would agree so far, that there were certain classes of commodities which carried with them big trade risks which the municipalities ought not to take in hand, because they were not so well qualified to do so as private enterprise. Between those two extremes there were a certain number of cases with regard to which men of both schools held sincere and diverging views. As he understood the paper it amounted to this: that with regard to the particular matter of the electrical industry, which was the one in respect of which the rnunicipalising question had chiefly arisen in the last 20 years, municipalities had not given so good an account of their stewardship as private enterprise would have done. Now was it possible to make out a bond fide case before competent judges whether the municipalities had in fact conducted electrical enterprises worse than private bodies? If such a case could be made, the question was what was the proper remedy. There was one point which had not yet been alluded to, namely, the light which the experience of foreign countries threw on the matter. He had had exceptional opportunities of seeing and hearing what was going on in America, in Germany, and in Switzerland, and he believed it was beyond dispute that in those countries electrical science was far more highly developed in the interests of the public than in this 62 country, and, secondly, that in those countries it had not been handled chiefly by municipalities. In America, out of 2,589 electrical enterprises, 2,250 were private, and only 330 municipalities; but in this country there were a majority of local authorities. If these figures had any significance, the deduction was that electrical enterprise had moved relatively slowly here because it was in the hands of municipalities. But those who held the view put forward in the paper were of opinion that the suggestion made by Lord Wemyss was a practical one — that Parliament should be asked to appoint a commission of inquiry. It was not a matter in which there need be any antagonism of interest. The municipality represented the ratepayers, and the ratepayers were the public. They wanted to know whether their money should l)e taken from them in rates or whether they should be allowed to invest their money freely in industrial affairs. Therefore the interests of the local authorities, and the interests of those who held the private enterprise view were identical, and they might well join hands in presenting a joint petition to the tAvo Houses of Parliament asking for this important commission. Mr. Spencer Hall said he hoped to have been able to give some statistics showing how municipal enterprise in relation to electrical lighting had given va^stly superior results to those attained by company operations, but time did not allow him to do so fully. He would, therefore, only take the point Mr. Sellon had referred to, that local authorities had not given so good an account of their stewardship as companies had. That view he entirely opposed to the facts. Taking first the average price charged to the consumers of the 39 companies whose accounts he had analysed he found that no less than 15 per cent, showed an average price of between Id. and 8fl?. per unit. On the other hand there was not a single local authority in London which charged so high a price; 28 per cent, of the companies charged between hd. and 6f/., but of the local authorities 63 o 42 per cent. The lowest charge by a company undertaking was 4'06d. per unit; but you had 40 per cent, of local authority under- takings charging lower than 5c?., the lowest price being 3^d, charged by the Edinburgh Corporation. There were six local authorities charging less than 4d. Taking again the cost o£ working from the aro;uments adduced, it would follow that the local authority under- takings must come out at the top with regard to the amount they expended. The practical control of all these works was in the hands of the administrative officers and officials, and under the local authorities there were as capable and clever engineers as in any of the private undertakings. Of the 39 companies referred to, 26 per cent, showed a total cost of over id. per unit, whilst amongst local authorities, only 8 per cent, out of 60 cost as much. There were only 5 per cent, of the companies whose total cost was lower than 2d., and of the local authorities there were over 25 per cent., and in one case it was down nearly to one penny. The profits being determined by the rate of charge to the consumers, the amount of profits was not any indication of the success or otherwise of any undertaking. Mr. Gaecke said this subject was very large, and he would endeavour to refer to one or two new points; but first he must say a word on the statements made by the last speaker, which, he ventured to say, were entirely erroneous. He had referred to a lower price for electricity l^eing charged by corporations, and to a lower cost of working; but taking the cost first, he had ignored altogether that the corporations omitted from their accounts items which had to be incurred by companies, and ought to be charged. The corporations manao-ed to charo;e the services of the town clerk, the borough surveyor, and many other items to other accounts. Then with regard to the price charged, the local authorities had the question of public lighting in their own hand, and they adjusted that according to the needs of the accounts. With regard to profits, he had made a most egregious blunder, and it was the statement which Mr. Burns 64 made that was at the bottom of the whole question. He stated that it was not the object of local authorities to make a profit, but Mr. Burns simply said the object and policy of the corporation was to make a profit; therefore it was an important question for Parliament to determine not only what was to be the scope of municipal enterprise; but the principle on which it was to be conducted: were the local authorities to make a profit or not. He had lately had occasion to analyse the net result of the workins; of electrical supply undertakings by corporations, and he found that although a profit of about half a million was made by all the municipal corporations carrying out electrical lighting, they bad taken more from the rates during that period than they had returned to the ratepayers. Then where did the benefit to the ratepayers come in? He endorsed the practical suggestion that every effort should be made to obtain reliable facts upon this important question. They were all ratepayers, and were anxious to learn, and he was quite sure that Mr. Burns, not- withstanding the recklessness of some of his statements, would be very glad to be corrected if he Avas wrong. A practical social revolution of the industrial conditions of this country should not be allowed to take effect without careful consideration by Parliament, and that not to come about by various private Bills promoted by this or that municipality, but should be determined after careful consideration. He therefore endorsed the suggestion that the Society should petition Parliament, as it had done on former occasions, for the appointment of a Select Commission ; and, further, that the excellent paper of Mr, Davies should be reprinted for general circulation. One thing which had come out was the enormous complexity of the question, and the apparent want of knowledge of its complexity. He had always found the mnjority of people took very little interest in it, and therefore the more tliey could disseminate sound literature upon the subject the better. One point which had occurred to hiin was the danger of extension of 65 niuiiicipal enterprise arising from the want of efficient management. He did not question that efficiency at present, though it might be open to doubt, but he would ask, if this tendency were to go on, who was going to do the work of the municipality? At present a few gentlemen who were enthusiastic for the Avelfare of the community devoted themselves to this work ; but if the London County Council undertook not only electric lighting, but tramways, electric traction, and all other industrial enterprises, who was going to do the work? Was it fair to say that a human being, whenever he is acting as a private individual is greedy and self-seeking, but the moment he joins a Town Council he becomes no longer self-seeking, but is entirely devoted to the welfare of the public ? It was not fair to put upon any individual the huge amount of work it was proposed to put upon Town Councillors and not remunerate them; but if you did, it would introduce an entirely new factor to the question. Then you had to consider whether it was better to carry on these enterprises by means of self-interested public companies, or whether they should have the State or the municipality-employed officers. Again, if the municipal corporations were going to be authorised to do this large amount of work, they ought to be put under the same restrictions and responsibihty with regard to the rendering of accounts. There w^as no other spending body in the State which Avas not called upon to render accounts. Why were not the municipal accounts published in the same uniform manner as the Board of Trade required tramway companies, gas companies, and electric light companies to publish their accounts? It would be said, no doubt, that the accounts were published, but they were published in such a manner that they never knew whether it was the electric department which paid or some other. Another important question was the difficulty of securing continuity of policy. During many years he had had to carr}^ on nego- tiations with local authorities, and the difficulty he always experienced was this — he would attend one Council meeting, when the question would be discussed, and a gentleman of great eloquence would get 66 up and make a speech, which carried the whole Council with him, and for the time the matter was disposed of, but the next meeting, when that policy was to be continued, that gentleman was not there, and somebody else got up of equal eloquence on the other side, and the whole policy was reversed. That was not a business-like way of carrying on business undertakings. He did not think there was any greater danger threatening the development of industry than the careless indefinite way in which this question was dealt with. It ought to be defined one way or the other. If these things were to be carried on by corjjorations, let the public know that they would have to put their savings into corporation stocks and become corporation officers, or else to leave the country with their capital and energies and go elsewhere. Major Flood-Page said he wished to enforce the suggestion that the Society of Arts should Petition Parliament, and lie spoke as a member of the Council of the London Chamber of Com- merce where the question originated from the fact that seventy municipalities were making an attack this session on the electrical industry, asking for powers to manufacture lamps and other things. This was a matter vital to the trade and commercial interests of this country, and they were in communication with every Chamber of Commerce in the kingdom, and he ])elieved there was none which would not support the petition they had originated. Electricity was as yet in its infancy, but, according to Mr. Garcke, who was a great authority on all statistical matters in connection with it, about £100,000,000 of money had been spent in electricity. Going back to the time when Lord Wemyss gave up his seat in Parliament in 1846 railways were then in their infancy, and in a few years they would have spent £1,000,000,000 upon it. AVlio had spent it, private enter|)rise or the municipalities? Why were they behind every other country in the world in electricity? Simply because the interference of Parliament had put them under the local (i7 autliorities. There were no less tlian 104 municipalities which had the power to introduce electricity, but had not done so and kept everybody else from doing it. There were now a number of companies asking Pju'liament for powers to take cheap electricity all over the North of England, but the municipalities were up in arms, and wished to prevent their interfering with their monopoly. In Liverpool there were 700,000 people, 3,000 only of whom took the electric light, but they wanted to supply the whole 700,000, that every man should have the electric light as he had water, but this could only be accomplished if the obstruction of municipal trading was put an end to. The Chairman said he must noAv brino" the meetino- to a close in the usual way of proposing a hearty vote of thanks to the reader of the paper. Whether they agreed with his notions or not they could all join in thanking him for it, and it Avas not only valuable in itself, but it had, he hoped, evoked a very valuable discussion though it was true the fringe only of the subject had been touched. With regard to the recpiest which had been made, he should have pleasure in submittino; the wishes of the meetino- to the Council of the Socictv of Arts, but if he might venture to make a suggestion, he thought a very happy secjuel to the proceedings Avould be if Mr. John Burns would add to their indebtedness to him by moving from his seat in Parliament for the return which was so eaoerlv souo-ht for. He was quite sure that he was as anxious to get at the facts as anybody else, and, therefore, he thought it would not be necessary for the Society to move in the matter if Mr. Burns would do so in the House. The vote of thanks having been carried, Mr. Davies, in reply, said his thanks were due to the audience, and especially to the Secretary and Council of the Society for giving him the opportunity of discussing this exceedingly interesting though 68 somewhat complex scientific question; they were also clue to the Attorney-General, who was so gracious as to take the chair when the paper was read, and also to those who had joined in the discus- sion. He might say he was specially indehted to Mv. Burns for having been so courageous as to come forward in an almost entirely hostile audience to put, with perfect candour and frankness, his A'iew of the matter. The subject Avas not a new one to him, as he had been engaged in a professional capacity in fighting a kindred question, namely, the right of private traders to come and push their electric wares into the boroughs in the North of England. In that effort he had been met with a uiiammity of malignant opposition on the part of the officials of municipalism which had been startling. The subject had been a subtle and difficult one, which could not be dealt with in a few paragraphs in a newspaper, nor could it be dealt with at a scrappy meeting of one or two ratepayers who might get together and sanction opposition to a private Bill. It could only be dealt with in any sort of rational manner when a scientific society like that gave both sides a full opportunity of expressing their views. The Council had been so good as to accede to his request and especially invite the Town Clerks of those Corporations Avho were opposing this important commercial innovation, and as he was anxious they should know exactly what his views were, his paper was distributed amongst them beforehand; but lie must confess that his gratification at the proceedings which had taken place was tinged by a drop of bitterness, inasmuch as he had not had one of those honourable opponents there to say one word in answer to his reasoned justification of the attitude he had ventured to take up. Might they not assume from this silence that these experienced and learned upholders of numicipal institutions were in their hearts as convinced as he was that municipal trading was prejudicial to tiie best interests of the Corporations? There had been some admirable contributions to the discussion, most of which struck the note of liberty, and he was glad that that was followed by Lord Wemyss in GO his peroration, when he told them that he should like to have written as his epitaph that he loved liberty. That epitaph might be written — he hoped it would be a long time first — equally well on the grave of Mr. John Burns. The question was, not whether they loved liberty, because they all loved liberty, but by what method would liberty be best assured to our citizens. Would it be assured by absorbing into the embrace of municipal government every activity and industry, or would it be better accomplished by leaving activity and enero;v free to trade in the old Avay? He honoured those who held the socialistic view and frankly stated it, but he hated the man who called himself a municipalising radical or democratic conservative, or some such misleading name. He wanted all those disguises thrown off and the principles at stake freely stated. No doubt Mr. Burns reflected the feelings of a great many of the working class, that the method of wealth production had hitherto been absorbed by the property class. It might be that certain methods of wealth production had in the past been so absorbed, and that the power of the State had been used to protect that absorption. But the methods of wealth production, Avhich he had been advocating the freedom of, namely, the brains and activity of the people, were not capable of being enslaved or owned by means of any property title whatever. The real activities he wished to see freed the most, existed not in the ownership of so many miles of copper wire, or of railway track, but in the brains and energies of the people themselves. It was impossible those brains and energies could operate to their full capacity for the advancement and advantage to society except in a medium of entire li])erty and independence. Mr. Burns said that if the discipline of militarism w^as good for the organization of methods of defence and attack, was it not equally good for industry ? It was not. The same systems of discipline and methods of organization which miglit be all very well for military purposes were not adaptable to industrial developments. With regard to the limit which should be drawn to define the 70 boundaries of the functions of the local governments, it seemed to him that if you went back to the principle of democrac}', you got the true line. That principle rested on no assumption that the many Avere wiser than the few, or the poor wiser than the rich, but on the single law — the result of experience — that a man could be trusted to attend to his own interests, and not to anybody else's. Therefore each man, as he liad an equal interest, whether poor or rich, in the defence of the country, was entitled to an equal voice in the appoint- ment of the Government, but it followed from that that the Government should confine itself to matters which were of common interest to everybody, and the Government or municipality should not engage in matters which were of interest only to a small proportion of the community over which they were appointed to rule. Mr. Davies writes: — Owing to the late hour of the evening to which the discussion was prolonged, the writer did not feel him- self permitted to enter upon statistical points in his reply. He would not, however, like those who honoured him by examining his Tables to think him neglectful of their criticisms. The supplementary Table (No. 6) has been compiled to meet the suggestion of Sir Itichard Webster. The figures in this are taken from the last edition of the " Official Intelligence," and show the proportion of outstanding indebtedness of tlie typical towns Avhich is attributable to remunera- tive, that is, presumably, trading expenditure. This proportion varies, it will be seen, from 75 per cent, of the whole debt in the case of Manchester to nearly 50 per cent, in the case of Nottingham. How far, if at all, the outlav of these lar^-e sums has relieved the ))urden of the ratejiayers it is Aery difficult to ascertain. Owing to the complexity and lack of uniformity in the accounts of the difierent Corporations and in the system of valuation, to say nothing of 71 the disturbing element of large corporate property, the revenues of which are applied in the relief of the rates in some towns — (the Corporation of Liverpool, for instance, is a large owner of landed property in the very heart of the city) — it is impossible to compare the rates levied in one town with those in another. All that can be said is that the rates in the six towns mentioned are high. The amount collected in Manchester last year was, according to the last edition of the Municipal Year Book, 7s. 14d, in the £, in Liverpool it is 6.9. OJf/., in Sheffield it is 7s. IHf/., in Leeds 7^. 2d., and in Nottingham 6.9. ll^r/. In regard to Mr. John Burns' statement that the assets are neglected in the Tables, this is hardly correct. The assets (as stated in the paper) are duly reflected in the statistics of rateable value, for of course the justification for the outlay of rate- payers' money in the making of roads or the laying of pipes and wires up to his property, and the supply through those pipes and wires of various commodities which he has need of is the amenities which those Avorks have added to his property. These amenities are duly taken note of when the valuation list is revised, and the point remains that the indebtedness and also the rates in the large towns have increased during the last 20 years out of all proportion to the growth in value of the ratepayers' property. ^■ffy Metchim &, Son, London, p. S. King & Son, Removed from 12 & 14, King Street. Established 1819 in PARLIAMENT STRBET. ORCHARD HOUSE, . . . . 2 & 4, GREAT SMITH STREET (Opposite the Westminster Palace Hotel, Victoria Street), WESTMINSTER, S.W PUBLISHERS, [Parliamentary & General Boohsellers, BOOKBINDERS AND PRINTERS. Publishers of the Reports and Publications of the London County Council. Poor Law Conferences. India Office & Government of India. China Imperial Maritime Customs. American Academy of Political and Columbia University: Studies in Economics. Pennsylvania University : Political Economy Series. Historical Reprints. Toronto University. Russian Ministry of Finance. International Railway Congress. Social Science. Massachusetts State Board of Health. Lists of these Publications and Monthly List of New Parliamentary Papers, Books, &c., Post Free. Parliamentary Papers • <«' Books (New and Old) Pamphlets • ^ ** • X Reports ^ ^ ^ f y ^ Blue Books " " ^ ^ ^ Official Publications, &c. - special Lists of Parliamentary Papers from 1800 to 1898, on 1. Army. 2. Education. 3. Fisheries. 4. Land and Agriculture. 5. Sanitary and Public Health. 6. India, Afghanistan, and Central Asia. 7. London. 8. Peerage Claims, Public Records, &c. 9 10 II 12 13 14 15 16 Labour. Colonies. China, Japan, Siam. Banking Currency, Weights .and Measures. Poor. Navy, Merchant Shipping, &c. Miscellaneous. Railways. p. S. King & Son, Removed from 12 & 14, King Street. Established 1819 in PARLIAMENT STREET. ORCHARD HOUSE, . . . . 2 & 4, GREAT SMITH STREET (Opposite the Westniinsler Palace Hotel, Victoria Street), WESTMINSTER, S.W PUBLISHERS, J?arliamentar^ & General Booksellers, BOOKBINDERS AND PRINTERS. Publishers of tfie Reports and Publications of the London County Council. Poor Law Conferences. India Office & Government of India. China Imperial Maritime Customs. American Academy of Political and Social Science. Massachusetts State Board of Health. Columbia University : Studies in Economics. Pennsylvania University : Political Economy Series. Historical Reprints. Toronto University. Russian Ministry of Finance. International Railway Congress. Lists of these Publications and Monthly List of New Parliamentary Papers, Books, &c., Post Free. Parliamentary Papers - Books (New and Old) Pamphlets < ^ ^ ^ " Reports ^ ^ ^ If ^ ^ Blue Books ^ ^ - - Official Publications, &c. special Lists of Parliamentary Papers from 1800 to 1898, on 1. Army. 2. Education. 3. Fisheries. 4. Land and Agriculture. 5. Sanitary and Public Health. 6. India, Afghanistan, and Central Asia. 7. London. 8. Peerage Claims, Public Records, &c. 9. Labour. ID. Colonies. 11. China, Japan, Siam. 12. Banking Currency, Weights .\nd Measures. 13. Poor. 14. Navy, Merchant Shipping, &c. 15. Miscellaneous. 16. Railways. In the Press. Cloth, 300 pages, 6s. net. London Water Supply. Being a Compendium of the History, the Law, and the Transactions relating to the METROPOLITAN WATER COMPANIES from Earliest Times to the Present Day. By H. C. RICHARDS, Q.C., M.P., Bencher of Gray's Inn, and W. H. C. PAYNE, L.C.C., of the Middle Temple, Barrister-at-Law, Ex- Member of the Water Com- mittee ; Representative of the London County Conncil on the Thames Conserancy Board. Assisted by J. P. H. SOPER, B.A., LL.B., of Lincoln's Inn, Barrister-at- Law. The object of this work is to place in the hands of legislators, shareholders, and ratepaj-ers, in a comprehensive form, the past and present position of the Water Supply of the Metropolis and Greater London, and of some of the large centres of population in the United Kingdom. Its aims are historical and legal, and it brings the whole question of the Water Supply of the Metropolis down to the present date. 23 Maps and Diagram. Cloth, 738 pages, lOs. net. VI. Miscellaneous Electrical Undertakings. VII. Directory of Directors and Officials of Electrical Undertakings. VIII. Electrical Companies Registered since 1856. Manual of Electrical Undertakings, 1898-1899. Compiled under the direction of EMILE GARCKE, M.I.E.E., F.S.S., Chairman Electrical Section London Chamber of Commerce, 1895-1897; Hon.-Scc. Electric Lighting Acts' Committee, 1884-1888 ; jfoint Author of ' Factory Accounts, their Principles and Practice." Invaluable to Shareholders and Directors of Electrical Companies, as also to Engineers, Town Councillors and others. The present is the Third Annual Volume of this Manual. Particulars are given of about 700 Electrical Companies and Municipal Undertakings. The number of pages in this Volume is 738, as compared with 598 in the preceding Volume. The Manual is divided into the following sections : — I. Telegraph Undertakings. II. Telephone Undertakings. III. Electricity Supply Undertakings. IV. Electric Traction Undertakings. V. Electrical Manufacturing Undertakings. The Manual contains : — Twenty-three maps, showing areas under the Provisional Orders granted to Companies and Local Authorities in the County of London. The streets in which the mains are laid are also shown. Map of Electric Railways in London, in operation, under construction or authorised. Coloured diagram showing in comparative form the average price obtained for current sold, the details of the working expenses, the profit or the loss per unit at 83 Electricity Supply Stations, based on official figures as rendered in Board of Trade form. In the Directory of Officials the addresses are given of Directors, Secretaries, Chairmen of Lighting Committees, &c. " Supplies a long-felt want" — Times. "The Compiler and the electrical industry are alike to be congratulated on this useful financial compilation." — Electrician. " We declared on an examination of the first years Manual, that it was a book that Electrical men in all branches would find extremely useful, and now that a more complete classification of Electrical Undertakings is given, the utility of the work is greatly enhanced. ' — Electrical Review. " Mr. Garcke's last volume was so complete and so perfectly planned that he could only proceed on the old lines, with the necessary additions and corrections to bring the book up to dnte. It is without doubt well worth the money." — Light>ii>ig. " This book is practically without a rival in the electrical field, so to say that it is the best of its kind would be to pay it a very poor compliment." — Electricity. " This most useful publication keeps, as its increase in size testifies, well up to date. » » « Several improvements have been made in the volume, notably the introduction of the addresses of the officials, of whose names an index is given."— Eugineer. " This is the third issue of a very useful work of reference. The book has been considerably enlarged." — London. "A timely and exceedingly useful Manual * * * Mr. Garcke may look forward to a great future for his Annual." — Daily Chronicle. " The Third Volume, which has just been issued, compares most favourably with its predecessors, and contains a mass of information which is as important to the public as the financier." — Financial Times. P. S. KING & SON, Orchard House, Westminster.