C U/4LS
THE CITY FOR THE PEOPLE
OR
THE MUNIGIPALlZflTION OF THE CITY GOVERNMENT
AND OF LOCAL FRANCHISES
BY
FRANK_PARSONS
Lecturer in Boston University Law School ; Member Boston Br ; Author of Parsons' Edition of Morse on Banks
aud Banking; Editor of May on Insurance. Perry on TrasH, and other legal works; Professor of His-
tory and Political Science, and Dean of Extension Lecture Department College of Social Science ;
President National League for Promoting Public Ownership of .Monopolies; Member
International Co-Operative Union. American Social Science Association, and
Xational Institute of Art, Science and Letters; Author of " The World's
Best Books," " The Power of the Ideal," " The New Political
Economy,' 1 '-The Telegraph Monopoly" Chapters in
Municipal Monopolies " of the Ely Economic
Series, etc. . etc.
No Copyright.
On the contrary, an invitation is extended to all to do their utmost
in every way to spread the truths contained in the following pages.
Newspapers and magazines are at liberty to quote as freely as they will,
due credit only being askt.
PUBLISH! BY
C. F. TAYLOR
1520 CHESTNUT STREET, PHILADELPHIA, PA.
p^
Lan-
guage is
a growth rather
than a creation. The
growth in our vocabulary
is seen in the vast increase in size
of our dictionaries during the past cen-
tury. This growth is not only in amount, but
among other elements of growth the written forms
of worojs are becoming simpler and more uniform. For
example, compare English spelling of a century or two cen-
turies ago with that of to-day ! It is our duty to encourage and ad-
vance the movement toward simple, uniform and rational spelling. See the
recommendations of the Philological Society of London, and of the American
Philological Association, and list of amended spellings, publisht in the Century
Dictionary (following the letter z), and also in the Standard Dictionary, Webster's Dic-
tionary, and other authoritative works on language. The tendency is to drop silent letters in
some of the most flagrant instances, as ugh from though, etc., change ed to t in most places where
so pronounced (where it does not affect the preceding sound), etc.
The National Educational Association, consisting of ten thousand teachers, recom-
mend the following:
"At a meeting of the Board of Directors of the N. E. A. held in Washington, D. C.,
. July 7, 1898, the action of the Department of Superintendence was approved, and the list
of words with simplified spelling adopted for use in all publications of the N. E. A.
as follows :
tho (though);
altho (although);
thoro (thorough);
thorofare (thoroughfare);
thru (through);
thruout (throughout);
program (programme);
catalog (catalogue);
prolog (prologue);
decalog (decalogue);
demagog (demagogue);
pedagog (pedagogue);
"You are invited to extend notice of this action and to join in securing the general
adoption of the suggested amendments. IRWIN SHEPARD, Sec'y."
The publisher of this Series feels it a duty to recognize
the above tendency, and to adopt it in a
reasonable degree.
PREFATORY NOTE.
THE people of this country have been very slow to appreciate
the value of public franchises. The shrewd capitalist has been
quic-k to note the rapidly growing values and the great possibilities
in this direction, and he has also been alert to get the aid of poli-
ticians in securing privileges that should belong only to the general
public. The rapid building up of private fortunes in this way has
at last opened the eyes of many communities regarding the im-
portance of public ownership of public utilities, such as water, gas r
electrical lights, street railways, etc., of cities and towns. During
the winter and early spring of 1897 I began to notice that certain
towns in some of the States were anxious to own and operate their
water works or gas works, but that they were required to first
obtain permission from the Legislature. I at once realized that
the most important thing to do in aid of the cause of Public
Ownership of Public Utilities was to learn to what extent muni-
cipalities are in bondage to the Legislature in the various States,
and to show the importance of obtaining municipal freedom as the
first step.
As my friend, Prof. Frank Parsons, of the Law Department of
the Boston University, had already given extensive study to muni-
cipal problems, I wrote to him asking if he could undertake the
task of examining the Constitution and Statute Laws of each State
in reference to the rights and privileges of cities and towns. My
plan was to have this information tabulated, one table showing the
constitutional bearings, and the other table showing the statutory
bearings upon this question, preceded by introductory text and
followed by explanatory text. I hoped thus to get the wnoie ques-
tion in this condensed form into the limits of a magazine article.
The task was a great one, but finally the Professor consented to
undertake it, with suitable assistants under his direction. The
work was necessarily slow, and waiting for the latest Acts of the
Legislatures still further retarded the work. As the work grew,
the Professor despaired of getting the results into the limits of a
magazine article. In the meantime I had planned a series of
volumes, to be called "Equity Series," to deal with leading public
questions. In the early autumn of 1898, after mature considera-
tion, the Professor and I concluded to incorporate this subject
in one of the volumes of "Equity Series," along with other chapters
dealing with other basic and vital municipal problems. This
volume is the result.
Municipal government is the problem of the age. It touches us
in our daily lives a dozen or a score of times while the State or
National government touches us once. The condition of the water
we drink and with which our food is cooked, the condition of the
air we breathe, and of the streets upon which we walk or ride,
is determined largely or entirely by our local government; and
also the public order, public education, public conveyance of all
kinds, and other important matters too numerous to mention, are
determined by our local government. Let us learn to solve our local
problems well, and in the interest of all.
C. F. TAYLOK.
^PHILADELPHIA.
AUTHOR'S PREFACE.
THE city is the condensation of the ages; the aggregation of all
that is best in civilization, and all that is worst in the remnants
of barbarism. The rapid growth of our cities and the monopoly
of their advantages by a few political and industrial schemers, are
among the most vital facts of the time. The citizen sovereigns
of America dealing with city life are confronted with questions like
these: Shall the People's cities be given over to syndicates and
corporations? Shall five hundred thousand or a million people
build costly streets and then give them to gas and electric trusts,
and street railway companies for the private profit of a few indi-
viduals? Shall other cities and towns all over the State, or their
Representatives in the Legislature, have more to say about the
management of this city's local business affairs
than its own people have? Shall Councils have
Shall the people
own the city and its power to govern the city against the people's
government or shall
they be owned by w in O r only in accordance with the people's
the politicians and
monopolists? w m shall they have power to legislate in spite
of the people's protest, and to refuse legisla-
tion in spite of the people's demand? Shall the spoils system con-
trol appointments to the great confusion and inefficiency of the
service? Shall rings and bosses, machines and lobbyists, corpora-
tions and monopolists continue to have large influence in municipal
government? And if all these things are not to be allowed, then
by what means may they be prevented?
This book is an attempt to answer some of these questions, and
the chapters that deal with municipal liberty, public ownership,
and direct legislation, outline some of the principal means by which
a city may become a city for the People and not for the Politicians
and Monopolists. Civil service reform, propor-
bo"ok ViSi0nS f the tional representation, the electric ballot and
the English corrupt practices act, are treated
more briefly afterward, and finally statutes, charter provisions, and
constitutional amendments are given in full for the three leading
movements. In the prelude all parts of the book are co-ordinated
by a discussion of the fundamental facts and principles on which
the main thought of the book is based.
The volume was begun at the request of Dr. Taylor; its general
plan is substantially the one proposed by him, and in the work-
ing out of the plan his criticisms and suggestions have been of the
greatest value. Some repetition has resulted from the effort to do
justice to each topic in its turn, but we think the reader will find
this method very favorable to a thoro grasp of the subjects treated.
FRANK PAESONS.
BOSTON.
PRELUDE.
The problem of the city is the problem of civilization. In 1790
only l-30th of the people of the United States lived in cities; in
1890 about one third of our population lived in cities of eight or
more thousand inhabitants. 1 That is, we must multiply the ratio
of 1750 by ten in order to get the ratio of 1890. An equal move-
ment for another hundred years would make the city population
three times as large as the total population of the country. The
growth of cities will probably stop short of that predicament, but
the stampede from the country promises to continue in the next de-
cade, at least, with undiminished and probably accelerated vigor.
Automobiles, motor bicycles and possibly flying machines, with
paper mache, liquid air engines, will make it easy to travel fifty
or sixty miles an hour in your own conveyance. No respectable
family will be without its automobile or flying machine, and motor
bicycles will be as thick as mosquitoes on the Jersey coast. The
country will be covered with a network of magnificent highways,
1 One of the most momentous and expressive movements In modern
history is the persistent, restless, and marvelously rapid absorption of
he rural population into city life. Read carefully the census records and
then let imagination carry you into the future:
Proportion of Population of U. S. living in Cities over 8,000,
Fraction of Percentage of
Year. total pop. total pop.
1790 1/30 3.35
1800 1 /25 4.
1810 1/20 5.
1820 1 /20 5.
1830 1/16 6.5
1840 1 /12 8.
1850 1/8 12.
1860 1/6 17.
1870 1/5 20.
1880 ..1/4 . 22.5
1890 1/3 29.2
The record indicates that more than a third of our people now live In
cities, and doubtless half the population will soon be urban. If towns are
included the really rural population is already a minor and rapidly dimin-
ishing fraction. In Scotland the rural population is diminishing absolutely
as well as relatively being only 928,500 out of a total of 4,000,000 in 1891.
But the most astonishing and thought compelling facts of all in this relation
are those that concern the growth of some of our largest cities. I Insert
u couple of hints:
Population of Chicago. Population o: New York.
1840 4,500 1800 60,000
1880 503.185 1880 1.206,299
1890 1,099,850 1890 1,515,301
1898 1,800,000 ' 1898 2,000,000
Greater New York 1898 3,549,000
The figures for 1898 are estimates based on state census returns since 1890.
The school census of 1892 gave New York 1,800,000, so that 2,000,000 for
8
PBELUDE.
broad and smooth, and lined with beautiful trees, and the farmer
can live in the city or near it and go to his fields every morning
and back at night on his own automobile or liquid air bicycle.
Invention is building the cities in another way. Modern machinery
enables four men to plant, raise, harvest, mill and deliver to t,
bakers flour enough to feed a thousand men one year, and the .
is not yet. Electricity is coming to the farmer's help. It is found
that electrifying the seeds will increase the yield 50 per cent.:
electrifying the atmosphere increases the crop 70 per cent.;
electrifying the ground has increased the product 300 per cent.
Why not electrify all three? Why not electrify the hired man and
the' hired girl? If we get this system into general use and elec-
trify the seeds and the ground and the atmosphere, and then go
further and electrify the hired man and the hired girl by giving
every youth a thorough practical education, making every worker
a partner in the business and cultivating a true civic patriotism
1898 Is probably below the truth. Greater New York does not include Jersey
City, which has a population of more than 500,000, wherefore the whole
city at the mouth of the Hudson numbers over 4,000,000, *"***
fold or more in a century. Chicago appears to double itself in about
years. It increased 250 fold in 50 years and promises a record of
700 fold in a century if its present rate of development continues t
Since the above was written and put in type Columbia University *
published a 500 page book, by Dr. A. F. Weber, about the Growth o
Cities" all over the world and some of the facts are of so much mte
in this connection that I condense a few of them in the following paragrap
In the whole United States 210,873 people lived in 6 cities in 1
whereas 18,284,385 lived in 448 cities in 1890. While the population of the
whole country has increased 12 fold in this century, the urban population
has increased 87 fold. The rapid increase began with the era of canals
in 1820, and swelled in the thirties and forties with the advent and devel-
opment of railroads. The decade ending 1850 lacked but 1 per cent, of
doubling the city population. In the fifties the gain was 75 per cent., in
the sixties 59 per cent, in the seventies 40 per cent, in the eighties 61 per
cent. From 1880 to 1890 our manufactures grew enormously, the capital,
number of employees, and net value of product increasing 100 per cent.
over the preceding decade, and with this growth the number of towns and
cities of 8,000 population or more rose from 286 to 448, with a lift of pop-
ulation from 11,318,547 to 18,284,385 persons. One-half the urban population
of the United States is in the North Atlantic States and four-fifths in the
territory north of the Ohio and Missouri rivers. In Massachusetts, Rhode
Island, New York and New Jersey more than half the people live in cities,
and twelve other states have more than a quarter of their inhabitants in
cities. Dr. Weber gives the following table to show the growth of cities
In the United States. He begins with cities of 10,000 population instead of
with cities of 8,000 as in my table at the beginning of this note.
Clanes of Cilift.
No.
1800
Population.
No.
1850
Population.
No.
1890
Population.
100000+
6
1,393 338
28
9 697 960
20 000100 000
' 5
201 416
24
878342
137
5 202 007
10000 20,000
36
495,190
180
2,380,110
Total, 10,000-f
5
201,416
66
2,766,870
345
17,230.077
Tn this country 28 per cent, of the people live in cities ot 10,000 or more
inhabitants; 24 per cent. In cities of 20,000 or more, and 15 per cent, in
cities of 100,000 or more. England and Wales are further on the road
62 per cent, of their people live in cities of 10,000 or more; 54 per cent, in
Cities of 20,000 or over; and 32 per cent, in cities of 100,000 or more.
Scotland, Belgium, Netherlands, Saxony, Prussia and Australia also have
a larger percentage of their people in cities than we have. The rate of
advance Is so great, however, with us, and the growth of business and in-
vention so enormous that the United States may very likely overtake the
older nations in the march of city development as it has in so many other
lines of development. Massachusetts already has 66 per cent, of its popula-
tion in cities of 10,000 and over.
PRELUDE. 9
and lofty ideal of devotion to individual and social service, if we
do all this along with the coming improvements in transportation
the time will come when 1/100 of the people can do the entire agri-
cultural work of the country, and even they can enjoy the advan-
tages of city life, so that the whole population will be substantially
urban.
With the concentration of population has gone the concentration
of wealth. A hundred years ago wealth was quite evenly distributed
here. Now one-half of the people own practically nothing, one-
eighth of the people own seven-eighths of the wealth, 1 per cent,
of the people own 50 per cent, of the wealth, and 1/200 of 1 per cent,
own 20 per cent, of the wealth, or 4000 times their fair share on the
principles of partnership and brotherhood.
A hundred years ago there were no millionaires in the country,
now there are more than 4000 millionaires and multimillionaires,
one of them worth over 200 millions, and the billionaire is only
a question of a few years more! Already, it is said, we have a
billion dollar trust; hundreds of others from ten millions up, and
a total trust and combine capitalization in the neighborhood of
eight or ten billions, and all this congestion of wealth and power
is centering in the cities.
The problem of the city is the problem of the future, and the
problem of the city is the problem of monopoly. Diffusion is
the ideal of civilization diffusion of wealth and power, intelligence,
culture and conscience. Instead of this we have private monopoly of
wealth, private monopoly of government, private monopoly of
education, private monopoly even of morality and the conditions
of its production. Combination, integration, union are most ex-
cellent if their benefits are justly distributed integration, plus
diffusion or union for the good of all, is the problem of the 20th
century.
We shall not attempt in this book to deal with the whole prob-
lem of diffusion. The case of The People vs. Monopoly is too big for
full treatment in a volume of this size, so we shall confine ourselves
to a few of the chief institutional aspects of the movement toward
a more perfect democracy or self-government in political and in-
dustrial affairs, private monopoly in politics and industry being
the central and most threatening evil of our time.
Self-government is the basic principle of our institutional juris-
prudence, resting upon historic and philosophic proof that justice
and liberty demand self-government, and that the management of
their own affairs is one of the most powerful means of elevating
and educating the people.
Free institutions are institutions that embody the principle of
self-government, and the freest institutions are those that carry
self-government nearest to perfection, reducing to a minimum all
external control. So fundamental is the principle of self-govern-
ment in our law that it is held by high authority to be inherent in
our system of government, underlying and permeating our consti-
tutions and rendering void all legislation in conflict with it. even tho
1 PKELUDE.
such legislation may not be objectionable in the light of any ex-
press provision of the constitution under which it is enacted. 2
But while it is clear that free institutions must be founded
on self-government, and our constitutions, statutes and theories
of government are saturated with the idea, yet the law does not
apply the principle consistently thruout. In several respects the
application is defective, the three following being within the scope
of this book:
1. As to areas. The law recognizes the right of self-government
in respect to state and nation, but not in respect to cities. Muni-
cipal corporations are creatures of the legislature. They have only
such powers as are given to them by the legislature, which may, at
its pleasure, abridge or annul these powers and privileges; divide
them or consolidate two or more of them into one without their
assent, attach a condition to their continued existence or abolish
them completely.
The principle of self-government requires that a city should be
as free and independent in its sphere as states and nations are in
theirs. A state has no more right to impose its judgment on a
city in respect to the city's internal business than the nation has
to impose its judgment on a state in regard to the internal
business of the state. The true rule is that national interests
should be governed by the nation; the state's peculiar interests by
the state; the city's special interests by the city, and the indi-
vidual's personal interests by himself, the presumption being
always with the lower group and the principle of decentralization.
Individual liberty should be left as large as possible, personal free-
dom being curtailed only where the public good clearly requires
it. In the field of public action as much as possible should be left
to the cities and towns, no business being given to state control ex-
cept such as the clear interests of the state require to be so placed;
and lastly, no powers should be exercised by the national govern-
ment except such as are necessary for purposes and interests of
national moment.
The full control of streets, the power to grant or withhold street
franchises and the right to own and operate local public utilities
should belong to each city secure from the possibility of legisla-
tive interference. The line between state and municipal action
should be drawn in each state constitution as carefully as the line
between state and national action is drawn in the Federal Consti-
tution. A limited sphere of local activity should be clearly marked
off and deeded to local self-government, beyond the reach of the leg-
islature; and outside the special local sphere a city should be free
to act as it may see fit, so long as it does not violate a valid law of
the nation or state, reversing the present rule and making a city
free to act except where justly prohibited, instead of being pro-
hibited except where it has received permission to act. Another
HnHhS? g *4 C vi!fiJ' ^^ VS " etrolt ' '* Mich. 228; see also People vs.
U8 Ind 426. ' VS ' Dennr> 118 Ind ' 382; Evansvllle VS. State,
PRELUDE.
plan would be to follow the method of the national constitution,
and specify in the constitution of the state, the powers to be ex-
-ercised by the legislature, and the guarantees to be observed in
respect to individual liberty, and then leave the whole residual
sovereignty to the municipalities.
Some of our states have gone far toward the accomplishment of
Municipal Home-Rule by constitutional amendments enabling cities
to make their own charters. But these home-made charters are still
subject to legislative control, and municipal liberty will never be
complete till the city has the right to manage its local business
affairs according to its own discretion.
2. As to departments of life. The law declares in favor of securing
self-government in political affairs, but comparatively little effort
is made to obtain self-government in industrial affairs. Yet the
application of the principles of self-government and democracy
is just as necessary to liberty, justice and development in the latter
case as in the former. Oppression by an aristocracy of industrial
monopolists is as bad as oppression by an aristocracy of political
monopolists. The educating and elevating effects of managing
their industrial affairs are as valuable to the people as the edu-
cating and elevating effects of managing their political affairs;
in fact, some of the most developing and most creditably handled
subjects in municipal government have been the making of roads,
managing of schools, supply of water, gas, electric light and other
public utilities. An important proviso, however, must not be over-
looked. The whole body of people affected by a street railway
service, for example, may properly decide all questions relating to
it. provided they have first acquired in an equitable way the right
to control it, and not otherwise. This makes it clear that we can-
not in fairness expect a large measure of industrial self-govern-
ment under existing ownerships, but it may be obtained thru pub-
lic ownership in' the case of monopolies, and, in other cases, thru
the development of copartnership and voluntary co-operation.
Private owners who are public spirited or even intelligently selfish
will open the door to labor-copartnership, and aid the growth of
co-operation and public ownership, and may even confer industrial
suffrage on the workers as a gift where good conditions make
immediate emancipation wise; much may be accomplished also
thru the efforts of the workers to become part owners thru public
ownership and co-operation; but the main dependence must be
the growth of enlightened public sentiment thruout the commun-
ity, an awakening of the whole people to a realizing sense of the
justice and expediency of co-operative industry and the public
ownership of public utilities.
3. As to methods. The principle of self-government, even when
applied, is generally very imperfectly carried out. We have not
even political government by the men to any considerable extent.
In cities we have government by councils.
In states we have government by legislatures.
In the nation we have government ~by congress.
12 PBELUDK.
The people have little direct efficient control. They are sov-
ereign de jure, but not de facto, except at election time. The actual
power exercised by the people consists chiefly in the periodic choice
of a new set of masters, who can make laws to suit themselves, and
enforce them till their term is up, regardless of the will of the
people. We are governed by an elective aristocracy, which, in its
turn, is largely controlled by an aristocracy of wealth. Behind
the legislatures and congresses are the corporations and the trusts;
behind the machines, the rings and the bosses, are the business
monopolies, the industrial combinations and the plutocrats; be-
hind the political monopolists are the industrial monopolists.
The principal remedy under this third division is Direct Legis-
lation, which is, indeed, of vital importance under every division,
because it opens the door for every other reform. No one who
really believes in self-government can refuse to support the initia-
tive and referendum, for they merely enable the people to veto laws
they don't want and secure laws they do want, i. e., they enable
the people to govern themselves.
Restating in brief the remedies mentioned, with some others
closely related to them, we have:
1. Home rule for cities in local affairs.
2. Direct Legislation, or the initiative and referendum, with
which we may name civil service reform, proportional representa-
tion, preferential voting, the electric ballot, equal suffrage, effici-
ent corrupt practices acts and the popular recall, all of which are
necessary in order that the people may really own and operate
the government under conditions most likely to secure wise leg-
islation and honest, intelligent and economical administration.
3. Co-operative business and public ownership of industrial mo-
nopolies, remembering that government ownership of industry is
not public ownership of it, unless the people own the government.
Public ownership of the government is essential to real public own-
ership of industry, and public ownership of government involves
Direct Legislation and civil service reform, wherefore these must
be a part of every thorough and reliable plan for the public owner-
ship of industrial monopolies. On the other hand, an advance in
public industry, or even in government ownership of industry,
tends to aid the movement toward good government in two ways:
First; It helps to do away with the private corporations, which
are probably the chief corrupting influence, and certainly one of
the leading obstacles to good government in our cities to-day; and
Second; it increases the importance of governmental affairs and
intensifies the disasters resulting from corruption, partisanship
and the spoils system, and so rouses the interest of the citizens
and impels them to demand reforms that will guarantee pure and
efficient management. Wherefore, except under specially adverse
circumstances, sufficiently powerful to overcome the effects just
named, government ownership of industrial monopolies tends to-
ward good government and public ownership of monopolies, both
1'KELUDE. 13
of which tend, of course, to the diffusion of wealth and power and
the realization of a more perfect democracy.
4. To push all these and other reforms, non-partisan leagues
should be formed in city, state and nation, to educate the people,
turn on the light in dark places, give the facts persistent and
judicious emphasis, permeate all parties with the truth, call false
officials to account, sustain men who do their duty and develop a
civic conscience that will make every public service a sacred trust.*
In education lies the final hope, for at bottom it is a new intelli-
gence and a new ideal, that must be relied on to mould the real
to a more perfect form. Individual development forces a change
in the laws, then better institutions help to develop a nobler man-
hood. By such interaction civilization is built up.
3 For information concerning such organizations address Samuel B.
Capen, "Municipal League," Boston; Edwin D. Mead. Prest. "Twentieth
Century Club," Boston: Dr. Charles B. Spahr, Prest. "Social Reform Club,"
New York; Hon. Clinton Rogers Woodruff, Sec. "Municipal League of
Philadelphia," and of "The National Municipal League," GIrard Bldg., Phila-
delphia: B. F. Gilkison, 111 Nassau street, New York City, Sec. "League
of American Municipalities;" Eltweed Pomeroy, Newark, N. J., Prest.
"Direct Legislation League;" Rev. W. D. P. Bliss. Chicago, 111., Prest.
"National Social Reform Union;" also the "Citizens Union" and the
"City Club," New York; "Citizens Municipal Association," Philadelphia,
and the "Civic Federation," Citizens' Association" and "Municipal Voters'
League," Chicago. Civil service associations and proportional represen-
tation leagues will be referred to hereafter.
The books and pamphlets issuing from the offices of President Mead
and Secretary Woodruff, together with the works of Dr. Albert Shaw on
"Municipal Government" in Europe, and the writings of Professor Good-
now, constitute invaluable contributions to municipal literature, and if
it were not that I had a share in its composition I should include "Muni-
cipal Monopolies," edited and partly written by Professor Bemis, as quite
indispensable to students of city problems. For current matter the official
publications of the various cities, and such periodicals as "Municipal
Affairs." -'City Government," "The Review of Reviews," "The Outlook,"
and "City and State," are of the greatest use. All the great monthlies
contain occasional matter of moment in this relation, and finally no stu-
dent of progress can afford to overlook Dr. C. F. Taylor's "Monthly Talks"
m "The Medical World." or "The Direct Legislation Record," edited by
President Pomeroy.
PRIVATE MONOPOLY. I.
The most pressing problem of the age is the problem of monopoly.
Private monopoly means privilege, unequal rights, breach of democracy;,
it means congestion of wealth and power and opportunity; antagonism
of Interest between the owners and the public, and power to make that
antagonism effective. The monopolists aim at profit; the public desires-
service at low cost. Competition generally tends to low rates, but monopoly
In private hands tends to extortionate charges and unjust profits. To secure-
and protect such profits, monopolists corrupt legislatures and councils,
water stock, hide their books, issue false accounts, make fraudulent con-
tracts, bribe public officers, control elections and appointments, perpetrate
all manner of frauds on the public, oppress their employees, resist regulation
and defy the law. Yet with all its evils monopoly has the great advantage
of saving the duplications, debasements and wastes of competition. The
problem is to keep the advantages and get rid of the disadvantages. Com-
petition cannot do it since it forfeits the advantages and is moreover im-
practicable and unmaintainable where men have once learned the benefits
of unified industry. Regulation will not afford a full solution of the
problem because (1) It cannot remove the antagonism of interest between
the owners and the public, which is the main root of monopoly evils; c2)
it cannot eliminate the congestion of benefit, tho it may modify this con-
gestion; and (3) it cannot prevent the existence of a privileged class. You
have still antagonism, congestion and aristocracy, instead of harmony, diffusion
and democracy. Regulation can do something, but it cannot attain to
harmony of interest, or full diffusion of benefit, or equal rights and true
democracy.
A private gas plant or street railway will be run in private interest. It
is a fundamental maxim of business that property is to be managed in the
interest of its owners. If the people want the street railways run in tlyir
Interest they must own them. Public utilities ought to be managed in
the public interest, and not in any private interest, and therefore ought to
be owned by the public. The very men who manage the great monopolies
in the interest of their private owners now, would manage them equally
well for the public if the public were the owner. But if you leave the
private interests, which have the managers heart-allegiance, succeed in
the managers will use all their power to evade or nullify the law, or control
the law-making and law-executing officers in the interest of the private
owners who employ and pay them, and for whose pockets they are bound
to work under the business ethics of the day. If the public should, thru
regulative measures, succeed in taking the control, which is the essence of
ownership, so as to compel a management in the public interest, we should
have something resembling public ownership by coercion (with borrowed
capital and private election of the immediate managers to be watcht and
controlled by another set of officers chosen by the public) until the struggling
private interests, which have the managers heart-allegiance, succeed in
evading or defeating the law: and if regulation does not go so far as to
' *Si control, the substance of ownership, and establish a mongrel
public ownership by confiscation if any margin of power is left the mana-
gers to serve the Interests of those who still hold the private title to the
property, that power will be used to make the still existing antagonism
iterest effective against the public. Regulation leaves one set of men
to do the work with vast wealth and power in their hands and every interest
the work the way we don't want it done, and puts another set to-
the first and keep them from doing it their way. creating thereby
mgest motives for the monopolists to buy up or capture the regu-
lators, control their appointments, or corrupt the government above them,
the antagonism, and drive the evils it causes deeper into the dark,
I'nYo g ( - SO , I !S e of . J nem aml intensifying others. Instead of our govern-
introlling the great monopolies, they are controlling our govern-
Public ownership complete and real, brings harmony of interest between
l IlOrS and me nil him n v mi I.- in cr +vrv ;,i , .,, t ; .... i ,!,,, ~:s
CONTENTS.
PUBLIC OWNERSHIP ....
DIRECT LEGISLATION II 255
HOME RULE FOR CITIES Ill 387
TUP; MERIT SYSTEM OF .CIVIL SERVICE IV 469
PROPORTIONAL REPRESENTATION V 474
PREFERENTIAL VOTING VI 484
(or Majority Choice of Mayors, Governors, etc.)
THE AUTOMATIC BALLOT VII 488
(or Voting and Counting by Machinery)
BEST MEANS OF OVERCOMING CORRUPTION. .VIII 492
(Encouraging Experience of England, 498)
Appendix
LEGISLATIVE FORMS I 505
(Laws and Amendments on I). L., Home Rule, etc.)
(Suggested Forms for Future Enactment, 510)
LATEST NOTES II 523
INDEX OF SUBJECTS 543
(Analytic Treatment of Leading Topics)
INDEX OF PERSONS AND PLACES . 582
PRIVATE MONOPOLY. II.
John Stuart Mill observed that monopoly of essential services involved
the power of levying taxes on the community. It may be noted further.
that these monopoly taxes are not levied for public purposes nor by the
people or their representatives as all good taxes should be. The monopolists,
or controlling owners and managers of private monopolies, not only exercise
the sovereign power of taxation, but the despotic power of taxation without
representation and for private purposes. If the matter had been properly
considered, every grant of a monopolistic franchise or privilege would have
been held void ab initio upon the fundamental principles of justice and the
common law, because it involved a grant of sovereign and ultra-sovereign
power to private parties. A monopoly controlled in private interest is
sovereign power in private hands. Only the sovereign people have a right
to monopoly, for only the people have a right to the sovereignty involved
in monopoly, and only public ownership can transform the monopolistic
power of taxation into a power of taxation with representation and for
public purposes, instead of taxation without representation and for private
purposes.
Not only do the monopolists exercise the power of taxation without
representation; they also in large degree determine the distribution of wealth,
decide which industry, which class, which individual, which community,
shall prosper, and which shall not; make and unmake the fortunes of
persons, streets, cities and states; direct the government and control legis-
lation. Thus again we find monopoly giving its owners sovereign powers,
wherefore again we say that only the people have a right to own a monopoly,
for only the people have a right to sovereign power. Monopoly we are bound
to have; it is an economic necessity; the only question is, shall the penple
own the monopolies, or shall the monopolies own the people?
Public ownership of water, gas, electric light, transit, telegraph and
telephone systems, etc., is simply ownership by a large body of citizens
instead of ownership by a small body, many stockholders in place of few,
and equal instead of unequal holdings, whereby the benefits of industry are
more evenly diffused, and the conflict of interest between the owners and
the public is eliminated by making the owners and the public one an-1 the
same. It is democracy and union in place of aristocracy and antagonism.
The change of monopoly from private to public ownership and control
means a change of purpose from dividends for a -few to service for all. And
this change of purpose resulting from unifying of the interests of owners
and the public, is the source of the improvements experienced under public
ownership in respect to cheaper and better service, purer government, better
psiiil and more contented labor, superior citizenship and a fairer diffusion of
weiilth and power. Civilization, manhood, and even the public safety, de-
mands the change. (See Chap. I and Appendix II e.)
CHAPTER I.
PUBLIC OWNERSHIP.
In dealing with this question we note with special emphasis
the most important fact that public ownership and government
ownership are by no means synonymous. Russia has gov-
ernment ownership of railroads, but there is no public own-
ership of railroads in Russia because the people do not own
the government. Philadelphia has not had real public own-
ership of gas works because the people do not own the coun-
cils. AVhere legislative power is perverted to private pur-
poses where the spoils system prevails and the offices are
treated as private property where government is managed
in the interests of a few individuals or of a class, anything
that is in the control of the government is really private
property, altho it may be called public property. If coun-
cils and legislatures are masters instead of the people, they are
likely to use the streets and franchises for private gain instead
of the public good. If the government is a private monopoly,
everything in the hands of the government is a private mo-
nopoly. At the heart of all our philosophy about the public
ownership of monopolies lies the necessity for public owner-
ship of the government. The monopoly of making and ad-
ministering the law underlies all the rest. If the people are
to own and operate water works, street railways and other in-
dustrial monopolies, they must own and operate the govern-
ment. It follows that the merit system of civil service and
the initiative and referendum are absolutely necessary to real
and complete public ownership; the latter to prevent private
monopoly by abuse of legislative and judicial power, the
former to prevent private monopoly by abuse of official and
administrative power. The legal title to property may be in
the city or state, and the people may 'get the whole beneficial
use of it thru the action of honest legislators and officials, but
18 THE CITY FOR THE PEOPLE.
no reliance can be placed upon the continuance of such re-
sults if the doors are open for perversion of legislative and
administrative power. Control is the essence of ownership,
and unless the people have the ultimate control constantly in
their own hands, so that they can compel prompt obedience
to their will, and enforce the management of public affairs
in their interest, the soul of ownership is not theirs in spite
of the paper title. It is of vital importance to keep in mind
the fact that public ownership of industrial monopolies re-
quires public ownership of the government, and that this in-
volves direct legislation and a strict, nonpartisan merit sys-
tem of civil service, so that these 1 measures are integral parts
of any reliable plan of public ownership.
To state the case- in another way: Government is a public
utility; wherefore the doctrine of the public ownership of
public utilities involves the public ownership of the govern-
ment. But public ownership of the government requires
direct legislation and the merit system of civil service, which
axe therefore essential parts of the doctrine of public owner-
ship of public utilities.
It must not be forgotten in this connection that putting
the legal title to a street railway, or other enterprise, in the
people may be the means of rousing them to demand civil
service reform and direct legislation, in order to transform
the paper title into a real ownership, and make it certain that
the property will be managed in the public interest. Such
movements must be carefully managed, however, else cor-
porate power may win the field before the public spirit or
civic patriotism of the people can be sufficiently developed,
and thoughtless persons may then mistake the failure of paper
titles and government ownership for the failure of real public
ownership.
The present demand for public ownership is largely the re-
sult of the evils experienced from private monopoly. 1 A
lj r ?if C \ U , S l the demand is Partly due to the conviction that
l8 /K e h !? hes t form of co-operation and the best moans of
V f b ^ nefl ,V u wheref re it is preferable to private enterprise
and e ? ht <; nea and free from the evils of private mo-
onol Fnr , e evs o prvae mo-
no P re J nJlv tn * P ' .P"^ , e v dllcatlon rests upon the idea that lean, inn is
ioi thn? H' e " #** among the whole people by means of
'tools than by reliance upon private institutions.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 19
monopoly is an advantage tending to shut out competition.
Monopolies in industry are of various sorts. A business or
possession which by its own inherent nature tends to shut out
competition is called a natural monopoly, while a privilege or
immunity established by legislation or combination is called
an artificial monopoly. The distinction is convenient, but
it is doubtful if it has much practical value. An exclusive
bridge or ferry privilege or railway franchise may constitute
as absolute a monopoly as the ownership of a mine. So may
an agreement for reduced rates of transportation, or exclusive
supply of materials and products, or a combination shutting
out competition by the weight of the capital involved and the
risk of ruin in a battle with the combine. Similar evils and
similar benefits appear to attend upon private monopoly in
all its varying forms.
Some of the evils that often attend monopoly in private
hands are excessive charges, enormous profits, watered stock,
false accounting and doctored reports, poor service, disregard
of safety, discrimination, fraud and corruption, defiance of
law, speculation and gambling, congestion of wealth and
power, lack of progressiveness, ill treatment of employes, de-
basement of human nature and denial of democracy. These
evils do not all develop in every case. In some cases only the
congestion of power is present, but, as a rule, private monopoly
with nineteenth century human nature tends to produce the
evils above enumerated and now to be briefly discussed.
THE EVILS OF PRIVATE MONOPOLY.
1. Excessive Charges. One reason men desire monopoly is
the power it gives to charge more than a fair equivalent for
the service rendered. The owner of an important bridge or
ferry monopoly can make the people pay several times as
much as the same labor and capital would bring in the open
market, and a street railway, or gas company, or telephone
company sometimes possesses more power to tax the people
than the city government. A few examples will make the
matter clear.
20 THE CITY FOR THE PEOPLE.
The charges of private water works in the United States
average 43 per cent, excess above the charges of public water
works for similar service, 1 and the public rates are, on the
average, considerably above the cost of the service for which
a charge is made. 2
In Indiana the average revenue per family in private water
works has been shown to be double the average cost of the
service, as disclosed by the records of municipal works. 3
Of the fifty largest cities in the country nine are supplied
with water by private companies. These cities are San Fran-
cisco, New Orleans, Omaha, Denver, Indianapolis, New
Haven, Paterson, Scranton and Memphis. All but three of
them refused to give their receipts and expenses for Mr. Ba-
ker's Manual of American "Water "Works, 1897, and one of
the three, Indianapolis, did not state operating expenses.
San Francisco made full returns, and so did New Orleans,
where the city is part owner and has an agreement that keeps
the company under some restraint.' 1
The Indianapolis company reports:
Average consumption 9,000,000 gallons.
Debt $1,000,000
Capital stock 500,000
Interest on debt $55,000
Taxes 13,052
Revenue from City 10,000 for street sprinkling.
Revenue from City 64,933 for fire protection.
Gross receipts 273,753
Careful estimates 5 place the operating expenses in Indianapolis
at a sum not exceeding $80,000 with $24,000 for depreciation, where-
fore it appears that $117,000 will cover the total expenses, aside from
interest. Subtracting this from the total receipts, $273,753, we
i Conclusion of M. V Baker in his Manual of American Water Works,
L890. He had data for 318 public and 430 private water works all over the
country, and compared the total family rentals, the total family rental being
the ordinary family or household rate, plus the separate charges for wate?
closet, bath tub, wash bowl, cow, horse and carriage, with use of hose
for washing the latter, and hose for lawn sprinkling
llffe r
3 Investigation of one of Prof. Commons' students, 1890. Average reve-
nue per family in the 23 private plants, ?9.7S: average total cost per family
including interest for the 30 public plants, $4.61, and the family cons ump-
The flrat general Indication of operating cost I got by tabulating data
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 21
have a profit of $156,000 for the capital involved. Taking out the
$55,000 interest on the debt we find $101,000 clear profit for the mo-
nopolists who hold the $500,000 stock, a profit of 20 per cent, a
year.
The San Francisco company reports:
A bonded debt of $9,975,000
Capital stock 16,000,000
Of which there is paid up only 1,230,500
Operating expenses $376,826
Interest 533,838
Taxes 102,156
Total expenses 1,012,820
Revenue from consumers $1,548,835
Revenue from City for fire protection 137,236
Total receipts 1,686,071
The operating expenses, taxes and reasonable depreciation on
real value of plant amount to $660,000, which leaves $1,026,000 profit
on capital. Subtracting $533,838 interest on the debt, we have
$490,000 clear profit for the stock, or more than 40 per cent, a year
on the paid value or actual investment represented by the stock.'
from a number of cities, and as the results are of intrinsic interest I give
the table here:
O-. Ex. Indicated
Averag* daily for 9,000,060 gal-
Operatlug coasamption Ions av<>. output
Expense! ia gallons under similar
Providence, R. I $72,091 $8,905,000 U $73,000
Worcester, Mass 55,000 6,500,000 76,000
Springfield, Mass 18,478 4,638,000 36,000
Peabody, Mass 6,125 906,000 62,000
Columbus, 64,000 14,000,000 41,000
Detroit, Mich 107,000 40,000,000 30,000
Toledo, 35,000 8,000,000 40.000
Milwaukee, Wis 118.630 25,291.000 40,000
New Orleans, La 64,000 9,000,000 64,000
Louisville, Ky 71,000 16,800,000 40,000
Allegheny, Pa 80,000 28,000,000 30.000
Chicago, 111 1,435,516 251,839,000 51,000
Boston 440,000 50,800,000 74.000
Philadelphia 1,113,470 215,000,000 46.000
New York city 643,000 189,000,000 31,000
Most of the plants are public. Other things equal, the proportional In-
dications, from small plants would be too high, and those from large plants
would be too small. Taking into account the cost from pumping from
driven wells, 300 feet deep, the use of water power and natural gas, the
rate of wages, pressure, character if surface, etc., I concluded that $80,000
was a liberal estimate for the operating cost In Indianapolis. While study-
Ing the point I tried to get an estimate from an engineer based on personal
investigation of every detail of the Indianapolis situation on the spot. This
I have at last succeeded In doing.
Mr. John W. Hill, a noted consulting engineer of Cincinnati, has re-
cently Investigated the Indianapolis Water Company by order of the City,
and his report has been examined and approved by the City Engineer. On
page 29, the operating and maintenance expenses for the year ending April
1, 1898, are placed at $80,000. The average daily consumption for the said
year was 10.260.IXK) gallons or H4 millions more than the output stated in the
Water Manual for 1897, so that my estimate of $80,000 operating expenses
for the 9 million output Is a little too high. The results of the two methods
of estimate are, however, remarkably similar, and I have allowed the text
to stand as I wrote It before receiving Mr. Hill's report.
The income of the Indianapolis company for the year ending April 1,
1898, was $292.561, which means a net profit of $130,000, or 26 per cent, on
the stock (after paying interest on the debt). The value of the plant is
about $1.800,000, or $800.000 above the debt, and the percenfage of profit
on this is of course much smaller (15% per cent.), because several hundred
thousand dollars have been put into the plant from the earnings, but the
money the monopolists purport to have taken out of their own pockets and
invested in the enterprise is represented by the stock, and the present rate
of profit on that Is 26 per cent. Yet the rates in Indianapolis are not high,
but on the contrary are lower than the rates of private companies usually
are.
"The people of San Fiancisc-.i only get about 12 gallons of water daily for
22 THE CITY FOR THE PEOPLE.
In view of such facts it is no wonder that some or all finan-
cial items are "withheld" by a large proportion of the private
plants all the way thru the Water Manual no wonder that
most of the companies in the above named cities refused to
furnish financial data; nor that the Indianapolis company
aimed to avoid the appearance of evil by omitting the item of
operating expenses.
Speaking of the benefits of public ownership of water
works in small towns, Professor Richard T. Ely says in
"Problems of To-day:"
"I have lookt into the experience of a whole group of towns in.
New York State, and they all tell one story. * * * The experience
of Randolph, in Cattaraugus county, New York, tells the story for
all. A private company wanted to put in water works, and the
lowest bid which they could be induced to make was $28,000, and
that was on condition that the town should subscribe for stock.
The charge for water was to be $10 for a household, with additional
charges for extra faucets, closets, etc., in proportion. Randolph
finally built its own works for a total cost of $20,299.86, and with
a charge of $4 for each household, instead of $10, is making a profit.
Everybody is delighted with the experiment."
The price of gas does not appear to have any definite rela-
tion to the cost of production. Bronson Keeler found in
1889 that in cities manufacturing under closely simi-
lar conditions the selling price varied from 75 cents to $16
per thousand feet, 7 He found a charge of $1.25 in one city
and $6 in another a few miles away. Out of 820 plants the
prices of 584, or 71 per cent, were multiples of 50 cents, and
84 per cent, were multiples of 25 cents.
In 1885 the New York Senate investigated the gas compa-
nies in the city of !New York, 8 and discovered that down to
ea V, h ye ^ rly i Payout of $1. In Peabody and Springfield the people get 40
gallons daily for $1 per year; in Worcester, 32 gallons; in Cincinnati, 60; in
Philadelphia, 87: in Boston, 100; in Chicago, 200; in New York city, 290
gallons daily for $1 per year, and in every one of these eight public systems
there ua margin after allowing for interest and depreciation on the whole
value of the plant.
' See Mr. Keeler's article in the November Forum, 1889.
9 Senate Doc No. 41, March 31, 1883. The reports immodiatolv became
> scarce that it was almost impossible even for a gas engineer' to get a
t gives such startling revelations of stock watering and enormous
profits, together with valuable information on the cost of gas, and contains
? man / things that the companies do not want the public to know that
8 * y: Accordln g to the belief of many the companies bought
U 70.) ""^ ^ hushcd UP th
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 23
the year of the investigation the price to ordinary consumers
had been for the most part $2.50 and $2.25 per thousand,
and that more than half of such price was clear profit. In
1883 the average cost of gas to all the companies was 60 cents
in the holder and $1 delivered at the burner, while the ordi-
nary price was $2.25, and the receipts of all the companies
averaged $2.16. In the year of the investigation the com-
panies made a price of $1.75, and the following year it was
reduced by state law to $1.25, which the companies were still
charging in 1897, altho 75 cents a thousand would then have
yielded a good profit on the real investment, as was proved
by the evidence brought out in another legislative investiga-
tion. 9
In 1892 gas was being put in the holders in 'Boston at a
cost of 33 cents per M; distribution cost 20 cents, allowing 7
cents for depreciation, and 20 cents for interest on an allow-
ance of $4 investment per M (which is more than fair), we
find that 80 cents per M would yield an ample profit, yet the
companies were charging $1.30 per M. 10
In Chicago an excellent water gas is put into the holder at
a cost of 20 cents per M 40 cents at the burner including
taxes according to the statement of the two chief Chicago
companies to the ]^ew York Stock Exchange in 1893 (and
37^ cents according to the report of the Mutual Company of
Hyde Park, Chicago) interest at 5 per cent, on the actual
value of the plant ($3.80 per thousand according to the
9 Testimony of Prof. E. W. Bemis, the leading authority on this subject
in the United States. In his chapter on Gas, in "Municipal Monopolies," p.
588, he says: "Gas is a monopoly, and the individual consumer has no pro-
tection from extortion unless it is given by the city and the state." On
page 591 he says that 75 cents per thousand is a sufficient rate in large cities
east of the Rockies, and calls attention to the Cleveland gas case (1892), in
which it was proved that the gas cost the companies 38 cents at the burner,
including taxes: 7 cents is enuf for depreciation, and 15 cents will cover
interest, or 20 at the very outside; so that 65 cents would be an ample total
charge. The company had been charging $1. The city ordered a reduction
to 60 cents. The company contested the order. But its officials were forced
to admit that, aside from depreciation of about 7 cents, gas at the burner
cost less than 40 cents per M. The price was finally fixed at 80 cents, with
a special payment to the city of 5 cents per M (in addition to the ordinary
taxes), making the real charge 75 cents per thousand (Ibid, 591-2, 650).
According to Prof. James' "Relation of Municipality to Gas Supply,"
1887, gas could be sold in New York for 65 cents a thousand.
10 The average charge for gas in Boston was increased 8 cents per M in
1892 above the average for 1891 (thru the abolition of discounts) in the face
of profits already enormous (30 to 60 per cent, on investment), and in the
face of a reduction in the cost of producing gas from 40 cents, in 1891, to
33 cents, in 1892. (See Report of the Legislative Investigation of the
Bay State Gas Trust, City Print, Boston, Mass., 1893, pp. 61-63, and Prof.
Beniis' chapter on Gas in "Municipal Monopolies," p. 589.)
24 THE CITY FOR THE PEOPLE.
Mutual Company's Report) would amount to 19 cents, where-
fore, allowing 7 cents for depreciation, it is clear that 65
cents would be a fair price; whereas the actual charge in Chi-
cago is $1. In Topeka the gas rate is $1.70; in Kansas City,
till recently, it was $1.75, and in Trenton, K J., $1.70. Ac-
cording to the evidence accumulated by Professor Bemis, 75
cents to 85 cents ought to be more than sufficient in these
places to yield a reasonable profit on the actual value of the
plant. Professor Bemis says that in Great Britain (where
public ownership has brought the companies to terms) the
average price of gas is only 75 cents, or about half the current
American price, and adds that there is no reason why the cost
should be greater here than in England, 11 our higher wages
being offset by our cheaper coal and oil, and the cost of ap-
paratus being about the same in the two countries. He says
that gas can be put in the holders for 20 to 30 cents per M;
distribution will average 15 cents, including taxes, deprecia-
tion 7 cents, fair investment $3 per M in large cities, $4 in
smaller cities; 50 cents average operating cost, 70 to 75 cents
total average price on a reasonable basis of 6 per cent, profit
on actual values. (Even this is probably high. See Appen-
dix II, A. 2.)
Electric light companies levy large monopoly taxes on pri-
vate consumers and the public. For commercial lights they
charge the people fifty to 100 per cent, more than municipal
plants, 12 and their charges frequently average two, three and
sometimes four times the total cost of the service, operating
expenses, interest, taxes, insurance, depreciation and all. 13
For full data the reader is referred to the authorities named in
the notes. A few cases only can be given here.
Prices for Commercial Lights.
Charge by Private Plant. Charge by Public Plant.
Boston, 1 cent per meter hour. Braintree, Mass., y 2 cent per meter
Brookllne, Mass., 1 cent per meter Swanton, Vt., 1/3 cent per meter
iiour. hour.
r \ork city, 1 cent per meter Westfield, X. Y., % cent per meter
uOlll . llOlll"
Philadelphia, % cent per meter hour. Newark, Del., 3/10 c,ent per meter
Detroit, $1 per lamp month. Wyandotte (near Detroit), 16 2/3
Kalamazoo, Mich, 20 cents per Kil- olSioo), 5 cents
Chicago, 1 cent per meter hour. Pe*, m.^ce'iit per meter hour.
11 Municipal Monopolies, p. (527
E of - Comlnons in "Municipal Monopolies," p. 156
The usual private company charge for commercial lights is 15 to 20
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 25
Many more instances could be given in which public plants make
rates for commercial lighting that are y 2 to % of the rates of pri-
vate companies in neighboring places, where conditions, all things
considered, are as favorable for low cost as in the public plants.
The density of business in a large city makes up for the increast
cost of labor and construction. It must not be forgotten that the
difference between public and private commercial charges does not
indicate the whole excess of the latter, since the commercial rates
of public plants are usually sufficient to yield a good profit the
fair price or actual total cost (including operating expenses, taxes,
insurance, depreciation and interest on real value of the plant)
will run nearer 1/3 than y s of the usual commercial charges of pri-
vate corporations."
In the early years of electric lighting, many cities paid two to
four times the fair price for street lamps, and not a few municipali-
ties still pay double the vahie of the electric lighting service. The
following table gives a few facts for 1890:
Prices Paid to Private Companies Per Standard Arc Per Year.
San Francisco, $440.
New York, $84 to $182. Washington, $219
St. Louis, $75.
Philadelphia, $177. Brooklyn (sub-arc), $182.
Boston, $237.
Cambridge, $180. Brookline, $182.
Springfield, $218.
Lowell, $182. Fall River, $180.
Worcester, $200.
St. Louis paid $75 a year for each street arc of 2000 candle
power burning all night and every night, while Philadelphia paid
$177; Washington, $219; Boston, $237, and San Francisco, $440 for
the same service. The St. Louis rate yielded a profit, and in other
cities the prices were sufficient to pay the operating expenses,
taxes, depreciation and reasonable interest on actual investment
were $75 to $85, in New York, Philadelphia and Boston, a little
more in Springfield, Cambridge, Brookline, Lowell and Worcester,
cents per Kilowatt-hour. Municipal plants generally charge 10 cents per
where Prof. Bemis says that the cost of producing a thousand watts for
street lights, including even interest and depreciation, is under o cents. )
14 See last preceding note.
26 THE CITY FOR THE PEOPLE.
and about $100 in San Francisco." With fair rates the taxpayers
of Philadelphia would have saved $100,000 on street arcs in the
census year; Boston, $125,000; Brooklyn, $177,000, etc., and the sum
total saved to the people in all the cities named would have gone
above half a million dollars.
Gradually people learned something of the facts, and lower rates
were demanded, but the companies, for the most part, yielded
slow l y _they were protected by monopolistic franchises and agree-
ments, by their influence with public officers and by the ease with
which they could doctor their accounts and make statements of
cost difficult for the people to controvert, since the experts in the
large cities were practically all in the companies' employ, or under
their influence. Some concessions were made, however, as the
following figures for 1894 demonstrate:
Yearly Price Per All Night Arc-Reported 2000 C. "P. Unless
Otherwise Marked.
San Francisco, $200.
New York, $146 to $182. Washington, $182.
St. Louis, $75.
Philadelphia, $160. Brooklyn (1200 c. p.), $182.
Boston, $139.
Cambridge (1200 c. p.), $115. Brookline, $146.
Springfield (1200 c. p.), $15.
Lowell, $131. Fall River, $160.
Worcester, $127.
The reduction is large in some cases: San Francisco from $440 to
$200; Boston, $237 to $139; Worcester, $200 to $127; Springfield,
$218 to $75, etc. And yet the number of lamps is so much greater
than in 1890 that the total excess is larger than before. Boston
taxpayers were overcharged $100,000 in 1894 for electric street
lights; New York paid $330,000 too much; the excess in Philadel-
phia was $425,000 more than $1000 a day, and the sum of the over-
charges in all the cities named was a good deal more than a mil-
" For the evidence of this see data in my articles on "The Peoples'
Lamps," Arena, June, 1895, et seq. ; the report of the Special Committee of
the Boston Common Council, Oct. 17, 1895, confirming my figures; the esti-
mates of Chief Walker, of the Electrical Bureau of Philadelphia; the data
of cost in municipal plants given later in this chapter, and the testimony
of William D. Marks, President of the Edison Electric Light Co., before the
Pennsylvania Senatorial Investigating Committee, Dec. 5, 1895. The city
of Philadelphia was paying $160 per arc. President Marks said his com-
pany would take the whole 5300 lights at $100 each, and that the cost would
not be more than $80 to $85 an arc. He afterwards told his stockholders
that at the $100 rate the company could make $20 on every arc. The Electric
I rust, fearing that Pres. Marks would carry his point, bought up a con-
trolling interest In Edison stock, blocked the President's plans, and forced
his retirement.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 27
lion dollars, or more than twice the total excess for the same cities
in 1890, notwithstanding the reduction of rates.
In Philadelphia, New York and other cities, the companies said
that they could not reduce to anything like the St. Louis rate
because of the difference in the price of coal, yet that difference
would not justify a difference of more than $5 per arc year between
St. Lotus and Philadelphia or New York. 18
Pittsburg, in the very heart of the coal region, was paying $195
per arc year $55 more than Boston, $35 more than Philadelphia
and 2y 2 times as much as St. Louis, or $120 excess per lamp year!
The chaos of prices makes it clear that the charge for electric
light bears no definite relation to the cost of production. It ap-
pears to depend chiefly upon political conditions the ratio of intel-
ligent public spirit to the power of monopoly in the control of the city's
affairs.
In Springfield alone did enlightened public spirit reduce the charge
to a reasonable point her rate of $75 per sub-arc (1200 c. p.) being
equal to $88 per standard arc (2000 c. p.), which, for Springfield
conditions is about equivalent to $75 per full arc in St. Louis.
The charges to private consumers frequently continue very high
after reduction of public rates. For example, the Worcester com-
pany continued to charge private consumers $219 per arc after re-
ducing the city rate to $127; the Brookline company charged pri-
vate parties $182 per arc and the city $146, and the Cambridge com-
pany (1898) charges private consumers $160 per arc of 1,200 c. p.
burning till midnight, tho the price to the city has been reduced to
$100 per arc of 1,200 c. p. burning all night and every night.
Some reduction has occurred since 1894. In 1897 and 1898 Bos-
ton paid $128 per arc; Brooklyn, $124; Philadelphia, $109 and $146;
Pittsburg, $96, and New York, $146, $164 and $182 (for arcs that
are not really over 1200 c. p.). The excess is still enormous $70
to $80 being all that should be paid in any of these cities.
A few years ago an investigation revealed the fact that the people
of Greater Boston were paj r ing the electric light companies a mo-
nopoly tax exceeding $800,000 a year, and the excess of charges in
New York and Philadelphia was much larger still.
Street railway companies in our larger cities are prominent
among monopolistic extortionists. The facts indicate that the
usual 5 cent fare is nearly or quite double the reasonable
charge. Buffalo street cars carry children for 3 cents, and
the average of all fares collected is 3.6 cents, yet a good profit
is realized. Recently a company asking for a franchise in
1(1 See proof in "The Peoples' Lamps,'" Arena, June, 1895, where it is
shown that, considering the density of business, the cost of ooal. labor.
real estate, etc., the difference between St. Louis and Boston would be about
?5 or $6 per arc year, $10 for Washington, $12 for Springfield, and little or
nothing for New York and Philadelphia.
28 THE CITY FOE THE PEOPLE.
Buffalo agreed to sell three tickets for 10 cents, making a
uniform 3 1/3 cent rate. A syndicate claiming to represent
35 million dollars has offered to buy up all the old lines in
Chicago and sell tickets 10 for 30 cents, good for the hours
of working people's travel, and for school children at all
hours. And President Farson, of the- Calumet Street Rail-
way, of South Chicago, publicly stated in 1896, when a fran-
chise with 5 cent fares and little compensation was about to
be granted to the General Electric Railway from the heart
of the city to Twenty-sixth street, that for such a franchise
for twenty years, if he could have it without dishonorable
relations with the city government, he would pay $100,000
to the city and give a straight 3 cent fare. Several years
earlier, before all the streets in Chicago had been let to the
street railway companies, a prominent street railway financier
offered to build extensive lines, give a straight 3 cent fare and
pay a considerable bonus to the city. 17 Street railway
magnates interested in the Detroit system, and thoroly
familiar with the business in that city, offered to run
all the cars in Detroit on a 3 cent single fare with 40
tickets for $1 (a 2 cent fare) and pay interest on the cost of
acquiring the roads, if the city would take them. 18 When
we remember that these Detroit capitalists contemplate busi-
ness under the existing load of fictitious capitalization, or, per-
haps, a still greater load, and that they expect to make a good
profit, it is clear that the rate sufficient to cover operating
expenses, taxes, depreciation and interest on the actual value
of the plant is considerably below 3 cents.
The cost of operation on the electric roads in our cities runs
from 10 to 12 cents per car mile. 18 The taxes, depreciation and in-
terest amount to 8 or 10 cents a car mile, bue when we remember
that, far the larger part of this is interest on bonds and stock,
and that the capitalization is usually two or three times, and
sometimes more than three times, the real value, it appears
that 4 to 6 cents would cover all proper fixed charges, mak-
ing the total proper cost on electric roads in such cities
Chicago, Xew York, Buffalo, Philadelphia, etc., about 14
17 Municipal Monopolies, p. 530.
18 The City was not in condition to effect a purchase of the roads.
t Is reported more than this in some cities, but, as we shall see
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 29
to 16 cents a car mile. 20 In Chicago and Philadelphia there are
5 passengers per car mile; in Buffalo, 6; in Boston, 7; in New
York a few roads have about 5 passengers per car mile; the Metro-
politan and the Cross-town, 7; the Thirty-fourth street horse, 9,
and the Broadway cable, 12. A uniform 3 cent fare would yield
from 15 to 36 cents per car mile on these roads, and, except on the
5-passenger roads, would yield a profit above normal interest, with-
out any increase of traffic. The lowering of fares, however, would
surely enlarge the traffic, thereby raising the number of passengers
per car mile, and reducing the car mile cost at the same time, part
of the new traffic going to increase the number of the car miles
run on the road, which tends to diminish the cost of each car mile.
Considering all the elements involved, it is probable that a uniform
2y 2 cent fare would be sufficient in most of our large cities, and
there is not a little reason to think that a well-managed railway
owned by the city could afford to make a 2 cent fare. 21
later, the accounts are doctored. Here are some of the facts with the
authorities:
Street Railway Operating Cost.
Electric Roads. Operating Cost per
Car Mile in Cents. Authority.
New York (Met. U. Elec.) 10. Engineer of the Road.
New York (Union O. Elec.) 12. Co's Report to Railroad Commissioners.
Buffalo 11. Co's Reports. (The figures include taxes.)
Niagara Falls & Sus. Bridge 10. Co's Reports.
Philadelphia 11. Statement of Gen. Man. to Glasgow Com
Rochester 10. Co's Reports.
Washington 9.27 Elec. Review, June 5, 1896, p. 733.
Chicago (City Ry.) 13. Co's Reports. (The figures include taxes.)
Chicago (av. of urban r'ds.) 14. Co's Reports. (The figures include taxes.)
St. Paul 12. Mr. Higgins in St. Ry. Jour., 1894, p. 292.
Kansas City 11. Mr. Higgins in Street Ry. Jour., 1894.
Savannah 11. President of the Road.
New Haven 11.5 Co's Returns to Railroad Commissioners.
Milford & Hopedale 8. Co's Returns to Railroad Commissioners.
Braintree & Weyrnouth 6.5 Co's Returns to Railroad Commissioners.
Toronto 8.33 City Engineer. (7.61 now.)
Montreal 10.50 Co's Statement to Glasgow Com.
Budapest 10.21 Glasgow Com.
Hanover 9.3 Elec. Review, May 22, 1896, p. 654.
Zurich 10. Elec. Review, May 22, 1896, p. 654.
Horse Roads.
New York (Met.) 17. President Metropolitan Road.
New York (34th St.) 17. Railroad Commissioners.
New York (2d Ave.) 19. Railroad Commissioners.
Buffalo 17. General Manager Buffalo Ry. Co.
Glasgow 17.5 Official Report of Road.
Montreal 18. Statement of Officers to Glasgow Com.
Cable.
N. Y. 3d Ave. 11. Superintendent of Road.
Metropolitan 17.5 Co's Statement.
Elevated Roads.
New York L roads 13. Mr. Higg ns in St. Ry. Jour., 1894, p. 362.
Brooklyn L roads 11. Mr. Higgins in St. Ry. Jour., 1894, p. 362.
20 The fixed charges amount to 8.55 cents per car mile on the Third
Avenue cable, New York; 8 cents on the Crosstown horse; 9 cents on tl
Chicago trolleys; 8.5 in Boston (elec.); 10 cents in Buffalo (elec.); 8
in Toronto; 7 cents in Montreal (elec.); 6.5 cents in Budapest (underground
leC Fuller data on the cost of street railway service may be had by Citing
Prof Parsons for Street Railway Circular No. II, o cents per copy; K
25 cents; 25 for 50 cents; 60 for $1; 500 f or .$5.
=iSee "The Peoples' Highways," Arena, May, 189o where the question
is discussed with special reference to Boston and Philadelphia, ^ven in
the latter city, if the roads were owned by the City free of debt, a 2 c
fare would answer. (See also Appendix II. C.)
30 THE CITY FOE THE PEOPLE.
Whatever experience may show to be the precise level of a reas-
onable railway rate in our cities, there is not the slightest doubt
that the present rates are altogether too high. In 1894 a franchise
was given the Detroit Electric Railway on its promise to give 3
cent rides in the daytime and 4 cent rides between 8 P. M. and
5.45 A. M. at night. It had 40 miles of road, mostly on the out-
skirts of the city, on routs that the old companies had considered
too unprofitable to cover. The old companies fought the new one,
and then practically absorbed it; and then, according to the con-
fession of one of their chiefs, did their best to ruin the new line
by running few cars upon it, and giving poor service, in order to
make the low fare experiment fail. Yet the road has made a 5
per cent, profit on 1he investment each year from the start, with
less than four passengers per car mile (owing to poor location and
poor service), and average receipts of 3 1/3 cents per passenger
If a poor road like 1 his, working under decree of devastation, can
live and profit on 3 1/3 cents, how much less fare would answer on
a well placed line, abundantly patronized and favored by the fullest
efforts of the magnates for its success?
Here are some further facts in regard to the rates of fare in a
number of progressive cities on both sides of the water:
Street Bailway Fares in Cents.
General Average.
Working- Rate Fare
men's Children's for Short on Whole
Ci'y- Population. Rate Rate Distance Traffic
Milan 440,000 1. 2
Vienna 1,560,000 1.6
Berlin 1,800,000
Budapest 500,000
London 4,000,000
Belfast 256,000
Glasgow 840,000
Toronto 176,000
Detroit 280,000
2 2.7
2y 2 3
2 2.7
1 2.5
2 *>
1 L78
4 4.2
3 3.3
... _> O.t>
Buffalo 360,000 .. 3 5 3.6
*In Milan cars run night and morning at a 1-cent rate, regard-
less of distance. The general rate is 2 cents from the centre all
the way out, without regard to distance. The average is esti-
mated.
Vienna has the zone system with a 2 cent fare for each zone: 4
cents the maximum for a ride regardless of distance, with free tras-
fers to any part of the city; 1 3/5 cents workingmen's fares regard-
less of distance on special cars; special rates to school children,
also, the public authorities have a voice in fixing rates. The aver-
age in the last column is estimated.
In Berlin the average fare is 3 cents, and the operating cost per
passenger is a trifle over a cent and a half.
In Glasgow the general rate is 1 cent per half mile, but for lon-
ger distances the fares are proportionately less, the average fare
charged per mile over the entire system being 1.18 cents. A number
f long runs were establisht at a 2-cent fare especially for working-
men, and night and morning cars are run at half rates so that
working people may live in the country and come to their work
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 31
every clay in the city at small expense. The Glasgow roads
became public property in 1894. A record made a couple
of years before showed the average fare under private owner-
ship to be 3.84 cents per passengar. In 1896 the average fare
had been reduced to 1.84 cents per passenger, and in 1898 it had
fallen to 1.78 a drop of more than 50 per cent, in five or six years,
while in Boston we pay the 5-cent rate, the same as we did ten
years ago. The operating cost in Glasgow is 1.32 cents, and the
total cost 1.55 cents, with 12 passengers per car mile and horse
power, which is considerably more expensive than electric traction.
London has a 1-cent rate for short distances. Liverpool, Dublin,
Belfast and Edinburgh have a 2-cent short ride rate. The average
of all the fares collected in these five cities is below 3 cents.
Toronto has 3-cent tickets good from 5.30 t-o 8 A. M., and from
5 to 6.30 P. M., school children's tickets 2% cents, good from 8
A. M. till 5 P. M., and general 4-cent tickets good any time in the
day; single fare, 5 cents; night fares are double the day rates, and
this brings the average fare up to a shade above 4 cents.
How long will the working people of our cities be content to
pay monopolists double rates for street car service? And how
long will intelligent and conscientious city officers and legislators
be content to permit the monopolists to mulct the people in this
way?
Tlie Bell Telephone Monopoly charges $24 to $75 a year
in small places for services worth from $6 to $20, and in large
cities $90 to $240 for services worth from $30 to $100. 22
Comparing the long distance tariff in the United States under
private monopoly with the government tariffs in England
and France, which are like ours expressly framed on the scale
of distance, we find the public tariff in England about 1/3
of our private tariff, and in France a good deal less than
1/3 of our tariff on long distances a difference in charges
far too great to be accounted for by any existing differences
in general prices or cost of labor. 23
For the telegraph also our people have had to pay and are paying
double rates to the Western Union monopoly. 24 And even the rail-
roads have been known to make excessive charges."
23 See the writer's chapter on The Telephone in "Municipal Monopolies."
p. 330, et seq.
53 Ibid., pp. 338-9.
"The Washburn Committee of the National House, and Postmaster
General Croswoll. examined the rates and distances here and in Europe,
and found our rates more than double the rates in Europe, mile per mile,
and when intrninl rates in Europe were compared with internal rates h<
the committee found that the rate per mile in England was less than
one-third the rate per mile in the United States, and in France less than
one-fourth of our rate, mile per mile (House Report, 114, 41st Cong, -a
32 THE CITY FOR THE PEOPLE.
Monopolies by combination, weight of capital, or privilege secured
by agreement with the owners of a natural monopoly, or a legisla-
tive monopoly, such as a patent or a franchise, frequently manifest
the same tendency to unfair charges.
In the Bramkamp wire nail case, 26 the attorney for the trust ad-
mitted that the combine had raised the price from 80 cents to $2.50
a keg, wholesale, securing thereby a monopoly profit of several
million dollars. That trust went to pieces, but recently another
has been formed, and wire nails have advanced 100 per cent, beyond
the ordinary competitive price. 27
The coal combine was investigated by Congress in 1893, and the
report declares (1) that in 1888 the extortions of the coal monopoly
averaged more than $1 a ton, or 39 million dollars for the year,
and (2) that from 1873 to 1886, $200,000,000 more than a fair mar-
ket price was taken from the public by this combination. It also
appeared that in 1892 the combine raised the price $1.25 to $1.35 a
ton on the kinds used by housekeepers, tho the price of coal was
already high, and the cost of mining diminishing every year.
Vice President Holden, one of the leaders of the combine, testified
before the New York Senate Investigating Committee, that "in
advancing the price of coal the cost of production or transporta-
tion is not considered at all."
The Linseed Oil Trust in 1887 put the price up from 38 to 52
cents a gallon, or nearly five million dollars additional tax on the
yearly output. In the same year the Copper Syndicate put up the
price from 10 to 17 and 18 cents a pound, or thirty millions addi-
tion on the yearly output.
A Congressional investigation in 1893 brought out the fact that
on the strength of a rumor that the internal revenue tax was to
be increast by Congress, the Whisky Trust raised its prices 25
cents a gallon, which would amount to an additional profit of
$12,500,000 on its yearly output.
In 1888, just after the Sugar Trust was formed, the average price
T 8 h 8 ;' T^ 57 " 6 , 2 ' J 9 ' 32; , R ,, M - Gen>ls Re P- N v. 15, 1872, p. 24. See also
Ihe Telegraph Monopoly," Arena, Vol. 15, pp. 400-403)
telegraph rates gation two years a o ' J found tQ e following contrast in
Ordinary Eat per Ordinary Minimum Average Receipt
Word in Cents Charge per 11,-a- per Message
sage in Ceuts in Cents
Great Britain ____ 1 10 i~i/
France ...... ^ lo|/ 2
Germany ..... } v 1^
Belgium ............ ..;;; %, \* R1/
Switzerland ..... i/ 5 ^
Austria ....... -, /2 1~
United States .......... '.'.'.'.'.'.'.'.'.'. 2 to 7 5 QI
See Arena, vol. 16, p. 637.
in a future number of the E
I' C1 i r- Court - Indianapolis, Nov. 1896. Nails wore retailins it
"
.3
"Review of Reviews, Vol. XIX, p. 680.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 33
of raw stigar was the same as in 1885, but the average price of re-
fined sugar advanced so that the difference 28 between the price of
raw sugar and the price of refined sugar was 76 per cent, more
than in 1885 and about 70 per cent, more than in 1887, the
year the trust was formed. Since then refined sugar has
fallen in the market, but raw sxigar has fallen more, so that
the difference has never been as small as in 1885, the enlarge-
ment being 70 per cent, in 1889, 16 per cent, in 1891, 50 per cent,
for 1892 and 1893, 23 per cent, for 1894-5, 27 per cent, for 1896 and
32 per cent, for 1897. For a dozen years we have paid each year
a good deal more per pound for refining sugar than we did in
1885 (altho the cost of refining has been constantly diminishing),
and our sugar bill has averaged at least 10 and perhaps 20 millions
a year more because of the trust. 29
The Standard Oil is another monopoty that has kept prices from
falling as much as the diminisht cost of transportation and re-
fining would have caused them to fall in an open market 30 and
at times it has lifted prices absolutely as well as relatively in spite
of the vast improvements in processes of manufacture, great cheap-
ening of transportation by the pipe line service and the falling
price of crude oil. From 1894 to 1897, for example, the price of
refined oil went up 14 per cent., while the price of crude oil de-
clined 6 per cent. 30
If any one has conscientious scruples or business interests which,
in spite of the facts above described, persist in interfering with
his understanding that private monopoly tends to extortion, he will
be introduced to tenfold more facts that tell the same story, if
he will investigate the matter thoroly for himself; or if he will wait
till I get time to write up the rest of the materials at hand.
THE PROFITS OF PRIVATE MONOPLY.
2. Enormous profits result from excessive charges, and the
monopolistic roll in wealth while the working masses and com-
petitive classes are cheated out of their fair share of the world's
wealth.
In private water supply we have seen monopolists taking
20 to 40 per cent, profit on their money (see above). In Chi-
25 This difference is what goes to the trust, which is simply a refiner.
29 Review of Reviews, Vol. XIX, n. 685.
30 Ibid., p. 684. A monopoly may even reduce prices below what they
would be In an open market, and yet its charges may be unreasonable, be-
cause the margin between the charge and the cost of production is too
great, the public not being accorded a fair share of the economies effected in
the business. Finally a monopolistic concern may temporarily reduce prices
to a reasonable level or even below it in order to crush out existing or threat-
ened competition, or for some other purpose, But the fact remains that, in
proportion to the strength of the monopoly, It is in the discretion of the
monopolist to raise his prices to an exorbitant degree, and he is almost sure
to fix them so as to draw to himself the largest possible monopoly profit, or
unearned increment, disturbing to the utmost the fair distribution of wealth.
3
34 THE CITY FOR THE PEOPLE.
cago we have found gas profits of 15 per cent. 1 According
to an official statement in the Progressive Age July 1, 1891,
the Laclede Company, of St. Louis, was making a net profit
of 66 cents per thousand, or over 18 per cent on the cost of
duplication. In Topeka and in Trenton the gas profit appears
to be 25 or 30 per cent, on the real value of the plant.
In New York the gas profits of the past have been enor-
mous, and, even with the present comparatively low rates, the
profits run about 25 per cent, on actual investment, and Con-
solidated Gas stock, in spite of generous infusions of water,
is selling to-day at 213. The oldest of the New York compa-
nies has paid 40 per cent yearly in cash on the $750,000 actu-
ally paid in, and over 1000 per cent, in stock dividends be-
sides. 2
The New York Senate investigation of 1885 (Sen. Doc. 41)
brought out the fact that "The gross sum paid for the ten
past years by the gas consumers in the city of New York to
the companies, irrespective of any other source of income to
them, was $74,656,884. Of this amount nearly half was clear
profit, viz, $30,074,715. * * * During the last ten years,
in addition to costs of gas and 10 per cent, on the share or nom-
inal capital of the companies named, there has been paid by
the consumers of New York city about $9,000,000. * * *
Taking all the companies, $4,941,000 have been paid in divi-
dends in excess of 10 per cent, on the nominal capital in ten
years, and the works have been increased out of earnings to
the extent of $6,413,000" more than 11 millions above 10
per cent, on the nominal capital, water and all. "If the 10
per cent, annual dividends are calculated on the capital act li-
ft Hi/ paid in by the stockholders, it would appear that the gas
consumers in ten years have not only contributed such 10
per cent, dividend, but a further amount sufficient, in fact, to
nearly duplicate the present system of gas supply" The
dividends on stock during the ten years were in nearly all
cases from 8 to 35 per cent., in spite of the water or inflation,
which, at the time of the investigation, amounted to about
1 Selling price $1 per M, operating cost, taxes and depreciation 45 cents,
profit 55 cents; claimed Investment, !?3.80 per m. (See section 1).
2 Municipal Monopolies, p. 503.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 35
2/3 of the capitalization. The average net income for the
Manhattan Company during said period was 82 cents per
thousand feet, besides $1,626,247 for construction and repairs.
In the Metropolitan the profit averaged 85 cents; in the Mu-
nicipal, $1.03, and the Mutual, with an average price of $2.29,
obtained a net average profit of $1.19, or a net average in-
come of $1.08 per thousand feet, besides accumulating a sur-
plus of $2,809,327 and expending $616,341 for repairs. A
steady profit of nearly 40 per cent, a year on the real value of
the investment is pretty good, but Boston can do better than
that.
The legislative investigation of the Bay State Gas Trust,
in 1893, revealed the fact that the Bay State Gras Company
had, in the preceding year, paid out $477,000 in dividends
and interest, and that the total cost of the plant was $750,000,
showing a profit of nearly 60 per cent, on the actual invest-
ment. 3
In the Cleveland gas case the evidence showed that the
company was paying cash dividends of $1440 a year on each
original investment of $1000, besides stock dividends amount-
ing up to 1892 to a total of $24,000 for each investment of
$1000. The original investor of $1000, without further pay-
ment, was receiving an innocent looking 6 per cent, on $24,000
of securities 144 P er cen t- casn profit per year on the real
investment and a gift of new securities that would sell in the
market for more than $24,000. 4
AY hen John Mcllhenny, of Philadelphia, was asked in
court his opinion of this, he said: "That is not an unusual
thing in this growing country at all. It is about the history
of all the prosperous gas works."
3 Report of the Investigation, revised by Mayor Matthews of Boston,
who led the movement, Rockwell & Churchill, City Printers, Boston, 1893.
The company admitted receipts of $777,760 in the preceding year, and placed
the operating expenses including taxes at $318,837. The report does not
state whether or no the company allowed for depreciation; if so the net
profit would rise above 60 per cent., if not it would fall somewhat below
60 per cent, on the investment. Mayor Matthews estimated the total ille-
gitimate or monopoly profits of the Gas Trust (several Boston companies
combined) at $2.000.000 in 3 years and 10 months, after allowing 8 per cent,
on the capital invested which he deemed a legitimate profit. The Gas
Combine in about four years had succeeded in lifting the profits of the com-
panies from $450,000 to $874,000 a year, the former rate being already too
large. (See Haverhill Case 70 per cent, gas profit, Appendix II A.)
4 Municipal Monopolies, p. 592.
36 THE CITY FOE THE PEOPLE.
In 1890 electric light was selling in Boston at a profit ol
50 per cent, on actual values. And in spit of the great reduc-
tion of rates produced by the public ownership movement and
the growth of intelligent comprehension of the facts, electric
light is still sold in Philadelphia, New York and numerous
other cities at rates sufficient to yield over 30 per cent, on the
real investment. 1
The Philadelphia Traction Company requires less than half
its receipts for taxes and operating expenses, so that it has over
5 millions a year for profit and depreciation. If we estimate
depreciation at 5 per cent on the probable cost of duplication,
there will still be 4 millions, or 16 per cent, profit on the real
value of the plant. 2 In Detroit the Citizens' Company (the
1 In general, all above $65 to $70 per standard arc year is profit. Only
In a few cases does the cost, aside from interest or profit, rise to $80. The
operating expenses per standard arc (2000 c. p. all night and every night)
usually run from $50 to $60 with coal from $2.25 to $3 a ton. For taxes
allow $2 per arc, insurance about the same. For depreciation allow 3 to 5 per
cent, on the actual value of the plant, an amount which varies from $150
to $300 even a plant as good as the Chicago plant with all its underground
construction can be duplicated now for $300 per arc, a,nd a first class
plant with overhead construction can be built for $250 per standard arc
or its equivalent. (See Arena, Vol 14, pp. 86 and 439 and authorities there
cited; also Muncipal Monopolies, p. 209, et seq.). With these data the
reader can test the electric profits of his own place, and if the result
indicates a high percentage, he should get an expert to make an accurate
estimate, or make it himself with the aid of the facts and principles set
forth in the authorities just quoted, and if the profit still figures high
he should rouse his fellow citizens to demand a reduction of rates, or
better still, public ownership of the electric plant.
2 This 16 per cent, does not by any means represent the profits on the
money actually paid in on the stock. Most of the cost has been paid
out of earnings and the 12 milllions derived from the funded debt. The
real profits of the monopolists amount to 20, 30, 40 and even 67 per
cent, on the money paid in on stock, as appears from the following state-
ment taken from p. 42 of the Railway System of Philadelphia, by Professor
F. W. Speirs of the Drexel Institute.
"The very large profit on actual investment in Philadelphia railways is
registered in the price which these operating companies pay for the privilege
of exercising the franchises of the original companies. The following table
shows the net return which the present stockholders of the original railway
companies are receiving on paid-in capital stock under guarantee of the
operating traction companies.
The lease terms of the principal lines of the Philadelphia Traction system
provide for net returns on paid-in capital stock as follows:
Name of Company. Annual Dividend on paid-in
Capital Stock.
Continental 20 7<
Philadelphia City 315
Philadelphia & Gray's Ferry 16
Ridge Avenue 42.8
Thirteenth & Fifteenth Streets... 656
Union 01 'g
West Philadelphia ....'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'. 20.'o
The dividend charges of the Electric Traction Company are as follows:
Frankford & Southwark 27
Citizens tff
Second & Third Streets. .".'.'.'!.".'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'. 25
(Note continued on next page.)
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 37
old company) realizes 14 per cent, profit on its stock, water
and all, tho selling 6 tickets for 25 cents, with a 3 cent fare
(8 for a quarter) night and morning. In Montreal 12 per
cent, profits are made on a 4 cent fare and school children
2i cents. The Metropolitan Company, of Washington, D. C.,
makes 15 per cent, profit on the cost of its system. The Third
Avenue Cable earns $38,422 a mile net, or 22 per cent, on
the actual cost of the road and its equipment. The profit on.
the Broadway line is probably much greater, but the separate
figures are not at hand. The whole Metropolitan system,,
cable, electric and horse, netted $8000 a mile in 1893 and
$25,000 in 1897. Mr. Edward E. Higgins, one of the fore-
most writers on street railway matters, told investors in 1895
that in cities of one to five hundred thousand inhabitants net
earnings of 15 to 25 per cent, on the actual cost of duplicat-
ing the tangible assets might be expected from the street rail-
ways. 1
Another high authority 2 says that in 1897 the American
street railways were earning $150,000,000 gross, and 40 or
50 millions net return on the investment. And the increase
of profits is very rapid, in spite of the bicycle. We have al-
ready noted the tripling of net earnings on the Metropolitan
system from 1893 to 1897. Further proof will be found in
the following circular issued by the Citizens' Committee of
Boston and presenting some facts from the Street Railway
Supplement of "The Commercial and Financial Chronicle,"
February 27, 1897. It shows that during the period from
1890 to 1897, when business in general was very dull, failing
to keep pace with the growth of population, and suffering in
many places an absolute decline, yet street railway earnings
enjoyed a marvelous increase.
The Peoples Traction Company has pledged the following dividends on>
paid-in capital stock:
Germantown 24
Green & Coates Streets 40
The Thirteenth & Fifteenth Street's dividend is to be increased to
71.6 per cent, after 1900; the Frankford & Southwark to 36 per cent, by
1903; and the Citizens to 72 per cent, after 1899.
1 "Street Railwaay Investments," p. 77.
2 The Street Railway Journal, Oct., 1897.
38 THE CITY FOR THE PEOPLE.
Growth of Street Railway Earnings.
in Street Railway
Earnings since 1890
., 28
in clearings
since 18UO
in clearings
since 1890
25
52
93
63
8
Philadelphia
44
15
68
13
68
3
St Paul
66
18
51
5
Boston .
55
13
In some places where there has been a considerable extension of
lines, the traffic and earnings have increased at still higher rates.
For example, the earnings of the Worcester roads have grown
170 per cent, and the trackage over 200 per cent, since 1890, while
clearings have risen only 16 per cent.; in Springfield, the trackage
and earnings have grown 180 per cent., while clearings were sta-
tionary; in Buffalo, the trackage and earnings have increased 140
per cent., while clearings have fallen 5 per cent.; other similar
cases of enormous increase of earnings are chronicled. Pittsburg,
133 per cent., while clearings fell off 5 per cent.; New Haven, 185
per cent., while clearings rose but 12 per cent..; Hartford, 270 per
cent., while clearings advanced 14 per cent., etc.
In Boston and its suburbs, street railway traffic has nearly
doubled in the last ten years. Since 1888, the first year of the
West End consolidation, the number of miles of track operated
by the company has increased 10 per cent., while the passenger
traffic has risen 80 per cent. If such results have been achieved
in the last eight years of severe depression, what may we expect
from the next thirty years of probable prosperity and ever accele-
rating progress?
Telephone profits amount to 12, 20 and even 30 per cent,
on real investment in towns and smaller cities, while some of
the charges in our largest cities are sufficient to yield more
than 100 per cent, clear profit. The Bell Company proper
reports $21,000,000, or 2/3 of its receipts since the beginning
as clear profit above all expenses, including interest, and for
1897 its profit was $4,169,000, or 4/5 of the gross receipts.
In a ]STew York investigation the sworn testimony of the
officers of the Metropolitan Telephone Company showed that
its net profits were 474 per cent, in six years on the cash capi-
tal invested 116 per cent, in 1885, 147 per cent, in 1886,
145 per cent, in 1887, etc. While the rate was $60, then
raised to $150 and again to $180, the company netted $2,843,-
,454 in six years on an original cash investment of $600,000.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 39
The owners of the Western Union Telegraph pay all ex-
penses and interest on bonds and then have left a clear profit
of 120 per cent, on the property value that remains after sub-
tracting the amount of the bonds from the cost of duplicating
the plant. 1
One hundred and twenty per cent, is a pretty good profit
even for a monopolist, but there is more. The Hon. John
Wanamaker says that "An investment of $1000 in 1858 in
"Western Union stock would have received up to the present
time stock dividends of more than $50,000 and cash dividends
equal to $100,000, or 300 per cent, cash dividends a year." 2
Think of it, getting your money back a hundred times in cash
and fifty times more in good securities, selling now at 98 in
spite of all the water in them 300 per cent, a year in cash and
150 per cent, in stock!
The net profits of the Tin Plate Trust are estimated at 40*
per cent, on actual values, and those of the Wire Trust at 60
per cent, a year. 3
The Sugar Trust has realized profits at the rate of 214 per
cent, in 1888, 400 per cent, in 1889, 200 per cent, in 1893,
etc., 4 and some of its members at least are now receiving
more than 360 per cent, on actual values. 5
The Oil Monopoly has been known to make 530 per cent,
on its whole capital year after year, and some of its invest-
ments and enterprises have netted it as high as 800 per cent.
1 Arena, Vol. 15, p. 600.
- P. M. Gen'l Wanamaker's "Arguments for a Postal Telegraph," 1890.
3 Review of Reviews, Vol. XIX, pp. 687, 688.
4 See data for these conclusions in Henry D. Lloyd's "Wealth against the
Commonwealth," pp. 32, 33, citing investigations by committees of Congress
and the New York Senate. The percentage in 1893 is really infinity because
the $10,000,000 bonds more than covered the real values, which were placed
at $7,740,000, excluding refineries that had been closed or dismantled by
the trust. The whole $75,000,000 of stock was therefore water as well as
part of the bonds. So that the 15 millions of dividends and surplus after
paying interest on the bonds, was a profit on pure space, rather than
200 per cent, on the $7,740,000 real value which belonged in truth to the
bondholders and not to the stockholders.
5 The Trust is now paying 12 per cent, on its common stock. The
Brooklyn refineries, capitalized at $500,000. were brought into the Trust
at $15,'000,000 in stock. So that in respect to the Brooklyn Company at
least the watered capital appears to be quite 30 times the real, and
12 per cent, on the stock means 360 per cent dividends on real values,
to say nothing of Brooklyn's share in the rapidly accumulating surplus of
the Trust, which amounts to over 30 millions (see data in Review of Reviews,
Vol. XIX, pp. 684-5).
40 THE CITY FOR THE PEOPLE.
a year, and in one case, thru railroad rebates, over 3000 per
cent, profit per year was obtained. 1
Do you realize the meaning of all this? Do you grasp the
full significance of these enormous profits and the excessive
charges on which they are based? Do 'you perceive that
monopoly in private hands means taxation without repre-
sentation and for private purposes? Do you know that our
people now are subjected by the monopolies to a taxation by
the side of which the taxes levied by King George and his Par-
liament are as the dust in the balance?
Taxation without representation is tyranny, and every mo-
nopolistic franchise, privilege or possession, by nature, law or
agreement is a transgression of our liberties. A monopoly in
private hands gives its owner the power to collect from con-
Burners more than the value of what they receive. One may
diarge the fair value of the service he renders without a mo-
nopoly. The advantage of monopoly the reason men strug-
gle so hard to obtain it is the power it gives to charge more
than that value. In other words, a private monopoly confers
the inestimable privilege of demanding something for noth-
isg, and involves the power of taxing the people for private
purposes.
If these magic methods of accumulating riches were equally
diffused, it would not be so bad ; but the working people, as a
rule, are not represented in the gas and electric light trusts,
the street railway companies, the sugar trust or the oil mo-
nopoly. They have to sell their labor and produce in a com-
petitive market, and buy very largely in a monopolized
market.
There are two principles of the common law that are of
the utmost moment to students of monopoly. The first is that
a monopoly is void as against public policy. 2 The second is
1 Wealth against the Commonwealth, pp. 67, 99 and 100.
* Chicago Gas Light Co. vs . People's Gas Light Co., 121 111. 530;
Richardson vs. Buhl, 77 Mich. 632; see also 68 Pa. St. 173, 186; 50 N. J.
Eq., 52; 130 U. S. 396. In the Michigan case Chief Justice Sherwood said:
''Monopoly in trade or in any kind of business in this country is odious to
our form of government. * * * Its tendency is. destructive of free institutions,
and repugnant to the instincts of a free people."
In the Case of the Monopolies (11 Coke, 84, b) it was held that even
the sovereign power of Queen Elizabeth was incompetent to create monopolies
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 41
that a legislative body in a free country has no power to tax
for private purposes, and cannot confer such power on any
man or set of men. 1
From these two settled principles of our law it clearly fol-
lows that no franchise or monopolistic privilege can lawfully
be granted in America, and that all such grants actually made
are void ab initio. The established rules of the law, logically
carried out, would render utterly void every monopolistic
franchise and ownership in existence. The public and the
public only may lawfully own a monopoly, because under
such ownership, and only under such ownership, does the
power of taxation involved in monopoly become a power of
taxation for public purposes and not for private purposes.
All this is clear, and yet our judges would probably hesi-
tate to declare a legislative franchise void to-day even if the
argument against its validity were fully and strongly urged,
(which it never has been so far as I know). And they would
hesitate because of the long line of such enactments in the
past, and the disturbance that would be caused by an adverse
decision at this late day. And yet it is perfectly manifest that
the fundamental principles of republican government are
broken every time a franchise is granted, and every mo-
ment a monopoly is maintained by aid of the law instead
because they were detrimental to the Interests of the people. And if the
"Divinely Commissioned Ruler" of the people may not Inflict this injury
upon their interests, by what authority can it be done by the servants
of the people, elected to conserve their interests, not to defeat them? An
agent must be loyal to his principal's interests, and the moment he ceases
to be so his authority vanishes. This is bed rock in the law of the civilized
world.
1 A legislative body can tax, or authorize taxation, for public purposes
only (U. S. Supreme Court, 20 Wall, at 664, V. S., 487, 58 Me. 590, 2 Dill.
353. Cooley on Taxation, p. 116 and cases cited) and taxation for the
benefit of an enterprise in private control is not for a public but for a
private purpose, and is beyond the sphere of legislative power. (Judge
Dillon in 27 la. 51, and 58 Me. 590. See also 20 Mich. 487.)
It makes no difference whether the constitution says anything about
it or not. The provisions of the constitution are not the only limitations
on legislative power. There are others that inhere in the very substance
of republican institutions, underlying the constitutions as essential to the
very purposes for which the constitutions exist, and therefore impliedly
recognized by the creation and maintenance of said constitutions. (The
U. S. Supreme Court in 20 Wall. See also Judge Billion in 27 la. 51;
25 la. 540; and 39 Pa. St. 73.) These cases and many others declare that
legislative power is limited by the great principles of justice for the enforce-
ment of which government is instituted, that acts in violation of these
principles will be held void by the courts, although no provision of the
constitution can be found to. condemn them, and that the taking of As
property to give it to B, or the identical act of giving B a power whereby
he may help himself to A's property is beyond the limits of legislative
authority. And what the legislature cannot lawfully do directly because of
the injustice 1 of the act, it cannot lawfully accomplish indirectly under the
guise of a franchise.
42 THE CITY FOB THE PEOPLE.
of being swept into the list of illegalities, as it should be. The
people are bitter in their denunciation of trusts, and Congress
has passed severe laws against them for the sole reason that
they are monopolies. Whereby we have the serio-comical
spectacle of a government creating monopolies with one hand
and enedavoring .to choke them with the other declaring
absolutely void all monopolies formed by agreement among
men because monopoly is in its nature contrary to public
policy, and sustaining exactly similar, in some cases identical,
monopolies established by the agents of the people without an
atom of authority to do it, but thru a flagrant breach of their
trust and in violation of the fundamental principles of free
institutions.
WATERED STOCK AND INFLATED CAPITAL.
3. Overcapitalization is the twin sister of extortion. Both
arise naturally from the desire to squeeze as much wealth as
possible out of the people and to keep the people quiet during
the process. Get a franchise, issue a lot of stock, keep enuf
of it to retain control of the enterprise, sell the rest, build
your plant, bond it for all it is worth, and recoup all you
put into the concern, then double up the stock and keep ad-
ding to it as the business grows, so that an actual profit of 20,
50 or 100 per cent', on the real investment will be only 5 or
6 or 7 per cent, on the bonds and stocks, and so appear on
the face of the accounts to be only a reasonable profit, not
likely to arouse opposition or set in motion the legislative or
administrative machinery for the reduction of the rates
such is the normal monopolistic plan. And if some public-
spirited citizen should stir things up and obtain a law or ordi-
nance or order reducing rates, the monopolist can take the
matter into the courts and protect his extortions in large de-
gree by showing that much of the bonds and stock have come
into the hands of "innocent purchasers for value," wherefore
he must be allowed to make interest and dividends on the whole
capitalization, else the said innocent holders will be cheated
out of a fair return and their property practically confiscated,
which would be a very wicked thing if it were caused by
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 43
legislative reduction of rates acting on a condition of grievous
overcapitalization, but is perfectly justifiable if caused by the
stock manipulation or the profit-absorbing tendencies of the
monopolist himself. Water in the capital is useful also in
protecting the monopolist from public ownership. Dilute
the figures so that the profits will seem quite small, and the
people will let things go on till the business pays 5 or 6 per
cent, or more, on the whole capitalization, and the stock rises
to par in the market, water and all, and then if the people
get to reading "foolish" books on public questions, or be-
come disgusted with corporate monopolies by direct expe-
rience, and begin to demand public ownership of gas, electric
light works, or street railways, or whatever line you may be
in, you can get the legislature to pass a law (if it has not
already done so) requiring that cities desiring public owner-
ship of public utilities shall buy out existing plants, and the
courts will make the cities pay full market value, the effect
of which will be to keep your city from going into public
ownership, or to give you several times the value of your plant
if it does.
Some facts regarding overcapitalization may indicate the
extent of the evil. For gas plants in large places $3 per
thousand feet of output is a fair capitalization, $4 being about
the limit. 1 Yet in many states the average gas capitalization
rises to $8 or $10 per thousand. In 1890 Brown's Gas Direc-
1 In Massachusetts, in 1897, there were six gas companies outside of
Boston having an output of more than 60 million feet each, and free of the
complications in accounts which result from the union of electric light
and gas works. These companies were in Cambridge, Fall River, Haver-
hill, Lowell, Springfield and Worcester, and their average capitalization
was $2.87 per thousand feet of output. The Mutual Co., of Hyde Park,
Chicago, reports $2.69 stock per M. It has no bonds, and all it claims in
sin-plus and tangible assets amounts to $3.80 per M. The capitalization in
Richmond is $3; in Philadelphia and In Wheeling about the same. For
Washington it was $3.25 in 1890, and $2.59 in Milwaukee.
Professor Bemis, our highest authority on gas, says that in Great Bri-
tain the total capital that has been raised or borrowed by the public gas
companies averages $2.99 per M. of annual output, and in the case of the
private companies, $3.27. The average "capital employed" apparently the
structural value in eight leading public plants and ten private companies
was $2.60 and $2.46 per M. The Professor says there is no reason why gas
construction should cost more here than In England, and in cities of 200.00C
or more east of the Rockies, he says, the cost of duplication wonld rarely
exceed S4 per M. The data collected by Prof. Bemis, Prof. James and Mr.
E. C. Brown, editor of The Progressive Age, indicate that in places of 5,000
to 25,000, where the population is scattered, . the real investment is usually
from $4 to $6 per M: in places of 35,000 or more it is $3 to $5, and in places
above 200,000 it is $3 to $4. (See Bemis on Municipal Ownership of Gas,
Amer. Econom. Assoc., pp. 42-5, and his chap, on Gas in Municipal Monopo-
lies, pp. 624-5, 627, 590, 591, 598, 608; also Brown's gas directory in Progres-
sive Age for 1890, and Prof. E. J. James' "Relation of the Modern Munici-
pality to the Gas Supply," Pub's of Econ. Assoc., Vol. I, 1886-7.)
44 THE CITY FOB THE PEOPLE.
tory placed the capitalization at $9 in Rochester and St. Paul,
$13 in Jersey City, $11 in San Francisco, $14 in Baltimore,
$19 in St. Louis and $20 in New Orleans. The present capi-
talization in New York city is $10, and in Boston it is $42
per thousand feet of annual output. 2
The Mutual Company of Chicago has been bought by the
People's Company, which issued $5,000,000 of bonds in place
of the Mutual stock, representing $2,119,667 of tangible as-
sets. This made the capitalization $9 per thousand feet, a
figure which holds true of all the Chicago companies. Their
capital is two-thirds water, and their 60 millions of securities,
representing 20 millions of structural value and 40 millions
of free gift by the people, are above par. In one Chicago
gas case it was affirmed on oath that only $100,000 had ever
been paid in in cash to the company, whose stock, in 1887,
was about 5 millions, and which, in that year, issued a divi-
dend in bonds of 7-| millions, while the stockholders almost
doubled their stock in a consolidation of companies then
effected. 3 This shows more than 2 of water to 1 of solid since
1887, and an original investor of $1,DOO has now $175,000
of securities, or 17,500 per cent, on his investment, without
counting the cash dividends he has received.
In Boston in the eighties the Bay State Gas Company was
capitalized at $5,000,000 on an actual capital expenditure of
$750,000. 4 And the "Boston Gas Syndicate," or "Gas
Trust," formed in 1889 by the Bay State and four other com-
panies, added $13,365,000 illegitimate capitalization to the
$4,640,000 lawful capitalization of the component compa-
nies, making a total capitalization of $17,000,000, or nearly
4 times the honest figure. 4
The growth of the water evil in Boston has been aston-
ishing. In 1888 the gas capitalization in Boston was about
2 See below for Boston figures. The New York Senate investigation of
1885 found the gas capitalization in New York city at that time $8.75 per
M. and stated that the fair capitalization would be about $3 per M of an-
nual output.
* Municipal Monopolies, 593.
4 The Matthews Legislative investigation of the Boston Gas Trust, Un-
mutilated report, City Print., 1893, pp. 6, 47, 48, 95. There were some
patents stated at $250,000, in addition to the 750,000 spent in constructing
works and laying pipes, but there was no evidence to show that the Bay
State ever paid a dollar for the patents, or that they had any value. There
was no entry on the Bay State's books of paying anything for patents.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 45
$4 per M, which was not unreasonable, but now (1898) the
Boston companies, as a whole, present one of the worst cases
of dropsy to be found in the history of diluted capital. The
amount of water in their composition is astounding, their
total capitalization being in round numbers $99,000,000,
or $42 per thousand feet of annual output, which is more
than ten times the fair capitalization per thousand in this
city. 5
The water in the stock values of Philadelphia street rail-
ways averaged 5 to 1 in 1897, and is now about 7 to 1. If
we consider the relation between stock values and amounts
paid in we shall find it 19 to 1 for the Thirteenth and Fif-
teenth street lines, 16 to 1 for the Citizens', 10 to 1 for the
Ridge avenue, etc. 6
When the Lynn and Boston, Lowell, Lawrence and Haver-
hill street railways were consolidated, the capitalization was
increased from $27,000 to $60,000 a mile, or about 125 per
cent., nearly the whole increase of which was water. The
West End consolidation doubled the capitalization of the Bos-
ton companies, and as their capitalization was already in ex-
cess of the cost of duplication, it is a mild statement to say
5 The Boston capitalization is over 4 times the New York and nearly 5
times the Chicago capitalization, tho both of these are principally water.
In 1888 the Boston companies had an output of 1,161,000,000 feet and a capital
of $4,500,000, or a little less than $4 per M of output. In 1898 they have
twice the output and 23 times the capitalization of ten years before, or
11% times as much capital per M instead of less, as should be the case with
the growth of the output. (See figures of Prof. Gray and Prof. Bemis, Mu-
nicipal Monopolies, p. 599.) According to the report of the Gas Commission
for 1890, the capitalization of the Boston Gas Co. was under $2 per thousand
of output, while the Bay State Gas Co., then in its second complete year
of operation, was capitalized at $36 per thousand.
"According to figures for January, 1897, given by Professor F. W. Speirs,
of Drexel Institute, pp. 43, 47, of the "Street Railway System of Philadel-
phia," the market value of the stock of all the street railway companies of
Philadelphia exceeds $120.000.000; the funded debt is about $12,000,000;
the amount of paid capital stock is about $50,000,000, and the total cost of
the construction and equipment of all the roads is about $36,000,000, or
$76,400 per mile for the 447 miles of track $56,300 per mile if the cost of
paving from curb to curb is subtracted. And as the returns to the Secretary
of State refer presumably to original cost the present cost of duplication
is probably less than $50,000 per mile. The par capitalization, or amount
of debt and stock at par values, was $108-301,800. or $242,280 per mile of
track, nearly 5 times the actual value. The market capitalization of $132,-
000,000, or $290,000 per mile, was nearly 6 times the real value of the rail-
way plant, and about 4 times the total expenditure, paving aiid all. If the
debt is subtracted from the total duplication value, paving and all, we find
water in the stock values to have been 5 to 1.
Since Professor Spiers wrote, the Philadelphia stocks have advanced so
as to increase the market capitalization $42,800,000, for which $1,620.000
must be subtracted for the Hestonville shares owned by the Union Trac-
tion, leaving $40,180,000 increase, referable to the 447 miles under consid-
4(J THE CITY FOE THE PEOPLE.
that over half the capitalization of the West End in 1889 was
baseless. The Massachusetts Board of Railway Commission-
ers says that part of the increase of $12,477 capitalization per
mile 'for all the Massachusetts companies in 1892-3 was
"stock-watering pure and simple," and that many companies
did not write off proper depreciation. 7
The three leading Chicago street railway systems have a
par capitalization of $130,000 a mile of track, with a market
valuation of about $200,000 a mile, while they can be dupli-
as
values and the amount paid in are shown in the last column below.
Strcft Railway Stock Values and Amounts Paid In.
Relation '<.-
Amount Market Present tween Stock
X.VMK OF COMPANY. Par Value. dln Price.^ MarK^ V,,,,,;- ,, I
paid in.
Continental ........................ $60 $29-00 $131 $145 5 to 1
Philadelphia City ................. 50 23,7o 172 208
Philadelphia and Gray's Ferry ...... 50 2o.OO 82% 101 4 to 1
Ridge Avenue ..................... 50 244 601 iu TO i
Thirteenth and Fifteenth Sts ...... 50 16.7o 227% 311
' I0 88 18 IS 5 t'o
. 50,00 334 450 to 1
Second and Third Sts. .. . . M . ".- 58 40.00 237
Germantown ..... 50 21.66 125 loO 7 to 1
GreeTa'nd CoaYeV Sts. . . . .......... 50 15.00 13234 140 9 tc
Philadelphia Traction .............. 50 50.00 69%
Union Traction .................... 50 10.00 9y 2
Union Traction stock is the chief variable, the Union Traction being the
consolidating company, that has gathered all the rest under its wings ana
guaranteed dividends on the stock of the absorbed roads. A new a
ment of $7% a share has been made by the Union Traction, making t
total paid in $17% instead of $10, as in 1897. The other figures in the paid-in
column remain the same.
The company has 6 cars per mile of track. When Prof. Speirs wrote. IE
1897, the Union Traction system included all the street railways in Philadel-
phia except the Hestonville line. The next year that was brought into t
Union, but its miles and capitalization have been subtracted from present
totals, so as to deal with the same system Prof. Speirs wrote about.
7 Since then something has been done toward more effectively restricting
overcapitalization of street car lines in Massachusetts, and the average capi-
talization has fallen from $53,000 per mile, in 1894, to $44,683 in 1897. In
the central states the average capitalization was $91,500 per mile in 1897,
and In the middle states, $138.600. Prof. Bemis thinks the fair capitaliza-
tion in Massachusetts would be in the neighborhood of $35,000 per mile,
and cites the splendid road in Springfield (with 3 cars to a mile and 180,36-
passengers per mile), which cost $33,987 a mile, could be duplicated for
$31,500, and is capitalized at $30.829 a mile. (Municipal Monopolies, p. .">.">.>
My own investigations lead to the conclusion that $25,000 to $35,000 a mite
Is sufficient for a trolley road, except in very large cities. In 1890, wh<>r<
the West End claimed about $84,000 a mile. Mr. B. E. Higgins (Editor of
the Street Railway Journal, N. Y. city, a very high authority entirely
favorable to the private companies) estimated the cost of duplication for
Boston at $62,682 a mile as the maximum (St. R'y Jour., March, 1896). He
referred to this estimate as high, and in another series of articles, in which
the companies were not named, but identification was easy by the data,
he said the system might possibly be duplicated for 60 per cent, of its
capitalization about $51,000. Paving would add probably $8,000 a mile.
The present stock and bond capitalization is $86,000 for each of the 304
miles owned by the company. It operates 315 miles (300 overhead trolley
and 15 horse) aud has eight to nine cars per mile.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. -\1
cated for $60,000 a mile. 8 The North Chicago Railway,
worth about $60,297 a mile, is capitalized at $146,346, face,
$246,000 market value, and assessed at $5,000 a mile. The
"West Chicago, worth, with the tunnels, about $61, TOT), is
capitalized at $149,500 face, $186,000 market value, and
assessed at $5,445 a mile. Out of about $50,000,000 of stock
issued by the eighteen companies in Chicago and its suburbs,
about $31,000,000 is pure water from the start. In a num-
ber of companies the stock is all water. For example, the
Chicago and Jefferson, $1,000,000, all water: the Chicago
Electric Transit, $1,500,000 stock, all water; the North Side
Electric, $1,500,000, all water; the North Chicago electric,
$2,000,000, all water; the Cicero and Proviso, $2,500,000
stock, all water, etc. 9 Even an issue of bonds is sometimes
8 Report of Illinois Bureau of Labor Statistics for 1896. Report of Special
Committee of City Councils oh the Street Railways of Chicago, 1898, see
folding table opposite p. 70 and also p. 306; Municipal Monopolies, pp. 513-4.
The Spec. Com., p. 306, states the par capitalization of the three sys-
tems at 33 million stock and 30 million bonds, 63 million total; the cost of
duplication, $28,858,000, and the overcapitalization, $34,400,000, or $70,600
per mile each for the 487 miles of track. The North Chicago and West
Chicago guarantee 30 to 35 per cent, dividends on stock of some of the leased
lines (pp. 294-301).
The three companies "West Chicago," "North Chicago" and "Chicago
City" have 390 miles overhead trolley, 82 miles cable and 15 miles horse,
487 total. The Illinois Bureau of Labor Statistics, 1896, went into the
question of cost in great detail and with the estimates of expert engineers,
real estate men and the statements of street railway financiers arrived at
the following conclusions: (1) That at the maximum the cost of the cable
systems, with 50 cars to the mile and all machinery, power houses, etc.,
belonging with them, would average $136,000, aside from land and
tunnels, while $100,000 a mile was probably nearer the truth. (2) That
$40,000 a mile was ample for the overhead electric systems, aside
from land and tunnels. (3) That, including land and tunnels, $60,000 a mile
was a reasonable estimate of the cost of duplicating the whole of the three
systems, electric, cable and horse. The land of the companies, valued by
experts, amounted to $7,000 a mile for the whole system, with an average
of twelve cars to the mile, and the tunnels averaged $4,000 a mile when
the cost was spread over the whole 487 miles.
On the estimates of competent engineers and statistics- of actual con-
struction, the Bureau found that the 42% miles of ordinary construction
on the five L roads could be duplicated for $250,000 a mile of double track,
including stations; equipment and power plant, $75,000 $325,000 total,
aside from right of way. On the 2% miles of loop, $750,000 per mile was
allowed for construction and $500,000 per mile for "frontage." The average
total per mile was $373,280 aside from damages or right of way.
"In not a single instance was a cent paid for the stock (of the L roads),
an aggregate of over $49,000,000 of water, pure and simple." Adding up
the actual receipts from sales of bonds it was found that the total moneys
received by the L companies and alleged to have been invested footed
up to $33,203,000, or $754,000 per mile, the difference between this sum
and $373.280, or $380,000, representing the cost of the right of way and
the 'millions divided among the original promoters.' "
9 See letter of Mr. Vanderlip, quoted in 1896, report of 111. Bureau of
Lab. Statistics: "I find in an examination of the street railway companies
that there is a total of, roundly, $31,000,000 of stock issued by various local
street railway companies that represents absolutely no investment. The
capital stock of practically all the street railway companies organized in
the last few years represents no money investment." A dozen cases of
total water, such as those cited in the text, are then stated, and also the
case of the Chicago Pass. Ry.. which "lias $2,000.000 of capital, half of
which is paid for and half represents no investment."
48 THE CITY FOR THE PEOPLE.
almost wholly water. For example, $3,413,050 of the
$4,100,000 first mortgage bonds issued by the West Chicago
Street Railway Company for the purchase of the $625,100
of Chicago West, Div. Ry. stock at $650 a share, represented
no investment, and is therefore water in the form of bonds. 10
On the five L roads of Chicago there was put a capitaliza-
tion of $1,555,000 per mile. They could probably be dupli-
cated for $373,280 a mile, aside from right of way, and
$754,000 a mile was all that was received for the securities of
the roads all there was to cover construction, land damages
and the millions divided among the original promoters. One
of the roads, the Lake street, had $18,000,000 of liabilities
in 1896, on an officially stated investment of $3,317,000
for 7-| miles of road, nearly $6 of liabilities for every $1 of
actual cost.
The market value of the St. Louis street railways is 4
times the actual cost. 11
The Milwaukee trolleys are capitalized at $100,000 per
mile of track face value of stock and bonds, yet the company
admitted in court, May, 1898, that the whole plant could be
duplicated for $36,037 per mile. 13
The Cleveland roads have an authorized capital of $145,000
per mile, have issued $136,000 a mile, only claim $66,600
a mile loua fide investment; could be duplicated for $29,000
a mile, or $39,000 a mile with the paving, and report for tax-
ation only $10,400 a mile. 13
The Capitol Traction Company, Washington, D. C., is
capitalized at $333,300 a mile, and could probably be dupli-
cated for less than $125,000 a mile. 14
1898p U 301 d substantlallv from Re P- s Pec. Com. of Chicago City Council,
nf T 1 nh ( ; PO / t v?. Stre ? t .,?E- Franchi ses by Lee Meriwether. Commissioner
^ 4i-n is80un ' 1 ? 96 ' p - " Market capitalization, $37,987,000; actual
RroAkivr ? ? - 00 ; assessed value, $4,246,000. The figures relate to 1895. The
Brooklyn investigation was the same year.
Rep" g} 111 "* Electric Ry. & L. Co. vs. City of Milwaukee, 87 Fed.
"The Street Ry. Problem of Cleveland," by Dr. Wm. R Hopkins 1890
r- mn" P ,?- 31 !' 19 ' 373 -6- 17 " overhead trolley and 10 miles
more than 4 cars per mile.
an C ?' f ^ujMngton repO rts to Congress $105.660 a
n, equipment, etc., of its 22 miles of underground trol-
!m-i ^S 1 and the total c,.pltall.atlon, lana, junk pile
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 49
In Toronto the $33,000 of bonds per mile is probably enuf
to duplicate the road (overhead trolley), and the $66,000 of
stock per mile appears to be all water. In Brooklyn it ap-
peared from an investigation in 1895 that the stock was 7
water to 1 solid, and by the returns for October, 1898, it
seems that the whole of the 32 millions of stock and half the
21 millions of bonds have no basis of tangible property, but
represent the capital value of the franchise right of taxing
the people beyond the fair price of the service rendered. 15
The following table represents approximately the situation
in the principal street railways of New York:
New York Street Railway Inflation.
Cost ofduplicat- Probable
Nominal cap!- Market capi- ing the system water in
t.ilization per talization per probably does market
mile of track. mile of -rack, not exceed (per capitallza-
niile of track). tion ia
about
Third Avenue Cable $526,316 ?1,080,000 $150,000 6 to 1
Metropolitan System Lines
owned and leased, horse, cable
and electric 472,700 640,000 90,000 6 to 1
Metropolitan lines owned cable,
electric and horse 1,130,000 2,350,000 100,000 22 to 1
The Third avenue has 14 miles of road, and 28 miles of
track. It claims for each mile of track $228,000 for road
construction, $200,000 per mile for equipment (cars, machin-
ery, land, buildings and fixtures), and $50,000 per mile for
right of way. But these claims cannot be sustained.
A hig-h official of the company testified before the Special Com-
mittee of the New York Assembly (1896, Vol. II, p. 1164) that the
cost of the most diffictilt cable construction on the line (as difficult
as any in the city, he said) had footed up, aside from real estate,
less than $100,000 per mile of double track, and could be duplicated
for considerably less than that. On some streets, where the diffi-
culties were less, the cost had been only about $60,000 per double
mile. So that the company's claim of $456,000 for the road con-
struction per mile of double track is 5 or 6 times the true value,
according to the evidence; $50,000 a mile of single track is a
maximum.
As to the second item, the Illinois Bureau of Statistics (1896) has
shown that $90,000 a mile of track is a maximum for cars, ma-
chinery, power houses, storage houses, etc., on a cable road with 50
cars to the mile. The Third avenue, with half that many cars,
should not figure over $60,000 at the outside. Land should not go
beyond $15,000 per mile, which is more than twice the value found
15 See section 13, Gaynor note.
4
50 THE CITY FOK THE PEOPLE.
by the Illinois Bui-eau for the Chicago electric and cable systems,
with an average of 12 cars to the mile.
An estimate of $125,000 per mile of track for everything except
the right of way would, therefore, seem fair, especially in view of
the facts First, that the Columbia Railway Company of Washington
has built and equipt a first-class cable road, with 7 cars per mile,
at a cost of $85,850 per mile of track, aside from land, and Second,
that the engineering data collected by the Illinois Bureau indicate
$100,000 per mile as the reasonable cost of the cable systems in Chi-
cago complete, aside from the land.
As to the claim of $50,000 a mile of track, or $100,000 per mile of
road for right of way, it may be noted that such entries are of
doubtful character. (See Eep. of Spec. St. Ey. Com. N. Y. Assembly,
1896, p. 1095.) The Railroad Commissioners could not tell me of any
sums paid to the city or state for the franchise, nothing but the
annual license fees and taxes, which, of course, do not belong in the
capital account. I could find nothing to justify this entry of
$1,443,000 in the account for capital expenditure, so I wrote to the
company and received word from the Secretary that "this sum does
not represent the specific payment to the city for rights of way,
but it does include all payments made since the incorporation of
the company, in 1853, for legal services and other services and expenses
properly chargeable as items of expense for rights of way." The
italics are mine. In the case of the Broadway franchise we know
that "legal services and other services and expenses" in obtaining
the right of way cost the company $500,000, without any "specific
payment to the city," and the thing got out and the railway officers
and the aldermen were indicted; but I am at a loss to understand
how any legitimate expenses of organization, procurement of
charter, etc., could possibly foot up to $1,443,000. As a matter of
fact, most of the city companies make no entry for the cost of right
of way. I cannot find such an entry even in the Broadway account!
Suppose we allow $200,000 for organization and other expenses
properly chargeable to right of way (and that is more than double
the cost of everything in this connection that is visible to the pub-
lic) ; with 28 miles of track that would be $7,000 a mile for "right
of way." Then we shall have $132,000 total cost per mile. Even if
we allow $90,000 a mile on the second item, instead of $75,000, we
shall still have but $150,000 per mile of track, which is less than
one-third of the face of the bonds and stocks per mile, and one-
seventh of their market value.
The Metropolitan Street Kailway Company owns 50 miles
of track (about half horse and half cable and underground
electric) and leases 177 miles (about 100 miles horse and the
rest cable and electric).
Horse track can be built in New York city for $6,500 a mile.
(Testimony of Secretary of the Central Crosstown, one of the
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 51
Metropolitan roads, Rep. of Spec. Com. N. Y. Legis., 1896, p. 1097.
His accounts showed $103,200 a mile for construction of road, which,
he said, could be duplicated for $6,500 a mile.) Cars, 9 to a mile,
$6,000 to $7,000. Horses, 40 to 60 per mile, $2,500 to $4,500. For land
ajid buildings, $18,000 per mile seems a liberal estimate. (See be-
low.) General equipment, office furniture, organization expenses and
other incidentals perhaps $4,000. A total of $40,000 a mile at the
outside, with $30,000 to $35,000 as probably nearer the real values.*
In dealing with, the electric and cable roads it may be well
to state a few facts in tabular form: cost per
Mile of Track.
Electric road construction, including overhead work $12,000
N". Y. Spec. Assembly Com. Eep., 1896, pp. 694, 910, 973.
Albany trolley track, 90 pound girder rails (including
$4,000 a mile for overhead work), Spec. Com. Rep 11,477
"Huckleberry Road," with 90 pound girder rails and over-
head construction (Spec. Com.) 11,000
Metropolitan, Kansas City, electric road construction.... 15,000
Syracuse trolleys, $13,000 per mile of track and $3,000 over-
head, total road cost, aside from paving 16,000
(Testimony of officials of the roads to Spec. Com.)
Springfield trolley, (Mass.), (3 cars and 180,808 passengers
per mile), cost of the system complete, road construc-
tion, equipment, etc., entire tangible assets 33,503
Could be duplicated for $31,500 a mile. (Co.'s reports ,
and valuation of engineer of Mass. Rd. Comssn.)
Calumet Electric, So. Chicago, complete 33,333
(111. Labor Bureau Rep., for 1896.)
Chicago General Ry., complete 28,752
(111. Labor Bureau.)
North Chicago Electric and North Shore, complete 35,000
(Mr. Louderback in Mason, Lewis & Co.'s Investment
Supplement, Feb., 1897.)
Chicago Electric Transit, complete, with power machinery
sufficient for many contemplated extensions 45,800
(111. Labor Bureau.)
Milwaukee trolley system complete 36.000
(Admission of Co. in Court.)
*See Rep. of Special Cora. N. Y. and Mr. Higgins' estimate in Street.
Ry. Journal, March, '96. Mr. Higgins gets a total of $45,000 a mile as the
cost of duplication for a first-class horse line in a giant city, but he esti-
mates track construction at $15,000, horses at $100 each, etc., his figures
being considerably above the cost, as shown by testimony before the
Special Committee, by the statements of contractors, and in many instances
by the reports of the companies themselves. The Central Crosstown of Now
York, for example, reports the cost of 658 horses, with harness, as $38.650,
or less than $59 per horse. Rep. N. Y. Rd. Com., 1898, pp. 1314, 1317. The
Forty-second street road reports the cost of 145 new horses as $8.200. or
about $56 each. Ibid, p. 1332. As to track, See data already given. Mr.
Higgius estimates land at $10,000 and buildings at $8,000 a mile, and 9 cars
to a mile $8,000. The real estate estimate I have not the means of testing,
but the Forty-second and Manhattan reports the cost of 190 horse cars as
averaging $630 each, and the Second avenue reports the cost of 375 ears
as averaging $750, and 250 of the cars are electric.
52 THE CITY FOE THE PEOPLE.
Cleveland overhead trolleys, with paving $39,000 a mile,
probable cost of duplication, complete, aside from
paving 29,000
(Dr. W. K. Hopkins).
Philadelphia Traction system, complete, maximum cost,
including $20,000 a mile for asphalt and granite paving
curb to curb, $76,000, (Prof. Spiers); probable cost of
duplicating road, without paving, is under. 50,000
West End Trolleys, Boston, maximum $62,000 (E. E. Hig-
gins, St.Ry. Jour., Mar. '96, figuring track and overhead
construction at $22,000 per mile of track, without pav-
ing, which is considerably too high), cost of duplica-
tion aside from paving is probably not above $55,000 or
at the outside 60,000
Mr. Badger (Electrical World, Oct. 31, 1891), gives the
average total investment per mile of track, real estate,
road and equipment for 45 horse roads 31,093
And for 22 trolley roads 27,780
He says: "As fine and substantial roadbed as electric
car ever ran over was built at a cost, exclusive of pav-
ing, of about $5,000 per mile. "Overhead construction
$2,500 to $5,000, with iron poles, etc." concluding "Thus
we have as an extremely liberal estimate, $26,000 per
mile, exclusive of real estate, buildings and paving, for
a road suitable for the heaviest metropolitan traffic."
($7,000 of the estimate was for cars.) "And it is a fact
that a good and satisfactory road can be built and
equipt for $20,000 a mile."
Estimated cost of overhead trolley system of highest char-
acter in giant city, complete (aside from land, with 5.7
cars per mile) 70,000
(Keport of Mr. Pearson, Engineer of the Metropolitan
Ey. Co., New York, to the City of Liverpool, 1897. For
each additional car per mile, add about $5,000).
Cost of underground trolley system of highest character
in giant city, complete, aside from land, with 5.7 cars
pel mile 96,000
Metropolitan Underground Trolley, Wash., reports con-
struction and equipment, complete, aside from realty
(13 cars per mile) 105,660
Cable system in giant city, complete, aside from land,
maximum estimates, with 50 cars per mile, and full
equipment, average 140,000
Reasonable estimate, omitting old cars, etc 100,000
(111. Labor Bureau and their engineers.)
Cable road construction (testimony of Third Ave. officers,
Rep. N. Y. Spec. Com.), less than $50,000 a mile, Com-
plete system, aside from right of way 125,000
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 53
Columbia Cable Ry., Washington, reported cost, complete,
(aside from land), with over 7 cars per mile 85,830
Metropolitan Cable, Kans. City, $50,000 a mile road con-
struction, $20,000 a mile machinery, real estate, etc.,
with 6 cars to a mile, total 70,000
(Mo. Labor Bureau, citing- St. Ry. Journal and Vice
Pres. Holmes, of the Metropolitan system.)
Land for electric and cable systems in giant cities, ave-
rages $7,000 per mile of track, by expert estimates of
the actual possessions of the leading Chicago Cos.
"Real Estate," (including land and buildings, except
the repair shops), is stated for the Metropolitan St.
Ry., of Kansas City, as $10,200 a mile. (Mo. Labor
Comssrs. Rep., 1896, p. 56, citing the St. Ry. Journal
and Vice Pres. Holmes, of the Metropolitan Ry.) The
West End Claims $17,000 per mile for "Real Estate,"
which means land chiefly as the power stations, car
houses and shops are named in other items. Mr. E. E.
Higgins (St. Ry. Journal, Mar. 1896), puts land at
$9,000 a mile for the West End, eliminating what is
not needful for the street railway system, a street rail-
way company has no right to hold a lot of land for
other than street railway purposes and capitalize it as
part of the railway system for passengers to pay divi-
dends on.) If $7,000 a mile covers land in the Chicago
systems and $10,200 land and buildings in Kansas City
and $9,000 the land required in Boston, it is surely
liberal to allow for land in New York 15,000
Some data relating to the cost of L roads and the history
of the Manhattan Elevated, of New York, may be useful
here:
Elevated road, including stations, actual cost, in Brooklyn,
1892-3, $297,000 per mile of double track; could be du-
plicated perhaps for $250,000. Equipment returned by
N. Y. L roads, $124,000 per mile, double track. Total
per mile of single track, therefore not over 210,000
Cost of L roads in Chicago, according to 111. Labor Bureau,
for entire L system, road, stations, cars, buildings,
land and all, $325,000; for straight road, including
loops, $373,280 per mile, double. Per mile of single
track this would indicate 190,000
For the proposed Boston Elevated (13.4 miles of road), the
engineers of the Mass. Rapid Transit Comssn. (Rep.
1892, pp. 85, 251) estimated road construction without
stations at $443,000 per mile of road; passenger stations,
$100,000; shops, yards, trains, coaling and watering
stations, equipment entire, $157,000. Land damages,
$51,000. Total, $751,000 per mile of road. Indicating
for constniction per mile of single track 350,000
And for land damages 25,500
54 THE CITY FOR THE PEOPLE.
The Engineer of the Boston L Co. estimates for 10 miles
of road electrically equipt, $297,000 a mile for road,
$389,000 for stations and equipment, and $300,000 to
$500,000 a mile for land damages. A total of about
$1,000,000 a mile of road or per mile of track, aside
from land damages 345,000
And for land damages 300,000 to 400,000
The difference as to the land damages between the
company engineer and the state engineer seems very
great, but as I do not know the details of the com-
pany's estimate, I cannot compare it with the other.
In the light of these facts the history of the New York L
roads is of much interest to the student of overcapitalization.
In 1879 the New York Elevated and the Metropolitan Elevated
were practically consolidated in the hands of the Manhattan by
leases for 999 years. The Manhattan agreed to pay to each of the
old companies interest on 8y 3 millions of bonds and 6% millions
of stock, and issued 13 millions of its own stock for pro rata dis-
tribution among the stockholders of the old companies, making the
total capitalization 43 millions upon an actual capital expenditure
of 22i/ 2 millions. Subtracting the bonds we find that 23 millions
of stock represented about 5y 2 millions of capital expenditure
4 times the original cost and probably over 5 times the present
value. The stock of the old companies was largely water, and the
$13,000,000 issued by the Manhattan was "only a pyramid of
water on a pedestal of transparent fraud." (Report of the Board
of Railway Commissioners, Assembly Doc. No. 162, 1883.)
The stock and bonds of the Manhattan now amount to 86 mil-
lions face and 95 millions market value, or $2,640,000 per mile of
double track, yet, as we have seen, it could probably be duplicated
for $500,000 or $600,000 per mile of road (or $700,000 at the very
outside), plus, perhaps, $50,000 to $200,000 land damages a total
cost, say, of $400,000 per mile of single track. This estimate, how-
ever, must not be taken as having anything like the conclusiveness
of the valuations of horse and electric roads, because of the indefinit-
ness of the land damage items. There is a chance here for some
one to make a valuable contribiition to the science of this subect
by ascertaining what the L roads of New York actually did pay
for land damages.
Returning to the surface lines let us study the leading
system in the light of the data tabulated above.
The Metropolitan system has 8 cars per mile on the horse
lines and an average of 14 on the cable and electric. Taking
the highest applicable figures indicated by the above data,
with allowance for legitimate organization and franchise ex-
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 55
penses, 16 we have a maximum of $40,000 a mile horse and
$150,000 a mile cable and electric for the cost of duplication. 17
This gives an average value of $95,000 per mile of road
owned, call it an even $100,000. Taking the whole system as
125 miles horse and 104 miles cable and electric, the high-
est figures given for either sort of road, the average value per
mile of track would be under $90,000. The stock and bonds
of the Metropolitan and the leased lines, less the securities of
the leased lines held by the Metropolitan, gives an outstanding
face capital of $472,700 per mile of track, and at present quo-
tations the market capitalization is $640,000 per mile of track,
or 7 times the true value. The bonds and stock of the Metro-
politan Company alone, after subtracting its holdings in the
bonds and stocks of leased lines, etc., gives a face value capital-
ization of $1,130,000 per mile of track owned, and the market
capitalization is $2,350,000 per mile of track owned, or more
than 23 times the real value.
The way, or rather, one way, in which large overvaluations-
arise, was explained to the Special Committee of the New-
York Legislature by Mr. Caswell, bookkeeper of the Albany
Railway. He said that the size of the construction account
was due to the fact that it had been receiving all the charges
for construction since the road was first built everything
that went into the road, buildings, stables, power house, etc.,
since 1863; one expenditure piled upon another, with no
subtraction for depreciation or extinction of property, so
that the capital account represented, not the present real
value of the plant, but that value plus the value of
dead horses, worn out machinery and old tracks long
since torn up. (Special Report St. Rys. N". Y., 1896, pp.
10 So far as I can learn, the Metropolitan's claim for right of way is very
small. I have several annual reports of the New York Railroad Commis-
sioners, and find that only two of the twenty-five lines in the system make
any entry for franchise or right of way in their returns, and it is well known
that the companies did not pay either city or state for their privileges any-
thing except their yearly taxes and license fees. In one case we know
that the right of way did cost $500,000, but it was paid to the aldermen and
lobbyists, and is not entitled to be considered as part of the legitimate cost
of duplication. (See Report on the Broadway Surface Railroad Co., New
York Senate Doc., No. 79, 1886.) There is no entry for right of way in the
company's accounts, but there is an entry for "Overhead and underground
construction, superintendence and organization expenses, law expenses, etc.,
$4,130,464," and perhaps the $500,000 comes in there.
17 The real value of a railway system is below the cost of duplication.
New cars and rails, etc., are worth more than those that are partly worn out..
56 THE CITY FOR THE PEOPLE.
095-6; see also p. 1096.) The valuations returned by the
companies include the cost of all preceding roads in tlie same
location, along with the cost of the present road, and some-
times other items not mentioned by Mr. Caswell.
Looking at the facts of the preceding section about profits,
and of the present section on overcapitalization, it is no wonder
that Mr. E. E. Higgins, Editor of the Street Railway Journal
and author of "Street Railway Investments," advises investors
that street railways in large cities "are among the safest and
most profitable in the entire range of capital investment,
* * * dividends on stocks being with few exceptions regu-
lar and satisfactory, in spite of the extreme overcapitalization
of costs."
If the bonded debt of the Western Union Telegraph Com-
pany is subtracted from the cost of duplicating the operative
plant, the water in the stock appears to be about 18 to I. 18
The Sugar Trust bought the Brooklyn refineries at 30 times
their former capitalization, making the payment in sugar
stock, which is now quoted at 120 preferred and 180 common,
so that the water in the present market capitalization repre-
senting that transaction is probably not less than 40 to 1.
When the nominal stock of the Sugar monopoly was
$75,000,000, Henry D. Lloyd said it was all water, as the
value of the plants was more than covered by the $10,000,000
of bonds. 19
According to a member of the Congressional Committee
that investigated the Oil Trust in 1888, $6,000,000 was the
value of the "works" on which the trust had issued $90,000,-
000 of stock, which sold in the market at a valuation of $160,-
000,000. 20 The stock now amounts to more than $97,000,000
nominal or face value, and it is selling at 525, which gives it
is The Telegraph Monopoly, Arena, March, '96.
i "Wealth against the Commonwealth," p. 33, citing legislative investi-
gations.
The American Newspaper Publishers' Association has made a statement
signed by 157 daily newspapers to the effect that the entire output of the
Paper Trust could be produced by a present investment of $15,000,000; so
American consumers of newspapers are forced to pay dividends on an in-
flated and wholly fictitious capitalization of at least $40,000,000.
The market capitalization of the Tin Plate Trust is $29,000,000, and
its properties are worth about $12,000,000. (Review of Reviews, Vol. XIX,
pp. 686-7.)
20 Lloyd, p. 82.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 57
a market value of $509,250,000 over a half billion of
value, most of which represents nothing but the monopoly
privilege of taxation without representation.
Take the Red Manual of Haven and Stout or the Hand
Book of Securities, DeHaven and Townsend, 40 Wall street,
and run your eyes down the columns of quotations of the va-
rious bonds and stocks. Whenever you find a specially high
quotation, turn to the name opposite the figure, and almost
always you will find a gas company or street or steam railroad,
telegraph or telephone, or a trust or some other recognized mo-
nopoly, or else a banking institution. Consolidated Gas, 213;
Chicago and Alton, 170; Equitable (?) Gas, 213; Commer-
cial Cable, 180; Lake Shore, 215; Metropolitan Street, 260;
New York Mutual (?) Gas, 290; Pennsylvania Coal, 350;
Pullman Car, 216; Sugar, 180; Oil, 490; U. S. Trust Co.,
1,290; New York Life and Trust, 1,275; Central Trust,
1,411; Fifth Avenue Bank, 3,205; Chemical Bank, 4,150
such, are some of the figures that meet us as we run over the
columns. $4,150 is a pretty good market price for a share
whose par value is $100. You may issue $4,000 of stock for
every $100 paid into the business, or you can issue $100 of
stock and let the excess of profits of your monopoly of po-
sition, influence or possession, swell it to $4,000 of market
values, or you may overissue in part and let the stock swell the
rest of the way up to your profits. In either case your capital-
ization is inflated. If your business is regarded as semi-public
by the people, and they show an interest in examining your ac-
counts, it is safer to overissue the stock. If gas consumers saw
on the face of the returns that they were paying 20, 30 or 60
per cent, on the money actually invested, they would be* rush-
ing to the Commissioners to have the rates reduced. But
issue a lot of stock and get it into the hands of "innocent pur-
chasers" and you are comparatively safe.
Seriously the inflation of capital, or watering of stock of the
inanimate order, is a most pernicious practice, protecting the
eimrn'.Miis extortions of monopoly by hiding them from the
people, checkmating reduction of -fares by commissions or
boards of regulation by confronting them with the innocent
58 THE CITY FOR THE PEOPLE.
holders of purchased stock, and compelling the people, when
they come to buy the plant, to pay several times its value.
FALSE STATEMENTS AND SUPPRESSION OF FACTS.
4. False accounting, misleading statements and suppres-
sion of important facts are favorite methods of keeping the
people in the ignorance so necessary to the continued exis-
tence of the great monopolies. The monopolists know that
their mastery over the people could not last one single day
if the people knew what they know.
Various instances of this evil of deception by commission
and omission have already been given. We have seen the
private water companies refuse to state their expenses and
profits. We have found gas companies and street railways
representing their values at many times the real figures, and
stating the cost of construction at 2, 3, 5, 10, even 16 times the
truth. In fact the whole section on overcapitalization is in evi-
dence here since- the paying of apparently moderate dividends
(5 or 6 per cent., perhaps) on an inflated valuation, which
makes the real dividend on actual value an immoderate one
(20, 50, 200 per cent., perhaps), is in itself a most serious form
of suppression and deception. A few examples on other lines
may be of use.
We have seen the Bay State Gas capitalized at $5,000,000 on an
actual investment of $750,000, which was the whole capital expen-
diture down to 1893, according- to the proof in the Matthews In-
vestigation. 1
We may note here the mass of contradictions presented by the
company's statements to state officials:
Valuations of Bay State Gas Property as per Official Returns.
Sworn Returns Sworn Returns Sworu Return* A^-c-.-ur-'
Y 'r to Tax to Secretary to Gas Valuations
Commissioners of Siate Commissioners
1886 $25,000.00 $725,956.16 $725,956.16 $76,000
1887 500,000.00 876,956.16 876,956.16 202,000
1888 500,300.00 770,317.28 833,912.91 501,300
1889 500,300.00 779,451.52 4,974.554.74 52(5,300
1890 500,300.00 5,047,145.24 5,038,726.49 526,300
1891 4,972,191.49 5,141,774.12 5,130,732.10 631,500
1892 5,022,773.28 5,193,149.33 5,125,006.44 661,500
The investigation resulted in a sort of compromise compelling-
the company to cut down its capitalization to two millions. Just
'Report or Bay State Gas Investigation, City Print, 1893, p. 47.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 59
before this was done the company reported to the Gas Commission
(p. 162, Eep. of Jan., 1894):
BAT STATE GAS COMPANY.
Real Estate )
Machinery and Manufacturing Appliances.. > S4.954.330.
Street Mains j
Now the investigation did not change the real estate, machinery
or pipes, but only the paper capitalization, yet the company's next
report to the Gas Commission (Rep. of Jan., 1895, p. xi, App. A)
contains the following:
BAT STATE GAS COMPANY.
Real Estate
Machinery and Manufacturing Appliances. . . > Sl.9oG.379.
s n-et Mains )
The land, buildings, machinery and pipes had shrunk three mil-
lions in one year because the legislature had cul^the bogus bond
and forced down the capitalization by the said amount., The as-
sessors did not appear to find any change in the property, for they
assessed it at $661,500 after the bond reduction, the same as before.
In 1892 the cost of gas in the holders in Boston was 33.3 cents
per M, and the cost of distribution 19.4 cents, yet the Boston Com-
pany reported these costs as $1.02, instead of 52.7 cents. 1 The
Gas Commissioners knew the truth, but suppressed it. When the
Investigating Committee appointed by the legislature ordered the
Commissioners to supply information, the Hon. George Fred.
Williams, counsel for the city of Boston, went to the office of the
Conimisssioners to get a copy of the returns of the gas companies.
A clerk brought the copy and gave it to one of the Commissioners,
who took it and tore out the last leaf, saying to the clerk, "What
did you put that in for?" 2
That leaf contained a statement of the actual cost of making
and distributing gas, and it was only with the greatest difficulty
that Mayor Matthews and Mr. Williams succeeded in obtaining the
facts. The companies did not wish the people to know the truth,
and the Commissioners allowed false statements to go out to the
people year after year in their reports; refused to allow examina-
tion of these returns, tho a part of the public records of the office;
kept the facts to themselves during suits for reduction of rates,
protecting the companies from just reductions and entailing a
waste of time and money that would have been unnecessary if the
facts known to the Commissioners had been brought to light and
acted upon; sought to suppress the facts even when ordered by
legislative authority to supply them, and after all, when the "ver-
batim" report of the investigation was published under authority
of the state, all these vastly important data were omitted, and
Mayor Matthews had to have a corrected edition of the report
published by the city in order to get the facts to the people.
1 See Municipal Monopolies, p. 580.
- See the City Report of tbe Investigation issued by the Mayor, 1893, pp.
21. 17, 14. 9.
*
60 THE CITY FOR THE PEOPLE.
The West End Street Railway Company, of Boston, for several
years reported an average operating cost, with, electric traction, of
25.8 cents per car mile, while the reports of companies in New
York, Buffalo and Chicago, and the statements of railway officials
in Philadelphia and New York showed the cost in those cities to
be 10 or 11 cents, or 12 cents at the outside. The West End reports
gave a higher operating cost per car mile with electric traction
than was shown for horse traction by the former reports of the
same company. This was absurd for it was well known that elec-
tric traction was much cheaper than horse power. To cap the
climax, the general manager of the West End told a committee
from Glasgow that electric traction had reduced the company's
car mile operating expenses 20 per cent. 1 One of the street railway
circulars prepared by the writer and issued by The Citizens' Com-
mittee called attention to the contradiction, and the next year the
West End report was so adjusted as to show a car-mile cost about
1-5 below the old horse reports, but still, in all probability, very
much above the truth, as were also the old reports. 2
1 Rep. of Glasgow Com. on Mechanical Traction, 1896, p. 25.
1 See The People's Highways, Arena, May, 1895, for several other im
probable statements in West End reports. The portion of the circular
referred to above was substantially as follows:
The West End reports an operating cost in 1896 of 24.5 cents a car
mile, and its reported cost of operation from 1891 to 1896 inclusive gives
an average of 25.8 cents a car mile with electric traction, or more than
twice the cost in New York, Philadelphia or Chicago. How can it be? It
Is not the long .cars, for Philadelphia, Ne\v York, Chicago, etc., have the
long car it cannot be wages, for New York electrics pay as much as
the West End, and Detroit wages are almost the same; it cannot be the
cost of coal, for the difference due to this cause should not exceed 1
cent on each car mile as between Boston and New York, Rochester, Buffalo
or Detroit. It may be difficult to believe that the company's reports are
Incorrect, but it is quite as difficult to believe that the legitimate cost of
electric traction in Boston under good management should be as much as
the reported cost. Not only do the data of other roads oppose such a
conclusion, but the West End's own reports are equally conclusive against
It. In 1889 the company reported the car mile cost as 24.7 cents, 96 per
cent, of the mileage being made with horses. In 1888, the whole mileage
being with horses, it reported the cost of operation as 24.8 cents per car mile.
Now it is a universally recognized fact that the operating cost with
electric traction is much less than with horses. Mr. C. L. Rossitut,
President and General Manager of the Brooklyn Heights Company, says
that the car mile cost with the trolley is about half the cost with "horses.
Mr. J. S. Badger, in the Electric World for October 31, 1891, brings
together the statistics of 22 trolley roads and 45 horse roads and shows
that the average cost with electric traction is less than one-half the average
with house power these averages will not permit as precise a conclusion as
Is possible where the two modes of traction are tried in the same city,
but they have much weight as tending to corroborate the specific statements
of leading experts.
President Vreeland of the Metropolitan Company, New York City, says
C he could have the trolley he could easily operate at 12 cents a car
mile, the sixteen million car miles that now cost him 17 cents tvith horses.
Electric experience in New York indicates that he would have been justified
In placing the cost of the trolley mile below 12 cents
The Special Committee of Glasgow that went to many cities for the
express purpose of comparing electric travel with horse travel, says on page
tuelr report that the testimony everywhere was that electric- traction
cheaper than horse power, and that its adoption results in a marked and
Immediate increase of the traffic; 34 per cent, in Hamburg. 50 per cent.
In Rouen, etc., thus conferring a double benefit on the companies.
More pointed still is the statement that Mr. Sergeant. General Manager
iur End Street Railway, made to the Glasgow Committee (Glasgow
2LJ& Repor \ I l ece ber ' 1896 > P- 25), to the effect that the adoption of
cars had added 17 per cent, to the revenue, and "reduced the
ig expense* per car mile by 20 per cent."-a statement in strong
contradiction of the West End reports
*
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. (>1
The Boston Eapid Transit Commission found that the Manhat-
tan Elevated of New York charged up new construction to ope-
rating expenses. 1 Their construction account is full enough to get
along without feeding for a long time, and it's just as well not to
let the people know that a 2-cent fare is more than enough to cover
the normal cost of operation on a well-constructed L road in one of
our big cities. 2
Sometimes when the people or their officers demand an investi-
gation the monopolists succeed in packing the committee. A fla-
grant case of this sort occurred in Philadelphia in 1894. Mayor
Stuart asked councils to make an appropriation for a municipal
electric light plant. Councils were dominated by the Electric
Trust, the president of one of the chief companies being a leading
councilman, and many others being interested more or less, so
they did not wish to do as the Mayor desired. They could not
afford, however, to ignore a request behind which there was so
much force of reason and public sentiment, so they called for esti-
mates of cost and appointed a committee loaded with men inter-
ested in and acting for the electric companies.
The Director of Public Works and Chief Walker, of the Electrical
Bureau, returned careful estimates, showing that a 2000 full-arc
plant could be built for $318 per arc and operated for $58.50 a year,
or $72, including depreciation (3 per cent, on % of the plant, which,
the chief said, was sufficient), taxes and insurance (at 1 per cent,
each). Interest would add $9.50 more, making $81.50 total, an esti-
mate which was high, as the chief said he intended it to be. The
chairman of the committee (in reality an attorney of the Electric
Trust), instead of conducting the investigation in a judicial man-
ner, instituted a determined attack upon Chief Walker and Director
Beitler and their recommendations, endeavored, in every way,
to magnify the cost, and gave the closing argument to Mr. Cowling,
manager of a company a large part of whose business would be
gone if he could not keep the city from making its own light, and
who testified that the cost of an arc light per year was $146 (a
statement shown to be utterly false by overwhelming testimony
in the Senatorial Investigation, already referred to, in the same
city the following year). The councils refused to make an appro-
priation, as, of course, they intended to do when they packed the
co'mmittee with the enemies of the measure, and to justify their
refusal the ridiculous figures of Mr. Cowling and the chairman's
nonsense were printed in pamphlet form and spread broadcast;
but the chiefs estimates icere not put into the pamphlet. 3
The publication of false statistics and the making of solemn
1 Report of Rap. Tr. Commission of Mass. Legislature, 1892, p. 91.
1 See estimates of engineers placing operating cost on the proposed Boston
L at 38 or 39 per cent, of receipts on a 5-cent fare, or less than 2 cents
for operation (Rep. Mass. Rap. Transit Com., p. 90).
3 Arena, Vol. 14, pp. 457-8. See Journal of Select Council of Philadelphia,
Oct. 5, 1893, to March 30, 1894, for the full record.
62 THE CITY FOli THE PEOPLE.
affirmations that gas, electric light, transit, etc., cost as much, or
almost as much, as the existing charges of the companies con-
stitutes a favorite pastime of the monopolists. Rarely has a city
begun to talk of public ownership but that the movement has been
met by assertions of the private companies that under the particu-
lar conditions in that city the service cost about as much as was
being charged for it, and that the city would lose money if it went
into the business; and rarely has a city disreg-arded these state-
ments and established municipal ownership without discovering
that such assertions were utterly baseless. It will not do to rely
upon corporation statistics without disinterested corroboration.
"If the city of Des Moines, four years ago, had accepted the sta-
tistics offered by its water company, it would not have redxiced the
water rates 33 to 40 per cent, by municipal control; nor would the
Supreme Court of Iowa have pronounced these rates reasonable
had it been guided by the showing of the water company's expense
of operation, including interest on excessive capitalization, exorbi-
tant salaries to officials, etc.
"Neither would the city now be under contract for the erection
of a municipal lighting plant, to cost $105,000, which the con-
tractors agree to operate for $65 per arc burning all night and
every night if heed had been given to the statistics by which the
General Electric Company proved (?) that such a plant could not
be built for less than $250,000, and might cost $350,000, and could
not be operated for less than we were then paying, namely, $126
per lamp. Instead of accepting these 'statistics' we relied on the
estimates of our engineers as to the cost of erection and operation,
and they corresponded almost exactly with the terms of the con-
tract we succeeded in securing." J
If Rockford, 111., had paid attention to corporation statistics it
would still be paying $125 per arc instead of $52. The city's en-
gineer estimated the cost of producing light under municipal
ownership at $56 per arc. The electric company declared it could
not be done, and exhausted every means to defeat the movement,
but at the last minute, when the city was about to contract for a
municipal plant, the company offered to furnish light at the rates
estimated by the city's engineer if the city would abandon its in-
tention of building a municipal plant. The city, preferring to own
its own pole line, contracted with the old company at $52 per 2000
candle power lamp burning all night and every night.
The monopolies exceedingly dislike the daylight; publicity is
not congenial to their retiring dispositions. When in the course
of trial their books have been called for they have even abandoned
important suits rather than bring their books into court. The gas
and electric companies, railways, telephones, Sugar Trust and
Standard Oil agree in refusing to furnish materials for a complete
biography. Even in Massachusetts, where the companies are re-
18< 8 tOCl snhstantlnll - v froni Mayor MacVicar iu the Progressive Age, Feb.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 63
quired by law to make returns, the big electric light companies omit
some facts, like the amount of current sold for motor purposes,
etc., the absence of which makes it impossible to make exact com-
parisons or reach entirely definite conclusions. The Sugar Trust
systematically conceals its books from investigating committees,
and even refuses to give the information required by the Census
laws.* The Standard Oil not only keeps its books and facts from
legislative committees, but it has been known to refuse for years
together to make any tax return in a state where it had many
millions of property subject to taxation; * it has not hesitated at
perjury when necessary to conceal inconvenient facts; 2 and it is
strongly suspected of having procured the mutilation of public
documents, the theft of testimony taken by a Congressional Com-
mittee and the abstraction of court records containing facts it
wished to suppress. 3
POOR SERVICE.
5. Poor Rerricr and Lack of Service, tho not so generally
characteristic of private monopoly as high charges and exces-
sive profits are, nevertheless, sufficiently prevalent to be named
among the evils of monopoly in private control. The mo-
nopolist does not aim at service, but dividends. Service must
yield to profit except where the law intervenes and manages
to get itself enforced, or in the extremely rare case of a mo-
nopoly whose owners have tender, public-spirited consciences
of sufficient power to govern them in their business relations.
Fortunately, however dividends are, to a considerable extent,
dependent on effective service. If the gas wont burn, people
will use electric light, or oil, or acetylene. If the street rail-
ways behave too badly, the people will use busses and bicycles.
There is no such thing as an absolute and compulsory mo-
11 <j poly as yet. A monopoly is an advantage tending to shut
out competition. But competition in the shape of possible
substitutes is not yet shut out from any line of business. If
wagon transfer, bicycle travel and the street railways in a
great city should come under one control, or the Standard Oil
should get command of all the oil wells at one end and of all
the gas and electric light franchises of a city at the other, we
* Review of Reviews, Vol. XIX, p. 685.
1 Lloyd's Wealth against the Commonwealth, Chap. XIII, p. 166, et seq.
2 Ibid., 59, 86, 89, 95, 96.
3 Ibid., p. 83.
64 THE CITY FOR THE PEOPLE.
should begin to realize what monopoly could do in the way
of exorbitant rates and imperfect service. We have not ex-
perienced the full possibilities of monopoly, but we have some
broad hints, and among them is the lesson that private mo-
nopoly tho opposed to the adulterations of competitive manu-
facture, nevertheless, in various other ways tends to poor and
insufficient service.
In any of our larger cities, day after day, hundreds of cars may
be seen crowded to overflowing seats full, aisles so densely
crowded that the conductor can scarcely wedge his way thru to
get the fares, and both platforms loaded to the pressure of a mob
and if you ask the managers for better service they tell you that the
people on the straps make dividends. That was the explanation of
a West End official, I am told, when his attention was called to
the crowded cars by a sufferer who often had to stand up half or
three-quarters of an hour going from his home to his office and
back in cars where the people were hanging in festoons on the
straps and riding outside in every available fashion, and who has
frequently counted 90 people on a car at a time "strap passengers
make dividends," said the railway officer, and doubtless he was
right. The more people in a car the smaller the expense per pas-
senger for wages of conductor and motorman, maintenance of
track, production of power, etc., and the larger the part of each
5-cent fare that can go to the profit account.
Warming the cars is important both for comfort and health,
and the means of doing it properly are well understood, yet the
service is poor in this respect on many street car lines. In mod-
erate weather, when it doesn't make much difference, the Boston
electrics are nicely warmed. But when the thermometer drops to
zero the radiators go to sleep. Being unequal to the task imposed
upon them they get discouraged and retire from active service.
On the Elevated, in New York, the cars are generally comfortable,
even in the coldest weather. But on Broadway the cars are heated
with stoves that behave in anything but a civilized and enlightened
manner. If you get near the stove you think you are sitting on a
gridiron in Dante's Inferno, and if not near the stove you think
you are with Peary at the pole. In Philadelphia almost all the cars
are cold.
The bad service rendered by many electric light companies is
matter of common complaint. The 2000 candle power arcs con-
tracted for in New York city were repeatedly declared by the City
Bureau of light to be really little more than 1000 candle power.
Philadelphia pays inspectors to test the arc lights nightly, to see
if the companies are living up to their contracts. Many times the
lamps fall far below the agreement. The latest report at hand
shows that over 7000 lights were deducted from the bills of the
various companies during the year. The Aegis of March 3, 1893,
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 05
p. 168, gives a list of 35 cities in 20 states whose lamps were ex-
amined by experts and found to be far below the contract require-
ment.
Our telegraph and telephone service is much inferior to that
afforded by many of the public and co-operative plants in Europe.
Complaints of the poor service of the Western Union Telegraph
are multitudinous. It manifests itself in slowness, inaccuracy, in-
sufficient facilities, failure to guard the secrecy of messages, ab-
sence of proper co-ordination with the telephone, use of antiquated
methods, etc. It is no uncommon thing for a person to send a
message and then get on a train, or mail a letter, and reach desti-
nation in person or by post before the arrival of the telegram.
Professor Richard T. Ely and the late President Francis A. Walker
have testified to the inferiority of our service as compared with
that of Europe, and Professor Simon Newcomb, of Yale, says that
the telegraph service in the United States is the poorest in the
world. 1
Our telephone service is not only inferior in universality, but
for the most part also in quality' and convenience. We have no
express talks, no telephonograms, no telephoning of mail matter,
and practically no telephoning of telegrams. 2 No one who has not
given special attention to the subject can have any conception of the
improvment of our telephone service easily possible under a well
co-ordinated system, offering low rates and making service the main
object.
Private companies for the supply of water, gas, electric light,
transportation, telegraph and telephone service, etc., avoid the
small towns and sparsely populated districts, because they can
get more profit on their money in dense populations, and they do
not care whether the country is well served or not. Many towns
would be without any general water supply if public enterprise
had not been willing to enter \vhere private enterprise would not.
A considerable number of towns of 3000 or 5000 people and villages
of less than 3000 inhabitants now successfully operating electric
light plants would probably not be enjoying the privilege of well-
lighted streets if they had waited for the private companies. 3
The neglect of small towns and country districts by the Bell
Telephone Monopoly is one of the most emphatic points in its his-
tory. In many parts of Europe the whole rural population is as
well supplied with telephones as the people of large towns in most
of our states. In Norway, Sweden and Switzerland, where the
service is public, there is one telephone to each 85 persons. In the
United States the figxire is 165. Massachusetts, the home of the
Bell company, and a few of our cities, are well telephoned, but for
1 For details and numerous facts see my articles on The Telegraph
Monopoly, Arena, Vol. 15, p. 948, et seq.
J See my chapter on The Telephone in Municipal Monopolies.
3 See remarks of Prof. Commons, and admissions of Mr. H. A. Foster,
a writer opposed to municipal ownership: Municipal Monopolies, p. 66.
5
6() THE CITY FOR THE PEOPLE.
the most part- little has been done to develop the service to any-
thing like its proper proportions. Even our best cities are far be-
hind some of the leading telephone centres of Europe, as the fol-
lowing table shows:
Ratio of Phones to Population.
No. of Persons No. of Persons
To >-ach Telephone To each Telephone
Stockholm, Swed., State System 23 New York, Private System..... 108
Chrlstiimin, Norway. Mimic.
Trondhjem, Norway, Manic.
Grimstad, Norway, Co-op.
Berne, Switz., State
Geneva, Switz., State
30 Greater New York, Priv. Sys
38 Philadelphia
25 Boston and Suburbs "
40 St. Louis
30 Chicago
170
60
127
Not all the state systems in Europe do better than our companies
in the distribution of service some state ownership is by no
means public ownership, and even real public ownership is not
always in the front rank of progress and enlightenment; but the
examples given show how far our companies are from giving our
people the full possibilities of the telephone service.
DISREGARD OF SAFETY.
6. Disregard of Public Safety is a twin evil with, the last.
Grade crossings, that kill and maim their thousands every
year; stoves that are dangerous in case of accident; carelessly
placed or improperly protected electric light wires, that injure
firemen, interfere with the extinguishment of conflagrations,
and not infrequently cause them ; overhead trolley wires, that
even Yerkes admits are, a menace to life and property; single
fiangi rails obstructing the streets and wrenching the wheels
of innocent carriages; fenderless cars or heavy iron battering
rams instead of true fenders; leaky gas pipes left to contami-
nate the air, and sometimes neglected till they cause terrific
explosions; beef that is more dangerous to life than Spanish
bullets, and oil below the standard test required by law such
are a few examples of the tendency of private monopolies to
disregard the safety of the public.
In 1890 a committee of the New York legislature found that "six-
teen deaths were directly traceable to the poor insulation and bad
arrangement of the wires of the electric light companies of New
York city." Fire Marshal Swene, of Chicago, reported 231 fires
caused by electric light wires and lights during two years in that
city. In his address to the twenty-eighth annual meeting of the
National Board of Underwriters, President Skelton said: "Concur-
rent action regarding our greatest enemy, electricity, seems to be
imperative. There has been plenty of evidence that fires caused
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 67
by electricity are growing alarmingly frequent, and inspections
show that but few buildings in any community are safely wired.
This great and increasing danger cannot be ignored. It threatens
the very life of fire insurance." In Boston we have had emphatic
object lessons on the danger of the wires; they have not only
originated a number of disastrous fires, but almost always they
greatly hinder the subduing of the flames, and injure more fire-
men than all other perils put together. The firemen very justly
dread them more than they do the fire.
Every one who reads the newspapers knows the fearful record
of the trolle3 r cars. 1 In Brooklyn alone they killed 104 persons in
two years, according to the press reports. In New York city the
cable cars used to swing at full speed round the dangerous curve
at Broadway and Fourteenth street, and so many accidents oc-
curred that the place became known as the "Dead Man's Curve."
Within two weeks I have read of four trolley accidents, in one ot
1 The Philadelphia Press of August 12, 1899, in an editorial on the Bridge-
port disaster, brings out clearly the facts that very little care is taken by
many companies in the selection of motormen, and that the ill treatment of
the men is a source of great danger to the public, even when the men
are competent. Part of the article is as follows (italics mine):
"The story of Motorman Hamilton, who guided the trolley car which
went over a trestle near Bridgeport, Conn., last Sunday, killing nearly
thirty people, will be a reminder to the public how completely its safety
Is in the hands of the motorman and how much his competency depends
upon the way he is treated by his employers. It is due to the millions
of people who patronize trolley cars every day and who place their lives
in the hands of the employees of the trolley companies to know what
precautions are taken in the choice and care of . motormen and conductors
to insure safety for life and limb.
"The line on which the disaster occurred is over fourteen miles long,
making a round trip of nearly thirty miles. Last Sunday morning Motorman
Hamilton breakfasted at 7.15 A. M., and then reported for duty. At 8.15
he started out on his first round trip from Bridgeport, returned and at
11.15 started on his second round trip, getting back to Bridgeport at 2.40
P. M., having lost twenty-five minutes from some cause on his second
trip. He had then seen six hours and thirty-five minutes of continuous s:rvic"
and was tind and hungry. He askt to be allowed time to rest and iat liis
dinnfi; but the motorman who should have relieved him was not at hand
and thy car startir told Motorman Hamilton that he could not be allowed any
stop for dinner but must start at once on another trip, demanding at least three
hours more of steady work. He obeyed orders and took his car out on the
fatal trip which sent nearly thirty people into eternity.
"The trestle from which the car fell was probably not constructed sub-
stantially enuf for the work it was called upon to do. There iwere also
no guard rails, and the depression or "jounce," just before the bridge
was reacht had doubtless much to do with derailing the car. But probably
all these factors together might not have been enuf to cause the disaster
had not Motorman Hamilton been compelled to go without his dinner. He.
was in bad humor, undoubtedly, and weak from lack of food and was in just
the condition of mind when evm the most careful workingman losrs his caution
and full inclined to disregard strict regulations. The disaster occurred at
5.15 P. M., and it teas then ten hours since Motorman Hamilton had sat down
to his breakfast. With no food in the interval to sustain him it is easy to imagine
in- ichfit condition h- was. And yet the official of the trolley company took
the risk of compelling him to guide a car freighted with human life over
a road part of which is now admitted to have been faultily constructed.
"The public does not know how many risks it is subjected to from this
lack of care of employees by their employers. It is only when a disaster
it would be ludicrous to call it an accident occurs that the public is let
into the secret of the risks taken. A few years ago a railroad collision
occurred in Ohio in which a number of lives were sacrificed, and during
the inquest it was made known that the engineer of the train whose care-
lessness caused the collision had been compelled to be on duty for forty-eight
hours leithout sleep and was worn out mentally and physically, and in no con-
dition to perform his duty promptly and efficiently. The same disregard of
employees' condition has been the cause of other disasters while many more
have been escaped by a fortunate chance."
68 THE CITY FOK THE PEOPLE.
which over twenty people were killed and in another thirty persons
were injured. The companies, as a rule, do not show much anxiety
to report these matters. Laws and ordinances were passed requiring
the cars to be furnished with fenders, but the companies have
stubbornly refused to fulfil the spirit and purpose of the law, and
in some cases, as in Philadelphia, resisted even the letter of it
until fined for disobedience. Most of the fenders in use in our
eastern cities run four to twelve inches above the level of the road,
and some have iron fronts, that would break a man's leg like a
splinter. If a child is on the track, the fender knocks it down,
probably breaking its leg, passes above it and leaves the car wheels
to do the rest. Cushioned fenders, running close to the track, are
necessary for safety. In Buda-Pesth the cars have fenders that
will push a baby from the track without injuring it. But it will
need work to get efficient fenders here. The companies care little
for safety unless it will save them more money than it costs. A
few years ago in Philadelphia a man presented a safety attach-
ment for street cars. On trial with stuffed arms, legs, heads and
bodies, it was found in every instance that they were rolled from
the track uninjured. The presidents of the street car companies
met to discuss the advisability of adopting the new invention.
"What will it cost?" they asked. "Fifty dollars a car," was the
answer. The presidents ciphered up the total costs, compared it
with the damages they had been paying for accidents, concluded
it was cheaper to run over people and pay for it, and decided they
would not protect the -cars with the safety fender. 1
DISCRIMINATION
7. Unjust Discrimination is an evil natural to monopoly
in private control. Whether it be a street railway, an electric
light plant, a telegraph or telephone system, a railroad or a
department of the government, if the control is in private in-
terest, unjust discrimination is almost sure to result.
It is one of the chief counts in the indictment of the railroads
and the street railways that they are by no means free from this
taint. I know a ward heeler in one of our eastern cities who has
all the passes or free tickets for street cars he cares to use or
give away to his friends or vassals. In Kansas City the investiga-
tion of the Missouri Labor Bureau developed the fact that the
street railways were lavish with free passes among city officials.
The city clerk acted as the railway's, distributor-in-chief in the
City Hall, and in the Common Council the sergeant-at-arms at-
1 The story comes to me from a source I have no reason to question.
ana it is exactly in line with the well known conduct of the companies in
respect to safety fenders.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 68
tended to the matter. One city legislator, Mr. Tiernan, promptly
returned the pass laid on his desk, but the Bureau failed to dis-
cover any other refusals to accept the "delicate advance." 1
Water, gas, electric light and telephone service are frequently
given free of charge to men of position and influence, who are
much better able to pay than the mass of consumers, who have
to pay for the privileges of the favorites of monopoly in addition
to their own. I could mention names, but I do not wish to hurt
anj-body's feelings, and the reader can discover examples enough
for himself if he will inquire with due diligence and sagacity. It
is the system and not the individual that merits the severest con-
demnation. Yet it must be remembered that every public-spirited
man who refuses a proffered dead-head service is helping to break
down the system and develop a truer civic conscience, while one
who accepts such service is helping to fasten the system upon
us and deaden the consciences of his fellows. 2
Inequitable treatment of consumers, or favoring some persons
and places at the expense of others, is not the only form of unjust
discrimination of which the private monopolies are guilty. The
grand discrimination* is between the mass of consumers, or the
common people, on the one hand, and the monopolists on the other.
The exorbitant rates and profits and excessive capitalizations by
which the monopolists seek their own advantage at the expense
of others constitute in themselves a most grievous form of dis-
crimination. The fundamental aim and purpose of private mon-
opoly is unjust discrimination.
FKAUD AND CORRUPTION.
8. Fraud and Corruption are among the most prolific, and
are quite the most deplorable, of all the results of private mo-
nopoly. As much as the debasement of individual character
and the degradation of government are worse than any mere
1 Bureau of Labor Statistics, Mo., 1896, p. 57. The Commission, while
speaking of these passes, says they cannot of themselves account for the
30-year franchise, extremely low assessments, neglect to compel payment
of taxes and the shutting of eyes to false car reports. The "extraordinary
indulgence" shown the street railways is due to the "fact that they wield
a tremendous political power" thru the shrewd lawyers and political man-
agers in their employ, and the combined effects of their various methods
of influence and mastery.
2 -For an account of the Western Union's complicated discriminations
against persons, classes, newspapers and places, see The Arena, Vol. 16,
p. 70, et seq. For criticizing the W. U., or other similar weighty reason,
newspapers have been denied the service necessary to their success, and
in some cases newspaper enterprises have been killed by W. U. discrimina-
tion. Even the Government's business, tho required by law to be sent
ahead of everything else, has to wait if a commercial message wants the
wire, etc.. etc.
For a discussion of the railroad discriminations which have built so
many fortunes and formed the foundation for so many successful trusts
and combines, see "The Railway Problem," by A. B. Stickney, and Lloyd's
"Wealth against the Commonwealth." See section 8; and section 9 last
note. The subject will be treated in a future number of the Equity Series
on Transportation.
70 THE CITY FOR THE PEOPLE.
matter of property, so much are the frauds and corruptions
of monopoly worse than its monetary effects. In a sense, ex-
orbitant rates and.profits constitute in themselves a fraud upon
the public, and in a large proportion of cases excessive charges
and extravagant profits are rendered possible only by frauds
of overcapitalization, false accounting, manipulation of stock,
unlawful agreement, etc., or by corruption of a legislative
body to secure a favorable franchise or other privilege, or of
administrative officers to prevent the enforcement of the laws.
Fraud and corruption lay the foundation for extortion, and
extortion supplies the means for new frauds and corruptions,
which open the way for further extortions, and so the uncon-
scionable game goes on. The subject cannot be dwelt upon
at the length its importance suggests, but a few details and
concrete examples will be given to show, what the private
monopolies are capable of.
Some of the common corporate frauds are inflated construction
-contracts with directors or other inside parties, or with construc-
tion companies owned by them; exorbitant salaries, false commis-
sions, "legal expenses," legislative and advertising expenses; false
statements, doctored accounts, suppression of important facts, per-
jured returns to tax commissioners and other public officers;
seesawing traffic or dividends, paying unearned dividends or with-
holding dividends earned, and other methods of manipulating stock
values, so as to buy it in at bottom prices and sell it again at high
prices; inflating records of value by adding together all past ex-
penditures with no deductions for depreciation and extinction of
past possessions obtained by such expenditures, large increase
of securities on the consolidation of companies, issuing fictitious
dividends, issuing valuable stock to stockholders at par, or other-
wise watering securities or inflating capitalization; distributing
stock among influential people; furnishing free light, transporta-
tion, etc., to men of wealth and position; bribing councils and
legislators to secure franchise privileges or to prevent others from
obtaining grants; scheming to wreck and capture public plants
or rival private plants, corrupting officers to prevent the enforce-
ment of the law or performance of duty; "bulldozing" employes
to vote for corporate agents and vassals for councilmen, aldermen,
legislators, etc.; furnishing too few cars, poor quality or over-
pressure of gas, undercurrent of electricity and other tricks of traf-
fic; workingon public opinion undercover thru the control of news-
papers and institutions of learning; stealing inventions, or buying
and suppressing them; ruining opponents by expensive litigation;
making "ring" contracts above reasonable market rates, or "con-
PUBLIC OXVNKESHIP OF PUBLIC UTILITIES. 71
spiracy" contracts to secure unreasonable rebates and advantages
guaranteeing enormous profits on leased or rented properties, etc.
Governor Hazen S. Pingree, of Michigan, while Mayor of Detroit,
discovered that the Citizens' Street Railway Company of that city
"literally owned the Council, body and soul." 1 They would pay
$3000 for a member, 2 and even made an actual offer of $75,000 to
buy the Mayor himself. 3 The Governor says: "My experience in
fighting monopolistic corporations and endeavoring to. save the
people some of their rights as against their .greed has convinced
me that the corporations are responsible for nearly all the thieving
and boodling with which our citiies suffer." 4 The bribe does not
always take a money form. Mayor Pingree was offered a trip
around the world by the agent of a certain company if he would
refrain from vetoing a specified franchise.
Speaking of the situation in Cleveland, Dr. Hopkins saj's: "When
we approach the question of corruption in the award of franchises,
it must be admitted that the system has thus far put an immense
premium upon all sorts of bribery and corruption. The street
railway interest has been all powerful in the control of political
machines. It has not only secured, apparently for the mere asking,
the most valuable privileges which the City Council could bestow,
it has also escaped the performance of many obligations which the
state has compelled the Council to make a condition of its grants.
And it has prevented the enforcement of nearly every law which
it has not cared to obey." 5
The Broadway Surface franchise was secured by bribing nearly
the whole Board of Aldermen. The "Cable Railway Company"
offered the city $1,000,000 bonus above the compensation required
by statute, but the franchise was given to the "Broadway Surface
Railroad Company" without compensation beyond the statute mini-
mum, the Aldermen overriding the Mayor's veto to do it. Almost
the entire Board of Aldermen and the officers of the company were
indicted for corruption, and it was shown that in bribes of
$20,000 per Alderman and something for go-betweens the franchise
had cost the Surface Company just half what the Cable Company
had offered to pay the city for it. 6 When Toronto wished to relet
its street railways on terms advantageous to the city and called
for bids, New York capitalists who went to look at the situation
laughed at the idea of paying part of the earnings to the city.
"They had been accustomed, so they informed one of the commit-
tee, to pay something to the Aldermen, but nothing to the munici-
pality." T
1 Facts and Opinions, by Hazen S. Pingree, p. 31.
2 Ibid., p. 30.
3 Ibid., pp. 86. 122.
'Ibid., p. 24.
5 "St. Ry. Prob. in Cleveland," Amer. Econ. Ass'n., 1896, pp. 315, 316.
6 Final Rep. Com. on Rds. relative to B'y. Surf. Rd. Co., Senate Doc.
Xo. 79. 1886; People vs. O'Brien, 111 X. Y. 1. Dr. Max West in Municipal
Monopolies, pp. 376, 377.
7 "NV. I). Gregory in The Outlook, Feb. 5, 1898.
72 THE CITY FOR THE PEOPLE.
Philadelphia has had ample experience with railway morals and
traction politics from the open purchase of the Union Passenger
charter, in 1864, to the "Suburban Trolley Grab" of 1894. The
former was bought by the liberal distribution of options on stock
among the members of the Pennsylvania Legislature. The latter
was an ordinance framed in Councils to give 100 miles of street in
a suburban district with absolutely no return to the city, and not
even an agreement on the part of the company to build roads in
the locations granted. The press and the people stormed and ve-
hemently charged the Councils with corruption, but the measure
passed by more than a three-fifths vote. The Mayor's veto, how-
ever was allowed to stand, but the traction mastery was clearly
indicated in the outcome. "Every newspaper of repute in the city,
regardless of party, had denounced the 'Grab,' and as the annual
municipal election approached at which one-half the Common
Councilmen and one-third of the Select Councilmen were to be
chosen, the papers demanded the defeat of every man who had
voted for the 'Traction Grab Bill.' Lists of those who voted for
the bill were published in all the papers, and their respective par-
ties were exhorted not to renominate them. But the political ma-
chine responded to other forces than those of public opinion. The
terms of seven Select Councilmen who voted for the bill expired.
All but one were renominated, and all nominated were re-elected.
In the Common Council the terms of forty-seven supporters of the
'Traction Grab' expired. Thirty-six were renominated and thirty-
five re-elected. The net result of the agitation of a united press
and a long and vigorous reform campaign in behalf of honorable
candidates was the election of one reform Councilman. A more re-
markable assertion of the control of a municipality by a political
machine identified with the interests of a railway company it would
be hard to find." "
The Philadelphia press, pulpit and platform have continually
proclaimed in recent years, practically unchallenged, that a con-
siderable number of Councilmen are in the pay of the street rail-
ways and other great corporations. 9
The "Railway Boss Act" of 1868, which practically gave Philadel-
phia into the hands of the street railways; the "Gas Ring," 10 in the
seventies, which owed much of its power to the ownership of one of
the principal railways of the city, and the "Motor Bill" of 1887 are
further illustrations of the political methods of Philadelphia street
car companies. The passage of the Motor bill, giving extraordinary
powers to motor companies was severely denounced by the press
and by the people in mass meeting. 11 The companies yielded a
8 S't. R'y. System of Phila., 1897, by Prof. Speirs of Drexel Institute,
"ibid
10 A fnll description f the famous "Gas Ring" of Philadelphia is easily
accessible in Vol. II of Bryce's "American Commonwealth," so it need not
be dwelt upon here.
11 Prof. Speirs recounts a part of what occurred in 1887 as follows:
"Mr. H. L. Carson, the distinguished historian of the Supreme Court,
PUBLIC OWXtRSHIP OF PUBLIC UTILITIES. 73
little and had the law modified somewhat, but their political power
remained undiminished, as subsequent events already described
have clearly shown.
A street railway financier, who offered to build extensive lines
in Chicago with a 3-cent fare and a good bonus, was told by mem-
bers of the City Council that these items were unimportant. The
vital condition was that he must pay $50,000 to the Aldermen at
the start and $250,000. when he secured his franchise. 12 In his book
"If Christ Came to Chicago" Mr. Stead estimates that, on an
average, franchises worth $5,000,000 are annually given away in
Chicago to those who best understand how to give the members
of the city government the proper encouragement. It is matter
of common knowledge in Chicago that the street railway compa-
nies spent vast sums in getting the Legislature of 1897 to pass the
infamous Allen bill permitting the grant of 50-year franchises.
Here is a legislative investigation of the West End Street Railway
Company of Boston in 1890 (House Document 585). The committee
found that the West End had, in one year, paid, or promised, the
following sums to influence legislation:
To lobbyists $22,000
To an attorney for services, influence, etc., in procuring legislation.. 10,000
To another, ditto '. 500
For dinners to members of Legislature at the Algonquin Club 1,922
For carriages for said members 584
To newspapers for printing speeches, arguments, etc., gotten up by
West End 7,500
$42,506
Besides this, the committee found that "large sums" had been
paid to other petitioners to withdraw. It is altogether improbable
that the committee came within hailing distance of all the expen-
ditures in the case, and perhaps the most vicious of them escaped
the light; but enough was discovered to give us a clue to some of
the items in the West End's overgrown expense account.
The electric light companies are not far behind the trolleys when
the exigencies of their situation demand political action. Indeed,
the two monopolies usually aid each other, and are often con-
trolled by the same men. We have already seen how they con-
trolled the Philadelphia Councils, packed the investigating com-
mittee and "gutted" the Edison company to prevent the city from
getting its light at a reasonable rate.
Electrical politics constitute the reverse side of the shield on
whose front we have found Extortion. The companies are obliged
to give due attention to politics in order to keep their right to ob-
denounced the act as 'an example of reckless and arbitrary power outgrowing
all the bounds of decency and restraint.' The conservative Public Ledger
says of the bill: 'It Is wrong in policy, bad in principle, a trick and a fraud.'
And again the Ledger explains the public hostility to the company by
saying that it is due to 'the breaking of their bargains with the city, their
pretence of abiding by the decisions of the courts of law, with their attempt
to circumvent the courts by covered up and tricky proceedings in the
Legislature, and their defiant contempt of -public rights.'"
12 Statement bv Prof. Beniis to whom the said financier gave the facts.
74 THE CITY FOE THE PEOPLE.
tain an exorbitant profit on light, and they are compelled to make
large profits on light in order to give due attention to politics.
They begin usually by bribing the Councils to get their franchises.
Then they have to keep on bribing to prevent the granting of rival
franchises and measures looking to the reduction of prices, and all
other legislation injurious to their interests. To secure immunity
from interference with their monopolistic right to overcharge, and
to intrench themselves in the law, they put their money and influ-
ence into politics, robbing the public with one hand and with the
other bestowing a part of the booty on the officers of the law tc
keep them from stopping the game. This is well known to be the
situation in Boston, New York, Brooklyn, Philadelphia, Chicago,
Minneapolis and other large cities. In Northampton, Mass., it was
found that all the city government, from the Mayor down, were
holders of stock in the electric lighting company. A member of
Council in Paris, 111., says: "The light companies are composed of
sharp, shrewd men. Their stock is distributed where it will do the
most good. It was observed that the company took special interest
in city elections. Men who never seemed to care who was made
congressman, governor or president, would spend their time and
money to elect a man of no credit or standing in the community.
The question was, 'Are you for the light company?' "
One of the Aegis investigators questioned nearly every large
city in the United States upon this point, and a great majority
replied that the electric light companies are in politics, and some
said that the companies own and run the city. Mayor Weir, of
Lincoln, Neb., wrote: "The electric companies are in politics in
every sense of the word. They attempt to run our city politics,
and usually succeed." Similar words came from the officials of
Milwaukee, Kansas City, Sacramento and many other cities. Elec-
trified politics are not a success for the people; electricity is un-
doubtedly beneficial to the body politic when properly adminis-
tered, but it will not do to leave the treatment to unprincipled
quacks, who care nothing for the health of the patient, if they
can only get his money.
Public plants have sometimes been crippled and captured by the
scheming of private companies. Michigan City built a public
electric light plant in 1886, with 84 arcs, for $7500. During the first
three years the cost per arc was $43. Then the Electric Street
Railway Company wished to buy the plant. The company had
backing in the city government, but the opposition was strong.
The result was that the reported cost mysteriously jumped to $80
per arc, and the plant was sold to the Electric Street Railway Com-
pany for $2,500, the company agreeing to furnish the city with light
at a cost not to exceed $75 per arc.
In Portland, Oregon, also, the electric light company had suffi-
cient influence in the city council to force the sale of the municipal
plant in East Portland when it became a part of the city of Portland,
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 75
and the Mayor says they are now paying two prices for electric
light, with little hope of deliverance.
A fraud of a similar nature produced the lease of the Philadel-
phia Gas Works. The works were paid for and doing well, furnish-
ing $1 gas and making a profit above all expenses, depreciation and
interest on the value of the plant, if the value of the free gas fur-
nished the city is included, and could have supplied good gas at
75 cents if Councils would have authorized proper repairs and im-
provements. Under the hypnotic influence of the monopolists
Councils refused to do this, and purposely withheld not only im-
provements, but needed repairs, in order to disparage the works
in every possible way. The people understood the situation and
were overwhelmingly against the lease. 13 But the attorneys and
lobbyists of the monopolists had more influence in the Councils
than the people, and "despite the public protests, despite the public
indignation and despite the very much better offers of competing
companies, the United Gas Improvement Company, controlled, as
it is, by those who have already secured the street railway, electric
lighting and gasoline franchises and privileges, was able to carry
the day." 14
Some time ago a professor in a prominent Pennsylvania Univer-
sity was given to understand that if he would give an opinion
favorable to the lease or sale of the water works of his city, his
opinion would be worth fully $25,000, and he says that prices have
risen since then. 13
One might expect the water business to be free of taint, but it is
not so, 16 and the reasons are quite clear when you come to think
of it. Suppose a water company is seeking a franchise, and finds
that the rates it favors will bring in $10,000 or $20,000 more than
those proposed by the City Council. This difference for even one
year of a twenty year franchise, judiciously distributed among
prominent councilmen, or handed to the leader of the dominant
party in the Council, may mean a gain to the company of $190,000
to $380,000 during the life of the franchise.
The Governor of a great state was offered 20,000 shares on option,
without cash down, if he would sign a certain franchise measure,
which he was told if signed would probably raise the value of the
said shares from $1,400,000 to $2,000,000, yielding him $600,000 clear
profit. He did not sign the bill, but his successor did, and the rise
of value was even greater than had been predicted. 17
13 See full statement by Prof. Bemis in Munic. Monops., pp. 602, et seq.
11 The Hon. Clinton Rogers Woodruff, Sec. Municipal League of Phila-
delphia and of the Natl. Munic. League, and member of the Pa. Legislature,
in American Journal of Sociology, Mar., 1898.
15 Statement of Prof. Bemis, Munic. Monops., p. 656.
18 See M. N. Baker's strong words in Municipal Monopolies, p. 48.
"Prof. Bemis in Municipal Monopolies, p. 657:
I am told by the Hon. John Wanamaker that while he was Postmaster
General $1,000,000 was offered if he would withdraw the La. Lottery Bill,
and another million, corning from Western Union sources, felt its way
among those close about him to ascertain if it would do to offer itself for
the withdrawal of the Postmaster General's bill for a Postal Telegraph. In
76 THE CITY FOR THE PEOPLE.
In an address 18 to the Ohio Gas Light Association, Mr. Dohert>,
of the Columbus Gas Company, said: "Keep the newspapers on your
staff, also the city authorities." He proceeded to describe a plan
for giving shares of stock to the managers and proprietors of news-
papers on note at less interest than the earning capacity of thfe
stock, and with the privilege of paying off the note at any time.
or of giving up the stock, by endorsement of which the note was
secured, if they preferred to do that. In other words, the news-
paper man makes no outlay, takes no risks, and if the stock pays
good dividends, or rises in value, he is a gainer, wherefore he will
feel an interest to work for the success of the company. The plan
being made clear, Mr. Doherty says, "To be brief, it should be our
business to-day to keep the stock of our companies distributed
among those who are in a position to promote the welfare of our
business."
In the Cleveland gas case it was in evidence that editors of lead-
ing papers and other influential people were supplied with free
gas, and it was admitted that $24,000, which was charged to "insur-
ance and depreciation" (in 1890 and 1891, when the entrance of a
competing gas company was being defeated in Council), did not
go to those purposes at all, but to expenses, the nature of which
the secretary-treasurer could not remember, and for which he had
no vouchers or written memoranda, altho the expenditure of every
cent for other purposes was plainly accounted for in his books.
A high authority in Boston gas negotiations said in 1897, "The
a speech at Williams Grove, Pa., Sept., 1898, Mr. Wanamaker spoke of
the relations of the corporations and the Quay machine in the following
terms: "The principal allies and partners of the machine are the corpor-
ations. * * * The corporation employees of the State are controlled for
Quay's use. * * * The steam railroads of the State employ 85,117 men,
and pay them annually In wages $49,400,000. * * The great street railways
of the State, which have received valuable legislative concessions for nothing.
give the machine loyal support with 12,079 employes, who are paid in salaries
$6,920,692 every year. That monopoly of monopolies, the Standard
Oil Company, pays annually $2,500,000 to its 3,000 employees who are taught
fidelity to Senator Quay's machine. The Bethlehem Iron Works, whose
armor plates are sold to the Government for nearly double the contract
price offered to foreign countries, influence their employees to such an
extent that, in the city of Bethlehem, It has been found difficult to get
men to stand as anti-Quay delegates. The thousands of working
men of the Carnegie Iron Works, it is said, are marched to the polls under
the supervision of superintendents and foremen, and voted for Quay can-
didates under penalty of losing their jobs. The great express
companies, who furnish franks to machine followers, one of which is bossed
by Senator Platt. with their thousands of men, can be counted on for
great service to the machine. The telegraph companies, whose
State officials can, it is said, be found at the inner Quay councils, with
the thousands of employees distributed at every imporant point throughout
the State, and before whom a large share of all-important news must pass,
is one of the most dangerous parts of the Quay machine. The
interests of the corporations and those of the masses have been diverging
for many years, until now what is for the people's good will not suit tin-
corporations, and what will seemingly satisfy the corporations is no longer
safe to the people. * * Capital with its manifold possibilities for good
in itself, becomes an agency of wrong and calamity when harnessed with
favored legislation. Unscrupulous Pennsylvania corporations have
been willing to purchase advantageous legislation and dishonest political
leaders have made a business of selling it to them. * * * The Quay
machine in Pennsylvania * * deals exclusively in legislative privileges,
and demands its price, and the corporations are its patrons."
18 At Cincinnati, Mar. 18, 1896 (Progressive Age, April 1, 1896).
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 77
Massachusetts Pipe Line's mongrel charter, procured from the
1896 Legislature, cost about $500,000." "
But the most remarkable of all gas frauds and corruptions, in
Massachusetts, at least, were those unearthed in Boston a few
years ago by a legislative investigation started by the Hon.
Nathan Mathews, who was Mayor of the city. It appears that a
Delaware man, by the name of J. Edward Addicks (since promi-
nent in politics) obtained a franchise in Massachusetts for the
"Bay State Gas Company" (which was practically himself), with
a right to issue $500,000 of stock, and no more. He then, under the
laws of Penns3'lvania, organized the "Beacon Construction Com-
pany" (which was also practically himself, as he owned 14,980 of
15,000 shares). The Bay State secured from the city the privilege
of laying its pipes thru the streets on condition that it would -lay
pipes in every street where the Boston Gas Light Company had
pipes. The Bay State Company (Addicks) then made a contract
with the Beacon Company (Addicks) by which the Beacon Company
was to build works and lay pipes as specified, and the Bay State
was to pay the Beacon $5,000.000, consisting of the $500,000 in stock
and a 4% million 99 year bond.
Works were built and some pipes laid when the Boston Gas Corn-
Company opened negotiations resulting in an agreement by which
the Bay State Company was not to lay any more pipes, but was
to manufacture gas and sell it to the Boston Company, which
was to distribute it to the people.
When construction was arrested, the Beacon Company (Addicks)
had expended about $550,000 in building gas works and $200,000
in laying pipes, or $750,000 total, but the Bay State Gas Company
(Addicks) had a meeting (1889) and accepted the said construc-
tion in full performance of the contract of the Beacon Construction
Company (Addicks) and turned over the $500,000 of stock and the
$4,500,000 bond in payment for $750,000 worth of work, thereby
capitalizing the Bay State at $5,000,000 on a real value of $750,000.
The construction bond, with the acceptance of part construction
as full performance, was a cover for the evasion of the Massachus-
etts law against fictitious capital, and a shrewd device for the con-
cealment of enormous profits.
Under the compact between the Bay State Gas Company and the
Boston Gas Company (which had been far the strongest company
in the city) the Bay State, in 1892, made gas at 33 cents per thou-
sand feet and sold it to the Boston Company at $1 per thousand, 20
19 Thos. "U". Lawson, till lately vice-president and director in several
Boston companies, and the negotiator, as he says, "of the various sett
ments, deals and organizations consummated or attempted in the Bost
gas field during the last three years," preceding the time of his writing
in 1897. See Munic. Monops., p. 599.
20 And now. a decade after the compact spoken of in the text. I find
in the papers the following paragraph:
"J. Edward Addicks, the gas man of Delaware and other places, filed
in the United States Court four bills in equity against the Boston (T<-\S
Light Company and allied companies, asking for an injunction restraining
78 THE CITY FOE THE PEOPLE.
which in turn sold it to the people at $1.30 per thousand. This
arrangement was a beautiful one thruout, for if the consumers
asked the Gas Commissioners to reduce the price of gas, the Boston
Company could say, "Why how in the world can you expect me to
sell gas for less than $1.30 when I have to pay $1 per thousand for
it under my contract?" And if it were complained that the Bay
State's profits were 200 per cent, on the cost of production 90 per
cent, on its entire stock it could point the complainor to the fact
that it had to pay interest on a $4,500,000 bond.
The Boston Gas and three other companies combined with the
Bay State to form what was known as the Boston Gas Syndicate,
or Gas Trust. 21 The consolidation was completed in 1889, and the
capitalization was $17,000,000, or $13,365,000 above the lawful capi-
talization of the companies involved $4,640,000 was excess of mar-
ket value above par at the time of consolidation, about $2,000,000
was excess of prices paid by the combine for stock of the com-
ponent companies over and above the existing market values, and
about $7,000,000 was pure unadulterated water. The Boston Gas
Company's stock ($500 par) was selling in 1889 for $900 a share,
but the combine paid $1200 a share for it in stock and bonds and
cash. Eoxbury stock (par $100) was sellkig at $190, and the Trust
paid $225, etc.
The five men chiefly concerned in this conspiracy against the Com-
mon law and the Corporation law of Massachusetts made large
fortunes out of the transaction. The bond acted as a sort of con-
duit pipe to convey the profits collected from the people of Boston
out of the state and away from the control of its laws into the
treasury of a foreign corporation at a rate which would have made
the total burden of the bond and its interest amount to nearly
$40,000,000, which the people of Boston were to pay substantially
for nothing almost wholly a monopoly tax under the concealment
and protection of the fraudulent bond. And the Trust served to
increase the profits available for abstraction. The profits went from
$450,000 to $874,000, or about double (in 1892) what they were (in
1888) before the Trust got control, while the cost of manufacture
the defendants from carrying out the contracts between them and the
Massachusetts Pipe Line Company, under which the latter is to supply the
former with all its gas for the next fifty years at twenty cents per I,uu0
cubic feet. Mr. Addicks alleges that the contract is fraudulent and Illegal,
and asks that it be declared null and void."
Mr. Addicks is probably right about the character of the contract. He
is an expert in such cases. The contract tends to shut out competition
and the cost of gas may sink far below the agreed price during the life
of the contract. Mr. Addicks sees very clearly that a contract to buy gns
of the Haas. Pipe Line at 20 cents is fraudulent, but a contract to buy
gas of his Bay State Co. at $1 when It made the gas for 33 cents, was verv
good in his sight.
21 The stocks of the companies were assigned to the Mercantile Trust
Company of New York as security for the bonds and stock of the Bay
State Gas Company of New Jersey, which were largely used in paying
for the Boston stock. The Bay State bond was transferred by the Beacon
Construction Company to the Bay State Gas Company of Delaware (another
Addicks company) and the stock and bonds of the Delaware Company were
also used in paying for Boston stock. All this was to get out from under
the laws of Massachusetts so far as possible, and to get the bond into
the hands of "third parties."
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 79
fell from above 40 cents to 33 cents. The Trust abolished the dis-
counts that had been allowed, and thereby raised the average price
8 cents a thousand.
In one respect, however, it was not economical. It paid big sala-
ries. In 1887 the aggregate salaries paid the presidents, treasurers
and directors of the five companies was $18,160; but in 1892 the
amounts paid by the Trust for salaries for president, treasurer and
directors were $60,930, or more than three times as much for the
single organization as for the five separate companies, and of this
extravagant total $25,000 was the salary of Mr. J. Edward Addicks,
who spent his time in Philadelphia, Wilmington, Brooklyn and
New York, and only came to Boston to testify that he didn't know
anything about gas. The organizers even paid $150,000 in pensions
and gratuities to retiring officers of the Boston Gas Company, and
had the impudence to capitalize the amount, as they did also
$350,000 "expenses of the Boston Gas Syndicate," including $250,000
to the trustees for organizing the Trust.
The Bay State rented its fifteen miles of pipe to the Boston Gas
Company at a rental which in two years paid back to the Bay State
the whole $200,000 which its pipe lines had cost. The Bay State
also bought tar of the other four companies to the extent of $29,000
in two years and sold it for $49,000. The Trust bought coal of Ad-
dicks' Delaware Company at a uniform advance above the market
price, adding $33,700 to the operating cost of the Boston Gas Com-
pany alone. Anything to turn profits into the hands of the Dela-
ware man and enamel the process.
In less than four years the Trust took from the people of Boston
over $2,000,000 in monopoly taxes above 8 per cent, on the lawful
capitalization. It turned in false statements to state officers and
swore to them. It broke its agreement with the city of Boston
and never fulfilled the condition upon which it was permitted to
lay its pipes in the city streets. It violated a dozen statutes of the
state of Massachusetts, besides breaking the Common law into
splinters. And when Nathan Mathews, the Mayor of Boston, sought
to have the Syndicate investigated, there was a tremendous fight
to keep the facts from the light. Even the Gas Commissioners
were so under the thumb of the Trust that they tried to suppress
some of the most vital facts 'in their possession.
The Bay State paid two lawyers in the Eing $20,000 for "legal
expenses" at the start, though there was no litigation at the start,
nor any legitimate legal expenses beyond drawing a few papers
no legal expenses unless the expenses of obtaining the license from
the Board of Aldermen could be called "legal."
The Baj r State started with a pretence of competition, but with
the intent to capture; they built their works in Dorchester and
laid big mains into Boston. They ran a main up to the Eoxbury
works and then said: "Now, gentlemen, take your choice. If you
want to go on with the gas business, go -right on; but if you don't
give up your business to us we'll parallel every foot of your pipes,
and we will do the gas business, and you will perish."
80 THE CITY FOR THE PEOPLE.
Well, the Mayor brought out the facts before a committee of the
Legislature, and demanded that the Bay State charter be forfeited
and its assets distributed. And the Hon. George Fred. Williams
quoted these memorable words from the United States Supreme
Court in Loan Association vs. Topeka, 21 Wallace, 655: "If the char-
ter granted, whether by special act or under general law, is used
not for the public benefit, but for the public injury, it is not only
the right but the duty of the Legislature to revoke that charter."
Seven of the committee signed a majority report against revoca-
tion. The report bears strong evidences of corporation bias and
even denies that the Bay State bond was a fraud (p. 151), tho ac-
knowledging that it was mostly fictitious "a dear bargain to give
this obligation of $4,500,000 for the Bay State plant, costing not
less than $750,000 to $1,000,000" (p. 148), "but who can say that they
had not the legal right to enter into such a bargain, and who can
take exception thereto? Certainly no one but the stockholders
of the company or its creditors then existing; but there were no
creditors, and the stockholders, at a legal meeting, afterwards
ratified it." (p. 149.) According to these gentlemen the public ap-
pears to have no rights that corporations are bound to respect.
A minority report, signed by six of the committee, states the case
fairly and says: "We are of the opinion that the methods above
shown of conducting the affairs of the Bay State Gas Company of
Massachusetts, in evading the statutes of the Commonwealth pro-
vided for the very purpose of regulating the corporations organ-
ized under its laws, and protecting the public from the abuse of
the privileges conferred iipon such corporations, and particularly
in the issuing, ratifying and paying interest upon said fictitious
obligation at the rate of ninety per cent, of its entire net earnings,
is sufficient reason for revoking the charter of said company, if
the Legislature can devise no other means of annulling the said
fictitious obligation." (p. 160.) Another committeeman made a
little report of his own in which he said that "on giving up the
note for $4,500,000, which appears to be a fictitious note of no value,"
some arrangement should be reached by which the Company could
go on. He did not think it necessary to take away the charter
of the Bay State Company. The Legislature passed an act (ch.
474, 1893) revoking the said charter o'n Dec 1st, 1893, unless before
that time the Bay State obligations for $4,500,000 should be legally
cancelled and discharged and surrendered to the Commissioner of
Corporations. The act permitted the company to capitalize at the
market value of its property as estimated by three Commissioners.
The obnoxious obligation was cancelled and surrendered and the
company was allowed to continue its career with a capitalization
cut down from $5,000,000 to $2,000,000. Some of the most import-
ant portions of the proceedings were omitted from the official re-
port of the investigation, and, most remarkable fact of all perhaps,
Mayor Matthews the hero of the battle, went from the Mayoralty
to the presidency of the Bay State Gas and its allies at a salary of
$25,000 a year.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 81
The Bay State Gas transactions were a fraud from beginning to
end; a fraud on the city, a fraud on the state, a fraud on the con-
sumers, a fraud on other companies, a fraud on the Common Law,
and they inoculated the Gas Commission and the government with
the virus of disloyalty to the public interest. 22
Only a small proportion of the frauds in the ocean of monopo-
listic corruption ever come to the surface, and those above men-
tioned are but a fraction of the cases that have come to light, but
space will permit no more. 23
DEFIANCE OF LAW.
9. Defiance of Law and Justice is a distinguishing charac-
teristic of private monopoly. Everything that has been said
in the eight preceding sections is in evidence under this head.
The very existence of private monopoly is a violation of the
fundamental principles of justice and constitutional law on
which our institutions are based. (See Section 3.)
In Chicago the City Railway Company has not hesitated to de-
liberately smash up and completely destroy property of the Gen-
eral Railway Company during a dispute between the companies as
to the right to use certain tracks. 1 A serious battle in the streets
was narrowly escaped. During the great Railway Union strike
in Chicago, according to the Chief of the Police Department in that
city, and the opinion of Hon. Carroll D. Wright, expressed to
several gentlemen in Boston, the railroads secured the appointment
23 See Report of the Bay State Gas Trust, City Print. 1893: Mass. Gns
Commission's Report, 1894, p. 4. In Wall Street the Bay State Gas episode
is called "The Boston Skin Game," and the general situation is termed
the "Beans Mystery" (Progressive Age, Jan. 15, 1898, editorial).
23 For the frauds of the Western Union Telegraph Co. see "The Telegraph
Monopoly," Arena, Vol. 16, pp. 70, 73, discriminations; pp. 74, 81, control
over newspapers and interference with the liberties of the press; pp. 186,
189. distribution of franks among Congressmen and Legislators, influencing
legislation with money, and even aiding two attempts to steal the Presi-
dency of the United States.
For Standard Oil morality, with its thefts, perjuries, briberies, deceits,
assaults, conspiracies, destructions of property, attempts to ruin honest
business men, and even whole classes of producers, fraudulent contracts
with railroads and other violations of law, see Henry D. Lloyd's "Wealth
against the Commonwealth," published by Harper. From the conspiracy
to blow up a rival refinery and the plugging of the Independent Pipe Line
in mid-country to the forced agreement by which a railway undertook to
carry oil for the Standard at 10 cents a barrel, charge rival shippers 35
cents a barrel, and pay the Standard 25 cents out of each 35 thus collected
from said rival shippers (Handy vs. Cleveland & Marietta Rd. Co., 31 Fed.
Rep. 689), the reco-rd of the Oil Monopoly is a record of fraud, violence and
corruption.
For Railroad frauds see Lloyd's "Wealth against the Commonwealth:"
Chas. Francis Adams' "Chapters of Erie;" Stickney's "Railway Problem."
nnd Cowles' "A Gen'I Freight and Passenger Post." The statements in
the latter book as to possible rates must be taken with some allowance
but it contains many valuable farts as to raiFway methods. The question
will be discussed in a future number of the Equity Series.
1 Chicago Gen'I R'y vs. Chicago City R'y, 111. Appellate Court, Oct. Term,
1895, p. 521; Municipal Monopolies, p. 532. (See Appendix II C. 2.)
6
82 THE CITY FOR THE PEOPLE.
of several thousand thieves, thugs and toughs from the city slums
as special United States police or deputy marshals, and thru them
the roads accomplisht the burning and destruction of a large
number of cars, in order to accuse the strikers of violence and turn
public sentiment against them. The roads afterward claimed dam-
ages, and made the city pay for the property they had themselves
destroyed. (See Rep. Supt. Police, Chicago, Jan., 1895, p. 17.)
The ordinance under which the new railway in Detroit is ope-
rated requires 3-cent fares in the daytime. This new road is now
controlled by the old company, the Detroit Citizens' Railway, the
two roads having the same officers and the same power house.
When the old company absorbed the new, the frequency of service
on the new lines was much reduced. It was clear that the company
was aiming at a practical nullification of the ordinance by driving
passengers to the other roads. A great deal of complaint was made,
and it was charged that the company was trying to ruin the new
road and kill the progress of the low-fare movement by making
it a financial failure in Detroit. The company denied this, but
recently, when the franchises of the roads were to be valued pre-
paratory to the proposed purchase by the city, the company's offi-
cers desired that the franchise terms of all the lines should be
averaged, and the value calculated on the average earnings and
the average term for the whole system. Professor Bemis, how-
ever, insisted on valuing the franchise of each road separately,
and an official remarkt that that method would be very much
against the interest of the company, because the longest franchise
term by far was on the new road, which they had been trying to ruin.
In Cleveland, as we have seen, "The street railway interest," ac-
cording to Dr. Hopkins, "has prevented the enforcement of nearly
every law which it has not cared to obey." In Philadelphia, Boston,
New York and Chicago the street railway interest is in the habit
of having the law made to suit itself, but if it fails in this, it does
not hesitate to defy or evade an inconvenient statute or ordinance.
The Philadelphia companies refused to obey the fender laws until
repeated fines compelled them to act, and then they fitted the cars
with miserable, cheap, heavy, clumsy, dangerous evasions of the
law. Similar episodes have occurred in other cities.
Perhaps the commonest breaches of the law by the great mono-
polies relate to taxation. In Cleveland the street railways reported
for taxation $1,869,000, or 1/14 of the capitalization, 1/G of the
claimed actual investment, and about % of the cost of duplication.
The rule calls for 60 per cent, of actual values. 2
In St. Louis the Missouri Bureau of Statistics found the street
railways assest $11 on each $100 of value, while property in general
was assest at more than $50 on the hundred. Some private prop-
erty was assest at 95 per cent, of its market value, while the St.
Louis railways, with a market value of $37,987,000, were assest only
3 Cleveland St. Rys., Hopkins, p. 376.
1'UBLIC OWNERSHIP OF PUBLIC UTILITIES. 8-3
$4,246,190. They are willing to pay interest and dividends on nearly
nine times as much as they wished to pay taxes on. The Lindell
system of street railways cost $1,298,000, was capitalized at $7,000,-
000 and assest at $769,720. It paid over 4 per cent, interest and divi-
dends on the whole capitalization, and 23 per cent, on actual invest-
ment, but was "so poor" it could only pay taxes on about a tenth of
its market value. The People's Railway track was originally assest
at $15,000 a mile, but when the president of the People's Raihva\
was appointed a member of the Board of Equalization, the assess-
ment was reduced to $9000 a mile. The president was willing to
help the other companies also. In 1894, 186 miles of track were
assest at $2,142,650. But in 1895, with the People's president on
the Board, 216 miles of track (or 30 more than in 1894) were as-
sest at only $1,718,930, or $500,000 less than the year before. At
this rate the growth of the city and increase of track will reduce
the street railway taxes to zero.
The Union Depot Line had 54 miles in operation, according to its.
return to the City Register April, 1894, 34 miles, according to its
return to the City Assessor, June 1, 1894, and 76 miles, according
to the survey of a competent civil engineer, November 5, 1894.
Taking the company's own returns, the city's loss at the regular
tax rate was $2800, and on the engineer's report, adopted by the
Missouri Labor Bureau as the true figure (which is just if care was
taken to ascertain that the company did not build the additional
miles between June and November), the city was cheated out of
$5880, or more than half the tax due under the law.
Under the law the railways must pay $25 tax on each car ope-
rated, and are subject to a fine of $100 to $200 for each unlicensed
car used in carrying passengers within the city. In 1895 the rail-
way officials returned sworn reports, giving the number of cars
used as 714. An agent of the Bureau watcht the cars in use on the
streets, took down the number of each and found 903 cars in use,
indicating a fraud on the city of $4725 license fees in one year.
In June, 1896, the companies swore to 722 cars, but if you went to
the Railway Advertising Company they would guarantee to put
your advertisement in 926 cars running every day in St. Louis. At
the time when the company was paying license tax on 714 cars
and the Bureau found 903 in use, the assessor found that the com-
panies possest 1430 cars, and the number reported to the Street
Railway Journal was 1686, or 5% per mile of track. 8 In Kansas
City the agents of the Bureau counted 133 cars of certain lines in
use March 7, 1896, but the sworn return of the general superin-
tendent of the company for that day was only 88 cars. Every count
that was made showed a similar discrepancy.' Perhaps the Kansas
8 Report of Hon. Lee Meriwether, Labor Comm'r for the State of Mo.,
1896. pp. 3, 4, 65-7, 29. 14-16. The railways absolutely refused to give the
Labor Bureau the slightest assistance in its investigation. From start to finish
every attempt to get information from railway officials was met with a
rebuff. In order to do everything possible to avoid inaccuracies, the Com-
missioner scut a draft of h'is report to the railway officials for criticisms
and suggestions, but they refused to make any beyond a few irrelevant
and impudent remarks; they would say nothing at all about the facts, pp. 6-8.
84 THE CITY FOB THE PEOPLE.
City and St. Louis railways calculated on the same basis as tiw
Philadelphia railways, which were discovered by the watchman of
the Department of Public Works to be evading- the law by chang-
ing the license from one car to another; a car going 1 out of the citj
limits would meet a car coming into the city and give the latter
its license, so that quite an economy of licenses was effected.
In Chicago the Labor Bureau (1896) found that the North Chicago
Street Railway Company was assest only $500,000, or 2 per cent,
of its market value. The West Chicago Street Railway was assest
at $1,100,000, or 3 per cent, of its market value. The Special Com-
mittee of the Chicago Common Council (1898), with the Mayor at
its head, discovered that the companies were operating lines in
numerous locations for which the public records showed no grants
whatever. The companies had simply helpt themselves to the
streets. The committee called the attention of the railway officials
to this and other important matters, and askt for explanations,
but the Chicago City Railway neglected to answer the committee's
questions, and "the North and West Chicago Companies, thru their
president, Mr. Yerkes, peremptorily declined, by letter to the Mayor,
to render the committee any assistance or recognition." 4
In the Bay State Gas investigation, Mayor Matthews and Hon.
George Fred. Williams enumerated a dozen laws which the evidence
showed had been violated by the company. It takes a couple of
pages in each report of the Massachusetts Gas Commission to re-
count the violations of law respecting the purity and candle power
of gas. 5 In the Cleveland gas case of 1888 the company defied the
ordinance reducing the gas rate from $1.25 to $1 per thousand
until the city took the matter to the courts and got a decision sus-
taining the ordinance.* Resistance to laws and ordinances reducing
gas, water, electric light, street railway and telephone rates has
occurred in Detroit, Indianapolis, Des Moines and many other
places indeed, it is the common practice of the companies in most
states to resist to the utmost until the position of the city or state
has been establisht by expensive litigation, the object of resistance
being to discourage, so far as possible, all exercise of the public
power of regulating rates. 7
Sometimes the companies nullify a reduction without open re-
sistence. During proceedings for securing lower gas rates a few
years ago, an official of one of the companies involved was heard
to remark that he "did not care what they did with the rates if
they only left the pressure alone." * The company could increase
4 Report of Spec. Com., p. 16.
' See (or example pp. 109-10, Rep. 1894; pp. 118 and 119, Rep. for
1895; pp. 153 and 154 Rep. for 1898.
9 State vs. Cleveland Gas L. and Coke Co., 3 Oh. Cir. Crts., 251.
7 In Detroit, when the railways refused to obey the law in respect to
fares, Mayor Pingree laid the basis for a suit by offering the legal fare,
and allowing himself to be ejected from the car for refusing to pay more
than the legal rate. See cases cited in my chapter on "The Legal Aspects
>f Monopoly" in Municipal Monopolies, p. 425. Also, p. 185.
This may help to explain what has long been known to be a fact, viz.:
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 85
the pressure and force enuf gas thru the meters to make the same
total profit as before. Electric light companies also, unless closely
watcht, can and do evade the law by manipulating current and
candle power.
These companies play with the tax laws after the usual corporate
manner. The Boston Electric Light Company reports $2,552,000
assets to the Commissioners (1895), and is assest at $710,900. Even
the Edison (Boston) reports $3,534,000 assets, and is assest at
$1,208,000; while the Worcester Electric reports $349,270 assets,
$304,500 capitalization and $253,300 assessment over 2/3 instead of
1/3, as in the other cases.
What a dainty plan it is for a little group of men (women are
not yet sufficiently "developed," thank goodness) to pay in $100,000
and vote themselves stock to the amount on its face of $500,000!
Or better still, to issue a million of stock and bonds, keep a good
lot of it, give your friends some, and the legislators and council-
men some, sell the rest, build the works with a part of the money
you get from the "bloomin' public" in this quiet way, spend
another part to buy the sort of politics and laissez-faire adminis-
tration your business needs and put the remainder in your pocket;
then make some light, charge three or four times what it is worth,
get a contract from your friends in power to light the city, turn
in a small valuation to the assessors so as to make the expenses
light, but roll up the capitalization so as to spread out big profits
over a large surface and make them look thin and small to the
stingy people who are apt to object to a man's making a few hun-
dred per cent. nice plan, isn't it? Almost as good as a bank rob-
bery for getting hold of other people's funds. Almost as good for
rapidity, and a great deal safer. And then if the people should
wake up and attempt to take control you can put on an innocent
look and tell them it's mean to ruin your trade, and if they insist
that your gas bills are frequently as high or higher when you consume
little and the gas Is comparatively low In price as when you consume at
the ordinary rate and gas is higher, 1. e. your gas bills do not seein to
bear any definite and ascertainable relation either to the price per thousand
feet, or to the amount you consume. Take a few cases from the argument
of Henry R. Legate at the State House in Boston a few years ago:
"In Cleveland, O., gas was reduced by the City Council from $1 to 80
cents per thousand, but the gas bills grew larger instead of smaller. A
citizen writes that for the six months from October to March, 1891-2, his
bill was $18.50 at $1 per thousand, while from October to March, 1892-3, his
bill was $19.58 at 80 cents per thousand the conditions being the same
except that there was one less member in the family during the last six
months.
"A similar comparison from H. T. Hlckok, of Brooklyn, N. Y. (whero
the companies were compelled to reduce their charge from $1.50 to $1.25)
gives six mouths' gas at $1.50, $18.45, and the same six months the following
year at 1.25, $21.88. The conditions were just the same, but the lower
the prices per thousand the higher the bills every month. Reduction in
gas don't reduce."
The United States Superintendent of Gas in Washington reports that
"the cause of large bills is excessive pressure In the street pipes."
In 1892, Henry M. Cross made complaint at the State House in Bos-
ton, as counsel for the United States Hotel, the Quincy House and a large
number of other gas consumers, whose prices had been advanced 30 per
cent, or more by the Boston Gas Company, as appeared from the increased
size of their bills, without change of conditions. Bills of the United States
Hotel, for example, showed $492 for January of one year, $592 for January
of the next year, and $713 for the same month of the third year (1892),
with "no addition to the number of lights."
80 THE CITY FOR THE PEOPLE.
they at least ought to buy up your plant at the entire amount of
your capitalization.
But be careful, else some eminent and respectable citizens may
organize a new company, -with the "boss" of one of the leading
parties at its head, and a number of prominent business men,
editors and officials let in on the ground floor to control public
opinion and the councils, and incidentally make a profit for them-
selves thru the rising value of the new stock. The new company
will promise lower rates and vigorous competition; will get a fran-
chise pay for it in cash if stock and persuasion wont do; erect a
few poles to hold the franchise, and then make overtures to you
of the old company. It is wasteful and ungentlemanly to fight,
so you sell out or "consolidate" at two to twenty times the real
value of your property, and the reorganized company goes to work
with $500,000 of bonds, which represent the actual value of the
plant, and $2,500,000 of stock, which represent the right of way
in the councils and the influences and consciences of ten or a
dozen prominent citizens purchast by the company plus the greed
and impudence of the corporators.
Law and justice! They are secondary considerations in the
electric light business, or the gas, water, telephone or street rail-
way business, or the business of any powerful monopoly. There is
something much more worthy of its regard, and that is the al-
mighty dollar."
9 Electric companies do not hesitate to bring pressure to bear to Induce
manufacturers of electrical machinery to boycott municipal undertakings.
(Progressive Age, Aug., 1897, reporting a meeting of the Northwestern Elec-
tric Association, which unanimously and enthusiastically adopted a proposal
to confer with manufacturers of electrical apparatus, secure their willingness
to be guided by the wishes of the Association, and keep them, whenever thf
Association thought best, from bidding on proposed municipal plants.)
The Wire Nail Trust of 1895 compelled manufacturers of wire nail
machines to break contracts with independent nail makers, recall machines
delivered to the carrier under such contracts, and even wreck machines
that had been delivered to consignees. ("Legal Aspects of Monopoly," p.
469.)
The Telegraph Monopoly does not hesitate to break the laws of the
United States as to the order of messages and the facilities to be given
the weather service.
The Bell Telephone Company is believed to have defrauded the public
by buying up and nursing the Berliner claim of priority till its own patent
expired and then by bribery and collusion securing a new 17-year lease of
patent monopoly under the B. claim. The charges were found true, and
the new patent set aside by the U. S. Circuit Court, but the Supreme-
Court reversed the decision. (See my chap, on The Telephone in Municipal
Monopolies, pp. 326-7 and U. S. vs. Amer. Bell Tel. Co., 167 U. S., 224.)
The railroads have "defiantly" gone on buying hundreds of thousands
of acres of coal land in Pennsylvania, in spite of the express prohibition
In the Constitution of that State, and neither the Legislature nor the
Supreme Court can be got to interfere, for the railroads own them both.
(Lloyd's "Wealth against the Commonwealth," pp. 18-19, 181, citing Con-
gressional investigations and "Leading Cases Simplified." by J. D. Lnwson.
who warns the student of railroad law "not to pay much heed to the
decisions of the Supreme Court of Pennsylvania at least during the last
ten or fifteen years. The Pa. Rd. appears to run that tribunal with the
same success that it does its own trains.'") With equal success, but less
openly the railroads defy the laws of the United States against discrimina-
tion, and the decisions of the Interstate Commerce Commission. (Lloyd,
p. 19, and "The Railway Problem," p. 207, by A. B. Stickney, then Chair-
man of the Board of Directors, and now President, of a g'reat railway.)
The Interstate Commerce Law provides for Imprisonment, and the violations
of the law are numberless, but the only conviction had under it was that
of a shipper for discriminating nsralnst a railroad. In respect to the Inter-
state Law, Stickney quotes a railway president as saying that "If all who
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 87
have offended against the law were convicted, there would not be iill<a
enuf in the U. S. to hold them."
Mr. Byron W. Holt, a high authority on the monopolistic combinations
called trusts, writes as follows about the Sugar Trust:
"The Sugar Trust has but little respect for law except the special laws
which keep out foreign refined sugars. It has repeatedly concealed its
books from investigating committees and refused to give information con-
cerning its stockholders, the use made of its funds, etc. It refused to
comply with census laws and to give information to the Census Department
in 1890. After the Attorney-General had tried for several years to get the
information required, he, acting on the advice of the Department, abandoned
the case because it was then so late that the information would be worth-
less if obtained. Hence the 1890 census is worthless as regards an industry
whose annual product is valued at over $200,000,000. It is unlikely that
these trust officials risk imprisonment and go to so much trouble and expense
to preserve unimportant secrets." (Review of Reviews, Vol. XIX, p. 685.)
A GREAT luAW BREAKER.
The Standard Oil Monopoly is well-known to be one of the arch-offenders
of the age, an utterly conscienceless law-breaker and criminal. (See The
Rice Case, 31 Fed. Reporter, 689; Investigations, Congress, 1872, 1888: Pa
Legis., 1872; N. Y. Legis., 1873, "Erie Invest.;" 1879, "Hepburn Report;"
1883, "Corners;" 1888, "Trusts;" Ohio House, 1879; Lloyds "Wealth against
the Commonwealth.") It is of great importance to the student of municipal
affairs to have some knowledge of those all-pervading monopolies, the rail-
roads, telegraph, oil trust, etc., that are such powerful factors in the
business and political life of every city. The Standard Oil is of special
Interest because of its tendency to own and control the gas and electric
light companies, and even the street railways, of some of our leading cities
a tendency which seems to amount to a systematic policy of expansion
toward complete monopolistic empire in the directions indicated. The pros
pect of bringing all the public utilities of our giant cities under the control
of the Czar of the Oil Trust may be alluring to the Czar, but will not be
pleasing to the people; yet the operations of the Trust in Boston, Philadelphia
and Chicago indicate that such may be the plan of the oil monopolists.
Whether this be true or not, the Trust is already a sufficiently vital factor
In municipal affairs to make a study of Its character indispensable In this
connection, and I therefore subjoin a few notes about some specimen points
in its record.
In 1879, the Pres., Vfce-Pres., Sec., Cashier and others all the prln
cipal men of the oil combine were indicted for criminal conspiracy, but
could not even be got to give bail; the Supreme Court of Pa., by an unheard-
of proceeding, interfered and hung up the indictments. (Lloyd, p'p. 170, 180.
258.) Afterward (1885) three oil trustees and others were indicted at Buffalo
for conspiracy to blow up a refinery regardless of life (pp. 247-8, 250, 252,
258.). They took legal advice before they acted to see what would be the
liability under the criminal law of arranging an explosion (247). They after-
ward tried to make away with the man who knew the facts the man the
trust officers had deliberately hired to blow up the refinery (268). The
jury found guilty all the defendants they were allowed to try (285), but
the court rendered the verdict as to the millionaire trustees, taking the
case away from the jury so far as the trustees were concerned (278), altho
they were clearly involved, as the whole evidence showed (pp. 247, 253,
262, 284, etc.). The judge delayed sentencing those who were convicted,
and at last fined them $250 (287) 1250 fine for blowing up a rival refinery
and 6 cents damages for breach of a hundred-thousand-dollar contract
(196). Popular indignation was great, but by some mysterious Influence
that judge was nominated by both parties for the Supreme Bench, and will
hold his seat till 1904 (p. 297).
The Oil Trust owns or controls gas companies in Chicago, Brooklyn,
Columbus, Toledo and other cities (337, 339). In Toledo prices were fixed
regardless of city ordinances, discriminating grievously between consumers
(306); municipal ownership movement started (307); Trust subsidized the
press and bought up the only morning paper, an able advocate of the
movement, and turned its guns on the city ga,s plant (317); distributed
pamphlets, and got advertisements in N. Y. and London papers to destroy
the credit of the city and prevent sale of the bonds (318-9); indictment
of the Trust agents for criminal libel in relation to the city's gas affairs
(324); the war with the Trust cost Toledo $1,000,000 (p. 336, and see below).
During the struggle the Trust got up a "big business men's protest" against
public ownership, which proved to have been largely signed by men whose
names could not be found in the directory (333).
In Columbus some gas consumers were made to pay twice, some three,
and some even four times as much as their neighbors paid for like service
(365). In 1891 the gas supply was shut up arbitrarily and suddenly In
midwinter, and the people were informed that the company would supply
no more gas till the City Council raised the "price (natural gas) from 10
cents to 25 cents a thousand feet an increase of 150 per cent. The gas
had not failed, but the company had increast its stock from $1,000,000 to
f 1,750,000, and must have more money to pay dividends (365). Same thing
88 THE CITY FOE THE PEOPLE.
at Sidney, O. (366); and one of Toledo's main gas pipes disconnected in
winter during the contest with the Trust (360), Independent pipe-line
plugged during effort of Oil Trust to ruin the line (111): another pipe line
cut and the oil set on fire (477-8). Independent well drillers' machinery
blown up (154). Silencing newspapers by threatening to put a rival in the
Held (160). At Fostoria, Ohio, gas pipes torn up to ruin a manufacturer
who wisht to hold the oil and gas people to their contract. The laborers
who did the work were convicted, but the principal escaped (348-9). The
independent Atlas Pipe Line torn up where it crost the Erie Road, grappling
irons and a locomotive being used (291). At Hancock, N. Y., the pipe
layers of the independents were confronted with hundreds of armed men,
railroad employees, who filled up trenches and tore out pipes, put a cnunon
in position, and left a garrison to go into winter quarters and hold the
In 1894 it was shown that New York oil consumers were paying twice
as much as Philadelphia, and three times as much as foreign consumers
buying in New York for export (425); discrimination against Boston (137,
189); Trust selling refined oil in Europe at prices lower than those at which
crude oil could be delivered from America (439). When an independent
refiner ran the blockade into New York in 1892, oil fell in New York,
Brooklyn and Jersey City from 8 and 8% cents to 4 and 4%; and in St.
Louis, after an independent company succeeded in getting a foothold, the
price of the best grade of oil fell to 5 cents from 14% (427).
In 1872 the Oil combine (then called the South Improvement Co.) secured
a secret agreement from all the railroads running into the oil regions, first
to double freight rates on oil; second not to charge the S. I. C. the increase:
third to pay to the S. I. C. the increase collected from all other shippers.
The rate to Cleveland was to be raised to 80 cents, except for the S. I. C.,
which continued to pay 40 and would receive 40 of the 80 paid by anyone
else. The rate to Boston was raised to $3, and the S. I. C. would receive
$1.32 of it. The S. I. C. were to receive an average of $1 a barrel on
the 18,000 barrels produced daily in the oil regions. The rates were raised
as agreed, but the excitement in the oil regions was so intense that mobs
would have torn up the tracks of the railways if Scott and Vanderbilt and
the rest Lad not telegraphed that the contracts were cancelled, and put
the rates back (46-7, 50, 55). But some of the contracts afterwards camo
into court, and had not been cancelled at all (51). In 1874 the roads began
gradually to carry out the plan that had been stopt by popular excitement
in 1872 (p. 85). Independent producers built the Tidewater Pipe Line.
Roads made war of rates to kill the Pipe Line. Roads finally carried 390
Ib. barrels 400 miles for 10 cents for the combine, throwing away $10,000,000
a year profits that belonged to the road stockholders in order to inflict a
$100,000 loss on the Pipe Line and help the Oil Combine in which the road
managers were interested, or under the control of which they acted (109)
"In this, as in all the moves of this game, we see the railroad managers
of a score of different roads, at points thousands of miles apart, taking
the same step at the same time, like a hundred electric clocks ticking al!
over a great city to the time of the clock at headquarters that makes and
breaks the circuit." (136). By corrupting their officers, slandering their
credit, buying up their customers, garroting them with law suits founded
on falsehoods, plugging up their pipe in the dark, etc., the Oil Trust tired
out the Tidewater folks, and they sold the pipe line to the Trust, which
used it as an "oil railway" to transport their own oil, and left the railroads
in the lurch (104-116, 112). The Pennsylvania Road tried at one time to
go into the oil business itself, but the Oil Combine served notice on it
to abandon the field, and on its refusal to comply with the order, the other
railroads instituted a war of rates that brought the Pennsylvania Road to
terms, and it sold out its oil cars, pipe lines, etc., to the Combine. Thus
the oil monopolists brought to its knees the greatest corporation then in
America by ordering the great Railroad War of 1877 (87-8).
When the Trust got possession of the pipe line to Buffalo in 1882, it
raised the rates from 10 cents to 25 cents a barrel (150 per cent.) and the
roads raised their rates at the same time, as they did also in Pa. in 1885.
The railway managers used their powers to drive traffic from the rai!n>:u!s
to the pipes of the Trust. Pittsburg and Cleveland, had similar experiences
(126-7).
To shut out the oil fields and independent refineries of Colorado and
Wyoming, the Combine resorts to terrific discrimination in rates. The Chicago
and Northwestern Road would bring a carload of cattle from Wyoming to
Chicago for $105, but for a car of 75 barrels of oil the freight was $348.
The rates from the Western fields to San Francisco were also put very
high, and the Combine built great storehouses on the Pacific Coast, which
; from the Eastern fields, the freight rates from the East being
suddenly lowered when it wishes to refill the said storehouses, and put
back again as soon as they are full (Lloyd. 480-1.) The people of California
are compelled to buy Eastern oil for the profit of the Trust instead of
buying Colorado oil, because the freight on the latter is prohibitive (427).
J. he Combine sells oil below the quality required by law, and bribes
State oil inspectors to loan their stencils to the Trust to do its own branding.
An inspector in Iowa exposed the swindle In written charges to the Gov-
ernor, which the Governor refused to investigate or allow to be seen, and
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 89
dismissed the inspector. The latter said In his complaint that the repre-
sentative of the Oil Combine said to him in substance: "You are the only
fool among the inspectors. We have the stencils of the inspectors at every
other point where we want them." Many conflagrations in cities can be
traced to low-grade kerosene. (See the whole story of this defiance of law
and public safety; Lloyd, 411-19.)
The Trust has systematically done its utmost to ruin C. B. Matthews
of Buffalo (245, et seq), and Geo. Rice (199 et seq., 200, 206, 224, 226, 233),
and all others who have made a stand against it. The persistent, systematic,
all-pervading, ruinous persecutions of Geo. Rice by the Oil Trust and its
railroad allies form one of the most dramatic chapters in the history of
industry. (Read Lloyd, Chap. XV, et seq., and write to Geo. Rice, Marietta,
O., for the expanded and continued story. See also Equity Series 4, to
appear soon.) The first railroad contract to ruin Uice doubled his freight
to 35 cents a barrel from the oil field to his refinery, at the same time
that the Combine paid 10 cents a barrel and received 25 cents of each
35 paid by Rice. The contract came into court (31 Fed. Rep., 689) and
was denounced by the court as "gross," "illegal," "inexcusable." The
Trust got the contract by threatening to build a pipe line and withdraw
its valuable business from the railroad. "Most impudent and outrageous,"
said the Select Committee of the U. S. on Interstate Commerce (Rep. 49th
Cong., 1st Sess. p. 199). Indeed, the courts have uniformly denounced
the relations of the Trust to the railroads in language of stinging severity
(Lloyd, 143. 206-8).
Stealing property, or compelling sale of it far below value, is a familiar
method of getting money to give to churches and colleges (Lloyd, 52; 73.
et seq, the Widow's Case, forced to sell for $60,000 property worth over
$200,000, and perhaps $400,000, pp. 78-9). Inventors are swindled and ruined
if their processes threaten to interfere with the prosperity of the Trust,
or lessen the value of its properties (191-3). Taxes are dodged (166), cheating
Pa. out of millions of dollars (168). Suit brought for taxes, but Trust
buys off the Attorney-General (176). Indictment for bribery and corrupt
solicitation of a public officer (179i, but ditched by the succeeding Attorney-
General, tho the fact was publicly known by the confession of one of the
principals (180).
The Trust got the railroads to bill its tank cars at 20,000 Ibs., tho
they actually weighed from 25,000 to 44,000 Ibs., and when an investigation
of the matter was ordered, the numbers of the tank cars were painted
out one night and the billing could not be tested a pot of paint and a
paint brush crippled the investigation and shielded the Trust and its allies
(229, 230, 235).
The chairman of one of the Congressional Investigations said to the
President of the Combine: "During your whole examination there has not
been a direct answer given to a question, and I wish to say to you that
such equivocation is unworthy of you." (50.) Concealment is an essential
part of the Trust's arrangements. It lives in the dark, and can live nowhere
else. Even perjury is a common affair with its oflicers (59, 61, 87, 89, 95-6,
231, 234, 235, 243), and it does not hesitate to mutilate evidence and steal
public archives, records of courts, testimony taken by Congressional Com-
mittees, or anything else that it thinks will be more convenient in its own
possession (60, 83, 373), unless it is something that can be bought, and
then it appears to prefer "purchase" (with money captured from others
by the methods outlined above). It even purchast a U. S. Senatorship in
Ohio for its vassal, Henry B. Payne. A member of the Ohio Legislature
confest that he had received $5,000 to vote for Payne. The editor and
proprietor of the principal Democratic journal in Ohio had stated, as was
sworn to, that he had spent $100,000 to elect Payne; the Representatives
and Senators had to be bought and it took a good deal of money to satisfy
them: and he complained that the Oil Trust had not dealt squarely with
him in the matter. Among the chief managers of Payne's campaign were
four <>f the principal members in Ohio of the Oil Trust. One of them,
who was given financial management of the Payne campaign at Columbus,
carried with him $65,000 to use in the election, as he told an intimate
friend, etc., etc. After the Ohio Legislature had examined sixty-four wit-
tht- IIi>use and Senate each resolved that Payne's election had been
brought about by the corrupt use of money. An investigation by the
U. S. Senate was urgently requested by the Governor and both branches
of the Legislature of Ohio officially . and unofficially by the press, the public-
appeals of leading men and the petitions of citizens regardless of party
(373-4. 377, 378. 379, 382, 383-7 1.
"Technicalities" defeated the demand for an investigation, despite the
earnest appeals of Senator Hoar and others. Payne did not want to be
examined. He had not a dollar's interest in the Trust, he said, and pleaded
that its officials were good men because they gave a great deal of (other
people's) money to charitable purposes. But the charge he would never
allow to be investigated was that the Trust had a great many dollars
interest in him. And, as for the charity, it is well-known that, as Lloyd
has so well said, "The Trust is evangelical -at one end and explosive at
the other." (358.)
Such are a few of the atrocious acts of the oil monopoly: not a complete
list of oil atrocities by any means, nor even a complete list of those that
90 THE CITY FOE THE PEOPLE.
GAMBLING.
1 0. Speculation and Gambling in stocks is an evil largely
due to the great private monopolies. Stickney says that pri-
vate railways and stock exchanges "constitute the most per-
fect machinery for the purpose of legalized robbery that the
human intellect is capable of devising." l The italics are his.
If you will go to the stock exchange in any great city, or look
thru the Red Manual, or read the reports in any big daily, you
will find that gas and electric stocks, traction companies and a
few great trusts, together with the railroads, make up the lists.
The evils of a system that encourages men to seek wealth by
the rise and fall of stocks instead of by honest industry are too
clear to need comment. We may note, however, an indication
as to the influence that controls our law making and our teach-
ing when we see gambling with dice and cards prohibited, but
gambling with stocks permitted and protected by law; grab-
bags and raffles condemned in Sunday schools and churches,
but the stock broker and manipulator in the front pew poor
folks' gambling very immoral, but the gambling of the rich
folks with the loaded stocks of the big monopolies hush!
UNJUST INDIVIDUAL AGGRANDIZEMENT.
11. Congestion of Wealth and Power is practically synon-
ymous with private monopoly. Private monopoly involves
congestion of power, and is almost sure to produce congestion
of wealth. Preceding sections have shown this, and all that
T ,ve need to do here is to emphasize the extent of the evil.
According to Dr. Spahr's tables, 1 one-half of the families
in the United States own practically nothing have no part in
the productive capital of the country, and no property of any
kind except their clothes and a little furniture; seven-eighths
of the families hold but one-eighth of the wealth, and one per
cent, own more than the other ninety-nine per cent.
have been discovered, but a few indications of what may be expected if
this combination and its allies get control of our gas-works, electric light
slants, street railways, etc. (See end of sections 1, 2, 3, 4 and 8.) These,
MI 25 above Paragraphs, show that the oil combination exhibits every
evil incident to private monopoly, and most of them in an aggravated form.
1 The Railway Problem, p. 202.
1 "Distribution of Wealth," by Dr. Charles B. Spahr.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 91
^ statement I have found exceedingly effective as a sum-
mary of the results of the United States census and other in-
vestigations, including those of Dr. SpaJir and the Massachus-
etts Bureau of Labor, is as follows:
Half the people own practically nothing.
% of the people own y 8 of the wealth.
1% of the people own more than 50% of the wealth, or 1
family in each hundred owns more than the other 99 families put
together, and could buy out the 99 and have something left.
1-200 of 1% own over 20% of the wealth, or more than 4,000
times their share, on the principles of partnership and brother-
love.
The following diagrams will present the facts more clearly
to the eye, which for the majority of us is the most important
avenue to the brain and conscience :
A. B. c. u
People, mtl^ I I I I I I I I I I I I I I I I
Wealth. Mlll^MBBflHHHHHII^HHHLZ 13
X. Y. Z.
A. B. = | of t e families, owning of the wealth (X. Y.).
B. 1). = | of the families, owning of the wealth (Y. 7*.).
P. L. O.
People, @ 1
"Wealth,
S. "T.
P. L. = \% of the families, owning more than half the wealth (8. T.).
L. () = 99$ of the families, owning less than the 1 % own.
M. _
People, | _
M. = the little group of 4000 millionaires, or about 1-200 of i % of the
people, owning '10% of the wealth (T. R.), chiefly the result of monopoly
profits, or tarsttion without representation, and for private purposes.
Professor John R. Commons 2 has analyzed the Tribune
Millionaire List with the following results:
91 or 24.G$> made their fortunes mainly in land values.
3*6 or fl.7 " " " other natural monopolies.
124 or 3.1 " " " artificial monopolies.
1647 or 4'.. 5 " " *' some business known to be
aided by monopoly, natu-
ral or artificial.
864 or 21.4 " " " business not known to be
aided by monopoly.
1 "Distribution of Wealth,' rP- ^528.
92 THE CITY FOR THE PEOPLE.
That is, upon the face of the returns industrial monopoly is
clearly traceable as a cause in the building of about four-fifths
of the fortunes of the millionaires and polymillionaires named
in the Tribune List. If we knew all about the 854 cases in
the last entry, it is probable that we should find some rebate,
or government influence, or favoritism of some monopolistic
magnate some special privilege aside from individual char-
acter and intellect, entering as a vital factor into nearly every
case. Brain and soul may bring a competence in a fair field,
but it is a rare thing for them to bring great wealth without
the aid of some outside advantage tending to shut out compe-
tition; and when they do it will usually be found, as in the
case of fortunes made in the legal profession, that the result
could not have been achieved but for the enormous salaries
and fees which the monopolists paid, and were able to pay be-
cause of their monopoly profits, and were willing to pay be-
cause their own great gains and salaries had put them in the
habit of giving large prices to men close to them and high in
their affections. I am not sure of a case where brain and heart
have won a million without the aid of some natural monopoly
or governmental influence, or the weight of accumulated
wealth, or the favor of one or more undoubted monopolists.
If the reader is^sure of such a case, I shall be grateful if he will
write to me of it, giving such detailed proofs as he can.
The amount of monopoly tax upon our people cannot be ac-
curately ascertained, but it sums up to an enormous total, 3 and
the worst of the system is that its effects are accumulating with
vast and ever accelerating rapidity, and that it is separating
our people into inharmonious classes, creating castes in our
cities, and bleeding whole groups of states to enlarge the
profits of a few great monopolies. The farmers and mechanics,
merchants, doctors, builders, the whole body of workers pay
tribute to the monopolists; and the West and South and Cen-
tre pay tribute to the East, because the monopolists mostly re-
side in that quarter. Private monopoly and its profits are
dangerous to peace and free institutions.
"Monopoly in any kind of business in this country is ad-
See Prof. Commons' Distribution of Wealth, pp. 257-8, whore a few fact/
nre given relating to land, transportation, gas, etc.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 93
verse to our form of government" said Chief Justice Sher-
wood. "Its tendency is destructive of free institutions and
repugnant to the instincts of a free people, and contrary to
the whole scope and spirit of the Federal Constitution. In-
deed, it is doubtful if free government can. long exist in a
country where such enormous amounts of money are allowed
to be accumulated in the vaults of corporations to be used at
discretion in controlling the property and business of the coun-
try against the interest of the people for the personal gain of
a few individuals." 4
"I want to know," said Senator Hoar, in 1888, on the floor
of the United States Senate, "I want to know the facts about
these five or six great trusts, which are sufficient in their power
to overthrow any government in Europe, if they existed in
those nations, that should set itself against them," naming
transportation, coal, sugar, oil, etc.
"The freest government," said Daniel Webster, "cannot
long endure where the tendency of the law is to create a rapid
accumulation of property in the hands of the few."
INERTIA OR NON-PROGRESSIVENESS.
12. Non-progressiveness on certain lines is natural to the
monopolist. He wants to get all he can out of his capital, and
is more or less protected from the compulsory progress imposed
upon the owner of a competitive business. So we find gas
works putting out the old-fashioned product instead of giving
the people the benefit of the cheaper and better gas we can
make to-day. Street railways keep on using the old rail that
makes the street rough and dangerous to delicate buggy
wheels, instead of putting down the grooved rail, level with
the surface of the road, so that the street may be smooth and
safe from curb to curb. We find them also neglecting to warm
the cars, or fit them with fenders or vestibules, till forced to
do so by law. Even severe mandatory legislation sometimes
fails to move the monopolies. It has failed to make the rail-
ways remove the deadly stove from their cars, or adopt safety
couplers and crossings. Even Chauncey M. Depew is re-
77 Mich.. 632, 657-8.
94 THE CITY FOB THE PEOPLE.
ported to have been arrested for violation of the law in respect
to the use of stoves in the trains of the railway of which he
was president, and charged with manslaughter, under the pro-
visions of the act, for permitting the continued use of stoves,
which in an accident burned up a few travellers. Professor
Bemis says: "The natural tendency of a monopoly so strongly
protected as are the lighting monopolies of Massachusetts would
be toward lack of progressiveness." And, as the 'Prof e r
remarks in the next sentence, the lighting business in other
states is, in fact, about as complete a monopoly as in Mas- a-
chusetts, and, therefore, equally non-progressive.
None of the private monopolies, so far as I know, have the
development of manhood and the progress of civilization as
their aim ; none of them seek to extend their services to people
in rural districts, as the Post Office does, and the English postal
telegraph, and the public water and electric systems, and the
school and road departments, do in all our states; and some
of the private monopolies not only neglect to move, but even
deliberately suppress important inventions which would com-
pel movement if not supprest. 1
MASTERSHIP AND OPPRESSION OF LABOK.
13. 7/7 treatment of employes is emphatic in the ca-
some monopolies, but is by no means so universal as most of
the evils previously discussed. There are two reasons for this :
(1) Some monopolists from business policy, humanity, good
feeling, pride, or love of approbation, pay fair wages and ac-
cord their employees reasonable treatment. (2) In some mo-
nopolistic industries the workers, or large classes of them, at
least, are able to protect themselves. The history of the great
strikes on the the street railways of Brooklyn, Philadelphia,
Boston, Detroit, Cleveland, Wheeling, etc., and the record of
die telegraph and telephone monopolies show what private mo-
* Postmaster General Wanamaker's Argument for a Postal Telegraph.
ftHl. pp. 11, 3 43-5, enumerates 16 inventions suppressed in one way or
another by the Western Union some of them of vital importance for cheap-
ening quickening and improving the transmission of intelligence; but their
Introduction would relegate part of the Western Union plant to the junk
lie, so we must wait till the millionaires are ready for the curtain to go up.
(See Arena, Vol. 16, p. 362, and Vol 17, pp. 200, et seq. )
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 95
nopoly may mean to employees where neither of the above-
named safeguards is operative.
The strike of the employees of the "Big Consolidated" street
railways of Cleveland has been attended with riots which the
police appear to have been unable to quell. Two cars carrying
passengers have been blown up with dynamite. Troops have
been sent to restore order, and the cars are running again. The
strikers and those who sympathize with them have instituted
a "boycott" against all who us*e the cars, forbidding all deal-
ings with such persons, and endeavoring to cut them off from
all supplies, even from medicines and the attendance of physi-
cians, and local business has suffered greatly in consequence. 1
In Brooklyn also street railway strikes have proved prolific
sources of violence, and have caused great loss to the compa-
nies, the strikers and the public. In 1895 it took all the police
of the city and 7,000 soldiers to preserve order. The compa-
nies refused to grant the reasonable wages and hours demanded
by the men, and as they could not get men to accept the terms
they were willing to give, they did not run their cars even
after order was restored. Wherefore Justice Wm. J. Gaynor,
of the Supreme Court, in the matter of Loader v. Brooklyn
1 The text expresses facts visible to an observer at a distance thru the
medium of the best papers. The following statement of facts comes from
the Rev. W. D. P. Bliss, President of the National Social Reform Union.
His sympathies are strongly with the men, but he is a man of the very
highest character, and he got the facts on the spot, and when he relied on
testimony he did not take It from the worklngmen, but from "unprejudiced
observers."
The cause of the trouble was consolidation and strenuous effort to make
dividends on overcapitalization. The companies worked the men longer hours
and made them drive the cars faster and at illegal speed. Some of the
"trippers," or men employed for special runs, had to bo at tho car shed=
waiting for runs from 5 A. M. to 1.30 A. M. the next night, 20% hours out
of the 24. Many accidents occurred and several children were killed. Th<
men protested against the long hours and the fast runs. They did not
enjoy killing children nor spending their whole lives in barns, or on the
road. The only heed the companies gave was to employ a new superin-
tendent, noted for harsh dealings with his men. Men who dared to complain
were discharged on the slightest pretext. Finally the men struck, not for
higher wages, but for humane treatment. Knowing that without a union they
were helpless, they demanded recognition of their union. The company re-
fused. The State Board of Arbitration tried to mediate and failed. A com-
mittee of the City Council succeeded In patching up an agreement and the
men went back to work. The company failed to keep Its contract, those
who had struck being discharged as rapidly as possible. The men struck
again. Every employee went out. There was no violence. The company
got new men, but could not get patronage. The sympathy of the city was
with the men. Then the companies blew up a barn with dynamite,
viously
and one
and the pape_^ .. _._
and their terrible use of dynamite. As a result of these atrocities and the
provocation of the state troops some violence has been done by the strikers.
The city still shows its faith in these facts by largely sympathizing with the
strikers and refusing to ride in the boycotted cars.
e men. Tnen tne companies Diew up a Darn wirn aynamue, prt--
notifylng the "scabs," who slept in It, not to do so that night.
; of their armed "scab" motormen shot a boy who yelled "scab!"
? papers were filled with lurid columns about "the riotous strikers"
96 THE CITY FOE THE PEOPLE.
Heights Co., &c., issued writs of mandamus to compel the
roads to run their cars. 1
In a letter to the Board of Mediation, Feb. 4, 1895, Judge
Gaynor said that the real cause of the trouble was deeper than
anything in the statement of grievances before them. "It
lies in a state of disquiet and moral protest not confined to the
employees of the companies, but pervading this intelligent
community, and which was caused by the recent speculative
uses and manipulations to which these companies have been
subjected." It was overcapitalization and the strain for divi-
dends that caused the heartless disregard for the welfare of
employees and the public which brought on the strike. 2
1 The judge said that a body of workers acting in concert had a right
to fix a price for their labor, and refuse to work at a less price, and that
if the roads could not get men to work at its terms, they must offer terms
on which they could get men. They could supercede their employees gradu-
ally, day by day, by men who would work on their terms if they were abl->
to find such men, or they could supercede them all at once if they had a
sufficient number of new employees for that purpose; but they had no right
to stop their cars during such a controversy, while they were gradually get-
ting other men. It was their duty to the public to run their cars with a full
complement of men. Any citizen could apply for a writ to compel the roads
to do their duty.
As a question of fact was raised by the companies, the writ had to be
In the alternative. And as the statute allowed 20 days time in which to
answer such a writ, it really amounted to little in this case. An extrem>
absurdity in the law to require that carriers shall not stop their cars n
single day, and yet allow 20 days time on the writ of compulsion. The
time should be shortened, either by definite provision or by putting the
matter in the discretion of the judge. Or the companies should be required 10
obey the writ until they show cause to the contrary, and then let them fix
the date of hearing as soon as they like, subject, of course, to recoupmcn
for the intervening time if they succeed in showing that the order should
not have issued.
- The judge remarkt that a few years before the Brooklyn City Road
had three millions of stock and three millions of bonds (or $30,000 total
capital per mile, which is high for horse lines). The bonds were increased to
six millions and the stock to twelve, in order to change from horse to electric
tractioc overhead (an increase of $60,000 a mile of track, or about double
the probable cost of the change). "But," as the judge said, "the case
does not stop here. The next two steps are what aroused the public i-mt^rii no-.
Those in control took this great company, and in 1893 leased it for Df>9 yvars
to a little street railway company called the Brooklyn Heights Railroad
Company which they had got control of. This little company had a
paper capital of $200,000, and a mile or less of track. One might think
that instead of the great Brooklyn City Railroad Company system
(with its 200 miles of track) being turned over to this minature com-
pany, the reverse would have happened; but it did not, for that would not
have served the purpose in view. By the terms of the lease this little
company agreed to pay the interest on the $6.000,000 in bonds and a yearly
dividend of .10 per cent, on the $12,000,000 in paper stock of the Brooklyn
City Company. All the overplus it was to keep. That was to go to its
stockholders. Thus the little company was made the absorber of all the
earnings of the Brooklyn City Company over and above what would have
to be taken to pay, as above stated, the interest on the bonds and a 10 per
cent, annual dividend on the stock of the latter company.
'But this did not satisfy those who had gone that far. They must go
further. To evade the payment of the incorporation tax of this state they
went down to the state of West Virginia, and there, in March, 1893, formed
a corporation, called the Long Island Traction Company, with the enor-
mous paper capital of thirty million dollars ($30,000,000). "l need hardly say
that this huge paper company had not a day's work or a dollar back of it.
It did not own a steel rail, a stick of wood or anything in the world. All
that there was of it was on paper. It was not a railroad company, but a
business company, its very name being a falsehood. It was brought up to
i rnLu; owxEjcsurp OF PUBLIC UTILITIES. 07
In the Philadelphia strike of 1895 the men demanded re-
cognition of their right of organization, a ten-hour day, with
wages not less than $2, and vestibules to protect the motor-
men from the rigors of winter and the inclemencies of the
weather. Public sentiment was overwhelmingly with the men,
and after a time the traction authorities patched up a truce on
an agreement to consider grievances, and not to discharge any
one for membership in the union. The men went to work
again, and the company began to discharge the active mem-
bers of the union, one by one, on the flimsiest pretexts little
mistakes formerly unnoticed and almost impossible to avoid,
trivial accusations of being two or three minutes late, some
small breach of the rigorous and complex rules that street rail-
way companies know so well how to make, and which even the
best men find it practically impossible to conform to perfectly.
Some of the men discharged had served the roads for fifteen
to twenty years, and had records entirely clear of any real
fault, unless membership in the union be so considered. The
company paid no more heed to its agreement to consider
grievances than to the rest of the contract. So, in one of the
Brooklyn, and those who created It, and also owned and controlled the little
Brooklyn Heights Company, turned over to It the certificates of the stock
($200,000) of the latter company. And thus, connected by these two links
with the Brooklyn City Company, this West Virginia company, with its
sham paper capital of $30.000,000, became the absorber, thru the little Brook-
lyn Heights Company, of all the earnings of the Brooklyn City Company
over the interest on bonds and the 10 per cent, annual dividend on stock
already specified.
"The effect of these transactions was pernicious to the community.
They were discussed and condemned wherever two or three met. Our
people lookt on and became justly Irritated and uneasy. They knew that
the thing remaining to be done by those in control of these enterprises was
to thus absorb a surplus out of the Brooklyn City Company large enuf to
pay a dividend on this sham $30,000,000 of paper stock of the West Vir-
ginia company, thereby to make that stock worth par, and enrich its holders
out of the industry of others. To do this the employees of the company
knew, and every one knew, that the expenses of the Brooklyn City Company
would be cut down to the lowest point. The result of such stock inflation
is always the same, and the attempt by this means and by that to get
money to pay a dividend upon it always follows, and thus it is always the
cause of heartlessness and oppression. In giving this history concerning the
Brooklyn City Company I have given you the history of the Atlantic- Avenue
Company, which is subject to the same process of inflation and absorption
by another so-called traction company."
Since the judge wrote, the leading Brooklyn companies have been ab-
sorbed by the Brooklyn Rapid Transit Company, a New York corporation of
1S:)6. Excluding the 1.2 miles of cable and the 2.3 miles of "L" road and
their capital, we find that October 1, 1898, the capitalization of 261 miles of
overhead trolley, with less than 9 cars per mile, was $53,000,000, or $200,000
per mile of track. The bonds alone amount to more than $80,000 a mile,
or at least double what it would cost to duplicate the system complete, so
that half the bonds and all the stock must be considered simply as paper,
without a base. About $10,000,000 of new stock will soon be issued to
enable the company to get control of the 132 miles of the Nassau trolley,
already capitalized at $200.000 a mile, and the absorption of the Coney
Island line is also contemplated. That will complete the consolidation of
the Brooklyn surface roads under the rapid Transit Conpauy.
7
OS THE CITY FOR THE PEOPLE.
most promising strikes on record, with the men well united
and an outraged public sentiment overwhelmingly with them,
the corporation won by faithless strategy, and the men were
really worse off than ever. Wages and hours remained as be-
fore, 1 and the power of capricious discharge, and the failure
to protect conductors from loss by careless or fraudulent mis-
counting of the money they turn in, which could easily be
done by ordering such moneys to be counted in the conductor's
presence. The men have not secured any real recognition of
their right to continued employment, and organization, and
impartial arbitration, or even fair consideration of grievances.
Even the vestibules were not obtained, and motormen had to
keep on whizzing thru the winter at the rate of 8 to 12 miles
an hour or more , and sometimes in the teeth of a 40-mile
zephyr at zero or lower, with nothing in front of them to break
the force of the wind.* Cold and exposure, long hours and
nervous strain materially shorten the lives of motormen; but
men are cheap, cheaper even than the horses the companies
used to ill-treat before they got the motormen. Often they
get frosted fingers, ears and feet, and sometimes, as in Boston,
January 26, '96, numbers of them find their faces frozen.
The locomotive engineer, the steersman of a tug, the pilot of an
ocean steamer, are all protected against the weather. In Ohio,
Indiana, Michigan, Minnesota, Wisconsin, and perhaps some
other states, the law requires vestibules on street cars, and they
are voluntarily used on a number of lines in Massachusetts,
New York, New Jersey, Pennsylvania, etc. The postal cars
in Philadelphia have them. There is no reason in the world
but heartless greed why vestibules, with moveable windows,
should not be put on every trolley and cable car in the north.
1 The nominal day was 12 hours, but the practical day was 13 to 14
hours, with a brief Intermission for lunch, and the pay 16 2-3 cents an hour.
In New York the men on some lines declare that they work 14, 15, 16 and
even 17 hours to earn a two-dollar bill. The Union Traction Company of
Philadelphia said it couldn't afford to pay any better wages. It had inten-
tionally put ir <>,;t i'f Its power to make reasonable concessions to the public
or the men by a scheme of leasing the united roads at enormous rentals,
amounting in soino cases to more than 60 per cent, on real investment, and
fooling up about five million dollars. It is the old scheme of keeping
yourself in several pieces and making a contract with each piece, so that
you can say. if any demand is made upon you, "I really can't reduce rates
or pay good wages or do anything else (except run the business as I want to).
If you doubt it, Just look at the contract obligations I am under. "
*A year oi- two later vestibules were put on the cars on the longest, sub-
urban lines.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 90
The lesistanee of most of the companies to this humane re-
quirement till forced by law to adopt it, their persistent re-
fusal to arbitrate or consider grievances, their arbitrary dis-
charges and burdensome regulations and their efforts to crush
the unions are strong indications of their attitude toward em-
ployees, who are no more to them than so many cogs in the
machinery of their power-houses. 2
The strikes that blaze out now and then to show us the real
condition of things are industrial rebellions, little civil wars,
relics of the barbarous age in which men fought out their dif-
ficulties in the streets instead of submitting them to decision
by the intelligent arbitrament of a court of justice. They are
calamities in general to the public, the companies and the
strikers. Now and then, there is a successful strike, as in De-
troit, with the help of its splendid Mayor, Pingree. 3 But, as a
rule, these battles with monopoly fail, and even their educa-
tional effect, for the most part, seems to fade and die in a little
while. Put not your faith in strikes, my brother, but in steady,
peaceful education and the ballot.
LOW CHARACTER PRODUCT.
14. Debasement of Human Nature is a natural result of
any arrangement by which a few selfish men are able to
achieve industrial and political mastery over others. The mo-
nopolists themselves become arrogant, overbearing, undemo-
cratic, disregardful of the rights of others, apt to look at men
not as equals and brothers, but as so many things to be used
in their works, grist to be ground up in their money mills,
oranges to be squeezed and thrown away. The workers, on the
1 For the treatment of employees by the Telegraph Monopoly, see Arena,
Vol. 15, pp. 802-14.
' The men began to form a union, got 39 members, the companies began
discharging them, the men went out In a body, perfected their organization
and demanded its recognition, with better wages and hours, and with the
help of Mayor Pingree they won. The companies in Detroit agreed to recog-
nize the Amalgamated Association of Street Railway Employees, and make
a yearly agreement with It covering wages, hours, etc., and providing that
all difficulties should bo submitted to arbitration, the award to be binding
on both parties. (Motorman and Conductor, October, 1895.) In Milwaukee
also the companies deal with the men thru their association. In Boston, top,
the men have an organization, which is recognized by the company. But ii
New York the men do not dare to belong to a la'bor union, or at least they
do not dare to have it known that they do, and it is very hard to keep tl
fact from the company's spies. The men, both on the elevated and on the
surface lines, tell me that the moment a man joins a union he is discharged.
100 THE CITY FOR THE PEOPLE.
other hand, too often take on the character of serfs unques-
tioning obedience to constituted control, un protesting submis-
sion to low wages and ill treatment, slavish deference to wealth
and power, regardless of its justness, willingness even to think
and vote the way their masters dictate. Divide men into con-
trollers and controlled on any basis Hut that of intelligent
selection of the controllers by the controlled, for the service
of the controlled, and subject to their instructions, and you
destroy the truth, courage, independence and brotherly sym-
pathy that lifts human nature to its highest type.
ARISTOCRACY.
15. Denial of Democracy is the very marrow of monopoly.
Democracy says "Equal rights to all; special privileges to
none." The monopolists say "Special privileges to us; the
rest may have what they can get, and what we may choose to
give them." Democracy means equality of opportunity and
equal protection of the laws. Monopoly means inequality of
opportunity and government by and for the few. We do not
need to dwell upon the topic here, for the aristocratic tenden-
cies of private monopoly and its dangers to republican gov-
ernment and free institutions have already been rendered em-
phatic by the facts of the preceding sections. (See especially
8, 9 and 11.)
THE BENEFITS OF MONOPOLY.
The benefits derived from monopoly thru its stoppage of
the wastes of competition within the field it covers, are ad-
mitted by all serious students of the subject. Competition in
the supply of water, gas or electric light, or in the street rail-
way, or telephone service, is an absurdity. It has been tried
scores of times, but has never succeeded. It is a terrible waste
to tear up the streets and put in parallel systems of gas or
water pipes, and then maintain two pumping or producing
plants and collecting agencies where one would do. With the
telephone the case is even worse, for besides the duplication of
systems, subscribers are forced to belong to both svstems i>r >
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 101
order to communicate with the whole field, and sometimes,
where the systems are quite unfriendly, complete service be-
comes impossible to secure. The vast economy of union is
indicated by such facts as that the consolidation of the street
railway companies of Boston saved 200 cars a day, and that
the 31 manufacturers of matches in the United States were
able, by combining, to close all the factories but 13 and still
supply the market fully. A carload of facts to the same effect
could be adduced, but it is not needful, for no one denies that
conflict is wasteful or that union and concentration mean
strength and economy. The irresistible movement 1 toward
the abolition of competition in respect to gas, water, electric
light, street railways and other public utilities, that has brought
the companies together into solid trusts and mighty combina-
tions, is fully justified on economic grounds. !N"o well-in-
formed economist advocates competitive enterprise in the
public utilities of a municipality, for he knows that it means
large wastes and ultimate failure thru open or secret combina-
tions of the competing companies, with high rates fastened,
upon the community by a double capitalization. 2
1 Within the last few years the gas companies In Boston, New York and
Chicago have united. A single monopoly controls the gas works in thirty
cities. Electric light companies are also combining, and street railway sys-
tems are consolidating at a tremendous rate. Substantially all the roads
in Boston have been gathered under one wing, which also covers the
elevated franchise. In New York all the elevated roads have come under
one management four surface roads are united in the Third avenue sys-
tem, and thirty roads, all the rest in the city, are operated by the Metro-
politan Company. In Chicago the crystallization has not gone so far, but
the chief lines have clustered into three great systems. This was the situa-
tion also in Philadelphia till 1896, but in that year the three systems came
together in the Union Traction Co., and now the Hestonville line has been
swept within the circle, and all the twenty-five original roads In the city
are in one solid system, the lines being leased to the Union Traction Co. for
999 years.
5 See Prof. Ely's "Problems of To-day," chapters on gas and railways.
Also "Municipal Monopolies," p. 594, quoting the testimony at Cleveland of
Captain Wm. Henry White, identified at different times with competing gas
companies In Boston, Chicago, Baltimore, Brooklyn, etc. The Captain says:
"Among the blessings that long-suffering communities have in this country
is the competing company. * * * They produce a new plant, put In all
the apparatus and parallel the mains of the other company, and they try for
a while to fight, and we have the usual gas war. Then the two companies
get together and say: 'Well, now, we have done the philanthropic act long
enuf, and we think the public had better pay for this little picnic of ours.'
They unite, and usually double the capital when they unite." (That is, they
double the total existing capital of both companies, making a capital four-
fold that of a single unmanipulated plant.) After speaking at some length
of the gas consolidations in Boston and vicinity, and in Chicago, all on the
principle just mentioned, the Captain said: "The competing company is not
a panacea for the ills the public has suffered. The opposition company is
the greatest mistake that is ever made."
Prof. Ely says: "Competition in gas has been tried 1000, yes, probably
2000 times, but never has been and never can be permanent." (Problems of
To-day, pp. 128, 142, 256.) See also Bronson Keeler's article in The Forum
for November, 1889, and Prof. James' discussion In Pubs, of Econ. Asso.,
102 THE CITY FOB THE PEOPLE.
The competition we have been speaking of is competition between
two or more private plants. Competition between a public plant
and a private one may be successful (as in Hamilton, O., with gas,
and in Stockholm, Sweden, with the telephone), successful, that is,
for the public plant; it almost certainly means ultimate ruin for
the private plant, and is subject to the objection of a wasteful dupli-
cation of systems.
THE PROBLEM.
The problem of monopoly is to retain the advantages and
get rid of the evils of the monopolistic systems that so largely
control our industries, and especially the public utilities of our
cities.
THE SOURCE OF BENEFIT.
The element in monopoly from which its good effects arie
is the exclusion of conflict, with its wastes and debasements,
from a certain field, and the development of union, co-ordina-
tion and harmony of effort within said field.
THE ROOT OF EVIL.
The evils of monopoly flow from power plus antagonism of
interest between those who own and control the monopoly and
those who are served by it. The antagonism of interest be-
tween the monopolists and the public, together with the
power which the monopoly gives to make that antagonism ef-
fective, is the fundamental cause of the excessive rates, exor-
bitant profits, watered stock, false accounting, poor service,
disregard of public safety, unjust discrimination, fraud and
corruption, defiance of law, speculation and gambling, con-
gCition of wealth, non-progressiveness, ill treatment of em-
ployees, debasement of human nature and opposition to de-
mocracy, which we have found to characterize the monopolistic
Vol. I, where twenty great cities are named which had tried competition in
gas, always with the same result combination, with division of territory,
or some form of consolidation, and a determined onslaught upon the public.
In Baltimore the companies united and advanced the price 75 cents a
thousand.
In Harrisburg the price went up from $1 to $2. In New York some years
ago, before consolidation, gas sold for a time at 75 cents, but when the com-
panies came together they put enuf more water in the capital to buoy It up
from 18 1/3 millions to 39 millions, and raised the price 10 $1.75, n jump of
130 per cent, above the competitive level.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 103
systems under consideration. All these things are contrary
to the public interest, and are clearly so understood by our
people, wherefore they could not exist except for an interest
antagonistic to the public interest and in possession of suffi-
cient power to make its antagonism effective. To abolish the
evils of monopoly, therefore, it is necessary to remove the an-
tagonism of interest between the owners and the public, or
else to deprive the monopolists of the power of pushing their
interests against the public interest. That the antagonism of
interest is the vital cause, and the power merely the condition,
is clearly evidenced by the fact that the very men who man-
age the great monopolies with a single eye to the private in-
terests of the stockholders who own the properties, are often
among the most efficient and public-spirited servants of the
people when entrusted with public business. As officers of a
gas company or a street railway they serve the company with
all their power, and any interests that oppose it must take a
back seat. As officers of a public enterprise they serve the
public with equal power. They are true to the financial in-
terests of those to whom they owe the primary financial alle-
giance as they understand it. If they are to manage the prop-
erty or conduct the business of A., B. & C., they think it
ought to be managed or conducted in the interest of A., B.
& C. If they are to manage the property or conduct the
business of a city, they think it ought to be managed or con-
ducted in the interest of the city. If A. & B. own the prop-
erty, they have a right to manage it for their benefit; if the
city owns the property it ought to be managed for the benefit
of the city. This is the attitude of practically all our honest
business men, and nine-tenths of them are honest, according
to the financial ethics of the day, a fundamental maxim of
which is that property should serve the interests of its owner.
Business men believe that if a plant belongs to a small body
of stockholders it should be run to make money for them; and
on the same principle, if the body of stockholders expands
until it includes all the inhabitants of a city, or in other words,
if the plant becomes public, they believe it should be honestly
conducted for the benefit of the public. Make them the agents
of a few private stockholders, and the community must take
104
THE CITY FOR THE PEOPLE.
care of itself. Make them the agents of the community, and
all their energy and integrity come over to the service of the
community. It is at bottom a question of ownership and the
sentiment and business ethics that go with it. The antagon-
ism of interest arising from the private ownership of monopoly
is therefore the real root of the evils of monopoly. 1 Public
ownership of monopolies removes this antagonism between
the owners and the public by making the public and the own-
ers identical. Public ownership is therefore a solution of the
problem, since it retains and even intensifies the benefits of
union, co-ordination, exclusion of conflict, etc., at the same
time that it eliminates the effective cause of evil. Further,
Public Ownership is the only complete solution, for it alone
can remove the active principle of evil. And the condition
of its activity, the power that goes with the private ownership
and control of a great monopoly can only be destroyed by
1 To illustrate the breadth and strength of the antagonism of Interest
between the monopolists and the public, take the following analysis from
my Fabian pamphlet, "Municipal Street Cars:"
THE PEOPLE WANT.
1. Low fares.
2. Good service.
3. Seats for all.
4. Efficient fenders.
6. Cars well wanned in winter.
6. Grooved mils. lnid so as to leave
the streets smooth.
7. A system safe and convenient.
8. Reasonable profits on actual in-
vestment.
9. Honest book-keeping.
10. Just assessments and equal taxa-
tion.
11. Honest and impartial govern-
ment in the interests of all.
12. Good wages and reasonable
hours for all employees.
13. Full freedom of organization.
14. Vestibules for the motormen.
15. Arbitration of difficulties.
In short, the people ask for justice,
kindness, fair play and the pub-
lic good.
The people say, "Do what is fair by
your patrons and employees,
and all will be well."
THE CORPORATIONS WANT.
1. High fares.
2. Small expenses.
3. Passengers on the straps, in the
aisles and on the platforms.
4. No expense for cushioned fend-
ers; it is cheaper to pay dam-
ages than buy good fenders.
5. Little or no expense for heating:
it is cheaper to freeze the pas-
sengers.
6. The cheapest rails, whatever ef-
fect it may have on the streets.
7. The dangerous, ugly, street-
marring overhead trolley sys-
tem.
8. Big dividends on watered stock.
9. Doctored accounts.
10. Shrunken assessments and es-
cape from taxation.
11. Corrupt government in the in-
terest of corporations.
12. Long hours and short wages for
the men; short hours and big
wages for the managers.
13. No union men.
14. No expense for vestibules; men
are cheaper than glass and
wood; if a man freezes now
and then it is easy to buy an-
other.
15. Their own imperial way, with
"nothing to arbitrate."
In short, the corporations aim at for-
tunes for industrial aristocrats.
The corporations say, a la Vander-
bllt (and act it when they do
not say it), "The people be
d d!"
PUBLIC 0\YNEK*HIP OF PUBLIC UTILITIES. 1 05
eliminating the said private ownership, or the control, which
is the essence of the ownership.*
COMPETITION.
Competition is clearly no solution of the monopoly prob-
lem. First, because it forfeits the benefits of monopoly,
which consist precisely in getting rid of competition with its
wastes and obstructions. Second, because it is impossible.
(See above, "The Benefits of Monopoly," also Appendix II.)
REGULATION.
Regulation, tho of decided use, is not a solution of the prob-
lem of monopoly, because it cannot remove the root of the
evil, nor the soil in which it thrives. The antagonism of inter-
est remains as long as the private ownership remains, and the
power to make the antagonism effective will also remain so
long as the private ownership of the monopoly continues.
Private ownership of monopoly means antagonism to public
interest, and it also means power. If you take away the mo-
nopolist's control, you take away the heart of his ownership.
The paper title is not the ownership; it is only the evidence of
ownership. The substance of ownership is the power to con-
trol the property. You may modify this power and still leave
the monopolist some ownership, but if you take the whole
power you take the ownership. 1 And if you do not take the
* If yon leave the private title and do not take the whole control. y<m
have still the antagonism and the power, and the evils will result to the ex-
tent of the power you have left outstanding. If you take the whole control,
you take the real ownership, however the paper title may read. So that,
whether you aim to annihilate the active cause of evil or the condition of
Its operation, you are driven alike to Public Ownership In substance,
whether It be so named or not.
1 To take the whole power by taking the title and control openly on just
compensation is fair and right. It is also fair to modify the power of the
monopolists by laws and ordinances reducing rates and overcapitalization,
obtaining better service, alleviating the condition of employees, securing
publicity of accounts, diminishing discrimination, and much may be done in
this way to lessen the evils of private monopoly and to smooth the way to-
wards completely harmonious public-spirted industry. But to take the
whole power of control under the guise of regulation would amount to taking
the property for public use without just compensation. "Regulation" that
goes as far as this ceases to be regulation, and becomes public ownership
by a process that comes pretty close to confiscation; and yet if it does not
go so far as this the problem Is not solved, for some power, plus antagonism,
will remain; in other words, regulation cannot- solve the problem, and noth-
ing but public ownership or complete co-operation can.
If we say to B., the owner of a ferry-boat, "You must run your boat
so and so, in accordance with our regulations, charge just what we tell
] 06 THE CITY FOR THE PEOPLE.
whole power, if any loophole is left for the monopolist to use
the forces of the monopoly according to his own discretion, to
that extent the business will be managed in private interest
(without the natural checks of competition) and the evils of
monopoly will make their appearance.
As a matter of fact, regulation has met with all sorts of
failures and difficulties. It works under serious disadvantages.
(1) It lets one set of men do the work and employs another
set to determine how it shall be done, and a third set to watch
the first, and see that the regulations provided by the second
set are properly obeyed. (2) It leaves the antagonism of in-
terest rankling underneath. The monopolists and their agents
resent the outside control, and scheme to evade or defy the
law. The managers regard the gas plants, street railways,
etc., as the property of themselves and the stockholders who
elect them and pay them; they regard effective regulation as
a violation of their property rights, and endeavor to nullify
it; and, if compelled to serve the public instead of the stock-
holders, they do so in a half-hearted, rebellious way, perpetu-
allv seeking a path of escape. (3) The added impulse to fraud
and evasion emphasizes the corrupting of public officers and
the demoralization of business men. The most powerful and
unscrupulous corporations, the very ones most in need of con-
trol, are able to avoid the law. They get their vassals ap-
pointed as commissioners, or they capture the regulators by
their intelligence, wealth and courtesy, or they block them
by false accounts, or tie their hands by imperfections in the
law, introduced thru the force of their money and influence
and the cunning of their keen attorneys. There are very few
laws that the great corporations are bound to obey, and the
you to, pay us what we choose to demand and keep your accounts as w
direct; your agent must do as we say, not as you say, in all respects affoot-
ing our interests; you may keep the title to the boat, and we will allow yon
pome interest on the money you have invested in it, but the management of
the property is to be as we direct" if we say this, we take the vital
ownership to ourselves, and the case stands substantially as if we had bor-
rowed the money from B. at interest fixed by ourselves, and built the bont
and controlled it in our own name.
Any such complete absorption of control by the public would probably
be regarded by the courts as unconstitutional and void, as taking private
property for public use without compensation; and might really be quite un-
just, especially if the interest were small and the risk were left on B., or if
other monopolists were left in larger control of their properties, thereby
depriving B. of the equal protection of the laws. Yet any regulation short
of such complete absorption of control will leave a margin of monopoly evil.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 107
power of the companies to defeat the will of the people is
growing every day thru combination, consolidation and the
increase of corporate wealth. So thoro is the control of the big
monopolies over the machinery of regulation that even in the
states where this method has been most fully tried the giant
companies regard the system as a protection and not as a men-
ace. (4) The courts are apt to interfere to prevent the en-
forcement of any regulation that cuts near the bone in the
financial quarter. Over capitalization and the innocent pur-
chaser are an infallible vaccine to keep off an epidemic of just
rates, which the corporators fear worse than the plague. (5)
As long as the monopolists can keep their excessive rates, they
can buy the fulfilment of their wishes the rest of the way.
In short, regulation fails at the vital points. It leaves the
monopolist in possession, with right of property and more or
less control. He has a full purse, a cunning lawyer and a flex-
ible conscience, bowing before the business maxim that prop-
erty is to be managed in the interests of its owner, and the rest
is easy. In dealing with little concerns, regulation is often
successful in a high degree, tho never attaining the full per-
fection of a harmony of interests; but in dealing with great
affairs, tho good is accomplished here and there, the general
result at the vital points is failure.
I suppose no state has done more in the direction of regu-
lating monopolies than Massachusetts. It is regarded as the
model state in this particular. And there is no doubt that
good has been done in the way of keeping down capitalization
in the towns and smaller cities, improving the seivice slightly,
publishing some information and reducing rates somewhat.
But when we come to the "West End and the gas companies
of Boston, just where regulation is needed most, what do we
find? We find these interests for the most part regulating
the regulators. 2 Look at the Bay State Gas case and the West
End investigation! (See above, 8 and 9.) See the Massa-
1 1 say for the most part, for there are notable exceptions. The Railroad
Commission did so far listen to public opinion and common sense as t
assent to a 99-year lease; and a 25-year lease. in Boston is better than a
year lease in Philadelphia or New York, or a 50-year lease in Cincinnati,
even with all the unfair advantages and immunities granted the Wert KM
St. Railway Interests with the 25 years. (See "Municipal Monopolies,
p. 561.)
108 THE CITY FOK THE PEOPLE.
chusetts Gas Commission suppressing facts of vital interest
to the people! Look at the crowded cars, the overcapitaliza-
tion, the excessive rates and the unprotected motormen on the
West End! Look at the watered gas stock, 4 or 5 times the
gas capitalization of New York or Chicago, and ten times
the true figure! See how the Gas Commissioners, while hold-
ing down the capitalization of comparatively small companies
outside of Boston so that it fell from $5.72 in 1886, to $2.87
in 1897, have, nevertheless, failed to prevent the rise of gas
capitalization in Boston from less than $4 in 1888, to over
$42 in 1898.
The companies pay the commissioners' salaries and usually
have the privilege of nominating them. Some of them,
both on the railway and the light commissions, are known
to be the companies' vassals. In some instances the person
appointed as commissioner has been known to have pre-
viously acted as attorney for one of the chief monopolies
whose business he would have to regulate as commissioner.
It can easily be imagined in what way he would be likely to
regulate it. It is natural for the companies, when nominat-
ing commissioners, to select men they know to be their friends
and sympathizers. And even commissioners without a pre-
vious bias are easily led to take a corporation view of the situ-
ation. They are business men, and inclined to accept the
"ethics of success." They are in. continual touch with the
companies' officers and attorneys. They find these officials
exceedingly courteous and considerate, full of intelligence,
great with successful conduct of large affairs, and bubbling
over with money. Without any corrupt relations at all the
commissioners may very naturally acquire a much deeper
sympathy and friendship for the owners and managers of the
monopolies they are supposed to regulate than for the masses
of the people whom they do not meet intimately day by day,
and who do not pay their salaries, or extend kind invitations
to take dinner at the "Algonquin," or show any appreciation
or knowledge of gas and electric light and street railway
business, anyway. The Michigan Board of Railway Com-
missioners recently congratulated themselves and the public
on the friendly relations existing between themselves and the
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 109
corporations they are supposed to regulate. But Governor
Pingree, then Mayor of Detroit, took a different view of the
situation, and with his usual emphatic directness, he said:
"You have no business to have the relations so friendly."
Professor Bemis and Professor Gray have made exhaustive
studies of the effects of regulation in Massachusetts in the
department of gas and electricity, and I find .scattered thru
their writings various paragraphs which, when brought to-
gether, make the most important comment on this subject
that has yet been written, I believe. Here is the substance
of some of the principal passages. Professor Bemis says: 3
"The reports of the Massachusetts Gas Commission give
many valuable facts as to leakage, candle power, etc., but
suppress certain vital facts necessary to the formation of a
correct judgment by the people as to the reasonableness of
the charges of the companies* * * * It (the Gas Com-
mission) has been so timid in its handling of the larger com-
panies, so secretive in its locking up of the facts it gathers
from the companies, since it is the only court on record that
keeps secret the evidence on which it acts, and has produced
the general impression of being so hostile to municipal owner-
ship, that the people of Massachusetts do not consider the
Commission idea more than a half-way measure."
"The Commission has never allowed a single competing gas
company in the state, and has often granted permission to a
gas company to build an electric plant in preference to an in-
dependent electric company, on the ground of the possibilities
of economy in the union of such monopolies. * * But the
' See "Municipal Monopolies," 596 to 602, 631 to 660, and "Municipal
Ownership of Gas in the U. S.," pp. 120-3.
Under the Massachusetts law the salaries and expenses of the Commis-
sioners are paid by the companies controlled by it in proportion to their
gross earnings. All gas companies are forbidden to issue stock dividends.
They must keep their books in the manner prescribed by the board, and
allow the latter to examine them at any time. The board must frequently
inspect the quality of gas, the pressure, meters, etc. It may require as
full reports of expenses and assets as it desires. It annually requires the
gas and electric companies to fill out under oath complex schedules of de-
tails, but the big companies omit enuf to make it impossible to "size up"
their business, and the board says it can't compel the companies to return
said facts. On petition of twenty consumers, or of the mayor of a city, or
the selectmen of a town, the Commission must give a hearing, make an in-
vestigation and issue an opinion or order relative to the proper price of
light; whether a new company should be admitted to a city; whether more
securities should be issued; whether better quality of light should be sup-
pliedin fact, almost any grievance of the consumer can be brought before
the Commission, and any disobedience of its orders is turned over to the
attorney general, who is expected to take proper legal action to enforce the
decision of the hoard.
110 THE CITY FOE THE PEOPLE.
power of wealth has induced the Legislature at different times
to incorporate three leading companies in Boston: The Bay
State, the Brookline and the Massachusetts Pipe Line Com-
panies. But it has now admitted the folly of its action by ask-
ing the Commission (1898) to report a plan for the consoli-
dation of the Boston companies."
After speaking of the success of the Commission in pre-
venting unreasonable capitalization of the gas companies out-
side of Boston, and even diminishing the capitalization per
thousand feet in recent years, the Professor says:
"The Commission, however, has been as great a failure in
its control of the large Boston companies in this matter of
capitalization as in that of competition. The power of wealth
at times, without necessarily any direct corruption, rendered
the Commission speechless, and made the Legislature its pliant
tool; and has shown the difficulty of framing any law for the
regulation of millionaires in the ownership of public fran-
chies that able lawyers cannot find a way to avoid."
Prof. John IL Gray, of the Northwestern University, who
has made a most careful investigation of the Massachusetts
situation thru personal study in the state and in the office
of the Gas and Electric Commission, and who, of all our
scientific writers, is one of the most favorable to regulation,
has come to several important conclusions, of which the fol-
lowing is the substance: 4
1. The law creating the Massachusetts Commission was
drawn by the attorney of the Boston Gas Company, intro-
duced into the Boston Board of Aldermen by his brother, and
by that body introduced into the Legislature.
2. The requirement of sworn returns is "morally degrading
and economically useless where no right or practice of (effec-
tive) verification exists."
3. In most cases where the right of audit and inspection is
reserved, "the well-known hostility of the corporations to the
exercise of this right, the bad traditions of administration
and the recognized weakness of the state governments, made
an effective examination practically impossible."
4 See Municipal Affairs, June, '98, and articles In the Quarterly Journal
of Economics during 1898-9. Also "Municipal Monopolies," p. 653, et seq.
1'UBLIC OWNERSHIP OF PUBLIC UTILITIES. Ill
4. "The corporators often exercise a direct and powerful
influence on the elections and appointments to office," with
a view to keeping the governments incapable of enforcing the
rights of the people.
5. Massachusetts is the only state that has ever succeeded
in finding out substantially what the gas companies have actu-
ally done, and it is highly doubtful if the facts could ever
have been got at except on an understanding with the Com-
mission that it would withhold them from the people.
6. "Our age is so thoroly commercialized and the corpora-
tions have been allowed to practice all sorts of abuses and con-
duct their business without effective regulation so long that, in
the present backward condition of political education, the pri-
vate corporations arc strange?' than the governments."
7. "Xo act of compensation or regulation can be effective
until the companies are convinced that they will be better off
under it than under present or impending legislation. *
Xo regulative act beneficial to the public can be passed with-
out the consent of the gas companies, nor can it be enforced
without their co-operation. * * * The act establishing
the (gas) Commission was drafted by and passed at the in-
stigation of the Boston companies." (It put the power into
the hands of their friends and nominees, and secured them
against competing companies, at the same time that it made
the people think they were getting control of the monopolies,
and so tended to quiet popular movements against them.)
8. "It has been claimed that the Commission has not done
all that the public expected of it; that it has even winked at
the violation of law by the companies, and that, too, in par-
ticulars over which it was given special jurisdiction. While
the charge is possibly true, it is equally probable that the
greatest wisdom the Commission has ever exhibited is just at
this point. It has probably done all that it could do and con-
tinue to exist."
The last two sentences sufficiently indicate Professor Gray's
strong bias in favor of the Commission, and render the rest
of his testimony all the more valuable in the nature of ad-
missions of the defects of that which he defends as the only
means of keeping us out of "reckless socialism."
112 THE C1TV FOR THE PEOPLE.
Of the Massachusetts Railway Commission Professor Bemis
says that it has kept fictitious capitalization at a lower level
than- in other states, but that "Its weakness is beginning to
appear. With growing financial strength, the Massachusetts
street railways are securing enuf influence over the Legisla-
ture to cripple the Commission and secure exemption from
an unpleasant amount of municipal control." 5 This state-
ment is not quite accurate. The street railways have long had
sufficient influence in the Legislature to accomplish almost
anything they wisht, but they have not sought to cripple the
Commission; on the contrary, they rely upon it confidently,
and have recently got the Legislature to increase its powers.
Professor Bemis recognizes this fact on the next page, where
he refers to the recent encroachments of the West End, al-
ready spoken of, and to the fact that the right of cities to
revoke locations has recently been taken away, and made to
depend on the approval of the Railroad Commission, of which
a writer in The Street Railway Journal for September, 1898,
says : "Its wise decisions have probably done more to establish
electric railroading in Massachusetts on a sound and profitable
basis than any other influence." The companies are_satisfied
with the Commission, but a less "profitable basis" in some cases
might be as well for the public.
To take power from the municipality and give it to a small
commission nominated and paid and largely under the influ-
ence of the companies is a decided step in retrogression. The
path of progress lies in the direction of putting more power
in the hands of the people, and according municipalities full
control of local franchises and monopolies.
The final and most effective comment on regulation is the
fact that Massachusetts, the original home and chief example
of the plan, and, as Professor Gray says, "probably the best
governed of our states," is, nevertheless, the region of the
most rapid growth of the movement for public ownership.
THE REAL SOLUTION.
The real solution of the monopoly problem is public owner-
6 "Muulcipa: Monopolies," p. 558.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 113
ship. That alone can remove the antagonism of interest be-
tween the owners and the public, which is the root of evil, or
destroy the power which belongs to private ownership of mo-
nopoly to make the antagonism effective. Both competition
and regulation fail in philosophy and in fact to solve the
problem of monopoly. There is nothing left but public owner-
ship; in other words, co-operative industry, for, in case of the
public utilities we are considering, co-operation of all who are
interested in the service means nothing more nor less than
public ownership and operation.
It is not monopoly that is bad, but private monopoly. Mo-
nopoly per se is good, because it means elimination of internal
conflict between the leaders of industry. Private monopoly
is bad because it retains the conflict between the owners and
the public and between the employers and employed. Cross
off the "private" and substitute public, and you eliminate all
these conflicts and the evils that go with them. It is not the
public water works, or electric plants, or public schools and
highways that corrupt councils and legislatures, charge high
rates, produce enormous profits, congest benefit instead of dif-
fusing it, cultivate aristocracy, deny self-government and un-
dermine democracy, ill treat employees, put out false statis-
tics, or defy the law. It is the private monopolies, not the
public ones, that do these things. A broader ownership, then,
is the key to the situation. A man is better off when he owns
a good railway, or water plant, or gas plant himself than, when
it is owned by another; and the same is true of a city. A pri-
vate corporation will operate its works in its own interest,
and, therefore, contrary to the public interest. It is part of
the business ideal to-day, and a part that is well carried out,
that property is to be managed in the interest of its owner.
If the people want the light works, street railways and tele-
phones run in their interest, they must oicn them.
It is better, of course, to regulate monopolies than -to leave
them to act out their own sweet will unchecked:* It is better
to fight forever than to submit to oppression. But it is a
great deal better yet to remove the cause of the difficulty by
unifying the interests involved. Public ownership will do
this, and it is the only thing that can do it. Let the people
114 Til 10 CITY FOR THE PEOPLK
own the water works, gas and electric plants, street railway-
and telephone exchanges, and the interests of owni
oordfe identical with the interests of the public. Make the
change fairly, not by confiscation, or anything approaching
confiscation. Apply the principle that when a change from
existing laws and institutions is made for the benefit of the
public, the public should bear the burden, if any is caused
by the change, and not throw the cost in undue proportion
on any individual or cla-s. ' Be careful t > get real puMic
ownership, and not a mere change from private monopolists
to private politicians. Have good civil service rules and the
referendum as part of the plan. And then, if there's any
reasonable degree of intelligence and public spirit in the com-
munity the problem is solved.
Excessive rates and enormous profits for a few will no
longer exist, for the motive will be changed from private profit
to public service. The watered stock, inflated capitalization,
false accounting, discriminations, frauds and corruptions and
violations of law, intended to cover or protect or render pos-
sible the schemes of profit, will fall with their cause. The
change of motive will also tend to good service instead of
poor, safety instead of danger, and progress instead of inertia,
tho it may not always pay in dollars and cents. Public plants
have no stocks to gamble with. They do not make million-
aires or cause congestion of wealth and power, or debase hu-
man nature, or oppose democracy. Their tendency is to serve
at cost. If there is any profit it goes to the public treasury.
No aristocratic salaries are paid. Real public ownership is
the very essence of democracy. And, instead of debasing
human nature by conflict and corruption, and by dividing men
into masters and mastered, it brings men together in a union
of interest, accords to all a share in the development arising
from the exercise of judgment and discretion in the control
of business affairs, and affords the co-operative conditions
necessary for the evolution of the highest traits of conscience
and character. 1
To carry the matter beyond appeal, it is needful, of course, to show
>nly that public ownership retains the good and cures the ills of privatp
monopoly but also that it does not entail as great, or greater evils of its
own. This we shall do. We may note, a priori, that a change from conflict
OWNERSHIP OF PUBLIC UTILITIES. 115
ADVANTAGES OF PUBLIC OWNERSHIP.
I. Lower rates would naturally accompany the change of
aim from private profit to public service, and the fact accords
with the theory.
Roads. When Glasgow took over the tramways, fares were re-
duced one-third at once, and reductions have been continued till
now the average fare is below 2 cents, and less than half the
average fare collected by the private company half a dozen years
ago. Our private companies have done nothing like that. We pay
the West End the same 5-cent rate we did at the beginning of the
decade.
The only tramway owned by the public in this country is the
bridge line between New York and Brooklyn, which for years was
operated by the municipalities in partnership on what was nearly
the same as a 2y 2 -cent fare (3 cents single fare and 2 for 5 cents).
The ride was short, it is true, but the private companies charge 5
cents no matter how short the ride, and the investment (15 mil-
lions) was large enuf for 100 miles of ordinary cable line (it would
have been watered up to 40 or 50 millions in private hands, likely),
and the wages paid were very high, yet a good profit was realized.
The cities lately gave the private companies a right to run their
cars over the bridge, so that a passenger might cross on the same
car that would carry him to his destination, but the rights of the
public have been carefully guarded. If New York and Brooklyn
had been ready for the move, it would have been better for them
to have united the services by taking over the private railways and
to co-operation, from secret fraud to open dealing, from private profit to
public service, from congestion of benefit to diffusion of it, from speculation
and gambling to quiet certainty, from defiance of law to obedience, from
danger to safety, from watered stock and false accounts to honest capital
and truthful records, from denial of democracy to government by and
for the people, from conditions tending to the debasement of human
nature to conditions tending to the elevation of human nature, cannot, in
the very nature of things, be attended by evils greater than those it cures,
otherwise devolution would be better than evolution, retrogression better
than progress. There is nothing quite perfect in this world, unless It may
be the blue sky or a beautiful flower, and even public ownership has its diffi-
culties, but they are virtues and charms compared with the evils of private
monopoly. We shall find that philosophy, history and experience unite in
proving that, even if all the objections the monopolists and their sympa-
thizers have ever raised against public ownership were admitted to be true,
it would still, on the whole, be vastly superior to private monopoly.
When we look closely at the matter we shall find there is no difficulty
at all with public ownership; the difficulty lies in the process of attaining
public ownership. The main trouble is to obtain REAL public ownership,
and the chief sophistry of objectors lies in mistaking a change from one
form of private ownership to another form of private ownership for a change
to public ownership. The difficulty has been and is being overcome in many,
many cases, and can be overcome in every case where the people come to
understand the facts, and have civic patriotism enuf to unite in a truly
co-operative undertaking for the pood of all concerned. The sophistry is
easily exposed, and when once understood the matter becomes very clear.
The simple question is: Shall the city be run for the benefit of the
people or for the benefit of a few individuals? Shall the jrrent franchises
and monopolies, the value of which has been created by the people, belong
to a few for their private profit, or shall they belong to the people for the
public good? Shall the streets belong to the community that builds them
and gives them value by its presence and its industry, or shall they be
turned over to little groups of stockholders for corporate profit?
116 THE CITY FOR THE PEOPLE.
let the people have a 3-cent fare all over Greater New York; but
in the present state of public education the lease is probabty as
good a move as could be had.
Bridges. There is a bridge at St. Louis owned by the Goulds,
and the contrast in the charges, etc., on the millionaires' bridge
and on the bridge owned by New York and Brooklyn is one of the
most enlightening it has been my fortune to discover.
The Two Bridges.
Charges for Crossing.
Private Bridge. Municipal Bridge.
Bt. Louis Bridge (Cost $13,000.000, Brooklyn Bridge, (Cost $15,000,000.1
bought by Gould interests On L roads 3 cents (2 fares for
for $5,000,000.) 5 cents) if you simply wish
to cross the bridge if you
On steam cars 25 to 75 cents come from a distance or
per passenger. are going beyond the bridge
it costs nothing to cross it
either in the L cars or the
Street car fare 10 cents, 5 surface cars the ordinary
cents for bridge. car fare takes you over
without extra charge.
Foot passengers 5 cents. Foot passengers Free.
Vehicles, one horse.. 25 cents. Vehicles, one horse... 5 cents.
Vehicles, two horse.. 35 cents. Vehicles, two horses ..10 cents.
Bicycles 10 cents. Bicycles Free.
Before the recent lease giving the companies the use of the Brook-
lyn Bridge the public operation realized more than enough to pay
expenses and interest, on a 2% cent fare, etc. (as above), paying
the car men $2.75 for an 8 hour day. The elevated railway compa-
nies running over the bridge pay the car-men an average of $2 for
ten hours, and some of the men receive less and work longer, so
I am told by the men themselves. On the electrics running over the
St. Louis bridge the men work 12 hours, for which the conductors
get $2.25 and the motormen $2.
Under the lease the elevated roads pay about $100,000 a year for
the use of the bridge, and the trolleys 5 cents a car, a fraction of
a cent per passenger. The franchise charges were made very small
in order to arrange matters so that no extra fare for crossing the
bridge would be collected from those paying the ordinary 5 cent
car fare, thus making the bridge free for passengers coming from
or going to a distance, and more than free to those who simply
cross it in the bridge cars, since a ride in the cars anywhere else
for any distance, no matter how short, costs a nickel instead of
the 2y 2 cent bridge rate nothing for the bridge and half price for
the car ride. The arrangement is good for the people and good
for the companies, as it increases their traffic, It could only be
improved by larger payment from the companies, or lower fares
in general, or, best of all, public ownership of the street railways
as well as the bridge.
The net earnings of the St. Louis bridge are 1% millions a year,
or 25 per cent, on the Gould investment, and 12 per cent, on the im-
pairable capital (the excavating of the tunnels, etc., will never
have to be done over again). The St. Louis charges may be ob-
jected to, not only as extortionate, but as discriminating. A pas-
senger who buys a ticket in New York or Philadelphia to St. Louis
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 1 1 7
or beyond has to pay 75 cents for crossing the bridge, whereas if
he buys a ticket to East St. Louis and then crosses the bridge in
a railroad train it will cost him only 25 cents, or 10 cents if he
crosses on a street car.
The St. Louis bridge is managed for private profit; the Brooklyn
Bridge is managed for public service, the aim being to make the
bridge as useful to the people as possible.
Telegraph and Telephone. When England bought out the private
telegraph companies, in 1870, and made the telegraph part of the
postal service, she reduced the rates one-third to one-half. 1 Our
own government has had an experience with the telephone which
is even more emphatic tho on a smaller scale. In 1894 the De-
partment of the Interior paid the Bell company in Washington
$60 to $125 each for 65 telephones, and employed a lady to attend
the main exchange at $600 a year, making the total cost average
$75 per phone per year. In 1895 the Department put in its own
phones, and the cost of operation and repairs is only $6.43 per
phone, with $3.80 for interest and depreciation, making a total of
$10.25 per phone year for what used to cost $75 under the Bell
regime the cost under private ownership being 7 fold more than
under public ownership. 2
The ordinary Bell rates for towns are $24 to $36 for residences
and $48 to $75 for business places. For large cities the usual rates
are $90 to $240. With municipal ownership or co-operative asso-
ciation we could have excellent telephone service at less than half
these rates 50 cents to $2 a month for small exchanges in towns
and country districts, and $2.50 to $5 in large cities. 3
Trondhjem, the third city of Norway, with 30,000 people, has a
municipal system with the following rates:
Per year.
For a business place within iy 2 km. (about one mile) of cen-
tral station $16.65
For a second business connection by the same person or firm 13.31
For a private house, same distance 8.33
For each 100 meters beyond iy 2 km 1-37
The town builds all lines, supplies the instruments and maintains
the sj-stem. With 780 exchange lines the average rental was $13.25
'The Telegraph Monopoly, Arena, Vol. 17, pp. 9-29.
2 See p. 350 of Municipal Monopolies for a complete statement of the
facts as given to me direct from the books of the Department. In the same
chapter many facts are collated relating to the low cost of public or co-
operative telephone service.
* Contrary to the ordinary rule of cost, the telephone service becomes
more costly as it increases in density, a fact that is due to the complexity
of large exchanges and the great increase in the number of calls per phone
where each subscriber may communicate with any one of many thousands,
Instead of being limited to a few hundreds, or a few dozens. Even in Chi-
cago or New York, however, responsible capitalists have offered to estab-
lish exchanges at $30 to $50 for residence and $75 to $100 for business
phones. And with municipal ownership or co-operative association, eliminat-
ing private profit, considerably lower rates could be made. The cost of
construction is $40 to $70 per subscriber in towns, and $75 to $200 In large
cities. The yearly operating cost is $8 to $12 per subscriber in small ex-
changes.
118 THE CITY FOR THE PEOPLE.
a year. Operating expenses, $8 per phone; fixed charges (4% per
cent, interest and 5 per cent depreciation), $4.35; total cost, $12.35.
The subscribers speak to surrounding towns (there are 11 of them)
within 50 miles at the rate of 4 cents for 5 minutes. The non-sub-
scribing public pays 6% cents per conversation interurban, and
2y 2 cents for a local conversation. Each subscriber makes an
average of 8 or 9 calls a day, so that the cost of a local conversation
to a subscriber is about % a cent. The Trondhjem telephone re-
ceipts afford a surplus, after covering all working expenses, interest
on the capital invested, a reserve of 5 per cent, a year on the capi-
tal, and insurance of employees against death, accident and sick-
ness.
Stockholm, Sweden, with 290,000 population, has a public ex-
change with a $14 entrance fee, $16.66 per year for residence phone
and $22% for a business place an average rate of $20 per sub-
scriber, with metallic circuit, underground wires, interurban com-
munication free within a radius of 43 miles, telephoning telegrams
and telephoning messages to be written down and delivered by
messenger at low cost. The Bell Company, bought out by the gov-
ernment, was charging $44 for far inferior service. The public
telephone of Luxembourg, 44 by 30 miles, makes a uniform yearly
charge of $16, and each subscriber has the free use of all inter-
urban wires, and can talk all over the Duchy. Besides the special
services just mentioned, the subscribers can telephone a letter (that
is, he can telephone matter to be written down and posted as a
letter) for 2 cents plus postage. Switzerland also has an excellent
system, metallic circuit, at a moderate charge, $8 plus 1 cent for
each call, the average total rate being $15 per subscriber in Zurich
and other cities.
In France, when the government took possession of the telephone
lines in 1889, the rates were at once reduced so that a comparison
shows the charges of the private companies to have been 50 per
cent, more than the public rates in Paris, and 100 per cent, more
in other cities, except in Lyons.
In Sweden there are over 160 co-operative telephone exchanges,
and others are dotted over Norway and Finland. The annual as-
sessments in these co-operative exchanges for working and main-
tenance are frequently as low as $6 to $8, rising in a few places
to $16, and averaging about $10 a year for the whole list of towns
from which I have been able to get returns. The public and co-
operative exchanges have brought out the facts about the business
so that even the local private companies, in some parts of Europe,
give the people very low rates.
In this country there are a few co-operative plants which show
what can be do,ne by the elimination of private profit and monopoly
methods. In Fort Scott, Kansas, the members of the Mutual Com-
pany pay $1 a month. The operating expenses are $12 per phone,
and the construction cost $50 per line. Any person can be a mem-
ber who will take a share of stock. The railroads, express com-
panies, etc., would not become members, but were willing to pay
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 119
a good rental, so the company has a number of subscribers on ren-
tals above $1.
At Grand Rapids, Wisconsin, the Bell Company was charging
$36 for residence and $48 for business places, and refused to lower
the rates. A co-operative company was formed, each member
taking- one and only one $50 share of stock. And In the company's
second year (1897-8) with 186 lines (costing $50 each for the total
construction and equipment account), the expense to members was
50 cents a month for residence and $1.75 for business. 4 The first
president of the company, Mr. John A. Gaynor, writes me that the
cost to subscribers has now been reduced to 25 cents a month for
residence and $1.50 for business places. There are now 220 phones
in the exchange. The total investment per phone is $43. The ope-
rating cost is about $9 per phone, including a repair allowance suffi-
cient, Mr. Gaynor says, to cover depreciation. Interest would add
$3 per phone year at the rate (7 per cent.) paid by private bor-
rowers in Grand Rapids. 6 If all those having telephones were mem-
bers of the company the rates would probably be about $6 house
and' $18 business, or $8 and $18, perhaps, if the co-operators wished
to pay in 5 per cent, on the investment as a surplus or improvement
fund. Under public ownership, free of debt, $6 and $18 would cover
the total cost according to the data sent me by Mr. Gaynor.
When the co-operative exchange was organized the Bell folks
lost their subscribers, but in 1897 began to ask the privilege of put-
ting in free phones. They wanted to get a big exchange, which
would be so valuable to business men that they would have to leave
the home company. When the people saw that the Bell was
scheming to kill the co-operative, they unanimously ordered out
the free phones. 6
Water. We have become so accustomed to the idea that the water
supply is naturally a public affair, that many overlook the fact that
in the early part of the century the movement for public water
works was as much a matter of opposition and criticism as the
4 There were 100 members and 86 renters all paying $1.50 to $2.50 per
month. A monthly dividend of 1% per cent, on the stock brought the cost
to members down to the figures stated in the text. The surplus earnings
in 28 months were $3.000 which, with the $5,000 from sales of stock, paid
for the plant, except $1,000.
* The present rates are $1 residence and $2.25 business, with 1% per cent,
monthly dividends to stockholders. Mr. Gaynor thinks residence rates will
uot go any lower, but says that the company has $100 a month surplus,
which should be used in lowering business rates. He advocates putting the
business rate at $1.50 and the dividends at 1 per cent, per mouth.
"Some local private companies, independent of the Bell, give very rea-
sonable rates. There is one in Elyria, Ohio, that reports a construction cost
of $40 a phoue and 12 per cent, profit on monthly rates of $1 residence and
$2 business. One in Elkhart, Indiana, reports a construction cost of $60 per
subscriber, operating expenses of $10 per phone per year, and 16 per cent,
profit with 360 phones at $1.50 and $2 a mouth. One in Manhattan, Kansas,
has a construction cost of $45 per line, $9 operating expenses and 12 per cent,
profit, with $1 a month each for 170 house lines, and $2 a month each for
50 business phones. A small local company is a very different matter from a
big monopoly that can fight to the death in one city, while it draws its
support from other cities. The reasonable rates are found in places so
small that Hell interests have not cared to monopolize them, or where there
is civic patriotism and common seuee enough not to remain in subjection
to the great monopoly.
120
TIIK CITY KOll TIIK POPLE.
movement for public street cars is now, and the history of the water
service, with its powerful testimony for public ownership, is too
much neglected. The very fact that public water supply has come
to be looked at as the natural order of things, is in itself strong evi-
dence that the public service has proved its case. But a few of the
vast mass of specific proofs have a right to a place in this investi-
gation.
In Schenectadj-, New York, just before the water system became
public, the family rate was $9; public ownership reduced the rate
to $7, and still there was a good profit. In Auburn, Neve York,
the family rate was reduced from $8 to $6 when the city bought the
plant in 1894; but the consumption increased and the operating ex-
penses decreased to such an extent that the profits were larger than
ever. In Syracuse the family rate was $10 under private ownership.
Public ownership reduced it to $5. The meter rates have also been
reduced. The reduction of rates by the public works saved the
citizens $100,000 last year, according to the estimate of the Chief
Engineer. We have seen that Randolph secured a $4 rate thru
a public plant where private enterprise demanded a $10 rate. 1 'For
the public water works of Indiana the cost per family is found to
be less than half the revenue per family received by the private
works.
In 1890 Mr. M. N. Baker collated the rates in 318 public and 430
private water works in every part of the United States. The re-
sults speak for themselves. The ordinary family rate is the first
charge, the price of admission of water to the premises. The
total family rental is the ordinary first charge, plus the rates for
water closet, bath tub, horse and carriage, garden hose, etc.
Charges for Water.
Ordinary
F amily Rate
Total Family
Rentals
Cost of Works
per Family
_,,, ( Public works ...
5
7.8
6.07
7.16
55
8.0
B.I
6.05
6.01
7.53
6.75
7.66
6.
8.5
6
8
6.66
10.58
9.51
16.43
13.
38.5
55
10.2
13.5
26.73
2474
31.16
28.85
38.
18.66
25.87
19.43
29.18
2145
2<.63
23.44
26.43
215
2U
27
34.75
31.9
49.41
37.2
68.25
16.75
56.2
119.9
181.3
107 04
101.42
223
193
98.82
87.5.i
112.3:!
164-M
85.8
106.3
82.2
82.1
93
79 .
44.5
57.5
48.52
70.74
72.97
53.47
81.98
155.
1 Private works
U-.....1. f Public works ...,
Massachusetts... | priyate works ;
p^/wio ,'c.i. r, i / Publie works ....
Rhode island j prfvate workg
^ . <i 4 (Public W'Tks
( Private works
v -v~ i f Public works .
1 Private works
r>,,. .,..;,..,.,!., ( Public works ....
Pennsylvania ~ { lMvate worki ;
Virginia f Public works....
Vlr * lma {Private works
,*v !,!; (Public works
st Virginia., j pnvate wQrkg
/-.__. ( Public works....,
Geor s )a t Private works........:...:::
Texas { u . blic work , s
1 Private works
norrnn (Public works
Oreg0n 1 Private works
xr^ nn *; ( Public works
NOYS Scotia { p r i vate works
'See section 1 for this and other facts relevant here.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 121
I have made some calculations as to the effect due to the dif-
ference in the cost works as follows: On the ratio between operat-
ing expenses and fixed charges that prevails in Nova Scotia, the
extra capital in the private works, if it is real cost, might justify
$12 addition to the public total rental, but not an addition of
$40. In Maine an average of the statements of the plants reporting
expenses shows fixed charges, interest, depreciation and taxes rang-
ing from % to 6 times the operating expenses, and averaging 4
fold the operating cost. This would justify an addition of $5.5
to the total rentals of the public works if the reported cost of
works for the private companies is real cost. In New York the re-
ported difference in cost of works would justify an addition of
about $7 to the public total rentals. It is not safe, however, to deal
with the cost of works as stated for private plants except as a
maximum. The companies are not apt to understate the cost, but
they are very apt to overstate it. In Pennsylvania the difference
of construction cost, if truly stated, would about equalize the rates,
but in Massachusetts, Rhode Island, Connecticut, West Virginia and
Oregon the difference in construction cost would intensify the dif-
erence in rates. In Oregon the total rentals were $37 public and
$68 private, or about 60 per cent, more for private rentals, though
the public works cost nearly 40 per cent, more per family than the
private works. The Oregon reports show fixed charges averaging
five times the operating cost, so that the average private company
total rental would be $90 instead of $68 if the average cost of the
private works were as high as that of the public works and the
companies charged on the higher capital in proportion to their
charges on the present capital. With this equalization of capital
charges the contrast would be $37 total rentals for public works
and $90 total for the private works.
In Massachusetts Mr. Baker found the total water rentals
averaged $24.74 for the public works and $31.16 in the private plants,
altho the cost of the works was less per family in the private plants
than in the public. Taking the Northeast and Middle States to-
gether the total rentals average 30 per cent more 111 private than
in public plants, and the investment per family is about the same.
The last sentence holds true substantially 2 for the entire United
States, aside from the Pacific coast, there the private rentals
average 71 per cent, more than the public, but the investment is
much larger in the private than in the public plants, tho a great
part of the excess is due to irrigation works. Excluding these and
taking tlie United States as a whol-e, tne investment per family is about
the same in public as in private water works, yet the total rentals
- In the United States, outside of the Pacific States, the private works
cost :;'.', per cent, less per family and charge 31% per cent, more than tho
puMic works. The Syracuse Commissioners in 1889 found that the private
works in 129 towns charged 37.3 per cent, more than the public works iu
123 towns investigated. Census Bulletin 100, July, 1891. finds the water
charge in 133 cities owning their works as $19.50, against $23.43 in 11^
cities with private works.
122
THE CITY FOR THE PEOPLE.
average 43 per cent, more per family in the private plants than in the
public*
The Water Manual of 1897 states the rates for 1250 cities and
towns. Mr. Baker has not analyzed them, but an assistant has
worked up a few states for me with the following results:
Water Kates, 1897 Manual.
Ordinary Family Rate
Total Family Rentais
Private
Public
Private
Public
y,
8
Mi
17
5%
5^
VA
10
27
26%
4<%
40
23K
IBJi
23
25
Texas
Washington
In Washington the cost of works per family is a trifle more for
public than for private plants ($167 to $164). In Texas the reported
costs are $102 public and $117 private. If the lower capital were
brought up to the higher and the usual ratio between operating
expenses and fixed charges holds good, the difference would add
about $1.10 to the family rate and $3 to the total rental, making
the real contrasts about $15 private to $10 public and $40 private
to $26 public. In Illinois the cost of works is reported to be $79
per family in public works and $95 in private works, making the
real contrasts $8 private to $6 1-3 public, and $26% private to $18%
public. In Massachusetts the cost of works appears to be $225 ; IT
family in public works and $139 in private works, making the real
contrasts $11 private to $5% public, and $40 private to $23y 2 public.
It must be remembered that the contrast of rates by no means
expresses the full difference between public and private ownership
of water works, because in addition to the rates charged consum-
ers the private companies receive hydrant rentals and fees for street
service, etc., from the city treasury, while public plants, as a rule,
collect nothing from the city for fire protection, street watering
and sewer flushing, but render these services free, and often pay
in a profit besides to the public funds. The full contrast would be
shown by comparing the total revenue per family in private plants
with the total cost per family in public plants (including lost
taxes, depreciation and interest actually paid), the conditions as
to population, cost of works, supply, etc., being ascertained, so that
* "We find the average total family rate for 318 public works $21.55 and
for 430 private works $30.82." (Baker's Manual of American Water Works,
1890, p xlix.) Mr. Baker further says: "In every state and territory of the
Union and in every province of Canada, private works show a hir/hcr 1otal
family rate than public." On p. Ill, he says in substance, "The raising of
money by taxation to pay interest on the bonds of the public plants does
not ucrfiunt for the lower rates charged by public works, such taxation bo-
ing oflVf t by the hydrant rental, which is almost invariably paid to private
companies, and the money for which is always raised by taxation. Again,
he s.-i.vs (same page), "There is but one conclusion. Private works chary- as
hi<ih rates as thuj can in consistency with business principles."
PUBLIC OWNERSHIP OF PUBLIC UTILITIES.
123
plants operating- \mder similar conditions may be compared or
clue allowance made for difference of condition where level com-
parison is not possible. The idea should be to eliminate the effect
of other differences in order to determine the effect of difference
in ownership.
[ asked an assistant to take the states of Pennsylvania and Illi-
nois, find the revenue per family in private works and the cost per
family for public works (including operation, with depreciation
and taxes), so far as the Water Manual and the population tables
supply the needful data, and put in opposite columns places re-
sembling each other, so far as possible, in population, consump-
tion and c-ost of works. The accompanying table shows the results,
with the addition of a contrast I met with in Maine. The operating
expenses under complete public ownership usually run from one-
half to three-fourths of the total cost. Depreciation and taxes are
estimated at 2 per cent, on the entire cost of the works. There is
no interest when public ownership is complete. But to illustrate
the difference that is made by debt or incomplete ownership we
may note that interest adds $2y 2 per family in Bethlehem, $4 in
Media, $2 in Doylestown, $3 in Hollidaysburg, $2 in Shippensburg,
etc. In Moline interest adds $1 per family, $1.71 in Taylorsville,
$1 in Savanna, $2 in Aurora, $1 in Evanston, etc., an average of
$1.33 per family actual interest for all the Illinois piiblic plants in
the table, or $2.50 per family if interest be estimated at 4 per cent,
on the total cost of tJie icorks. The figures in parenthesis at the
right and left indicate the ordinary family rate or initial charge.
It Avill be noted that the difference between the total revenue per
family in private works and the total cost per family in public
works is often much greater than the difference in the initial family
charges. This is due to the saving by public works of what goes
to private companies for fire protection, street sprinkling, etc., and
for profits on commercial service.
PRIVATE WATER SUPPLY.
Total Revenue
per family
\ier Year
UoderPriyate
Ownetship,
Total Cost per
Family per
Year Coder
Complete Pub-
lic Ownership.
PUBLIC WATER SUPPLY.
(13) Franklin Pa
510^
14
12
13
V/2
VA
zsy 2
25
8%
W/3
12%
18
in
5%
VA
8.7
7.9
9.8
&
19
$4
4
3
3
2
6
5
2
4
3
2.8
*%
&A
2
3
3
5%
5
Bethlehem (1%),
Pa.
Media,
Doylestown,
Hollidaysburg (5),
Shippensburg,
(10) Tione^ta, ' "
East Greenville (5),
iltil Jenkintown, "
Beaver,
Roaring Spring,
111.
Me
Bradford (4%),
(16) McDonald "
North East (5%),
East Stroudsburg,
(~/0 Lincoln ' 111
Moline (6%)
Tavlorsville,
(8) Alton "
Lexington (6),
(8) Sterling & R F. "
Elgin (6),
LaSalle,
(KV) Chillicothe "
Evanston,
(8) Cairo "
Rock Island (8),
(10) Oak Park "
Aurora (4),
Portland M e
Lewiston,
124 THE CITY FOR THE PEOPLE.
In most of the larger places and many of the smaller places
having private works, the companies withhold a part or the whole
of their revenue data. This greatly limits the number of possible
comparisons. For example, Springfield, Illlinois, has public works
serving the people at a cost of $5 per family. The places having
private works that would naturally be compared with Springfield
ou the basis of population, etc., are Peoria and Quincy. Both have
higher initial rates and much smaller consumption than Spring-
field, but the revenue statement is incomplete. The Peoria company
states only the commercial receipts, and the Quincy company only
the revenue from the city treasury.
These columns by no means represent the extremes. In some
Pennsylvania towns, where the consumption is very large, owing
probably to mining use, the revenue per family rises to $40 or more,
while in several Illinois towns having public works the cost per
family is below $1.50. For example, Hillsboro has an average daily
consumption of 125 gallons per family, and a yearly cost of $1.47
per family, including depreciation and taxes, with $1.20 for actual
interest (which is about 4 per cent, on the cost of the works), a
total of $2.67, interest and all.
The consumption in Oak Park is not given. That of Alton is
400 gallons, against 250 in Lexington. In all the other Illinois
corrij arisons the consumption per family is greater with the public
than with the private works'. The cost of the works reported by
the private companies is generally somewhat larger than the cost
of public works, whether it is really larger is in doubt. In some
cases the cost of works is much larger than with the opposite pri-
vate works, even accepting the capitalization of the private com-
panies Bethlehem, Shippensburg and Bradford for example.
Brookline, Massachusetts, has a public water system, while Hyde
Park, with about the same population, has a private plant. In
Brookline the family rate is $3 and the total family rental amounts
to $20y . In Hyde Park the family rate is $6 and the total family
rental $30. In Milford and Hopedale, having also nearly the same
population as Brookline, the private company charges $8 for the
ordinary family rate and $33 for the -total family rental. Yet the
cost of the works per family and per thousand gallons of output
is vei-y much greater in Brookline than in the other cases. Never-
theless the Brookline receipts are three times the operating ex-
penses, and yield a profit of about 3 per cent, on the value of the
plant, after allowing for depreciation, besides supplying public
buildings, streets, fire protection, etc., free. 4
Both Brookline and Hyde Park are supplied by driven wells and pump-
ing, rne Milford Company has wells and river and pumps.
There are other public plants with still lower rates than those of Brook-
Hue. For example. New Bedford, with $2.50 ordinary charge aud $12.50
total family rental, and Holyoke, with $4 ordinary ftnd $13 total. These
places, however, have 3 times the population of Brookline. Holyoke is
helped out by gravity. The New Bedford revenue from consumers is 2V 3
times the operating cost and sufficient to cover operating expenses, deprecia-
tion and interest actually paid, amount ing to about 2 per cent, of the cost
of the works. With what the city pays for street service, etc., the plant
yields a profit of 3 per cent, ou its value, above the cost of operation and
"oreelatton.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 125
Iii the winter of 1892 a statement was made by Henry R. Legate,
of the Xen- y at ion, before a legislative committee at the State House
in Boston, to the effect that a committee of the London County
Council had made a thoro investigation of the subject of municipal
water supply, and in their report of October, 1890, stated, among
other things, that the average daily water supply of Glasgow, Scot-
land, was 49.84 gallons for each person, while in London it was
but 29.91 gallons; yet the rate in Glasgow for a house of the
rented value of $250 was $7.25, and in London' for a house of the
same rental value it was $19.18, or 2y 2 times as much for 2/5 less
water. And in Glasgow one charge pays for bathroom and other
items, while in London extra charge is made for all these conve-
niences. The committee recommended that the city buy the works,
though the cost was estimated at $167,500,000.
Gas. In 1890 the private gas company in Hamilton, Ohio, was
charging $2 per thousand for gas of poor quality and refused re-
duction, protesting that it could not sell for less. It also refused to
sell out at a reasonable figure, and declined to arbitrate. So the city
built works of its own, charged $1 a thousand for good gas and
made a profit. When the city took possession of the gas works in
Charlottesville, Virginia, in 1876, the rate was reduced at once from
$3.50 to $3, then to $2.25 in 1886, $1.50 in 1887, and now the rate is
$1, and the total cost to the people is 83 cents per thousand. Dan-
ville, Virginia, reduced the rate under municipal management from
$4 to $1.50 in 1890, and the present total cost to the people is 88
cents. When Wheeling took the gas works, in 1870, the private
rate was $3.50. A large reduction was made at once, and now the
rate is 75 cents, with a total cost varying somewhat from year to
year, but averaging about 54 cents for the years whose figures are
at hand. Henderson, Kentucky, reduced from $1.50 to $1.25 in 1891,
and now charges $1. In Indianapolis a few years ago a citizens' co-
operative association secured gas at less than half the charge made
by the Standard Oil gas interest in Toledo or in Dayton ($54.8 an-
nual rate in Dayton against $26.8 in Indianapolis). Toledo put
in a municipal plant, and in spite of all difficulties, the million of
extra cost due to the Standard Oil war upon the city and the grad-
ual failure of the natural gas wells, the plant has saved the people
far more than its cost by its own service at low rates and by bring-
ing down and keeping down the Standard rates. 5
The municipal plant in Richmond delivers gas at the burner at
an operating cost of 57 cents a thousand. Taxes and depreciation
bring the cost up to 70 cents. 6 The private .gas company of Wash-
ington, D. C., better situated than the public works of Richmond,
8 Lloyd, p. 360.
8 Interest on the value of the plant would bring the total up to 82 cents.
But there Is no need to add interest, since the plant paid for itself long ago.
A private company must add interest, but a plant completey public owned
by the city, clear of debt, has no Interest. The people of Richmond are
getting gas at a total real cost of 70 cents, while Washington pays $1-10 V
fl.35. The people of Washington could get their gas at lower cost than
Richmond if they had municipal gas works.
] 26 THE CITY FOR THE PEOPLE.
refused to come lower than $1.25 till 1896, when Congress forced a
reduction to $1.10. In the large suburb of Georgetown the price
is still $1.35, about half of which probably is profit in the neigh-
borhood of 20 per cent, a year on the investment.
From Brown's Gas Directory for 1891 and Professor Bemis' studies
of municipal plants in the same year ("Municipal Ownership of Gas
in the United States") it appears that there were eight private
gas companies in Virginia and four municipal plants. All but two
of the private companies charged from $2 to $3, and the average
for the eight companies was $2.11. Three of the public works
charged $1.50 and one of them $1.44, and the average cost 7 to the
people, operating expenses and all fixed charges teas $1.11. In West
Virginia there were five private companies and one municipal plant.
One of the private companies charged $1, another $1.60, and the
other three $2 to $2.25. The public works in Wheeling charged 75
cents per thousand, and the total cost to the people was 50 cents,
there being no debt and no interest to pay, operating cost, depre-
ciation and taxes were the whole expense. The public works in
Philadelphia charged $1.50, but 60 cents of it was clear profit in
the city treasury above the cost of operation and fixed charges, so
the people really got their gas for less than $1. Of the 89 private com-
panies in Pa., 26 charged $2 and over, 55 charged over $1.50, 8
charged $1.50, and only 8 made a rate as low as $1, and they were
all located where coal was much cheaper than in Philadelphia.
During the whole history of public operation in Philadelphia the
cost of gas to the people was much lower than in Baltimore, Wash-
ington or Xew York. In Kentucky none of the 18 private com-
panies sold as low as the public works in Henderson. In Ohio
there were two public plants. The works in Hamilton supplied gas
at a total cost of $1 (30 cents of it being interest), and the works
in Bellefontaine (free of debt) supplied gas at a total cost of 63
cents per thousand. Of the 43 private companies only 5 made so
so low a rate as $1. The rival company in Hamilton was forced
down by public competition. In Cleveland certainly, and in the
other $1 cities probably, the charge had been forced down by the
power of the City Councils, under the Ohio law respecting city regu-
lation of prices".
It appears, therefore, that every one of the public gas works made
a splendid record as compared with the private plants in its own
locality.
The present cost of gas in public works is shown in the follow-
ing table:
7 Professor Bemis, including the cost of permanent improvements and
omitting depreciation, gives figures which average $1.31 for the four Vir-
ginia cities, with the interest actually paid in 1890. It seems fairer, how-
ever, not to take the expense of improvements in place of depreciation,
except where one is shown to be the substantial equivalent of the other,
which was not the case with the four Virginia cities in 1890. Estimating
depreciation at 2% per cent, of the investment and taxes at 1% per cent.,
the average total cost in the four Virginia cities was $1.17, including the
Itterest actually paid by Danville and Charlottesville, the Richmond and
Alexandria plants being free of debt. If all had been free of debt, the aver-
age total cost would have been $1.08.
Present Cost of Gas
Richmond, Va
Operating cost
per thousand
in burner
(in cents)
57
Total cost*
per thousand
(in cento)
70*
Charloftesville, Va
65
83*
Danville, Va ,
69
88*
Alexandria. Va
7ti
9'>*
Wheeling, W. Va
45
56*
Kellefontaine, Ohio
54
70*
Hamilton, Ohio
,.. . 43
PO
Henderson, Kv
74
90*
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 127
Selling Price
31.00
1.00
1.33
.75
.87 av.
.80
1.0(1
* Column B represents the actual cost to the citizens, operating
expenses, depreciation and taxes, and in the case of Hamilton in-
terest also (26 cents of the 80) all the other plants have more than
paid for themselves out of the earnings and the people have no in-
terest to pay. The addition of interest would bring the cost in
Richmond up to about 82 cents, and in Wheeling to 67 cents, etc.
Taxes run from 3 to 6 cents per thousand; depreciation 7 to 12
cents. The figures of column B are above the truth in several in-
stances, perhaps in all, because the superintendents have a habit
of including the cost of improvements and extensions, with ope-
rating expenses, which makes the first column really include an
item that partly or wholly offsets depreciation and sometimes more
than overbalances it. Wherefore the depreciation added to column
A puts some of the figures of column B above the fact. The small
size of most of the places and the consequent small output, the use
of coal gas and the high price of coal in Virginia puts the cost of
production above that which obtains in our larger Northern cities.
The Philadelphia works are leased to a private company. The
Toledo plant we have spoken of. Fredericksburg, Virginia, began
with public gas in 1891. The price has fallen from $3, under private
ownership, to $1.50 under public management, and the consumption
has more than doubled. The total cost to the city, including in-
terest, is $1.33. Dtiluth has recently bought the gas and water
plants. The charge under private ownership (1897) was $2 per
thousand, under public ownership (1898) it is $1.50, and $1 for fuel
gas. In Massachusetts, Wakefleld and MiddleborougJi began with
public gas in 1894, and Holyoke and Westfield have recently voted to
follow their example. In Wakefield, before public ownership, the
charge was $2.19, afterward $1.75, which covers all expenses, in-
cluding interest, in spite of the heavy capitalization ($11.37 per M),
due to the fact that under the imperfect laws of Massachusetts the
cit}' was forced to pay the private company for its works more
than double the cost of duplication.
In England the public works sold gas for 82 cents in 1889, and
made a profit of 22 % cents above interest and sinking fund, so that
the real cost to the citizens was 60 cents, while the private com-
panies charged 90 cents. In 1897 the public works received an
average of 75 cents a thousand, including 18 1/3 cents profit, where-
fore the real cost was not over 56 cents, while the private compa-
nies charged an average of 86 cents. 8
8 The cost in the holder in English plants of large output is about 30
cents, and distribution 6 to 7 cents in both public and private plants, being
128
THE CITY FOR THE PEOPLE.
A feic contrasts. Bringing together a few crisp contrasts from
preceding paragraphs and adding some new ones we have the fol-
lowing:
A Pew Crisp Contrasts.
Water and Gas Charges
Under Prirate
Ownership
Under Public Ownership
Ordinary family charue for water:
Syracuse, N. Y
$10
5
g
6
Randolph, N. Y
10
4
9%
P
54^
Average in Massachusetts
7%
5^|
164
9%
Aren-ge in Washington State
Cost of gas per thousand:
11
|2
lu
81
IHiluth
1% and Si
Wakefield
24
1%
3*
1%
Washington (priv.)
1.25
Richmond (pub.) .70
Pittsburg (priv.)
81.20 and 81 net
Wheeling (pub.) .75 and .96 net
2.11
1.17
Average in W. Virginia for '91
1.80
.50
Electric Light and Telephone. ! Private Charges
Public Cost
Cost of electric light in private plants:!
Cost
(1893-4) Pittsburgh, Pa.,
(IS91-7)Troy, N. Y
(1896) Buffalo, N. Y
(1897-8) Bufralo, N. Y....
per telephone :
United States Department of
the Interior.,
Grand Rapids. Wise. (prir.) ......
8195
148
27
100
875
ouse
usinesa
Cost of electric light lor like service
by public planis in the sameyears:
Allegheny, Pa S3
West Troy, N. Y 75
Detroit 83
Detroit 73
Washington (priv. metallic, tin- f ? i 00 nouse
limited) j -j s , 5 business
(225,000 population)
S<-henectady, N. Y. (priv.)
(27,000 population)
f 836 house
I 866 business
f $!l ay.cojfof pro-
Gran.) f 86 house I d"etiun per
Rapids \ -\ $%&
(co-op.) (18 business | whic h wouli add
I?:',.
Stockholm (priv. me- ($16 house
tallic, unlimited).. -<
(21-0,000 population) ($22 business
Trondhjem. Norway, :intmi-{
upal system <
(30JOOO population)
Telephone Conversation Charges Private Oionership
Local conversation by non-subsciiber
Bell prices United States 10 to 15 cts.
To call a friend to public station nearest his
home by telephone and messenger.
Bell price in Philadelphia 50 cts.
luterurban talk
Between Mount Holly and
Philadelphia 18 miles 25 cts.
Boston to New York 200 miles 82
Boston to Philadelphia 304 miles 83
Philadelphia to Chicago 820 miles 58
Public Ownership
( Switzerland 2 cts.
\ Germany 5 cts.
f Christiania 12 cts.
I Stockholm H cts.
Anywhere in
Luxenbur^" cts.
and Belgium 5 cts.
Same Distances
(England, postal
< lines, 6 cts.
(Sweden 4 cts.
England 60 cts.
f England 91 cts.
j France 50 cts.
| Germany 25 cts.
[Sweden 13 cts.
("Sweden 767 miles 27 cts.
j In Germany you can talk
1 all over the empire for
"
Public ownership and control is estimated to have reduced transporta-
tion cbargefl in Switzerland 78 per cent, below private monopoly level
( sec p. . I'J i .
OWNERSHIP OF PUBLIC UTILITIES.
129
These contrasts and the facts relating to water rents, the Glas-
gaw tramways and the "Two Bridges" stated in the earlier part of
this section, are sufficiently remarkable, but the antitheses now to
be stated from the history of electric lighting are, perhaps, still
more astonishing.
Electric Light. The table below and the explanation following it
are parts of one statement, and should be so treated in reading or
quoting.
Cost of Electric Light Before and After Public Ownership.
Tutul cost per lamp year for electric street lights before and after public operation, the
alter service being as good or better than the service it replaced.
AFTER
BEFORE
AFTER
Price paid private
Cot per ro in-
Cost under complete put'\ic owner-
ship in -lulling operating expen-
cluding operating
ses, taxes, insurance and depre-
street arc just be-
expenses, taxes.
ciation, but not inf rest, there
fore public oper-
insurance, d--pre-
being no interest 10 p:<j when
atiou begau.
elation and in-
public ownership in complete,
terest.
1. e. when the people own the
plant free of debt.
Aurora, 111
$325
872
961
Elgin, 111
2 .'8
375
65
95
56
80
Fairfleld, la
Marshall town, la
125
40
30
Bay City, Mich
100
67
58
Detroit, Mich
132
83
68
Allegheny, Pa
180
86
75
Bangor, Me
150
58
48
Lewiston, Me
182
58
52
Peabody, Mass
185
73
62
Column 2 is made up of the operating cost plus 5 per cent, on
the investment for insurance, taxes and depreciation, and 4 per cent,
for interest, except where the actual interest is known. With
Aurora, Fairfield, Marshalltown and Bay City the real contrast is
between columns 1 and 3, for there is no debt to allow for in those
cases. Perhaps the same is true of Bangor and Lewistown. The
data in my possession leave that point in doubt in those two cases.
The true contrast is alwaj-s between columns 1 and 3 if you wish
to compare private ownership and operation not merely with public
operation of a plant the capital in which is still privately owned,
but with public operation and ownership complete. 3
a little less in the public than in the private works. Wages are higher here,
but the hours are 10 to 12, instead of 8, as in England. Allowing for this,
American wages are about 25 per cent, higher, a difference more than bal-
anced by the lower cost of oil and coal, so that in American works of large
output, the cost in the holder is usually less than 30 cents. (For further
details respecting the real cost of gas making, see reports of the public
companies in America and of the Local Government Board in England.
Also Prof. Bernis" Municipal Gas, pp. 25-7, 46-51, 54. 61, 129. and chapter on
Gas in Municipal Monopolies, pp. 589-592, 606, 608-9, 611-628. City Govern-
ment, The Progressive Age, and the proceedings of the Incorporated Gas
Institute, England, contain valuable data that help one to keep abreast of
the times.)
8 When we are trying to ascertain what it is fair for a private company
to charge, we must add interest, but when w.e are trying to discover the
effect upon the people of a change to complete public ownership, there is
no interest on the public side of the account.
In mv articles on "The People's Lamps." in Tit- .\r<'im. June to Decem&er,
1895, which constituted the first attempt to classify electric plants according
9
130 THE CITY FOR THE PEOPLE.
For Bay City, Detroit and Allegheny the figures represent the
cost in the second full year of operation, after the plant had -ot
well under way, but in the other cases the cost in some of the sub-
sequent years has exceeded the cost in the early years, and so I
have taken an average of all the years for which the data were ob-
tainable. For example, the Peabody costs, including interest and
all, as reported by the superintendent, run $70, $78, $70, $75, $72.7,
affording an average of $73.
In Aurora the operating cost for the second year was $25 per arc,
and the investment $230 per arc, making a total actual cost of
$36.50. An allowance of 4 per cent, interest would add $9.20. In
later years the operating expenses have varied from $50, and even
$54, to $45 and $40, which is the figure for 1898. The total operating
expenses from the start foot up to $95,882, which, divided by the
total number of lamp years gives an average operating cost of $50.
The average investment has been about $220, wherefore the average
total cost of production for the dozen years has been about $61 a
year for 2000 candle power arcs operated an average of 6 to 7 hours
per day. Deducting 3 per cent for depreciation each year since
the second the present investment for each of the 233 arcs is about
$200, so that the present cost of production is $40 operating cost,
plus $10 for taxes, insurance and depreciation, or $50 total. No
wonder the city clerk says in his report of 1897: "Our citizens are
thoroughly convinced that municipal management of street light-
ing is the most economical and satisfactory."
Prior to city ownership, in 1890, Elgin paid $228 per arc till mid-
night, but in 1891 the city plant ran all night, on the moon schedule,
or one-third more hours, at an operating cost of $42 per arc, and
a total cost, interest and all, of $62. The prior private rate \vas fully
to the elements of cost, and make anything like a thoro study of public and
private operation, a table was introduced comparing the cost of light be-
fore and after, using in the "after" column the figures for complete public
ownership as reported to me, and explaining in the text that interest was
not included and why, and that in some cases the reported "operating ex-
penses" included repairs which the superintendents said were more than
sufficient to cover depreciation, etc. The table, however, was quoted with-
out the accompanying explanation, and so was misunderstood. I have there-
fore reversed the plan, putting in the "after" columns the highest figures
fairly claimable, with interest in column 2 and without any offset against
depreciation in any case, relying on the accompanying explanation to in-
dicate the amount of deduction that should be made. Two mistakes in
printing were made in the Arena table, and in some cases I have found that
the figures reported to me by the authorities in my earlier Investigation dilVer
from those now sent me for the same items. For example, the former re-
port from Bay City said the price per arc just before city ownership was
$110, while the letter now at hand says it was $100. So in Elgin the price
was reported to have been $266, while it is since stated as $228. My former
question, however, called for "the price paid for similar service," and_ as
the lamps burn more hours under public ownership, the former answer may
have been an estimate of what the public hours would have cost at the
private rate for lower hours.
Some corporation gentlemen have objected to some of the comparisons
of public and private rates, because Aurora and Fairfleld run the electric
works in connection with the water works, and Bangor not only does that,
but uses water power, as Lewistown does also. I cannot see, however, that
it makes any difference how the people make their saving. If they make
it. It Is made just the same, whether steam or water is the means.
If a city saves $10 an arc by. using water power, it is $10 per arc ahead of
where it was just as much as if it were saved in any other way. The
purpose of this comparison is not to blame the private companies, but to
show what the people have gained and can gain by taking matters into
their own hands and using their wits.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 181
equal to $266 per arc for the service rendered by the public plant,
or over three times the public total. Under public ownership the
operating expenses in the seven years for which I have data have
been $42.2, $45.7, $46.2, $42.6, $43, $53, 47.2, giving- an average of
$45.5. The report for 1898 for example puts the operating cost at
$47.20 including $1 for insiirance. The average investment per arc
figures about $200, so that the average total cost without interest is
$56, and with interest $62. These averages are almost exactly the
same as for the third year of operation, and somewhat above the
figures for the second year.
In Aurora and Fairfield the private charge was over four times
the public total, there being no debt on the public plant, and, there-
fore, no interest to pay.
Detroit reports $89 per arc, total cost, including interest for the
year ending June 30, 1897 (the second year of operation), but Pro-
fessor Commons and Professor Bemis both criticise the reports of
the Detroit Commission. (Municipal Monopolies, pp. 141, 270-2.)
Professor Commons objects that the $89 includes interest, $18.28
per arc on the whole plant, no allowance being made for the incan-
descent lights or for the fact that the debt was less than the cost
of the plant. The true interest was $3.13, less than that charged
to the plant in the report. Professor Bemis, speaking of the report
for the next year, notes that the investment per arc is calculated
without due allowance for depreciation or for the fact that $43 per
arc represents conduits, only one-fourth of which are used by the
electric light plant. One-half of the poles also are used by the
police and fire departments and by private lighting, telephone and
street railway companies. Regard to these and other considerations
named by Prof. Bemis would reduce the total cost by $3 or $4 more
per arc. For 1898-9 the Commission reports $46.46 operating cost
per arc; depreciation, $10.85; interest, $14.48; lost taxes, $3.77;
total, $75.56, including interest, or $61 per year under complete
public ownership, free of debt. The number of arcs averaged 1868
for the year, and the investment per arc is said to be $360, bnt $300
is more nearly right, as indicated by the above facts.
The Allegheny plant makes an excellent showing-. The last re-
port gives $48 operating cost per arc of 2000 c. p., burned all night
and every night. This cost includes insurance and water. Without
insurance the operating cost is about $46. Depreciation is estimated
at $12.46, or 5 per cent, on the total investment down to date. In-
terest is put at 4 per cent, on the whole investment, or about $10;
lost taxes, $1.87. Total, $72.33. Five per cent, depreciation is too
much. 10 The investment on which depreciation should be estimated
is not $250 per arc, but $218, the amount resulting from writing off
3 per cent, depreciation each year, and the depreciation per arc
now is only $6.54, instead of $12.46. Subtracting the sinking fund
from the face of the debt, the real debt is only $200,000, and as
10 See "The People's Lamps," Arena, for Sept., 1895; and "Municipal
Monopolies," pp. 113, 127, 133, 207, 269, etc.
132 THE CITY FOR THE PEOPLE.
one-fifth of this belongs to the incandescent plant for public build-
ings and not to the arc service, the real debt for each of the 1200
arcs is only $133, and as the bonds draw interest at 4 per cent., the
actual interest is $5.32, instead of $10. The real total cost for 1898
is, therefore, under $62, including interest and all.
Fail-field has a little plant that cost the city $5000. If 3 per cent,
depreciation be deducted from 1882 the investment now is but $180
for each of the 18 arcs operated. The average yearly operating cost,
including the expense of all renewals, has been $64 per arc.
Bay City paid $100 per arc burning 1400 hours, but under public
ownership burned its street arcs 2421 hours (or 1021 more than be-
fore) at a total cost of $58, there being no debt. In Peabody the
arcs contracted for were supposed to be 2000 c. p., but, according
to the frequent experience with private companies, were really
lower in candle power than the 1600 c. p. lamps operated by the city.
The table by no means exhausts the important facts in this con-
nection, but its meaning is likely to be better understood if it is
not too long. A few additional facts, however, may be mentioned
here without danger of confusion.
Jacksonville, Florida, started a public electric plant in 1895, which
at once reduced the commmercial incandescents to less than one-
third and commercial arcs to about half what the private company
was charging an average reduction of nearly 2/3 on the bills of
the first month. In the third year of operation the net cost of
the public arc lights has been reduced to less than % of what the
city had been paying a private company, and commercial rates
have been reduced from % to % , forcing reductions also on the
part of the private companies in their charges for electricity and
for gas reductions which alone are officially estimated to equal a
yearly profit to consumers of light of 2/3 the cost of the public
plant. (See further Appendix II B.)
Jamestown, N. Y., began in 1892. In 1894-5 it added a commercial
plant. In 1897 it operated 275 street arcs 1200 c. p. and 1200 sixteen
c. p. lamps, or 375 sub-arc equivalents at a net .cost to the city of
$48 per arc year, including depreciation and interest, a saving of
fully 1 cent per lamp hour, or $22 a year for each lamp equivalent,
or $8250 for the 375 sub-arc equivalents. Citizens pay the city plant
$6000 a year for commercial lights, saving $3000 on former prices. 11
Total cost and total income, $24,000; total saving on the light fur-
nished by the public plant, $11,250. Besides this, Professor Com-
mons estimates the forced reductions in the charges of the private
company at $10,000 a year, making the savings to the citizens
effected by the public plant amount to a total of $21,250 a year in
a town of 2300 people.
Lansing, Mich., bought the private works, reduced rates at once
from 20 to 18 cents per 1000 watts, and again to 12 cents in two
11 One largo consumer, who had boon paying ?1.400 a year for his li.irhvs
fot them from the city for ?900. A leading suc-inl club had been payinLr
450. To retain its custom, the company reduced the charge for the sam^
Ught to $120.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 133
years, and as nearly one-third of the receipts are still clear profit
above all expenses, including- interest, the real reduction is not
merely 2/5, but well toward 2/3 of the former private charges.
Springfield, 111., has lowered the cost of light from $138 to $60
per arc by a plant built to become public via a citizens' trust. The
city pays $113, but $53 of it is not for light, but goes toward paying
for the plant. The $60 covers interest, depreciation and operation
(see Method below). The Chicago plant, in its early years, cut the
cost at least $125 from the private charges before the public plant
was built, and is now making a fine record. (See Objections below.)
Chief Barrett said in 1895 that the public works could furnish com-
mercial incandescents at % the private charge of a cent per lamp
hour, 16 c. p., if the public plant could secure permission to sell
commercial lights. Eecently he has said (speaking of the whole
commercial service, including both arc and incandescent lights)
that if the city could sell light to private consumers the charges
now exacted from them could be cut in two. The South Park Sta-
tion, in charge of the Park Commissioners, makes a splendid show-
ing, as appears in the table below.
Logansport, Ind., has a commercial plant which has just reduced
the commercial rate for incandescents to 5 cents per 1000 watts, or
14 cent per lamp hour, 16 c. p. In 1894, when the public plant was
built, the private charge was 1 cent per hour or 20 cents per 1000
watts. 1 In 1897 the commercial receipts of the Logansport plant
more than covered the entire operating expenses, plus depreciation,
taxes and insurance, giving the city its street lighting free and a
profit besides. Ames, la., reports receipts from commercial lighting
which yield a surplus above all costs of operation, depreciation
and interest. Quite a number of public plants cut the cost of public
lighting very much by selling commercial lights at a profit tho at
rates very much below the usual private charges. (See Arena, Vol.
13, pp. 391-2.) Seven municipalities report all expenses covered by
commercial lighting and seven others report a profit above all cost
of operation and fixed charges. (Ibid., adding Ames and Logans-
port.)
The present cost of producing electric light in municipal plants
is shown in the following table. The data given by the local au-
thorities have been adopted except as to the investment per arc in
Detroit, Allegheny and Aurora. (See above.) The investment given
in a number of other cases is probably 15 per cent, or 20 per cent,
too high, because depreciation, tho estimated as part of the cost
of light from year to year, has not been charged off or deducted from
the capital account. The figures relate to 1897 and 1898, except in
Braintree and Danvers squares, where separate arc data have not
been sent me since 1895. For 1898 the Danver's municipal reports
show 123 sub-arcs, 1,200 c. p. (average number for the year 115) and
1 Logansport has natural gas for power, estimated by the local authori-
ties to be equal to coal at $1.65 per ton. This does not affect. the compari-
son, for the private plant had the same advantages in respect to fuel as
the public plant.
134
THE CITY FOE, THE PEOPLE.
about 3,000 commercial incandescents 16 c. p. The commercial rates
are % cent per lamp hour or 10 cts. per 1,000 watts. Commercial
receipts, $3,752; total operating expenses, $7,869; leaving $4,117 to
be paid from taxation, which with interest and depreciation on the
whole investment gives $59.28 as the total cost to the city of each
street arc as estimated by the local authorities. The total invest-
ment is $37,313; incandescent, $20,500; arc, $16,813. The debt on
the arc plant is $1,500, and there is in the treasury a sum of $1,500
Bet apart to pay that debt, so that in fact no interest should be
entered against the arc service when the cost of production is being
considered. The actual operating cost per sub-arc was $46 four
years ago, and is probably lower now; depreciation and taxes
would add $6.50, making the total cost of production now not over
$52 for each sub-arc of 1,200 c. p. burning an average of 5 to 6 hours
a day.
Present Cost of Electric Light in Municipal Plants.
3 .
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156
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838%
87
$43
86
8145
Lewiston, Me
150
6
45
52
5%
133
Dunkirk, N. Y
8
81.45
391^
14
63^
li
410
West Troy, N. Y
115
3.15
**"Xa
61
14
ww/2
75
It
280
Allegheny, Pa.
1,200
11
.95
4K
11
57
. 7
218
Hasten, Pa
141
2.85
80
15
95
12
300
Bay City, Mich
209
7
1.80
491/
52
V 1 ^
187
Detroit, Mich
1,868
2.10
/4
15
' /2
12
SCO
Chirago (So. Park
2
2
Plant)
490
6
3.90
42
15
57
11 V
290
Aurora, 111
233
6
1.75
40
10
50
8
200
Elgin, 111
188
6
1.90
9V
56
190
Topeka, Kan
264
6
2.00
9
51
9
185
Little Rock, Ark
7
2.55
41M
8
8%
165
Wheeling, W. Va
(2500c.p.)
450
11
.90
46
11%
57%
9
230
Peibody, Mass
(1600 op.)
10
3.25
51
10V
fil 1 /
8V
210
170
/2
01/2
/2
Braintree, Mass
(1200c.p.)
TV*
3.05
47V
14
61 V
11V
280
118
1 /a
/2
01/^2
/2
Panvers, Mass
(1200c.p.)
5%
3.00
46
10V
B6V
8%
210
78
* r fm
x2
WW/2
Jamestown, N. Y
(l-'OOc.p.)
283
11
1.60
36
13
49
2fiO
So. Norwalk, Conn
(1400cp.)
joo
6
2.80
36%
11
47%
9
220
The interest actually paid in some of these plants West Troy
and Aurora for example is nothing. In others the actual interest
is much less than the estimates in the seventh column. For ex-
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 135
ample, the real interest in Allegheny is $5.32 per arc; in Wheeling,
$3.00; in Dunkirk, 53 cents, etc.
The first 14 plants have no commercial business. This is well un-
derstood to be a serious handicap. Chief Barrett, of Chicago, made
this point very emphatic, and Mr. Alex. Dow, formerly in charge of
the Detroit plant, and now general manager of the Edison Illumi-
nating Company, of the same city, says: "It is peculiarly character-
istic of public lighting operated all night, that its addition to the
ordinary work of a private lighting plant tends to reduce the
average cost of the combined output." He also speaks of the dupli-
cation of equipment resulting from having one plant for commer-
cial work and another for street work. 1 This matter was clearly
brought out in the Arena in 1895. 2
For other data respecting the cost of production and the charges
for commercial light, see my chapters on "The People's Lamps," in
The Arena, Vols. 13 and 14, and the later investigations of Professor
Commons and Professor Bemis, in their chapters in Municipal Mo-
nopolies. I have found the usual commercial charge in public
plants to be y 2 cent per lamp hour, or half the usual private charge.
Sometimes the rates are % of a cent, as in Peabody and Marblehead,
Mass., and Lisbon, la., and sometimes they go down to 1/3 of a cent
or below, as in Newark, Del. (with steam), and Swanton, Vt. (with
water power), and in one instance, Logansport, Ind., the rate is
y 4 of a cent per lamp hour. Professor Commons arrives at sub-
stantially the same conclusion, stating that the usual rates with
public plants are y a cent per meter hour and 35 to 50 cents per
month, against one cent per hour and 75 cents to $1.25 per month
with private companies. (Munic. Monops., p. 156.)
Professor Bemis has obtained data from several hundred plants,
public and private, and placed them in groups, according to number
of lamps, candle power, hours burned, cost of coal, etc., and in every
group the average charge by the private companies is more than
the cost in the public plants, even when, in addition to 5 per cent,
interest, 7% per cent, is allowed for depreciation, loss of taxes and
other charges not covered by the operating expenses. (Ibid p. 240
and tables following.) Professor Bemis does not allow such per-
centages because they are the true percentages, but in order to
meet objectors 011 their own ground. His tables comparing public
and private plants operating under similar conditions thruout are
admirable. The method is as conclusive as anything can be, except
the record of "befores" and "afters" in the same cities, or the direct
comparison of plants precisely alike, except that one is public and
the other private. And his facts show beyond question that even
admitting the claims of the leading advocates of private monopoly,
the proof is still clear in every group that public service is cheaper
than private.
The facts of this section by no means, exhaust the evidence on
1 Address to the Natl. Elec. L. Assoc., June 8. 1898.
2 "The People's Lamps," Nov. number, pp. 449, 455.
136 THE CITY FOR THK PEOPLE.
this head, yet they constitute a massive proof that public owner-
ship tends to low rates. I have thot best to dwell with special em-
phasis on the financial sections of this chapter, because the majority
of people live on the money plain. With most men when you touch
the pocket nerve you touch the most sensitive part of their being,
the most fully developed portion of their nervous structure, the
fibres most vitally connected with the motor muscles and the
centres of thought and action, and having the most powerful in-
fluence over them. For these reasons I give much space to the
financial aspects of the subject, tho I believe them, weighty as they
are, to be, nevertheless, intrinsically of vastly less importance than
the humanitarian and social advantages of public ownership.
THE ECONOMY OF PUBLIC OWNERSHIP.
II. Economy. Besides the saving to the people from low
rates public ownership tends to secure an absolute economy
in production. Several of the reasons for this I stated in The
Arena for August, '95, and repeat them here with nine addi-
tional points.
1. A public plant does not have to pay dividends on watered stock.
2. It does not have to pay dividends even on the actual Investment.
3. It does not have to retain lawyers or lobbyists, or provide for the en-
tertainment of Councilinen, or subscribe to campaign funds, or bear the
expenses of pushing the nomination and election of men to protect its
interests or give it new privileges, or pay blackmail to ward off the
raids of cunning legislators and officials, or buy up its rivals, etc.
4. It does not have to advertise or solicit business.
6. It is able to save a great deal by combination with other department*
of public service. Speaking of the low cost of electric light in Dunkirk,
the Mayor of the city says: "Our city owns its water plant, and the
great saving comes from the city's owning and operating both plants.
No extra labor is required but a lineman. The same engineers, fire-
men and superintendents operate both plants, and the same boiler
power is used.,, So in Bangor, Marshalltowu, and a number of other
places, the municipal lighting system is run in connection with the
public water plant. In Wheeling, the gas and electric plants are op-
erated together. In La Salle, the fire, water, and light departments
are consolidated. A great saving in the cost of labor and superintend-
ence results.
6. Public ownership has no interest to pay.
7. Even where public ownership is incomplete, the people not owning the
plant free of debt, they still have an advantage in respect to interest,
because they can borrow at lower rates than the private companies
have to pay.
8. As cities usually act as their own Insurers, public ownership is free of
tribute to the profits and agency commissions of private insurance
companies. Looking at the public works of the country en masse, this
is a decided economy. But the diffusion of loss in individual cases
is likely to be less perfect under this system than with private in-
surance, unless municipalities federate in a plan of mutual insurance.
Ex-Mayor Matthews, of Boston, defending the charges for electric
light in that city, as agent of the Boston Electric Light Company, (in
the summer of 1898), admitted that a private company must add $8
or $10 to the legitimate cost in a public plant, because a private com-
pany would demand 6 per cent, on the investment, instead of 4 per
cent, and would have to pay nearly $2 more per light for insurance,
fire and liability, to cover the profits of a private insurance company.
9. There is often a large saving in salaries. A public plant pays its chief
well, but does not pay the extravagant salaries awarded by miliionare
monopolists to themselves or their substitutes in office.
10. Public plants frequently gain thru the higher efficiency of better treated
and more contented labor, still further energized in many cases by
the noble motives and sentiments that go with public service in the
minds of patriotic men.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 137
do not burden the
C StS L f ("Ration are likely to be less with public than
works. Accidents are fewer in a system that aims at
good service and safety, and treats its employes well. When tv do
occur, the claims are often compromised or settled fairly and amicably
without suit. (Sometimes public industry is largely protected by law
from damage claims, but this is not a good economy.) When trial be^
comes necessary, juries are more lenient toward cities and towns than
toward private corporations. And finally, legal talent costs the cUy
less than a private company for the same service. I have in mind a
city of a hundred thousand people I used to know something of which
paid only $1,500 a year to one of the best lawyers in the state to act
as city counsel while a railway company retained the same lawyer at
a salary of $10,000. The Boston Elevated is said to have paid nearly
F20,000 for the services of two lawyers in connection with a single hear-
ing at the State House, or more than half as much in one item as the
city of Boston pays for legal services in a whole year. The totals of
corporation expenditure for lawyers salaries and fees are not easy to
obtain, but it is well known among those conversant with corporate
S,??^ 1 ?' , t ^ t a sin S le municipal monopoly, like the Union Traction of
Philadelphia or the West End Street Railway of Boston, pays several
times as much for legal services as the whole city in which it is located
with all its hundreds of miles of streets and other vast interests such
as water-works, gas-works, fire service, schools, parks, hospitals etc
and its complex government with thirty or forty departments
13. The civic interest of the people leads to other economies thru the in-
crease of patronage and the lessening of waste. The larger the out-
put, the lower the cost of production per unit of service, other things
equal, and the tendency to waste electricity, water, etc.. is much
less when the people know that the service is 'a public one, the profits
of which belong to them and the loss in which, if any, must be paid by
them, than when they know that the service is rendered by a private
corporation charging monopoly rates and making big profits for a few
stockholders. These economies are intensified as education and exper-
ience with public ownership develop the understanding and the civic
patriotism of the people.
14. The diffusion of wealth and elevation of labor accompanying public
ownership tend to diminish the extent and the cost of the criminal
and defective classes.
15. The cost of numerous regulative commissions and interminable legisla-
tive investigations into the secrets of private monopolies, would be
saved by the extension of public ownership.
16. The elimination of conflict and antagonism carries with it the cost of
all the useless activities prompted by that antagonism. Legislation
would cost us less, for example, were it not for the private monopolies.
For a large part of the time and attention of our legislatures is given
to them.
Mr. Baker thinks that one "advantage of city ownership is that
no taxes are levied by the city on its own property, and hence this
item of expense is eliminated." I believe, however, that taxes must
be included in the real cost of municipal water, gas or other public
service. (1) The government is a factor in production. Every hon-
est industry, whether public or private, owes something to the
safety, order and protection afforded by state and municipal gov-
ernments, and to that extent the cost of government is an element
in the cost of producing commodities and service. (2) Justice re-
quires that taxes should be included in the cost of public supplies
and collected in the rates, except where considerations above the
financial plain command the service to be rendered free or below
cost. To bring out the point, suppose the taxes of a community
were paid by the consumers of gas and electric light thru the me-
dium of the rates. If then the electric light plant were made public
and freed from taxes, the consumers of gas would have to pay the
whole cost of the government. The elimination of taxes from the
cost of public service would throw an undue burden on other prop-
erty and industries and their distinctive patrons.
Some persons insist that interest must be estimated as part of
138 THE CITY FOK THE PEOPLE.
the cost in public works, whether the plant is clear of debt or not.
This seems to me an error, and I am glad to find that both Profes-
sor Commons and Professor Bemis agree with me. 1 There is no
more reason to compute interest on a public plant out of debt than
on the money invested in the streets and pavements. If a man B
earns $2000 a year and lives in a house of his own, for which he
would have to pay $1000 if it were owned by some one else, it does
not cost him $3000 to live, but only $2000, if he spends all he makes.
It is one great advantage of owning his dwelling that it costs him
less to live than if he had to rent. But you may say, he could rent
his house for $1000, so it really costs him $3000 to live. Well, per-
haps he could earn $10,000 a year in another business, but it does
not cost him $10,000 a year to live because of that fact. The pro-
ductive effort he puts forth, the total cost to him, is $2000 a year.
His two daughters might earn $1500 teaching, and his wife might
take in washing, etc., which, with the rent of the house, might
make a total of $5000 a year income the family might have, yet it
does not cost that family $5000 a year to live. It is a confusion of
thought to class what you give up as part of the cost of production. 3
1 Professor Commons comes to his conclusion by a different path, but
reaches the same result that I did in the '95 Arena articles, speaking of
which, the Professor says: "I agree that both he and the city officials are
right in figuring interest only on the outstanding debt. This gives the true
cost of production to the taxpayers, and the saving of interest in this way
must be counted as one of the most important economies which municipal
ownership brings." (Munic. Monops., p. 100.) Speaking of the Richmond
Gas Works, Prof. Bemis says: "Since the plant was paid for fully 15 years
ago out of the net receipts, there is no need of allowing anything for In-
terest." And again, when stating the cost in Bellefontaine, without any
estimate for Interest, he says: "As the plant has been paid for, there is,
of course, no need of earning interest." (Ibid, pp. 609, 613.)
2 It may be said that a city owning a gas or electric plant, for example,
might have put the cost of the works at interest so that "lost interest"
must be included in the cost of production along with "lost taxes." In the
first place, taxes are not Included, because they are "lost." The taxes
formerly coming from the private electric company are not lost. Their
Incidence is changed, that is all. The government gets its requisite revenue;
if less here then more there. The said taxes were really paid by a certain
body of citizens thru the medium of light rates; now they are paid thru
other media by a somewhat different body of citizens perhaps. The reason
for including taxes is that they pay for one of the factors in the production
of light the protection of government. There Is no analogy therefore
between Interest and taxes in this relation.
In the second place, suppose a city owns an electric street lighting plant
producing at a cost of $60 per standard arc Including operation, taxes and
sinking fund for depreciation and insurance, and that the investment is
$300 per arc. And suppose the city sold the works, loaned the money at 5
per cent, (or $15 an arc) and bought light from a private company at the
$60 cost plus $15 interest; the real cost to the city is still $60; the $15 is
really paid by those who borrowed the electric light money; whatever way
you look at it the ownership of the electric fund saves the city from
wrestling for interest on electric light or other commodity involving equiva-
lent capital. It is one of the great advantages of ownership that it saves the
owner interest. Interest is money paid for the use of money or capital. If
you own the capital you don't have to pay for the use of it. Otherwise you
might as well be a borrower as an owner. When the producer works with
his own capital he has to take care of depreciation but not interest. If
Interest were charged in the above mentioned public street lighting plant
and $75 per arc were collected from the taxpayers instead of $60. $15 of
each $75 would go into the public treasury, that is in substance it would go
back into the pockets of the taxpayers and the effect would be the same as
if no interest were calculated on electric light. In case of a commercial
plant paid for by taxation the effect would probably not be quite the same
so far as Individuals are concerned since the body of consumers may not be
Identical with the body of taxpayers in personnel or proportion of payment.
Yet oven here the difference practically vanishes when the plant is paid for
out of earnings as is usually the case, and under any circumstances if the
municipality owning a plant commercial or otherwise, is regarded as a unit,
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 139
The cost of production is what you must have under existing con-
ditions and the rest is profit. Let rival manufacturers make war
on each other, one an owner and the other a borrower, and you
will soon see that interest does not enter into the cost of produc-
tion in the case of the owner. He. can live on his wages of superin-
tendence. Operating expenses, including repairs, insurance, taxes
and depreciation, cover his cost and he can sell right down to the
bone if he is willing to get along without profit. In the case of the
borrower, however, interest is an item in the cost of production,
and it is just this difference that makes it so much cheaper to be
an owner than a borrower.
The advantage of a city as a borrower is a considerable item.
In 1895 I found that, as a rule, private companies were paying from
2 to 4 per cent, more than the municipalities in which they were
located. The West End Street Railway paid 5 and 6 per cent., the
Boston Electric Light Company reported interest amounting to 6
per cent., and the Edison Company's report indicated 7 per cent.
All the way thru the Water Manual I find the private companies
paying 5, 6 and 7 per cent., while the public loans often run 2 per
cent, less, and sometimes 3 and even 4 per cent, below the private
rate. Boston, New York, Philadelphia, Syracuse, Dunkirk and other
cities have borrowed at 3 per cent.; Cambridge, Rochester, Troy,
Alllegheny at 3% per cent.; Peabody, Braintree, Newton, South
Norwalk, Harrisburg, Easton, 4 per cent. A difference of 2 per
cent, in the interest rate means a difference of about $5 per year
in the cost of production of a standard arc lamp under ordinary
conditions, and with a plant like that of Chicago in 1894 (under-
ground wires, etc.) it would mean a saving of $12 per arc, or $13,320
on the 1110 arcs then lighted by the city plant.
The higher wages and shorter hours that often characterize
public treatment of employes, have a tendency to increase the cost
of labor. This is often balanced or more than balanced by a re-
sulting increase in the efficiency of labor. When it is not, the ex-
cess should properly be charged, not to light, or water, or trans-
portation, but to citizenship. The true philosophy of the matter
is that if a city can produce light for $60 per arc at competitive
wages and hours, that is the real cost of production of the light,
and if $20 more per arc are paid, not because the city has to pay it
to get the light, but beeaxise it Irishes to pay it to get better citizen-
ship, then the $20 in a rational account should not be charged to
the production of light, but to the production of manhood.
In respect to the salaries of leading officials, public ownership
economizes in money at the same time that it diminishes luxurious
and aristocratic tendencies and helps to produce conditions favor-
able to the growth of democratic sentiments and the development
the payment of interest on a service free of debt is simply paying money
out of one pocket into another, just as if a man owning a mill should pay
hints- If $1000 interest on the capital invested. The interest would go from
his right pocket into his left, he would have just as much money as be had
before, and interest would really have cost him nothing however much he
put it down on paper.
140 THE CITY FOK THE PEOPLE.
of vigorous and useful manhood in the leaders of industry and in
their families.* In Auburn, New York, the president of the private
water company received $4000 a year, but after the city bought
the works the chief of the water system received $2500, and the
total operating expenses were reduced from $20,000 to $10,000 the
first year, altho the output was increased 500,000 gallons a day or
1/7 of the total under private ownership. In Philadelphia the head
of the gas plant supplying the whole city received $5500 a year,
while the salary of the president of the Boston gas combine was
$25,000, and that of the treasurer $22,000 a year. With the street
railways public ownership would save at a still higher ratio in the
item of salaries, if it is true, as reported, that the presidents of the
railway systems in our largest cities receive $25,000 to $50,000 or
more apiece. It is understood that the former president of the
Union Traction of Philadelphia received $25,000, and the new presi-
dent began with $20,000, with a prospect of increase. The name of
H. H. Vreeland, president of the Metropolitan Traction of New
York, is put in the center of a list of ten men whose salaries are
said to aggregate $650,000 a year.
The amount of economy due to the elimination of legislative cor-
ruption, etc., under the third count, cannot be estimated with any
precision. The reader will find in Sections 8 and 9 sufficient evidence
that the saving is not inconsiderable. The following passage from
page 135 of Professor Bemis' work on Municipal Gas will impart
additional emphasis to the point.
"A lawyer of deserved prominence and high character in Tennes-
see who has been the attorney of a large gas company for years in-
formed the writer that not a year had passed since he has known
anything about it, when his company had not felt itself forced t
direct bribery of the city council to secure favors, or more often
to protect itself from unscrupulous raiders. The superintendent
of a large gas company in another state told me that, while his
company had not thus resorted to bribery, it would undoubtedly do
so in self-defense if its interests were seriously menaced. A well-
known president of one of the largest gas companies in the West
has informed a friend of mine that he was asked a bribe of $5000
on the very floor of the city council by one of the members. A
stockholder in another gas company tells me that his company pays
annually two per cent, on its capital as a bribe to members of the
city council to ward off raids."
* The leading owners of a gas plant, street railway or other monopoly
are apt to appoint themselves to the chief offices, attaching large salaries
to their positions as one means of concealing excessive profits and a pleastut
method of stroking their vanity the right way the high salary being a
(self-created) testimonial to the great worth of their personal services.
Large salaries being once attached to the offices, are apt to continue In
greater or less degree when the same offices are occupied by non-owners.
This process, together with the need experienced in some cases of paying
high wages to attract men of special ability away from business on their own
account into the ranks of employes, or to win aggressive men who might ex-
pose or oppose the monopolists if not retained by them, and the sympathy
naturally felt by the owners for the agents closest to them and in fullest
enjoyment of their confidence, have led to the payment of salaries on a scale
commensurate with the overgrown profits of monopoly.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 141
Two per cent, on the "capital" of a private gas company might
mean anywhere from 6 to 20 cents per thousand on the price of
gas (not counting- the extremes of capitalization), or 10 to 25 per
cent, added to the fair rate per thousand feet.
It is interesting in this connection to note the testimony of Mr.
Allen R. Foote, a former secretary of the National Electric Light
Association, who opposes public ownership, but, nevertheless, ad-
duces many facts that make against his position. He says that
"A public plant has no expensive conflicts with the municipal coun-
cils, nor is it compelled to maintain a lobby, resort to bribery, give
interest in stocks and bonds to politicians, or fee able attorneys to
watch 'strikes' in the legislature or council, and to resist unjust
taxation. It does not have to 'fight' to obtain new legislation or
ordinance before it can extend or improve its service or make
changes in its motive power. These sugggested disabilities under
which every public service corporation operates to a greater or
less degree, none of which inhere in the conditions imposed upon
municipalities, tend to increase capitalization, increase rates of in-
terest and the cost of operation, through fixed charges or otherwse,
and correspondingly to increase the necessary price charged users
for the service rendered." 3
Mr. Foote's intention is to prove that it is unfair to compare the
cost in public and private plants, but what he really shows is a
few great defects of the private system and some of the economies
and other strong advantages of public ownership.
THE CO-ORDINATION OF INDUSTRIES.
III. Co-ordination deserves a separate consideration be-
cause it is far more than a mere economy. It may mean $8 or
$10 saving per standard arc to combine the electric plant with
the water works sendee, but that is not all it means. The
lesson in harmony and co-operation is worth more than the
money manhood and civilization lie along that path as well
a> wealth and leisure. Private ownership may attain the bene-
fits of co-ordination to some extent, but only public ownership
can realize them fully. The dangers and detriments of private
monopoly increase with combination and so offset the benefits
of union. This is why the law is so careful to limit the scope
of franchises and restrict the consolidation of private com-
panies. Only public ownership moreover can attain complete
co-ordination, for many services owned by the public now will
3 Sre Mr. Foote's article "No Government Should Operate an Industry."
Munh-ipnl Affairs, June, 1897.
142 THE CITY FOR THE PEOPLE.
not be given over to private control, and no perfect union can
be made between public industries aiming at service, and
private corporations aiming at dividends. Unification of
motive, method and control is essential to complete co-ordina-
tion. Between public control and private control there is at
bottom, not a harmony but a discord, not a co-operative im-
pulse, but an impulse of battle.
The water works and the electric light plants are operated in co-
ordination with each other in Aurora, Batavia, Paris, La Salle and
Bloomington, 111; Columbus, Goshen and Martinsville, Ind..
Marshalltown, la.; Portsmouth, O.; Dunkirk, N. Y., and doubtless
other places, in respect to which I do not know the facts in this re-
gard.
Of the 12 cities now operating gas works in this country, all but
4 (Richmond, Charlottsville, Fredericksburg and Duluth) have
public electric plants also, which are more or less co-ordinated w'th
the gas works. 1 In Duluth the water and gas plant is one institu-
tion under a single manager.
Speaking of water works Mr. Baker says: "Under municipal own-
ership a harmonious development of this and other public works
is possible. Water mains may be laid before streets are paved,
thus saving the damage and expense of tearing up good pavement
to lay water pipes. The health and police departments may easily
work with the water department for the public good, instead of
the water company being continually fearful lest the health board
declare its water insanitary, and being too often ready to vcs'st
efforts to secure a better supply."
Co-ordination is possible not only between departments in the
same city and town, but between services in different municipali-
ties. The Massachusetts Metropoltan Water act of 1895 provides
for the co-ordination of the water supply of Boston, Chelsea, Ev-
erett, Maiden, Medford, Newton, Somerville, Belmont, Hyde Park,
Melrose, Revere, Watertown, Winthrop, etc. Such interurban fed-
erations are of the utmost value, and we hope they may have a
wide development in the near future.
In Detroit the electric light poles are used by the police and
fire departments and by commercial, telephone and street railway
companies. This is only a small co-ordination, but it is in the right
direction. We have already spoken of the advantage of having the
1 This sort of union is not infrequent with private companies in some
sections of the country. Private monopolies unite to a considerable extent
and would form more unions if the law <IH nor aim to prevent it. But
there are two serious drawbacks to the co-ordination of private monopolies.
1st. It intensifies many of the evils of monopoly and especially its political
dangers, and 2d, The co-ordination of public service cannot be complete in
private hands for the fire and police service, roads, schools, parks, water
works, etc., will not be relegated to private control, so that the only possi-
bility of complete and perfect co-ordination of the public service lies in
public ownership of all public utilities under a thorough plan of federation
and mutual help.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 143
street lighting plant do commercial business also (see Section I),
and the advantage would be still greater if all the public utilities
of the city were united in one harmonious system. Port Arthur,
Ont., the only place on this continent that has secured city owner-
ship and operation of its street railway system, has put in an
electric plant of 1000 ineandescents in connection with the railway.
In Belgium the telephone is operated with the telegraph as part
of the postal system. This is true of the trunk lines in England,
and the co-ordination will probabty extend to the local exchanges
in the not very distant future. In Norway, Sweden, Switzerland
and Germany the public telephone service is thoroughly co-ordi-
nated with the public telegraph and the public post. In this coun-
try we cannot telephone telegrams except by special arrangement,
and we cannot telephone mail matter at all.
Among the benefits that accrued from making the telegraph pub-
lic in England is to be noted a considerable economy in rent, fuel,
light and wages by uniting the telegraph service with the mail
service under a single control, avoiding useless duplications, using
the same offices, the same collecting and delivery agencies, and
often the same operatives for both services. 2
PUBLIC PROFITS.
IV. The Profits of a public enterprise go to the people
and not into the pockets of a few individuals. A city owning
its water or light plant or street car lines may run them on
rates sufficient to yield a profit, which goes into the public
treasury to reduce taxation, or add to the public resources, or
it may operate the works at rates too low to yield a surplus,
in which case a fund equivalent to the dividends and profits of
the private companies, goes to the people in the shape of lower
rates.*
The great majority of cities and towns supplying water, gas,
electricity, telephone service or transportation to the citizens, do
so at rates sufficient to yield a profit.
The Philadelphia water works turn into the public treasury
$1,302,000, or about 4 per cent, a year on the value of the plant above
expenditures (tho the average receipts are but 3 cents per 1000
gallons), $900,000 clear profit above depreciation, there being no
J See Arena, Vol. 17, p. 29.
* For a fine discussion of a related topic showing that cities collecting
garbage, laying pavements and constructing work l>y direct employment ol
labor, make thereby a large saving on the cost of doing the same work
by contract in the same or neighboring cities, see "City Government, vol.
7, No. 3, pp. 53, 56-7. The experiences cited by Mayor Perry of Grand
Rapids and H. J. Gondon of New York, in the papers referred to, prove that
the direct method, properly used, saves the profits of contractors and the
costs entailed ly their frauds and blunders.
144 THE CITY FOK THE PEOPLE.
interest to pay. The works, moreover, furnish free service to
the city, which, at the meter rate charged by the city, would be
worth $200,000 by the Chief's estimate. At private rates the city
would pay $555,000 for the 11,100 fire hydrants alone ($50 per hy-
drant is the price paid the private company in Indianapolis), and
$50,000 to $100,000 for street sprinkling, sewer flushing, etc.
So that the city treasury is fully iy 2 millions ahead thru the public
ownership of the water supply. If we include the savings to con-
sumers, who pay a little less than 3 millions now at 3 cents per
thousand gallons (nearly a million of it being clear profit to the
city), and would probably pay two or three times as much to a
private company (the receipts in Indianapolis are 8 cents per thou-
sand gallons), we shall see that the total saving to the people of
Philadelphia is probably not less than 4 millions a year, and maybe
a good deal more than that. Her gas works paid for themselves
out of earnings, and at the time of the lease, with gas at $1, were
yielding over $400,000 a year cash profits above operating cost,
which was more than enough to cover depreciation and cost of
collections, water, etc., leaving as clear profit the 700,000,000 feet of
free gas annually supplied to city buildings, etc., worth $700,000,
or 7 per cent, on the value of the works. A few years ago, when
the charge was $1.50 per thousand, the gas receipts of Philadel-
phia paid for the large amount of gas burned in the streets and
public buildings, and also turned about $1,000,000 cash into tiie
public treasury every year.
In New York city the public water works turn $1,530,000 cash into
the public treasury after paying interest and cost of operation.
The free public service at current rates would surely be worth
$600,000, making a total profit of $2,130,000, or $1,500,000 after allow-
ing for depreciation.
Chicago's water works yield a cash profit of $1,483,000 above ope-
ration and interest on the water debt. This with free service that
would probably cost $700,000 or more if obtained from a private
company, indicates a clear profit of nearly $2,000,000 above depre-
ciation. 1
We have spoken already in Section I of the profits of public elec-
tric plants that do commercial lighting profits sometimes suffi-
cient even in small communities to cover the whole expenses of
the plant and give the city its street lamps free. In large places
municipal works doing all the commercial lighting can cut the
prevailing private rates in two and still more than pay all costs,
tho lighting the streets and public buildings free.
Every one of the twelve cities operating public gas works receives
a considerable margin above operating cost, and all but Middle-
borough make a good profit above operation and depreciation, tho
Hamilton has to pay her profits over to the capitalists for interest. 2
For numberless other cities and towns making a profit on water, tho
selling at very reasonable rates, see Baker's Manual of American Water-
Works, 1897.
2 For the details as to public gas profits see Municipal Monopolies Chap,
on Gas, 1898, and Bemis on Municipal Gas, 1891, pp. 55, 87, etc. For 1890
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 145
The Wheeling gas works have paid for themselves out of earnings
on a charge of 75 cents per thousand feet, and are helping to pay
for the electric light works. The public gas works of Richmond
paid for themselves over fifteen years ago, and the works of Hen-
derson, Bellefontaine, Alexandria, Danville and Charlottesville have
also made their cost and paid off their debt out of earnings, and
some of them a good deal more. The Philadelphia gas works paid
for themselves long ago if they are credited with the actual value
of the gas they furnished the city free of charge. 3
The English public gas Works make a good profit also. (See Sec-
tion I.) Take one case. When Nottingham took over the gas plant
the price was 83y 2 cents per thousand. The city lowered it to 70,
then 62, and after a few years to 54 cents. The consumption rose
from 500 million feet to 1106 million, and the profit rose from
$25,000 to $165,000' a year. The rate was lessened 16 per cent, at the
start, and in 8 years the price was lowered 25 per cent, more, con-
sumption more than doubled and profits increasd 600 per cent.
LARGER FACILITIES.
V. Enlargement and Extension of Facilities as public
hc((l may require is a distinguishing characteristic of public
enterprise.
Private gas and water companies lay their mains only in streets
that will yield a profit. Public works put their pipes into any
street where there is a reasonable demand for the service. Private
schools and turnpikes go only where they will "pay" can't go any-
where else except on the basis of charity; but public schools and
roads go into every district where there are children to educate or
people to travel.
Mr. H. A. Foster, tho opposing public ownership, in a review of
:!4 towns having public electric plants, admits that "somewhat over
half the number are places where it is doubtful if a commercial
or private plant could be made to pay under any circumstances." '
In cities and towns of every size, with or without public lighting
plants, it is public enterprise, not private, that lights the streets and
Professor Bemis found the cash profits above operation ran from 6 to 24%
per cent, on the value of the plant. In round numbers
Hamilton C. Wherhm," Philadelp ia 1.'-%,
Danville M Hende son 10^ Riehmond 19tf
( harlottesville S%f, BelUfontaiuo ># Alexandria 11^'
"I believe it would be better if each department were credited every year
with the value of all the service it renders. If the totals of receip
profits included such values and the accounts were balanced by e
to the public good also including said values, the people would understand
more clearly the full value of their public works It would also be a good
thing if each department chief, as far as possib e. would close his ' repor
with a comparative statement of prices and results in . h wn r * ft?"
other public and private enterprises of similar character in the same localit
or neighboring communities. He might be given authority to call for Persons
and papers to get the facts from private companies. The bottom facts are
what we want everywhere and all the time.
1 Electrical Engineer, Sept. 5, 1894.
10
146 THE CITY FOB THE PEOPLE.
alleys, and if it were left to private companies the streets of the
poor and the alleys if the shims would be left in darkness the very
places most in need of light for safety in travel and as a police
measure to prevent crime, would be without the protecting influ-
ence of the street lamps. 2
Our postal service goes to every hamlet in the land, but the tele-
phone monopoly confines itself to cities and densely populated dis-
tricts, where the profit will be large. In England, also, where the
local telephone service has been in the hands of a licensed and
protected national monopoly, small towns and country districts
have remained for the most part without the service. But in Nor-
way, Sweden, Luxemburg and Switzerland the public telephone
has netted the rural districts and become almost as universal as
the post.*
When England bought out the telegraph, the "government's first
move was the rapid extension of the lines into districts hitherto
unprovided with telegraph service, and the reduction of the tariff."
The miles of line were increased from 5601, under private owner-
ship in 1869, to 15,000 under public ownership in 1870. The public
telegraph developed "large additional facilities by opening more
offices, locating offices more conveniently and making every pos1>
office and post-box a place where a telegram may be deposited to
be taken to the nearest telegraph office for transmission."*
MORE BUSINESS.
VI. Increase of Business is one of the marked advantages
of public ownership. Lower rates and increased facilities en-
large the volume of business, and the natural tendency of the
people to patronize a public enterprise more cordially than a
private one has a further effect in the same direction. And
the larger output means a fuller satisfaction of the wants of
the community and a lessened cost of production per unit of
service and per individual served.
In 1889 the water commisssioners of Syracuse, N. Y., investigated
250 towns, and found that, even where prices were the same, there
-It must be noted however, that while public ownership is apt to put
water mains, gas pipes, light wires, etc., wherever there is reasonable need
for them, yet where the voters and taxpayers are not directly and personally
Interested in the service, as in the case of schools, the facilities provided,
tho far in excess of what private enterprise would probably afford, are
nevertheless considerably below the reasonable need.
8 Germany has not been so successful in the extension of the telephone
to town and country, because she has made the mistake of adopting a uni-
form rate of $35.70 which is fair enough in the larger cities but is prohibi-
tive in the country. To charge the same rate for local telephone service in
a farm district or a town of two or three thousand people, as in a city of
a million and a half is an absurdity. A uniform rate in the post is good
and a uniform rate for interurban telephone service would be all right, but
a uniform rate for local exchanges is by no means so easily justified and
If such a rate is to be adopted it should be the town rate, not the big city
rate.
4 The Arena, Vol. 17, p. 29.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES.
147
was a much greater use of water in towns supplied by public works
than in towns supplied by private companies. The statistics of the
50 largest cities in the country, collated by the eleventh census,
showed the same. I put the Manual of American Water Works
(1897) and tables of population by census returns and later esti-
mates into the hands of an assistant, with instructions to find the
average consumption per family in all the large cities having pri-
vate works returning data from which the fact could be ascer-
tained, and then find the consumption in an equal number of large
cities having public plants and scattered over the country as widely
as the private systems. The following table shows the results: l
Consumption of Water with Public and Private Service.
Averagp Daily Consumption
per Family in Gallons.
Private
Works.
Public
Works.
Indianapolis
275
430
300
450
600
160
1-20
650
170
320
200
220
1167
850
760
500 (?
1140
530
510
375
1373
950
1000
700
1000
630
BOO
800
600
600
300
500
1(166
1000
inno
700
1000
920
712
700
Buffalo.
Terra Haute
Wheeling
San Francisco
Memphis
Nashville
Mobile
New Orleans
Charleston S C
New Haven
Albany.
Quincy, 111
Chicago.
Peoria, "
Cleveland
Kansas City, Kan
Kansas City Mo
Des Moines, la
St. Louis
Los Angeles, Cal
Oakland, "
Portland, Oreg
Detroit.
Bridgeport, Conn
Pittsburg.
Elizabeth N J
Camden N J
Paterson "
Lancaster, Pa.
Elmira NY.
Troy N. Y.
Total averages...
486
887
The left column includes all cities registered as over 30,000 popu-
lation in 1890 and having private works which made sufficient re-
turns to permit the estimate of consumption per family to be made,
the private companies supplying seven cities of the specified rank
made no returns of the average consumption, and one made very
incomplete returns. In the further case of Omaha the average had
to be estimated from the maximum and minimum consumption.
Running over the tables of ownership and keeping in mind both
population and location, a list was made of comparable cities hav-
ing public water works, and the right hand column contains the
first 20, for which the Water Manual and the population estimates
afforded the requisite data, 23 public cities being looked at in get-
1 The figures in the Water Manual refer to '95 and '96, and the family
consumption here stated must not be taken as absolutely precise, for *he
population for those years is not certainly known. The estimates of local
authorities and statistical experts are. however, likely to err equally in
respect to the cities In the left column and in respect to those in the rteht.
148 THE CITY FOR THE PEOPLE.
ting he said 20, and the facts for three of the attempted cities
be.ug found incomplete. Pittsburg has private works as well at.
^ublic, but as % of the service is public I have allowed it to stand.
In respect to gas, Professor Bemis found that the proportion ot
consumers to population was 20 per cent, larger in cities owning
public works than in the Massachusetts cities with private works
selling at about the same average prices. 2
On the Brooklyn Bridge "when the railway fare was cut in two
in 1885, the traffic at once more than doubled, and the receipts, in-
stead of falling off, were considerably increased." s
Glasgow had a similar experience with her street railways when
she began to operate them. The fares were cut one-third and the
business was doubled in about two years.
When England took the telegraph, in 1870, pushed the lines into
rural districts and cut the rates 1/3 to y 2 , the number of messages
increased 50 per cent, and the amount of business done (or number
of word-miles) about doaibled the first year. By the middle of
1871 (about a year after the postal telegraph had got things ar-
ranged in the new order and was well prepared for work) even
the number of messages was nearly double what it had been under
private ownership, and the average length of the messages was
very much greater, partly on account of the extremely low rates
for press work under the postal tariff.
Since 1869 the per capita use of the telegraph has grown six
times more rapidly in Great Britain, under public ownership, than
in this country, under private ownership. In 1869 there was about
one message to five persons in Great Britain, and one to three per-
sons in the United States. Our telegraph was considerably ahead
of the English when both were in private hands, but when theirs
became public it speedily went ahead of ours, so that now the mes-
sages are nearly two to each person in Great Britain and less than
one to each person here. 4
The quality of the new business is also specially worthy of note.
The result of public operation "was a vast and immediate increase
in the popular use of the telegraph. Social messages and newspaper
traffic developed enormously. The telegraph became something
more than an aid to speculation, and began to be of use to the
people." 5 The president of the Western Union Telegraph Company,
testifying before committees of Congress a few years ago, said that
"less than 1 per cent, of the people used the telegraph" in the
United States, and that only "about 5 or 6 per cent, of the messages
were social." Afterwards he said "46 per cent, of the total business
is purely speculative stock jobbing, wheat deals in futures, etc.;
2 Municipal Gas, p. 23.
3 Dr Max West in Municipal Monopolies, p. 407, citing Report of Rridge
Trustees, 1885, pp. 4-10. The Dr. says, "There was at the same time no in
crease in operating expenses of the bridge as a whole, but a slight decren.se.
The operating expenses of the railway itself are not separately reported,
but they undoubtedly comprise all the large items."
4 See facts and references in The Arena for Dec., 1896. pp. 20-22.
f The Arena, Vol. 17, pp 17-21.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 149
34 per cent, legitimate trade; 12 per cent, press; and 8 per cent-
social." In Europe, with the public telegraph, "two-thirds of all
despatches are on social or family matters." In Belgium, with her
low public rates, 63 per cent, of the messages are on social matters."
The increased use of a public service by the mass of the people
is one of the strongest recommendations of public ownership.
NO SECRET REBATES OR BUSINESS PREFERENCES.
VII. More Impartiality in the treatment of customers and
/r.s'.<? friction between consumer and supplier is apt to exist in
public service than in private. The consumer is a part owner
iu the public plant, and partners stand a better chance of good
treatment than outsiders. On the other hand the consumer
feels that the public service is his and he behaves better toward
it than toward a private monopoly that he believes to be over-
charging him and playing the master with him and his agents.
As a matter of fact whichever way you turn you will find some
private monopoly giving free service for private purposes to
some persons and overcharging others, making secret rebates
and other unjust discriminations in private business to the
great emolument of some individuals and the ruin of others,
but where will you find such things in works that are really
public? Works in which the people have the ownership, and
over which they have effective control do not establish secret,
rebates or discriminate unjustly in any way in the privato
business of their customers. 1
" Arena, Vol. 15, pp. 411-12. U. S. Sen. Rep. 577, 48th Congress, 1st Sess.
pp. 15, 16 and Part 2, pp. 63, 244; Bingham Hearings, 1890. pp. 41, 56; Honso
Rep., 114, 41st Congress, 2d Sess., p. 42; I. T. U. Hearings, 3894. p. 17
1 There is of course a discrimination between public business and private,
which is perfectly just and proper. Public street cars may carry policeman
on duty free of charge, and the post office may give the franking power to
senators and representatives, etc., to facilitate public business, more than
the value of this service being collected by general taxation.
The reader will note the claim for public ownership is more impartiality,
not perfect impartiality, there is a sort of distinction in favor of public
business which does not seem to me to meet the highest ideals. As for
example, the charging of rates for water, gas, electric light, etc., sufficient
to cover the cost of the water, and light used in the streets and public
buildings, so that the municipality gets its service at the expense of the
body of citizens who consume water, gas, etc. Except where higher con-
siderations intervene to lift the matter above the financial plain I believe
the truest plan is to make each service pay for itself. Gas Consumers are
only a part of those benefited by the street lamps. The whole body of tax-
payers should contribute to the latter. Nevertheless this distinction in favor
of public service has none of the absolutely pernicious features that nnrk
the discriminations of private monopoly between individuals. And even with
the burden of paying for the public service the customers of city works are
vastly better off in pocket and every other way than under the reign of
private monopoly.
150 THE CITY FOR THE PEOPLE.
SUPERIOR SAFETY.
VIII. Public Safety is a natural aim of public service,
more or lees perfectly fulfilled according to the character of the
officers in charge of the service. A striking illustration of the
difference in safety that may result from a difference of aim in
this respect, is to be found in the railway statistics collected a
few years ago by Professor Ely, which proved that of each
million of railroad passengers 6 times as many are killed in
the United States under private control as in Germany under
public control. The public railway over Brooklyn Bridge has
a remarkable record for freedom from accident. It has
handled 500,000,000 passengers with only 2 fatal injuries
(one to a passenger and one to a trainman), and one other ser-
ious injury to a passenger. The latest report in my posses- ion
which summarizes the accidents on the street railways of New
York and Brooklyn shows 47 killed and 129 injured, the Total
passengers carried during the year being 423,149,000 a ratio
of accident per million passengers that is 70 fold greater than
on the public line.
FULFILMENT OF LAW.
IX. Obedience to Law is more likely to characterize public
service than private monopoly. A business owned and con-
trolled by the law-maker is more apt to conform to the law-
makers will (one expression of which is the law) tljan a busi-
ness owned and controlled by one whose interests are largely
adverse to those of the body of citizens who make the law
directly or thru representatives that, when true to their trust,
embody the citizens' interests in the law and the policy of the
government.
SUPERIOR SERVICE.
X. Better Service in every respect is likely to accompany
public ownership. Public ownership is not .an absolute guar-
antee of good service, but a public monopoly has at least no
interest opposed to good service. A business is apt to be man-
aged in the interests of its owners. If the people own the ser-
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 151
vice they will be more apt to get what they want than under
an antagonistic ownership. The servants of the people, with
a good civil sendee, will be more apt to do the people's will,
than the servants of a company whose will is opposed to the
people and who are in the business to get all they can and give
no more than they must.
We have found in New York that street arcs supposed to be 2000
candle power by contract, were really only a little more than 1000
c. p. Wheeling's public arcs, on the other hand, show an actual
candle power of 2500, or 500 c. p. above the standard. South Nor-
walk's sub-arcs show 1400 c. p., or 200 above the usual sub-arc
specification. Detroit, with her public electric plant, gets steadier
and more brilliant lights than those obtained from the private com-
panies. The Report for 1898, p. 6, says that "The quality of light
furnished has been uniformly of the full standard of 2000 candle
pOAver, which is better than w r as found practicable to obtain of con-
tractors." Professor Commons, after comparing a large number
of public and private plants, says the indications are that "the
great majority of the 300 cities and villages now furnishing light
are actually getting better service at less cost than those which de-
pend upon private companies." 1
Professor Bemis found that the quality of gas supplied by public
plants was superior on the average to that of the gas supplied by
the private companies of Massachusetts, judging by the candle
power. 2 One of the strongest contrasts I have met with under this
head is that between the public pipe line of the Toledo gas works
and the private pipe line of the Standard (Oil) Gas Company. "The
city trustees built a better pipe line than private enterprise had
laid. The private line was of cheap iron of 14-feet lengths, while
Toledo's was in 24-feet pieces. One of the private lines was laid
with rubber joints and in shallow trenches, in many places of not
more than plough depth. It leaked at almost every joint; ite course
could be traced across the fields by the smell of gas and the
blighted line of vegetation. There were frequent explosions from
the escaping gas; lives and property were much endangered. The
city line was laid with lead joints, and had every device that en-
gineering experience could suggest for its success, and was so con-
structed that it could be cleaned or repaired, and freed from liquids
interfering with the flow of gas, without shutting off the supply
features the other pipe had not."*
With the Glasgow tramways, the Trodhjem telephone and the
English telegraph, improvement of service is one of the marked
results of public ownership. 4
1 Municipal Monopolies, p. 173.
1 Municipal Gas (Econ. Assoc.), p. 24.
1 Lloyd's "Wealth against the Commonwealth," p. 360.
* See below, "Experience." General Francis A. Walker told the writer
that according to his experience the service on the English lines was superior
152 THE CITY FOR THE PEOPLE.
The self-interest of a private company leads it to make as much
profit as possible. And the same self-interest of a public plant leads
it to render good service at as low cost as is consistent with the
proper treatment of labor and the development of civilization.
HONEST ACCOUNTS.
XL True Accounts constitute one of the great advantages
of public ownership. The accounts of public plants are not
always perfect. Like the accounts of private companies they
frequently omit any estimate of depreciation, but unlike the
statements of private companies the books of public works
show the true cost of construction and expenses of operation.
The entries are honest as far as they go. I have yet to hear of
a single false entry in the books of a public business except by
an occasional defaulter, an animal not yet extinct in either
public or private service. In the ordinary routine of busine?*
false entries are practically unknown in public works, while
every investigation of private monopolies gives abundant proof
of the prevalence of false accounting, and even the laws re-
quiring sworn returns appear to be powerless to bring the big
monopolies down to the truth. Professor Bemis, the cele-
brated gas specialist, says: "Gas companies have various ways
of concealing their profits, even in the reports they are forced
to make to the Massachusetts Gas Commission. Not only are
exorbitant salaries, legal fees, and 'legislative' or 'advertising'
expenses often paid, but directors sometimes justify their
title by 'directing' the money of their corporations into their
own pockets through excessive prices for oil, acetylene patents,
or other properties in which they are personally interested.
One company may thus buy from another for 60 cents, or even
to the service here, and Professor R. T. Ely says the same in respect to the
German service. Our telegrams are subject to much delay. Speculative
despatches have the right of way, and everything else even the business
of the Federal Government has to wait. Our telegraph service is defective
in other ways, it is inaccurate, uses old methods instead of the newest and
best, divulges the secrets entrusted to it. refuses efficient service to the
government, is not co-ordinated with the telephone, and is marred by unjust
discriminations.
England, France and Germany have adopted new inventions while the
Western Union has repressed them and locked them up in order to get the
wear out of the existing plant. No complaint is made in Europe of discrimi-
nation, lack of secrecy, slowness, or inaccuracy (though such complaints
were common in Great Britain before the people purchased the telegraph).
The Government gets efficient service at cost and the telegraph is co-
ordinated with the telephone to the great convenience of the public.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 153
a dollar, in the holder, gas which it can itself make for 20 to
30 cents." 5
Private works have a very strong motive to manipulate
their accounts. In public works this motive is absent. They
cannot understate expenses for the works must claim enough
to cover the actual cost. There is no wish to overstate ex-
penses for the credit of the officers depends on making a good
showing for the works. Besides all this the publicity that sur-
rounds a municipal undertaking is an additional guarantee of
true accounting.
NO INFLATED CAPITALIZATION.
XII. No Watered tftock is issued by public works. The
cost may be too high when private works are purchased by
city or state, but care is usually taken to write off the excess
as fast as possible. ISTo fictitious capital is created by public
enterprise, and it does its best to banish that created by private
monopoly. This is a benefit the importance of which cannot
easily be overestimated.
NO STOCKS TO GAMBLE WITH.
XIII. Public Ownership Tends to Diminish Speculation
and Gambling. This is too obvious to need extended com-
ment. Every time a private monopoly is transferred to the
public a body of stock ceases to exist and the materials of
gambling and speculation are diminished by that amount.
LESS FRAUD AND COREUPTION.
XIV. Public Ou'iiership Tends to Diminish Fraud and
Corruption by removing one of their principal causes. It is
not the public water, gas and electric plants that buy up voters-
and keep their lobbies at city hall, but the private companies.
It is not the public post but the private railways that maintain
shrewd lobbyists in Washington and every State capitol.
"Municipal Monopolies," pp. 5S8-0.
154 THE CITY FOR THE PEOPLE.
One of the greatest advantages of public ownership is its
tendency to relieve our government of corrupting relations
with men of wealth and giant corporations. Rich and influen-
tial citizens whose interests as investors in gas and electric
plants, street railways and other franchises prompt them to
weaken and corrupt the government, or at least to wink at cor-
ruption on behalf of the companies in which they are inter-
ested, would, under public ownership have no financial inter-
ests at stake except as consumers and taxpayers, which would
lead them to desire good government and efficient administra-
tion. As part owners in private railways and gas works their
financial interests are opposed to good government, but as
part owners in public railways and gas works their financial
interests would demand good government. Few matters stated
in this chapter are more important than this change of interest
and civic relation in men of wealth and power, for, as Mayor
Swift of Chicago told the Commercial Club of that city, De-
cember 28, 1896, it is precisely those men of wealth and in-
fluence who are responsible for the corruption of municipal
government. "Who bribes the Common Council?" said the
Mayor. "It is not the men in the 'common walks of life. It is
you representative citizens, you capitalists, you business men."
In studying the effect of public electric works I have found
many instances in which the purification of municipal politics
was clearly aided by .the change to public ownership. And
Professor Bemis after examining the history of the gas works
in Philadelphia, Richmond, Wheeling, and all the other eiti; >
having public works in 1891, declared that experience in every
one of those cities, not excepting Philadelphia, had shown that
public ownership tends to diminish political corruption.
Professor Commons says: "I maintain that nine-tenths of
the existing municipal corruption and inefficiency result from
the policy of leaving municipal functions to private parties;
and that an essential part of the present unparalleled awaken-
ing of civic conscience on the part of all classes of the people
is the desire for municipal ownership of franchises. As the
people become aroused to the degradation of their politics and
to the need of reform, their attention is concentrated on the
chief source of that degradation, the underhanded and often
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 155
high-handed domination of city officials and machine politics
by the corporations whose life is maintained by city fran-
chises." (Tor the facts see sections 8 and 9.)
Professor Ely says: "Our terrible corruption in cities dates
from the rise of private corporations in control of natural
monopolies, and when we abolish them we do away with the
chief cause of corruption. 'But,' it is said, 'we must take
natural monopolies out of politics.' It never has been done,
and it is an impossible thing to do absolutely impossible. No
gas-works, no water-works, no street-car lines, no steam rail-
ways, are so thoroughly in politics as those in the United
States. Our American railroads are incomparably more in
'polities' than the German railroads. ]STot only this; those
German railroads which have been bought by the state, I bef
lieve, are less 'in polities' than they were Avhen they were pri-
vate property I unhesitatingly advocate public
ownership and management for gas-works, and I challenge
anyone to instance a single American city or, for that matter,
any city, wheresoever situated which has gone over to public
ownership and which regrets it; which, indeed, has not found
that a corrupt political influence was thereby removed and
political life purified."
Dr. Albert Shaw says: "'The pressure that would be
brought to bear on the government to produce corruption
under municipal ownership of monopolies like gas, electric
light, transit, etc., would be incomparably less than the pres-
sure which is now brought to bear by the corporations."
Governor Pingree says: "The corporations are responsible
for nearly all the thieving and boodling with which our cities
suffer."
Private monopolies are by their very nature compelled to
be more or less "in politics;" but make the works public with
a provision that they shall not be sold or leased except on a
referendum vote of the people, and many of your council
bribers and government wreckers will stand among the lead-
ing friends of honest government. 1
1 See "Objections" below for points on the subject of corruption. The
only political abuse claimed by objectors to attach to public works relates
to misuse of patronage. But this abuse exists only where public ownership
156 THE CITY FOR THE PEOPLE.
ATTRACTS GOOD MEN INTO POLITICS.
XV. The Inducement to Good and Able Men to take part
in politics is greater under public ownership of pubic utilities
than under private ownership of them, while the inducement
to selfish and scheming men is less than under private owner-
ship. The chance to gain money and power by selling votes
and influence in council and legislature to gas or electric, or
street railway companies, or by other political work for some
big monopoly is one of the things that attract bad men into
politics. And the fact that so much of this sort of work is
done is one of the principal things that keep good men out of
politics. They do not like to live in an atmosphere charged
with filth. The abolition of the private monopolies will do
more than any other one thing to purify politics, and the puri-
fication of politics is all that is necessary to get the best and
ablest men to take their full part in public affairs.
DEVELOPS CIVIC INTEREST AND A BETTER CITIZENSHIP.
XVI. The Mass of citizens will take more interest in pub-
lic affairs, and a better citizenship along the whole line will
result. The interest which the average citizen takes in civic
affairs depends on the number, importance, and directness of
the ways in which the government affects his interests. One
of the surest ways to develop public spirit and a nobler civic
ideal is to enlarge the scope and importance of city govern-
ment. A government that means order, education, roads, fire
protection, water, gas, electric light, street railways, telegraph
and telephone service, will engage the attention, interest and
effort of the average man much more effectively than a gov-
ernment that means only half or a third of the services named.
To some the tendency of public ownership to intensify public
spirit and civic patriotism seems the very highest of all it?
many advantages. For example the famous Mayor Jones of
has not been fully adopted. A modified form of private ownership with the
all important monopoly, the government, largely controlled in private in-
terest is not really entitled to be called "public ownership." Yet even this
partial public ownership tends to produce a strong movement toward real
public ownership and at its worst the abuse of patronage is an evil utterly
insignificant as compared with the secret, all pervading, soul degrading,
government destroying corruptions of private monopoly to-day.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 157
Toledo, said in his admirable address to the League of Amer-
ican Municipalities, Detroit, 1898: ''The greatest good that
we are to find through municipal ownership will be found in
the improved quality of our citizenship."
OPPOSES THE SPOILS SYSTEM.
LEADS TO THE MERIT SYSTEM OF CIVIL SERVICE.
XVII. Civil tier vice Reform will be aided by Public Own-
ership. The awakening of civic interest in the mass of the
people, the infusion of better men and nobler influences into
politics, and the elimination of some of the worst men and
most degrading influences, will help the cause of every govern-
mental reform, but there are even more specific reasons for
believing with Professor Ely that "The door to civil service
reform is industrial reform." In the first place large masses
of business cannot be so well or economically managed with-
out good civil service regulations based on the merit system
of appointment and promotion, wherefore the enlargement of
public business intensifies the losses of taxpayers from the
absence of such regulations, deepens their interest in civil ser-
vice reform and strengthens their demand for it. In the
second place the managers of public works are prompted to
favor such reform because their works cannot reach the highest
efficiency or economy without it. The pride which every good
superintendent has in his works and the natural desire of de-
partment chiefs to make as good a showing as possible makes
such men the friends of civil service reform. The Detroit
Electric Commissioners express the feeling of many depart-
ment heads when they say in the last report (1899), p. 10,
"To a strict adherence to the policy which assured the work-
ing force of the Commission a tenure of position dependent
solely upon good behavior and the system of promotion in
service according to merit which has always prevailed, the suc-
cess which has thus far attended the administration of this
department of the city's government, is mostly due. The
Commission has had occasion to call attention to the import-
ance of this subject. The work of the past year confirms its
belief, and has served to emphasize the necessity of a rigid
158 THE CITV FOE THE PEOPLE.
adherence to this principle A departure from
this policy would result in decreasing not alone the uniform
efficiency of the service, but also seriously interfering with its
economical administration." In the third place experience
proves that public works become powerful means of improve-
ment in the civil service. This has been the case in Chicago,
Wheeling, Richmond, and other large cities. Superintendent
Darrah of the Wheeling works told Professor Bemis in 1891
that the very fact of the gas works being in public hands was
forcing the question of civil service reform to the front.
When the legislature granted the Wheeling works the right
to sell gas, it required that the board of gas trustees should be
non-partison i. e. selected from the twoi chief political parties.
Professor Bernis made a special study of this subject and states
the result as follows: "The tendency of public ownership in
every city investigated is, I find, to a gradual separation of
politics and patronage from the gas and other departments." 1
There is no doubt upon reason and experience that public
ownership tends to destroy the spoils system and establish the
merit system of civil service.
TENDS TO IMPROVE THE GOVERNMENT.
XVIII. Better Government is likely to result from the
public ownership of monopolies, not only thru its tendency to
force civil service reform, improve the quality of citizenship,
deepen the interest of the masses in municipal government,
attract more good and able men into politics while discour-
aging bad men, change the financial interest of the rich and
influential from opposition to good government to support of
it, and abolish the corporations that constitute the chief cause
of corruption, but also thru its tendency to liberate thinkers,
speakers, writers, editors, preachers, teachers and working-
men from the restraints now imposed upon them. It is not
quite safe to-day to be a reformer or to talk too plainly about
the doings of the big monopolies. Editors of great dailies
would lose their positions if they told the people what they
1 Municipal Gas, p. 135.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 159
know and think about the street railways, electric light com-
panies, etc., for the owners of such monopolies are in many
cases the owners of the papers also. Preachers who apuly
Christian principles too specifically to industrial conditions
find the church purse and policy controlled by those who favor
a statute of limitations on the Golden Rule when it comes into
the neighborhood of private monopoly or brings suit against
a trust or combine. A professor of economics who discusses
the evils of monopoly with reasonable thoroness is in danger
of losing his position thru corporate influence, or the pressure
of wealth upon the trustees, or their fear of losing support.
The business man may lose his trade and the workingman his
employment by expressing himself on the monopoly question.
A public spirited merchant of Chicago who took a vigorous
part in exposing and opposing the outrageous scheming of the
street railway companies to get a fifty year franchise, was
threatened with ruin again and again if he did not desist.
Reform under such conditions is not an attractive occupation.
Press, pulpit, college, and market wear the chains of monopoly
as well as the city hall and the state house. But make the
monopolies public and the chains will fall. It will no longer
be dangerous to advocate the reforms that are now so bitterly
fought by the private monopolists. Governmental reform will
have only natural inertia and the politician to overcome, and
if the referendum is added to public possession of monopolies
the politician will be swept aside along with the industrial
monopolist.
FRANCHISE ADVANTAGES.
XIX. An unlimited franchise is an advantage which a
public monopoly possesses as a rule over private monopolies.
The point is well brought out by Mr. A. R. Foote of the Cen-
sus Department, who claims that a public plant has economic
advantages over a private company at present in the fact that
the franchise of the public plant is unlimited, exclusive, and
unrestricted. Unlimited because successful public ownership
mil probably never be abandoned; exclusive because govern-
ment tends to complete supremacy in its sphere of action;
1GO THE CITY FOR THE PEOPLE.
and unrestricted because free to adopt all improvements. The
advantages of such a franchise economically and politically
are sufficiently obvious. It is the necessity of effort to prevent
invasion of franchise, and to secure enlargement or renewal
of it that keeps private companies in politics. It is not quite
true, however, that the franchise of a public plant is unre-
stricted, as may be seen from the large number of electric
works that would like to do commercial lighting but arc not
allowed to. Public franchises ought to be less restricted than
they are, and will be, as the people come to understand the
situation more thoroughly. The great advantage of public
ownership in this relation lies in the fact that public plants
can be trusted with unlimited, exclusive, and unrestricted
franchises while it would not be safe to accord such franchises
to private companies.
HIGHER REGARD FOR LABOR.
UNDER PUBLIC OWNERSHIP THE WORKERS ARE CO-PARTNKUS.
XX. Better Treatment of Labor is one of the chief recom-
mendations of public ownership to the mind of a philanthro-
pist, a democratic philosopher, or a workingman. The ten-
dency shows itself in shorter hours and longer wages, better
provision for safety and comfort, larger liberty and care for
accident and old age. Public ownership puts Labor above
Capital. Private ownership puts Capital above Labor. Men
before money in one case; money before men in the other.
The Brooklyn Bridge record of $2.75 for an 8 hour day on the
public cars, while the private companies, running over the same
bridge, pay $1.50 to $2.30, or an average of less than $2 for 10 hours,
shows the tendency of public ownership in this regard. 1 The Bridge
Railway also gave its men a two weeks' vacation on full pay, rubber
coats and gloves and two uniforms a year, free medical attendance
in case of injury, and usually half their regular wages as long as
needed. The employees of the private roads have none of these ad-
vantages. When Glasgow took over the tramways, hours were
reduced 2 to 4 hours a day and 24 to 38 per week, or over 30 per
cent.; wages were raised 2 shillings a week (two years later
1 The wages given are those of the train hands. A comparison of engi-
neers and firemen's wages in 1897 showed $4 for engineers and $2.37 for
firemen for an 8 hour day on the public trains, while the L roads in New
lork and Brooklyn paid $3 to $3.50 for a 10 hour day to engineers and $1.75
to $2 for firemen.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 161
another increase was made, amounting- to a 25 per cent, advance),
and two uniforms a year were supplied to each man free a volun-
tary improvement of the conditions of labor exactly contrary to
the policy of the private companies. The public tramways of
Huddersfield pay higher wages for 8 hours work than are paid by
the private companies in surrounding places for 12 to 14 hours.
Sheffield, on taking the tramways, increased wages over 10 per
cent, and provided uniforms for its men. The municipal gas works
of Wheeling and Richmond both pay more for common labor than
the competitive rates in their localities, and the Chicago electric
plant has been criticised by the opponents of municipal ownership
for employing two shifts, with short hours, at $2 a day, instead of
working the men in one shift at $35 to $50 a month, as the private
companies do.
A private corporation usually cares little about its ordinary work-
men. They are only part of its tools and the part most easily and
cheaply replaced. But with a public corporation it is different.
Well-paid labor and contented citizenship are of the first impor-
tance to the community, and the employees are part of the people
for whose benefit the municipal railway or other public institution
exists, are partners in it, in fact, with a share in its control, and
the consequence of these united facts is a powerful tendency to
shorten hours, raise wages, provide for protection from storm
and accident, establish the rights of promotion for merit and se-
curity from unjust discharge, and recognize the right of organiza-
tion, freedom of petition and independent political action.
Years of careful study of the attitude of public and private cor-
porations toward laboring people led me, in a series of articles on
Street Railways in 1897, to make the following comparative state-
ment of
1 abor's Interest in Public Ownership.
J>r<v<ite. Oicnership Means /'nf,li<- ranter.-} i/> Means
Long hours and low wages for Short hours and high wages for
workers. workers.
Short hours and big salaries for Reasonable hours and moderate
managers. salaries for managers.
Denial of the rights of organization Full recognition of the rights of or-
aud petition. ganization and petition.
Oppressive regulations for private Moderate regulations for the public
interest and caprice. good.
Insecurity of employment arbitrary Greater security of employment iirni
discharge at the whim of a petty a growing movement toward ma
boss. ing it absolutely secure.
Strikes, boycotts, blacklists. Petition, investigation, redress, win.
the ballot as the final resort.
Carelessness of the conditions of la- A definite and persistent policy of
bor, men bought as commodities improving the conditions of labor,
at the lowest market price and appointing and promoting for merit
and thrown away like old clothes and service, protecting employes
when the value is worn out from storm and injury, providing
of them; no protection from cold for sickness, old age and death;
and storm; no provision for the recognizing that a contented, well-
worker in case of sickness and old fed citizenship is of the first im-
age, nor for his family in case of portance; that men are worth more
his death; no sympathetic treat- than money; that 4.000
ment of the workers as partners homes in moderate circumstances
and brothers or even as valuable are better than 20 luxurious pal-
live stock, but merely as money- aces and 3,980 tenements pinched
making tools that can be replaced by poverty,
at little if any cost.
11
162 THE CITY FOR THE PEOI'LK.
High fares, curtailing the use of the Low fares, enabling the working peo-
roads by the working people, and pie to live at a distance and reliev-
compelling them to live in crowded ing the pressure in the tenement
tenements near their work. districts.
Large profits to a few, adding to the Profits for the people no overgrown
disturbance of wealth diffusion fortunes for the few; tendency to
which constitutes the main griev- wealth diffusion and removal of
ance of labor to-day. the greatest danger of present
industrial conditions.
Mastership and moneyed aristocracy. Partnership, democracy, fraternity.
When the street railways are owned by the public every laboring
man in the city will be a partner in the business, a co-owner of the
plant.
The roads will belong to him as much as to the richest man in
the community. He will have an equal vote in determining their
management. He will share the benefits of the system in the shape
of cheaper transportation, public utilities bought with the profits
that accrue to the municipal treasury, larger freedom, greater se-
curity and increased remuneration of labor.
One may get a clear view of the relations of public and private
enterprise to the labor question by comparing the Boston police
with the street railway employees:
A full-fledged policeman gets $1,200 A full-fledged conductor or motor-
a year. man gets $800 a year if he loses no
time.
The policeman has an excellent The conductor and motorman have
chance of promotion, one in each little or no chance of promotion.
seven members of the force being
an officer enjoying a salary of
$1,400 to $2,800.
The policeman is on duty ten hours The conductor or motorman is on
day or seven hours night. duty more than ten hours whether
his service Is day or night.
The policeman is secure In his po- The conductor or motorman may be
sition during good behavior. discharged any moment at the
whim of a petty boss.
The police board may retire a police- The conductor or motorman, when
man on half pay after twenty old or disabled, is dropped like a
years service in case of disability, burnt-out fuse.
and shall, upon request, retire him
on half pay at 65, or, in case of
permanent disability, by accident,
etc., in the service.
The police are free to organize, to The conductors and motormen or-
petltion, to vote as they please, to ganize at the risk of discharge,
speak their minds on any public petition with little chance of fair
question. consideration, strike with small
probability of accomplishing any-
thing but loss of wages for all con-
cerned, and permanent dismissal,
with blacklisting, perhaps, for the
leaders, and are often afraid to
vote or speak on public questions
according to their independent
judgment, for fear the company
management may deem their ac-
tion adverse to corporate interests,
and mark them for dismissal.
The superintendent of police gets The president of the West End is
$3,500 a year as the agent of the said to receive $25,000 a year as
people. agent of the company.
One of the most striking contrasts under this head is brought
out by a comparison of the treatment of employes by the Western
Union Telegraph monopoly, on the one hand, and by the English
postal telegraph and our own post office on the other.
The heaviest count in the indictment of the present telegraphic
system in America is the ill treatment of employes and the general
abuse of the employing power child labor, overworked operators,
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 163
long hours and small pay for those who do most of the work; short
hours and big pay for those who manage and scheme; less wages
to women than to men for the same work; favoritism and unjust
distinctions between men in the same service; a settled policy of
reducing wages and increasing work; denial of the right of peti-
tion, the right of organization and the right to consideration be-
cause of long and faithful service; fraud; oppression, merciless
discharge, blacklisting, boycotting, breaking agreements, treating
men as commodities to be bought at the lowest market price and
thrown away like a sucked orange as soon as the company has
squeezed the profit out of their lives such are the items, or some of
the items, under this vital count.
The employment of thousands of little boys, twelve to sixteen
years old, is a very serious wrong. These children ought to be in
school, not in the street. One of the best things about public
business is that it does not impose the burdens of toil upon child-
hood. In the post office the carriers are men, not boys. There is
no better measure of the difference in the spirit of public enter-
prise and the spirit of a great private corporation, than is to be
found in the contrast between the fine looking men who act as
messengers for Uncle Sam, 8 hours a day, on salaries of $600, $800
and $1000 a year, and the little mind-starved, opportunity-cheated
bovs that act as messengers for the telegraph companies, 10 to 16
hoxirs a day, on salaries of $2 or $3 a week.
The contrast between the operators and the carriers is scarcely
less intense. In the cities, 9 and 10 hours constitute a day's work
for an operator, but elsewhere the day is from 12 hours up. The
majority of operators work 12 and 13 hours, some work 16 and
18 hours, and at times 20 hours. 2 Yet the labor of an operator is so
confining and exhausting that life and health do not ordinarily
stand the strain very many years, and Mr. Orton, a former presi-
dent of the Western Union, told a committee of Congress that no
operator should work over 6 hours a day. A few operators get
$75 or $80 a month, but nine- tenths of the operators of the Western
Union are paid from $15 to $40 a month, 3 and girls are employed as
low as $12. United States mail carriers, on the other hand, work
8 hours at far less exhausting labor and receive from $50 to $84
a month $84 always after the second year. And this is not the
end of the contrast by any means, as the following table shows: 4
Quite as emphatic is the contrast between the English public
telegraph and the Western Union. Here are the facts in parallel
columns:
'Blair Rep. U. S. Sen., Vol. 1, p. 119, 125, 150, 156; I. T. U. Hearings,
p. 50.
8 Postmaster General Wanamaker's Arg., 1890, p. 141.
4 The clerks in the postofflces are not included In the comparison for In
the mass of the offices they are not federal employes, but are hired by t
postmasters who really stand to the government- in the relation of contrac
tors. In 3d and 4th class offices the clerkage is entirely in the hands of the
164
THE CITY FOK THE PEOPLE.
WESTERN UNION.
Two big strikes in a quarter of a
century- Serious losses and inter-
ruptions of business. Large drops
In wages and progressive mal-im-
proveinent of conditions of labor.
Poor service and discontented em-
ployes.
Persistent policy of lowering wages
and increasing the burdens of the
workers. The managers took ad-
vantage of the defeat of the men
in the great strike of '83 to re-
arrange matters so as to get "one-
third more work out of a man for
a days service." (Pres. Green's
words. Wan. Arg., p. 221.)
The Blair Committee of the United
States Senate found thai the
Western Union had pursued a
systematic policy of reducing wa-
ges by filling positions vacated by
death, resignation, transfer or dis-
charge with new men at salaries
|5 or $10 below the pay of former
occupants; that the reduction had
amounted to 40 per cent, from 1870
to 1883, and that all the while the
hours of labor were increasing and
the profits of the company grow-
ing larger.
Organization frowned upon. Em-
ployment insecure. Promotion at
a minimum. Long service re-
warded by dismissal to make room
for the cheaper labor of a boy the
old operator has taught to do his
work. No provision for sickness,
disability or death.
ENGLISH TELEGRAPH.
No strikes. Harmonious uninter-
rupted operation. Large increase
of wages, and progressive improve-
ment of conditions of labor. Su-
perior efficiency of well treated and
contented workers.
Persistent policy of Postal Tele-
graph Department from first to
last to raise wages, shorten hours
arid add to the privileges of labor.
Since 1870, when the government
took the telegraphs, wages have
risen from 39 per cent, to over 72
per cent, of the total revenues. As
a rule, the salaries of telegraphers
in England have been raised $150
to $200 each since 1881 and hours
have been shortened one-seventh,
the present hours being eight in
the day time or seven at night for
six days in the week.
Employes free to organize. Employ-
ment is secure. Merit finds pro-
motion. Long service is rewarded
with increased pay. And liberal
provision is made for pensions in
case of sickness, disability and old
age.
Note 4 continued
Private Telegraph and Public Post.
Average pay per month
Average hours
Promotion ....
Length of service..
Tenure.
Eights of petition, organi-
zation, etc
TKLKGRAPH OPKR'AIORS.
$40 to 851.
9 to 16.
For merit, rare.
Not recognized as giving
any claims to increase of
pay, or continuance in
employ.
Prpoarious dependent, on
individual whim ami ar-
bitrary power of an irre-
sponsil>l<> superior.
Denied.
CARRIERS.
RAILWAY MAIL
Cl.KRKS.
$75.
For merit the rule.
Clearly recognized as giving a
valid title to increase of pay,
retention and preferment.
"Freedom from removal except
for inefficiency, crime, or in s-
conduct."**
Accorded.
The daily train run of a railway postal clerk is 4 to 6 hours. (Post-
master General's Rep., 1892, p. 523 et seq.), but the clerk is obliged to devote
some further time to making reports, checking records, preparing supplies
for the following trip, etc. A carrier receives $600 the first year, $800 the
second year, and $1,000 the third. Between four and five thousand of the
seven thousand railway clerks receive $1,000 to $1,400 each, and fifteen
hundred more receive $900 each. The postofflce does not seek to buy labor
at auction, but aims to pay as much as it reasonably can, regardless of the
price of labor at forced sale in the markets of competition.
**Statement of Postmaster General John Wanamaker, 1892. Rep. p. 501.
not merely as the aim, but as the actual condition of the railway mail service
a condition which had produced great improvement in the service. Post-
master General Bissell, 1894 Rep., p. 395, says: "The civil service laws and
regulations as applied to the Railway Mail Service accompish all the most
sanguine expected," and goes on to speak in the highest terms of fho fine
quality of appointments, the high efficiency, the permanence of employment,
ami the promotion for merit, secured under the civil service rules.
PUBLIC OWNKKSIIIP OF PUBLIC UTILITIES.
165
The following paragraph from the Telegraphers' Advocate, Nov.
6, 1896, expresses the feeling- of the great body of employes in this
country in respect to the advantages of public service:
"The mail carriers sent a delegation to Washington not long since
to see the Postmaster General. Think he will refuse to receive the
committee? Think all the mail carriers in the United States will
have to strike in order to get their organization 'recognized?' Oh,
this government service is fearful short hours, good pay, live
where you please, vote as you please, no wage-cutting, no reduction
in force, no strikes, lockouts or blacklists. It's just awful, so it is.
No self-respecting operator coxild stand it."
Under private ownership labor has no means of redress but the
strike, and that is often disastrous to the employes as well as to
the public; witness Brooklyn, Philadelphia, Boston, etc.
Organized labor fully recognizes the evils of private monopoly
and the advantages of public ownership, and the American Federa-
tion of Labor, representing a vast body of workers, adopted the
folllowing resolution at its annual convention in December, 1896:
"Resolved, That the sixteenth anmial convention of the American
Federation of Labor urges upon all the members of affiliated bodies
that they use every possible effort to assist in the substitution
in all public iitilities municipal, state and national, that are in
the nature of monopolies public ownership for corporate and pri-
vate control."
The reader may find it helpful to carry with him the following
comparisons. They are not the strongest that can t>e made, for
the right hand column does not represent the extremes of low pay
or long hours in private corporations, and even as averages the
hours are understated, being the theoretical and not the actual
hours, which often run 10 to 20 per cent, over the theoretical day.
The contrasts, however, are crisp and clear and easily remembered,
and all the more forceful from the fact that they are not the ex-
tremes:
Hours and Wages under Public and Private Ownership.
PUBLIC.
PRIVATE.
Average
Average
Average
Average
hours
pay
hours
pay
'
per day.
per year.
per day.
per year.
Railway Mail Clerks ...
7
81030
12
9540
Western Union Opera-
tors.
Postal Carrier*
8
900
12
72)
Conductors and Mot.-r-
111 e n, Philade pliia
Street Railwavs. .'-t.
Brooklyn Bridge Kail-
way Trainmen
8
1000
10
700
Louis about the sunif.
Trainmen on New Yo k
and Brooklyn L
Roads.
Boston Police
7}*
1210
10
. 520
Employes West End
Street Railway, Bo-
ton.
166
THE CITY FOE THE PEOPLE.
NO INDUSTRIAL RIOTS OR REBELLIONS.
XXI. No costly strikes and lockouts adorn the history of
public works. Diligent inquiry has brought to light only two
strikes in public institutions, one among the trimmers of a
municipal lighting plant, and the other among the employes
of a post-office who were not really public employes, but con-
tractees of the postmaster. Neither strike occasioned any
serious loss. Compare this record with the following items
relating to strikes in private industry:
Losses Occasioned by Strikes.
Loss to
Employes.
Loss to
Employers.
Loss to
Public.
Total.
New Orleans Street Railway Strike, 1892.
New York Street Railway Strike, 1889...
8500,000
8750,000
$5,000,000
86,250,000
1 707,000
Reading Strike 1887
3,620,000
1 000,000
70 ),000
5 320 000
Gould Sirike, 1886
1,400 000
3,180,000
Chicago Strike 1894
1,739,000
5 353 000
80,000,000
87 097 000
Telegraph Sirike, 1883
250,000
709,300
1881-6, 3902 strikes involving 22304
establishments and 1,332,200 employes
51,814,700
30 701,500
1887-94, 14,389 strikes involving 69,166
establishments and 3,714,230 employes
163,807,657
82,587,786
400 000 000(?)
Most of the figures are taken from government reports. For the
Chicago strike the estimates of loss for employes and companies
were made by the United States Commission, the loss of the country
at large is Broadstreet's estimate. The strike was caused by a 25
per cent, reduction at Pullman on wages already down to an average
of $613 a year, with a large class making far less than that. The
United States report says: "Some witnesses swear that at times
for the work done in two weeks the employes received in checks
from 4 cents to $1 over and above their rent. (They lived in Pull-
man's houses, and he did not reduce the rent when he cut wages.)
The company has not produced its checks in rebuttal." There was
rioting and destruction of life and property; over 700 persons were
arrrested for murder, arson, burglary, assault, intimidation, riot
and violation of the United States statutes.
The railway strike of 1877 was caused by a 10 per cent, reduction
in wages already low. There was rioting, with loss of life, at vari-
ous places. The state militia at Martinsburg and Pittsburg refused
to fire on the strikers, and United States troops were called out.
In Cincinnati, Toledo and St. Louis mobs of roughs and tramps
succeeded in closing shops, mills, etc. At Pittsburg the crowds
resisted the troops and 22 persons were killed in one day. Cars to
the number of 1600 and 126 locomotives were burned. The loss
at Pittsburg alone was estimated at $5,000,000.
If the people owned the roads would they burn their own prop-
erty ? If the railway men and street railway men were part owners
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 107
and directors in the roads, would they not vote instead of striking?
If the public managed the monopolies would they disregard the
rights of labor, and then refusing to arbitrate produce 2000 strikes
a year, with a total loss of 350 or 400 millions? History and psy-
chology and common sense say, Xo.
CO-OPERATION.
XXII. Public oivnership is a step toward co-operative in-
dustry. A public business soon becomes substantially an all
inclusive co-operation in itself. I presume that no co-operative
undertaking of any sort has more universal and hearty good
will of those concerned in it than have the national post-office
or the schools and parks, water-works and fire departments of
our cities.
COHESION.
XXIII. Social strength and cohesion will be aided by pub-
lic ownership. The water, gas, electricity, railways, tele-
phones, and telegraphs are food, light, arteries and nervous
system for the body politic, and a being that controls its own
food supply and has possession of its own nerves and blood
vessels is more likely to be well and strong than a being whose
supplies and means of communication and distribution are
owned and controlled by somebody else.
PUBLIC ASSETS CITIZENS* RICHES.
XXIV. Ownership of useful property is in itself an ad-
vantage to a municipality or a state. A man is better off when
he owns a good business himself than when it is owned by
another, and the same thing is true of a city. Mr. Dow, for-
merly of the Detroit electric plant, and now of the Edison
Company in the same city, puts the matter well when he says:
"If a municipal plant is operated and managed in good run-
ning order, at such a figure as, added to interest, sinking-fund,
and lost taxes, will equal, or rather not exceed, the contract
cost of lighting, there is a gain to the taxpayers in municipal
lighting, directly by reason of ownership of a marketable
asset, free from incumbrance at the winding up of tlie sink-
168 THE CITY FOR THE PEOPLE.
ing-fund; and indirectly by the retention of the depreciation
fund in the active business of the taxpayers." 1
DIFFUSION OF WEALTH AND POWER.
XXV. Diffusion of benefit is one of the most important
of all the advantages of public ownership. The public schools
and the post office, municipal water and gas and electric light
works, fire departments, and public railways, telegraphs and
telephones, do not figure in the biographies of millionaires. 1
The Tribune list of sources of the fortunes of millionaires and
polly millionaires does not mention these things nor speak of
any public business whatever in that connection, but it has
much to say of private railways, telegraphs, telephones, and
express companies, gas works, water works, ferries and street
railways.
Low rates and good service, smaller salaries, larger wages
and shorter hours, no lobby-work, no rebates, no stock,, true
capitalization, profits paid into the public treasury every-
thing about public ownership tends to the diffusion instead
of the congestion of wealth and opportunity. The following
words of Justice Marshall in a great monopoly case in Ohio,
ought to be framed in gold and hung in every legislative hall
and council chamber.
"A society in which a few men are the employers and
the great body are merely employes or servants, is not the
most desirable in a republic; and it should be as much the
policy of the law to multiply the members engaged in inde-
pendent pursuits or (sharing) in the profits of production, as
to cheapen the price to the consumer. Such a policy would
tend to an equality of "fortunes among its citizens, thought to
be so desirable in a republic, and lessen the amount of pauper-
ism and crime." 2
1 Western Electrician, Feb. 22, 1896.
1 The reader must not understand that I have the slightest prejudice
against millionaires. At least half a dozen among the people for whom I
have the profoundest respect and admiration are millionaires. I speak of
millionaires as an evil economically because the congestion of wealth is
bad. A community in which a few men are very rich while a large class
at the bottom is very poor, is not so good as a community where wealth is
more evenly diffused so that all are in moderate circumstances or well to do,
and a system that develops millionaires at the top and tramps and slums at
the bottom is not a good system even tho the personality of some of the
millionaires may be as flue as any to be found in the middle classes.
J Supreme Court of Ohio. 49 Oh. St. at 187.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 169
111 Xew Zealand the progressive land, income and inheri-
tance taxes, and the public ownership of railroads, telegraphs
and telephones has gone far toward preventing the growth of
enormous fortunes and stopping the concentration of wealth
in few hands. 3
PROGRESS.
XXVI. Progress it-en csti of the best sort is apt to charac-
terize public enterprise. There are two kinds of progressive-
ness. The progressiveness that adopts whatever will produce
more dividends is perhaps less intense in the majority of
public plants than in the offices of private companies. This
is certainly true in the case of industries open to private initia-
tive. The fresh blood of vigorous competition keeps such in-
dustries close to the front. But remember that public owner-
ship is not contrasted here with all private business, but with
private monopoly; and private monopoly bars out private in-
itiative far more effectively than public monopoly does, for
any one in the community may suggest an improvement in a
public service with a chance of being cordially heard, and if
the public ownership is rounded out with the initiative and
referendum, a few people can secure the discussion of any
desired improvement and bring its adoption to vote by those
most interested to have every reasonable improvement pos-
sible, viz: the people served by the plant and responsible for
its expenses.
AVhen we turn to the sort of progressiveness which aims at
improvement in the usefulness of the works to the community,
or the greater safety of the service whether monetary gain
results to the business or not, then there is no question but
that public ownership greatly excells the private monopolies.
Such improvements if made at all by such monopolies gen-
erally have to be forced upon them by public action or a re-
bellion of their employes.
As a matter of fact, allowing for differences in individual cases
due to variations in the personal equation of the management, the
3 Letter from Henry D. Lloyd who has just returned from a visit to New
Zealand.
170 THE CITY FOK THE PEOPLE.
history of public roads and fire departments, water, gas and electric
light works, shows a very commendable spirit of progress even on
the purely economic side of the question. The water works of
Syracuse, the federated system of the Metropolitan Water District
in Massachusetts, the electric plants of Allegheny, South Norwalk,
Dunkirk, Peabody, and Detroit, and the gas works of Eichmond
and Wheeling will compare favorably with the best private works
in regard to their progressiveness and its results under the condi-
tions in their respective localities. Summing up his investigations
of all the public gas plants in the United States Professor Bemis
says: "Progressiveness is characteristic of all the plants save
Alexandria." 1 While my studies of electric plants do not warrant
quite so sweeping a generalization, yet the returns year after year
certainly indicate a definite, systematic and successful effort to
keep abreast of the times with both sorts of progress, in at least
four-fifths of the large number of public plants whose reports I
have seen. In some cases the strength of the progressive spirit is
quite remarkable. Topeka, for example, built electric works in
1887 and found them poor, so bad in fact that Topeka has been
held up as a warning to municipalities not to trespass on the pre-
serves of monopolists. But in spite of her poor plant Topeka made
light at a total cost of $100 per arc interest, taxes, depreciation and
all, saving $20 per arc on the price she had paid a private com-
pany, and in May, 1896, she entirely rebuilt the plant with modern
machinery, and now the operating expenses are only about $40 per
arc and the total cost $60, with a management that is a credit to
the city and a source of pride to her citizens. Even Chicago in
the last few years has brought her electric record up from one of
the most criticized to one of the most admirable, as we shall see
when we speak of objections. The Brooklyn Bridge and the Glas-
gow tramway managements have proved themselves extremely pro-
gressive. The former has been untiring in its efforts to increase
the usefulness of the Bridge and the latter has won an interna-
tional reputation for an energetic and intelligent progressiveness
exceeding that exhibited by any private tramway company in Great
Britain. Glasgow not only sent a committee all over the civilized
world to study the best methods of street railway service but she
made it a definite purpose to use the roads to relieve the conges-
tion of the tenement districts by arranging rates and runs so as
to encourage tenement dwellers to move out of the city, and bring
suburban homes within the reach of the poorest classes; a matter
of the utmost moment to which private companies give no heed
unless compelled to do so by public law or the necessities of a
franchise agreement.
Our post office is all the time introducing new ideas and better
1 Municipal Monopolies, p. 620. See also p. 610 where the i'rofessor
speaks of the Richmond Management as "very progressive," and p. <il^,
where after stating the details of the Virginia plants, he says, "Save perhaps
i:i Alexandria, progressivenoss is everywhere apparent."
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 171
methods. It has availed itself of the stage coach, canal boat,
steamship, way train, lightning express, pneumatic tube and
gravity chute, and it is not the fault of the Post Office Department
that we cannot send letters by telegraph. Postmaster General after
Postmaster General has urged upon Congress the claim for a postal
telegraph but the Western Union vetoed the measure and the
Western Union has more influence in Congress than the post office
or the people.
Inventors are better treated under public ownership. The public
does not steal or suppress inventions but encourages and remuner-
ates them. In our road departments, fire departments, war depart-
ment, etc., new ideas are eagerly welcomed. Never is an inventor
so sure of just reward as when his improvement applies to a public
business.
While the Western Union has been suppressing inventions the
English postal telegraph has been encouraging and adopting them.
England has adopted the telephone, the multiplex and the auto-
matic in her telegraph system, doing at least half her telegraph-
ing with the latter, and the department is always pushing forward
to new improvements. The Western Union has done very little with
any machine system, nothing with the multiplex, and refused the
telephone entirely though it might have had it for a song. The
English telegraphic engineers stand in the front rank. The West-
ern Union sent for one of them to come to the United States and
examine its lines and instruct it what to do with them, and he
found the said lines in bad condition and told the Western Union
how to doctor them. The English electricians have not deteriorated
because of the transfer of the telegraph to the government. The
government electricians are among the leaders in the new move-
ment to perfect a system of telegraphing without wires. They are
just as anxious to discover improvements as ever more so, in fact,
because they are surer of appreciation and reward. The public
service is more progressive than our private service and therefore
promises more to progressive men. England welcomes telegraphic
invention because she aims at service. The Western Union aims
not at service, but at money, and welcomes only such inventions as
will help her make more money without an overwhelming sacrifice
of her investment if her moneyed interests are endangered, no
matter how greatly the discovery would improve the service, she
frowns upon it, boycotts and imprisons it.
BEAUTY.
XXVII. Aesthetic development will be aided by public
ownership. Compare the broad pavements and symmetrical
front of the post office building on Mnth street, Philadelphia,
with the narrow walk and jagged conglomerate of ugly build-
1 72 THE CITY FOB THE PEOPLE.
ings or. the opposite side of the street. Compare the Fair-
mount Water Works with the stations of the electric com-
panies.. Compare the; capitol grounds at Washington with the
railway depots. Recall in delightful memory the exquisite
beauty of the "White City" at Chicago, the home of our great-
est exposition and at heart a public undertaking (much of the
best work and planning done without pay as well as in public
service), saturate your vision with its wonderful symmetry,
harmony, beauty of form and color, nature and art, and then go
down into Chicago and look at the narrow, dingy, dirty, ugly,
hiddledee piggledee, planless, disreputable streets that private
enterprise has built. Xo one with the love of beauty in his
soul could go from the dream of the City by the Lake to the
nightmare of Clark street, without feeling that the same men
and women were totally different beings in Clark street from
what they were in the White City, and that life would be in-
finitely nobler if the spirit that created the Beautiful City
could transform the discordant streets of the cities of traffic
into habitations fit for man. Any thoughtful man who will
make the comparisons suggested, o~ others of a similar nature,
will see that when men ease up a little on the rush for wealth
and begin to think of life and service as well as money, what-
ever they touch grows beautiful. Beauty is its own best justi-
fication, a primal good in itself, a source of happiness per se,
a utility of the highest order. No promise of public owner
ship appeals to me more than the prophecy of art, art in daily
life, trees, birds, flowers, light, air, blue sky and rippling
water for all the children of men.
MORALITY.
XXVIII. Moral development no less than aesthetic pro-
gress is favored by public ownership. The change from profit
to service as a motive and aim, is in itself a moral transforma-
tion of most vital moment. The hand of business no longer
strikes the selfish chords alone, the altruistic chords are
sounded with those of self, and the two learn to vibrate to-
gether in harmony. When self-love learns that its richest
naths lie thru the fields of other-love, morality has won the
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 173
mind, and when sympathy, thru harmonious living, gains
strength enough to rule the life, morality has won the heart.
The war between the people and the monopolies is opposed
to the growth of sympathy and brotherhood. Private monop-
oly is anti-christian and anti-moral, as well as anti-legal. Even
the evils of intemperance may be banished more certainly thru
public ownership and co-operative industry and the diffusion
of wealth and comfort consequent upon them, than thru any
direct attack, for as Frances AVillard well said, the real sources
of intemperance chiefly lie in the poverty and ill-life caused
by improper industrial conditions.
MANHOOD.
XXIX. Manhood of some sort is constantly being evolved
along with the gas, electric light, transportation or telephone
service in every public or private plant. Thru wealth diffu-
sion and awakening of civic interest, thru better treatment of
labor, co-operative effort, aesthetic development and moral im-
provement, public ownership not only leads directly to a nobler
manhood, but produces conditions favorable to the rapid
growth of a Xew Political Economy and a New Conscience
that shall recognize manhood as the supreme product of an
industrial system and demand intelligent scientific and per-
sistent effort to subordinate all other objects, and adjust all
powers of industry, education, and government to the develop-
ment of the highest character and the noblest manhood.
LIBERTY.
XXX. Liberty of thought, of speech, and of action,
liberty of press, pulpit, college, court, legislative hall, market,
family, voter and workinginan, will be aided by the downfall
of the great private monopolies that hold them all in thrall.
DEMOCRACY.
XXXI. Democracy and self-government are not merely
favored by public ownership; public ownership is democracy
and self-government in industry, and is essential to democracy
174 THE CITY FOR THE PEOPLE.
and self-government, in political and social life. You are not
the equal of Yanderbilt or Rockefeller before the law or in
the government of the country, and cannot be while they own
railroad systems and oil monopolies and you do not. A work-
ingman who is dependent on monopolists for opportunity to
earn his daily bread is not free even to cast his vote as he
wishes. He may be freer than his brothers of the feudal age,
but he is not free. Our government is more nearly a democ-
racy than the government of King George, or Charlemagne,
or Caesar, but it is not a democracy, and cannot be while one
man owns 200 millions and another man owns nothing. Our
constitution provides against titles of nobility, but many of
our monopolists have aristocratic power over larger masses of
men than many a Duke or Marquis controlled in the olden
time. Our gas and electric magnates, street railway, tele-
graph and telephone princes, railroad and oil emperors, are
just as truly aristocrats as if born with titles. Jay Gould is
reported to have said that he had rather be president of the
Western Union than President of the United States, and no
wonder the chief executive's powers, except in time of war,
and his chances at any time of fleecing the people to line his
own pocket were insignificant compared to those enjoyed by
the Czar of the Telegraph.
The American people would be indignant if any one should
charge them with favoring royalty, creating and sustaining
dukes, marquises, lords, and earls, or meekly submitting to
titled aristocrats of any grade. There would be a revolution
if Congress should confer the title of lord, or duke, or earl, on
Yanderbilt, Gould, Rockefeller, Morgan, Sage, etc. Lord
Gould, Lord Rockefeller, Duke Morgan, and the rest would
soon find the country too w^arm for their habitation. Yet the
essence of royalty and aristocracy is not in the title but in the
overgrown power which one man possesses over his fellows.
A Congress that grants railroad, telegraph, and banking privi-
leges to private individuals, establishes a far more powerful
and therefore more dangerous aristocracy than any that could
possibly be created by the mere bestowal of titles of nobility.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 175
UNITY OF INTEREST.
XXXII. Finally the fundamental and all-pervading ad-
vantage of public ownership is that it removes the antagonism
of interest between the owners and the public, which is the
vital cause of all the evils of private monopoly. (See above,
"The Root of Evil," and "The Real Solution.")
METHOD.
Having ascertained the advantages of public ownership,
the next question is how to secure it.
First, The city or town must have authority, either by
constitutional provision or by general law or special act of the
legislature. A general law according all municipalities the
right to build or buy, own and operate any public utility is
next best to a constitutional provision, but is difficult to pass.
The easiest plan is to push partial measures one after another,
a water act first, then a gas and electric light law, then a street
railway act, etc. 1 In this way the opposition of the monop-
olists is divided, one section being dealt with at a time, where-
as a blanket law at the start encounters their united battle.
After the partial measures have been separately secured, they
can be easily condenst into a brief and sweeping law.
While the statute provisions are well worth working for,
they are far inferior to constitutional provisions, because they
are always open to modification or repeal at the whim of a
corporation legislature, and even the courts sometimes make
trouble. One of the rules of law is that a legislature cannot
sanction a government enterprise except for a "public pur-
pose," and it is for the courts to say what constitutes a public
purpose, and a court may now and then make an arbitrary
decision. 2
1 In asking for the passage of such laws the fact should be emphasized
that they are merely permissive measures.
2 There is an opinion by a Mass, court (Opinion of Justices, 155 Mass. 601)
to the effect that the legislature could not authorize municipal fuel yards,
the sale of coal and wood not being a public purpose in the opinion of the
majority of the court, the ground of decision being that buying and selling
coal did' not differ from buying and selling other commodities in general, an
the judges thought it would be bad policy to open the door for municipalitie:
to go into mercantile business. In a strong dissenting opinion Judge Oliver
Wendell Holmes, now Chief Justice of Mass., used these words:
"I am of opinion that when money is taken to enable a public body to
offor to the public without discrimination an article of general necessity, tt
176 THE CITY FOE THE PEOPLE.
Probably the most emphatic proof of the need of consti-
tutional provision in favor of public ownership is to be found
in the recent "Internal Improvement" decision in Michigan.
The State passed a law authorizing Detroit to purchase street
railway systems lying wholly or partly within the city limits.
Councils appointed a commission, with Gov. Pingree at its
head; the details of the transfer were arranged, and the mat-
ter was ready for a referendum vote when the proceedings were
arrested by a decision of the State Supreme Court that the
law permitting Detroit to own and operate her street railway
system is not constitutional, because the Michigan Constitu-
tion, 9, Art. 14, says: "The State shall not be a party to or
interested in any work of internal improvement nor engaged
in carrying on any such work, except in the expenditure of
grants to the State, of land or other property." The court
holds that as the State cannot own internal improvements, it
cannot authorize a city or town to own them. "This would
enable the State to do by means of agencies called into being
by itself, what it cannot itself do, and what the constitution
purpose Is no less public when that article is wool or coal than when it is
water or gas or electricity or education, to say nothing of cases like the
support of paupers, or the taking of land for railroads or public markets."
In 150 Mass., 592, the supreme court held that the legislature could
grant municipalities the right to make and sell gas and electricity, on the
ground of the general convenience of the service, the impractiabilit!/ of each
individual's rendering the service for himself, and the necessity of usitni the
streets in a special way, or exercising the right of eminent domain; whereas the
buying and soiling of coal and wood does not require special use of the
streets, nor the right of eminent domain.nor the exercise of any other fran-
chise or authority derived from the legislature.
In dealing with sewers, water, gas, and electric works, etc., courts have
sought to strengthen their conclusions by reference to the necessity of a
special use of the streets, or other action requiring legislative authority;
but they did not decide that a purpose could not be a public one without
this element; on the contrary, schools, libraries, museums, lodging houses,
hospitals, baths, scales, markets, etc., do not require any special use of the
streets nor any franchise or rights of eminent domain, but can be established
by any one without legislative authority. As to iinpractiability, it is as
impracticable for each individual to establish a coal-yard, and get coal from
the mines at reasonable rates, as it would be for each individual to supply
himself with schools, libraries, baths, hay-scales, etc.
It has been held that roads, bridges, sidewalks, sewers, ferries, markets,
scales, wharves, canals, parks, baths, schools, libraries, museums, hospitals,
lodging-houses, poor-houses, jails, cemeteries, prevention of fire, supply of
water, gas, electricity, *eat. power, transportation, telegraph and telephone
.service, clocks, skating-rinks, musical entertainments, exhibitions of fire-
works, tobacco warehouses, employment offices, etc., are public purposes, and
proper subjects of governmental ownership. (See Cooley on Taxation and
oases cited. A municipality may be authorized to build and own a street
railway, such railway serves a public purpose. Sun Printing and Pub~.
Assoc. vs. New York, 46 N. E. Rep., 499, April 9, 1897. Cities and towns
may be authorized to establish and operate gas and electric light works.
New Orleans Gaslight Co. vs. La. Light Co., 115 U. S., 659, 670, 683. Opinion
of Justices, 150 Mass.. 592. Citizens' Gas Light Co. vs. Wakefield. 101 Mass.,
432. Crescent City Gas Light Co. vs. New Orleans Gas Light Co.. 27 La.
An., 138, 147.)
On running thru the cases to find if possible, a common ground of de-
<-!si')!i. it appears that whatever is of general utility or convenience to the
community constitutes a public purpose.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 177
forbids its doing." 1 This sounds plausible, but is in fact
wholly fallacious. An essential qualification is omitted from
the statement (just quoted) of. the principle on which the
court bases its conclusion. The prohibition in respect to in-
ternal improvements is upon the State, not upon cities; and
the mere fact that the State cannot do a certain thing does not
prevent its authorizing others to do that thing, unless the
reason of the prohibition on the State is that the said thiny
is wrong in itself, which is clearly not the case with internal
improvements. 2
1 Attorney Genl. v. Pingree, Supreme Crt. Mich., 79 N. W., Rep. 814.
1 The logic of the decision would prevent the legislature from authorizing
the ownership and operation of railroads, street railways, telephones, etc.,
iiy private corporations as well as by municipal corporations. The pri-
vate corporations of Michigan are as much agencies called into being by
the legislature as the cities are; and if the State, under Sec. 9 of Art.
14. cannot authorize an agency called Into being by itself to do any act
the State can't do, then the said Sec. 9 prevents it from authorizing a pri-
vate corporation to own and operate a street railway in Michigan. The
fact is that the inability of the State to do an act, does not prevent It
from authorizing a city or other party to do the act unless the prohibition
is based on the wrongfulnoss of the act itself. In This c-ase the State
Is prohibited from owning and operating street railways, etc., not because
the ownership and operation of railways is wrong per se, but because the
Constitution makers believed it was not wise for the State to own and
operate them. That this is the ground of the cinstitutional provision is
clear, not only on Its face, but upon the history of the adoption of the clause
which is dwelt upon at length in this very decision. If the State cannot
authorize a municipality to do an act the State cannot do itself, then the
legisViture cannot authorize a city to elect Municipal Water, or Park
Commissioners, or otherwise manage its own internal business affirs, for
the Michigan Supreme Court holds emphatically that the Stat-e cannot select
such officers or manage such affairs. (People v. Hurlbut, 24 Mich., 44;
Board of Park Commissioners v. Detroit, 28 Mich., 228.) If the State cannot
authorize a city to do what it cannot do itself under this clause, then as
the State cannot own any internal improvement, it cannot authorize a
city to own water, gas or electric light works, parks, sewers, drains, fire
hydrants, etc. This last point was raised and the court said that "all these
things are authorized and defended because it is a proper exercise of the
police power." Well the State has as much police power as the city; can
it then go into the gas business, or the electric light business? Such a
move would be a clear violation of Sec. 9, Art. 14, which does not make
any exception in favor of water, gas, electric light, police power or anything
else, except the expenditure of grants to the State.
If the law had been held void for excess in granting Detroit authority
to own and operate street railways beyond city limits without due restric-
tions If the decision of unconstitutionally had been based on the ground
that the law under consideration authorized Detroit to own and operate.
roads beyond city limits in terms so broad that they might include a system
covering the whole State, if any such system existed with lines lying
partly inside of Detroit, and that a bill creating such a monopoly was
contrary to the rights of other municipalities in the State, there might have
been some force in the contention, altho even In that case the practical fact
that the systems really intended to be purchased do not actually extend
bevond reasonable limits might well be held sufficient to sustain the act,
i. e.. the law might be held void as to the excess when excess arises (If
ever), but sustained as a good authority on the actual facts of the case.
But to decide that the Constitution prevents cities from owning street
railways because the State cannot own them, is an absurdity.
The argument of the decision breaks down at every point, and any one
who will read it carefully will see, I think, that the judges decided as they
did simply because they did not believe In city ownership of street railways.
Their notion in this respect may be correct, but it is not well to have such
a notion erected into a constitutional prohibition.
I have great faith in the courts, and have had many a battle for taem
with some of my friends. Even Professor Bemis thinks me very conserva-
tive on this point and perhaps I am. If so, it is because I know so well
178 THE CITY FOR THE PEOPLE.
The judges are quite as apt, however, to go to the full limit?
of the law in sustaining municipal ownership. Take for ex-
ample the Hamilton gas case, in which it was decided that
under the Ohio law permitting a city or town to erect or pur-
chase gas works whenever the council deemed it expedient, a
city could erect and operate municipal gas works, altho a pri-
vate company had previously obtained a franchise and was
operating in the city. 3
It has also been held that the right to light the streets and
public buildings and to sell (electric) light to the citizens for
their houses and places of business, is within the implied
police powers of a municipality for the preservation of prop-
erty and health. 4
The second point under this head is the financial one, the
matter of ways and means. A city may
1. Build works;
2. Buy them outright;
3. Buy them on the installment plan;
4. Buy a controlling interest in the stock;
5. Have a provision put in the franchise whereby
the plant will revert to the city free of debt
and without further payment at the end of
the term;
6. Or rent the works and operate them.
Works may be paid for
1. Out of earnings;
2. By ordinary taxation;
3. By assessments on property the value of which
is increased by the works; 5
the lofty Ideals that, as a rule, possess the judges of our higher courts,
this Michigan court among the rest. But mistakes will mar. prejudices
will pervert, and precedents will fetter, even the thought of the best minds
at times.
8 State vs. City of Hamilton, 47 Oh. St., 52; Hamilton Gas L. Co. vs.
Hamilton City, 146 U. S., 258, 265-8 (1892). For a similar opinion in respect
to electric light see 42 Fed. Rep., 723; and Municipal Monopolies, 446.
In New York, the courts have decided that a city, in granting a franchise
for water-works does not debar itself from erecting and operating a plant of
Its own. Mr. Baker says the Pennsylvania courts have given a contrary
opinion. In Montana the courts have decided against the constitutionality
of a law providing that no municipality supplied by a private company, shall
build waterworks without first buying or offering to buy the works of the
con<]>ny.
1 City of Crawfordsville vs. Braden, 130 Ind., 149.
8 Thousands of owners of land In our cities and their suburbs are made
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 179
4. By income and inheritance taxes, waich vvhen
progressive constitute a powerful means of
raising funds for public purposes from those
best able to pay, and at the same time are
equally potent as. a means of counteracting the
congestion of wealth in few hands.
The amount to be paid may be reduced to a reasonable
figure,
1. By making the franchise terminable at will;
2. By preventing or eliminating stock-watering and
overcapitalization prevention by drastic regu-
lation, forfeiture of charters, etc.; elimination
by requiring companies to write off liberal de-
preciation and call in excessive stock, or hold
face capital where it is till the real value comes
up to it, allowing companies a reasonable
period in which to rid themselves of excessive
capitalization; both prevention and elimina-
tion by taxing FACE and MAKKET values.
3. By careful regulation of rates;
4. By thoro investigation and public supervision.
of corporation bookkeeping;
5. By competing works.
Publicity, reduction of rates and prevention or cutting
down of inflated capital, are of the first importance. The
latter is even more fundamental than the former for over-
capitalization obstructs due reduction of rates. The taxation
of companies upon the face or par value of their securities
where such value exceeds the worth of the physical plant (or
on the market value of the securities if this is higher than the
face value) and other measures to prevent and reduce over-
capitalization seem to me to be the thin edge of the wedge
the measures which under ordinary circumstances should come
first, as a preparation for full and effective reduction of
rich by the increase of land values thru the construction of street railways,
water works, lighting plants and telephone exchanges, the laying of side-
walks and the paving of streets. It would be perfectly just under public
ownership to take a part or the whole of such increase of values to pay
for the works. This principle is already applied in the <-nse of ?a v; ^
sidewalks, sewers, etc., and its application could be extended to suburban
railway lines, gas mains and electric light and telephone systems.
1 80 THE CITY FOR THE PEOPLE.
rates to a reasonable level, which, together with fair capitaliza-
tion, constitutes the true preliminary to public purchase.
Jnder our constitutions, Federal and State, the courts require
that in taking over the works of a private gas or water or street
railway company the city shall pay the market value of the prop-
erty, including the franchise, and the market value of the franchise
depends on the length of its unexpired term and on the earnings
of the company, present and prospective, so that the higher the
rates the more the people have to pay for the franchise which very
likely the company got for nothing. 7
During the negotiations in Detroit the street railway franchises,
on the basis of earnings and unexpired terms were estimated to
have a value of about 8 millions or substantially equal to the struc-
tural value of the whole system, so that the people would have to
pay double the worth of the physical plant. In Washington, D. C.,
and in Massachusetts, the street railways have no franchise terms.
The grants may at any time be altered or repealed. In Mass.,
water works and bridges have frequently been taken for public
use at or near the structural value and far below the market value
indicated by their earnings. 8
Efficient measures for the prevention or eradication of over-
capitalization, and for the reasonable regulation of rates, are of
.great importance. Where franchise terms exist, such measures are
often absolutely essential in preparation for a transfer to public
ownership at a just price. The Mass, commission plan will do
something toward keeping down fictitious capital, tho it lets the
capital get waterlogged in the big companies, just where it is of
T Some people say that there are no longer any "innocent holders" of
corporate stock, and insist that as the public may squeeze the water out of
a gas plant or street railway or other monopoly by regulation of rates and
capitalization or by competition, therefore it may do the same thing directly
and immediately by condemning the property to public use and paying only
the value of the physical plant. The trouble with this is that it is impos-
sible and would be unwise even if possible. The courts and the constitutions
are in the way.
The time-honored rules of law and establish! conceptions of justice are
in harmony with one method and against the other. A long line of decisions
and a practically unbroken consensus of opinion confirms the principle that
a city taking property by eminent domain must pay its market value. And
a franchise is as much "property" as a building or a railway track. Where-
fore if tracks and franchise are taken, the city must pay the market value
of both, which is indicated by the market value of the company's bonds and
stocks, and more precisely determined by the cost and depreciation of the
physical plant, and the term and earnings of the franchise. To take an unex-
pired franchise without compensation, paying only for the physical plant,
runs counter to the judicial sentiment of the race and is therefore unwise
in spite of the fact that by the deepest principles of the law the custom of
granting private franchises should never have arisen. Having been granted
its market value must be paid if it is taken by eminent domain. On the
other hand, the reduction of market values by competition, public or private,
or by the regulation of rates or capitalization, is recognized as just and
proper by an equally well establisht set of ideas and decisions. When there
are two ways of accomplishing a purpose, one of which runs counter to
establisht ideas of justice and the other is in harmony with those ideas, the
wise man chooses the latter plan.
8 See cases cited in my chapter on the Legal Aspects of Monopoly, in
"Municipal Monopolies," p. 463, ct seq. In England the law allows munici-
palities to buy street railways at the structural value at stated periods, the
ends of franchise terms, 21 years first, then at the end of each 7 years.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 181
most importance that it should be undiluted. Laws providing for
forfeiture of franchise on proof in court of serious overcapitaliza-
tion might avail more than the commission method if it were also
provided that suit for this purpose might be brought by, or must
be brought at the demand of, twenty or more reputable citizens.
The elimination of overcapitalization may be secured by requiring
the companies to write off liberal depreciation and call in each
3 r ear a certain amount of the excessive stock, or in some cases
simpty holding the face capitalization where it is until improve-
ments and extensions bring the real value up to it. A date might
be fixed after which it should be unlawful to have a face capital
of bonds and stocks exceeding the actual value of the physical
plant plus the patents or other privileges, honestly bought and
paid for, allowing the companies 15 or 20 years for the gradual
exudation of the dead matter in their systems. Of all the measures
for preventing or reducing over-capitalization, however, I have most
faith in the plan of taxing corporations on valuations not less than
the value of their assets, nor less than the par values of their securi-
ties, nor less than the market values of their securities. Take the
three values in each case and tax the company on the one that is
highest. With honest execution such a law would be very effective
especially if a strong progressive increase of taxation were awarded
/H;H tJie excess of par or market values above real values.
In Massachusetts, since 1871, no street railway company can issue
stock till the par value is paid in in cash. Since 1893 stockholders
must pay market value for new stock. In 1894 all stock or script
dividends by telegraph, telephone, gas, electric light, railroad,
street railway, aqueduct and water companies are forbidden. In
1897 the increase of capitalization upon consolidation of street rail-
ways was forbidden. The issue of bonds was restricted in 1889. In
1896 the provision that no increase of stock could be made in excess
of the structural value of the plant and the cash assets was re-
pealed and the matter was left with the commissioners. This was
done for the benefit of the West End Company, as one of the com-
missioners informed me. This is a step backward, but the Mass,
laws have shown what can be accomplished by regulation of cap-
italization, for the street railway capitalization in this State has
fallen from $52,963 per mile in Sept., 1894, to $44,683 in Sept., 1897.
The average capitalization in Ohio, Indiana, Illinois, Michigan, Wis-
consin, Minnesota, Iowa, Missouri, and Kentucky, was $91,500 per
mile, or more than twice the Massachusetts figure, altho the
number of cars per mile averaged 3.78, which was exactly the
same as in Massachusetts.
Massachusetts franchises are liable to revocation at the pleasure
of the Legislature, and formerly the street locations of tramways
could be revoked by the Aldermen. But in 1897 the right of the
city government to revoke street railway locations in the streets
was made subject to the consent of the Board of Railway Commis-
sioners, a great gain for the companies.
182 THE CITY FOE THE PEOPLE.
The regulation of rates is most important as a means of squeez-
ing the water and fiction out of corporate capital. By such regu-
lation net earnings may be reduced to a level which will bring the
total eminent domain valuation somewhere within reasonable
limits. Gas, water, street railway, telephone and other monopoly
rates may be regulated by the Legislature or by the city under
Legislative authorization, and probably under the implied authority
of the municipal police power. 8 The only limitation is that the
regulation shall be reasonable. Property cannot be taken for public
use without compensation indirectly thru the regulation of rates
any more than it can be so taken directly. What amounts to
compensation is a difficult question. It has been held that a rate
is constitutional if it is sufficient to cover cost of service, interest
on bonds, and some dividend which latter may be only one per
cent, or even less.* Where the proposed rates will give some com-
pensation, however small, to the owners of the property, the courts
have no power to interfere. 9 It is not quite settled, however, that
courts would sustain a profit of 1 per cent, or less. 10
It is clear that a corporation cannot claim rates sufficient to
allow dividends on excessive capitalization. The U. S. Supreme
Court says in the Nebraska case:
"If a railroad corporation lias bonded its property for an amount that
exceeds its fair value, or if its capitalization is largely fictitious, it may
not impose upon the public the burden of such increased rates as may
be required for the purpose of realizing profits upon sucJi excessive valua-
tion or fictitious capitalization."
But if the evidence before the court indicates that the proposed
rates will not cover operating expenses, as was the case in the
Nebraska decision, of course the rates will not be sustained. 11
Legislative reduction of telephone rates from $11.16 a month to
$2.50 has been sustained. 12
The speed, accommodations, and rates of street railways may be
regulated under the police power of a State or municipality. 13 A
State may order a street railway to remove snow and ice, to number
and license cars, to limit their speed, to operate more cars, etc. 14
8 "When a business becomes a practical monopoly, to which the citizen
Is compelled to resort, and by means of which tribute can be exacted from
the community, it is subject to regulation by the legislative power." (Brad-
ley, J., interpreting the Munn case in Sinking Fund case, 99 U. S., 700, 747.)
* In 35 Fed. Rep. 879, the court said: "Compensation implies three things
payment of cost of service, interest on bonds, and then some dividends,"
which Justice Brewer declares may be only 1 per cent, or less. Even a
lower rate than this rule would allow may be entirely constitutional and
perfectly just in some cases as was pointed out by the Interstate Commerce
Commission in its fourth annual report. See also Larrabee's Rd. Question,
p. 365.
8 Chicago & N. W. Rd. Co. vs. Dey, 35 Fed. Rep., 879. If any compensa-
tion is left above proper and lawful expenses, the reasonableness of the
margin is a legislative, not a judicial question, 143 U. S. 546.
10 See Milwaukee Elec. Ry. & L. Co. vs. Milwaukee, 87 Fed. Rep. 577.
11 Smyth vs. Ames, 169 U. S., 466, Mar., 1898. 171 U. S. 361, May, 1898,
commonly known as the Nebraska Case.
"Hockett vs. State, 105 Ind. 250; 106 Ind. 1; 118 Ind. 194.
"Buffalo, etc., Ry. vs. Ry.. Ill X. Y. 132 (1888); 117 Mass., 544; 58 Pa.,
119; 95 111., 313; 36 Neb., 307; 22 N. J. L. (2 Zab.) 623; 19 Minn., 418.
14 Frankford, etc., Ry. Co. vs. Phila., 58 Pa., lin. Booth on St. Ry. Law,
p. 336.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 183
A statute fixing transfers at 8 cents is good, 15 so is a law
limiting ferry tolls collected of street railway passengers, 18 also an
Act reducing fares on the Buffalo street railways to 5 cents." The
Legislature has a right to fix rates on street car lines, tho no such
power was expressly reserved, and tho the charter says "the di-
rectors shall fix rates." 1S
Upon the principle that control of street railways comes under
the police power of a city, Lincoln, Nebraska, fixed street car rates
at 6 rides for 25 cents, and the ordinance was held good. 1 '
Indiana passed a law reducing street railway fares in cities
having a population of 100,000 or more according to the U. S. census
of 1890, and the law was sustained in the State Supreme Court but
held void in the Federal Circuit Court because it was a special act
in clear violation of the Constitution of Indiana.
Reformers should be careful in drawing their bills. If this law
had said "cities of 100,000 or more," it would probably have been
sustained; but as it said "cities of 100,000 or more according to the
census of 1890," it was a special act, there was only one city to
which it applied or ever could apply and the author of the bill
might as well have written "Indianapolis" instead of the circumlo-
cution he used. 20
A State may authorize municipalities to fix the charges of a
private water company. 21 Chief Justice Waite said: "Statutes have
been passed in many States requiring water companies, gas com-
panies, and other companies of like character, to supply their cus-
tomers at prices to be fixed by the municipal authorities.
"That it is within the power cf the government to regulate the
prices at which water shall ba sold by one who enjoys a virtual
monopoly of the sale, we do not doubt."
Investigation of monopolies, regulation of their bookkeeping,
and public supervision of their accounts are very necessary to form
the basis for laws regulating rates; and to aid the enforcement of
such regulations and of proper limitations upon stock and bonded
capitalization. There is no doubt that very complete regulation
and publicity of corporate accounts would be sustained, for the
courts hold that monopolies of transportation, water supply, etc.,
are "performing public functions," and are subject to full control.
In general it is not desirable to build competing works because
15 Wakefield vs. South Boston R. R. Co., 117 Mass., 544, chap. 381, 36,
Laws of 1871.
16 Parker vs. R. K. Co., 109 Mass., 506.
17 Buffalo E. S. R. R. Co. vs. B. S. Rd. Co., Ill N. Y., 132, chap. 600,
X. Y. Laws. 1875.
1S 111. Cent. Rd. Co. vs. The People, 95 111. 313; the legislature has a
general power to "define, prohibit, and punish extortion," p. 315.
l; ' Maxwell, C. J., in Sternberg vs. State, 36 Neb., 307, 317 (1893).
20 For a much fuller discussion of this case and of the whole subject of
regulation of rates, see my chnp. on The Legal Aspects of Monopoly in
Municipal Monopolies.
21 Spring Valley Water-Works vs. Schottler, 110 U. S., 347, 354.
184 THE CITY FOE THE PEOPLE.
of the absolute economic waste entailed and because it is a resort
to a method beneath the dignity and conscience of a public body.
When a city wishing 1 to establish public works is already in-
debted up to the limit allowed by law or near it, or in any case
where it wishes to secure the works with little or 110 resort to
loans, the choice lies between the installment, franchise, stock pur-
chase and rental methods.
A city may rent the tracks of a street railway company, operate
the cars and pay for the road out of earnings. Or it may have its
agents openly or secretly buy a controlling interest in the stock,
and then operate the system and make it pay for itself out of earn-
ings. Or it may contract with private parties to build or buy the
plant and allow the city to pay for it in installments from the
earnings, if the city assumes the operation, or from the yearly
taxes if the private parties operate the plant till the payments are
complete. Or it may be provided in the franchise agreement that
in consideration of the franchise term the tracks or lighting plant,
etc., shall become the property of the city from the start or at
the end of the term without further payment. Or it may be pro-
vided that after a certain date the city may purchase at the actual
value of the physical plant and then the city may lay by each year
a certain sum from the yearly taxes to build up a fund for such
purchase. Or the company may be required to pay into the public
treasury each year a percentage of receipts sufficient or more than
sufficient to provide the means for said purchase at the end of the
term.
The French Government granted Jelephone franchises to private
companies on condition that they should pay 10 per cent, of their
gross receipts to the State, and that the State should have the right
to fix rates, and to buy the system at the end of the five-year
franchise for the value of the materials employed in it. When the
government took the lines the 10 per cent, receipts had more than
covered the purchase price under the agreement.
Berlin's agreement with the Berlin Electric W T orks Company se-
cures the city 10 per cent, of the gross receipts plus 25 per cent, of
all profits above 6 per cent, on the actual capital invested, and very
low rates for public lighting. The agreement also fixes the rates
to be charged private parties, and no departures from tljese rates
can be made without assent of the city authoritites. The city
authorities retain the fullest rights of inspection, both technical
and financial, and all the campany's affairs are open to the knowl-
edge of responsible public officials. A deposit of 250,000 marks is
required from the company to hold it down to the rules as to
laying wires, etc. Finally the city reserves the right to buy the
plant after 7 years at a fair valuation carefully provided for in the
contract. Dr. Albert Shaw, from whose "Municipal Government
in Europe" this Berlin agreement is condenst, says on p. 350, "In
studying these German contracts one is always imprest with a
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 185
sense of the first-class legal, financial and technical ability that
the city is able to command; while American contracts always im-
press one with the unlimited astuteness and ability of the gentle-
men representing the private corporations."
Berlin has recently extended the franchises of its street railway
companies till 1920 under the following conditions:
1. The companies are to unite and convert the entire system to
electric traction.
2. Extensions to be made as the city orders; the city to pay a
part of the cost of construction after 1901 1/3 1 at first, y 2 after
1907, and the whole after January 1, 1914.
3. The overhead trolley to be used except where the city may
require storage batteries or other motor system, on just arrange-
ments as to increased cost.
4. City to have 8 per cent of the gross receipts within city limits
and y a the excess of net income over 12 per cent, on present capital
and 6 per cent, on any additional capital.
5. Company to pave streets.
6. No "running boards" for conductors on the outside of cars
to be used, and motormen not to work over 10 hours a day, except
on special occasions.
7. After 3 years fares shall not exceed 2% cents within the city,
nor to the end of every line in 20 enumerated suburbs. Commu-
tation and scholars' tickets at reduced rates, and also workingmen's
fares at certain hours.
8. At the end of the term all property of the company located
in the streets or on city land, and all patents come to the city with-
out payment.
9. Disputes to be settled by arbitration.
10. The company to establish a pension fund for all employees.
Leipsic has an admirable lighting contract, one part of which pro-
vides that at the end of the franchise term the works shall become
the property of the city without cost. In Hamburg the street rail-
way tracks revert to the city at the end of the charter period. In
1894 an outside company offered to build a plant of 1000 electric
lights in Minneapolis and sell it to the city for $1 at the end of a
5-year franchise, if meanwhile it might receive $150 per arc per
year, which was the price the old company was getting. The city
engineer investigated the matter and found that the new company
could afford to make the offer. But the contract with the old com-
pany was renewed for 5 years at the old rate of $150 per light. That
is, the city gave away a thousand arc plant. Do you ask why?
Well, the old company had "influence."
In 1891 the franchise of the Toronto street railway expired. The
city paid the appraised value of the physical plant, $24,640 a mile,
and operated the road for six months at a profit of $25,000 a month.
Then the city council of 24 members decided by a majority of one
to sell the system, which was done on the following conditions:
186 THE CITY FOR THE PEOPLE.
First: The company to pay the city $800 a year for each mile of
single track, plus
8 per cent, on gross receipts up to one million dollars,
10 per cent. " " " between 1 and iy 2 millions,
12 per cent. " " 1% and 2 millions,
15 per cent. " " 2 and 3 millions,
20 per cent. " " " above 3 millions.
This means about 15 per cent, of the total income in Toronto
with 91 miles of track and a little over a million receipts ($1,077,600).
In Boston it would mean about 20 per cent of the gross receipts of
the railways, or 1 & 1/3 millions a year, and in Philadelphia, with 450
miles of track and almost 11 millions of receipts, a Toronto contract
would mean nearly 21 per cent, of the receipts, or 2% millions a year
in the city treasury.
Second: Five cents for a single cash fare; 25 tickets for $1, or 6
for a quarter; tickets good from 5.30 A. M. till 8 A. M., and from
5 to 6.30 P. M. (the hours in which the great body of working people
go to and from work), 8 for a quarter, or 3 cents a ride; school
children's tickets, good from 8 A. M. till 5 P. M., 10 for a quarter,
or 2% cents a ride; half fare for children under 9. Fares on night
cars double the single day rate; free transfers thruout.
Third: City engineer to have control in respect to number of cars
run, speed, improvements to be introduced, removal of snow, repairs
of streets, etc. The system to be transformed from horse to elec-
tric, and extensions to be made from time to time* as directed by the
city authorities.
Fourth: The company's system of bookkeeping to be subject to
approval of city treasurer and city auditors, and all the company's
books and accounts to be subject to monthly audit by city auditors.
Fifth: Employees not to be required to work over 10 hours a day,
nor more than 6 days a week, nor for less than 15 cents an hour.
Sixth: At the end of 20 years (or 30, since the franchise may be
"renewed for a term of 10 years, and no longer") the city may take
the plant at its actual physical value as determined by arbitration.
The Review of Reviews for August, 1894, says that "This contract
is the most complete and satisfactory municipal franchise that has
ever been granted in America. It ought to form a model for the
cities of the United States." Yet under this contract, fine as it is,
the city received only $10,000 a month from the railroads in 1892 as
against $25,000 a month under public ownership in 1891, which
would cover depreciation and interest and still leave more than
the net income under the agreement. In 1897, with a large increase
in mileage and traffic, the city's share amounted to about $14,000 a
month. The company realized $20,000 net per month in 1894,
$30,000 in 1895, $31,000 in 1897. In the latter year it paid interest
on $33,000 of bonds per mile, or enuf in all probability to duplicate
the road (4.8 cars to a mile), and had a profit of 4.5 per cent, on
$66,000 of stock per mile, all water. The company has invested
about 3 millions, including the purchase price and the cost of chang-
ing from horse to electric traction. It has issued 3 millions of
bonds and 6 millions of stock, and the stock was selling at 80 cents
on the dollar in 1896, probably more now 9 millions of capitalization
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 187
and nearly 8 millions of market value on a plant worth less than
3 millions, and the people pay interest and dividends on the excess
of value, in spite of the famous contract which is really very ad-
mirable as a contract, but still vastly inferior to municipal owner-
ship, which would give the people still lower rates, banish the water
and put all the profits in the public treasury. The gross receipts
run nearly 16 cents per car mile, and the operating expenses are
under 8 cents. The average receipts per passenger, including the
night rates, are ^cents, and the cost per passenger, exclusive of
franchise tax is about 2 cents. With municipal ownership, free of
debt, a uniform 2 cent fare could be made, and the increased traffic
would certainly take care of depreciation and a moderate payment
to the public good.
It is said that the councils did not intend, when they took the
roads, to continue public operation any longer than necessary to
make the sort of contract they desired. It might be thought that
the success of public operation would have changed this intention.
In trying to understand the excessive* capitalization and also why
the city council voted as it did after the great success of municipal
operation in 1891, one may get some help from the statement of
one of the counsel of the road to Dr. Charles B. Spahr, of The
Outlook, that the capitalization is not excessive because two of the
original four who received the franchise had sold out after doubling
their money, and the owners of the franchise were entitled to com-
pensation for the vast amount of credit they had to command in
order to take the franchise and also their labor in agitating against
municipal ownership!
In 1894 Springfield, Illinois, was paying $138 per arc of 2000 candle
power on the moon schedule, i. e., burning dark nights only. The
city knew the price was exorbitant, but the company (which con-
trolled the gas plant as well as the electric) presented a signed
statement that the cost of the service was $117 per light, and re-
fused to come below $120 anyway. The city wisht to build, but had
reacht the limit of its borrowing power. So it made a contract
with 60 citizens by which the latter were to form a company and
build and operate a plant, the city paying $113 per arc, $53 of each
$113 to go toward paying for the works, and all profits arising from
the administration of the plant to be applied on the capital account.
When the works are paid for by these means they become the prop-
erty of the city. The 60 citizens put in $1000 each, built the plant,
leased it to two electricians, who agreed to suppply light at $60
per arc ($43 operating cost and 7 per cent, interest on the capital,
7 per cent, being what the banks charged for the money loaned).
The public buildings are lighted with incandescents (800) free of
charge (a gift of at least $1800 to the city), and 25 per cent, of the
gross receipts for commercial lighting are credited to the city. It
is estimated that in five years from the start the plant will be paid
for, and then it will belong to the city free of debt, and the people
will get electric light at cost. By this plan the city has incurred
no debt, has not increased taxation, but, on the contrary, has di-
188 THE CITY FOR THE PEOPLE.
minisht it, and the public spirit and co-operative feeling 1 of th
citizens has been brought into play. The lessees get operating ex-
penses and interest from the city arcs and 75 per cent, of the com-
mercial receipts, which yields them a good return, altho commer-
cial rates have been reduced 40 per cent below what they were in
June, '95, when the company started. In June, '98, the company
had credited the city with over $60,000 profits, leaving about $51,000
debt on the whole plant for municipal and commercial lighting. In
two or three years the plant will come to the city clear, street
lights will be operated at a cost of about $40, probably, and the
commercial lighting, even at the present low rates, will yield enuf
to cover all the cost of the public lighting.
Contractors have offered Des Moines to build a good plant and
operate 500 arcs all night and every night for $62.50 each, the city
to levy a 2 mill tax for two years, which, with the saving to the
yearly electric light fund, will pay the cost of the plant ($105,000
for 600 arcs and 1500 incandescents) in about 2 years.
Indiana has a law authorizing the construction of water works
by companies, with a contract provision that the city by annual
payments to the company should become the owner of the works
at a time stated.
In Great Britain, under the Tramways Act of 1870, municipalities
may build their own tramways if they so desire, or if the lines
are built by a private company, then at the end of 21 years and
of each subsequent franchise period of 7 years, the town or city
has two years in which it may buy the railways at the actual value
of the physical plant. About one-fourth of the tramways (with }<>
per cent, of the mileage) in England and Scotland are owned bv
the municipalities, and additions to the list are being made as fast
as the franchise periods come to an end.
Most of the cities owning railwaj-s have leased them on terms
which will cover in 21 years the principal and interest of the debt
incurred for building or purchase, and in many cases the city re-
ceives a considerable annual payment beyond what is needful for
interest and sinking fund.
In Manchester the lines were built in 1877, and the rentals to
1895 amounted to $1,275,000, while the total cost of the lines wa*
but $725,000. In 1900 the city will receive a valuable railway prop-
erty in good condition, and free of debt, and can use its revenues
to accomplish a considerable reduction in taxation, or render a
service to the mass of the people by putting fares down to the
level of cost.
Before 1896 it was not easy to obtain permission for municipal
operation of street railways. A few permissions had been given
but the House of Commons had a standing order forbidding the
introduction of any bill for such a purpose. In 1896, however, the
order was rescinded and the door thrown open. An act allowing
Sheffield to operate street railways was unanimously passed," and
Sheffield took the railways. Increased wages 10 per cent., provided unl-
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 189
other pUies soon obtained similar powers. There are now 43 tram-
Avays owned by municipalities and 117 by private companies, the
mileage being 620 public and 934 private. Of the public ownea
tramways, 16 with 318 miles of track are operated as well as owned
by municipalities. One of these lines with 48 miles of track is in
London. (See Appendix II.)
The English electrical journals report that the London County
Council has determined to acquire the street railways as fast as the
franchises expire. A strong syndicate has offered to take all the
tramways, rebuild them for electric traction with the underground
conduit, put the ownership of the tracks and conduit in the county
council at once tcithout consideration, and pay a yearly rental to the
city equal to the entire net earnings of the existing roads for the
preceding year, on condition: (1) That a 28-y ear's lease shall be
given the syndicate. (2) That the equipment and power plant shall
belong to the syndicate, and shall be bought by the Council at the
end of the lease at a valuation to be determined by arbitration.
(3) That no regulations shall be imposed upon the syndicate as to
service or employees. The Council objected to the latter condition
and were doubtful of the desirability of the conduit system, so
that the offer was not accepted, but it shows very clearly the
willingness of capital to build even the most expensive systems,
pay large rents for franchises and at the end of the term turn
over the plant to the city at a cost that is practically nothing,
since the syndicate was to receive no pay for the tracks, and only
the actual value for equipment and power plant which would be
much more than covered by the franchise rentals.
In Australia it is said the common method is for the city to build
the tramways with money borrowed from the State, and then lease
the roads for 20 or 30 years under conditions requiring the lessees
to take care of the debt and return the roads to the city free of
incumbrance at the expiration of the term.
In Milan, a city of 44,000 population, the horse roads with a 2
cent fare paid the city 10 per cent, of their gross receipts. The
new Edison Electric Company has bought the horse roads and
obtained a new franchise for 20 years from Jan. 1, 1897. The
company is to hand over all the tramicays to the city, which is to
convert them for electric traction, and then the Edison Co. is to
equip and work them on the overhead system. Of the total receipts
the company is to get 7.72 cents per car mile for operation. From
the remainder a fixed sum per mile is to go to the city to cover
depreciation and maintenance of the permanent way. Of the
balance 60 per cent, goes to the city and 40 per cent, to the company.
The city regulates the service and the number of cars to be run,
and has fixt the fares at 2 cents all the way out from the centre,
with one cent fares night and morning for working people.
forms for the men, reduced fares 10 per cent., and made a surplus in 1896-7
of S40.000 above interest and sinking fund, or 6 per cent, on the capital of
$650.000.
190 THE CITY FOR THE PEOPLE.
In Budapest, the capita' of Hungary, a city of about 500,000
inhabitants, the street railways were built by private capital, and
at the expiration of existing charters, the roads and their equip-
ment are to be the property of the city without payment to the
private owners. The fares are fixt by law and average 2% cents
per passenger. Heavy taxes are paid to the city, a good reserve
fund and a fund for the care of employees are provided, and after
all the electric roads pay 8 per cent, dividends on the investment.
The underground conduit is used in the centre of the city, and the
overhead system in the outer districts. All books and accounts of
the companies are open to public inspection.
In a mimber of our States laws have been passed enabling cities
and towns to own and operate water, gas and electric plants, street
railways and telephones being sometimes added, and municipal
power to grant street franchises is given (see Chapter III) so that
cities in such States can make contracts similar to those adopted in
Europe.
Before leaving this important subject of method I should
like to suggest:
1. The advantage of putting public works under the con-
trol of non-partisan boards or boards which must be com-
posed of members from each of the leading parties, as in the
Wheeling Gas Board.
2. The importance of a provision such as that which pro-
tects the Richmond works, by prohibiting the sale or lease of
public plants except upon a referendum vote of the people to
that effect. This will nail down the coffin lid of corporate
monopoly. When works become public under such a pro-
vision they are protected from being purposely run down and
injured in order to give apparent reason for a retransfer to
private operation, as in the case of the Philadelphia gas works.
The referendum clause discourages the corporation schemers,
and they are far more likely to let the plant alone.
3. More important than all the rest, perhaps, is this final
recommendation: that every city council be supplied with a
small number of good books on economic and political sub-
jects. The list should include the writings of Dr. Shaw,
Henry D. Lloyd, Professors Ely, Bemis, Commons, Jenks,
andGov. Pingree. If the discerning reader feels inclined to put
this book also in the list, we shall not object. The publica-
tions of the National Municipal League and the League of
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 191
American Municipalities, and the reports of famous investi-
gations into municipal and corporate affairs such as the Bay
State Gas, West End Street Railway, Broadway Franchise,
Cleveland Gas, New York Gas, Philadelphia Gas, Tweed
Ring, Chicago Street Railway, St. Louis Street Railway, New
York Special Street Railway Committee's Report, Massachu-
setts ditto, Glasgow ditto, etc., should certainly be included.
It would greatly add to the value of such a little library if
a competent expert would go thru the books and mark the
most important passages with black and blue and red, make
brief marginal notes and cross references, and paste on the
inside of the front cover a brief index bringing together the
best points of the book under the heads most likely to be of
use to members of council. 23
Some of the principal politico-economic periodicals might
be added with advantage, and arrangements should certainly be
made to obtain the yearly reports of leading public works such
as the Wheeling, Detroit and South Norwalk lighting plants,
the Glasgow Street Railways, etc., and the complete reports
of a few progressive cities and towns such as Boston, Brook-
line, Springfield, Glasgow, Birmingham, etc.
The city council of Ithaca, N. Y., set the example in Feb-
ruary, 1898, by appropriating $25 for books on municipal
questions for the use of councils. The Hon. Josiah Quincy,
the progressive Mayor of Boston, has an admirable little de-
partment of municipal statistics and general information, with
an excellent man at the head of it, but it is not located so as
to make it likelv that councilmen will become saturated with
facts thru its instrumentality.
The plan suggested for councils would be valuable also in
high schools, Christian associations, labor unions, and young
men's societies of every sort. It is simply the plan followed in
the best colleges, of making little special libraries by grouping
together the principal books relating to a given subject, plus
" I am authorized by the Trustees to state that any City Coun c s * n <" n S
$25 or $50 or $100 to the "College of Social Science" will be supplied witl
a number of books proportionate to the remittance markt and indext as
suggested, a reasonable charge for marking being added to the > ord nary price
of the books. With a $50 or $100 set there will be sent a ^litt e Jndex bo
consolidating the chief references in all the books under the leading muni-
cipal topics Dr. C. F. Taylor, 1520 Chestnut Street. Philadelphia, is tr
urer of the College.
192 THE CITY FOR THE PEOPLE.
my own method of marking and marginal notes, cross refer-
ences and analytic indexing, that enables one to collate with
ease all the material he has upon any specific point.
EXPERIENCE.
Under this head many volumes might be written describing
the successes of public ownership, the mistakes that have been
made here and there and the precautions that should be taken
to prevent similar errors in the future. We have already
spoken of the Brooklyn Bridge Railway with its efficient ser-
vice, wonderful freedom from accident, and admirable treat-
ment of employes. We have stated the facts about some of
the public telephones, the Springfield electric plant, the Lo-
gansport and Jamestown works, etc., and hinted at the great
successes in Richmond, Wheeling, South Norwalk, Allegheny,
Detroit, and other cities. In this section I will confine myself
to three additional illustrations selected from widely different
fields; the water works of New York State, the municipal un-
dertakings of Glasgow, and the experience of England with
the telegraph.
The facts about the water works of New York State I take from
a thesis prepared in 1896 by Almon E. Smith, one of Professor
Commons' students in Syracuse University. Table I divides the
cities and towns of New York into ten groups according to popula-
tion from below 1,000 to 2,000,000. The number of cities in each
group having public water works and the number having private
works appears in columns 2 and 3. 1
It will be seen from columns 4 to 14, that the miles of mains,
number of taps and hydrants, and consumption of water per family
are all greater in places having public works than in places served
by private companies. This indicates greater efficiency and more
general use and satisfaction under public ownership. In the vast
majority of cases there is not only a contrast, but a very emphatic
1 Data on all points were not obtained from all the cities but the facts
were secured for a sufficient number of municipalities to make valuable com-
parisons except in the eighth and tenth groups. In the first group 3 and 10,
4 and 12, 3 and 11, 4 and 11, 3 and 6, 3 and 6, 3 and 6 represent the number
of public and private plants reporting. In the second group the numbers are
23 and 37, 30 and 46, 24 and 39, 30 and 44, 9 and 13, 21 and 26, 20 and 26,
20 and 25. In the third group the numbers are 9 and 19, 11 and 23, 9 and 19,
11 and 21, 5 and 7, 8 and 8, 9 and 9, 8 and 10. In the fourth group, 9 and 19,
12 and 18, 10 and 18, 11 and 18, 6 and 12, 9 and 10, 9 and 7, 10 and 10. In
the fifth group, 12 and 10, 13 and 10, 13 and 10, 13 and 10, 5 and 3, 13 and 3,
13 and 3, 12 and 3, etc. That is, in group 5 the number of cities having
public works reporting percentage of taps per family is 12, and number of
private works so reporting is 10. The number of plants in the group re-
porting miles of mains is 13 and private works 10, etc.
PI-P.LIC (JWJVERSHIP OF PUBLIC UTILITIES.
193
A V Kit Ami CIIAKliK.
Per Kamily
5W
a* "-
I
? w
CO
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: i
- ?
3 5
fi>^
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M M
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2 1 2
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Per Mile
of Mai us.
a'ls
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Average
Daily
consumption
iu gallons
per family
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C-t ^
10
CO
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Average Number
(in hundreds) of
Hydrants.
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5
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Taps
per family
per cent.
3
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3
18
S
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g
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9
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R
CO
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Population
in thousands.
(1)
2
3
CQ
CO
3
T-l
IO
3
CO
2
IO
10 to 25
25 to 50
50 to 100
100 to 500
500 to 1000
1000 to 2000
contrast in favor of the public works. The advantage runs 1/3, 1/3,
1/2, 1/5, 2/3, 200 per cent., 25 fold, etc., in favor of the public plant
in the different groups. In only '.I of the 55 contrasts in the table
is the average of the private works the best and in one of these,
the charge per mile of mains in the sixth group, the contrast is
due simply to the greater density of business in the public plants,
as shown by dividing the number of taps by the miles of mains,
a rebuttal which does not apply to the other contrasts of columns
.15 and 16 since the density of public business is greater in those
194 THE CITY FOR THE PKOl'I.K.
cases also wherefore the lower public charges per mile of mains
are all the more potent proof instead of being- offset.
Mr. Smith says:
"In judging of the efficiency of the service, we have only to
compare cohimns (4) and (5), (G) and (7), (8) and (9), and (10) und
(11) *.- {;- * ^; e fl n( j that thruout the state there is a greater
number of taps per family where the works are public, than there
is otherwise. In regard to these two columns, it is evident 1hat
they deserve careful study. They contain one of the most vital
facts, and illustrate one of the most important truths connected
with the entire subject. It is from this comparison that we see,
percha,nce, more definitely than from any other source, to what
extent the system is found practicable for general use. It is doubt-
less the most concise manner available for expressing the degree
of universality in the use, and satisfaction with the price of water
furnished by private and public works.
"In the places of less than a thousand population we find that
11.14 per cent, more of the residents use the water from public
works than from private plants. In cities owning their own works,
an average of 49.74 per cent, of the families are supplied, while only
38.6 per cent, of the families are supplied in places where water is
the basis of a private industry. In villages having between 1000
and 3000 population the difference is 10.75 per cent, of the entire
population, the proportion supplied being public 41.64 per cent, and
private 30.89 per cent. In those villages that have a population of
from 3000 to 5000, 45.93 per cent, in those having public works and
33.63 per cent, in those cities depending upon private companies,
are supplied with water. This shows a difference of 12.30 per cent,
of the whole population. Cities of from 5,000 to 10,000 inhabitants
show a much greater difference. There we find 56.62 per cent, of
the families use the water when it is supplied by the city, and :i.">.37
per cent, where the supply is private. This leaves a margin of 21.25
per cent, on the side of municipal ownership. In the cities \vhrsc
population is between 10,000 and 25,000 the proportion of consumers
to the entire number of families is 48.16 per cent, public and 39.74
per cent, private. In those whose population is over 25,OOU and less
than 50,000 the percentage of consumers is 50.42 per cent, public
and 30.18 per cent, private. * * * It is certain that if we adopt
the proportion of taps to families as our standard of efficiency of
service, and moderation of rates, we shall be obliged to concede the
preference to be with the public works.
"We consider next, columns (6) and (7). This seems of vast
importance as it marks a tendency to supply all suburban localities
on the one hand, and on the other, simply to furnish the most
densely populated sections. * * *
"There is a longer line of distributing main for an equal popula-
tion where it is owned by the city. The plants have more suburban
lines when under public control. This encourages the people to
abandon the overcrowded centers in our cities and to build homes
PUBLIC OWNERSHIP OF PUBLIC UTILITIES.
105
in the outlying districts. * * * A very significant fact may be
seen from the possibilties for fire protection. We may notice that
in 'every class the number of hydrants is greater when the works
are under public control. The difference being from 2.5 per cent,
in group 3, to 72.2 per cent, in group 7." * * * The consumption
is also everywhere found larger per family and per capita when it
is supplied by the city, the greatest difference appearing in group 4,
where the average in public works is 547.7 gallons, in private 309.96
gallons per family, or a difference of 237.74 gallons per family."
"From columns 15 to 20 it appears that the public service is de-
cidedly cheaper than the private service in every group, the charge
per family is considerably lower in every case, and also the charge
per tap, which in two groups is less than half for public plants
what it is for private works, and averaging all the groups but the
first the private charge is about 100 per cent, above the public
charge."
The savings to the cities and towns thru public ownership are
thus summed up by the essayist, after elaborate calculations in
which interest, taxes, hydrant rentals, etc., are fully allowed for.
Saving by Municipal Ownership of Water Supply.
GROUPS ON CITIES.
Annual Balances Saved by Public Ownership
(considering both family service and public
consumption, fire protection, Ac.)
Per Family
Per Tap.
Total Amount
Cities of 1st group
85.47
814.17
84,387
Cities of 2d group
4.42
14.31
58,976
Cities of 3d group
8.10
14.10
75.835
Cities of 4th group
5.05
14.26
110,098
Cities of 5th group
6.23
15.68
286,479
In the 6th group only one city of each sort is reported, the
savings shown by public ownership being $1.68 per family, $5.57
per tap, and $r>4,2'!7 total. For the private works in the remaining
classes the essayist had no price data.
For a second illustration of the results of experience in public
ownership we will take a statement concerning Glasgow which 1
drew up recently from letters and reports direct from Glasgow
together with the writings of Dr. Albert Shaw and Sir James Bell,
and which has been adopted for issue by a referendum vote of the
National League for Promoting the Public Ownership of Mon-
opolies. It is called:
THE WISDOM OF GLASGOW.
Glasgow is the second city of Great Britain. Its population is
196 THE CITY KOI; TIIK I'KOI'LK.
750,000, br 900,000 with suburban towns. In respect to the munici-
palization of industry it is probably the leading city of the world.
Jt has extended the field of municipal business far beyond the
limits usually prescribed. It owns and manages public slaughter
houses, a consolidated market system, public swimming baths, laun-
dries, sanitary wash houses, model tenements, municipal lodging
houses, a family home, a municipal art gallery, public water works
gas and electric works to supply light, heat and power; the street
railway system, a city farm where the sewage is used and fodder
raised for municipal horseflesh in the street cleaning department
and on the street railways, the harbor and everything pertaining to
it harbor tramways, ferries and steamers, graving docks, weigh-
ing scales, cranes, various yards and offices, and the supply of
water for ships all belong to the city and contribute to its reve-
nues. And it would have had a municipal telephone system, if the
permission it has more than once requested had been granted. 2
The results of these extensive experiments in public ownership
have been the development of an active local patriotism, the purifi-
cation of politics, improved conditions of labor, better homes, better
health, cheaper and better service, a remarkable increase of busi-
ness, diffusion of wealth, power and benefit, and a new impulse to-
ward noble ideas the tendency being to substitute the ideal of
public service for the ideal of personal aggrandizement.
In the model lodging houses every lodger has a separate apart-
ment, the use of a large sitting room, a locker for provisions and
the use of a long range for cooking his own food. The charge is
7 to 9 cents a day, and at the women's lodging 6 cents. These mu-
nicipal lodging houses have led to a great improvement in the pri-
vate lodging houses. Private parties have opened improved estab-
lishments on the plan of the public houses, with the same prices,
and the same strict rules as to order and cleanliness. Many of the
smallest and worst of the private houses have disappeared entirely.
In the public baths the charge for a swim, as long as you like,
is 4 cents, 12 tickets for 36 cents; boys and girls under 13, 2 cents
and 12 tickets for 18 cents. Special reduced rates for schools,
classes and associations of young people. Clubs can get the exclu-
sive use of the pond for one night weekly, between 9 and 10, for
$1.60 (which admits 40 members) and a charge of 2 cents for each
person bej-ond 40. Women's clubs, 96 cents for 24 members and 2
cents for each additional person. Private hot baths, 6 to 12 cents. 3
2 In a letter relating to the Glasgow situation and the Natl. Pub. Own.
Circular, Col. Thos. Wentworth Higginson calls attention to the fact that
while Glasgow has done much In the development of municipal business sli--
has neglected to establish public libraries. Our cities, tho far behind in the
public ownership of material utilities, have shown more wisdom in respect
to provision for the intellectual man.
8 Condensed from p. 177 of "Glasgow" by Sir Jamos Bell, Lord Provost
>f Glasgow 1892-5, and 1895-6. Boston has just opened (Oct.. 18!>8i her first
permanent all-the-yoar-round public bath. The baths are all private. The
only charge is for soap and towels 1 cent, and Saturdays from 10 A. M. to
5 P. M. boys and girls are supplied with soap and towels free. Boston is
ahead as to charges but there is no swimming pool, which is one of the most
important persuasions to cleanliness, changing Its pursuit from a labor to a
pastime.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 197
Hardly less useful, as Dr. Shaw says, in the cause of cleanliness,
are the public laundries. For 4 cents an hour a woman can have
"the use of a stall containing an improved steam boiling- arrange-
ment and fixed tubs, with hot and cold water faucets. The washing
being quickly done, the clothes are deposited for two or three min-
utes in one of a row of centrifugal machine driers, after which they
are hung on one of a series of sliding frames, which retreat into
a hot air apartment. If she wishes, the housewife may then use
a large roller-mangle, operated, like all the rest of the machinery,
by steam power, and she may, at the end of the hour, go home with
her basket of clothes washed, dried and ironed. To appreciate the
convenience of all this it must be remembered that the woman
probably lives with her family in one small room of an upper tene-
ment flat. In each of these establishment the city also separately
conducts a general laundry business, drawing its patronage from
all classes of society." (Dr. Albert Shaw, Municipal Government in
Great Britain, pp. 109, 110.)
Most important of all her undertakings, perhaps, are Glasgow's
public tramways. The general manager, Mr. John Young, has re-
cently revised and brought down to date a condensed statement
of the facts drawn up by me two years ago for the use of the Citi-
zens' Committee of Boston. He also sends the report for '97-8.
These documents, with the writings of Dr. Albert Shaw and Sir
James Bell, and the Report of the Massachusetts Rapid Transit
Commision, supply the data on which the following summary is
based
In 1894 the city of Glasgow became the owner and manager of
its street car lines. The consequences were:
1. The hours of labor were reduced from 12 and 14 to 10 per day,
and from 84 and 98 to 60 per week; wages were raised 2 shillings
per week, and two uniforms a year were supplied to each man free
a voluntary improvement of the conditions of labor showing a
policy exactly contrary to that of the private companies.
2. Fares were reduced at once about 33 per cent. the average
fare is below 2 cents, and over 35 per cent, of the fares are 1 cent
each a voluntary movement in the direction of cheap transporta-
tion, disclosing once more a policy precisely contrary to that of the
private companies. For short distances the fare is 1 cent, and night
and morning working people can go long routes for a cent. For
the year ending May 31, 1898, the average of all fares was 1.78 cents;
a few years ago, before the city took the lines, the private tramway
company collected an average of 3.84 cents per passenger.* At the
private charges of 1891 the 106,345,000 passengers of '97-98 would
have paid the company $4,083,648 instead of $1,900,000 they paid the
city last year. The same number of rides in Boston would cost
about $5,300,000. We pay the same 5-cent rate that we did ten years
ago, while in Glasgow fares fell 50 per cent, in 5 years (1891 to 1896),
and are now 55 per cent, below the level of 1891.
* M:is*. Rapid Transit Report, April, 1892, p. 13l.
198 THE CITY FOR THE PEOPLE.
3. The service was improved. An editorial in the Progressive Re-
view, London, November, 1896, says:
"The tramways of Glasgow has been made the finest undertaking
of the kind in the country, judged both by their capacity to serve
the public and as a purely commercial enterprise."
Glasgow is one of the first cities in Britain to take steps toward
replacing horse power by mechanical traction. She sent a commit-
tee all over the civilized world to study the best methods, and an
electric system is now being introduced while even London con-
tents itself with horses.
4. The traffic was greatly enlarged .doubled in about two years,
by low fares, good service and the increase of interest naturally
felt by the people in a business of their own.
5. Larger traffic and the economics of public ownership have re-
duced the operating cost per passenger to 1.32 cents, and the total
cost, including interest, taxes and depreciation, is 1.55 cents per
passenger. When the private company was collecting 3.84 cents per
passenger it declared that only .24 of a cent was profit. Now the
city collects 1.78 cents and still there is about a quarter of a cent
clear profit, and this is with horse power, which makes the cost per
car mile at least 20 per cent, more than with electric traction. 6
6. The profits of the business go to the public treasury, not into
the pockets of a few stockholders. For the year ending May 31,
1898, in spite of the extremely low fares, there was a clear profit of
$189,070 above operating cost and all fixed charges, interest, taxes,
depreciation and payments to the sinking fund. In round numbers
the profits above operating expenses and ordinary fixed charges
were $240,000 and the profits above operating expenses alone were
$500,000.
We are told that conditions are different in America, and infer-
ences must not be drawn from Glasgow. Let us see. It is true, of
course, that it would not do to say that as Glasgow has a 1% cent
fare, therefore our roads can be operated on a 1% cent rate. Street
railway wages are higher here than in any city of Europe, so far
as I know, and our cities are not so compact as Glasgow. But is it
not fair to conclude that public ownership would have an effect in
our cities similar in kind to the effect it has had in Glasgow? If
the change to public ownership in Glasgow brought lower fares
and better service than existed under private ownership in Glasgow,
is it not fair to believe that the change to public ownership here
would give us lower fares and better service than we now have?
Public railways in Glasgow have proved far better for employees
and the people than private railways. We infer that similar results
will follow in America. Details may be different, but the essential
6 The average fare in Great Britain in 1897 was 2.66 cents and the average
operating cost 1.97 cents per passenger, facts which are partly due to the
public ownership of 40 per cent, of the mileage, partly to density of traffic
produced by compact population and low fares. (Glasgow has 12 passengers
per car mile, abt the same as Broadway, New York, while Boston hiis abt 7)
and partly to lower wages which in Glasgow make n diil'crcnce oi about half
a cent per oassengei.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 199
conditions are the same, as shown first, by experience with indus-
tries already public here, and second, by a study of the cause of
improvement under public ownership in Glasgow.
1. In public business here, as elsewhere, the workers are freer,
get more pay and work fewer hours than the employees of the
great private monopolies. The public service is good, the charges
are very low and the profit, if any, belongs to the people.
2. The change from private to public ownership of a great mo-
nopoly means a change of purpose from dividends for a few to service
for all. This change of purpose is the source of the improvement
under public ownership in respect to cheaper transportation, a
better paid and more contented citizenship, a fairer diffusion of
wealth and power, etc. This change of purpose will accompany
the change to public ownership here as well as in Europe or Aus-
tralia, and, therefore, public ownership of the railways here will
cause a movement in the same general direction as in Glasgow:
Fares will be lower than they are now.
Wages higher. Hours shorter.
Service better. Traffic larger.
And all the profits and benefits of the railway system will go to
the public instead of a few individuals. Private enterprise seeks
to get as much and give as little as possible, while public enterprise
aims to give as much and take as little as possible. A business
owned by a few is apt to be run in the interest of the few, while
a business owned by all, is apt to be run in the interest of all or,
to put it in one comparative phrase, a business otoned by the people
is MORE apt to be run in the interest of the people than a business
oic tied by a Moryan Syndicate.
THE ENGLISH TELEGRAPH.
As a final example under this head let us take the experience of
England with her telegraph lines." Up to 1870 the telegraph busi-
ness in Great Britain was in the hands of private companies, and for
many years complaints had been made of excessive charges, poor
service and inadequate facilities. The companies pretended to
compete, but in reality had an understanding among themselves
which prevented the reduction of rates to a just figure. The press
of Great Britain complained of the extortions, delays, errors, wastes
and inadequacies of the telegraph service, and the Chambers of
Commerce of thirty prominent cities memorialized the House of
Commons, stating that the petitioners "had reason to complain of
the high rates charged by existing companies for the transmission
of messages, of frequent and vexatious delays in their delivery, of
their inaccurate rendering and of the fact that many important
towns, and even whole districts, are unsupplied with the means of
telegraphic communication."
An able commissioner appointed by the Postmaster General made
a scientific study of the abuses of the existing service, and the con-
See fuller statement in my article on The Telegraph Monopoly, Arena,
Vol. 17. p. 9.
200 THE CITY FOR THE PEOPLE.
dition of the service in Belgium, Switzerland and other countries
where the telegraph was public property, and reported a plan for
public ownership.
The telegraph companies used every effort to prevent and impede
the reform. The objections they raised were:
1. It was not the government's business to telegraph.
2. There would be a loss if it did.
3. The telegraph would be better conducted under private enter-
prise.
4. The government rates would be higher.
5. And the use of the telegraph would decrease.
6. The government service would be non-progressive no stimulus
to invention, etc.
7. The secrecy of messages would be violated.
8. The telegraph would be used as a party machine.
9. The government could not be sued.
10. To establish a public telegraph would be an arbitrary and un-
just interference with private interests.
In spite of these terrible prophecies .England bought the tele-
graphs and made them a part of the postal system in 1870, and
none of the predictions came true, not even the last, for the com-
panies received more than the fair value for their property. The
immediate results of public ownership were:
1. A reduction in rates of 1/3 to %. *
2. A vast increase of business the work done by the telegraph
doubling in the first year after the transfer.
3. A great extension of lines into the less populous districts, so as to
give the whole people the benefit of telegraphic communi-
cation.
4. Large additional facilities by opening more offices, locating offices
more conveniently and making every post-office and post-box
a place where a telegram may be deposited to be taken to
the nearest telegraph office for transmission.
5. A considerable economy by uniting the telegraph service with the
mail service under a single control, avoiding useless duplica-
tions, using the same offices, the same collecting and delivery
agencies, and often the same operatives for both services.
6. A marked improvement in the service, throwing complaint out of
the steady occupation she had had so long the aim of the
post-office being service, not dividends.
7. A decided gain to employes in pay, hours, tenure of office, etc.
8. Unprecedented advantages to the press for cheap and rapid trans-
mission of news, at the same time freeing it from the pres-
sure of a power that claimed the right to dictate the views
and opinions it should express.
9. The development of business and strengthening of social ties, ties of
kinship and friendship, through the. growth of business and
social correspondence.
10. The removal of a great antagonism and the cessation of the vexa-
tious and costly conflict it had caused between the companies
and the people.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 201
Looking at the subsequent history of the English postal tele-
graph we find:
1. A further reduction of nearly one-half in the average cost of a
message.
2. More than a tenfold increase of business in twenty-five years
while population increased but one-fourthover 1000 per cent,
telegraph growth to 25 per cent, population increase.
3. A sixfold extension of lines and fiftyfold increase of facilities.
4. A steady policy of expanding and improving the service, adopt-
ing new inventions, putting underground hundreds of miles
of wire that formerly ran oger houses and streets, etc.
5. A systematic effort to elevate labor, resulting in a progressive
amelioration of the condition of employes in respect to wages,
hours, tenure, promotion, privileges and perquisites.
6. A good profit to the government (excluding interest on the
water-logged capital cost) in spite of low rates, large exten-
sions into thinly populated areas, advancing wages, heavy
losses through carrying press despatches below cost, compe-
tition of telephone companies in the best-paying part of the
traffic, etc.
7. Satisfaction with the telegraph service even on the part of con-
servatives who objected to the- change before it was made.
Comparing the English situation with our own we find:
IN ENGLAND. IX THE UNITED STATES.
Low rates. High rates (twice as high).
Good service. Poor service.
Extension of telegraph facilities to Facilities only for the classes,
the masses.
Rapid growth, 40 times as rapid as Slow growth, less than one-sixth of
the growth of population, and 4 the growth of the English system,
times as fast as the growth of the
letter mail.
Progressive improvement of labor. Progressive maltreatment of labor.
Harmonious uninterrupted operation. Big strikes.
Large popular use of the telegraph. The telegraph an adjunct of specu-
lation.
A management aiming solely at serv- A management aiming solely at serv-
ing the people. ing themselves.
Moderate salaries for leading offl- Exorbitant salaries for leading offi-
cials, cials.
No big fortunes from telegraph The telegraph a millionaire machine,
manipulation.
Universal satisfaction with the tele- Universal discontent with the tel -
graph situation. graph situation.
Public monopoly. Private monopoly.
The fact that Great Britain began with the private telegraph
and gave it twenty-five years and more to show what it could do,
that she found it unendurable, and changed at large cost to the
public system, which proved a great success, and after a trial of
more than twenty-five years is acknowledged by all to be incom-
parably superior to the old plan and the further fact that the said
country is very like our own in government, language, customs,
sentiment, etc., give the history of the English telegraph a peculiar
value to us.
The parallel between the English telegraph before 1870 and our
own system to-day is very striking we have in an aggravated form
all the evils the English reformers complained of and several addi-
202 THE CITY FOR THE PEOPLE.
tional ones of our own boundless dilution of stock, enormous
profits, telegraphic millionaires, monopoly of market reports, sys-
tematic ill treatment of employes, etc. England had abundant
reason for revolt; America has still greater reason.
What could constitute a stronger proof of the benefits of the
public ownership of monopolies than this experience of a quarter
of a century of private ownership, full of abuses and complaints,
followed by a quarter of a century of public ownership of the same
monopoly in the same country, resulting in remedying the abuses,
stopping the complaints and convincing the stoutest opponents of
public ownership that they had been mistaken, and that it was the
best plan after all, having abundantly proved its case by actual
trial.
SATISFACTION.
Several investigations into the degree of satisfaction with
public electric plants show over 90 per cent, of strongly favor-
able replies from the officials/ and so far as the mass of the
people is concerned the cities having public plants are prac-
tically unanimous in favor of public ownership. Professor
Bemis finds that in every city having municipal gas works
public ownership has given general satisfaction. "The people
believe they have gained thru public ownership and operation
and wish to continue it." 2
Glasgow is enthusiastic over her municipal street railways
and other public enterprises. Our public water works and fire
departments are much more satisfactory to the people as a
rule than the private variety. Norway and Sweden, Luxem-
burg, Belgium, and Switzerland are abundantly satisfied of
the wisdom of their public telephone systems, while our people
are anything but contented with the telephone monopoly
which controls most of our cities and charges 2 or 3 prices
for its services. As to the telegraph, every country, kingdom,
or republic that began with public ownership has had un-
1 Arena, Dec., 1895, p. 101. Municipal Monopolies 221-2 (1898). The main
objection made by superintendents answering unfavorably is that the charge
to private consumers is put too low. The places from which objection comes
are nearly all very small towns.
2 Municipal Monopolies, 619 (1898); Municipal Ownership of Gas (1891),
p. 14. The I'rotess(,r questioned all the citizens he could meet in the cities
visited and on the trains going to and from them and found that "general
satisfaction prevails over the results of city ownership. No one expressed
any desire to return to private ownership, or uuy faith in the objections
that city ownership is dangerous paternalism, or interference with private
rights, or that it leads to corruption of politics thru an enlargement of the
number of offices."
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 203
broken telegraphic peace and satisfaction, while the countries
that have made trial of the private system have found it so
imperfect that they have abandoned it for public ownership or
made a strong effort to do so, backed by a public sentiment
that nothing but the money and influence of a gigantic cor-
poration could have resisted. Even the most strenuous oppo-
nents of public railways in Germany now admit that they
were wrong and that experience has shown the public system
to be superior to the private. No one here would think of
turning over the post office to a private corporation.* Every-
where the satisfaction of the people with the socialization of
monopoly is being shown in the most substantial manner pos-
sible by the
GBOWTH OF PUBLIC OWNERSHIP.!
In 1800 there were 16 water works in the United States,
all built and owned by private parties except one in Win-
chester, Virginia; 14 of the 15 private plants have since
become public, and from 1800 to 1896 the public works went
up from 1 in 16 to 1690 in 3179, or from 6.3$ to 53.2$ of the
total. 1 Of the 50 largest cities in the United States, 21 origi-
nally built and now own their water works, 20 have changed
from private to public ownership, and only 9 are now depen-
dent on private companies for their supply. 2 According to
* Imagine the watered stock, the doubled and trebled, squared, cubed and
integrated rates, the discriminations between individuals and places, the
postal lobbies, the indifferent service except for high-pay-commercial mail,
etc., etc.
1 By 1810 there" were 5 public plants in a total of 26. From 1810 to 1825
(the second war period of the country and the years immediately preceding
and following it), no public plants were added, and the ratio stood 5 to 32.
From 1825 to 1855 the percentage of public works rose from 15.6 to 45.3; but
the agitation preceding the civil war and the war itself set back the develop-
ment of public works to 42 per cent, in 1865. In 1863, the central year of
the struggle, not a single water-works plant was built. From 1865 to 18 1 5
the percentage of public works rose rapidly. From 1875 to 1890 franchise
fetting became a business and private ownership gained several points,
ince 1890 the development of public works has been more rapid than ever
before, the number rising from 806 in 1890 to 1690 in 1896. while private
plants increased from 1072 to 1489 only. (Mr. Baker in Municipal Monopolies
Chap. I.) The effect of war in stopping municipal development, and the
recent enormous increase of public works, are facts of exceeding interest.
- The 9 cities are San Francisco, New Orleans, Omaha, Denver, Indian-
apolis, New Haven, Patersou, Scranton, and Memphis. All the other chief
cities have public works. In New Orleans the works were first built by a
private company (1833), then sold to the city (1868), then sold back to a
company (1878), and now the taxpayers have voted 6,272 to 394 for public
waterworks. Indianapolis has had an engineer examine the situation with
a view to municipal purchase of the works. Many other cities and towns
both in the United States and Canada are proposing to establish municipal
works either by purchase or construction.
f See further Appendix II F.
2Q4 THE CITY FOR THE PEOPLE.
die "Water Manual of 1897 there have been 205 changes from
private to public ownership in water supply, and only 2<*
changes from public to private. About of all the private-
works built have become public, while only 1/75 of the public
works have changed. In Massachusetts 29 plants out of 67
have changed from private to public ownership. In other
words 43$ of the works built by private companies have be-
come public, and no plants have changed the other way. In
New York there have been 26 changes from private to public-
and 1 the other way. In Pennsylvania 14 changes from pri-
vate to public and 1 the other way. In Canada 19 out of 54
private works built have been changed to public, and the
changes^ the other have been none. In Massachusetts 75$ of
the water works are now public, in Illinois 78$, Michigan 81$,
Iowa 82$, New York 50$, Pennsylvania 24$, California 16$,
Minnesota 87$, Nebraska 88$, Canada 75$. From 100 per
cent, private to 75, 78, and 81 per cent, public in less than a
century is a very decided change. 3 And the movement is ac-
celerating; from 1890 to 1896 the growth of public owner-
ship has been far more rapid than at any previous period,
the public works more than doubling in the six years (110$
increase to be more exact), while the private works increased
only a little over one-third (39$). The net gain in the number
of public works was 884, while the net gain of private works
was only 417.
In England and Wales 45 out of 64 great towns and bor-
oughs own their water works, with all the large towns in Scot-
land, and Dublin, Belfast and Cork in Ireland. In 1898 the
London County Council has voted to get Parliamentary per-
mission to own and operate its water works. (See Ap. II F.)
3 In 1800 Massachusetts had water plants in Boston, Plymouth, Salem,
Worcester, and Peabody, all private. The first system in the state was built
In Boston by a private company in 1652, and the first public works in the
state were those built by the city of Boston in 1848. Worcester bought out
the private works in 1852. The first plants in Illinois were those of Chicago.
1840, and Ottawa 1860, both private, and the first public works were built
by Chicago in 1854. Michigan began with the private plant in Detroit,
1827, bought by the city in 1836. The common council of New York ordered
a well sunk and reservoir built in 1774. The work was stopped by the
Revolution. In 1799 the Manhattan Co. built works. In 1830 the city built
water works for fire department, and in 1842 the Croton works were put iu
operation by the city. The first complete works in the state were at Geneva,
1787 (private), bought by city 1896. Albany had private works in 179H,
changed to public in 1813, back to private in 1831 and finally to public owner-
ship in 1851. The first works in Pennsylvania were -at Bethlehem, 1761.
private, bought by city in 1871. The Philadelphia works were begun by the
fity in 1800, the first water being supplied January 2, 1801.
PUI5LK' OW.XKKSIUP OF PUBLIC UTILITIES. *2Q5
Private gas works were in successful operation at 'Baltimore in
1VJ1. at Boston in 1822, at New York in 1827, and at Philadelphia
in 1835. In 1841 the Philadelphia Councils attempted to take pos-
session of the works but it was found that they had merely suc-
ceeded in creating- a trust which under the rulings of the courts
made the managing 1 board trustees for the bondholders and the
absolute masters of the situation till all the bonds had matured
and were paid. So that the first real public gas works were estab-
lished in Richmond in 1S52. Since then 11 other municipalities in
this country have secured public works by purchase or construc-
tion. In Great Britain Birmingham, Glasgow, Manchester, Lei-
cester, Nottingham, etc., own their gas works one-third of all the
gas works are public and more than one-third of the gas supplied
is from the public works. From 18S2 to 1897 the number of public-
works grew from 148 to 208, or from 29.6 to 32.45 per cent, of the
total, and the proportion of gas sold by municipalities rose from
31.7 to 36.9 per cent. Outside of London one-Jialf the gas used and
one-half the consumers are supplied by public works. In 1898 the
number of public works rose to 212 or 32.7 per cent, of the total
of 648 works, and 48.8 per cent, of all consumers in the United
Kingdom were served by public plants. Taking two nations of
Europe, Bronson Iveeler found, as long ago as 1889, that 500 muni-
cipalities owned their gas works; 168 public works in the United
Kingdom and 338 in Germany out of a total of 667 plants (in Saxony
every plant public), over 500 cities altogether.
The growth of public electric lighting is shown by the following
approximate figures:
Number of Public Electric Plants.
1882 1
1884 3
1886 11
1888 32
1890 61
1892 192
1895 220
1898 nearly 400
From no per cent, in 1880 to 15 per cent, in 1898; from 1 in 1882
to about 200 in 1892 and nearly 400 in 1898 is good progress. 4 In
Great Britain municipal electric plants in 1895 sold 31.9 per cent,
and in 1897 they sold 45.2 per cent of the total consumption ot
electric energy. (See Appendix F.)
4 There have been 2 sales of public lighting plants because of dissatis-
faction, and in both cases the works were a failure under private, as w
as under public management : 3 sales distinctly stated not to have been
caused by dissatisfaction but to be due to very different causes, two ot
them to corporate influence in councils, and one to the inability of t
to raise the money for needed reconstruction and extensions. There is
one case where a fire destroyed a very satisfactory public plant, but the cit
was too heavily involved to rebuild. In five other cases of alleged failure
the facts have not been ascertained. That is the extent of the offsets from
the forward movement of electric public ownership. (See
below. 1 ,
200 THE CITY FOK THE I'EOri.K.
In Great Britain as we have seen one-fourth of the street railway
systems with 40 per cent, of the mileage belong to municipalities,
and 16 systems with 318 miles of tracks are operated as well as>
owned by the cities. Huddersfield was allowed to operate its roads
from the start (1882) becatise no private company could be got to
undertake the work. Between 1893 and 1895 Plymouth, Blackpool,
Leeds, and Glasgow began to operate tramways, the first two for
the same reason as iii Huddersfield. All these places have made
a success of public ownership notwithstanding the adverse condi-
tions in the first three. In 1896 Parliament gave Sheffield the right
to operate tramways, and withdrew its prohibition upon such peti-
tions and immediately a score of cities began to make plans for
public ownership, London and Liverpool among the number, ;ind
11 cities entered upon the public operation of their tramways from
1896 to 1898. No wonder Professor Bemis speaks of "the rapidly
rising tide of municipal operation in Great Britain." Here is the
list of cities owning and operating their tramways in Great
Britain, with their population. (See further Appendix II F.)
1882. 1896-98.
Huddersfield 100,460 Sheffield 347,280
Aberdeen 136,000
Blackburn 129,460
1893-95. Bradford . 228,900
Plymouth 98,120 Dover 33,000
Blackpool 35,000 Halifax 94,775
Leeds 402,450 Hull 225,050
Glasgow 750,000 Liverpool 644,130
Nottingham 229.775
South Hampton 100.000
London 4,500,000
Partial operation, 24 miles of track, Jan., '9!>.
America has had but three examples of public ownership and
operation of street railways, the Brooklyn Bridge Railway, the
interlude in Toronto, and the municipal system of Port Arthur,
Ontario. 6 There have been strong movements for public purchase
and operation of street railways in Boston, Philadelphia, Chicago,
St. Louis and other cities. In Detroit a commission was appointed
with Governor Pingree at its head to secure city ownership of all
the street railways. A substantial agreement with the companies
was reached and the city was about to take a referendum on the
matter (which would doubtless have sanctioned the purchase)
when the movement was checked by the peculiar decision of the
State Supreme Court already discussed. (See Method above.)
This all-important fact, that the stern logic of experience is
pushing the people into public ownership, is further illustrated by
the history of the telephone. Belgium began with private tele-
phones in 1884, but found it best to transfer them to public opera-
tion in 1893. Great Britain has ciphered out the same sum in social
economics; the trunk lines became postal property in 1895, and it
is generally believed that the government will acquire the entire
6 Municipal Monopolies, p. 508. The town runs an electric light system
in connection with the railway.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 207
business of the exchanges when the National Telephone Company's
license expires. Norway also decided in 1895 to take possession of
all the trunk lines. Trondhjem has bought up its exchange.
Stockholm has a public exchange. Other cities like Rotterdam,
Amsterdam, etc., were reported in 1896 to be constructing ex-
changes, and many more were said to be discussing the subject.
Glasgow has repeatedly asked permission to establish a municipal
telephone plant. Austria has moved along the same path and since
Jan., 1895, private telephone companies have ceased to exist in
Vienna. France took possession of the telephone lines in 1889.
Switzerland also began with private telephones but has made the
whole system public property. Sweden has gone far on the same
road; the state owns most of the interurban lines and is fast ab-
sorbing the exchanges. In Italy and Spain concessions of 25 and
30 years have been granted to private companies on condition that
at the end of the franchise term the telephone system shall become
public property without any payment to the companies. Germany,
Luxemburg, Wurtemburg, Bulgaria, Bavaria, and some of the
Australian Republics began with public telephones and have re-
tained them.
Thus in seven countries that began with private telephones we
see a transformation to public ownership, and provision for it in
two others, 6 while not one of the countries that began with public
telephones or have had them now for a number of years, show any
disposition to transfer them to private corporations. The move-
ment is all one way in the telephone world.
It is substantially the same with the telegraph. With the ex-
ception of the sale of the experimental line from Washington to
Baltimore, no country has changed from public to private owner-
ship, but every country in the world that began with private tele-
graphs has changed to public ownership except, Bolivia, Canada,
Cuba, Cypress, Hawaii, Honduras, and the United States, and even
in Canada the government owns some of the commercial lines, so
that the only countries without government ownership of com-
mercial telegraphs are
Bolivia, Cuba.
Cypress, Hawaii, Honduras,
and llu-
UNITED STATES. 7
The company is not the best in the world, but Uncle Sam seems
to have a tendency to afiliate with Cuba and Hawaii in more
ways than one. France, Germany, Russia, Sweden, Norway, Den-
'In Austria, Belgium, France, and Switzerland the l
complete, the telephone systems in those countries being now entiiely
See the Telegraph Monopoly Arena, vol 15, p. ^l. and authorities there
cited.
208 THE CITY FOB THE PEOiM.K.
murk, Switzerland and some other nations built their own lines
at the start. In Belgium and in the Netherlands some of the early
lines were built by the government and some by private enterprise.
The government lines proved the most satisfactory and the public
system was rapidly extended both by direct construction and by
the purchase of private lines. In England the telegraph was orig-
inally private but became public in 1870. Even in the United States
the government puts up military telegraph lines, and it is a com-
mon thing for cities to own police and fire alarm systems.
In the history of railways the power of the movement toward
public ownership of monopolies is equally apparent. Prussia at
first adopted the private system almost wholly, the State content-
ing itself with building lines in out-of-the way districts where pri-
vate enterprise would not condescend to go in Southern Germany,
on the other hand, the nations considered the making of the rail-
ways an exclusive function of the State for years the two systems
worked side by side, with the result, not of showing South Ger-
many the need of a change to corporation railways, but of showing
North Germany the need of a change to the public system, so that
the Prussian Government bought up the private railways, and now
owns nearly all (about nine-tenths) of the mileage in the State;
Saxony learned the same lesson and bought all the railways be-
longing to private companies; Belgium tried both systems, with
the result that in 1870 the Government decided to buy out most
of the private lines; on a referendum after thoro discussion
Switzerland has voted to buy the railroads; in Austria-Huno-ary,
Holland, Norway, and other countries the movement is from pri-
vate railways to a State system, gradually enlarging its scope and
absorbing the private lines; in France the reversion of the private
railways is in the State, and they will become public property when
their terms, expire; in Australia the same double experiment with
public and private roads has been made with the same results
continuance of public ownership wherever adopted, and change
from private to public, until now nearly the whole system belongs
to the Government, some colonies having no private roads at all;
such illustrations could be continued almost indefinitely, but
enough has been said to reveal the law of the movement.
THE MOVEMENT OF HISTORY.
The recent remarkable growth of public ownership dis-
cussed in the preceding section is but a part of one of the
greatest, most fundamental and far reaching movements of
history. From the dawn of civilization to the present <l;i\.
with a wave-like motion at times, but with ever increasing
volume, the movement toward public co-operation has grown
and swelled and gathered force till more than 300 different
PUBLIC, OWNERSHIP OF PUBLIC UTILITIES. 209
varieties of national and municipal undertakings in the prin-
cipal countries of the world are now enumerated, 1 and the list
is still expanding. The primitive man was an individualist
pure and simple. He wandered in primeval forrests in the
utmost independence, attending to his own wants and entirely
innocent of co-operative effort for the public good. At first
man had to depend on individual effort even for defense of
life. His own strength and the aid of such of his fellows as
might choose to come to his aid were all he had to rely upon.
But after a time as men grew more intelligent they found a
better way. They united in tribes and nations for mutual de-
fense and aggression. The whole strength of the nation was
put behind each man to defend him from harm. Formerly
it had taken the whole of a man's time to get his meals, train
himself for battle, and defend himself and his family, and
there was no security for property even if he had had time to
accumulate it. But the nationalization of defense brought
far greater security and released a large part of the energy
prviously given to conflict and the preparation for it, and made
possible the commercial, material, intellectual and moral de-
velopment of modern times.
There was a time when the only remedy for injustice was
private action. Quarrels were fought out by the disputants
and such of their neighbors as chose to join in the affair. A
robbery or murder was punished by some of the persons
directly affected. But the administration of justice has be-
come a public business now, except as between a corporation
and its employes, where the old method persists in the form of
"trikes and lockouts.
There was a time when education and fire protection, roads,
bridges and canals, hospitals, parks, cemeteries, etc., were
wholly private affairs. Now they are very largely public.
Private turnpikes and bridges are getting scarce, and the pub-
lic schools are overwhelmingly predominant up to the college
or academy grade. The rapid movement toward public ab-
sorption of water works, gas and electric plants, street rail-
1 Vrooman's "Government Ownership."
14
210 THE CITY FOK THE PEOPLE. ^
ways, telegraphs, telephones and railroads has already been
noted.
Is this movement a mistake? Shall we abandon the public
water works, and the post office, the public streets, bridges,
parks, libraries, museums, schools, courts, armies, navies, etc. ?
Shall we give the army to a Yerkes syndicate? And the navy
to a Gould corporation? Shall we give up the courts to a
Eockefeller trust? Or the roads and schools to a Hanna com-
bine? If not, if we would not think of going back to private
ownership, in the businesses that have been given to public
management, then let us be consistent and aid the movement
to give other similar industries the benefits of public operation
and complete co-operation. Would you think well of one who
opposed the establishment of public courts, or schools, or high-
ways, or water works years ago? If not, be careful not to op-
pose the corresponding movements of your own time. Per-
haps we can help ourselves most clearly to see the matter in
its true light, by remembering that even the government itself
was not so very long ago a private monopoly, owned by the
king or emperor or a few aristocrats, and that the chief com-
plaint about it now, where complaint exists, is that it is still
too much subject to private control, that is, its socialization is
not yet perfect, and progress requires the completion of the
process. 2
* Public ownership may come thru government action or thru the gradual
crystallization of co-operative groups in wider and wider circles till the all-
inclusive circle of public ownership is reached. The latter is probably the
superior method where it is practicable, especially in fields not occupied
by oppressive and conscienceless monopolies. The extent to which public
ownership and co-operative effort have replaced separate individual action in
any community is one of the surest tests of the degree of its civilization.
The ordinary processes of development are well described in a paragraph
by Prof. Seligman of Columbia University In the New York Independent
May 6, 1897. I have called it:
THE FIVE STAGES.
"In all the media of transportation and communication there seems to
be a definite law of evolution. Everywhere at first they are in private hands
and used for purposes of extortion or of profit, like the highways in medi-
eval Europe, or the early bridges and canals. In the second stage they are
'affected with a public interest,' and are turned over to trustees, who are
permitted to charge fixed tolls, but are required to keep the service up to a
certain standard; this was the era of the canal and turnpike trusts or com-
panies. In the third stage the Government takes over the service, but
manages it for profits, as is still the case to-day in some countries with the
post and the railway system. In the fourth stage, the Government charges
tolls or fees only to cover expenses, as until recently in the case of canals
and bridges, and as is the theory of the postal system and of the municipal
water supply with us at the present time. In the fifth stage the Govern-
ment reduces charges until finally there is no charge at all, and the ex-
penses are defrayed by a general tax on the community. This is the stage
now reached in the common roads and most of the canals and bridges, and
which has been proposed by officials of several American cities for other
services, like the water supply."
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 211
PUBLIC SENTIMENT AND AUTHORITY.
Jefferson and Jackson.
While Thomas Jefferson was President, in 1806, Congress
passed an act for the construction of a national road from
Cumberland, Maryland, thru Virginia into the State of Ohio,
and the act received the President's approval. This was as
great a public enterprise for that day as the building of a
national railway from ocean to ocean would be to-day. In his
writings Jefferson strongly approves of national roads and
canals, 1 and shows a settled belief in the policy of internal im-
provements under public initiative and control. This is the
ground one would naturally have expected the Father of
Democracy to take, but men do not always do what you ex-
pect them to. Jefferson, however, was a consistent democrat
in his industrial as well as in his political philosophy.
President Jackson also believed in public ownership. By
his writings and his votes he was committed to an internal im-
provement policy. 2 In his inaugural, 1829, he said: "Internal
improvements and the diffusion of knowledge so far as they
can be pushed by the constitutional acts of the Government
are of high importance." 2 In his very first message (1829)
General Jackson declared war on the Corporation Bank of the
United States. He said that its stockholders would ask for
renewal of privileges at the expiration of its charter in 1836,
but he should advocate a National Bank to belong to the Gov-
ernment, instead of a corporate bank belonging to a few stock-
holders. He did the same thing in his second and third mes-
sages. 3 The bank question was made an issue in the presi-
dential election/ and Jackson won and vetoed the re-charter
1 See Tucker's Life of Jefferson, vol. II., pp. 218, 448, 521; also "Memoirs,
etc., of Jefferson," edited by T. J. Randolph. 'In letters to Edward Liv-
ingston and others Jefferson doubts whether Congress has power to pass a
road or canal bill (at least without providing fOT the assent of the states
affected as in the Cumberland law) and recommends an amendment that will
give the national government full power to make roads and canals, saying
"There is not a state in the Union which would not give the power willingly
by way of amendment." (Letter to Livingston April 4, 1824.) It seems that
the sentiment of Jefferson's compatriots was also strong in favor of public
improvements and not so particular about explicit authorization by special
amendment. Jefferson says in a letter to Madison in Dec., 1825, after the
President's Message, "The torrent of general opinion sets so strongly in favor
of it (national roads, and canals, and other internal improvements) as to be
irresistible."
1 Parton's Life of Jackson, vol. 3 p. 171.
8 Ibid pp. 272, 342, 374.
4 Ibid p. 395.
212 THE CITY FOIt THE PEOPLE.
bill, saying "Here is a small body of men and women, the
stockholders of the Bank of the United States, upon whom
the Federal Government has bestowed, and by the renewal bill
proposes to continue, exclusive privileges of immense pecun-
iary value, and by doing so restricts the liberty of all other
citizens. This is a monopoly." 5 Then follows a statement of
specific evils, in which the President says that such a franchise
will enable "a few individuals to wield a power dangerous to
the institutions of the country." The General was able to
defeat the corporate bank, but he could not establish a public
bank without the co-operation of Congress.
A National Telegraph.
In 1844 Henry Clay eloquently advocated national owner-
ship of the telegraph. He foresaw from the very start the
dangers of a telegraph monopoly in private hands. For half
a century Congress has been bombarded with appeals for a
postal telegraph. Charles Sumner, Hannibal Hamlin, Gen-
eral Grant, Senators, Edmunds, Dawes, Chandler, and X. P.
Hill, General B. F. Butler, John Davis, Postmaster-Generals
Johnson, Randall, Maynard, Howe, Creswell, and Wana-
maker, Professor Morse, the inventor of the telegraph, Cyrus
W. Field, the founder of the Atlantic Cable and a director in
the Western Union Company, James Gordon Bennett, Pro-
fessor Ely, Rev. Lyman Abbott, B. O. Fowler, Judge Clark,
Henry D. Lloyd, Dr. Taylor, T. V. Powderly, Samuel G-om-
pers, Marion Butler, and a host of other eminent men in every
walk of life have championed the cause of the people. James
Russell Lowell, Phillips Brooks, Francis A. Walker, and
others of the highest character and attainments have expressed
their sympathy with the movement. Legislatures, city coun-
cils, boards of trade, chambers of commerce, and labor organi-
zations representing 'millions of citizens have joined in
the effort to secure a national telegraph. The New York
Herald, Boston Globe, Philadelphia Times, Chicago Tribune,
Albany Express, Washington Gazette, Omaha Bee, Denver
Republican, San Francisco Post, and a multitude of other
Ibid. p. 406.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 213
papers representing every phase of political opinion have
earnestly advocated the measure. Two political parties have
definitely demanded a government telegraph; more than two
millions of men by vote and petition have asked for it.
Nineteen times committees of the House and Senatehave re-
ported on the question, seventeen times in favor of the measure
and twice against it. One of the latter is a mild two page re-
port made without investigation by John H. Reagan of Texas.
The other adverse report was made in 1869, on the ground
that the five years of security promised the companies by the
law of 1866 had not yet elapsed.
The following opinions of eminent men show the drift of
sentiment and authority in favor of public ownership and
operation of street railways. They are extracts from letters
written to me during the Boston campaign for municipal own-
ership in 1897.
Municipal Ownership of Street Railways.
Opinions of Eminent Men. 1
DR. LYMAN ABBOTT:
"I am heartily in favor of municipal ownership of street rail-
ways. The experience of Manchester and Glasgow abroad has
shown what may be done under right conditions; but we have
another illustration nearer home, and, in some respects more con-
vincing. The Brooklyn Bridge is both owned and operated by a
joint commission representing the two cities of New York and
Brooklyn. The government of these two cities has been, in the
past, thoroughly corrupt, yet I think there are very few persons
who doubt that the conveniences for the traveller furnished by
the Brooklyn Bridge are very much better than those furnished
by the elevated system of railways or by the trolley cars on either
side the river. Moreover the fares on the railroad have been di-
minished, and the fares for foot passengers abolished. No money-
making corporation could be expected to do the latter; probably
no money-making corporation would have done the former. In
my judgment, our cities are quite competent to own and operate
their own municipal systems, and municipal ownership and opera-
tion, instead of increasing, would diminish corruption, which is
now largely due to the partnership between corporations and the
city."
DB. FELIX ABLER:
"I am strongly in favor of municipal ownership wherever grave
political objections do not stand in the way. (I should not have
1 Soe further Appendix II, G to L.
214 THE CITY FOR THE PEOPLE.
favored municipal ownership in New York at the time when Tam-
many was still in power.) And my reasons are two: First, the
advantage to the general public in the shape of cheaper fares,
beter service and the like. Second, the advantage to be expected
to accrue to the employees, and, indirectly to the wage-earning
class in general by a tendency to advance wages and to improve
the conditions under which labor is performed."
PROFESSOR RICHARD T. ELY:
"I am much pleased to learn that there is a strong movement in
Boston to secure municipal ownership of the street railways. It
is especially encouraging to know that the association formed for
this purpose includes such men as Hon. Robert Treat Paine, Dr.
Edward Everett Hale, Mr. Edwin D. Mead, Col. Thomas Wentworth "
Higginson and Hon. Josiah P. Quincy. 1 need scarcely say that I
am in entire sympathy with the movement. I have heard of noth-
ing recently which strikes me as more encouraging. It gives one
new hope for the future of the country. If the movement is suc-
cessful it will not only give decided direct benefits to the people
of Boston in the way of cheaper transportation and improved ser-
vice, but it will bring indirect benefits to which even more import-
ance must be attached; it will contribute to the purification and
elevation of political life. It will be the greatest contribution to
municipal reform yet effected in the United States."
WM. DEAN HOWELLS:
"I am heartily in favor of municipal ownership of street railways,
because it will cheapen the fares to those who most need cheap
fares, and will best serve all the interests of the public. I think
there is every reason for it, and I have never heard of one against
it, though I have heard of some arguments, and I know there are
some prejudices."
HENRY D. LLOYD:
"The organization which you have formed to secure the owner-
ship of the street railways of Boston by the city, seems to me one
of the most important movements which has ever been undertaken
in Boston for the emancipation of the people. The sentiment in
favor of municipal ownership of such monopolies I find very strong
over the country; and I believe that the initiative which you in
Boston have taken, will have a powerful effect in crystalizing that
sentiment into action. Cities should own monopolies for the sup-
ply of the necessaries of life like transportation, water, etc., be-
cause it is as true of communities as of individuals that if they
want their business well done, they must do it themselves; and this
is certainly their business. The public, as experience proves, can-
not resist the intense, powerful, and concentrated manoeuvres of
private ownership. The diffused interest of the public is an un-
equal antagonist in su^h a struggle.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 215
"The great secret of social wealth is co-operation, and it must
now be acknowledged to have been proved abundantly by exper-
ience that citizens can co-operate as successfully as stockholders.
Private administration of such supply of the necessaries of life is
the most expensive. The public will work for itself without the
cost of the enormous profits which are now paid. There is an
irrepressible conflict between private self-interest and public self-
interest. Private self-interest must economize on speed, seats,
extensions, and in every other possible way, while it is to the profit
of the public to pursue the opposite course. It is impossible for
private self-interest to take into account in its extensions and
fares such a public consideration, for instance, as the distribution
of the population in healthful instead of unhealthful districts;
whereas it would be to the direct interest of the public to put this
first. In illustration: it was recently pointed out in a debate in
the London County Council that a large working-class population
had been settled in the environs of London on a low and very
unhealthful flat, though just beyond was a range of high and salu-
brious hills which were inaccessible on account of the greater cost
of reaching them. It would be money in the pocket of the com-
munity to carry these people past the miasmatic 'lands and settle
them on the hills. But only the public could let such a source of
profit enter into its calculations. It is not to the interest of the
public that working men and women or working children, or any
of the rest of the population, should be huddled in tenements in-
stead of being scattered amid healthful surroundings; nor that
they should be over-taxed two cents twice a day, for an extor-
tionate profit to the stockholders of the street car company. This
four cents a day amounts to a tax of twelve dollars a year; and
yet the per capita share of each inhabitant of this country in the
cost of the Federal Government is only $4.50 a year."
DR. W. S. EAIXSFOED:
"To my mind, the question of municipal ownership of city fran-
chises is quite one of the more important issues before our people.
The chief hardship in the life of the working-people in the cities
of the United States, more especially the Eastern cities, is the
enormous rent they are obliged to pay a rent often amounting
to 30 per cent, of their gross earnings, which percentage is eco-
nomic ruin. Now where the rents are high, city franchises are
proportionally valuable. It can be proved, for instance, that in
the City of New York, the franchises are more valuable than in any
other city in the world. Now, these franchises are the absolute prop-
erty of the citizens. It must be apparent to everyone that they
should be so managed, that from them the public may receive the
maximum of profit. Now, as a matter of fact, the franchises have
been used by the ins in city politics to bribe their way into power.
The city's franchises have been consequently a fat purse out of
'216 THE CITY FOE THE PEOPLE.
which enormous rewards are paid for political support. And
who is the loser? Above all, the working-man, whose rent, or to
use another word equivalent to that, whose taxes the proceeds of
these franchises would enormously reduce. To-day, for instance,
the City of New York raises close on $40,000,000 a year in taxes.
I believe, if the franchises of that city, docks, ferries, railroads, g-as,
etc., were on an absolutely honest basis, carried on as business
concerns for the city's benefit, the net income arising from them
would be over $15,000,000 a year.
"The objection immediately raised to any and every scheme of
municipalization of the franchises is, you cannot do those things
until you have got an honest and competent civil service. To such
an objection I reply boldly: there is one way and one way only
to get honesty and competence in civil service, and that is by
making the service of such vital importance to the public, that
the public itself will insist on an honest service. Nor is this an
idle dream. It has been and is being carried into splendid effect
in scores of the principal municipal centres in the Old World."
DR. CHAS. B. SPAHK:
"I believe in municipal ownership of street railways, because only
through such ownership can charges be reduced to the cost of the
service, and the competitive rate of interest on the capital actually
invested. The fixing of street car fares to pay interest on capital
never lent to the public, I regard as extortion of a peculiarly in-
jurious kind. It is economically wasteful, because it cuts in two
the normal patronage of the road, and so prevents the reduction
in the cost of service which increased patronage would bring. It
is unjust politically, because the tax takes the same amount from
families worth less than one thousand as from families worth more
than one million. It is unjust socially because it aggravates the
over-crowding of the poor into the immediate neighborhood of the
workshops. Within twenty miles of New York there are as many
acres as there are families, and with rapid transit such as muni-
cipal ownership could afford, the evils of the tenement house
system would be abolished."
DB. C. F. TAYI.OR:
"It is strange that it is so hard to awaken the people to the
fact that they are heavily taxed by private corporations. Your
'Arena' articles conclusively proved that with public lines street
transit is practicable at 2 cent fares in our larger cities. Our citi-
zens are taxed three extra cents for street car fare. If a man or
a woman rides to work in the morning and back in the evening,
that means a tax of 6 cents per day. By riding home to dinner
and back to work again, it means a tax of 12 cents a day, and
if we add fares to and from a place of amusement in the even-
ing, it means a tax by the street railway companies of 18 cents
per day. If we calculate this by the year, we are. better able to
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. ' 2 1 7
realize the burden of this great and unjust tax. If a shop girl
rides to her business in the morning and back in the evening, she
is compelled to pay 10 cents for the two trips instead of 4 cents,
which it would be at 2 cents per ride. This tax of 6 cents per
day amounts to 36 cents per week, and for the fifty-two weeks in
the year, it amounts to $18.76. If we add extra rides on Sundays,
holidaj's, evenings, etc., the amount of the tax will easily foot up
to $25 per year. That such a tax should be levied on shop girls,
seamstresses, mechanics, washerwomen, bootblacks, etc., is out-
rageous. The wealthier classes of citizens as a rule, pay a much
heavier tax, for they ride more frequently, not having to count
the cost of such a seeming trifle as a street-car fare. So the per-
sonal tax from this source upon the average merchant or lawyer
would be two or three times more than that upon the average shop-
girl, or from $50 to $75 per year. But when we add to this the
tax upon the members of an average family, the amount increases
heavily. Take, for example, the family of a mechanic, whose son
is an apprentice, whose daughter is a shop girl or seamstress, and
whose daughter at home attends the High School. This tax falls
heavily every day upon the four members of this family, and also
upon the wife whenever she goes down town.
"Does the average voter think of this on election day? Suppose
this tax were paid every year, instead of every day in the year.
Then imagine our voters going up to the polls, each one paying his
street-car tax and then casting his ballot. As we have seen above,
many a mechanic with an average family would have to pay
$50 or $100; a merchant or professional man would be taxed
much more heavily, particularly if he has a large family. Suppose
we imagine a procession at the polls on election day, each voter
depositing his street railway tax for the year, and then depositing
his ballot, do you think it would take him many years to find out
that by municipal street car ownership all this tax could be saved?
Perhaps the average voter would rather devote a few hours now
and then to the subject of municipal transportation, and save this
heavy yearly tax. Yet now he pays the tax just the same, only
daily instead of yearly, and it is difficult to wake him up to the
fact that he is paying any tax at all. And this is taxation without
representation. The voters have no representative in the mangiug
board of the street car companies."
Since the Boston campaign a "National League for Pro-
moting the Public Ownership of Monopolies" has been formed
to spread a knowledge of the facts about monopoly, and issue
brief statements of opinion from time to time as occasion may
require. The association is called, for short "The 1ST. P. O.
League." The following is a list of the
218 THE CITY FOR THE PEOPLE.
MEMBERSHIP
Of the National League for Promoting the Public Ownership of Monopolies. 1
Dr. Edward Everett Hale, Boston. Prof .Frank Parsons, Boston
Rev. B. Fay Mills, Boston. Dr. Charles B fepahr New 1 oik.
^ov Pinsree Detroit Hon. George Fred ^ illiams, Boston.
D? Johu g Clark Ridpath, New York. Pres. Thomas E. Will, Manhattan.
AVilliam Dean Howells, New York. Henry D. Lloyd, Chicago
Senator Marion Butler, Washington. Dr. C. F. Taylor, Philadelphia.
Hon. Herbert Welsh, Philadelphia. B. O. Flower Boston
Pn.f John R. Commons, New York. Pres. George A. Gates, Grinnell.
Jr. W.'S. Rainsford. New York. N. O. Nelson, St. Louis.
Prof George D. Herron, Grinnell. Hon. John Breidenthal, Topeka.
Samuel Gompers, Washington. . Prof. Graham Taylor, Chicago.
Bov^ Washington Gladden, Co.um- Hon. B^Jone., Mayor^of Toledo.
Prof/J. Allen Smith, Seattle. Boston.
Dr E B Andrews Chicago. Marion M. Miller, New York.
Rev. Russell H. Conwell, Philadel- Miss Diana Hirschler, Philadelphia.
nhla Prof. Helen Campbell, Denver.
Rev Chas. M. Sheldon, Topeka. Rev. W. D. P. Bliss. Los Angeles.
Hon. S. L. Black, Mayor of Colum- Miss Helen Potter, Boctpa.
bus o Pres. Frances E. Willard.*
Edward Bellamy.* Edwin D. Mead. Boston.
Col. Thomas Weutworth Higginson, Gov. Rogers, Olympia. Wash.
Cambridge F. U. Adams, Chicago.
Hon. Henry Truelsen, Mayor of Du- Dr. Anna Shaw, Philadelphia.
luth. Robert A. Woods, Boston.
Ex-Gov. Wm. Larrabee, Clermont, Hon. T. S. McMurray, Ex-Mayor of
Iowa. Denver.
Charlotte Perkins Stetson, New John DeWitt Warner, New York
York. Hon. John MacVicar, Mayor of Des
Rev. Herbert N. Casson, Ruskin, Moines.
Tenn. Dr. Geo. C. Lorimer, Boston.
Pres. Eltweed Pomeroy, Newark. Hon. Lee Meriweather, St. Louis.
Ex-Gov. John P. St. John, Olathe, Mary A. Livermore. Melrow, Mass.
Kans. Elizabeth Cady Stanton, New York.
* Deceased since joining the League.
The first person named in the right hand column is Presi-
dent of the League; the next seven, together with the Presi-
1 The purposes of the National League for Promoting Public Ownership
of Monopolies are:
(1) To educate the people upon the monopoly question.
(2) To bring a national weight of opinion and authority to bear upon
local, state or national efforts in the direction of public ownership when-
ever it may seem wise to do so. Brief statements of fact and expressions
of opinion will be issued from time to time by the League or its executive
council. The association is not political, but may direct attention to legisla-
tive measures, and advocate them before legislatve committees and the
public.
Membership in the association does not commit one to the unqualified
advocacy on any and every occasion of the immediate absorption of mono-
polies by the public. It is the principle of public co-operative effort as a
promising remedy for the evils of opresslve private monopoly that th" asso-
ciation has in view the principle to be applied, not hastily and indiscrimi-
nately, hut with due regard to all the conditions of each particular case.
Membership is confined to persons who have done earnest work in some
progressive or humanitarian field, or whose position, character and attain-
ments give their opinions a commanding weight, and their services a special
value. Names of such persons may be proposed for membership and may
be submitted by the president or executive council, and shall be submitted
on a petition of five per cent of the existing membership and upon a two-
thirds referendum vote to that effect the persons so proposed shall become
members.
No statements will be issued In the name of the League until adopted
by a referendum vote. Any member disapproving a statement may require
that fact to be specified in case the statement is issued by the League.
Statements may be submitted to a referendum by the president or executive
council, and upon an Initiative of five per cent of the members the president
shall submit the statement or statements set forth in the petition.
The League and Its purposes and methods shall be subject to modifica-
tion by a two-thirds referendum vote. Such change may 'be submitted at
any time by the president and executive council, and shall be submitted by
them on a twenty per cent petition to that effect.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 219
lent, constitute the Executive Council; and the first sixteen
in the left hand column are Vice Presidents. Several state-
ments have already been adopted for issue by referendum vote
of the League, among them, "The Two Bridges," "The Five
Stages," and "The Wisdom of Glasgow," already quoted, and
the opinions by Mayor Jones, Mayor MacVicar, Dr. Shaw
and Professor Ely, cited below, and "The Kailroads of Swit-
zerland," given at the close of this section.
I would like, if it were possible, to quote from every one of
the distinguished members of the League, but space forbids
more than a few citations, from the large amount of valuable
material at hand. The following is an extract from the opin-
ion by Hon. S. M. Jones, the famous Golden Rule Mayor of
Toledo, adopted by the League:
"The movement for public ownership is government seeking the
good of all as against the individual who seeks only his own good.
It is a recognition of the fundamental fact that the humblest citizen
is entitled to the greatest degree of comfort that associated effort
can provide. It is organized love, manifesting itself in service. It
is patriotism of the highest and purest type. It is the casting down
of idols and the lifting up of ideals. It is dethroning the million-
aires and exalting the millions. Happily, we are passing away
from the abject worship of mere dollars to a realization of the truth
so tersely stated by the simple Nazarene nearly nineteen hundred
years ago: Ye cannot worship God and Mammon. And we are
coming to measure men not by their ability to organize industry
and use their fellow men simply as profit-making machines but
by their ability to organize industry and serve their fellow men.
" 'Municipal ownership is all right with regard to water works,
but not as to street railwa3 r s,' said a learned judge to me recently.
If I were a young man that had been trained to a proper respect
for the bench, I presume I would have accepted this declaration as
final, because of the learning of the judge, but had this judge used
his reason instead of accepting the reasoning of some hired man
emploj'ed by the corporations, he would have known that the same
principle applies to both classes of service, and that if it is good
for the city to own its own water works, it is good that every
utility that ministers to all of the people shall be owned in the
same way.
"The people will learn that they can serve themselves better with-
out profit than a private corporation can serve them with profit
as an incentive for their effort.
"But the greatest good that we ire to find through municipal
ownership will be found in the improved quality of our citizenship.
220 'THE CITY FOR THE PEOPLE.
"I believe that the great need of the hour is that the people shall
be educated upon this subject of co-operation in social service."
The following statement, adopted for issue by the !N". P. 0.
League, is an opinion by Hon. John Mac Vicar, Mayor of
DesMoines and ex-President of the League of American
Municipalities :
"There must be an end of the controlling and corrupting of our
city governments by those interested in the manipulating* of public
utilities, even if the last vestige of private ownership in them shall
be up-rooted. To those good but misguided people who without
having perhaps devoted time to examination of the subject, and
are therefore disposed to oppose municipal ownership and control
of the natural utilities represented by water, gas, street railway
and electric lighting plants, I would put this pertinent question:
Whence the fei'tile source of those corrupt influences which too
often debauch city councils, and as often lead state legislatures,
and perhaps sometimes our national Congress astray? Did they
ever hear of a city or state tempting a public official with bribery
to betray the interests he has sworn to protect? Surely not. The
potent cause to which public officials sometimes yield, must be
sought for elsewhere. Are not the colossal opportunities offered
through the medium of exclusive privileges granted by city councils
and legislatures the very foundation of this evil? I think you will
agree with me that they are. Therefore if these valuable fran-
chises, these splendid privileges, were reserved to the cities, would
not this source of corruption which has caused legislative bodies
to become a byword among the people, cease to exist?
"Such a change involves the necessity *>f civil service reform. . . .
Burden develops responsibility. There is a reserve of patriotism
and capacity of self-government in our citizenship, to which we are
not afraid to appeal. Nothing could do more to bring out the
latent virtue of the indifferent citizen than freighting the ship of
state with still dearer interests. I am not afraid to startle our
money-making voters by producing a situation which will alarm
them into a state of perpetual political vigilance. Arouse them
to the seriousness of the prevailing conditions, and the spasmodic
energy which now cleans the augean stables of municipal corrup-
tion once in ten or fifteen years, would be harnessed by unavoidable
necessity into constant connection with the public services whose
functions would be to supply them with street transportation,
light and water, and would exert an influence that could not be
satisfied excepting with the best service possible. Every citizen
would be interested in securing the greatest efficiency in the public
service and in a very short time demands would be made by a
quickened and enlightened popular sentiment for the enactment of
a strict civil service law. So long as the corporate interests operate
PUKLIC OWNERSHIP OF PUBLIC UTILITIES. 221
these public utilities for private gain just so long will we have
uncompromising opposition to civil service and good city govern-
ment. Eemove first the incentive to this opposition, which to my
mind can be accomplished by removing our public franchises from
the public mart, and a new era will dawn in which the best citizen-
ship will be the dominant force -in municipal government."
Parts of the opinion by Prof. Ely referring to corruption
and the advantages of public water supply have already been
quoted. A few further paragraphs may be of interest here:
"I unhesitatingly advocate public ownership and management
for gas works. * * * When we take up electric lights, we shall
find no reason to abandon the principle of local self-government
and municipal self-help. * * * Street railroads are one of the most
important natural monopolies, and a tendency for public owner-
ship and management is beginning to become manifest. There is
not a shadow of doubt that passengers could be carried in Balti-
more for three cents more than is charged in Berlin where the
companies must keep the streets paved from curb to curb, must
provide each passenger with a seat, must, in laying tracks, have
some respect for the rights of owners of vehicles, and do a thousand
and one things which an American corporation does not dream of,
to say nothing about the fact that in 1911 their entire property
reverts to the city without compensation."
The following paragraphs adopted for issue by the N. P. O.
League, are from Dr. Albert Shaw, our most eminent writer
on municipal government, and one of the world's profoundest
students of, and highest authorities upon, the municipal ques-
tions we are considering:
i
"All the monopolies of service, such as gas, water, trams and the
like, should belong to the community. Simplify the administration,
trust the people, give the municipality plenty to do, so as to bring
the best men to the work, keep all the monopolies of service in the
hands of the municipality, and use the authority and influence of
the municipality in order to secure for the poorest advantages in
the shape of cheap trams, healthy and clean lodgings, baths, wash-
houses, hospitals, reading rooms, etc.
"The pressure that would be brought to bear on the government
to produce corruption under municipal ownership of monopolies
like gas, electric light, transit, etc., would be incomparably less
than the pressure that is now brought to bear by the corporations.
"The wear and tear upon the morals of a weak municipal govern-
ment are greater by far when it comes to the task of granting fran-
chisesthat is to say, of making bargains with private corpora-
tionsthan when it is attempted to carry out a business undertak-
222 THE CITY FOK THE PEOPLE.
ing directly ou the public account. Thus jobbery and rascality,
wastefulness of public money, and bad results in the end, are more
likely to be the outcome when the contract system is used in street
cleaning, paving and various other public works, than when the
municipality employs its own men to clean its own streets, lay its
own pavements, and do its own public work on direct municipal
account.
"Our municipal officials are elected or appointed for short terms.
The city's legal advisers draw small salaries, and have no expecta-
tion of remaining in the public employ for more than a few brief
> years at most. They hope and expect after leaving the public em-
Iploy to find lucrative private practice. Such practice can hardly
be obtained except through the favor of the rich corporations.
What motive, therefore, could impel the legal advisers of an Ameri-
can municipal government to fight desperately for the public in-
terest as against the great array of legal talent representing those
corporations that seek to gain, to enlarge or to renew franchises,
on terms prescribed by themselves?
"In studying German contracts one is always impressed with a
sense of the first-class legal, financial and technical ability that the
public is able to command, while American contracts always im-
press one with the unlimited astuteness and ability of the gentle-
men representing the private corporations.
"The ablest lawyers in all our cities are retained by these private
corporations. They are given fat fees, directorships, stocks and
bonds, and all sorts of pecuniary emoluments, besides political and
social consideration. In return, they are expected to use their sharp
wits, their technical knowledge of corporation law, and their
training in the practical art of politics, to get the better
of the community at large, and thus to retain or obtain for the
benefit of their respective corporations very valuable public privi-
leges, which ought not to be granted at all except upon the pay-
ment of their full value, with their exercise always subject to full
public control. When municipal franchises and privileges are to be
granted, it is not the municipal authorities that make the terms,
btit the private companies. The laws and ordinances that have to
do with the granting of these privileges are carefully prepared by
the attorneys of the corporations. They are never drafted by the
legal representatives of the state or the city.
"The enormous sums of money contributed for purposes of politi-
cal control by the corporations enjoying municipal supply privi-
leges, have given us the boss system in its present form. And the
boss system, which, in fact, knows no distinction of political party,
is fast destroying state and municipal government as the stedfast
and loyal servitor, defender and promoter of the public interest.
"We find public and municipal authority and prestige weak and
low; while the authority and prestige of private corporations en-
gaged in such services of municipal supply as public illumination
and street transit are enormously active and strong. No such rela-
tive disparity as that between the prestige and strength of munici-
PUBLIC OWNERSHIP OF PUBLIC I LILIIIKS. 223
pal government and the prestige and strength of private corporate
influence, exists anywhere else in the world. Direct ownership and
operation would at least tend to build up the municipal govern-
ment on the side of its dignity and prestige.
"The views that one encounters in the United States, which pre-
sume to settle all such practical questions in advance by the recital
of dogmas touching the nature of government, would be deemed
the merest silliness by practical men in Europe. Those men see
no possible reason why a modern government, which is, after all,
nothing but the organization of the people for their own benefit,
should not render the public any service which upon careful inquiry
it may be agreed that the government can render with actual and
permanent advantage to itself and the citizens."
Two other authorities of the highest character, Professors
Bemis and Commons, also take strong ground in favor of the
public ownership of monopolies, but their writings have been
so often referred to in this chapter that a special citation here
seems unnecessary.
Hon. Josiah Quincy, the progressive Mayor of Boston, ha?
established municipal baths, a municipal paper, and a muni-
cipal printing plant. In the Arena for March, 1897, p. 532,
et seq., he expresses himself in favor of public ownership and
operation of electric lighting plants, and in respect to transit
suggests the advisability of city ownership of the tracks at
least. 1 After speaking of the difficulties in the way by reason
of the franchises granted private companies and the large
amounts that have been invested in their securities, he says:
"But aside from the question of dealing fairly with vested in-
terests, there seems to me to be no reason why an American city
should not take up any service of this character which may be
recommended by business and financial considerations. There is
no principle that stands in the way, for instance, of the municipal
ownership and operation of an electric light plant. It is purely a
commercial question in each particular case. The electric lighting
business in particular, with the present improved dynamos and en-
gines, is one which a properly organized city ought to be able to
conduct for itself with some economy and advantage.
"The argument is sometimes made that new fields of work of
this character cannot safely be entered upon until the civil service
1 This is the recommendation of the Massachusetts Special Committee
appointed to investigate the street railway question. (Report Feb.. 1898.]
The report is a valuable one but is written with a strong bias in favor of
the private companies as against complete municipal ownership and opera-
tion, and Is marred by statements and .omissions likely to mislead 1
unwary reader, as has "been shown by Prof. Bemis' able comments on the
report.' (Municipal Monopolies, pp. 518-9, 531, 538, 557, 569, 639, 648-9.)
224 THE CITY FOR THE PEOPLE.
system is more firmly established in our cities, and their general
standard of government is higher; but it does not seem to me that
such reasoning rests upon a sound basis. Any extension of mu-
nicipal functions must tend to arouse a public interest which can-
not but assist in improving administration and hastening the adop-
tion of a strict civil service system. The indifference of the more
intelligent and well-to-do citizens, and their willingness to vote
their party tickets blindly, while exercising little or no influence
over party nominations, is the curse of many of our cities. Business
men of large and unselfish views can control a city government if
they will take the pains to do so. If some extension of municipal
functions in the directions above indicated would arouse some who
are now apathetic to a sense of their vital interest in sound admin-
istration, it would do a good work. We should not, therefore, wait
for a perfect municipal organization before we undertake any de-
sirable addition to the services now rendered directly by the city,
but should be willing to trust something to the educating and
awakening effect of imposing further responsibilities upon a mu-
nicipal government, and thus bringing it into a new and close re-
lation with the citizens.
"Only the business considerations in favor of municipal owner-
ship have been hitherto touched upon, but the broad political con-
siderations are even stronger. The power now necessarily wielded
by the great corporations which control such branches of public
service as lighting and transportation often gives them too great an
influence over municipal governments. It must be admitted that
there have been many cases in our American cities where corpora-
tions have practically dictated the action of city councils. Their
influence over nominations and elections, where they choose to
exert it, may often be a determining one. Even a corporation hold-
ing a municipal franchise that has nothing further to ask of the
city, and only desires to be allowed to prosecute its business with-
out interference, is often drawn into municipal politics by the
skilfully planned attacks of politicians who have purposes of their
own in view.
"It may be urged that the influence of the additional city em-
ployes made necessary by the taking over of branches of service
now performed by corporations will be equally great and equally
selfish; but experience proves pretty conclusively that this is not
the case. It has frequently been demonstrated that any influence
which may be exerted by municipal employes in favor of a party
in- power is likely to be fully offset by the opposition of those who
have been disappointed in obtaining public office or employment.
And even those engaged upon city work are sure to have grievances,
real or imaginary, against the administration in power, and are
never solidly united in its favor. Moreover, with the extension and
firmer establishment of the civil service system, public employes
are coming to feel fairly secure in their positions, regardless of
political changes."
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 225
Hon. James D. Phelan, the far-sighted Mayor of San Fran-
r-isco, writes as follows in the Arena for June, 1897, pp. 991-3:
"The street car service, the telephone, telegraph, garbage disposal,
water and artificial light are owned by private corporations. As
might have been expected, the result has been the creation of pow-
erful monopolies and the imposition of high rates for all kinds of
service, and to maintain them we have, as a corollary, the suspected
corruption of public bodies. Legislators and supervisors, and even
courts are exposed to the machinations of these corporations, which,
with the Southern Pacific Company, the overshadowing railroad
monopoly of the state, nave been classified by the people, in impo-
tent wrath, as 'the associated villainies.' They have debauched poli-
tics and have established a government more powerful in normal
times than the state government itself.
"These conditions emphasize the desirability of the public own-
ership of utilities, because, while better results could no doubt be
attained, especially under a reform of the civil service, public bodies
would not be exposed to the insidious inroads of corruption, which
carries with it the ultimate destruction of representative govern-
ment. Where the commodities supplied are a public and universal
necessity, either natural or made so by the demands of civilized
life, the state, in granting franchises, practically transfers with
them the power of taxation. * * *
"The growth and development of the business of a city depend
very largely on the transportation facilities which it possesses
within its limits and connecting with its suburbs. One system of
street railway, for instance, costing less than $9,000,000 to build and
equip, and which collects over $3,250,000 annually in fares, has
issued stock for $18,750,000, and has outstanding bonds for $11,000,-
000, upon all of which it pays interest. Its earning power with
five-cent fares should not be the measure of its value. Its value
for the purpose of estimating reasonable dividends should be its
actual cost. And, on this theory, such a system should supply the
citizens of San Francisco with cheaper service, especially during
certain hours of the day, when the working classes pay the toll
permitted to be collected over the public streets.
"A gas company whose plant can be duplicated for less than
$5,000,000 is paying 6 per cent, dividends on $10,000,000, and a water
company, whose capitalization of stock and bonds amounts to $23,-
000,000, and whose property, held for the legitimate purpose of sup-
plying the city with water and not for the exclusion of competitors
or for speculation, is very considerably less, is paying regular rates
of interest to its stockholders and bondholders on the face value of
its securities. I closely estimate that $7,000,000 is annually paid
by San Francisco for her water, light and street car transportation,
a sum $3,000,000 in excess of the amount raised last year by the
municipality from direct taxation for the support of the local gov-
ernment.
15
22b' THE CITY FOR THE PEOPLE.
"The state should not permit private fortunes to be made out of
the necessities of the people, nor should city councils permit the
use of public streets to become the means of oppression. Unjust
and unnecessary taxation is oppression. The questions here in-
volved are equally momentous with those which stirred to action
the American revolutionists, and John Hampden before them. * *
"Modern American cities, careful to preserve representative in-
stitutions in their purity, should be prepared ao own and operate
public utilities. That is the ultimate solution of this disturbing
question. Failing of this, the unequal and demoralizing- struggle
between the weak and the venal on the one side, and the strong
and the unscrupulous on the other, must go on. In practice the
power of regulation is the opportunity of the corrupt and the cor-
rupter, and is no adequate remedy."
The Hon. Hazen S. Pingree, former Mayor of Detroit, and
now Governor of Michigan, says:
"I was elected Mayor by the most influential people of the city.
Directly after I was elected I discovered that the railroads were
paying less than their lawful taxes. I said so, and the railroad
support was lost to me. I found the gas companies charging exor-
bitant rates, and I said so, thus losing their support. I found bank-
ers speculating with the city funds. I denounced them, and they
said I was unsafe. I attacked the surface railroads, and they
called me an anarchist. I was four times elected Mayor. I lost a
lot of old friends, but I was elected by a larger majority each time.
It is s(;ii'ething to be proud of when the influential classes turn
their backs on me and the common people stand by me.. I have
come to lean on the common people. They are the real founda-
tion of good government.
In May, 1897, Mayor Pingree said:
"I am loth to surrender my belief in municipal control and accept
the doctrine of municipal ownership; but I am free to confess that
I am being gradually forced into the position of an advocate of
ownership. The methods of franchise holders compel it, as also the
ignorance and venality of many of the people's representatives.
But mu<;h of this venality, I may say, is the outgrowth of corporate
methods.
"I have advanced so far as to advocate ownership of street rail-
way tracks, and through the manipulation of lighting companies
I was compelled to force through the municipal ownership of a
public lighting plant.
"After some seven years of struggle against extortionate rates
and the exploitation of watered stock, I must admit that my hold
on municipal control is feeble. The methods of franchise holders
are forcing the expedient of municipal ownership, and yet they
expend large sums of money to defend themselves against muni-
cipal ownership.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 227
"Unless there is a great change in the present general outlook,
indeed, as I am constrained by conditions to say, unless the leopard
change his spots, we will be obliged to adopt municipal ownership
as a defense against these franchise holders.
In Xovember, 1897, lie says:
"Good municipal government is an impossibility while valuable
franchises are to be had and can be obtained by corrupt use of
money in bribing public servants I believe the time
has come for municipal ownership of street railway lines, water,
gas, electric lighting, telephone and other necessary public conve-
niences, which by their nature are monopolies.
In 1898 the Governor says without qualification:
"THE REMEDY is ix PUBLIC OWNERSHIP. This will not only solve
municipal questions, but will bring railroads, express companies,
street lines, telegraph and telephone companies and other agencies
into the proper subjection.
The five mayors above mentioned, with Mayor Harrison
of Chicago, Mayor Rose of Milwaukee, Mayor Truelsen of
Duluth, Mayor Black of Columbus, Mayor Johnson of
Denver, the Mayors of Atlanta, Cincinnati, and St. Paul,
Governor Rogers of Washington, ex-Governor St. John of
Kansas, ex-Governor Larrabee of Iowa, and other leading
mayors and governors have, come by actual experience to know
that adequate regulation of corporate monopolies is a prac-
tical impossibility, and that public ownership is the only solu-
tion of the monopoly problem. The fact that such men advo-
cate public ownership of lighting plants, transit companies
and other monopolies, carries the matter beyond the realms
of theory and puts it on a basis of business sense and practical
necessity. They are men of affairs, several of them men of
large wealth, all of them men of great experience in govern-
ment, and all of them high in public esteem. The words of
such men spoken for the public good have untold weight.
From Jefferson to Pingree the record of authority for public
ownership is overwhelmingly strong, especially when we re-
member that all who have lifted their voices against it are
either laissez-faire theorists clinging to the worn out philoso-
phy of a bygone age, or aristocrats at heart distrusting the
people and desiring the monopoly of privilege by a feu, or
228 THE CITY FOR THE PEOPLE.
business men whose financial interests are linked with private
monopoly. (See Objections below.)
The sentiment of the general public is growing very fast in
the direction of public ownership. 1 This is shown by the
strong movements for municipal railways in Philadelphia, St.
Louis, Chicago, Detroit, and other cities. In Chicago Mayor-
elect Carter H. Harrison and each opposing candidate stood
on a platform favoring city ownership of street railways.
At the Detroit convention of the League of American Mu-
nicipalities in August, 1898, when 1,500 members of the city
councils and other branches of city governments and many
prominent mayors were present from cities in all parts of the
country, the sentiment was overwhelmingly in favor of muni-
cipal ownership and operation of public utilities.
* In December, 1898, the convention of the National Muni-
/cipal League, received most favorably a municipal program
/ and model charter presented by a committee consisting of Dr.
I Albert Shaw, Professor Goodnow and Horace E. Deming of
New York, and Hon. Clinton Eogers Woodruff, Charles Rich-
ardson and Professor L. S. Howe of Philadelphia, and strongly
favorable to public ownership. Some of the provisions of the
model charter are as follows:
Cities "may acquire or construct and may also operate on their
1 In Oct., 1895, a committee of the Boston Common Council reported
unanimously In favor of city ownership of an electric light plant. The
committee visited ten cities east and west. In Springfield, 111., they found
the situation already stated in this chapter. Their study of Chicago con-
vinced them that when the city puts its plants into full operation the cost
per arc will be reduced to $60, even with 8-hour labor at good pay. They
discovered that Bloomington, 111., saved enough in five years by public
ownership to pay for its plant, etc., etc. They tested the data cited in
the Arena articles and finding them correct endorsed my conclusions. They
Bummed up as follows:
"The actual cost of construction will not exceed $168 per arc for an
overhead system of 3,000 arcs in Boston, and your committee are positive
that they are not in error in making this statement. The additional cost
of real estate will of course depend upon the location, but your committee
believe that such locations can be secured as to bring total cost of plant,
Including land and buildings, not over $250 per arc.
"Assuming that an estimate of $250 per arc is correct, the cost to the
l& SL a 3,000-arc plant (600 lights in excess ot present needs) would be
$750,000. The Interest on the investment, a fair charge for depreciation, and
well-paid labor, would in the opinion of your committee, make the total cos-
n ?oe ^Sf * 75 per arc > and tnere would be a net saving to the city of at least
$125,000 per year.
"The City of Boston should not pay more than $75 per arc per year for
its electric lighting, pending the establishment of a municipal electric-light
In reply to a criticism on the report the committee strongly reaffirmed
their conclusions and stated that since 1882 Boston had paid 'the electric
light companies $2.125,000 for services which could have been produced for
$00,000 under public ownership. The report was adopted by the Common
Council by a unanimous vot<>, but it was killed by neglect when it got to the
Board of Aldermen.
PUBLIC OWNEBSHIP OF PUBLIC UTILITIES. 229
own account * * * railroads or other means of transit or trans
portation and methods for the production or transmission of heat,
light, electricity, or other power in any of their forms, by pipes,
wires, or other means."
A city may issue bonds without debt limit restrictions, if their
bonds are for a revenue producing business.
A two-thirds vote of councils and a majority vote of the citizens
on a referendum shall be sufficient for the issue of bonds and the
assumption of any undertaking from which the city will derive
a revenue, but the alienation of city property shall not take place
without a four-fifths vote of the councils and such referendum
vote as the people may provide for in their charter.
Municipal franchises are to be limited to 21 years.
Public audit of the accounts of companies receiving franchises
is to be established.
Cities of more than 25,000 inhabitants to have the fight to make
their own charters and provide for municipal ownership and
operation of public utilities as they see fit.
The recent Social and Political Conference at Buffalo, by
practically unanimous vote (only 1 dissent), adopted a resolu-
tion for the "Public ownership of public utilities."
We have already spoken of the resolution adopted by the
American Federation of Labor in 1896. (See XX.)
Another symptom of the rapid growth of public sentiment
in this direction is the great development of legislation favor-
able to public ownership. In 1890 no state in the Union had
any general law authorizing cities and towns to own and oper-
ate lighting plants or street railways, now one state has put
such a lighting provision into its constitution and 31 other
states have general laws of this kind (Tennessee and Massa-
chusetts being the leaders in 1891), and 5 states have author-
ized municipal ownership and operation of street railways.
See Chap. Ill for these and other similar indications, and for
the new charter of San Francisco, which announces a definite
policy of bringing all public utilities under public ownership
and operation.
One of the strongest indications of the trend of public opin-
ion is to be found in the concerted movement of street rail-
way interests in various cities from one end of the country to
the other to obtain 50 year franchises. The companies see
the rising tide of sentiment in favor of municipal ownership,
230 THE CITY FOE THE PEOPLE.
and in the last few years they have stopped at nothing, how-
ever dishonest, that promised a continuation of the enormous
powers and profits of their existing franchises. 2
Perhaps the most definite and striking of all the evidences
of the movement of public sentiment on this question thru the
power of discussion is contained in the following statement
adopted for issue by referendum vote of the iSL P. O. League.
THE RAILROADS OF SWITZERLAND
BY
PROFESSOR FRANK PARSONS.
Rapid Growth and Final Triumph of the Sentiment in Favor of Public
Ownership.
On the 6th of December, 1891, the question of national purchase
of the Swiss Central Railroad was submitted to a referendum vote
with the following result:
In favor of such purchase 130,500
Opposed 290,000
Majority against purchase 159,500
On the 20th of February, 1898, the question of national owner-
ship of railroads was again submitted, a referendum being taken
on the government purchase of the five main railroad lines of
Switzerland (the Jura Simplon, Swiss Northeast, Swiss Central,
United Swiss and Gotthard.) The question had been long and
bitterly discussed. The arguments pro and con had been thor-
oughly considered. This second vote was as follows:
In favor of national purchase 384,382
Opposed 176,511
Majority for public ownership 207,871
Consul General James F. Du Bois, in the report 1 from which
these facts are taken, makes some interesting comments. "It will
be seen," he says, "that there has been, since 1891, a great change
in the minds of the people of Switzerland concerning the Govern-
ment ownership of railroads and this change has been brought
about by a thoro discussion of the subject in the press and
on the platform. Never before in the history of the Republic has
such a bitter contest been waged, and never before has the Govern-
ment received such a large majority."
ti of Dr ' Albert Shaw ln the N <^ York "Independ-
polies, pp 6M-5 a Part <l uotatlon of the same in Municipal Mono-
1 St. Gall, Feb. 21st, 1898, U. S. Consular Reports, Vol. 56, p. 584.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 231
"The total cost of construction and equipment of the five main
lines (above mentioned) is estimated at $190,998,000.- The total
length is 1700 miles, and the Government it is estimated will have
to pay for these roads about $200,000,000. The total receipts in 1897
were $20,722,600; an average of 5 per cent, dividends has been de-
clared during the past five years. The number of persons employed
is about 25,000," or nearly 1 per cent, of the population.
"The election was keld yesterday, Sunday, February 20th, and by
8.30 in the evening the general result was known in every town and
city in the Republic. The news was given to the people by the
government absolutely free of charge, which demonstrated the fact
that Switzerland has one of the finest telephone systems in the
world. It is owned by the Government and operated in the interest
of all the people. 3 * * * The result of the election is being cele-
brated with great enthusiasm thruout the country."
Government ownership in Switzerland is public ownership in fact
as well as in name, for the people own and control their goveru-
ment, through the initiative and referendum.
SUMMARY STATEMENT.
Gathering up the most vital elements of the preceding dis-
cussion we obtain the following balance sheet in the account
of The People v. The Monopolies.
The companies aim at dividends not The public aims at service, justice
service, at financial success uot and humanity first and profit after-
justice, at money not manhood. ward.
Private monopoly has some advanta- Public ownership of monopoly keeps
ges and many disadvantages. The all the advantages of internal
problem is to keep the advantages union, and eliminates the disad-
and get rid of the disadvantages. vantages of private monopoly by
The advantages arise from uuion making the owners and the public
and the elimination of internal one and the same, thereby remov-
conflict that characterize all mono- ing the antagonism of interest
poly. The disadvantages arise from which is the vital cause of the
the antagonism of interest between evils of private monopoly.
the owners of a powerful mono- The referendum and a civil service
poly and the public. The advant- managed in the public interest,
ages belong to monopoly, the dis- form essential elements in any re-
advantages to private monopoly. liable plan for a real public owner-
ship, for without them we merely
Competition has failed to solve the go from the private ownership of
problem. a group of stockholders to the pri-
vate ownership of a group of office-
holders.
Regulation tho a palliative has also Public ownership so understood
failed as a solvent, and must fail keeps the benefits of monopoly,
because it cannot reach the anta- adds new benefits of its own, re-
gouism of interest which is the moves the evils of private mono-
root of the difficulty. poly without introducing new evils
or difficulties at all comparable
with those it removes, wherefore
public ownership completely solves
the problem.
* The ordinary charges are S8 a year plus 1 cent a call, and the average
total payment for the ordinary local service is under $18 a year for each
subscriber thruout the country.
232
THE CITY FOE THE PEOPLE.
Private Monopoly Tends to
Excessive rates.
Enormous profits for stockholders.
High cost iu
interest.
Dividends.
Lawyers fees.
Lobby expenses.
Corruption funds.
Litigation expenses.
Advertising and solicitation where
the monopoly is not absolute.
Insurance.
Salaries.
Regulation.
Legislation.
State and municipal care of crimi-
nal and defective classes in-
creased by the congestion of
wealth due to private monopoly.
And wastes by
Inferior efficiency of ill-treated
labor.
Strikes and lockouts.
Absence of complete co-ordination
which cannot be allowed in the
case of private monopolies be-
cause of the dangers of large
combinations in private hands.
Antagonism between owners and
the public.
Congestion of wealth, devitalizing
and demoralizing two considerable
portions of the community.
Facilities only where the business
will "pay."
Small traffic because of high charges,
inadequate facilities, and the rela-
tive dislike of the people to patron-
ize a private corporation.
Discrimination iu rates, service, In-
vestment and ownership (com-
panies have been known to refuse
to sell stock to ordinary persons
because they desired all their stock
to be in the hands of "influential"
persons.)
Disregard of public safety.
Poor service.
False accounting.
Watered stock and over-capitaliza-
tion.
Speculation and gambling.
Fraud and corruption.
Defiance of law.
Discouragement of good men because
of the filthy condition of politics,
largely due to the influence of pri-
vate monopoly.
Civic Inertia, disgust, despair and
neglect.
Destruction of good citizenship.
Official demoralization.
Annihilation of honest government.
Unfair treatment of employees.
Strikes and lockouts.
Social cleavage.
Congestion of wealth, power and
benefits.
Assets for the companies.
Wealth for the few.
Millionaires and tramps.
Beauty for a few. Ugly buildings,
ugly streets, ugly surroundings for
the mass.
Selfishness and hardened conscience
Debasement of human nature.
Public Ownership Tends to
Moderate rates.
Service at cost or profits for the
public treasury.
Low cost, or economy in
Interest.
Dividends.
Lawyers fees.
Lobby expenses.
Corruption funds.
Litigation.
Advertising.
Insurance.
Salaries.
Expenses of regulation and investi-
gation.
Expenses of legislation relating to
monopolies.
Expenses .attendant upon defective
classes.
And sayings by
Superior efficiency of well-tested
labor.
Absence of strikes and lockouts.
Co-ordination of industries.
Increased interest of the people.
Better diffusion of wealth securing
a larger total of education, in-
telligence and energy in the
community.
Elimination of antagonism and
conflict.
Putting profits In the public treas-
ury.
Public ownership, moreover, can be
secured without a dollar of public
debt or taxation. (See Method.)
Enlargement and extension of facili-
ties.
Increase of business.
Impartiality In the treatment of
customers.
Safety for public and employees.
Better service.
Honest accounts.
No watered stock and fair capitali-
zation.
Diminished speculation and gamb-
ling.
Lessened fraud and corruption.
Obedience to law.
Increased Inducement to good and
able men to take part In politics.
Awakened interest In public affairs
among the people as a whole.
Better citizenship.
Civil service reform.
Better government.
Better treatment of labor.
Abolition of strikes and lockouts.
Social strength.
Diffusion of benefit.
Assets for the people.
Wealth for all.
General competence.
^Esthetic development.
Moral Improvement.
Manhood.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 233
Too much liberty for a few; none Liberty for all.
for the many.
Special privileges for some. Equal rights for all
Aristocracy. Denial of Democracy Democracy and self-government
and self-government.
Antagonism. Harmony.
Conflict. Co-operation.
Non - progressiveness, economically Economic and social advancement
and socially.
Private monopoly means taxation Public ownership leaves the power
without representation, and for of taxation (for public purposes) in
private purposes. the people and their representa-
tives, where it belongs.
Private monopoly is contrary to the Public ownership and co-operation
principles underlying free govern- in all its forms are in accord with
ment; it is undemocratic, anti-re- the fundamental principles of free
publican, and anti-Christian; it is government, and with conscience,
a violation of the settled principles Christianity and the laws of love
of justice, and of the common law and brotherhood,
and a breach of the supreme law
of love and brotherhood.
Experience serves but to emphasize Experience proves its beneficent ef-
its evils and prove the hopeless- fects.
ness of efforts at regulation or Analogy favors its extension,
prohibition. Its growth is phenomenal.
The drift of the age is in its direc-
tion.
The current of history sets that way.
Its evils Increase with the ever ac- The trend of thought, the weight of
celerating aggregation of capital, authority, and the movement of
and the concentration of power. events, are all in its favor.
The question lies between
the despotic dollar on one thought, manhood, democracy,
side, and brotherhood and progress on
the other.
Which tcill you help to win?
OBJECTORS AND OBJECTIONS.*
1. The leading objection to public ownership is the "dan ye r
of increased patronage and the spoils system, whereby the
public ownership of monopolies becomes a source of corruption
in politics." It is true that the spoils system in municipal
business is a serious evil, but the remedy is not to close the door
to public ownership but to open it wide. The spoils system
itself is nothing but private ownership of the government;
the treating of public office as private property. Establish
full public ownership of the government as well as of other
municipal monopolies and there will be no danger from patron-
age. And the best of it is that public ownership of indus-
trial monopolies tends to force governmental reform and so
eliminate the only serious objection made to it. (See Section
XVII.) Even if this were not true, however, the political
evils of the patronage are utterly insignificant compared to the
political evils produced by the private monopolies (Sections
8, 9, XIV), so that at the very worst public ownership would
1 See Appendix II. M.
234 THE CITY FOR THE PEOPLE.
result in less corruption than private ownership in the case of
monopolies. The corporations buy up our councils and cor-
rupt our legislators, and when we demand the abolition of
these very corporations that produce the difficulty, they say,
"You'll have a terrible time if you get rid of us, see how rotten
vour government is." Of course you see how greatly the de-
struction of the corruptors will increase corruption. Don't
take away the evil companions who are undermining the
morals of your boy, making him wild and dissipated and more
anxious about money than conscience and the public good,
you will stand no better chance to correct his habits when they
are gone, he'll go to the dogs all the more when the strongest
influence that makes him go to the dogs is removed.
As Mr. Baker says it is easier to stop thieving and rascality by
a common council than by a water, gas, or street railway corpora-
tion. The people are roused more than by the hidden private fraud
and the councilmen are more readily turned out or controlled than
the owners of the private corporation.
Experience shows that, as a rule, no political difficulties have
arisen in the administration of public plants for the supply of
water, gas, electric light, etc. 1 Probably the most thoro study
under this head has been made by Prof. Bemis in his investiga-
tions of municipal gas works. In 1891 he found great steadiness
in the employment of superintendents and engineers. In Richmond
"the same man had been superintendent since 1886, and before
that was assistant superintendent from 1870 to 1886, and he came
to the works in 1865." "Bellefontaine is free from the spoils system
in her gas department." The same man "has been city engineer and
superintendent of the gas works in Danville for 16 years. Superin-
tendent T. J. Williams has been in charge in Charlottesville since
1855. Hamilton starts out with a similar laudable purpose of keep-
ing the gas department out of politics. The present trustees and
superintendent are Democrats, and the assistant superintendent
and the foreman of the service gang are Republicans." 1
Summing up the professor says, Municipal Gas, p. 82:
"We therefore find that six of the nine cities are entirely free
from political influence, and that two others, Philadelphia and
Richmond can only be charged with employing a few more men
than necesary, for the sake, possibly, of giving employment to
political friends, though this is charged, not proven. In Wheeling
1 See chapters on Water, Electric Light and Gas, In "Municipal Mono-
polies," especially pp. 610. 612, 619-20.
1 Municipal Gas, pp. 77, 81.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 235
we find conflicting accounts, but do know that the financial results
are fine, and that whatever connection the works may have with
politics does not produce much injury, and is diminishing."
And on p. 136:
"The occasional change of some of the employees of gas works
in public hands for political reasons, an evil which does not exist
at all in many public gas works and which is decreasing, as our
investigation proves, in all the others, is nothing in comparison
with the corruption now existing in a large proportion of the cities
where gas works are in private hands."
In 1898 Prof. Bemis has again investigated the public gas works.
After speaking in detail of Richmond, Fredericksburg, Alexandria,
Charlottesville and Danville, all the Virginia plants, he says: "In
none of these Virginia cities has the spoils system had any apparent
influence." 1 On p. 619 he says that "political influences do not
appear to enter into the management of either of the Massachu-
setts (public) plants." He found the common labor subject to
change for political reasons in Wheeling, but in spite of this "the
results on the whole seem to fully justify the almost unanimous
belief in public ownership and operation which has always appeared
to exist there and in other cities owning their gas plants" (p. 613).
Summing up again on pp. 619-20, the Professor says:
"The influence of the spoils system in some cities does not appear to have
anything like the demoralizing influence on the city government that is pro-
duced by the efforts of private companies elsewhere to secure valuable fran-
chises."
The American Federation of Labor puts the whole matter in a
nut shell in the resolution, part of which has been already cited:
"Whereas, The influences of corporations holding or seeking to
obtain possession of public franchises are among the most potent
influences antagonistic to reformative measures, and the most
active cause of corruption in politics and of mismanagement and
extravagance in public administration; therefore, be it
"Resolved, That the sixteenth annual convention of {he American
Federation of Labor urges upon all the members of affiliated bodies
that they use every possible effort to assist in the substitution in
all public utilities municipal, state and national that are in the
nature of monopolies, of public ownership for corporate and private
control."
2. "Paternalism," says a second objector, "public owner-
ship is paternalism." That is almost correct. There is only a
slight mistake in the first syllable. Public ownership is not
paternalism but /raternalism. When somebody else manages
the business for you, that is paternalism; but when you get to-
gether and run the thing yourselves or by agents under your
1 Municipal Monopolies, p. 612.
236 THE CITY FOR THE PEOPLE.
control and direction, then it is fraternalism. A street railway
service owned and managed by a private corporation is pater-
nalism so far as the city is concerned. But a street railway
service owned and managed by Jie city is fraternalism.
3. "Socialism" says a gentleman in a silk hat and a gold
headed cane, who doesn't know what socialism is, but never-
theless speaks of it in tones full of calamity, or the prophecy
of calamity, more dire than any recorded outside of Milton's
Paradise Lost or Dante's Inferno. "Public ownership of mo-
nopolies is socialism." If so the post office is socialism, and the
public roads and parks, hospitals, cemeteries, water works, etc.
The truth is, however, that the public ownership of monopolies
is no more socialism, than the Mississippi Valley is the conti-
nent, or the eating a piece of bread is the swallowing, of a whole
loaf. Socialism means "the common ownership of the means of
production and distribution." The common ownership of
water, gas and electric works, street railways, telephones and
other monopolies is no more socialism than Chestnut street is
Philadelphia. "Well, at any rate, the public ownership of mo-
nopolies is socialistic, it is in the direction of socialism." Post
office, public roads, public schools, etc., ditto. The public
ownership of monopolies may be socialistic, or may not be, ac-
cording to intent. A journey from New York to Chicago
may be San Franciscoistic if the traveller intends to go the rest
of the way, but not if he intends to stop in Chicago. "But
suppose all -sorts of business become monopolies as they bid
fair to do with the growth of trusts, then surely the public
ownership of monopolies will mean socialism." Any business
which does become a monopoly and continues such after the
monopolies of land and transportation have become public,
and which relates not to a mere luxury, but to a public utility,
and which manifests the evil tendencies found to accompany
existing monopolies, should be taken by the public and man-
aged in the public interest, whatever name may be applied to
such taking by those who fling scare-words instead of dis-
cussing the case on its merits.
t. "Liberty will be less," says one who calls himself an
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 237
"Individualist" Very likely those who now own the monop-
olies will be deprived of some of the "liberty" they now pos-
sess to tax the people, issue watered stock, corrupt our legis-
lators, etc. But the workers and the mass of the people gen-
erally will have more liberty than now, for they will have the
liberty of managing these vast business interests for the public
good, and of keeping their money till they get an equivalent
for it.
There is no quarrel between true individualism and the co-
operative philosophy. The savage individualist of the prime-
val forest has of course no use for government or co-operation
of any sort. But the developed individualist of a highly
civilized society is naturally co-operative to a large degree
in his conduct and thought, no matter what sort of nonsense
he may talk. Primitive individualism expresses itself in ab-
solute independence; ennobled individualism just as naturally
expresses itself in co-operation and mutual help; and the
noblest individualism would necessarily express itself in com-
plete mutualism or universal co-operation. Men whose hearts
were filled with brother love could not be private monopolists.
Brotherhood would spontaneously banish private monopoly.
We are all individualists whether our individualism be of
the antagonistic or the co-operative order. And even the most
strenuous defender of the antagonistic individualistic idea lives
in a net work of the public co-operations his philosophy con-
demns. As Sidney "Webb says:
"The Individualist City Councillor will walk along the
municipal pavement, lit by municipal gas and cleaned by mu-
nicipal brooms, with municipal water, and seeing by the mu-
nicipal clock in the municipal market, that he is too early to
meet his children coming from the municipal school, hard by
the county lunatic asylum and municipal hospital, will use
the national telegraph system to tell them not to walk through
the municipal park, but to come by the municipal tramway,
to meet him in the municipal reading room, by the municipal
art gallery, museum and library, where he intends to consult
some of the national publications, -in order to prepare his next
speach in the municipal town hall, in favor of the municipal-
238 THE CITY FOE THE PEOPLE.
ization of gas and the increase of the government control over
the telephone system."
How far this has gone may be seen from the fact that Vroo-
man's "Public Ownership" gives a classified list of 337 social-
ized businesses, enterprises, and institutions, together with 225
businesses, enterprises, institutions and events, controlled in
some degree by Governments, making 562 types of human
effort that the people (of various countries) have already re-
claimed from absolute individual management.
5. "It is not the government's business to own and operate
water works, gas plants, street railways and telephones. It
should confine itself to keeping order," says a devotee of the
Spencerian theory of government. It seems to me it is the
government's business to do anything it can do for the public
good that the people want it to do. The government is simply
the hand of the people, to accomplish any purpose the people
command it to. Herbert Spencer's policeman theory of gov-
ernment would abolish the public post, the public schools and
libraries, the public roads and bridges, and the public water
works and fire departments as well as the public railways,
and Spencer accepts these consequences and affirms that all
these things should be left to private effort. Great as he is
in many ways, I think he has failed to catch the truth that
service is as true a function of government as restraint}-
6. "Vested interests must be respected," says a stockholder.
"It is not fair to take away my opportunity to make a living."
Your opportunity to have some one else make a living for you,
would be more accurate, would it not? But we will waive
that point. All private interests have to yield to the public
good. Salus populi suprema lex. When the public needs a
man, it may take even his life; shall it have less power over
his property? There is nothing sacred about "vested inter-
ests." We will pay you the value of the property that is
rightfully yours and you can invest the proceeds and still re-
isa- S f ^KiH Functions of Government" in The Industrialist. Jan. to June,
IB ,, \ i V< I Show ? the fallac y of Spom-eVs theory of government
rro.n LIs o\\u principles and admissions.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 239
tain your "vested interest," merely changing its form or loca-
tion for the benefit of the community.
Private monopolistic business has rarely, if ever, in all its
history, left one stone unturned in its determined effort to
ruin or drive out of business all others in the same field. And
in many cases it has paid itself over and over again for all the
investment it really made.
7. "Towns and cities will be extravagant and go into debt
for public works." It is easy enough to stop that by a statu-
tory debt limit, which indeed already exists in nearly all the
states. It is not necessary to go into debt in order to secure
public ownership, not one dollar of either debt or taxation is
necessary. (See section on Method above.) But suppose
cities and towns should be extravagant, are they not of age?
And will you advocate tying their hands and telling them what
they may do and what they may not do with their own money
and credit in their own affairs? Are you not the same gentle-
man who objected a moment ago to any sort of paternalism?
In a witty speech at the State House in Boston, before the
legislative committee that was considering the bill of 1897,
permitting cities and towns to own and operate street railways,
Col. Thos. Wentworth Higginson recalled the fact that fifty
years before, when public water works were as scarce in
Massachusetts as public railways are now, and progressive men
were coming to the State House year after year to ask the
legislature to grant permission for the municipalization of the
water supply, the very same objections had been raised that
are brought forward now against municipal ownership of the
railways. He remembered it had been said that the additional
patronage would be dangerous, that the public water-works
would be a source of corruption in politics, that towns and
cities would be extravagant and go heavily in debt for water,
that it was aside from the proper sphere of government to
manage such business enterprises, etc. Yet the fear of evil
consequences had proved to be groundless; experience had
demonstrated the benefits of public water-works, and the right
of cities and towns to municipalize' the water supply is firmly
estcablished in our law. Col. Higgmson'? address was specially
240 THE CITY FOR THE PEOPLE.
amusing, as several of the time-honored objections he spoke
of had been raised by members of the Kailway Committee of
the House a few moments before he addressed them.
8. "Private initiative ivill be lost by public ownership"
On the contrary it will probably have freer play under public
ownership than under private monopoly. It is only in com-
petitive business that the superiority of private initiative mani-
fests itself, and the wastes and antagonisms that accompany
it go far toward cancelling its benefits even there. When a
private monopoly holds the field free initiative is hedged with-
in narrower limits than under any other form of industry.
(Section XXVI.)
9. "Public oicnership is non- progressive. See how far the
public railways of Europe lag behind our private railways."
The inference is unfair; it is not public ownership, but Europe
that is non-progressive. Many enterprises in Europe that
have no connection with public ownership are less developed
than in America, e. g., elevators, banks, hotels, labor saving
machinery of all kinds, etc. The railroads of Great Britain
are private, but they are far behind ours. Even the conven-
ience, almost necessity, we should consider it, of a baggage
check is practically unknown in England, and the passenger
has to look after his baggage as best he can. The European
passenger is locked in an apartment in the car and can't get
out till the man with the key lets him out. In America Phila-
delphia is considered so slow that when a New York actor
asked a young lady where her mother was, and she replied "In
Philadelphia," the actor said, "Oh, well, don't wake her up."
Yet Philadelphia is too much for England in competition, even
in the heart of England's empire in Egypt. The bridge across
the Atbara river, a thousand miles south of Cairo on the line
of the railroad that will run from Cairo to the Cape, has been
built by Philadelphia bridge builders, in competition with the
leading establishments of England. The English builders
asked for two years time one year to prepare the material
and another year to erect the bridge; and they wanted $67,750
for the completed work. The Philadelphia house promised
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 241
the material in six weeks, the finished bridge in six months,
the whole cost to be $28,000. They got the contract, they
have kept their promises, and the most rigid inspection pro-
nounces the materials and the structure all that can be desired.
There were some insinuations that the Americans got the con-
tract by bribery and the corrupt use of money; but Lord
Comer, the head of the English political authority in Egypt,
and Lord Kitchener, the Commander-in-Chief of the Egyptian
Army, have silenced all such stories by stating the facts. In
opening the bridge Lord Kitchener said: "The construction
of this magnificent bridge, I think may fairly be considered
a. record achievement, * * * As Englishmen failed, I
urn delighted that our cousins across the Atlantic stepped in.
This bridge is due to their energy, ability, and power to turn
out works of magnitude in less time than anybody else. I
congratulate the Americans on their success in the erection
of a bridge in the heart of Africa. They have shown real grit
far from home, in the hottest month of the year, and depend-
ing upon the labor of foreigners."
When public enterprise in Europe is compared with private
enterprise in Europe, or when a comparison is made between
public and private monopoly in this country the record for
progressiveness is with the public monopoly, and in the case
of the telegraph and telephone the public plants of Europe
are in a number of cases ahead of our private systems. 1
10. "Public ownership is inefficient." Efficiency is largely
a matter of the personal equation. Some public plants are
ill-managed and some are well managed, and the same is true
of private plants. The evidence indicates that on the average
public plants are quite as well if not better managed than pri-
vate monopolies. (See last section and references there given,
1 See sections 1, 5, 12, I, X, and XXVI, and the parts on Experience and
Method. In a paper read at a meeting of the Ainer. Gas Light Assoc. by Mr.
E. G. Cowdery, the author says there is great need for better management
of the private gas works. "The gas business." he says, "and progress in
it has been greatly retarded by methods, which are not sound in princit
but greatly speculative In their nature." (Progressive Age, Jsov. 1, 1890.)
Prof. Bemis says, "Private gas companies with an assured monopoly, often
feel less impelled to make improvements than public companies control^
by the voters, whose demands for cheap light, etc., can be brought to bear
upon their own agents far more easily than upon private companies.
'Municipal Gas, p. 132, see also p. 118.)
242 THE CITY FOR THE PEOPLE.
especially noting the splendid facts of Section I.) Mr. H. A.
Foster, who opposes municipal ownership and defends the pri-
vate electric companies in the Electrical Engineer of Septem-
ber 5, 1894, nevertheless frankly says that "In all fairness it
may be said that the much- vaunted better management in pri-
vate hands does not exist. In fact, the men in charge of city
plants compare quite favorably with those in charge of private
plants of similar size." He also admits that public plants are
commonly bought or constructed as cheaply as private, and
speaking of the correspondence by which the Electrical Engi-
neer obtained the data it engaged Mr. Foster to analyze? and
write up, he says:
"The tone of all communications from those favoring the
municipal side seems to have taken it for granted that the re-
sults shown would tell that side sufficiently well; and it mu^t
be admitted that in quite a number of cases, such is the fact."
Remembering that Mr. Foster is an electrical expert and ac-
countant of high standing, who was employed on the census of
1890, and is one of the ablest of those who have written in
opposition to public ownership, the above admissions would
seem to close the case on this point. 1
11. ''Public ownership is less economical than private."
This is the point Mr. Foster attempts to make. Even if it were
admitted little would be gained against the overwhelming mass
of reasons for public ownership, many of which vastly out-
weigh any mere matter of 'dollars and cents. Moreover, if it
were admitted that private operation is more economical than
public, the question would immediately follow, "Who gets
the benefit of the economy?" Would it be wise for the people
to forego the benefits of better service, purer government,
better diffusion of wealth, better treatment of labor, etc., for
the sake of an economy that would merely put more dollars
in the already overloaded pockets of a few monopolists? But
ditlorf of I 1 nlffi,. a nilal < rep ? rt . 0( the Kan sas Labor Bureau discloses a con-
than hnVht^n S ln P S lv , ate gas plants whlch Prof - Bem 's says is "worse
fn 93 of thP Rpn ^ ed in an ^ of the P ublic Plants." One large plant
of' Its nnt f P i9 ^n, S a i ss by leaka ge and condensation of 25 per cent,
aloaso ^M2n n mllli , n ,, feot - , Anotn er with over 5 million feet reports
?ii R? r cent -: wnl 'e another does not keep any account of leakage-
made at the ^!, 1188 ^ - Stat , lon meter to determine 3 ^ the amount of |as
le at the works. (Manic. Monopolies, p. 620.)
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 243
as a matter of fact there is no such superior economy in pri-
vate monopoly; the superior economy, as we have abundantly
shown, is with public ownership. (Sections 1 2 I II III
IV, XXI.)
Mr. Foster reaches his result by averaging the lamp hour costs
in anomolous groups of plants and allowing 13% per cent, on the
whole cost of the plant up to date for fixed charges in the public
works (6 per cent, interest, 7y s per cent, for depreciation). The
overwhelming weight of expert opinion is that 7y 2 per cent, is al-
together too high for depreciation. 1 The managers of private
electric lighting plants when estimating depreciation rarely place
it above 3 per cent. From 1890 to 1897, inclusive, the amounts
written off by the Massachusetts companies average less than 2
per cent.*
But the doubling of the depreciation and more is nothing com-
pared to the estimating of depreciation on the whole cost of the plant
down to date, with no deductions for depreciation in former years.
If the plant cost $200 per arc, 7% per cent, depreciation would be
$15, and the next year the value of the plant on which the new
depreciation charge should be estimated would be only $185, and
the depreciation $13.88; the fifth year the value per arc would be
$146.42 and the depreciation only $10.96, and so on, but Mr. Foster
does not make these subtractions, and so in another way unduly
inflates the fixed charges in public plants. It may do for the super-
intendents of public plants to neglect the deductions of deprecia-
tion, for in many cases the showing is sufficiently remarkable with-
out reference to this matter, but it will not do for the opponents
of public ownership to disregard such deductions, especially when
they insist on such a high rate of depreciation as 7% per cent. Six
per cent, interest is also too high for municipal plants, as Mr. Fos-
ter has himself admitted since his article was written. Moreover,
3 of the 14 municipal plants used by Mr. Foster are so exceptional
as to be entirely out of place in an average: Alameda, Cal., where,
as he says himself, the cost is so high as to "throw doubt on the
accuracy of the figures;" Fairfield, la., a diminutive plant, with
only 14 arcs then, and Anderson, Ind., using natural gas two cities
with exceptionally high costs and one with exceptionally low cost.
Further, the lamp-hour or candle-power cost is not a fair test unless
the conditions as to price of coal, hours of burning, etc., are similar
in the cases compared, or the difference is fully allowed for, which
is not the fact in Mr. Foster's comparisons. If two plants are equal
in every way except that one runs all night and the other only till
midnight, the cost per lamp-hour or candle-power, will be consider-
ably less in the all-night plant. -The longer load lessens the cost
1 See chapters on Electric Light by Profs. Commons and Bemis, In Muni-
cipal Monopolies and facts and authorities cited In my Arena articles of 1895.
2 Municipal Monopolies, p. 207.
244 THE CITY FOK THE PEOPLE.
per hour in the same plant with the same management and equal
economy in every respect. If the cost per candle-power were the
same in the two cases, the all-night lamp would cost twice as much
as the midnight lamp, whereas, in fact, the difference is only one-
fifth, so that an all-night plant that charges the same per candle-
power as a midnight plant, is charging a great deal too much if
the midnight charge is a proper one and other things are equal.
Similar considerations invalidate inferences against public street
plants by comparing them with private commercial plants without
allowance for differences of condition. Even this is not all. Mr. Foster
estimates (as he tells us he had to since they were not reported)
the watt hours per lamp for all commercial arcs and incandescents,
and for nearly half the street lamps; he says he has not much confi-
dence in his estimates, as to said hours, in which we cordially agree
with him, said estimates being vague guesses, apparently based on
the principle that lamps of a given candle-power are run the same
number of hours in all places. After this he proceeds to calculate
the cost per kilowatt hour and per lamp hour, covering a 7x10 page
of the Electrical Engineer with three and four-place decimals to
complete the operation. Being based on hours of burning guessed
at in 2-3 of the cases and on fixed charges out of all bounds, it is
easy to see how much more convenient it will be to use these lamp-
hour rates as a basis of comparison with the charges of private
companies instead of comparing the cost of a standard arc per year
in a public plant with the cost of a standard arc per year in a
private plant under similar conditions of production, as an unscien-
tific person would be apt to do rather than spend a couple of weeks
writing down guesses at schedules and ciphering out mysterious
and in-responsible hour rates to four places of decimals, so as to
forget that the said hour rates are based on guesses, and proceed to
draw inferences from them that never could be obtained from the
simple, undifferentiated, unmystified, unsophisticated cost per arc
per year. The public plants included in Mr. Foster's investi-
gation, are in every part of the country, from Maine to California,
under all sorts of conditions as to output and length of run, cost
of labor and power, but Mr. Foster says nothing about said rela-
tions of cost (except the general remark that in more than half
of these places a private plant could probably not be made to pay),
and selects a lot of places in New York state, nestling near the coal
fields, pairs them off by population with the same public plants
underground system against overhead, little street plants against
commercial plants, stations with tremendous investment ($473 per
arc in the case of Alameda, Cal., which counts pretty fast at 13%
per cent.) and $5 or $6 coal against stations with low investment
and $2 coal; and then without making any allowance for differences
of condition, sums up his groups, takes the average on each side
and announces that "The result is somewhat surprising, as there
is a difference of 20 per cent in favor of the private companies."
Finally, if the three manifestly unjust comparisons be omitted
and reasonable rates for interest and depreciation be taken, the re-
PUBLIC OWXEESHIP OF PUBLIC UTILITIES. 245
suits of Mr. Foster's own tables are favorable to municipal owner-
ship by 22 per cent., 1 in spite of his reckless guessing at hours
and special selection of private plants, which was probably not
done by the electrical engineer or Mr. Foster with any intent to
color the truth, but because the data respecting the New York
works were easily attainable.
12. "The frequent failure of public ownership shows it is
not successful." This is in substance the point made by M. J.
Francisco, who gives the names of 22 places that he says have
become dissatisfied with their electric lighting plants and sold
them. Prof. Bemis wrote to each of the municipalities named
by Francisco, and got 18 replies. 1 One of the places never
owned a public electric plant. Seven others still own their
plants and are satisfied with them. One merely took a failing
private plant temporarily till a new company could be got to
run it. One plant burned and the city was too heavily in-
volved at the time to put in a new one. One city sold its plant,
not because of dissatisfaction at all, but because it had not the
means to reconstruct it. In another case the plant was con-
structed for a village: the place now has 40,000 inhabitants;
the introduction of cheap water power is expected soon, and
while waiting for this the city is buying light temporarily of
a railway company which has surplus power. In 5 cases the
plant was sold; two of them being plants that failed both in
public and private hands; the cause in the third case unknown ;
in the fourth and fifth cases plants entirely satisfactory to
the people were sold thru corporate intrigue and influence in
councils ; these were the cases of Michigan city and East Port-
land, already mentioned in Section 8. Only two failures in
the whole lot so far discovered, and one case of sale with the
cause not stated, and both the failing plants were failures also
under private management.
Even if all the plants cited by Francisco had really failed it would
prove nothing; 22 failures out of three or four hundred public elec-
tric plants would not be alarming. The real failures cannot be
more than 3 per cent, on the evidence before us, even supposing
all cases not heard from were failures. The failures in private
1 See p. 94, Arena for Sept., 1895, and pp. 134-139 of "Municipal Mono-
polies."
1 Prof. Bemis says 18, but only gives the results in 17 cases. See the
details in full in Municipal Monopolies, pp. 218-21.
246 THE CITY FOR THE PEOPLE.
business are said to be 95 per cent., but this includes competitive
as well as monopolistic business. I have not been able to obtain
an estimate of the failures of private electric light plants.
M. J. Francisco is the author of "Municipal Ownership; Its Fal-
lacy." He is attorney for an electric light company, and has been
president of the National Electric Light Association. He is or was
at the head of an electric company in Rutland, Vt., which the ^Egis
investigators of Wisconsin University say was charging $280 per
arc in 1893 when Allegheny was making light at a total cost of $83
per arc, equivalent, perhaps, to $100 under Rutland conditions.
Francisco's pamphlet is simply an attorney's brief, and not a truth-
ful brief, either.
Mr. Johnston, of the -iEgis, consulted Chicago's chief of construc-
tion and other officers in reference to Francisco's statements about
that city, with the following result: "In this pamphlet Francisco
says that part of the operating expenses are charged to the police
and fire departments. Mr. Carrol says not one cent is so charged.."
(Indeed Francisco must have thought the officers of fire and police
were sleepy gentlemen to allow such accounting they wish, like
other officers, to make as good a showing as possible for their own
departments.) "Francisco figures linemen's salaries at $2500.
There is not a lineman employed by the city; all the wires are un-
derground. The cost of coal per lamp is given by Francisco at $40,
while the real cost is but $27, and in nearly every calculation Fran-
cisco has juggled with the facts in order to prove his theory."
Francisco uses the lamp hour and candle power test with reck-
less disregard of conditions. In one case he reaches his result by
assuming that 2,175 incandescents of an average of 27 candle power,
are equivalent to 48 arcs of 1200 candle power, whereas in reality
they are equivalent to about 524 such arcs in cost of operation. 1
By such means he arrives at very erroneous conclusions respecting
the cost in plants. We do not need to waste further time with Fran-
cisco; Professor Commons found his statements "utterly untrust-
worthy."* Prof. Bemis and the Mgis investigators had the same
experience, and anyone who will compare pp. 82-3 of Francisco's pam-
phlet with Vol. -3, n. 3, Amer. Statis. Assoc. Pubs., p. 302-3, will doubt
whether the quoted words are strong enough to cover some of
Francisco's statements. Francisco cites Victor Rosewater as saying
in a given article precisely the contrary of what Victor Rosewater
really said in that article. 8 Francisco also quotes approvingly the
1 Municipal Monopolies, pp. 224-5.
'Ibid. p. 95.
* On Francisco's pages 82 and 83, we find:
^An honest opinion by a former advocate of municipal ownership.''
Soon after the first paper on municipal ownership was read at Cape
May, Victor Risewater published an article in the New York Independent
claiming that municipalities could and did furnish the lights at less expense
than private companies. * * Mr. Rosewater afterward discovered that the
reports of municipal plants, which had been furnished by the advocates of
municipal ownership, were not reliable. He frankly and "honestly confessed
Is error in an article published by the Amer. Statistical Assoc. * * The
t is, in Mr. Rosewater's opinion, that there is no possibilitv of making
definite comparisons."
This is simple straightforward lying. Victor Rosewater did not say that
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 247
impartial Mr. Cowling and the packed committee of Philadelphia
already referred to, also the report of the Massachusetts gas com-
mittee written by the attorney of the Bay State Gas Co., and fol-
lowing the worst corporation style with such marked success that
it is known to-day as one of the purest examples of misstatement
and fallacy to be found in the English language. 4
There are a few other statements, however, that are entitled to
consideration before a prize is awarded. For example the pam~
phlet handed to Massachusetts legislators in 1897, entitled a "Com-
parison of Street Eailway Conditions and Methods in Europe and
the United States," by P. F. Sullivan, a street railway official (gen-
eral manager) from Lowell. It would be amusing to spend a half
hour with this pamphlet, but one or two samples must suffice. On
page 6 we find that "In all cities in the United Kingdom otJier than
Glasgow 2 cents is the minimum fare." On page 18: "The tendency
is quite the other way, as witness the adoption of one cent fares
for a half-mile ride in Glasgow and London." On page 13 we read
that "The West End Co. averaged for the fiscal year ending Sep-
he had found the reports of municipalities unreliable. He made no such con-
fession, nor did he say that definite comparisons were not possible. On the
contrary he distinctly affirms in the very article referred to that specific
comparisons are valid when carefully made. (Amer. Statls. Assoc., vol. 3,
U. S. p. 302-3.) What he does "confess" is that in the Independent article
he made the mistake of comparing averages made up frdm imperfectly classified
hsts of rates. That is the only "error" he confesses. He gives the Statisti-
cal Association page after page of municipal returns, so that he could
scarcely have thought them unreliable. He expressly declares specific com-
parisons with due allowance for differences of condition to be good, but
opposes the comparison of averages as usually made.
On page 300, Victor Rosewater says, "The cost per hour is utterly worth-
less for any scientific use." and condemns the practice of comparing one
plant with another (with different conditions as to run, etc.) by means of the
lamp hour cost, as being entirely unreliable. Yet this Is precisely the
method adopted by Francisco all the way through his book.
4 During the struggle in Massachusetts to secure a law permitting cities
and towns to own and operate gas and electric plants, a committee of the
State Senate visited three cities that had public gas plants: Richmond, Alex-
andria, and Philadelphia. Mr. M. S. Greenough, attorney for the Bay State
Gas Company of Boston accompanied the committee, did most of the "in-
vestigating" and wrote the report made to the senate in April, 1890. In
writing of Richmond the attorney included the cost of all extensions and
permanent improvements in the operating expenses and made various other
"mistakes," giving a false view of the Richmond situation (Prof. Bemis'
Municipal Gas, pp. 87-8). The misstatements and omissions In the account
of the Philadelphia works were so serious that Superintendent Wagner of
the Philadelphia gas works wrote, "I am sure you will excuse me for enter-
ing into a controversy with gentlemen who have not even the common
honesty of correct quotations in the reports they submit as the result of their
nvestigations." (Munic. Gas, p. 12.)
On behalf of the petitioners I had the pleasure of replying to the
gaseous arguments of counsel at the State House on the municipal lighting
bill (see verbatim reports in Boston Commonwealth March 29, and April
5. 1890), and in closing said in substance, "Brushing away the sophistry of
the corporation counsel the whole substance of the issue is seen to be this:
On one side the companies do not wish to lose their franchises, I. e., their
existing chances of making profit on their investment beyond what they
could make with the same capital in an employment unprotected by a mono-
poly, and on the other side the interests of the people require that public
franchises and enterprises outside the sphere of competition should not be
given over to private control for private gain, and the building of fortunes
beyond equivalence for the service rendered. It is the people vs. the com-
panies, public good vs. private interest. That is the plain issue. Thousands
of solid citizens petition for the law. One manufacturer of gas machinery,
two gas companies and one electric trust are all the remonstrants. The
legislature is the agent of the people, not of the companies, and it Is always
the duty of an agent to forward the interests of his principal, when acting
in his business."
248 THE CITY FOK THE PEOPLE.
tember 30, 1896, to carry fewer than seven persons per car mile.
How then can ice account for the thirty or forty persons that we see so
frequently upon one of that company's cars? It means that if you
divide 30 or 40 by 7, they averaged to ride 4 & 2/7 or 5 & 5/7 miles."
We might with equally potent logic and profound philosophy ask,
"How can we account for the 3 or 4 persons we so frequently see
on one of the cars? or the 10 or 12 persons, or the 70 or 80 persons,
we so frequently see on one of that company's cars." Aristotle.
Whately and Mill were slow compared to Sullivan. You couldn't
prove anything and everything by their logic. But you can fix on
any average ride yon desire and prove it by Sullivan's logic just as
conclusively as he proves this and the rest of his well, "argu-
ments," we may call them by courtesy.
In dealing with discussions of municipal ownership and other
progressive movements it is important to remember that while any
writer may make mistakes whatever his point of view, yet the
motives of those who oppose public ownership are usually very much
inferior to the motives of those who advocate it. Those who oppose
public ownership usually do so from motives of self-interest of
a low type, or from the bias of conservative training resisting
change and new ideas by instinct and reflex action, or from both
these motives; while those who advocate public ownership gener-
ally do so from a conviction that it will be for the good of the
community a conviction reached in many cases after long, earnest,
painstaking study that has overcome preconceived opinions to the
contrary. Such advocacy, moreover, is frequently opposed to the
selfish interests of the advocate, and made at serious loss and in-
convenience.
Two instances frequently cited as failures of public ownership
must be mentioned under this twelfth head; I refer to the Philadel-
phia gas works and the Chicago electric light plant.
The Philadelphia gas works have never been really and com-
pletely public. When councils took possession of the works in
1841 they were put in the hands of trustees, who became, under
the rulings of the courts, the agents of the bondholders and abso-
lute masters of the situation as against the city until the bonds
were paid. The control of this board of trustees was emphatically
private ownership, and became one of the most corrupt in history. 1
By combination with private street railway interests the gas trust
became very powerful as well as corrupt, and practically owned the
city government instead of the city government's owning the gas
works. It was not until 1887 that the government was really able
to control the works, and even that change did not make the plant
really public, for the people do not own the government in Phila-
1 See Bryce's "American Commonwealth," and appendix to "Municipal
uas.
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 249
delphia as is clearly shown by the refusal of councils to submit
the question of leasing the works to a vote of the people. Since
water gas came into fashion a considerable part of the gas supplied
to the city has been bought of a private company instead of fitting
the city works to make their own water gas. This private com-
pany gas cost the city a good deal more than it would have cost if it
had been made by the city. Moreover, the keeping of a private
interest in the gas business created a specially disturbing influence
always seeking to control councils and get possession of the whole
business. Councils refused to make appropriations for needed im-
provements and repairs and did all in their power to discredit the
works so as to justify a sale or lease. And yet in spite of all these
difficulties the financial record of this quasi-public plant is good.
Before the lease the plant had paid for itself out of net earn-
ings, and had furnished cheaper gas during nearly all of its
history than had the private works of New York, Baltimore, and
Washington. In 1894 the Quaker City had done what the Standard
Oil, Gould, and Sage interests insisted before the New York Legis-
lature in 1897 could not be done without ruin, viz., reduced the price
of gas to $1. Yet the works continued to pay operating expenses
and depreciation charges besides furnishing nearly 700,000,000 feet
of free gas to the city each year, worth at the current rate, $700,000.
or fully 7 per cent, on the structural value of the plant.
The works are not leased for the financial good of the city, for'
the city could have secured lower prices and more profits by keep-
ing the works than are provided for by the lease, as Prof. Bemis
has shown. 1 The works were not even leased to the highest bid-
ders, as competing companies made much better offers than the
United Gas Improvement Company. The lease was a private busi-
ness transaction of the class in which an agent sells out his
principal's property and business to a corporation in which the
said agent has an interest, or from which he has received a con-
sideration. If it had been provided, as in Richmond, that no sale
or lease of the works could be made without consent of the people,
the plant would still be in the city's hands, and the intrigues to
capture it would probably never have been entered upon. If the
people had possessed the initiative upon city ordinances they would
long ago have ordered the repairs and improvements asked for
by this department, and by the water department, and both the
plants would have been a credit to the city in every way: worthy
representatives of complete public ownership, and not mere quasi-
public institutions as has been the fact.
One of the main resources of objectors has been to point out
the defects of the Chicago electric plant and exaggerate them
into a "failure." A careful review of the case, however, from first
to last, reveals, not a failure, but a remarkable success, especially
Municipal Monopolies. 606.
250 THE CITY FOB THE PEOPLE.
when we consider the expensive character of the construction, the
high wages and short hours, the small number of lights compared
to the capacity of the plant, and the size of the city, the absence
of commercial lighting, and the influence of the spoils system which
has now been overcome.
Chicago paid $250 an arc before the public plant was put in ten
years ago. In 1893-4, according to Chief Barrett's report, with
underground wires and a little more than half the capacity of the
plant in use, there were 1,110 full street arcs, $620 investment per
arc, and $96 expenditure per arc-year, which the chief said included
such full repairs and improvements as to cover all depreciation.
Upon these conditions, with complete public ownership, the saving
would be about $150 per arc (or $125 per arc if interest be included),
as compared with the price charged before public operation began.
Boston paid $237 per arc for several years after Chicago built her
municipal plant. Chief Barrett reported $52 labor cost per arc.
The works employed two shifts with short hours at $2 a day. If
the plant had employed one shift at $35 to $oO a month, as the
private companies did. the labor cost per lamp wotild have been
$17, and the whole expenses $61 per lamp. The city received two
services from its lighting plant the production of light and the
lifting of labor. The former alone (which is all it received for
the $250 it used to pay the private companies) really cost it $61
per lamp, including depreciation. If it had abandoned the other
service and put labor back on the private enterprise level, it could
have obtained its light for $61 a lamp; wherefore the other $35
(of the $96 total) was not really paid for light but for the elevation
of labor. Besides this, the plant was handicapped by changes of
the common labor with each new mayor, and by refusal to allow
it to sell commercial light, both due to political causes. There
were 18,500 arcs and 433,400 incandescents in Chicago, and the city
plant ran but 1,110 lamps small plant, run half capacity, no com-
mercial lights, no day load, only night load for street lamps, and
superintendent's control of labor hampered by politics, and yet
it was saving the city $125 per lamp year at the very least. For
commercial lighting the private companies were charging and
still charge 1 cent an hour per 16 candle power light, or over font
times what Chief Barrett said the city could do it for if allowed to
sell light.
Upon the Chicago situation I wrote as follows in 1S95: "It is
to be carefully noted that the fact that Chicago does not manage
her light plant as well as many other cities, is not an argument
against public ownership of electric light any more than the fact
that she does not manage her streets as well as many other cities
is an argument against public ownership of streets it is an argu-
ment for good government in Chicago in each case. The fact that
a certain married man does not act as well as other married men
because he is under the influence of an evil woman, is no argument
against marriage per se, nor even against that particular marriage,
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 251
for may be he was a great deal more under the influence before he
was married than after. That is the case with Chicago compared
with herself, before and after, she makes a good showing for public
ownership. Whether with private ownership or public, she is worse
off than most other cities under the same system. But she is
better off with public ownership than she was with private. Her
record with public ownership is not as good as it ought to be, but
it is far better than her record with private ownership of cor-
porations and monopolies."
Since the above was written civil service reform has been in-
augurated in Chicago, and this with an increase of 350 arcs have
been chief factors in reducing the expenses per arc from $96 to
$70 a year for each of the 1,4 GO arcs in 1898. The present chief,
Edward B. - Ellicott, estimates that in 1899 improvements -and ex-
tensions will reduce the expenses to $60 per arc, and the total
cost, including interest and depreciation, to about $90 per arc, 2,000
candle power all night and every night, underground wires, coal
$2.50, high wages, and no commercial lights. Near the close of.
1898 the city plant has 2,500 arcs and the Halstead station had
operating expenses of $32.38 per standard arc for the first half of
1898, though not running up to its capacity as it expects to do in
1899. The public lighting plant in South Park, Chicago, under the
control of the Park Commissioners, operates 4 ( JO r>-hour full arcs
at a cost of $12 for operation and $26.50 fixed charges, or $68.50
total cost with coal at $3.90.
Such a record is certainly far from indicating a "failure" for
municipal lighting in Chicago.
Does the reader see reason to believe
A. That private monopoly means
1. Privilege, unequal rights, breach of democracy.
2. Congestion of wealth and opportunity.
3. Antagonism of interest between owners and the pub-
lic, often causing extortion, inflation, fraud, defi-
ance of law, corruption of government, etc.
4. The sovereign power of taxation in private hands
and the ultra sovereign or despotic power of tax-
ation without representation and for private pur-
poses.
B. That regulation tho capable of affording some relief, can-
not attain a complete solution, since privilege, congestion
of benefit and antagonism of interest will still remain,
while the motives to corruption, fraud and evasion
of law are intensified and evil is driven deeper into the
dark.
C. That public ownership in the true sense (see p. 17) will
abolish privilege and remove the antagonism of interest
between monopolists and the public, which is the tap-
252 THE CITY FOR THE PEOPLE.
root of monopoly evils. Public ownership alone can at-
tain the maximum diffusion of benefit and realize the
ideals of democracy.
If you do see this, or if for any other reason you favor the extension
of public ownership, will you do what you can to secure the
following?
1. PUBLICITY of the accounts and transactions of cor-
porations, monopolies and combines in order that
we may know exactly what the real investment, op-
erating cost, salaries, wages, depreciation and prof-
its are. The law should provide for direct inspec-
tion and audit by public officers and for full pub-
licity of the results. The public which supplies
. the franchise and the patronage is of right a part-
ner in the business and entitled to a knowledge of
the inside facts. This knowledge is needed to fully
prepare the way for the following moves.
2. EFFECTIVE PROHIBITIONS AND PENALTIES
AGAINST STOCKWATERING, AND INFLATION
OF CAPITAL. TAXATION OF THE MAXI-
MUM FACE OR MARKET VALUE OF CORPORATE
SECURITIES, instead of allowing the companies to
tax the people in rates on the basis of face and
market values of stock and bonds, while paying
back to the public a small tax on the actual value,
or in most cases a fraction of the actual value of
the plant. This will help to squeeze the inflation
out of monopolistic capital, especially if the tax
rate be made progressively higher in proportion to
the width of separation between the maximum face
or market capitalization and the structural value
of the "plant. This measxire will have the additional
advantage of enlarging the public revenues during
the process of cutting down overgrown capitaliza-
tion.
3. REDUCTION OF RATES by legislatures, councils,
commissions, etc., to the point where (after paying
operating cost, depreciation and taxes) they will
yield simply a reasonable profit on the actual pres-
ent value of the capital the owners have put into
the business. This will check extortion, diminish
the funds available for corruption and wealth con-
gestion, squeeze all the remaining water out of
corporate capital and prepare the way for public
purchase at reasonable prices. (The amount the
owners have put into the business, less deprecia-
tion.)
4. PROGRESSIVE TAXATION of large incomes, in-
heritances, land values and other properties ex-
ceeding a moderate individual holding. This will
PUBLIC OWNERSHIP OF PUBLIC UTILITIES. 253
help to check the concentration of wealth, dimin-
ish the corruption fund, return to the people a part
of the money unfairly taken from them in monop-
oly taxes, etc., and provide ample funds for the
public purchase or construction of gas and electric
plants, street railways, telephone systems, etc. By
perfectly just and lawful methods we can meet the
cost of buying the monopolies by making the mo-
nopolists pay that cost out of the monies they
have captured from the people thru unearned rents,
excessive rates and unjust legislative grants; we
can do it by means of progressive taxes levied in
accordance with the principles laid down by Judge
Cooley, John Stuart Mill, Francis A. Walker and
other eminent authorities, culminating in the equi-
table maxim, "Equality in taxation means equality
of sacrifice."
5. DIRECT LEGISLATION AND THE MERIT SYS-
TEM OF CIVIL SERVICE to secure public owner-
ship of the government and provide the best foun-
dations for real public ownership of industrial mo-
nopolies. 1
6. THE EXTENSION OF PUBLIC OWNERSHIP AND
CO-OPERATIVE INDUSTRY by purchase of exist-
ing monopolies or construction of public utilities,
and by favoring profit-sharing, labor-copartnership,
co-operative companies and federations, consumer's
leagues, and everything that looks toward union
of effort for the good of all. 2 None are more in-
terested in these movements than the wealthy, for
they mean evolution instead of revolution .(See Ap-
pendix II, E 2.)
1 Full public ownership of the government logically precedes public
ownership of industrial monopolies, but as each tends to bring the other,
we should work for both and neglect no opportunity of obtaining the latter
under reasonable conditions even tho direct legislation and the merit
system are not immediately attainable. In an Anglo-Saxon community
generally, a public title to important business interests is one of the surest
means of rousing the people to demand direct legislation and the merit
system to make the public title a real public ownership.
* There are two general methods of arriving at true coordination and
union of effort; (1), by voluntary individual action, crystallization of workers
and consumers into co-operative groups, and gradual expansion and federa-
tion of these groups, till the whole community is included; (2), by public
action originating an industrial organization or taking over an organization
already effected. The ultimate results of the two methods are the same.
They work toward the same end. At the limit they are identical. In a
thoroly democratic community voluntary co-operation merges into public
ownership, and the growth of co-operation must inevitably create a thoroly
democratic community. In such a community without aristocrats or slums,
if every employee, user or person of full age and discretion directly affected
by the street 'railways of a city should own a share and have a voice in
their control, it would amount substantially to public ownership under
direct legislation, proportional representation and equal suffrage.
The methods differ as to their special fields of application. One is
peculiarly adapted to the development of industries in which individual
initiative has free scope; the other to industries in which the transforma-
tion to co-operative forms is rendered specially difficult by the power and
selfishness of intrenched monopoly.
254 THE CITY FOB THE PEOPLE.
In agriculture, manufactures, and commerce voluntary co-operation may
attain most excellent results, building solid tissue by the affinities of the
Individual atoms, and molding men, under conditions of the most perfect
liberty and thru the attractions of clearly appreciated personal interest,
toward the co-operative nature, thought, feeling and conscience, so essen-
tial to the complete success of co-operative institutions. Wherever industry
Is free from the pressure of monopoly; wherever monopoly can be prevented
or broken up or regulated so as to permit a reasonably practicable, smooth,
and rapid approach to united Industry thru co-operative crystallizations,
expansions and federations, every effort should be made to rouse the people
to the importance of forming co-operative groups that each of the gr<.-at
methods may do its appropriate work in the industrial reorganization of
society. (Read Henry D. Lloyd's "Labor-Copartnership," and N. P. Oilman's
"Co-operation and Proflt-Sharing," and write to "The Consumer's League,"
of New York, for their publications). Even monopoly may be transformed
by Individual action where the monopolists can be persuaded to open the
doors to labor-copartnership and citizen copartnership, aiming at diffusion
of public ownership for the public good. It is a rare thing however for a
monopolist to get industrial religion. And in dealing with monopolies,
especially those that are strongly intrenched and constitute sources of
corruption and congestion, the short-hand method of public ownership with
payment out of earnings and progressive taxes, offers many practical advan-
tages and is clearly the line of least resistance in this country now. Its
immediate and powerful effects as an equalizer or eradicator of unjust
advantage, place it in hearty accord with democratic sentiment, and form
for it a vigorous alliance with democratic thot and action.
Public ownership is the highest form of co-operative industry. It is
better for the ownership and control of a street railway or other monopoly
to be diffused among a thousand men than to have it concentrated in one
man or a dozen men. It is still better to have the ownership and control
diffused among all the users and employees, best of all that it should be
equally diffused thruout the whole citizenship affected. That only is com-
plete democracy. Public ownership is the form of co-operation that attains
the full ideal of diffusion making all citizens equal partners and admitting
future generations to the inheritance of past accumulations, inventions,
discoveries and social developments upon a plane of perfect equality and
Impartiality. In many cases it is clearly wise to go at once to the ultimate
form by public purchase or construction, especially where oppressive and
deeply rooted monopoly needs to be speedily overcome, or when important
public interests are involved of a nature not likely to be adequately cared
for by anything short of public action, or where the resistance to evolution
on the line of individual co-operation is very much greater than the
resistance to honest and intelligent public action.
CHAPTER II.
DIRECT LEGISLATION.
Iii early days the legislative function wgs exercised by the
whole body of enfranchised citizens assembled for the purpose.
The laws of the commonwealth were made by the voters di-
rectly, in substantially the same way that the laws of a New
England town are made to-day. But after a time the body
of free-men became too large to meet in this way, and a sys-
tem of law making by delegates was adopted. Towns and
districts elected men to represent them in legislative council,
and government by representatives took the place of gov-
ernment by the people except in respect to the local affairs
of towns that possess the town-meeting system.
The change from legislation by the people to legislation
by final vote of a body of representatives chosen for a speci-
fied term, was a transformation fraught with the most mo-
mentous consequences. Under the former system the people
had complete control of legislation. No laws were passed
that the people did not want, and all laws were passed that
the people did want. But under the delegate or representa-
tive-final-vote system this is not true. The representatives
can and do make and put in force many laws the people do
not desire, and they neglect or refuse to make some laws the
people do desire. The people cannot command or veto their
action during their term of office. The representatives are
the real masters of the situation for the time being. Between
elections the sovereign power of controlling legislation is not
in the hands of the people, but in the hands of a small body
of men called representatives. It appears therefore that the
change from legislation by the voters in person to legislation
by delegates was a change from a real democracy to an elec-
tive aristocracy ; from a continuous and effective popular sov-
ereignty to an intermittent, spasmodic and largely ineffective
255
256 GOVERNMENT BY AND FOR THE PEOPLE.
popular sovereignty; from a government of the people, by the
people and for the people, to a government of the people, by
a f ew f OT the people? - yes, sometimes, but
too often for the legislators, and the lobbies, bosses, rings,
monopolies, and party leaders who control them. It was a
change in which self-government was fettered and the soul of
liberty was lost
What then shall be done? Shall we give up the represen-
tative principle? Clearly not. Division of labor and expert
service are as essential in law making as in any other business.
It is not representation, but misrepresentation that is wrong
not the representative system per se, but the unguarded and im-
perfect form of it in use at present. What we want is not a
body of legislators beyond the reach of the people for one,
two, four or six years, as the case may be, but a body of legis-
lators subject at all times to the people's direction and con-
trol. It is good to have powerful horses to draw your load,
but it is well to have bit and rein and whip if they are frisky
or likely to shy or balk. It is good to choose strong men to
manage municipal and State affairs, but it is well too to pro-
vide the means to hold them in check or make them move at
the people's will.
The problem is to keep the advantages of the representa-
tive system its compactness, legal wisdom, experience, power
of work, etc., and eliminate its evils, haste, complexity, cor-
ruption, error, over legislation and under legislation depar-
ture from the people's will by omission or commission.
The solution lies in a representative system guarded by
constitutional provisions for popular initiative, adoption, veto,
and recall. Elect your councilmen and legislators and let
them pass laws exactly as they do now, except that no act
but such as may be necessary for the immediate preserva-
tion of the public peace, health or safety, shall go into
effect until thirty days after its passage in case of a city ordi-
nance, or ninety days in case of a state law. If within the
said time a certain percentage of the voters of the city or
state (say five or ten per cent.) sign a petition asking that
the law or ordinance be submitted to the people at the polls,
THE INITIATIVE AND REFERENDUM. 257
let it be so submitted at the next regular election, or at a special
election if fifteen or twenty per cent of the voters so petition.
If the majority of those voting on the measure favor it, it be-
comes a law; if the majority are against it, it is vetoed by the
people.
Let it be further provided that if the council or legislature
neglect or refuse to take any such action by ordinance, law,
contract, franchise, etc., as the people desire, the matter may
be brought forward for prompt decision by a petition signed
by a reasonable percentage (say five or ten per cent.) of the
voters of the city or state. The petition may simply state
the general purpose and scope of the desired measure, leav-
ing the council or legislature to frame a bill to be submitted
to the voters; or it may embody a bill or ordinance, where-
upon the petition, with the bill or ordinance, will go to the
council or legislature, which may adopt it, reject it, pass an
amendment or substitute, or do nothing in any case the
proposed measure (together with the action of the council or
legislature upon it, if any) will go to the polls for final de-
cision at the next election, or earlier, if a sufficient number
(say fifteen or twenty per cent.) of the voters so petition.
These methods of law making by the people are called
Direct Legislation, which includes two main processes known
as the Initiative and the Referendum.*
*The referendum may be obligatory or optional, general or partial, ex-
ecutive, legislative, judicial or petitional. Under the general obligatory
referendum all laws except emergency measures (acts necessary for the im-
mediate preservation of the public health, peace or safety) must be submit-
ted to the people; no petition is needed; the sxibmission is as much a part
of the process of law making as the submission to the mayor or governor.
The cantons of Berne and Zurich, in Switzerland, have had this system
in operation for thirty years with admirable results. Under the partial
obligatory referendum all laws of a certain class must be submitted to the
people. For example, constitutional amendments must be submitted to the
voters in every one of our states except Delaware, and in Missouri, Cali-
fornia, Washington, Minnesota and Louisiana freehold-charters must go
to the polls. The purchase or erection of water works, gas and electric
plants, telephones and street railways, the issue of bonds for roads, schools
and other municipal movements of large importance are usually guarded
by the obligatory referendum. (See Chapter III. Comments on Table II.)
The optional referendum provides for a vote of the people on any measure
in reference to which such vote is demanded by petition of a reasonable
percentage of the voters, or by some officer or body in whom such discretion
is vested.
The executive referendum is where the mayor or governor or president
has a right to refer a measure to the voters for decision.
The legislative referendum is where one house, or a given percentage
Csay twenty-five per cent.) of one or of both houses may refer a measure
TO the people for decision, or where a measure upon which the houses disa-
gree must be referred to the voters.
The judicial referendum is where a law that has been declared uncon-
17
258 THE END OF CORRUPT LEGISLATION.
The Initiative is the proposal of a law by the people.
The Referendum is the submission of a law to the people
at the polls for approval or rejection.
By these means the people can start or stop legislation at
will. By initiative petition they can bring a measure forward
for discussion and decision. They can repeal an old law or
amend it, or enact a new one, and progress is no longer barred
by the interest or inertia of the legislators or councilmen, nor
by the weight and wealth of corporate monopoly. Moreover,
the people can prevent had legislation as well as secure good
legislation. If the legislature passes a law the people di.-like
they can call for a referendum and veto the measure at the
polls before it goes into effect, whereas at present the law goes
into effect whether the people like it or not, and they have to
wait till they can elect a new legislature to repeal the ob-
noxious act (after the damage is largely done, perhaps), and
if the said act is a franchise, very likely it cannot be re-
voked at all when once allowed to take effect a franchise
grant to a private company being a contract within the pro-
tection of the Federal Constitution, a fact which makes it
particularly necessary that franchise grants (especially K un-
qualified by a reservation of the right to revoke at will) should
be submitted to the people.
Does not the Direct Legislation Amendment to the Rep-
resentative System solve the problem? Does not the guarded
representative system retain the benefits and eliminate the
stitutional must be submitted to the people for the final decision under a
nxed rule to that effect, or may be so submitted by the court, or by a speci-
fied number of the judges.
The petitional referendum is where the submission is called for by peti-
ion of the voters. A petition signed by the required number of voters is
imperative, not a mere request, but a compelling mandate. It is the petl-
na LA r . m of the P tlonal referendum, or the systtm in which the option
w with the people, that is usually meant when the word "referendum" is
used without explanation.
oith 1 * Wi hli be * Seen that executive > legislative or judicial referenda may l.p
nlthL g t T 2 r P tlona1 ' general or special, and that the petitional
S iorf/ an U M? d ., t0 repeal an old law or veto a new one ' or confirm a law
, .nHvo ffl nS tltutloi f >j or ^11 for an election to remove a legislative or
executive officer or a judge from office
The effective vote at the polls may be fixed at a majority of those voting,
vote may b e e Required * *' r * three - fifths - two-thirds, or three-fourths
m^, hr *T rd " re ' erendu m" Is often used in the sense of the right of the
K /t ton enactments submitted to them, and it is also used to designate a
N ,,* rt in n tl ".' wnal Amendment securing this right. The word "initiative"
ntended " manner ' The Context will usually show which sense Is
THE POPULAR VETO. 259
evils of the unguarded representative system? The city or
state will have its body of legal experts, trained advisors, and
experienced legislators as at present. They will continue to
do most of the law-making as they do now, but their power
to do wrong or stop progress, their power to do as they please
in spite of tihe people, will be gone. The city and state will
have the service of its legislators without being subject to
their mastery. If the delegates act as the people wish, their
action will not be disturbed. If they act against the people's
wish, the people will have a prompt and effective veto by
which they can stop a departure from their will before any
damage is done. If the delegates do not act, the people can
put the machinery in motion and bring the matter to decision.
"When the delegates truly represent the people their action
will stand; when they fail to represent the people their de-
cision will be subject to prompt revision. To-day their acts
that do not represent the people's will stand as firm during
their term of office as the acts that do represent the popular
will. Is this right? Is it right that the people's delegates
should be able to impose their will upon the people for one,
two, four or six years? Is it right that the acts of delegates
contrary to the people's will should stand in spite of the peo-
ple? Is such a delegate system really worthy to be called a
"representative system?" Is a system properly termed rep-
resentative which may misrepresent as much as or more than
it represents, and in which there is no adequate means of de-
termining whether its action is representative or not? Is not
the right to a referendum, the right of the people to prevent
the delegates from misrepresenting them, absolutely neces-
sary to entitle the delegate system to the name "representa-
tive?"
SELF GOVERNMENT.
There is a confused impression in the minds of many that
the choosing of rulers is the substance of freedom and self-
government; that a people who elect their law makers are
really making the laws. But it is not so. The selection of a
governor is not governing, any more than the selection of a
.J
260 THE OPEN DOOR OF PROGRESS.
captain is commanding, or the choice of an organist or pianist
is playing. The choice of a legislature is not self-government
any more than the selection of a jailor or the choice of a jail
is freedom.
An apprentice may be allowed to choose the master to
whom he is to be bound for years, and a lunatic or minor who
is deemed incapable of governing his own affairs may, never-
theless, have the privilege of selecting the guardian who is to
govern him. A people may elect their rulers and yet live under
an absolute despotism. This was true in old Rome when the
King was elected by the whole body of citizens. It is true
now of the Western Fulahs in Africa and the Kamtscadales
in Asia, who elect their chiefs, but after election must obey
the head man's orders. It is true in many of the cities of
America, where the people go to the polls year after year in
the fond delusion that they have a voice in the administra-
tion, of public affairs, whereas, in reality, a ring of rascals
holds the city in its grasp, and whichever nominee the citi-
zens may vote for, the ring will rule the same as before, en-
acting its private purposes into law, pouring the public
moneys into its purse, filling appointments with its creatures
to perpetuate its power, and controlling the city for its plun-
der, regardless of the interests or the wishes of the people.
It is true in the nation and the states as well as in the cities.
The rule of a congress or legislature that does the will of a
railroad or syndicate of gamblers in opposition to public opin-
ion and the good of the commonwealth is a despotism as truly
as ever the rule of a Tarquin or a Caesar was. Napoleon him-
self, the arch-despot of modern times, was elected to his im-
perial power.
The duration of a government or lease of power has noth-
to do with its character as free or despotic. A control that
lasts but a single year may be as far from freedom as one
that endures for a life time; and a people electing their rulers
each year to govern according to their own sweet will mail
be no better off than a nation which 'elects a sovereign to
wear the crown for life. The essence of despotism is the
control of others for the benefit of the controller, regardless
THE POPULAR INITIATIVE. 261
of the welfare of the controlled. The Tweed administration
was a despotism altho elected to power. So was the gas legis-
lation, of the Philadelphia councils leasing the city works to
a powerful and corrupt ring, in spite of the well-known and
vigorously-manifested opposition of the great mass of the
people. So was the action of the Black Congress that gave
away the people's franchises and money and lands to the
schemers who projected the Pacific roads. Men of America,
do you govern the country? Is it your will that is done in
Senate chamber and council hall, or is it the will of the oil-
trust, sugar-trust, whiskey-trust, the railways and the bank-
ers? He is the sovereign whose will is in control. You are
not sovereign, for many things you wish to have done remain
undone, and many tilings are done that you do not wish to
have done. Politicians call you sovereigns in their campaign
speeches. But it is not true. You have the privilege of chooe-
ing which of two or three sets of sovereigns you will have
to rule over you, but you are not sovereigns yourselves. The
men you elect are your masters during their term of office.
You come to them, not as sovereigns to their servants, but
as subjects, with humble petitions, which you are not sur-
prised to see them reject or ignore. They give away your
property and you are helpless; they pass laws without your
approval and against your interest and you cannot prevent
their taking effect; they refuse to take action on your most
pressing needs, and you are powerless until the expiration of
their deeds of sovereignty gives you an opportunity to choose
a new lot of masters to rule you for another term. This is
not a government by the people, but a government by an aris-
tocracy of office holders elected by the people. You call your
rulers "representatives;" and to some extent they are such.
Honesty and coincidence of interest do lead them to carry
out your will to some extent, but they are free to legislate
for their own private interests or the interests of those who
furnish inducements for action in their behalf, and the peo-
ple cannot prevent it. Representatives have their uses. You
need the aid of specialists in legislation, but you do not need
to part with your rightful control of your own affairs when
262 THE CITY FOB THE PEOPLE.
you seek their aid and council any more than you need to part
with, it in dealing with a tailor, a doctor, or an architect.
It is well to employ an architect when you are going to
luild, but you never would think of giving him power to
draw up his plans and put them into execution without sub-
mitting them to you for approval, much less would you give
him a right to refuse to alter his plans in accordance with
your request, or to decide how much of your money should be
spent without recourse to youfor assent, or toexpend your funds
for a structure which you strongly disapproved and against
which you loudly protested. You would avail yourself of
the architect's skill in the drawing of plans, but you would
feel free to tell him what sort of a house you desired, and
would expect him to act upon your directions and suggestions,
and to submit his plans to you for approval or rejection be-
fore beginning to build on your land and on your credit or
with your cash. In this case you would continue to control
your affairs while availing yourself of the architect's wisdom
and skill. In the first case, the control of your affairs would
ta in the architect, not in you.
It is the same with legislation. Doubtless it is well to seek
the aid and council of men well versed in law and skilled in
the phrasing of statutes, but it is not necessary to give these
men the power to ignore our petitions, nor the right to put
the laws they plan in execution without allowing us time and
opportunity to express our disapproval and rejection if we
wish to do so. There are cases of extreme urgency, in which
the architect or the legislative agent must be permitted to
act without waiting to consult his principal. Fire, flood, or
other unforeseen event may make it imperative that the
builder should act on his own judgment, without an instant's
delay. Likewise an unforeseen event endangering the public
safety may make it needful for our legislators to act at once.
But as a rule there is time for consultation, and it ought to be
required. If you do not require it, if you allow your "rep-
resentatives" to put their plans into execution without an
opportunity on your part to reject them or modify them, you
practically place the control of your affairs in the said repre-
DIRECT LEGISLATION. 263
sentatives for the term of their election, and self-government
on your part ceases during the said term.
"We do not want a government by the people without rep-
resentatives, nor a government by representatives without the
people; but a government by the people with the aid and ad-
vice of representatives, or what is essentially the same thing,
a government by representatives acting as the people's agents,
subject at all times to the orders and instructions of the pe.,
pie, and to total revocation of authority at their will. The
first is impossible in a complex society; the second is an aban-
donment of- the principle of self-government; the third com-
bines the good qualities of the representative system with a
real sovereignty in the people it secures the economies and
values of representation without sacrificing justice, liberty
and self-government. It uses the legislator, like the architect,
to draw up the best plans his knowledge permits; it gives him
a right, like the architect's in cases of extreme emergency, to
act upon his own unaided judgment; but requires him at all
other times to submit his ideas to his principal before putting
them in practice, and holds him at all times subject to the
orders and suggestions of his principal. Such is clearly the
ideal management of political affairs as well as of business
affairs. Indeed politics is itself nothing but business; the
people's business, it ought to be, and under their control.
We have already seen' how this intimate and continuous con-
trol of their representatives by the people can be secured in
place of the present subjection of the people to their repre-
sentatives during successive periods. It is a simple matter of
extending the use of the referendum.
THE REFERENDUM IN USE IN AMERICA.
The Referendum is already a Fundamental Fact in American Gov-
ernment and a Settled Principle in our Legislative System.
The suggested improvement of our representative system, to
make it harmonize with the law of self-government does not
require the adoption of any new principle or method. Both
the initiative ana the referendum" have been in constant use
in America ever since the Mayflower crossed the sea. All
264 GOVERNMENT BY AND FOK THE PEOPLE.
that is needed is an extension of established principles and
methods to cases quite as much within their reason, purpose
and power as those to which they are now applied.
In many of our towns we have the ideal of Democracy in
respect to local affairs. They are controlled by the people
directly. Any ten men, by petition to the selectmen, may
secure the insertion of an item in the warrant for a town
meeting, and so bring the matter before the town. Any one
may make a motion or enter the discussion, and all may vote.
The town meeting plan is the Initiative and Referendum ap-
plied to town business.
Direct Legislation is also used by all our states, except Del-
aware, in making and amending their constitutions, from
which it would seem that our citizens are already convinced
that it is the best possible plan of legislation, since it is the
one they adopt in respect to their highest and most important
law.
At first, as we have said, there was no other sort of gov-
ernment. For nearly twenty years after the founding of
Plymouth Colony, in what is now Massachusetts, the law
making was done in primary assembly of the freemen every
quarter, and when the colony grew so large that it was dif-
ficult for the people to meet in this way four times a year, it
was provided that every town should elect two delegates to
join with the Bench in enacting all sudh ordinances as should
be judged good and wholesome, and that the whole body of
citizens should meet once a year to have a general over-sight
of the doings of the delegates, repeal any of their acts that
were deemed prejudicial to the whole, and pass such new
measures as might be needful in the judgment of the people. 2
That was the referendum almost as it is advocated to-day. It
lasted from 1638 till 1658, and in a modified form till 1686,
but it was lost to state affairs when the colony was united
with others and the population became too large to meet even
once a year. No one in Massachusetts seems to have thot
of the method of polling the whole citizenship on specific
^ "*
THE INITIATIVE AND REFERENDUM. 265
measures 3 for the reason may be that in those primitive, un-
sophisticated times, the delegates really acted very nearly as
the people wished them to. The population was compara-
tively homogeneous in interest, the disturbing influence of
powerful class and monopoly interests was unknown, and the
modern politician had not been born.
Still the people did preserve Direct Legislation in town
affairs and in the making of the fundamental law, fondly
dreaming that this would be sufficient to prevent any possible
deflection of wiley representatives. It has not done that, but
it has proved itself the most perfect of all legislation. No
law-making in the world has been so smooth, so wise, so effec-
tive, so free from taint or suspicion of class interest or cor-
ruption as the making of American constitutions and the leg-
islation of New England town-meetings. Compare the honest,
public-spirited, effective, progressive and economical govern-
ment of a Maine or Massachusetts town with the dishonest,
selfish, narrow, ineffective, non-progressive and extravagant
governments of our ring-ruled cities, and you will get some
idea of the natural tendencies of the two systems leaving
the law-making power with the people, or giving it to a limited
number of men to play with as they please for a specified time.
No other part of the country can be compared to New Eng-
land in the completeness of its local improvements, yet no-
where is the debt so small as in New England towns; nowhere
else are the voters so well informed; nowhere else is such
ample provision made for the education of children. 1
Thomas Jefferson referred to the town-meeting as "the
wisest invention ever devised by the wit of man for the per-
3 In other places the thot occurred and was acted upon. In the seven-
teenth century the fundamental law of Rhode Island required that all laws
passed by the general assembly should be referred to the people, and this
was done until the law was superseded by a royal charter. In reference
to the early constitution of Pennsylvania Noah Webster says, "I cannot help
remarking on the singular jealousy of the constitution of Pennsylvania,
which requires that a bill shall be published for the consideration of the
people before it is enacted into a law, except in extraordinary cases." and
remarks that this reduces the legislature to an advisory body. In Virginia
Jefferson drafted a provision that all laws, after passing the legislature,
should be voted on by the people, and advocated it as a part of the state
constitution, but it was defeated for fear it might touch slavery. This was
the referendum in its highest form the obligatory.
1 See "Town and Village Government." by H. L. Nelson. Harper's
Monthly, Vol. 83, p. Ill, June, 1891, contrasting the effects of the New
England town-meetings with the effects of the village government in ntates
not possessing the town-meeting.
266 THE END OF CORRUPT LEGISLATION.
feet exercise of self-government and for its preservation.''
Prof. John Eiske says that "Government by town-meeting is
the form of government most effectively under watch and
control. Everything is done in the full daylight of publicity.
The town-meeting is the best political training school in ex-
istence. It is the most perfect exhibition of what President
Lincoln called 'government of the people, by the people and
for the people!' " Prof. Bryce says, "The town-meeting
has been the most perfect school of self-government in any
modern country. * * * It has been not only the source,
but the school of democracy."
The value the people of New England place upon their
town-meeting system is shown by the tenacity with which
they cling to it, refusing to have their towns incorporated
even after they have grown to unwieldy size, because in so
doing they lose the town-meeting and pass from self-govern-
ment into the hands of politicians. . For this reason Paw-
tucket, Rhode Island, did not become a city until its popu-
lation came close to 20,000. Brockton, Massachusetts, held
off until it was listed at 15,000. North Adams, a town of
more than 16,000 inhabitants and 4,000 voters has repeatedly
refused to become a city. Waltham, Ohicopee, Pittsfield and
many other towns bear witness to the same strong feeling.
Massachusetts has only thirty-two incorporated cities, instead
of sixty or more, as she would have under the regime prevail-
ing in states where the town-meeting is not in vogue.
Brookline, Massachusetts, is a town of 15,000 people. It
lies within the metropolitan district of the city of Boston, but
is not a part of Boston, having retained its government in
spite of its situation within the practical limits of a giant city.
The contrast between the city of Boston and that of Brook-
line is a startling one. Boston, tho better governed than
some other cities, has its corruption, its bosses, rings, spoils
system, arrogant monopolies, high taxes and extravagant ex-
pendituresextravagant for the results achieved four or
five times as much as the English city of Birmingham spends
to obtain as good or better results. 1 In Brookline economy is
' Forom, Nov., '92, p. 267; see also No. Amer. Rev., v. 152, p. 538.
THE POPULAR VETO. 267
a fine art, arid tho large amounts are spent in public improve-
ments and on the magnificent school system, the taxes are
considerably lower than in Boston. There is no corruption,
boss rule, ring rule, or spoils system in Brookline, altho the
expenditures amount to If millions a year, or more than
the expenditures of the whole state of New Hampshire. The
town is governed by the citizens in primary assembly, the
town meetings averaging eight per year. 4 The meetings be-
gin a.t 7.00 P. M., and are usually over between 10 and 11
P. M. Ample notice is given of every matter to be considered
at the meeting, so that proposed ordinances, etc., may be fully
discussed, and all who feel interested may attend, make mo-
tions, argue and vote. Sometimes a large number of voters
attend the meetings, but usually two or three hundred of the
best-informed and most public-spirited citizens do the business,
so that while the door is open for the whole body of citizens
to take part in the decision of any matter that comes before
the town, yet the actual decision in each case is generally left
by tacit assent to a small body of public-spirited men who
have taken pains to inform themselves upon the questions in
issue two hundred men in one case, perhaps a thousand in
another, a legislative body whose units vary considerably ac-
cording to the topics under discussion, coming together
by a sort of natural selection, compounded of interest, intel-
ligence and public spirit, acting with the power of a limited
assembly, but subject at all times to prompt revision or veto
by the whole body of citizenship a fact which operates to
keep attention and decision close to the public interest. This
is exactly the sort of government we are proposing for our
cities and states. The extension of the initiative and refer-
endum to practically the whole range of municipal and state
business will place the ultimate power at all times in the peo-
ple, and that will make it safe to leave public business to
limited bodies of experts, who will be held true to the public
interest by the power of veto and revision residing in the
public. When we contemplate the admirable effects of this
*See the yearly reports of the town and a condensed account in the
Direct Legislation Record, 1896, pp. 2-4, and "Brookline, A Model Town
Under the Referendum," by B. O. Flower, Arena, Vol. 19, p. 505, April, 1898.
268 THE OPEN DOOR OF PROGRESS.
system in Brookline, effects which lead the people of Brookline
to resist most earnestly all attempts to make the town a part
of Boston, because their experience has shown that Direct
Legislation gives results far superior to those obtained under
the unguarded delegate system in the adjoining city of Bos-
ton, even tho the said adjoining city is so much better than
other cities that it prides itself, not without reason, on being
the Athens of America and the Hub of the Universe. When
we contemplate these facts we feel convinced that common
sense and civic patriotism demand the extension of the prin-
ciple of Direct Legislation to Boston and all other cities of our
land.
The worth of the town-meeting method is recognized
not only in Massachusetts, Maine, New Hampshire, Vermont,
Rhode Island and Connecticut, but in New York, Michigan,
Illinois and many other states outside of New England. In
Illinois it came into direct and vigorous conflict with the rep-
resentative system of local government. In 1818, when Illi-
nois became a state, its population was chiefly in the southern
counties, and composed for the most part of settlers from Vir-
ginia and Kentucky, Virginia's daughter state. These set-
tlers established a system of local government by elective rep-
resentatives without any local deliberative assemblies of the
people. Settlers from New England and New York, coming
into the northern part of the state, began to demand the town-
meeting system. A struggle ensued, resulting in the adop-
tion of a new constitution (1848) providing for local option
in local government; that is, township government by delib-
erative assembly of the voters would be. organized in any
county whenever a majority of its voters so determined. The
two systems being thus brought into immediate contact in
the same state, with the people free to choose between them,
the northern system has steadily supplanted the previously
established southern system till less than one-fifth of the coun-
ties retain the representative system, more than four-fifths of
the state having adopted the New England town-meeting
system of local government.
A similar local option by county vote has been established
THE POPULAR INITIATIVE. 269
in Missouri (1879) and in Nebraska (1883). In Minnesota
(1878) and Dakota (1883) provisions for township option
have been enacted, i. e., any township containing 25 or more
voters may petition the county commissioners and obtain the
Xew England organization.
The general movement toward Direct Legislation in town
affairs is unmistakable, and the public school system is often
the entering wedge. The school district as a preparation for
the self-governing township is exerting its influence in Kan-
pas, Colorado, Nevada, California, Wyoming, Montana, Idaho,
Oregon and Washington. Even in South Carolina, Ken-
tucky, Tennessee and the Virginias a similar tendency is man-
ifest, and it is probable that thruout the southern and west-
ern states, as formerly in Michigan, the self-governing school
district may bring in its wake the self-governing town, with
its deliberative assembly of the voters, electing officers, levy-
ing taxes and making town laws by direct vote of the- people. 5
The use of the referendum in the United States is not con-
fined to town affairs and constitution making. Any one who
will go thru the laws of the various states marking all provi-
sions for submitting 1 to popular vote franchises, licenses, con-
tracts, bond issues, charters and all sorts of laws and ordi-
nances, will discover a vast number of ref erendal clauses, and
will begin to realize how important a place in our law is
already occupied by Direct Legislation in state and city affairs.
Some perception of this may be secured by marking the ref-
erendal clauses in the laws cited in Chapter III of this book,
but the distance between such perception and the whole truth
may be appreciated when it is known that in the single state
of Iowa a moderate search, by no means exhaustive, has re-
vealed thirty provisions for the popular initiative and twenty
provisions for the referendum, most of them obligatory; and
such provisions are not more prevalent in Iowa than in many
other states. Some of these enactments are given below*;
B John Fiske's "Civil Government," pp. 90-94.
*Some of the Iowa provisions are as follows:
1. "One hundred citizens of any city of over seven thousand inhabitants
may cause the question of establishing a superior court to be submitted."
2. "One-fourth of the voters may cause the question of raising taxos
for public improvements or payment of debts to be submitted; or the ques-
270 THK CITY FOR THE PEOPLE.
the points I wish to emphisize here are: first, that our laws
are permeated by the principle of IHiect Legislation; second,
that in a large body of cases the obligatory method is in use;
third, that in a considerable number of other cases the option
rests with the people; fourth, that in another large body of
cases the option is expressly given to the executive or legis-
lative authorities; and fifth, that in all other cases, according
'ion of the rescission of any of such proposition that has already been
adopted."
3. "Two-thirds of the voters of any village may cause the board of su-
pervisors to change the name of such village."
4. "A majority of the voters of a township may cause the trustees to
submit the question of building a public hall."
5. "Twenty-five voters of any portion of territory may cause the dis-
trict court to submit the question as to whether such territory shall be in-
corporated as a town."
6. "Twenty-five of the voters of such town may cause the question dis-
continuing the incorporation to be submitted."
7. "A majority of the voters of a portion of territory adjoining, a city
or town may cause the question as to being annexed to such city or town
to be submitted."
8. "Ten per cent, of the voters of a city or town, under special charter,
may cause the council tosubmit the question as to abandoning such charter."
9. "Twenty-five property owners of each ward in a city, or fifty owners
of a town, may cause the mayor to submit the question as to municipal
ownership of water works, gas works, electric light or power plants, or
granting franchises for such."
10. "One-third of the taxpayers of a city or town may cause the question
as to aiding in the construction or repair of a highway leading thereto to
be submitted."
11. "Twenty-five property owners in each ward in a city, under special
charter, may cause the mayor to submit the question as to ownership of
water works, gas works, electric light or power plants, or granting fran-
chises for same or for railways, street railways or telephone systems."
12. "One-fourth of the voters of a city, under special charter, may cause
the question as to amending such charter to be submitted."
13. "A majority of the resident freehold taxpayers of a township, town
or city may cause the question as to aiding railroad company in construc-
tion of projected railroad to be submitted."
14. "From fifty to eighty per cent, of the voters of a city or town, ac-
cording to population, may cause the mulct tax to be substituted for the
prohibition law against selling liquor."
15. "One-third of the voters of a county may cause the question as to
establishing a high school to be submitted."
16. "Ten voters of any city, town or village of over one hundred residents
may cause the question of making it an Independent school district to be
submitted."
17. "One-third of the voters of a school corporation may cause the ques-
tion of free text books to be submitted."
18. "The State cannot go into debt more than two hundred and fifty thou-
sand dollars without submitting the question."
19. "All acts creating banks must be submitted."
20. J| Amendments to the constitution must be submitted."
21. "No territory can be annexed to a city or town without submission."
22. "The council may submit the question as to annexing territory in
cases wherein such territory has asked for annexation."
23. "The council must submit the question as to uniting the city or town
with another contiguous one."
24. '^No city or town can extend Its limits without submission."
25. "The name of a city or town cannot be changed without submission."
26. 'No water works, gas works or electric light or power plants shall
be authorized, established, erected, leased or sold, or franchise extended or
renewed without submission."
27. "Cities and towns cannot appropriate money to found and maintain
libraries without submission."
28. "No water works can be purchased or constructed by cities of the
first class without submission."
29. "Cities and towns cannot grant, renew or extend franchises for
the use of Its streets, highways, avenues, alleys or public places for tele-
DIRECT LEG1SL A fiOX.
271
to the law of most of our states, 1 the referendum may be
used at the discretion of the legislative authorities the
legislature or council may submit any question to the voters,
so that really the only change ice ask for is the placing of
the OPTION in the hands of the people instead of leaving
it icith the legislators. If it rests with the councilmen to
decide whether a franchise, lease, contract, or other matter
shall be submitted to the voters, they will be ready enuf to
submit enactments with which they have tried to act hon-
estly, and in respect to which they really desire to follow the
people's will; but when there is a steal on foot and the coun-
cils are conscious of dishonest purpose, they will refuse to
submit the matter to the voters. The question of building a
public subway may go to the people, but the question of a
Broadway Surface Franchise or a Philadelphia Gas ,Lease
will not l)e submitted, even tho the people hold enormous mass
meetings demanding it, and the press is a unit in favor of it,
and public sentiment is at a white heat over the refusal. To
leave the option with the legislature is to put the referendum
beyond the reach of* the people just when they need it most.
As tho my architect could submit his plans to me before build-
ing if he chose, or go ahead and build with my funds with-
out consulting me, no matter how much I protested, if it
suited his purpose to use his discretion that way. When he
was acting honestly 'for my interest he would consult me, for
he would have nothing to fear from such consultation; but
graph, district telegraph, telephone, street railway or other electric wires
without submission.'
30. "Cities cannot deepen, widen, straighten, wall, fill, cover, alter or
change the channel of any water course, or part thereof, flowing thru the
limits of such city, or construct artificial channels or covered drains, without
submission."
In a large number of States the prohibition of the liquor business Is
allowed to cities or counties by vote of the people, and the referendum is
being used more and more in the obligatory form, through constitutional
provisions compelling the legislatures to submit certain questions to the
people whether they petition for a referendum or not. In 15 states the lo-
cation of tho capital cannot be changed except by popular vote. In 11
states no debts, unless specifically provided for by the constitution, can be
incurred without such a vote. In many states a similar restriction applies
to assessments above a fixed rate. In 19 states counties must choose their
county seats in this war.
1 Delaware seems to take a position against any implied authority in the
/egislatnre to submit questions to the people. Rice v. Foster, 4 How. (Del.;
470. The vast weight of authority, however, is the other way. See People
v. Reynolds, 5 Gilm. (111.) 1; Ewing v. Hoblitzelle, 85 Mo. 64; and the
citations in the article by C. S. Lobiuger, Esq., on "Constitutional Law"
in American and English Cyclopedia of Law. p. 1022 of vol. VI (2<1 ed..
and in Dr. E. P. Oberholtzer's "Referendum in America." published at
Penn. University.
272 GOVERNMENT BY AND FOE THE PEOPLE.
if he were trying to put up a job on me, lie would exercise
his option to act without conferring with me, because such a
conference would greatly endanger the succes3 of his job.
A few illustrations may show how frequent is the use of
the referendum, and how thoroly the legislators believe in it
when they have no private interests likely to be endangered
by it.
1. The New Jersey legislatures of 1885 to 1888 are said
to have referred 40 questions to the people.
2. In the fall of '93 California sent 9 questions to the
people.
3. New York voted a few years ago on the question of
prison labor and on selling the public salt works.
4. The city of New York long ago voted at the polls on the
water-supply, and have recently decided in the same way to
build an underground city railway, and the legislature has
also referred the question of municipal annexation and con-
solidation to the citizens of New York and vicinity.
5. Boston citizens have voted a number of times on the use
of the common, rapid transit, the subway, the methods of
choosing aldermen, a single chamber, etc.
6. Minneapolis recently voted on the question of raising
$200,000 for the schools and $400,000 to extend the city
water works.
7. San Francisco, Los Angeles, St. Louis, Kansas City,
Duluth, Tacoma and other cities have held referendal votes
on the adoption of freehold charters. (See Chapter III.)
8. It is a common thing to submit to the people of a city
questions relating to the purchase or erection of public water
works, gas works, electric light plants, etc. In a very large
proportion of the four hundred municipalities that own their
electric light plants the matter was decided by direct vote
of the citizens. In a number of other states a referendum
vote is necessary to the grant of street franchises for water,
gas, electric light, telegraph, telephone, transit, etc. In
several states such referenda are required by the constitution.
(See Chapter III, comments on Table II.)
In New Orleans a specially interestng referendum has re-
THE INITIATIVE AND REFERENDUM. . 273
oeiitly been held (June '99) on the question of levying a tax
to establish municipal water supply and better sewage.
Women could vote, and vote, if they wished, by proxy, a
dangerous provision as to the proxy part of it. The initiative
was also used, as the referendum was secured by a petition
signed by over 10,000 taxpaying voters.
9. Many referenda occur in counties, townships and school
districts, fixing of county seats, division lines, school taxes,
questions of municipal indebtedness, etc.
10. Local option is the referendum in full bloom. For
years the cities and towns in Massachusetts have been voting
at moderate intervals on the question of license or no license.
Many of them, including even Cambridge and Chelsea, have
voted against license. The total vote on the liquor question
frequently exceeds the vote for candidates. For example, the
Chelsea vote for mayor in 1896 was only 96 per cent, and
the vote for school committee only 80 per cent, of the local
option vote. Local option on the liquor question also exists
in New York State, Mississippi, Arkansas, Texas, Georgia,
Tennessee, etc., and the effects in educating the people on the
temperance question, developing local patriotism and bringing
it to bear upon the enforcement of law are most admirable.
The following cases of the use of the referendum in No-
vember, 1896, may be noted here:
1. Massachusetts voted on two amendments to the con-
stitution. The amendments had been passed by two Repub-
lican legislatures and endorsed by the Republican convention,
yet both were defeated by a 60 per cent, adverse vote, altho
McKinley got nearly 70 pea* cent, favorable vote and the Re-
publicans carried the state ticket also by a tremendous ma-
jority. This shows the independence of party ties which
usually characterizes a vote on a well-defined measure, and
illustrates the fact that "representatives," even when .acting
honestly, may not represent the real opinion of their con-
stituents. The total vote for governor was 380,000, and on
the amendments 276,000 and 261,000 respectively only
the more intelligent and fully posted voting on the latter.
2. New York voted on the Forestry Amendment passed
18
274 THE END OF CORRUPT LEGISLATION.
by two Republican legislatures and endorsed by the Repub-
lican Board of Forestry Commissioners. The amendment was
defeated by 400,000 majority, tho the Republican Presiden-
tial electors had over 200,000 majority. The vote on tho
amendment was 321,486 for and 710,505 against. The total
vote for President was 1,423,876.
3. In Minnesota nine amendments were submitted; one
was defeated and eight adopted, the favorable votes varying
from 90 to 58 per cent, on the different questions. Party lines
were not drawn 011 the amendments.
4. In Missouri four amendments were voted on. They
were not party measures and had not been discussed in the
papers. The people voted them all down, probably thru the
natural instinct of wholesome conservatism, that refuses to
make a change until the reasons for it and the effects of it are
understood. The votes on the amendments were respectively
57, 59, 62 and 80 per cent, of the Presidential vote, which
was 20 per cent, larger than the ordinary vote in a non-presi-
dential year.
5. Nebraska voted on twelve amendments. The votes
varied from 54 to 70 per cent, in favor of the amendments
and 50 to 53 per cent in favor of the various Populist candi-
dates. That is, the range of discrimination on measures wa?
five times as great as on men. This shows that there is less
partisanship and more judgment in voting on measures than
in voting on men.
6. The Colorado people defeated an amendment submitted
to them. It was complicated and not well understood, so that
few voted upon it. Those who voted did not act. on party
lines but opposed the amendment because it contained some
propositions thought to be suspicious, as possibly intended to
cover a job. The amendment was favored not only by the
legislature but by many state officers.
7. Idaho voted on three amendments, including one for
equal suffrage. They were not party measures, but were
brought before the people by an almost unanimous vote of
the legislature. The equal suffrage amendment was recom-
mended in the platform of every state convention. All the
THE POPULAR VETO.
275
amendments were adopted, equal suffrage by a TO per cent,
vote.
8. In Montana an amendment apparently beneficial was
overwhelmingly defeated because, as I am told, it was sus-
pected of concealing a trick.
9. In California six amendments were submitted by the
same legislature; three were ratified and three defeated. The
voting was not on party lines nor in any sort of agreement
with the action of the people's "representatives." The second
amendment was carried by 43,000 and the first was defeated
by 100,000 (162,945 against and 63,824 in favor). The high-
est vote on any amendment was 85 per cent of the total vote
for candidates.
10. Louisiana, Texas, Arkansas, Georgia, the two Dakotas
and AYashington also voted on constitutional amendments in
1896. Michigan has had twenty-nine referenda in twenty
years, most of them vaguely stated and not largely voted on. 1
The large experience of our cities and states with the true
referendum, a small part of which has been recited, appears
to establish some very important generalizations.
1. As a rule much greater discrimination is used in voting
on measures than in voting on men.
2. The referendal voting is largely independent of party
ties or the vote on men. Measure after measure is voted down
by the same citizens who sustain the party and re-elect the
legislature that proposes these measures. If it were not for
the referendum if the citizens had simply compound plat-
forms to vote for, with candidates and party politics to ob-
J For further cases of the use of the referendum and the initiative, see
the Direct Legislation Record. Vols. I to V, edited by Eltweed Pomeroy,
of Newark, N. J., President of the National Direct Legislation League; also
Oberholtzer's books, "King People" and "The Referendum in America;"
the statute books of the various states and the municipal records and re-
ports of cities and towns all over the United States. A number of referen-
dum votes were taken at the recent elections (November, '98). Those in
South Dakota, Washington and California wore of special importance, as
may appear hereafter. In California six amendments passed the legislature,
but only one was carried at the polls.
The principle of the Referendum is recognized in every election in
which the people are asked to vote for candidates in reference to their pro-
posed action upon the issues of the campaign; the theory is, that, In voting
for candidates who stand for certain measures, the people render a decision
upon those measures. The whole theory of our elections, therefor^, is
based on the right of the people to decide upon measures, tho the mixture
of issues rnd the unreliability of candidates make the present method of
carrying out the theory very imperfect.
276 THE OPEN DOOR OF PROGRESS.
scure and overwhelm the inanimate issue, the people could
not have expressed their will on the said measures they would
have been obliged to endorse measures they did not want in
order to elect the men they did want.
3. Laws passed by legislatures and councils are frequently
rejected by the people. "Representation" does not represent;
or, more precisely, unguarded representation frequently mis-
represents. Legislation by final vote of the people's delegates
cannot be relied upon to -represent the people's will, but on
the contrary, may be relied upon to fail in such representation
in a large proportion of cases, even when the delegates are
acting honestly, with the aim of carrying out the wishes of
the people.
4. The action of the referendum is conservative. Changes
not supported by strong reasons are voted down.
5. Complex measures and those not clearly understood are
apt to be defeated.
6. Anything that involves a job or political trick, or is sus-
pected of being tainted with corruption or injustice, is voteu
down on general principles.
7. There is an automatic self-disfranchisement of the unfit.
The more intelligent and public spirited citizens take the
trouble to understand the measures presented for decision and
vote upon them. The ignorant voter and the bigoted partisan
who constitute the curse of the ballot, sustaining corrupt ma-
chines and bosses and every political iniquity, are the very
ones who ordinarily care least about a referendum vote. There
are no offices or jobs to be won by it; no party success to be
scored by it; what's the use of voting on it? Lack of interest,
carelessness or lack of knowledge and a fear that they might
vote in the dark against their interest eliminates their vote, to
the great purification and elevation of the ballot. Referenda
on the liquor and gambling questions are, of course, excep-
tions. The political slums do vote in such cases, but the civic
enthusiasm and educational energy of the better citizens, in
prospect of a clear-cut vote on such an issue, generally lifts
the ballot almost or quite as much as the omission of the slum
vote in ordinary cases.
THE POPULAR INITIATIVE. 277
8. It is clear that Direct Legislation is not only in entire
accord with American feeling and history, but is deeply im-
bedded in our institutions. Both the principle and the prac-
tice of the referendum are familiar to our people, and its
methods are not only in constant use in our system of law-
making, but have a monopoly of a considerable space at each
end of the scale of legislation that is under discussion, 4 and
are open to engagements at the option of the legislative au-
thorities at all intermediate points.
Direct Legislation is the sole method used at the top of the
scale in making and amending state constitutions; and at the
bottom of the scale in many states in the legislation of towns
and school districts. In the intervening spaces, city, county
and state legislation, the initiative or referendum or both
may be put in practice whenever and wherever the legislators
and councilmen so desire. The only difference is that at the
ends of the scale the referendum is either compulsory or else
the option rests with the people, whereas in general as to in-
termediate areas the referendum is not compulsory, and the
option is not with the people, but with the legislators. Now
it is an undoubted fact that looking at the matter in a broad
way, the legislation at the two ends of the scale we are con-
sidering is vastly superior to the legislation in the intervening
fields. Our constitution and the acts of our town and school
district meetings are on the whole just, public-spirited, clear,
concise, the pride of our jurists, historians and philosophers
incomparably the best legislation we have; while our statutes
and the acts of our city councils are voluminous, complex,
ambiguous, tainted with corruption and saturated with the
spirit of private interest a by-word all over the civilized
world, so that government builders in Australia urge upon
4 I do not include national legislation. It seems to me that the safest
and best plan is to extend the referendum to city and state legislation over
a considerable portion of the country before we attempt to deal with the
initiative and referendum in Federal affairs. It is best to solve the simpler
problems first, that we may be better prepared to solve the more difficult
ones. The city referendum is the key to the state referendum, and both
will lay the foundation for the national referendum. The principles and
arguments involved, however, are practically the same thruout, and expe-
rience, discussion and research in any department of Direct Legislation
throws light on the whole question. Moreover, in the present condition
of our law it is impossible to separate state and municipal government.
These facts may explain to the reader the method of treatment adopter!
in this chapter.
278 THE CITY FOE THE PEOPLE.
their people the necessity of avoiding a reproduction of the
American system; a disgrace to our civilization, a menace to
our institutions. It would require a Swift or a Carlyle to
find words to describe the botch work with which our statute
books are annually disfigured, the inefficiency, confusion and
corruption that have flowed from the abuse of the representa-
tive principle.
In the field where the referendum is compulsory, or at the
option of the people there is little or no trouble; but in the
field where this is not true there are legislative evils, the rem-
edy for which is universally regarded as one of the greatest
problems of the age. Is it not clear common sense to try in
the middle areas the method that works well at both ends?
Is it not worth while at, least to try the experiment of using
the successful method in place of the unsuccessful one? es-
pecially as the only change required is the very simple and
obviously just and proper one of transferring the referendal
option from the people's delegates to the people themselves,
so that city and state enactments 1 may be brought within
the rule that applies to town affairs and constitutional provi-
sions, sweeping the whole extent of state and local legislation
within the control of the beneficent principle of actual, con-
tinuous and effective popular sovereignty. In almost every
state we have a solid stone road at each end of the legislative
highway, with a treacherous bog in the middle. Shall we not
build the stone road thru the bog, so we shall have, from end
to end, a safe and solid roadway?
There can be no doubt about the answer that is due to these
questions. The referendum has shown itself the best of all
the legislative methods known to us, and it is the part of wis-
dom to extend its field of usefulness, and apply it to correct
the abuses resulting from less efficient methods. If a farmer
should find that a method in use in two of his fields produced
far better results, with less expense, than the methods he used
on the rest of his farm, he would be a f - if he did not ex-
temd the use of that better method to all the fields he possessed
to which the said method was reasonably applicable.
1 See last preceding note.
DIRECT LEGISLATION. 279
THE MOVEMENT IN AMERICA.
To Perfect the Representative System by Fuller Provisions
for tJie Initiative and Referendum.
A. ACCOMPLISHED FACTS.
That our people believe in real self-government and are
not insensible to the benefits to be derived from an extension
of the rights of effective petition for the enactment or submis-
sion of a law or ordinance, is shown by the splendid progress
made in recent years toward a fuller provision for the use
of the initiative and referendum.
1. San Francisco has adopted the initiative and referendum
(on a 15 per cent, petition) in respect to all ordinances and
amendments to the charter to which the people choose to ap-
ply them, and ordinances involving the grant of a franchise
for the supply of light or water, or the lease or sale of any
public utility or the purchase of land worth more than $50,-
000, must be submitted to the people. (May, 1898. See
Chapter III.)
2. Alameda, Buckley, Seattle and Blacksburg have also
adopted Direct Legislation. The percentage for effective pe-
tition runs from five per cent, in Buckley (Washington) to
51 per cent, in Blacksburg (Virginia), which is a small place
with a large idea of economy, the result being a plan for the
initiative and referendum all in one, the petition being large
enuf to carry the proposition without any separate referen-
dum vote. This does not seem a wise plan. A moderate per-
centage of the citizenship ought certainly to have the right of
bringing a matter before the people for decision by secret and
authentic ballot.
3. Seattle, Washington, with 42,000 inhabitants, adopted
the initiative and referendum by a strong popular vote. Five
times the local bosses and aristocracy prevented the question
from going to the people, but at last the long struggle was
won. It takes 25 per cent, of the voters to exercise the initia-
tive as the law now stands, but the beauty of a D. L. Law,
even with a high percentage, is .that it places it in the
power of the people to reduce the percentage to 5 or 10 per
_'M> GOVEltXMEA'T BY AND FOR THE PEOPLE.
cent, whenever they see fit. It was probably a wise thing
under the circumstances to begin with a high percentage, be-
cause a law framed in this way could be more easily carried,
and the initiative once in the people's possession, they can
amend the law and put the percentage wherever they choose.
4. The charter of Greater New York was submitted to the
people for approval or rejection. The referendum principle,
however, has not been given its due control inside the charter.
5. In five states municipalities have been given the right
to adopt home-made charters by referenda! vote, and in throe
of these states the popular initiative is provided for, Minne-
sota, requiring only an 8 per cent, petition to frame a new
charter and a 5 per cent, petition for the submission of an
amendment to the charter. (See Chapter III, Comments on
Table I.) In a sixth state, Ohio, a strong movement is on foot
to obtain a constitutional amendment giving municipalities a
right to frame their own charters on petition of 5 or 10 per
cent, of the voters of the municipality. As Mayor Jones, of
Toledo, and other prominent men are leading the movement,
it is likely to be a success.
6. The municipal initiative in respect to street franchises
and public ownership of public utilities has been recognized
by several states in their recent legislation, and the referen-
dum by many states. (Chapter III.)
7. It is coming more and more to be the custom, even in
special legislative grants of franchises, etc., to insert a clause
requiring submission of the matter to a vote of the people in
the locality affected.
8. It has come to be the practically universal custom to re-
quire a municipal referendum 011 local bond issues, and other
questions of indebtedness.-
9. Nebraska passed a law in 1897 providing for municipal
Direct Legislation on a 15 per cent, petition, or 20 per cent,
if a special election is desired to determine the matter at issue.
But only one special election can be held under this act in
any one year unless the petitioners for it shall deposit with
the city or village clerk a sum of money equal to the expense
of such election.
THE INITIATIVE AXD REFERENDUM. 281
The right to propose ordinances for the government of any
city or other municipal division of the state may be exercised
by 15 per cent, of the voters of such city or municipal divi-
sion as well as by the mayor and councilmen or other gov-
erning authorities of the municipality. The petition must
contain the full text of the proposed ordinance. If the mayor
and council pass the proposed ordinance within thirty days
after the petition is filed, the matter apparently does not go
to the polls unless there is a petition for a referendum. If
the council amend the proposed ordinance, both the original
proposal and the amended ordinance go to the people.
No ordinance passed by the council, except an urgency
measure, goes into effect till thirty days after its passage, and
the voters by a 15 per cent, petition, filed with the city clerk
within said thirty days, may demand a referendum on the
ordinance at the next general election, or by a 20 per cent,
petition they may require a special referendum, which must
be held not less than fifteen nor more than twenty days after
the filing of the petition. Ordinances relating to the imme-
diate preservation of public peace or health or items of appro-
priation of money for current expenses, which do not exceed
the corresponding appropriations of the preceding year shall,
by unanimous yea and nay vote of the council and the ap-
proval of the mayor, he deemed to be urgency measures.
The law does not go into effect in any city until accepted by
the voters thereof. 1
This is a condensation of the chief provisions of the act.
It is much longer and contains more detail than need be, and
is by no means perfect in other ways. The 15 per cent, re-
quirement is too high; it makes the use of the referendum
too cumbersome and difficult. There is reason to believe, also,
that in respect to some matters, such as ordinances involving
important franchise grants, the referendum should be obliga-
tors'. Again the percentages and methods adapted to the
1 Party lines were drawn to some extent in the vote on this Nebraska
bill, the Republicans voting against it. This probably arose chiefly from the
fact that the bill was introduced by their "political opponents. One of the
main causes of the strength of the measure was the support it received
from the various labor organizations.
282 THE END OF CORRUPT LEGISLATION.
municipal initiative and referendum in one place may not be
best in another place, wherefore it would have seemed wiser
to authorize the adoption of the principle of Direct Legisla-
tion by any municipality, and let it make its own laws as to
percentages and methods of carrying out the principle, sub-
ject, perhaps, to a few broad limitations, such as the obligatory
franchise referendum and a minimum, percentage, altho even
these matters might safely be left to the municipality in most
cases, if real home rule were bestowed upon it.
10. The Arizona Territorial Legislature in 1897 passed a mu-
nicipal Direct Legislation bill applying to cities casting a vote
between 600 and 1,000. Petitions must be signed by 30 per
cent, of the legal voters of the city, of which signers one-half,
at least, must be taxpayers. It is a clumsy law, and applies at
present only to the city of Prescott, but it is a good entering
wedge, and a territorial law may have great strategic value,
because it requires the approval of Congress, and may be the
means of bringing the subject of Direct Legislation to discus-
sion and vote in Washington, thus drawing the attention and
thought of the people to the matter in a new and vital way,
and possibly securing the endorsement of the National Gov-
ernment for the Referendum Principle.
11. In November, 1898, the people of South Dakota
adopted a constitutional amendment securing the initiative and
referendum in state and municipal affairs. 1 A five per cent,
petition is sufficient for either the initiative or referendum,
end all measures passed by the people's representatives are
subject to referendum petition except such laws as may be
necessary for the immediate preservation of the public peace,
health or safety, or support of the government and its existing
public institutions.
The provision is brief, sweeping, strong; but lacks some-
what in definiteness. Note especially the failure to name
any period between the passage of a law and its taking effect,
during which a referendary petition may be filed. An ad-
lists T? n^rt *t * ^ as carrled thru t^ legislature mainly by the Popu-
ceived } L P vnt ' ^ he n Se ^ ate r> (1897) by a P art r te - but in the House re-
e votes of all the Populists, six Republicans and two Democrats.
THE POPULAR VETO. 283
verse legislature granting a corrupt franchise or ''railroading
thru" a dangerous law might evade the referendum by mak-
ing the petition period too short. The amendment says that
the legislature shall "enact and submit" laws proposed by the
people. It would be better to say that the Governor or Sec-
retary of State shall submit proposed laws, unless enacted as
proposed, in which case they should be subject to referendary
petition, as in other cases. A Direct Legislation amendment
should also state distinctly that the people may propose
amendments to the state constitution or the city charter, and
that no state enactment adopted by the people shall be re-
pealed or amended by the legislature without submitting the
matter to the people, and that no municipal enactment adopted
by the citizens shall be altered or repealed by the city council
or municipal authorities without a referendum.
12. The Oregon Legislature has passed a D. L. Constitu-
tional amendment, which, if approved by the next legislature,
will be voted on at the polls in June, 1902. The law does not
apply to municipalities, but only to state enactments.
The initiative requires an 8 per cent, petition filed with the
secretary of state at least four months before the election at
which the measure is to be voted on.
The referendum may be ordered by the legislature, or may
be demanded (except in urgency cases) by a 5 per cent, peti-
tion filed with the Secretary of State within 90 days after the
final adjournment of the legislative assembly on whose action
the referendum is sought. Laws necessary for the immediate
preservation of the public peace, health or safety are urgency
measures.
The vote in the legislature was overwhelming and abso-
lutely non-partisan 43 ayes to 9 noes in the House, and 20
ayes to 8 noes in the Senate. It was introduced in the House
by a Republican and in the Senate by a Populist, and not a
man in either house attempted or suggested anything of a
partisan nature in the discussion and ^assage of the bill. 1
1 Direct Legislation Record. Vol. VI, j>. 1. Sincp this chapter was set
tip the Legislature of Utah has passed a D. L. amendment to be submitted
to the people at the next general election. See infra Appendix on "Legis-
lative Forms."
284 THE OPEN DOOK OF PROGRESS.
B. EFFORTS.
In the last few years Direct Legislation amendments or
laws have been introduced in almost every legislature in the
country. In 1897 Direct Legislation measures were intro-
duced in the Legislatures of Indiana, Ohio, Michigan, Wis-
consin, North Carolina, Delaware, New Jersey, Maine, Mas-
sachusetts, Missouri, Minnesota, Iowa, Kansas, Nebraska,
Colorado, "Washington, Montana, Idaho, etc. It is said that
"every state legislature west of the Mississippi, except, per-
haps, Arkansas and Louisiana, had a Direct Legislation meas-
ure before it." 1 Before that amendments had been pushed
in Massachusetts, New York, New Jersey, Illinois, Minnesota,
Nebraska, Kansas, both Dakotas, Colorado, Montana, Idaho,
Oregon, "Washington, California, and perhaps elsewhere. In
some states vigorous work has been done for the referendum
at every opportunity since 1894. In a number of cases the
measure has passed one House, and in some cases both Houses
(but failed for lack of a 2-3 vote, or for some other reason),
and in still other cases the bill came within a few votes of
passing. 2
In "Washington a Direct Legislation amendment passed the
House (1897) by a vote of 63 to 12. In Kansas an amend-
ment drafted by Chief Justice Doster and Senator Young
passed the Senate 29 to 10, and the House 76 to 42, the Ke-
publicans for the most part voting against it and the Demo-
crats and Populists for it. It needed 8 more votes for the
necessary two-thirds. The bill required 15 per cent, for
effective petition. In Montana a Direct Legislation amend-
ment passed the House 41 to 27 21 Populists, 19 Democrats
and 1 Republican for it; 21 Democrats and 6 Republicans
against it; defeated for lack of the needful two-thirds vote.
The bill engrossed the attention of the legislature for 23 day?,
and held all other legislation in check until it was decided.
The Hon. M. J. Elliott, who introduced the measure, says:
'Direct Legislation Record, Vol. IV, p. 21; see also p. 6.
"Several D. L. bills were introduced in the "09 session of the Penn.
Legislature. One of them was very generally and favorably commented on
by the press of the state, but it died in committee. See Appendix. "Leg-
islative Forms."
THE POPULAR INITIATIVE. 285
;i lt took the combined force of plutocracy among the Repub-
licans and Democrats to defeat it." It called for 21 per cent.
petitions, which is high, yet the law would open the way for
the reduction of the percentage by a vote of the people on that
point alone, disentangled from the claims of parties or candi-
dates, or the pros and cons of other issues. Xext year a bill
is to be introduced with provisions for 10 per cent, petitions.
In 1894 the Hon. Richard AY. Irwin, a leading Republican
of Massachusetts, introduced a bill giving Direct Legislation to
such cities as might accept the act. He secured the passage of
the bill thru the House by a vote of 150 to 3, but it was lost
in the Senate, altho Direct Legislation was advocated in every
political platform in the State,
In oSTew Jersey a Direct Legislation amendment came
within 2 votes of a favorable issue. It was introduced in 1894
by the Hon.. Thomas McEwan, the Republican leader of the
House, 1 and was championed in the Senate by Mr. Adrian,
the leader on the Democratic side and a former President of
the Senate. The Legislature listened to addresses in favor of
the amendment by Mr. J. L. Sullivan, the author; Samuel
Gompers, President of the American Federation of Labor;
Key. H. D. Opdyke, representing the Farmers' Alliance; Sam-
uel J. Sloan representing the Prohibitionists of the state,
and other men of weight, including some of the officers of the
National Direct Legislation League.
The Rev. Opdyke said in part:
"Make the Referendum the law of the state and a less number of
officers will be needed to administer the government, and they will
work at reduced salaries, to the relief of the taxpayers
Pass this amendment and the licensed liquor traffic of the state
will be swept out of existence as if struck by a western cvclone.
This is not a party measure. It is approved by all
parties Democrats, Republicans, Prohibitionists and Populists
work together for it The people are determined to
get the government back to themselves. It is an absolute necessity.
In conclusion let me say that as farmers we have never
asked for much from the legislature, and the little we have asked
1 Mr. McEwan afterward went to Congress, and has introduced Direct
Legislation resolutions into the last two Congresses and in the Republican
National Convention of 1896, but his efforts have not received as much en-
couragement in these quarters as could be wished.
286 THE CITY FOR THE PEOPLE.
is not yet in sight. But the farmer demands the enactment of this
measure. He wants to do some lawmaking himself, and you may
rest assured that when the farmers, as well as the lawyers, become
law-makers, we will have fewer laws but better government, less
evil and more virtue."
Mr. Sloane said :
"We have submitted petitions in which there were thousands of
names of the best citizens of our state, only to see these petitions
laughed and scoffed at, smothered in committee, and in one in-
stance thrown around the chamber from member to member, as a
lot of school boys might pelt each other with paper snowballs. We
have seen these so-called representatives cowering under the lash
of the bosses, doing the bidding of thieves in opposition to their
own expressed sympathies and beliefs."
C. THE RISING TIDE OF THOUGHT.
The drift of public sentiment toward the extension of the
initiative and referendum to city, state and ultimately to
national legislation, is one of the most emphatic tendencies
of our time.
Professor A. V. Dicey, of Oxford University, wrote on the Refer-
endum in The Nation in 1886.
In 1888 Boyd Winchester, U. S. Minister to Switzerland, began to
write about Swiss institutions.
In 1889 Professor Bernard Moses published an essay on "The
Federal Government of Switzerland," and Sir Franpis Adams'
"Swiss Confederation" appeared the same year.
In 1890 the Universal Review contained an article on the Refer-
endum, by E. A. Freeman, and W. D. McCrackan wrote a series of
letters on the Initiative and Referendum for the New York Evening-
Post, and followed them with articles in the Arena, Atlantic and
other periodicals, and with lectures in various places.
In 1891 Boyd Winchester's book, "The Swiss Republic," came out,
and some of McCrackan's articles appeared in the Arena, etc.
In 1892 McCrackan's "Rise of the Swiss Republic" and J. W. Sul-
livan's "Direct Legislation thru the Initiative and Referendum"
were published. Mr. Sullivan had been studying Direct Legislation
for some years; had been to Switzerland in 1888 to study the sub-
ject in the home of its highest development. He began to write
about it in the New York Times in 1889, and his book, published
three years later, is undoubtedly the best popular statement of
the subject yet made.
In 1894 Mr. Sullivan started the Direct Legislation Record, the
editorship of which was afterward transferred to Mr. Eltweed
Pomeroy, of Newark, N. J. The Record is beyond question the
DIRECT LEGISLATION. 287
finest publication devoted to one specific reform that has yet ap-
peared in America.
The first Direct Legislation organization was formed in Newark
In 1892. There is now a National Direct Legislation League, of
which Mr. Pomeroy is president.
Such was the beginnings of effective thought on this subject
in England and the United States. To-day it requires six or
eight pages of small type to record the titles of the books
and leading articles that have been published in this country
on the subject of Direct Legislation. The popular movement
began in 1892, with the publication of Mr. Sullivan's book,
and has been greatly aided by Mr. Pomeroy's editorial work
in the Direct. Legislation Record, together with his extensive
lecturing tours and skillful efforts to establish centers of Di-
rect Legislation work in various parts of the nation, and to
strengthen the National Direct Legislation League. To the
work of these two men and the inherent sense and justice of
their cause is largely due the fact that now, after less than
six years of discussion, over three thousand newspapers and
magazines favor Direct Legislation, and at least four millions
of voters are ready to sanction its principles at the ballot box.
With the single exception of the Public Ownership of Mono-
polies, no other progressive idea has had anything like so rapid
a growth as this.
Those who have read this chapter from the beginning will
realize (if they did not do so before) that there is nothing par-
tisan about the referendum movement. Further proof of
this is found in the fact that the measure has received strong
support from the press of all shades of political partisanship
Republican, Democratic, Prohibition, Populist and Socialist.
In. some states it has been made a plank in the platform of
everv party in the state, and thruout the country numerous
platforms Republican, Democratic, Prohibition and Popu-
listic have declared in its favor. The National Convention of
the People's Party at St. Louis in 189 6 put a Direct Legislation
plank in the platform and ordered the use of the initiative
and referendum in the internal government of the party. A
Direct Legislation plank has been adopted by the party in
288 GOVERNMENT BY AND FOR THE PEOPLE.
every state where it has an organization, except in a few south-
ern states. Democratic state conventions in Illinois, Michi-
gan, Massachusetts, Minnesota, Nebraska, Ohio, California,
Washington, Oregon and other states have adopted vigorous
Direct Legislation planks, and a strong effort was made by
William J. Bryan and other leaders to put it in the National
Democratic platform, made at Chicago in 1896. It came
within one vote in committee. One more progressive man
would have put the heart and soul of Democracy
into the Chicago platform. The Prohibition party has
put a Direct Legislation plank into several of its
state platforms, and might have adopted the one pro-
posed for the National platform in 1896 if the Conven-
tion had not split on the money question before it got a chance
to consider the Direct Legislation plank. The Republican
party has adopted Direct Legislation in some of its state con-
ventions, and it was urged by Congressman McEwan for the
National platform in 1896, but failed of success. The Lib-
erty Party, the Union Reform Party, the National Party,
the Union Party, the Single Taxers and the Socialists have
all declared in favor of the referendum. In England the
Conservative Party has stated the referendum as one of its
leading aims, and in Australia a powerful movement is on foot
to secure the obligatory referendum in case of any deadlocks
or legislative disagreement between the two Houses. 1
Those of every party who believe in government by the
people favor the extension of the referendum. So do those
who see the irresistible drift toward democracy, and wish that
the movement may be smooth and peaceful instead of harsh
and explosive. Even far-sighted men of wealth and power
without much philanthropy favor the referendum, because
they understand that the people are more just and wisely
conservative as well as more wisely progressive than the ordi-
nary legislature, congress or parliament. Only the short-
sighted, reckless plutocrats and politicians, and those who are
THE INITIATIVE AND REFERENDUM.
289
tin icillmg to trust the people, or do net wish them to govern
themselves only such oppose the referendum.
Among the supporters of Direct Legislation are such Re-
publicans as John Wanamaker, Governor Pingree
Senator Irwin and Congressman McEwan; such Dem-
ocrats as William J. Bryan and Geo. Fred. Williams; such
Populists as Senator Clarion Butler, Chief Justice Doster and
Hon. Ignatius Donnelly; such Prohibitionists as Ex-Gov. St.
John and John J. Woolley; such writers as Henry D. Lloyd,
B. O. Flower, Prof. R. T. Ely, Prof. J. R. Commons, Prof. E.
W. Bemis, Wm. Dean. Howells and Charles M. Sheldon; such
preachers as the Rev. B. Fay Mills, Dr. Lyman Abbott, Dr.
George C. Lorrimer, Rev. Russell H. Conwell and Rev. Wash-
ington Gladden, and such leaders of labor as Samuel Gompers
and Eugene V. Debs organized labor is, in fact, almost a
unit for Direct Legislation.
We have seen the Farmers' Alliance and Industrial Union
with three million members, and the American Federation of
Labor, nearly a million strong, stand shoulder to shoulder on
this great issue, heartily endorsed by the farmers, and until
December, 1894, the sole political demand of the Federation
of Labor. The Knights of Labor, the Brotherhood of Loco-
motive Engineers, the order of Railway Conductors, and
many other labor organizations favor Direct Legislation. A
considerable number of trades unions use the initiative and
referendum in their own affairs.
The movement is endorsed not only by a large part of the
press l and by various political parties and labor organizations,
but also by church conferences, 2 Christian Endeavor Societies,
Ep worth Leagues, Good Roads Associations and numerous
other societies. And in private conversation, according to my
experience, five out of six persons admit the fairness and de-
sirability of Direct Legislation as soon as they understand
what it means.
1 It Is estimated that "more than 3,000 newspapers and magazines are
advocating direct legislation as a primary reform." A. A. Brown in Arena,
Vol. 22, p. 98. The number stated amounts to about one-seventh of the total
pressof the country.
- Direct Legislation Record, 1896, p. 18.
19
290
THE END OF CORRUPT LEGISLATION.
Among the eminent men and women who have advocated
the extension of Direct Legislation are the following:
Gov. Pingree, of Michigan. William J. Bryan.
Rev. Russell H. Conwell.
Prof. John R. Commons.
Hon. Geo. Fred. Williams.
Wm. Dean Howells.
Rev. B. Fay Mills.
B. O. Flower.
Prof. George D. Herron.
Sir Francis Adams.
Arthur J. Balfour.
K O. Nelson.
Rev. W. I. Rainsford.
Gov. Thomas, Colorado.
George E. McNeill.
Pres. G. Droppers.
Prof. E. W. Bemis.
Robert Treat Paine, Jr,
Gov. Walcott, Mass.
Gov. Smith, Montana.
Rev. W. D. P. Bliss.
U. S. Sen. Marion Butler.
Con. D. B. Henderson, la.
Dr. C. F. Taylor.
Hon. John G. Woolley.
Prof. Dicey.
Ex-Mayor McMurray, Denver. May or Jones, Toledo.
Prof. George Gunton. Prof. Helen Campbell.
Edward Bellamy. Frances E. Willard.
Thomas Jefferson. Abraham Lincoln.
Other eminent persons favorable to the extension of the
referendum have been named in preceding paragraphs, and
still others I know to be favorable, but have nothing definite
in writing or print expressing their views.
It may be well to quote a few lines from some of the think-
ers named in order to show how emphatic their attitude is
and the grounds of their belief.
Rev. Washington Gladden.
Mary A. Livermore.
Samuel Gompers.
Hon. John Wanamaker.
Rev. Lyman Abbott,
Robert Blatchford.
Lord Salisbury.
Edwin D. Mead.
Henry D. Lloyd.
Rt Rev. F. D. Huntington.
Rev. R. Heber Newton.
John S. Crosby.
Hon. C. 0. Post.
Florence Kelly.
Pres. Thos. E. Will.
Ex-Gov. John P. St. John.
Gov. Lind, Minnesota.
Gov. Rogers, Washington.
J. St. Loe Strachey.
Gov. Lee, South Dakota.
IT. S. Senator Pettigrew.
Dr. George A. Gates.
Lord Rosebury.
Prof. Lecky.
THE POPULAR VETO. 29 1
Wm. Dean Howells said in a letter to me dated May 22,
1897:
"I am altogether in favor of the Initiative and Referendum as
the only means of allowing the people really to take part in making
their laws and governing themselves."
A letter from Rev. Lyman Abbott contains these words:
"In my judgment the remedy for the evils of democracy is more
democracy; a fresh appeal from the few to the many; from the
managers to the people. I believe in the Referendum, and, within
limits, the Initiative, because it is one form of this appeal from
the few to the many."
The Hon .John Wanamaker wrote me in August, '97 :
"I heartily approve of the idea of giving the people a veto on
corrupt legislation. The movement to secure for the people a more
direct and immediate control over legislation shall have my sup-
port. I trust such a movement will receive the thoughtful atten-
tion of all who would improve our political and industrial condi-
tions. I am willing to trust public questions to the intelligence and
conscience of the people."
In July, '97, I received the following from Frances E. Wil-
lard, the great President of the World's Woman's Christian
Temperance Union:
"I believe in Direct Legislation, and think it is so greatly needed
that language cannot express the dire necessity under which we
find ourselves. The reign of the people is the one thing my soul
desires to see; the reign of the politician is a public ignominy. I
also believe that Direct Legislation is certain to become the great
political issue in the immediate future. The people are being edu-
cated by events. They are coming to see that there is no hope for
reform under the existing system of voting."
The following is from a letter postmarked June 5, 1897,
from Henry D. Lloyd, author of "Wealth Against Common-
wealth" and "Labor Copartnership:"
"Direct Legislation the Initiative and Referendum must be
supported by every believer in free government The
people have carelessly allowed their delegates in party, corpora-
tion and government to become their rulers, and now they are
awakening to the startling fact that the delegate has become their
exploiter. The people are losing control of their means of subsistence
because they have lost control of their government, the most powerful
instrumentality for the creation and distribution of wealth in so-
ciety. Its government must be recovered by the American people
292 THE OPEN BOOK OF PEOGKESS.
peaceably, if possible; but it must be recovered. Direct Legislation
would be the ideal means for this peaceable revolution. If the
revolution is to be acomplished otherwise, Direct Legislation will
stand forth in the new order as the only means for expressing the
popular will that a free people will exercise. No future republic
will ever repeat the mistake of giving- its delegates the opportunity
to become its masters." l
Wm. Jennings Bryan, the famous orator and Democratic
leader says:
"Democracy is not merely a party name. Democracy has a mean-
ing. Democracy means a government in which the people rule,
and that is all we ask for. We are willing to submit any question
that concerns the people of this country to the people themselves."
"The principle of the initiative and referendum is democratic.
It will not be opposed by any democrat who indorses the declara-
tion of Jefferson, that the people are capable of self-government,
nor will it be opposed by any republican who holds to Lincoln's
idea that this should be a government of the people, by the people
and for the people."
Samuel G-ompers, President of the American Federation of
Labor, with nearly a million members, writes these weighty
words:
"All lovers of the human family, all who earnestly strive for
political reform, econotaic justice, and social enfranchisement,
must range themselves on the side of organized labor in this de-
mand for Direct Legislation."
Lord Salisbury, the great English statesman, prime minister
and leader of the Conservative party of Great Britain, has said :
"I believe that nothing could oppose a bulwark to popular pas-
sion except an arrangement for deliberate and careful reference
of any matter in dispute to the votes of the people, like the ar-
rangements existing in the United States and Switzerland."
The Eev. B. Fay Mills, the celebrated evangelist and elo-
quent preacher, writes:
"I will hold up both hands for the Initiative and Referendum.
I sometimes think I agree with those who feel that this should
be the next step in social reconstruction, as I certainlj- believe it
will be productive of all others."
1 These and other letters were loaned to President Pomeroy, and appear
In Senate Document, 340, 55th Congress, second session, July 8, 1898.
THE POPULAR INITIATIVE. 293
Prof. Lecky, Conservative Member of Parliament and
author of "Democracy and Liberty," "History of European
Morals," etc., says:
"The referendum would have the immense advantage of dis-
entangling issues, separating one great question from the many
minor questions with which it may be mixed. Confused or blended
issues are among the greatest political dangers of our time. . . .
The experience of Switzerland and America shows that when the
referendum takes root in a country it takes political questions, to
an immense degree, out of the hands of the wire-pullers and makes
it possible to decide them mainly, tho perhaps not wholly, on their
merits, without producing a change of government or of partj"
predominance."
Prof. George D. Herron says:
"Not the centralization but the diffusion of power is the safety
of the present."
Dr. George A. Gates, President of Iowa College, writes?
"I have more confidence in Direct Legislation as a means of ap-
plying the principles of a true democracy to our public affairs
than in any other movement before the public. Our American de-
mocracy is very democratic in form, but as matters now stand ,
very undemocratic in fact."
J. St. Loe Strachey, editor of the London Spectator, says:
"The man who refuses to agree on the referendum cannot be true
to the essential principle of democratic government."
Andrew Jackson said in his inaugural:
"So far as the people can, with convenience, speak, it is safer
for them to express their own will."
Governor Pingree strongly endorses the referendum prin-
ciple, and in respect to important municipal franchises, would
make the submission obligatory. In his message to the 40th
Michigan Legislature, p. 28, he urges "the passage of an act
making it requisite to the validity of a franchise in the streets
of any municipality that the ordinance granting such rights
shall be voted upon and approved by the citizens."
Professor Geo. Gunton, a New York editor and Republican
defender of trusts and monopolies, yet a believer in good gov-
ernment, discussing the initiative and referendum of the San
Francisco charter, says:
294 THE CITY FOB THE PEOPLE.
"Whether much use is made of this privilege or not, it will un-
doubtedly create among- San Francisco's aldermen a livelier sense
of the representative character of their office and a keener regard
for the course of public opinion." And then, speculating upon the
possible results of inaugurating such a system in New York city,
he adds: "Extension of educational facilities and various public
improvements could either be voted directly, or a club held over
the head of the Administration and Municipal Assembly which
would very materially stimulate progressive action on their part.
Then, too, there would undoubtedly be fewer franchises granted
for inadequate compensation, and fewer contracts let to political
favorites if it were known that all such ordinances could be
promptly vetoed by a plebiscite."
Hon. John G. Woolley, the great temperance orator, says:
"It ought to be possible for the people to order a plebiscite upon
the liquor question or any question that seems great enuf to them.
The Initiative and Referendum would be dignified,
conservative, simple, safe, powerful I am by instinct
and training an adherent to the Hamiltonian idea of government,
but my reason, my intelligence impels me to assent to Direct Leg-
islation as necessary to the continuance of our free institutions."
Do not fail to note how constantly the opinions cited em-
phasize the idea that Direct Legislation is essential to self-
government. That fact lies at the heart of the whole discus-
sion. I have sometimes listened to men dispute about the
referendum for half an hour or more, and then, when it was
possible to get a word in edgewise, asked if they believed in
self-government here in America, and on a favorable reply,
which has rarely failed, I have said, "Well then you believe
in the referendum, for it is nothing but self-government, and
self-government is impossible without it. There may be dif-
ficulties in extending the referendum, as there usually are in
any great advance, but remember they are difficulties with
self-government; and if you. really believe with the great mass
of the American people that self-government is right and
necessary for justice, safety, manhood, education and devel-
opment, it is your duty to set about trying to overcome what-
ever difficulties you find in the way." I have yet to see the
person who has any answer to make to this if the justice of
Belf-government is once admitted, so manifest is it that the
referendum and self-government are one and the same thing.
DIRECT LEGISLATION. 295
We have seen, in the early part of this chapter, that
Thomas Jefferson believed in Direct Legislation (tho that ex-
pression was then unknown), p.nd tried to get it into the
Virginia constitution. Some paragraphs from his writings
show how strong was his feeling:
"Governments are republican only in proportion as they embody
the will of the people and execute it ...... vVere I to assign
to this term (a republic) a precise and definite idea, I would say,
purely and simply it means a government by its citizens in mass,
acting directly and personally according to rules established by the
majority, and that every other government is more or less repub-
lican in proportion as it has in its composition more or less of
this ingredient of the direct action of the citizens ......
The further the departure from direct and constant control by the
citizens, the less has the government of the ingredient of republi-
canism ...... And believing, as I do, that the mass of the
citizens is the safest depository of their rights, and especially that
the evils flowing from the duperies of the people are less injurious
than those from the egotism of their agents, I am a friend to that
composition of government which has in it the most of this ingre-
dient ...... An elective despotism was not the government
we fought for."
Abraham Lincoln was also a believer in the principle oi
Direct Legislation, and sought to put it in practice to settle
one of the most momentous questions in our history. His
famous phrase, "a government of the people, by the people,
and for the people," is an exact definition of a system based
upon and effectively controlled by Direct Legislation, and it
will not harmonize with any other system.
In 1854 Mr. Lincoln said at Peoria, " According to our
ancient faith, the just powers of government are derived from
the consent of the governed. * Allow all the governed
an equal voice in the government, and that and that only is
self-government . ' '
Early in the war Lincoln made an effort to secure an ar-
rangement that would terminate hostilities and settle the
questions of union or disunion and slavery or no slavery by
means of a direct vote of the whole people. Gentlemen were
sent to talk with the President and Secretary of the Confed-
eracy to see if an agreement could be made to go to the people
with two propositions peace with disunion and confederate
296 GOVERNMENT BY AND FOE THE PEOPLE.
independence as the southern proposition and peace with
union, emancipation, no confiscation, and universal amnesty
as the northern proposition; the citizens of all the states north
and south to vote "yes" or "no" on these two propositions at
a special election, both governments to hold themselves bound
by the result of the vote. If such an agreement had been
made it is probable that union and emancipation would have
been secured without further strife. A large number of citi-
zens even in the south were Union men, and perhaps the high
probability of a Union majority in the referendum was what
influenced Pres. Davis to refuse to entertain the proposal for
a settlement by ballot a Union majority would mean the
collapse of his Presidency. 1
THE REFERENDUM MOVEMENT
Part of a World Movement toward Liberty, Peace and Democracy.
A little more than a hundred years ago every nation in the
civilized world was under an absolute aristocracy. There were
some gleams of freedom, in England she had her Magna
Charta and Bill of Rights and her House of Commons, but
the suffrage was exceedingly limited and the distribution of
representation outrageously unjust, the majority of seats in
the House being controlled by a few nobles and men of
wealth. Only in local affairs did the principles of self-gov-
ernment find anything like adequate expression.
Transplanted in America local self-government and the fun-
damentals of the Magna Charta and the Bill of Rights grew
into the ideal of complete self-government. England trod
upon this ideal, and it took up arms and drove the monarchy
out of the colonies.
Voltaire and Rousseau stirred the mind and heart of Europe.
English thought, transformed and glorified in the flames of
our Revolution, was taken to France by Eranklin, Paine and
Lafayette, and by the French soldiers returning from America.
France took fire, and the French Revolution burned up the
Bourbon throne.
1 See the full story by Edmund Kirke In the Atlantic, September, 1864.
See also Senate Document, 340, July 8, 1898, p. 86.
THE INITIATIVE AND REFERENDUM.
297
Xapoleon's armies shook every throne on the continent,
overturned the most of them, put plebians in imperial places,
annihilated the "Divine Right of Kings" and scattered
the seeds of democratic thought all over Europe. The soldiers
of the Allies returned from France talking of freedom and
popular government. The printing press fed the new thought,
and the students in the universities were full of English,
American and French ideas of liberty. The French revolu-
tion was smothered, but only for a moment. It burst out
again and again, not only in France, but in Italy, Austria,
Germany, Spain and other countries. Kings and Emperors
granted constitutions to appease the people. England re-
formed her representative system, greatly extended the suf-
frage, passed splendid secret ballot and civil service laws, and
took effective measures against corrupt practices in elections.
America built a republic, with government by the people in
town affairs and constitution making, and for the rest a mix-
ture of government by delegates with government by the peo-
ple. And Switzerland evolved a republic based on the idea
of government by the people with the aid of representatives.
A century full of tremendous movement in the direction of
democracy: 1775 all absolute monarchy or aristocracy; 1875
not an absolute government in America or Europe except in
Russia and Turkey; all the rest 011 the high ground of con-
stitutional government with representative houses and wide
suffrage, or still further up the slope where kings and nobles
entirely vanish, with a few almost at the top, where the peo-
ple's will is sovereign all the time. From absolute king to
sovereign people from one to all that is the fundamental
movement of the age; and do you think it will stop part way?
Will forces that the kings and emperors and aristocracies of
Europe have not been able to resist be held in check by a
few politicians and plutocrats? Not if the people continue to
think. ISTot if the press and the school can be kept from the
schemers' control. If the movement towards democracy does
not stop if the evolution of equality in government does
not cease, Direct Legislation must come. It has come in
Switzerland and to a large extent in America, is used to some
298 THE END OF CORRUPT LEGISLATION.
extent in England and France, is vigorously demanded in
New Zealand and Australia, and is bound to come here and
in every other country where the trend to democracy is strong,
because there is no other way in which the rule of the few
can be entirely supplanted by the rule of the many.
The diffusion of power is the mightiest idea that is moulding
the world to-day, except the principles of love, justice and
brotherhood from which it is a oorrollary. Direct Legisla-
tion has an inevitable part to play in the progress toward dif-
fusion of power, and is therefore sanctioned and necessitated
by the principles from which the ideal of diffusion is derived.
Direct Legislation aiding diffusion will help the cause of
peace as "well as the cause of liberty and democracy. Since
the dark ages very few wars have been brought about by the
common people. The reason the world is still drenched with
blood every few years is that the men who decide on war are
not, as a rule, the ones who do the fighting or suffer the losses
of the conflict. If the men who voted war had to stop the
bullets and pay the taxes, arbitration would soon replace
battle. If conciliatory proposals could be suggested by ini-
tiative of the people as well as by the President and Congress ;
if international commissioners carefully discussed and ad-
justed differences, subject to a referendum, either compulsory
or on petition of the common people in each disputing coun-
try, instead of being subject to approval or rejection by a
hot-headed Congress, that sees in war perhaps a chance for
glory, profit, conquest., or political capital; if an appeal from
the government to the people were possible in every case of
war, except where immediate action in self-defence were neces-
sary in short, if the final decision lay with the people on
both sides of the line, wars would be few and far between.
If the good Czar wants to bring about the disarmament of
Europe, he cannot do better than work for the Initiative and
Referendum. So long as he works with the governments he
is dealing with men whose power and pride and interests of
every sort are largely bound up with the military; but give
full power to the common people and war would become a
lost art in the civilized world.
THE POPULAR VETO.
THE PRACTICAL DETAILS.
299
There are several methods of providing for the proposal
of measures by the people, and the reference of enactments
to them for approval or rejection. The most effective means
of securing full rights of initiative and referendum is a con-
stitutional amendment. If the provision is only a statute
the legislature may repeal it at any time when they have a
law on hand which they do not wish to submit to the people.
A statute right, however, may do much good, and, if long en-
joyed, will be certain to develop a sentiment that will not only
make its permanent repeal impossible, but will inevitably
lead to constitutional guaranty. The following analysis may
serve to suggest some of the leading points that should be
covered by a Direct Legislation amendment or statute. Pro-
visions amounting to a new method of amending the consti-
tution or involving any changes therein would of course be
invalid in a mere statute the legislature cannot change the
constitution; such provisions could only be effective in a con-
stitutional amendment, and if incorporated in a statute might,
render it void in toto.
ANALYSIS OF DIRECT LEGISLATION LAW OR AMENDMENT.
The percentages refer to the vote at the last preceding election.
Initiative. Five per cent, of the voters of a city (or state) may
propose an ordinance (or law) or amendment to the char-
ter (or constitution) by imperative petition (containing
the proposed measure) filed with the city clerk (or Secre-
tary of State).
Said official shall publish such proposal at once and sub-
mit it to the people at the next city (or state) election
occurring 20 (or 40) days after the said filing, unless it is
adopted by the councils (or legislature) 50 (or 130) days
before said election,, in which case it shall be subject to
the referendum.
A special election may be ordered by a 15 per cent, peti-
tion, or at the discretion of councils (or legislature) or of
the mayor (or Governor).
Referendum. All measures proposed by the people, and all enact-
ments of councils (or legislature), except urgency meas-
ures, shall be subject to the referendum.
300 THE OPEN BOOK OF PBOGEESS.
Five per cent, of the voters of a city (or state) may de-
mand a referendum. 1
The mayor (or Governor) or one-third of either council
(or House) may order a referendum.
Urgency measures are those necessary for public health,
peace or safety, passed by a two-thirds or three-fourths
vote of councils (or legislature).
Other enactments shall be in abeyance for 30 (or 90) days
after passage by councils (or legislature) and publication.
If within that time a referendum petition is filed with the
city clerk (or Secretary of State), the said official shall sub-
mit such measure to the people for final decision at the
next city (or state) election, as above.
A special election may be ordered as above. (See Initia-
tive.)
If no referendum petition is filed within said time, the
measure takes effect under the same conditions as at pres-
ent.
Franchise and monopoly grants and contracts with mo-
nopolies must be submitted to the people.
A measure rejected by the people cannot be again pro-
posed the same year by less than 20 per cent, of the voters,
nor re-enacted in councils (or legislature) except by a
two-thirds vote, and in such case must go to the polls,
whether there is a referendum petition or not.
A measure once approved by the people cannot be altered
or repealed without a referendum.
When a law is declared unconstitutional, the Governor
or the legislature may, and on a 15 per cent, petition shall
submit the law to the people, and if approved by them it
shall thereafter be law, notwithstanding said decision.
(This amounts to a new means of amending the constitu-
tion.)
How far the referendum or reference to the people should
be made obligatory is a very important question. The direct
citizen vote is already obligatory in respect to constitutional
amendments and the affairs of towns under the ]STew England
1 Five per cent. Is by some considered too large when applied to populous
utles or states, as 5 per c.ent. of a very large voting population would place
too great a difficulty in the way. It is proposed that a definite number be
xed, as 3,000 for a city or 10,000 for a state, or 5 per cent, when such
7imu numbers would exceed 5 per cent. The following is a good wording:
Three thousand voters, or a number equal to 5 per cent, of the total of
o < /?, C ^5 , at the last Preceding election, if such percentage is less than
rf,00( >r in case of a state "Ten thousand voters or a number equal to
5 per cent, of the total votes cast at the last preceding election. If such
percentage yields a number less than 10.000." This option would roquir-
5 per cent, unless such 5 per cent, would amount to more than 3,000 in case
ol a city, or 10,000 In case of a state. Whichever was least in any case,
the 5 per cent, or the fixed number, would govern that case. Five per cent.
or a small voting population would be easy to secure; in a large voting
population the above mentioned option would be desirable
THE POPULAR INITIATIVE. 301
system; and in a number of states a citizen vote is necessary
to certain franchise grants, public purchases, bond issues, etc.
In several of the Swiss cantons the law exempts urgency meas-
ures, leaves transactions that do not go beyond established
routine to take effect if not objected to, and in all other cases
requires the submission of each and every legislative act to
the people as a matter of course and without any referendum
petition.
Matters of routine may be denned as including appropria-
tions, purchases, contracts and other acts that are substantially
the same as in the preceding year. It might be well to put
routine measures with urgency measures as exempt even from
the optional referendum, leaving them subject to control thru
the initiative. But however that may be, they ought clearly
to be exempt from the obligatory referendum.
It seems probable that ultimately the obligatory referen-
dum will be found the better form for several reasons:
1. It saves the trouble and expense of a double appeal to
the people, once on the petition and once on the ballot. It
has been found in Switzerland that the optional referendum
sometimes remains useless because the voters, wishing to in-
voke its aid, cannot afford to bear the cost, so the law to which
they are opposed remains unchallenged and goes into effect
without a verdict of the people.
2. The obligatory referendum does not play informer
does not require the disclosure of opinions, but affords the
voters all the protection of the secret ballot. The optional
referendum puts the petition signers on record and. makes
their opinions known, therefore it does not close the door so
completely as the obligatory referendum to improper legisla-
tion that is supported by powerful employers and corpora-
tions against whose influence employees and others dare not
act openly for fear of discharge, or loss of business, blacklist,
boycott, etc.
It is often the case that citizens who oppose an unjust en-
actment and wxrald vote against it at the polls, are, neverthe-
less, afraid to record an adverse opinion by open petition, and
others, tho not exactlv afraid to avow themselves, yet deem
302 THE CITY FOK THE PEOPLE.
it wisest for business or social reasons to keep their ideas to
themselves.
3. The mere inertia of the people permits some things to
pass that are objectionable, but not sufficiently so to awaken
an energetic protest; so that designing legislators are encour-
aged to act on the possibility that bad laws adroitly worded
may go thru unnoted by the people, or at least escape the
requisite petition till the 30 or 90 days are up. The Optional
Plan leaves a somewhat wider way to improper laws than the
other, and holds out a slight hope to corruption; an exceed-
ingly small one, of course, for the chance of success is a des-
perate one for an evil law with the Referendum in either
form, but hope enuf perhaps to invite the attempt sometimes
when it would not be thought of under the. Obligatory Sys-
tem, by which the chance of success is reduced almost to ab-
solute zero.
In all probability, however, notwithstanding the ultimate
advantages of the obligatory plan, it will be best to begin with
the optional referendum (except as to street franchises, and
dealing's with corporations and monopolies), the reasons being:
(1) That during the transition from present methods to Direct
Legislation there would be a volume of business that might
prove burdensome under the obligatory system, and (2) That
the optional form provides an intermediate step, permits a
more gradual change to the new system and allows the people
time to become more accustomed to the use of Direct
Legislation before they enter upon the full privileges and re-
sponsibilities of the obligatory referendum.
Either the Optional or the Obligatory Referendum, to-
gether with the initiative, will make our legislative system
consistent thruout, and bring all parts of it into harmony with
the fundamental principles of liberty, self-government, de-
mocracy and popular sovereignty, which it claims to regard
as the essential principles of true government, and to which
it professes an earnest desire to conform. The right to pro-
pose or initiate a city or state measure is like the right of a
citizen in town-meeting to make a motion upon any matter
of business to- be acted upon by the meeting, and the right
DIRECT LEGISLATION.
303
of ten citizens to have any subject they choose inserted in the
warrant for action by the town; the right to demand a vote
at the polls on a given law, corresponds to the right of a citi-
zen in town-meeting to call for the ayes or noes; and the ob-
ligatory referendum corresponds to the rule which requires
the plans and proposals of town officers and committees, and
all motions made at town-meetings to be put to a vote of all
the citizens who care to express themselves, whether a vote is
asked for or not.
It must be remembered that the Referendum, in its strict
sense, is merely preventive, whereas the Initiative and Ref-
erendum together give the people the means of construction
as well as the means of prevention.
The word Referendum, however, is frequently used as sy-
nonymous with Direct Legislation, including both the propo-
sal of laws by the voters and the reference of laws to them.
REASONS FOB THE REFERENDUM.
THE DOORWAY OF REFORM.
1. It is the key to progress. It will open the door to all
other reforms. It is not the people who defeat reform. The
people want honest government, civil service reform and just
taxation. They vote overwhelmingly against monopoly rule
and for public ownership of street franchises and public utili-
ties almost every time they have the opportunity. It is the
power of money and corporate influence and official interest
that checkmates progress. 1 Miles of petitions have gone in to
Congress for a postal telegraph. By the million our people
have expressed the wish for such an institution, and Hon.
John Wanamaker says in his very able argument on the sub-
ject, that the Western Union is the only visible opponent of
the movement. It is enuf, however, for it has more weight
with Congress where its interests are touched than all the 75
millions of "common" people in the country. But if those
1 In Switzerland direct legislation has defeated the monopolies, abolished
the lobby, destroyed political corruption, undermined partisanship, and es-
tablished proportional representation, progressive taxation, home-rule in lo-
cal government, and public ownership and control of railroads, telegraph*-
telephone and express service. (See below under Experience.)
304 GOVERNMENT BY AND FOE THE PEOI'LK.
ki common" people made the law, the Western Union would
weigh several tons less, and the nation -would own the tele-
graph in a very short time. Postal savings banks, progressive
income and inheritance taxes and popular election of U. S.
Senators would probably be adopted by vast majorities if sub-
mitted separately to popular vote, and perhaps a referendum
might even give the Filipinos their freedom. Freehold char-
ter laws, civil service acts, proportional representation, effi-
cient corrupt practices acts, local option and state dispensary
systems, etc., would be adopted in many States, and city after
city would get its government and its streets out of the hands
of politicians and monopolists. Philadelphia would not have
been robbed of her gas works if she had had the referendum,
but would have improved them and kept them in good con-
dition for the serving of the people. Her water supply would
have been enlarged and purified instead of being left to dis-
tribute filth and disease in order that councils might have
a plausible excuse to sell the works some day to a syndicate
of greedy capitalists. Boston might be lighting her public
buildings and streets and supplying electricity to her citizens
at half the private company's charges if the people had had
the referendum to keep the aldermen and the legislature from
killing all measures of relief. Boston, New York and Philadel-
phia would not have been worsted in their battles with the
street railways. Detroit and Chicago could have won their
victories with a fraction of the cost in time and money that
has been required to fight the league of railway corporations
and legislative authorities.
Hundreds of instances might be named in which councils,
legislatures and congresses have persistently defeated the well-
known will of the people. It is not sufficient now to educate
the people to a new idea, or even to elect representatives on
the promise to carry it into execution ; you have also to fight
the power of money and corruption in the legislature that
will steal away or put to sleep the ardor of your legislators.
How important it is that progress should rest with the peo-
ple free of hindrance from their rulers is clearly brought out
in this fine passage from the great historian, Buckle:
THE INITIATIVE AND REFERENDUM. 305
"No great political improvement, no great reform, either legis-
lative or executive, has ever been originated in any country by its
rulers. The first suggesters of such steps have invariably been
bold and able thinkers, who discern the abuse and denounce it and
point out how it is to be remedied. But long after this is done,
even the most enlightened governments continue to uphold the
abuse and reject the remedy."
"Wendell Phillips said:
"No reform, moral or intellectual, ever came from the upper
classes of society. Each and all came from the protest of the
martj-r and the victim. The emancipation of the working people
must be achieved by the working people themselves."
The Referendum is the key that will unlock the door to
every onward movement. It will give us new reforms as fast
as the people want them, without the necessity of waiting till
the millionaires and politicians are ready for tjie curtain to
go up. In this great fact lies the tremendous and immediate
importance of the Referendum, altho it is by no means the
only irresistible reason for favoring the movement.
Direct Legislation will give the people the power of volun-
tary movement; it will bring the public mind into connection
with the motor muscles of the body politic; it will gear the
power of public sentiment directly and effectively to the ma-
chinery of legislation, with no slipping belts, switched off
currents or broken circuits.
At present the pocket nerve and the corporation ganglion
are frequently able to paralyze the progressive muscles and
the civic conscience and control the body politic, and the party
ganglia compel it to remain inactive, or else go to enormous
labor and perform a large number of actions that are against
its wish in order to acomplish a few things it desires as tho
a man were obliged to lift a fifty or hundred pound spoon to
his lips with each sip of soup and endure the pricks of several
pins and needles or sit down on a tack with each mouthful of
bread or fragment of beef, the bill of fare being written with
those conditions to be accepted or rejected as a whole, like
the conglomerate platforms of our parties.
The separation of measures accompanying Direct Legisla-
tion is another thing that makes it par excellence the friend
20
306 THE END OF CORRUPT LEGISLATION.
of progress. Each reform will receive as a rule the full sup-
port of all who believe in it without suffering from the alien-
ation and subtraction of the votes of citizens who favor it
but oppose some other measure with which it may be linked
in the platform, or object to the party in whose platform the
reform is suggested or dislike the candidate whose name is
tied to the movement and whose election is the only means
of securing its success.
PURE GOVEKMENT.
2. Direct Legislation will tend to tlie purification of poli-
tics and tlie elevation of government. It is not the people
who put up jobs on themselves, but corrupt influences in our
legislative bodies; the Referendum will kill the corrupt
lobby and close the doors against fraudulent legislation. It
will no longer pay to buy a franchise from the aldermen, be-
cause the aldermen cannot settle the matter; the people have
the final decision, and they are so many that it might cost
more to buy their votes for the franchise than the privilege
is worth. It is comparatively easy for a wealthy briber
to put his bids high enuf to overcome the conscience or other
resistance of a dozen councilmen. It is quite a different mat-
ter to overcome the consciences or other resistance of ten
thousand or a hundred thousand citizens. Legislative bribery
derives its power from the CONCENTRATION OF
TEMPTATION resulting from the power of a few legisla-
tors to take FINAL action.
The Broadway Surface Railway Company paid aldermen
$20,000 apiece for the Broadway franchise steal, which cost
the company in bribes and lobby expenses about $500,000;
but how much would it have cost to buy up a referendum vote
in the city?
The Philadelphia councils submitted the question of bond-
ing the city for $12,200,000, to be used for a variety of pub-
lic improvements (November, 1897), but they refused to sub-
mit to the people the question of leasing the city's gas works
to the United Gas Improvement Company (which already
THE POPULAR VETO. 307
owns the gas works in over 30 cities), altho the people de-
manded a referendum with indignant vehemence. The In-
quirer had a referendum vote taken in the Twenty-eighth
ward, with ballot boxes and regular printed ballots, just be-
fore the lease, and the vote was 32 in favor and 2583 against
it 81 to 1 against the action of the councils. There is no
doubt that a vote in other parts of the city would have gone
overwhelmingly against the councils. "The Progressive Age,"
a leading organ of the gas interests, in its issue of January 15,
1898, admitted that the people would have voted against a
lease, and that "it w?.s artificial pressure which effected the re-
sult." Commenting on this case "City and State," of Phila-
delphia, said: "The refusal to permit the owners of a great
property (which is valued approximately at $30,000,000) to
say whether they shall part with it or keep it is worthy of the
severest condemnation." "Bribed by the rich to rob the
poor," said the Hon. Wayne MacVeagh. The poor thieves
in legislature and council bought by the rich thieves in the
corporations, to give away the property of a million people
that has been entrusted in their care.
Such cases show with tremendous emphasis that it will not
do to leave the referendum option with the legislators. They
submit questions that are immaterial to them or in respect to
which they wish to act honestly; but they never submit a fran-
chise steal to the people. When they are acting from honest
motives they often find the referendum very helpful in com-
ing to a wise and just conclusion; but when they are acting
from corrupt and selfish motives they have no use for the ref-
erendum.
The reader will remember that in examining the facts relat-
ing to the use of the Keferendum in the United States, we
found that the people have voted down all propositions that
were suspected of being accessory to any job, and the stren-
uous opposition of the corruptionists to the extension of the
Referendum shows that they appreciate its power for purity.
They know very well that corporation frauds could not go on,
and that valuable gas, electric light "and street railway fran-
chises would no longer be given to lobbying corporations if
we had the Referendum.
308 THE OPEN DOOR OF PROGRESS.
When the Heading Road was asking for special terminal
privileges in Philadelphia at Twelfth and Market streets, the
company put $5,000 at the service of each member of the se-
lect council, and a noted political boss, who was in the council
at the time and had large influence there, told a prominent
lawyer of my acquaintance that there were only three council-
men who refused the money, and that he (the boss) was not
one of the three.
I am told that in Massachusetts legislators at the state
house can be bought for $250 a vote on important measures.
It is said that in Washington State ordinary legislation can be
purchased at $200 a head. A few years ago a member of the
Albany legislature told an intimate friend of mine that two-
thirds of the legislature had taken bribes, and it was doubtful
if many of the other third would resist in case of strong pres-
sure. I am told by Peoples' Party men that, in the Legis-
latures of some Western States, Populist members can be
bought for $20 a vote and other members for $10 a vote.
A member of the Michigan legislature resigned because he
could not put up with the continual strain on his morals, and
his successor told him that he made $16,000 out of his first
session on a salary of $300 a session.
A legislator may be subjected to successful pressure by
street railways, gas and electric light companies, the railroads,
the oil-trust, or the coal combine, but the citizens are too nu-
merous, too much interested in their own pocket-books and
too wide awake to their own welfare to be wheedled or bribed
or threatened into giving away their property, or endowing
big corporations with privileges and powers to be used to the
disadvantage and oppression of the donors. As Professor
Bryce says, "The legislators can be 'got at;' the people can-
not."
Prof. Bemis tells of a corporation voting $100,000 to buy
the Chicago council as calmly as it would vote to buy a new
building, and says that, according to a reliable attorney, such
a proceeding is an ordinary thing. Under the Referendum
such proceedings would not- take place because they would
be of no use. The Referendum destroys the power of legis-
lators to legislate for personal ends.
THE POPULAR INITIATIVE.
309
The lobby exists mainly to get, from tlie legislature private
advantages which the people would never grant, because such
advantages are against the interests of the people. You may
find it quite easy to offer ten men or a hundred men enuf to
overcome their interest in good government according to their
perverted standards of value, but you would find it very diffi-
cult and very costly to buy half a city full of men to vote
against the public interests. In a state or national vote the
lobbyists' problem would be more gigantic still. Imagine
Oakes Ames travelling all over the United States bribing men
with stock to vote for a big Pacific steal ! It would take more
stock than the road would ever own, even if it had as much
water in its capitalization as lies in the broad bed of the Pacific
Ocean. If a million citizens owning a city or state entrust
their business to 100 agents, and you wish to acquire a million
dollar franchise for nothing, or obtain a contract that will
give you a million more than the fair value of the work you
do under it, you may be able to persuade 51 of the agents to
vote the contract or franchise to you, but it would be a very
different undertaking to persuade 500,000 people to vote you
the booty. You could give each agent of the 51 an ''induce-
ment" of five to ten thousand dollars and still have one4ialf
or three-fourths of a million of the plunder left for yourself,
but to buy the people at the same rates would cost you two
and a half to five billions, or several thousand times as much
as the whole steal would come to; and instead of being a
gainer you would be some billions out of pocket. In order to
buy the people and have half the plunder left you would have
to reduce your "commissions" from $10,000 apiece to $1 a
head. The Referendum would infinitely dilute the power
of bribery in procuring legislation, and correspondingly
weaken the motive for it. It is one thing to say to a few
agents, "Help me steal a fortune from the people and I will
give you a big slice of it," and quite another thing to say to
the people, "Permit me to take a fortune from yourselves
and I will give back a few cents of it to each of you."
The Referendum will be the death of the lobby. It will
be impracticable to lobby the people because of their number.
310 THE CITY FOK THE PEOPLE.
And it will be useless to lobby the legislators for they cannot
deliver the goods. 1
No doubt persuasion will still be used with legislators as
the first and easiest method of initiating legislation, but the
lack of finality in the action of legislative bodies will take
away its commercial value, and the Lobby or "Third House"
as it exists to-day will dissolve. Log-rolling and minority ob-
struction will also lose their power, and dishonest men will be
much less likely to buy legislative positions and other offices,
because they cannot make them pay. Where would Tweed
have been with the referendum in full play? Where would
Quay be now if the people had the referendum on the United
States Senatorship?
Blackmailing will be destroyed as well as the corrupting
power of the lobby. The Keferendum works both ways; it
1 Mr. S. E. Moffett says in his Suggestions on Government: "That every
man has his price is too hard a saying; but that the great majority of men
have their price is the simple truth. When votes are quoted at $2 apiece
from 5 to 10 per cent, of the voters of a state can be bought. Ten dollars
apiece would buy, perhaps, 20 per cent.; $100 apiece would buy 50 per cent,
and if the price was raised to $100,000 each, it is doubtful whether one voter
out of twenty in any state of the Union could resist the temptation. Now,
it often happens that the enactment or defeat of certain legislation is im-
portant enuf to rich corporations to make it worth their while to offer $100,-
000 each, if necessary, for the assistance of a few members of Congress or
of a State Legislature; but it would be impossible for any corporation to
offer $100 apiece to a majority of the voters of the United States; and prac-
tically impossible to make such an offer to the majority of the* voters of an
average state.
"There are other ways, too, in which the private interests of legislators
are made to influence their public action. The Congressional silver pool,
at the time of the passage of the Sherman law of 1890, and the Senatorial
speculation in sugar stock during the manipulation of the Wilson tariff bill
in the Finance Committee, became national scandals. Every great railroad
whose interests are affected by legislation has its attorneys in Congress
or in the State Legislatures. The presidents and chief stockholders of im-
portant corporations have held seats in the Senate and openly spoken and
voted in behalf of their private interests without betraying a thought of
impropriet}'.
"It is said that the true remedy for these evils is to elect good men to
office. The advocates of this happy and original idea will have every-
thing their own way when they show us two things: First, how to insure
the election of good men; and, second, how to keep them good after they
are elected. It is useless to expect representatives to be very much better
than the people they represent. It is as much as we can reasonably look
for if they are no worse. A system of government whose satisfactory opera-
tion requires the continual election of archangels to office is not a practi-
cable working system. To have a really stable frabric of government we
must base it upon enlightened self-interest. As Mill puts it:
' 'The ideally perfect constitution of a public office is that in which the
Interest of the functionary is entirely coincident with his duty.'
JSow, the self-interest of the average man, acting as one of the mass
r voters, lies in the direction of good and and honest government. It is
worth more to him to have cheap sugar, pure water and safe, rapid, cheap
1 comfortable transportation than to accept 50 cents from the sugar trust,
a dollar from a water company and $2 from a railroad, to be cheated, pois-
>ned, jostled and belated, with the prospects of being eventually flattened
out or burned alive in a wreck. But the average man in the place of a legis-
>r would certainly succumb to the same influences that corrupt the poli
ticlan."
DIRECT LEGISLATION. 311
keeps the corporations from using the legislature for thei*
private gain, and it also keeps the legislators from blackmail
ing the corporations by introducing bills injurious to them,
so that they will offer large sums to have the bills quashed
a shameful practice prevailing to a large extent in some of
our legislative bodies.
The unguarded representative system, or delegation of un-
controlled law making power to a small body of legislators,
has utterly failed to check class legislation, or the growth of
monopoly and corruption. On the contrary, these evils have in-
creased in city and state where the delegate system has control,
whereas in town affairs and constitution making, and city
business so far as referred to and controlled by the people,
the said evils are comparatively unknown. This contrast viv-
idly illustrates the power for purity that Direct Legislation
possesses.
As we shall see below, the force of partisanship will dimin-
ish by the referendum. Party success will no longer mean
power to mould the laws of a city or state for one or more
years. And the intensity of party feeling will diminish as
the value of the prize to be won is lessened. The weakening
of partisanship will react on the executive department, and
the spoils system will have less hold on the government even
before civil service regulations are thoroly formed and en-
forced.
As we have seen, the obligatory ref e'rendum would be most
effective in checking corruption; but even the optional refer-
endum will make corrupt legislation a dangerous and un-
profitable thing. The mere fact that the right of appeal to the
people exists within the reach of a reasonable percentage of
voters will purify legislation at its source. (See Professor
Gunton's remarks above quoted.)
The Initiative and Referendum will destroy the private mo-
nopoly cf law making. The public ownership of monopolies
will destroy the chief corruption fund. Civil service refonr
and effective corrupt practices acts will also make for purity
Proper restriction of immigration and thoro educational
measures can hardly fail to follow close upon the referendum
312 GOVERNMENT BY AND FOR THE PEOPLE.
And the force of these six measures will gradually eliminate
corruption from government. As politics grow purer the ras-
cals will leave the field and nobler men will enter it, thus
hastening the upward movement.
3. Demagoguery and the influence of employers over the
votes of their employees will be diminished factors in elec-
tions. When the question is voting an office to A or to B,
one as good as the other for all the voter knows, a two-dollar
bill or the wish of his employer may seem to the voter to be
worth more than the problematical difference between the
two candidates, for whatever their platforms and promises
there is little possibility of telling what they will do when
elected. 1 But when the question comes directly home to the
self-interest of the voter, on a bill to give away public prop-
erty, or franchises, or make an extravagant contract, etc., the
voter will use the protection of the secret ballot and record
his opinion, regardless of two-dollar bills or the wishes of em-
ployers.
The Bay State Gas Company of Boston found no difficulty
in managing the councils, but if the public ownership of gas
works were put to a vote of the people, the Bay State would
be almost a cipher in the ballot. If the municipalization of
the street car lines were put to vote i believe that even the
employees of the roads would neglect to obey the voting-
orders from headquarters, and. cast their ballots almost to a
man for the change. Even the ignorant voter will be rescued
by the Referendum to some extent. The demagogue and
politician will lose a, large part of their power to prejudice and
confuse when the issue is a single, clear-cut question of money,
property or public policy, instead of the present entanglement
of measures and men tossed together in a confused heap for
Carlyle says: "What is it to the ragged, grimy freeman of a 10-pound
franchise borough, whether Aristides Rigmarole, Esq., of the Destructive
party, or the Hon. Alcides Dolittlc, of the Conservative party, be sent to
Parliament; much more, whether the two-thousandth part of them be sent,
for that is the amount of hi-s faculty in it. Destructive or Conservative,
what will either of them destroy or conserve of vital moment to this free-
Has he found either of them care, at bottom, a six-pence for him or
his Interests, or those of his class or of his cause, or of any class or cause
that Is of much value to God or to man? Rigmarole and Dolittle have
alike cared for themselves hitherto, and for their own clique and self-con-
ceited crochets, their greasy, dishonest Interests of pudding or windy, dls-
interests of praise, and not very perceptibly for any other interest
whatever."
THE INITIATIVE AXD REFEREXDUM.
313
the express purpose, one might think, of affording dema-
gogues their golden opportunity to prejudice men against the
whole "heap" by centering attention upon some objectionable
feature of it, and ignoring the good features or lying about
them, or to prejudice men in favor of the whole by reversing
the process of deception.
4. The power of rings and bosses will be greatly reduced
bif the Referendum; directly so far as concerns the large por-
tion of their power, which depends on controlling legislation;
indirectly so far as concerns their administrative power. Noth-
ing will do more than the Referendum for the cause of civil
service reform, and the awakening of a strong interest in
politics and the ballot on the part of our best people, and these
things will quickly abolish the boss and the ring.
Proportional representation, majority elections and strin-
gent corrupt practices acts will be likely to be proposed and
adopted under the initiative and referendum. And further
relief may be afforded by the Imperative Mandate or Recall
the removal of an officer by initiative and referendum on a
two-thirds vote a plan which would operate in case of any
executive, judicial, or other officer appointed for a certain
district or elected by a majority vote in a given district, but
would not work with officers elected under the plurality rule
or proportional representation and the secret ballot.
All these things, together with the fact that the purification
of legislation, will take away the larger part of the profits of
bossdom, make it likely that the Platts and Crokers, Quays
and Hannas will find their empires undermined by the Refer-
endum and its natural sequences.
5. Partisanship icill sink into comparative insignificance
in the government of the country. At present about all the
guide the average voter has is the party to which he belongs.
He knows little or nothing of the candidates on either side.
There are only a few things much talked of in the campaign,
so far as his party papers and speakers bring him information,
and he thinks his party is right on these things, or he votes
with it because his father did or his employer, and because
there is no particular reason appealing to his interests to pre-
814 THE END OF COEEUPT LEGISLATION.
vent him from doing so. But when specific measures are
submitted separately to the people in the precise form in
which they are to take effect, voting will assume a definite-
ness heretofore unknown, and the citizens will vote on each
measure as they believe their interests require, and will not
be likely to rob themselves or disregard what they believe to
be for their benefit, merely to please a party machine. Expe-
rience with the Referendum plan, in town affairs, voting on
city franchises and making constitutions, abundantly proves
that the voters do not keep to party lines when it comes to
opening streets, building school houses, making appropriations
and acting on any matters of business, the drift of which is
clearly brought home to them. Not only will the interest of
the voter lead him away from partisanship, but the outside
pressure tending to make him a partisan will be much less,
since the larger part of the motives for that pressure the
legislative and administrative spoils to be gained by party
success will disappear, the first as a direct consequence of
the Referendum, the second as an indirect consequence thru
the favored growth of civil service reform.
SIMPLIFICATION.
6. The Referendum will simplify as well as purify
ELECTIONS. It is much easier to vote upon measures
than men. A man is a cyclopedia of measures bound in mys-
tery; even his character is a puzzle, for the main business of
opposing politicians is to fling mud at each other's candidates
until it is impossible to tell how much is mud and how much
is man, or some other animal.
After throwing all the mud they can dig up or manufac-
ture, the next duty of the politicians is to pile up a lot of high-
sounding words into sentences that will come as near as pos-
sible to covering any conceivable thing that a council, legis-
lature or congress may do, and call it a platform, to remind us
of its likeness to the board contraption at the business end of
a summer convention, used for the speakers to stand on during
the rumpus and afterward cut up for kindling.
THE POPULAR VETO. 315
Instead of a tangled mass of ignorance and vituperation,
the Referendum will bring to the voters a series of clear-cut
measures, each to be decided on its own individual merits.
Shall we have proportional representation? Shall women
vote on the same terms as men? Shall street car companies
be required to put effective fenders and vestibules on the trol-
ley cars? Shall towns and cities have the right to build or
buy, own and operate municipal gas and electric light works
if they wish? Shall they own and operate street railways?
Shall they make their own charters? These are questions
easily understood and capable of decision without the per-
plexing admixture of personal considerations or inquiries as
to whether a Democratic candidate for office did not behave
with becoming modesty in early life, or loves liquor too well,
or whether the tariff ought to be higher, or silver freer, or
whether the hard times or the good times came in under Re-
publican or Democratic administration.
That the referendum would disentangle issues is one of
its most weighty claims to our attention. At present we have
to put up with the splinters in the bread, the hairs in the but-
ter and the salt in the ice cream or go without our food. The
party cooks stand smiling and bowing before you, urging their
bills of fare on which you can plainly read such questions as
these: "Will you eat a hash of chicken and dog meat? or will
you have beef and rat tail in croquettes?" "Will you drink
coffee steeped in vinegar or chocolate flavored with gall?"
The party tailors fix up three or four suits for you to choose
from. "Will you wear black clothes with yellow stripes and
a very tight belt? or a grey suit with bright green shirt and
corn creating shoes? or a silk hat, red overalls and a green
necktie?"
The exceeding complexity of the judgments required of our
voters and the impossibility of satisfactory voting under a sys-
tem characterized by Mixture of Issues, is well brought out
by ;MT. Moffett
To put the "party policy" idea to the test, let us suppose that I
desire the reform of the tariff, and object to the further coinage of
silver, the intensity of my wish for tariff reform being represented
316 THE OPEN DOOE OF PROGRESS.
by 100, and that of my opposition to silver legislation being- repre-
sented by 99. Suppose that my party passes a tariff bill satisfac-
tory to me, and also passes a silver coinage bill. I am called upon
to render judgment upon this "policy" at the next election. I do
violence to my convictions on the silver question for the sake of
my preponderating convictions on the tariff; but my dissatisfac-
tion (99) on one question must be deducted from my satisfaction
(100) on the other, leaving me a net satisfaction of only 1 instead
of the 199, which I could have had if I had been allowed to vote on
each measure by itself.
But this is putting the case too favorably for the "policy" theory.
In this example the voter does get some opportunity, however
slight, to move in the direction of his preponderating desires. But
the situation is not often so simple. Suppose, for instance, that my
ideas of a national "policy," quantitatively expressed, run like this:
Tariff reform 10
Opposition to silver coinage 99
Economy in government 80
Annexation of Hawaii 50
Extension of civil service laws 100
Strong navy 40
469
Suppose that my party meets my wishes on tariff reform and
economy (180), and the other party on silver, Hawaii and the navy
(189), while neither takes a satisfactory position on the civil ser-
vice (100). Then, if I vote for my party, I vote for a policy of which
I approve of only 180 parts and disapprove of 289; and if I vote for
the other I vote for a policy of which I approve of 189 parts and
disapprove of 280. Thus my net satisfaction is 109 less than nothing
in one case and 91 less than nothing in the other. And, moreover,
the situation is almost certain to be still further complicated by
the nomination of candidates whom I do not consider fit to hold
office, but for whom I must vote as the only way of exerting an in-
fluence on the choice of any policy at all. If the people were allowed
to vote on measures as well as on men, I could exert my full power
at the polls in favor of the whole 469 points of the policy I desired
to see carried out, and, in addition, I could vote for the candidate
I thought best qualified for legislative business, regardless of his
opinions on disputed political issues.
The American theory of representative government is that "the
members of a lawmakiug body should be true representatives of
the people, endeavoring, to the best of their ability, to carry out
the popular will, and held accountable by their constituents for the
fidelity with which they execute their trust." This idea is clearly
stated by Mr. Woodrow Wilson:
"It should be desired that parties should act in distinct organi-
zations, in accordance with avowed principles. Under easily recog-
nized leaders, in order that the voters might be able to declare by
THE POPULAR INITIATIVE. 317
their ballots not only their condemnation of any past policy by
withdrawing all support from the party responsible for it, but
also and particularly their will as to the future administration
of the government by bringing into power a party pledged to the
adoption of an acceptable policy."
This admits the principle of the referendum, the right of the
people to determine the law, but the method proposed is unwork-
able. The trouble lies with the fact that the harm is often largely
or wholly done before the people get a chance to condemn, and
with the false assumption that a "party pulley" is a clearly defined
unit, which may be unmistakably condemned or approved by the
voters. The fact that it is nothing of the kind is one that lies on
the very surface of our history. We have never had a national
election whose returns made it possible to determine just what
policy, in the sense of a programme of legislation, the people
wanted, altho there have been very few elections in which the
popular will on some one overshadowing issue has not been made
tolerably clear. It w T as reasonably plain in 1864, for instance, that
the Northern people favored the prosecution of the war, but the
election threw no light on their ideas upon reconstruction, eman-
cipation, negro suffrage, or the finances.
The theory of representation stated above is based on true
feeling, but it does not work out in practice, because of the
mixture of issues, and because the people have no immediate
check upon the delegates; even if the people voted on each
issue separately, it would do them little good to condemn,
long after the wrongs, men who gave away Broadway fran-
chises or leased Philadelphia gas works. It will not bring
back the horse to pass a vote of censure on the hostler a year
or two after the horse was stolen.
7. The Referendum icill simplify and dignify the law.
A law that is to be submitted to the people with any great
hope of its adoption must be reduced to its lowest terms, 1 and
we shall stand a chance of avoiding in future the piling up of
massive tomes of useless enactments which the legislature it-
self knows little or nothing about a month or two after their
passage, even if understood at the time, and which became
law to buttress some private interest or to fill up the time of
our legislators, who, being elected to make the state's laws,
1 See above statement of facts as to the use of the Referendum where
it appears that people are apt to veto on general principles, a complex and
ambiguous law which cannot be clearly comprehended by them a most
beneficent tendency, for surely a people ought not to be expected to obey
a body of laws they cannot understand.
318 THE CITY FOK THE PEOPLE.
seem to measure the fulfillment of their duty by the number
of bills they enact. David Dudley Field estimated in 1871
that if the enacting of local laws were left to the communities
to which they apply, the work of the New York legislature
would be reduced 95 per cent. EHweed Pomeroy says that in
1892 alone New Jersey passed 600 laws, many a one of which
was longer than the whole Justinian Code, that governed the
Roman world for centuries. These New Jersey laws also
have been, examined, and nearly the whole of them found to
be (1) local or special laws, or (2) laws that fall under a prin-
ciple already established, so that they are mere senseless rep-
etitions, or (3) acts in private Or corporate interests that ought
never to have been passed by any body, local or state. In later
years the legislature seemed to get tired sooner than in '90,
and at one session passed only about 400 laws, but they have
kept up their reputation for useless enactments pretty well,
altho some good laws ware passed.
Under the referendum the yearly output of New Jersey's
law factory would probably be reduced from 400 or 600 to
20 or 30 such at least is the result indicated by the expe-
rience of Switzerland, 1 and such is the reason of the case upon
1 For the last twenty years the cantons of Berne and Zurich, where they
have the obligatory referendum, have passed an average of 4 or 5 laws
a year, and these laws are short, simple and easily understood. In a recent
Swiss national legislative session of the usual activity 65 measures were
introduced and 24 passed. The New York legislature about the same time
passed 700 laws, and the measures introduced into Congress reached the
enormous total of 24,000. It is said that Switzerland has less than one-
seventh as many lawyers as we have in proportion to population.
In 1895 Governor Griggs, of New Jersey, said: "I have absolute faith in
the judgment of the people when intelligently and deliberately formed."
And in his inaugural he used the following powerful language in ex-
pressing his lack of faith in the virtues of our present prolific system of
legislation:
"I consider it most important that you should at once restrict the vol-
ume of legislation. The mass of statute law has now become so immense
as to be almost beyond the power of the legal mind to acquire it or the
judicial mind to interpret it. It was intended by the amendments to the
constitution adopted in 1875 to decrease the quantity of statute law by the
abolition of special legislation upon several subjects, notably, the govern-
ment of counties and municipal corporations. Such decrease was for several
years effected. But gradually, aided by experience and a sharpened inge-
nuity, the draughtsmen of statutes came to know ho<v to draw up laws
which, while possessing the form of generality required by the constitution,
had all the substance of special application to the desired locality without
becoming fastened to any unwilling municipality. ***** A strik-
ing instance of manifold legislation exists in the laws relating to boros.
These forms of local government did not exist until recently. They were
all created under so-called general laws. The spirit and letter of the consti-
tution required that they should be governed by a uniform system. Yet we
find three different general acts now In force regulating the creation and
government of boros. At each session of the Legislature numerous amend-
ments to each of the three systems are passed, until this one title in the
General Statutes covers 111 pages. So variant, inconsistent and confused
DIRECT LEGISLATION. 319
an analysis of the laws now enacted. The principles of the
vX>mmoii law, with a few simple modifications, are entirely
sufficient for any state. There would be more justice and
less litigation by far, if courts were left free to apply broad
principles instead of being compelled to give attention to the
rigid language of narrow-minded, short-sighted legislators,
and if men were able to carry the law in their conscienc s
instead of requiring a two-horse team to convey it and a line
of lawyers and judges from the justice court to the supreme
court of the United States to explain it to him, and then be
in danger that they'll turn round next day and declare it is
the other way. It is one of the most ridiculous things in mod-
ern civilization that every man is presumed to know the law,
while everybody knows that nobody knows it, not even the
judges of the Supreme Court. It is impossible to keep track
of one thousandth part of the statutes of state and nation; the
legislators don't know much about them by the time the ink
is dry, except, perhaps, the bills they drew themselves, and
I have known legislators who did not know much about their
own bills even while advocating them. But if some poor fel-
low in blissful ignorance happens to run up against some
words in a musty volume in the law library, and his enemy's
lawyer happens to find those words, the poor innocent has to
suffer for not sitting up nights to learn the statutes. The fact
are these acts that no legal advisor or judicial interpreter can safely say
what the law is on many subjects relating to boros.
"For some years past the annual volume of the laws has been growing
in thickness. As an example, the most recent, that of 1895, contains 106
different acts relating to cities, 43 relating to boros, 33 relating to townships,
13 relating to villages. It cannot be that any such number are necessary.
"Take some other subjects. There are nine separate amendments to the
school law, seven different acts on the subject of sidewalks, eight relating
to the State House, five relating to swamps and marshes. Similar variety
and multiplicity will be found in any volume of annual statutes for the last
six or seven years.
"When we consider that the power of legislation is the greatest that can
be exercised by any human agency, that every law changes the rights and
modifies the duties of a greater or less number of citizens, it is proper to
inquire whether proposed laws are sufficiently considered before they are
adopted. The same tendency to multitudinous and slipshod legislation pre-
vails in other states of the Union, and has attracted the attention of many
thoughtful persons.
"Besides the uncertainty and confusion that ensues from the existence of
so many separate statutes, the easy change of existing law tends to create
popular disrespect for the sanctity of the law. What can be so readily made
and so easily altered can be fairly considered as of small importance.
"The General Statutes of the State now in press will comprise three large
volumes of over 1,000 pages each. ****** Unless we confess
that our legislative system is a failure, we must find a method of remedying
this excess." (See Appendix II T.)
320 GOVERNMENT BY AND FOR THE PEOPLE.
is that our legislatures spend most of their time in establishing
stumbling blocks in the paths of justice and the people, and
the Referendum will not be long in use before the great mass
of statute law will be replaced by a few simple provisions im-
partial to all, in thoro accord with justice and easy to learn.
Local legislation should be performed by counties and mu-
nicipalities under general state laws, and private legislation
should not be tolerated at all. Numerous bills that are now
rushed thru, very often without discussion or understanding
by the legislators, would never be introduced under the refer-
endum, the certainty of a popular veto making them hopeless.
I have even known lawyers to secure the introduction of a
bill to change the law applicable to a case they had in hand so
it would work in their favor. Such action is an invasion of
the judicial field by the legislative power. Senator James
Bradley, of JSTew Jersey, believes this sort of thing to be quite
prevalent. He says:
"The present mode of legislation is behind the age. I have be-
come a sincere convert to the Referendum. The mass of bills pre-
sented was something to startle one. The provisions of one bill
lapped on another, and I believe many an indolent lawyer found
it easier to frame a bill covering just what points he needed in
some case he had on hand than to exercise his brain in looking up
the immense number of laws we have on every subject on our
statute books. The looseness of legislation should grieve every
good citizen of the state, and I hope the day is not far distant
when the people will turn to the Referendum, and pass laws more
general in their character and less of them."
The nation is deluged with laws, 13,000 new ones al-
together in a single year sometimes, and the people know
nothing of most of them till they see them in the newspapers,
when it is a good while too late to stop them, and indeed not
one per cent, of the people have time or interest or eyesight
to go thru the wilderness of nonpareil nonsense and the muss
of technicalities called laws.
Direct Legislation will stop a large part of the present law-
making, turn over another large part to municipalities, and
simplify what remains to the infinite relief of the people and
the great lightening of the burden now resting upon our
legislatures.
THE INITIATIVE AND REFERENDUM. 321
The over production of laws is a sign of a low grade, unde-
veloped legislative system. It is simply the natural fecundity
of low organisms. A fish has multitudinous offspring at a
single session, an elephant, only one: but the quality is in in-
verse ratio to the quantity. The Referendum will lift our leg-
islative system from the fish stage to the elephantine or the
human plane.
Of course the dignity of the law will increase with the
diminution in quantity and improvement in quality. A few
examples will serve to illustrate the degree of dignity pertain-
ing to some of our legislative proceedings under the present
plan.
In New York a bill providing- that every oyster stew must con-
tain 13 oysters passed one house.
The Minnesota legislature passed a law forbidding- the sale of
any pie over 24 hours old at any lunch counter.
In Arkansas a bill was introduced providing- that any bachelor
over 30 must pay a tax of $50 a year for each year he remains un-
married, unless he can bring an affidavit from a reputable woman
stating that he has offered himself to her in marriage that year.
They called it the "single tax." I do not know whether it passed
or not.
Texas passed a resolution that her skies are bluer than those of
Italy.
Iowa prohibited bloomers.
If I remember rightly, one House at Albany passed a law forbid-
ding roosters to wear trousers on the public streets. Some man
hod exhibited a few chickens dressed in more humorous fashion
than results from pulling out their feathers, and a grave and rev-
erend member of the legislature, deeming the show unseemlj-, in-
troduced a bill to regulate the clothing of chickens.
In New Jersey the proper length of clams is regulated by statute
they must be one inch long to escape the legislative prohibition.
And New York prohibits lobsters less than six inches long.
In Indiana the Senate passed an act providing that no man shall
be fined more than $250 for kissing a woman. The bill was intro-
duced by a man who kissed a woman without her consent. She
had sued him, and as she was pretty he feared the jury would
render a heavy verdict against him, and he introduced the said
bill to head off the jury.
RESPECT FOR LAW.
8. The Referendum will aid the enforcement of the laic,
for the people will grow up with it. It will be law because
21
322 THE END OF CORRUPT LEGISLATION.
the people want it, and they will stand behind it, and see that
it is carried into effect. Nothing is of more 1 importance to a
nation than a deep reverence for law; but reverence dies when
legislation is dragged in the niire, and when the people regard
tihe law-making bodies with dread and disgust. 1 Why is it
that we revere our constitutions so deeply? It is because they
are the work of the people and not of a band of politicians
whose motives are open to question. The Referendum will
fold the whole law in new confidence, endow it with the
strength of public opinion, and give it new force for the main-
tenance of order and the accomplishment of progress.
ELEVATING POLITICS AND ATTRACTING GOOD MEN TO PUBLIC LIFE.
9. The Referendum will elevate politics as a profession
and bring the best men again into political life. Govern-
ment is intrinsically the noblest of all professions, for it in-
cludes and controls all others, as the captain of a ship holds
the destiny of all on board. But when power is prostituted
to evil ends it becomes despicable. The people no longer re-
gard membership in a city council or a legislature as a badge
of honor, but rather as a mark of suspicion. He is most prob-
ably in league with the powers of darkness or he would not
have been elected. Honest men have little weight in the
councils of many of our cities; they find the atmosphere un-
congenial, and retire in disgust, or if they persist in their duty
they are soon hounded out by the ring, which finds them in-
convenient. Many of our wisest and purest men look on poli-
tics as too dirty to touch. They will not descend to the mean-
ness and cunning usually necessary to secure office, nor sub-
The motives of city councils, state legislatures and national congresses
are everywhere called in question. Nobody has much confidence in their
public spirit, conscience or wisdom. Newspapers and magazines are full
of slighting remarks about politics; and so besmirched have politics become
by the multitudinous bad practices of legislators that it is as much as a
good man's reputation is worth to have anything to do with practical poli-
ics - However pure hls motivos may really be, he will find it almost im-
possible to convince the public that his interest is unselfish and his methods
mscientious, so firmly is the idea of chicanery linked in the public mind
ith the idea of practical politics. Laws made by legislators regarded in
such a light cannot have the respect of the people to any such degree as
laws directly sanctioned by the citizens at the polls, or made by legislative
>s under the popular veto and subject to conditions in every way tend-
ing to eliminate fraud and private legislation.
THE POPULAR VETO. 323
ject themselves to the cruel suspicious and slanders that
often accompany public life. Mudslinging and the winning
power of chicanery too often, discourage the wise and good
and leave the field to the most callous and unscrupulous.
With the referendum all this will change. Attention will
be directed from men to measures. The power for evil of
our office holders will shrink to a small fraction of its present
bulk. Bad men will be discouraged from entering or con-
tinuing in politics because they will no longer be able to ac-
complish their evil purposes. With these changes the sus-
picions and mudflinging now so prevalent will decrease, be-
cause their causes will subside. As discussion of specific
measures takes the place of partisan abuse, men of probity
and wisdom will feel their influence Avith the people increase,
and will delight to exercise their powers of mind and con-
science in the direction of public affairs when they can do so
without stain or ignominy. The increasing weight of good-
ness and the returning purity of political life will induce our
best men once more to take a leading part in it and stand for
office in council, legislature and congress as they used to do
in the patriotic days of the revolution. The Senate will again
become an Assembly of Sages instead of a Club of Million-
aires, and it will no longer be necessary for a man like Beecher
to pray "Lord keep us from despising our rulers, and keep
them from behaving so we can't help it."
10. The Referendum will help to bring out a full vote of
the better and more intelligent citizens, while it would tend,
as a rule, to eliminate the votes of the less intelligent the
very reverse of the effects which the present system tends to
produce. While speaking of the Use of the Referendum in
the United States we called attention to a number of facts
showing the general tendency of the referendum to cause an
automatic disfranchisement of the unintelligent, so that we
will confine ourselves here to the other branch of the propo-
sition before us.
In the first place the interest will generally be more dis-
tinct in a vote on the grant of a franchise, civil service reform,
appropriations for roads, schools, etc., than on a vote
324 THE OPEN DOOR OF PROGRESS.
whether A or B shall be councilman or mayor. And in the
second place, the .effectiveness of the vote will be greater.
The influence of these facts in securing a full vote has been
very noticeable when Boston, New York and other cities have
submitted questions to the direct vote of the people. In Pres-
idential and Gubernatorial elections, when a heavy vote is
polled, it is often largely due to the enthusiasm created by
some great issue involved in that election ; when no such issue
is at stake the mere vote for candidates is usually much
smaller. In the ordinary process of making laws people think
that one of two machines will do> the work any way, it makes
little difference which, and interference is useless. It will
make no odds whether they go to the polls or not. They
cannot acoinplish anything except by using the methods of
the machine, and sinking to. the level of unscrupulous, con-
scienceless war. Mr. Arrowsmith says :
"A few years ago the New Jersey legislative submitted to the
citizens of Orange the acceptance or rejection of a measure pro-
viding for the election of a new officer, president of council, at a
salary of $1,000 per annum. Now, out of a citizenship of upwards
of 5,000, almost altogether opposed to it, only a small percentage of
the voters expressed themselves upon the question. I did not vote
upon it, and my neighbors exhibited a similar indifference. Why?
simply because we Orange folks knew that our wishes would be set
at naught, and the politicians would come to Trenton and carry
their point with or without our consent."
Such a reference was not a referendum, because the vote
of the people was not intended to be final. It was a sham;
the people knew it lacked effectiveness, and altho they were
interested in the question they stayed at home. The real ref-
erendum is final and effective, and encourage I lie people to
go to the polls for the same reason that it encourages the best
men to enter political life. It is full of strength, hope and
progress. Let the people once feel that they are really sov-
ereign and they will vote and look after their own interests,
and instead of 40 to 60 per cent, stay-at-homes among the
"better classes," who leave the field to the machines, we shall
have a reasonably satisfactory expression of the people's will.
Ask a man if he wants a tenderloin steak or a bit of leather
for his dinner, and if he knows he will get leather any way
THE POPULAR INITIATIVE. 325
lie may keep his mouth shut; but if he knows that what he
says will settle the question, he will express himself vigor-
ously.
HELP THE PAPERS TO TELL THE TRUTH AND USE DIGNIFIED
ENGLISH.
11. The elevation of the press is one of the effects of the
Referendum, and one which alone is sufficient to make it an
incalculable boon. One of the most noticeable and important
of all the many changes produced in Switzerland by the adop-
tion of Direct Legislation, is the substitution of fair debate
for noisy vituperation in the columns of the daily papers. It
will do a similar work in America, and the Lord knows that:
we sorely need, such a change. As measures are put in the
place of men, sober discussion will take the place of the
traffic in abuse. The tendency to manufacture facts, and
deluge the country with sophistries will not so readily yield,,
but even in this respect there is sure to be a great improve-
ment. When the people come to direct their own affairs they
will demand the truth ; they will want the actual facts, so that
they may judge correctly in respect to their business, just as
a board of directors of a private corporation wants the facts,
and regards deception of themselves as one of the most un-
pardonable sins.
THE PEOPLE'S UNIVERSITY.
12. Direct Legislation icill have 41 profound educational
effect. Wendell Phillips said lonig ago that the discussions
accompanying presidential elections give the people a tre-
mendous intellectual lift every four years. With the Ref-
erendum, the progress will be continuous instead of spasmodic,
with intervals wide enuf for the pupils to forget nearly all
that they learn at each lesson,, as at present.
Nowhere on the face of the globe do you find as high an
average of keen intelligence as among the men of a New Eng-
land town trained from boyhood in the town-meeting. Con-
tinual voting on measures supplies an invaluable discipline
326 THE CITY FOR THE PEOPLE.
in place of the retrograde influences often involved in per-
sonal elections. Every citizen's sphere of thought and re-
sponsibility -will be enlarged by the Referendum, and growth
will be the result. Besides being a University in itself, the
Referendum will make the public welfare depend so directly
and obviously on the morality and intelligence of the people,
and not on the sagacity and probity of a few individuals, that
patriots, statesmen and business men will combine to develop
to the utmost every means of educating the masses, and a
great impetus will be given to popular education, with a cor-
responding improvement in the results.
It is interesting to note that, according to Mulhall, Switzer-
land is the best schooled country in the world. The percent-
age of children attending school is far above that in any
other country in Europe or any state in America. The per
capita expenditure for education is correspondingly high, and
the diffusion of knowledge is remarkable. 1 The Referendum
educates the people directly, and creates a powerful sentiment
in favor of the thoro education of the children.
History has only one other example of a people so univer-
sally cultivated, and that is the still more remarkable instance
of the Athenians. Among all the Greeks, they were the most
cultured, and they were far the most democratic. The Age
of Pericles, and immediately succeeding years, when Grecian
civilization was at its height in Athens, with a cluster of
great philosophers, statesmen and poets such as the world
has never seen before or since, corresponded with the
full bloom of democracv. All power was in the hands of
the people, who made the laws by direct discussion and vote
It is interesting to compare the expenditures for education and for
le army in Switzerland and in some of the other chief countries of Europe.
The figures are from the Clarion of March 12, 1898:
, Expenditure per capita
For Army For Pub. Education
. d. B. d.
France 17 . , ft
BiHr ::= ^^ I ? \\
BSm.^::z::::::::.::::::::::::E:E:;: : : :: E J J H
as 3 10
spends comparatively little on the army and much on edu-
BISECT LEGISLATION. 327
in public assemblies of the citizens. And the historian, Free-
man, says that the average intelligence of the assembled free-
men of Athens was higher than the average intelligence of
the English House of Commons, which is probably the equal
of our Congress.
DEVELOPS MORALS AND MANHOOD.
13. The emotional development of the people, as well as
tlicir intellectual growth will follow from the Referendum.
The consciousness of added power and responsibility will give
the voters a new dignity and a nobler manhood. They will
feel like judges in the court of final appeal. Xot mere se-
lectors of somebody to boss them, but rulers themselves, Not
mere nominators of a sovereign, but sovereigns. Such changes
in spiritual attitude and environment always work most pow-
erfully upon the moral and emotional development of the
individual and the race. The patriotic, law-abiding, law-en-
forcing sentiments of the people will be specially intensified
by the Referendum, because they will know that the country
is theirs not merely in name, but in fact; not merely to live
in and use as some one else bids them, but to mould and con-
trol for themselves.
A STEADYING INFLUENCE THE SOCIAL FLY-WHEEL.
14. The Referendum favors stability by developing pa-
triotism and education, securing greater simplicity and better
enforcement of law, driving bad men out of politics and bring-
ing good men in, supplying a safety valve for popular discon-
tent, and requiring a more careful consideration of legisla-
tion. Long use of the Referendum has shown that it is con-
servative. This clearly appears from the facts already stated
concerning its use in this country, and its record in Switzer-
land for thirty years shows that two-thirds of the measures
submitted to the people were rejected by them. 1 If the votes
1 Direct Legislation Record, 1897, p 17:. One of the most important of
the advantages of the Referendum is the fact that it forms a drag on hasty
legislation. There are two reasons for this tendency: First, an agent is apt
to give more consideration to his action when he knows that the watch
328 GOVERNMENT BY AND FOR THE PEOPLE.
of the legislators had been final, many of the rejected meas-
ures would have been law and some of the best measures
adopted by the people would not have been passed by the
legislators. An open door to popular decision gives discontent
a peaceful vent prevents its accumulation and draws it
away from destructive methods of escape. The present sys-
tem affords it no reasonable means of exerting its power, and
allows it to acumulate indefinitely. The importance of this
matter can hardly be overestimated. Anglo-Saxon manhood,
confined beneath the pressure of accumulating injustice, is
the most dangerous explosive known to history. Macaulay
predicted that it would destroy America industrial oppres-
sion of hopeless masses leading to revolution; but Macaulay
did not know about the Referendum that is going to re-
lieve the pressure, we hope, before the explosion comes.
The Referendum reduces to a minimum the danger of
broken peace. Nothing can oppose so strong a bulwark
against an appeal to passion as the knowledge that the
PEOPLE made the law and can change it when they please
the knowledge that there is no selfish power, deaf to reason
and impervious to sympathy, imprisoning progress in the dun-
geons of iniquity, whence only force can hope for speedy re-
lease, but that deliberate and careful discussion before the
great, honest, justice-loving people will remedy every wrong
Such knowledge will remove the causes that have produced
the growth of anarchy. It is smotltering discontent in hope-
lessness that breeds poison. Every anarchist I ever heard
express himself had much of truth in what he said. It was
his hopelessness of obtaining the justice he sought by peace-
ful means that made him advocate fire and bomb. An an-
archist generally is a man who feels intensely the pressure or
wrong conditions, and whose nature has more of recklessness
than hope. Give us the Referendum and the path will be
and control of his principal are continually upon him, than if he is beyond
the reach of interference and can do as he likes without interruption. Sec-
ond, not only will the legislators give more attention to what they do when
the people are to pass on their acts, but the fact that a large body of citi-
zens must make up their minds before the bill can become a law will itself
necessitate far more discussion of the measure than when only one or a few
persons do the deciding, especially if influence, money or partisanship give
the few their decision beforehand without the trouble of discussion.
THE INITIATIVE AND REFERENDUM. 329
so plain that Anarchy will soon go out of business. There is
no such thing in Switzerland. It is foreign to real democracy,
for there the obstruction to your wishes is the people, and
you can't get rid of them with a bomb.
It is sometimes objected by those who oppose Direct Legis-
lation, that the Initiative will give all sorts of cranks a chance
to bring their ideas to the front. But that is really one of
the advantages of the institution. It enables discontent to
find out just how big it is, gives it form and precision, sifts
out the kernel of truth and justice at the heart of it, lifts it
into the fresh air of public discussion before it has a chance
to ferment and explode. Even the worst cranks would prob-
ably be diverted from violence to peaceful petitions and ef-
forts to educate the public to their ideas. The petitions
would cause no trouble, not even the effort of a veto, until
they rose to 20,000 in Massachusetts and 70,000 in Xew
York, and if there were 20,000 citizens in the Bay State who
were united in the opinion that a certain change should be
made in the law of the state, surely the matter would be
worthy the careful attention of the people.
Under the Referendum, the street car men of Brooklyn
or Philadelphia would not give up their work for the priva-
tions and turmoil of a strike, nor would they suffer in hope-
less silence, but they would state their grievances at the head
of a petition for the Referendum on Municipal Ownership of
the Roads, and get their friends to circulate it, and then vote
the secret ballot for the transformation that would give them
a voice in the government of the industry in which they are
engaged.
Under the Referendum, the unemployed would not parade
the streets of our cities in angry, hopeless mobs, but they
would set the wheels of the law in motion to give them com-
plete justice, instead of the patchwork of hated charity.
Xot only will revolutionary and disruptive forces become
comparatively harmless under the Referendum, and progres-
sive forces work more smoothly and steadily, but even the
unavoidable difficulties and errors incident to the government
of large bodies of men will be more serenely and calmly dealt
330
with. People are not so apt to find fault with what they do
themselves as with what is done by others. Take a man who
is scolding about something and prove to him that it is his
own doing and he becomes quiet and moderate. Watch a
mechanic trying to use a defective piece of machinery made
by some one for whom he is not responsible, and see how blue
the air will be with deprecation or something worse; but let
him endeavor to use an imperfect machine made by himself,
and see how good natured and tolerant he is, and how pa-
tiently he seeks to remedy the defect. So censure and ridi-
cule without measure are heaped upon the acts of councils,
legislatures and congresses, but note the atmosphere of quiet
acquiescence when the people have spoken, even tho the in-
terests involved are of the most tremendous moment and the
preceding struggle was most intense.
The following selections illustrate these points. Read first
a few of the extracts collected by Mr. Pomeroy, showing the
light in which many legislative bodies are regarded, and then
compare the expressions of cordial acquiescence in the people's
decision in 1896, on the part of those who had advocated men
and measures that were not successful at the polls.
CONGRESS.
From the Outlook (religious).
"Congress has adjourned. It has lived without achievement; it
dies without honor. It was elected by an overwhelming majority.
At the end of its career it was defeated by a majority not less sig-
nificant."
From the New York Herald.
"Congress drew its final official breath amid a wild saturnalia.
Champagne flowed like water, women of ill repute swarmed the
corridors and sang songs in the public restaurants with inebriated
Congressmen in the small hours of the morning. Between roll
calls members staggered between their places and the bottle."
NEW YORK LEGISLATURE.
From the Review of Rerieirs.
"Republican politicians at Albany turned out to be as selfish
and unscrupulous as their Democratic predecessors had been. The
opposition of Mr. Platt and his friends wretchedly mutilated the
reform programme."
THE POPULAR VETO. 331
From the New York World.
"The New York State legislature of 1895 was probabty the most
incompetent, vicious and useless that the people were ever called
upon to pay for. The session itself cost the 7,000,000 people of the
State almost as much as the 1894 term of the British Parliament,
which made laws for 300,000,000 of its citizens and colonists."
No. of Cost of
Legislative Body. laws maintenance.
Congress 351 $3,477,834
British Parliament 266 468,640
New York Legislature about 700 420,000
(The second session of the 53d Congress, which legislated for 70,-
000,000 of people, cost nearly eight times as much as the British
Parliament, legislating for 300,000,000.)
From the Outlook.
"Distrust of legislation has been widened and deepened by the
record of the New York body just adjourned This
legislature, more than any other of recent years, was elected on the
pledge of reform It was pledged to ballot reform,
and passed a blanket ballot bill which permits the ballot of the
bribed voter to be identified by the purchasers.
"It was pledged to a corrupt practices act, requiring sworn
itemized statements of the receipts and expenditures of campaign
committees, and ignominiously rejected all measures designed to
fulfill this pledge.
"It was pledged to public school reform, and defeated the bill
which had the support of all the reform organizations.
"It was above all things, pledged to the complete overthrow of
the Tammany Hall police system, yet it passed the police bill mak-
ing mandatory the Tammany system of a bipartisan commission
and then rejected the bill giving the honorable commissioners ap-
pointed by Mayor Strong the power to reorganize the Tammany
force."
PENNSYLVANIA JLEGISLATUBE.
From the Voice (Prohibition).
"The Pennsylvania legislature expired to-day without a mourner.
In the early part of the evening a number of the members were
visibly affected by liquor, and with howls, yells and whistling did
all in their power to make night hideous. The climax was reached
at midnight. Then it was that the most disgraceful scenes that
have ever occurred within the halls of the State Capitol took place.
Some of the members were not satisfied with what
they could drink, but threw the liquor over each other, so that
when they emerged from the room they were spattered with beer
from head to foot; others carried bottles with them; others had
lunch sent to them at their desks, where they entertained their
"lady friends."
332 THE OPEN BOOK OF PROGRESS.
MASSACHUSETTS LEGISLATURE.
From Harper's Weekly.
"It has been widely and most regretfully noticed that during
the last ten years or so the Massachusetts legislature, once a body
of exceptional purity, intelligence and public spirit, has become
more and more an assemblage of ordinary political hacks, acces-
sible to corrupt influences."
MICHIGAN LEGISLATURE.
From the Detroit Free Press.
"It would be impossible within a reasonable space to record
the sins of commission and omission committed by the present leg-
islature. ...... The whole course of the legislature is in-
dicative of venality and of servility to the machine. Lobbyists may
have had less expensive work at times past, but they never found
it easier. Our misrepresentatives go so far as to say that the people
shall not voice their opinion upon a great constitutional question.
They are without rights which the legislators are bound to respect.
It is for the machine and the corporations We have
in Michigan the most terrible example yet furnished in a time of
profoxmd peace of what calamities may result from a perversion
of the principles of representative government."
INDIANA LEGISLATURE.
From the Review-Hei^ald, Battle Creek, Mich, (religious).
"The Indiana legislature has won for itself a distinction for de-
fiance of law, even in the days of lawlessness. A Republican legis-
lature has struggled for supremacy with a Democratic executive,
and the contest culminated on the night of the llth in a wild riot.
Chairs, revolvers, books, fists and boots were freely used. More
than a score were severely injured
"The disgraceful scenes that are witnessed in some of our legis-
latures are sufficient to cause a deep blush of shame on the cheek
of every American."
ILLINOIS LEGISLATURE.
From the Chicago Times-Herald.
"If the honest, law-abiding people of Illinois could have been
present in Springfield to witness the extraordinary closing hours
of the thirty-ninth general assembly, they would have been led
seriously to doubt whether there exists in this State a republican
form of government."
ARKANSAS LEGISLATURE.
From the Farmers' Tribune.
"Representative Yancy disclosed how the Iron Mountain Railroad
had been able to buy and control the legislature of the State at
$100 per vote. There is no doubt that enough legislators were
under pay to swing the vote in the favor of the railway company."
THE POPULAR INITIATIVE. 333
TEXAS LEGISLATURE.
James Armstrong in The Owning Nation.
"\Yith the exception of prayer, excursions and the payment of
salaries, I know nothing which that august body has successfully
done. They have insisted on mileage while traveling 1 on passes,
and laughed to scorn every proposition to curtail expenses. Their
conduct from the first day of their meeting has elicited nothing
save my sovereign disgust."
"sow read a few more paragraphs from some of the most
strenuous advocates of the party and policy that was defeated
at the polls, and mark their quiet acquiescence in the people's
verdict aaainst them.
William P. St. John, treasurer of the National Democratic Committee
"The people have declared themselves unmistakably. I there-
fore cordially acquiesce."
The New York Journal said:
"The people have chosen Major McKinley instead of Mr. Bryan
to be President. Xobody has a right to object, for the people's
will is sovereign. It is the high privilege of the citizens of this
Republic to decide for themselves what is good for them, and when
they happen to be wrong they always have the good sense to suffer
the consequences with patience, knowing that at the ballot box
they can set things straight again. The Journal regrets the de-
cision of the people. Four years, however, constitute an insig-
nificant space in the life of a nation. Let us hope that the pre-
dicted confidence and prosperity will be forthcoming. The Journal
has no inclination to quarrel with the jury of the people because
of their verdict."
The Chicago Evening Dispatch said:
"Wait. It is only four years. The mills of the gods grind
slowly, but they grind exceeding- small; wait. To dispute the will
of the majority is revolution, and the Dispatch believes in the
perpetuity of the nation, and concedes that what a majority of the
people want all of the people can stand. Our faith is pinned to
American citizenship."
The Wheeling (W. Ta.) Register said:
"But we have faith in the American people, in their common
sense, and in their riigged honesty. Four years is not long, and
Mr. Bryan is young."
The Indianapolis (Ind.) Sentinel said:
"The result will come as a great disappointment to thousands,
but the fundamental principle of our Government is acquiescence
r>34 THE CITY FOB THE PEOPLE.
in the will of the majority, and, therefore, all good citizens will
reconcile themselves to making the best of what they may possibly
consider a bad matter."
TJie Wilkesbarre (Pa.) Leader said:
"The will of the people is supreme. Let all cheerfully bow to it
and hope that the best that could have been done has been accom-
plished."
The Salt Lake (Utah) Herald said:
"The American people, as a people, cannot be purchased, tho
they may be deceived. Those who advocate free silver will accept
the verdict of the American people as that of the sovereign power
of this country."
The Houston (Tex.) Post said:
"The voice of the nation has decided against the Democracy and
in favor of Republicanism, and nothing remains, of course, but to
bow as gracefully as possible to the will of the majority."
If men can so serenely bow to the defeat of their most
cherished hopes when the people speak, altho the door is
closed for four long years, how much more calmly would
they yield when they knew that it might not be necessary
to wait four years but that the decision could be modified
whenever the people should consider it best to do so?
ECONOMY.
15. Large economies will result from Direct Legislation
thru the stopping of jobs, extravagant contracts, corrupt legis-
lation of all sorts, cutting down the power of bosses and rings,
simplifying the law, reducing litigation and diminishing
even the expenses of legitimate government. A single illus-
tration under the latter head will show the economical ten-
dencies of the Referendum. In New Jersey every year about
100 newspapers receive about $1200 apiece for printing the
acts of the legislature, a performance which costs the publisher
less than one-tenth of what he receives; $75 cost to each news-
paper, over $1200 cost to the taxpayer. More than $100,000
out of the pockets of the people every year merely to 1 enable
the politicians to keep in the good graces of the papers, for
if a paper ^misbehaves, it is easy to strike it from the list of
DIRECT LEGISLATION. 335
those that ar, to get the law-money, and not a few papers
would die if tiiey did not get this help a consummation de-
voutly to be wished, since one-third, or even one-tenth of the
papers in the state could do the whole work of the press, and
do it better and cheaper than it is done now, with a paper to
each 1000 inhabitants in some localities, and four of them
(the papers) to publish the laws in a single town of 5000 peo-
ple. The shrinkage of state legislation under the Referendum
and the effective auditing of appropriations will probably save
the whole $100,000 and a large part of the actual present
cost. The state could print for itself the laws enacted each
year and send a package to every post office or news delivery,
where they could be had free upon application.
This is only one little item, but it shows the drift. The ruler
is apt to arrange thing's to suit his own interest. When the
people really make the laws, they will arrange things for
their interests. They will banish unnecessary offices, reduce
the salaries of lofty officials, abolish jobbery and extravagance,
get rid of the iniquitous spoils system, cut down the power of
corporate wealth, rescind all forfeited franchises and take
control of misbehaving monopolies. Economy, justice and
purity will go hand in hand. Ring-rule and class-legisla-
tion will die, and politicians will lose their power, because
they can no longer command rewards for their supporters, no
jobs, no fat contracts, no rich franchises. The cost of taking
the Referendum vote will be very slight; not so much as the
saving on many a single contract; not a half of the saving on
the one item of printing the laws ; not a tenth of the value of
many a franchise it will keep from being stolen.
IDENTIFICATION OF POWER WITH PUBLIC INTEREST.
16. The Referendum icill identify poire r with the public
interest. One of the prime sources of evil in our government
to-day is the possession of vast political power by private in-
terests. History shows that the law is in the main the ex-
pression of the interest of the law-maker. If the law is to be
n the people's interest, it must be their act; the enacting and
336 GOVERNMENT BY AND FOR THE PEOPLE.
approving power must be in the people. Power is used in the
interest of its possessor. If the power of government is to
he used in the interest of the people, they must have contin-
uous and effective control of the government.
Government should be so arranged that interest and power
will coincide with justice and the public good. This can only
he the case when the real control is in the whole- body of citi-
zens of full age and discretion and good character, for the in-
terest of a part is not identical with the interest of the whole,
and so far as power is possessed by a part, its exercise may de-
viate from justice and the public good.
THE WORKWOMAN'S ISSUE.
17. The Referendum icill give Labor its true weight.
Labor's interest in the Referendum is measureless; it is par
excellence the workingman's issue. The present delegate
system places Labor at tremendous disadvantage as compared
with Capital. Nearly all the delegates are wealthy or sym-
pathize with the wealthy, or are under their influence. Labor
cannot expect a great deal from legislators; and the weapon
it has largely relied upon, the organized strike, is being alx>l-
ished by injunction. Not without reason, for it is certainly
against the public interest to allow a big corporation and its
employees to settle their disagreements by private war in the
heart of a great city, to the vast disturbance of business and
perhaps the destruction of life and property just as much
aeainst the public interest as it would be to allow two individ-
uals to settle a dispute by conflict in the public streets. Xever-
theless, Labor is coming to be in a very tight place without the
strike and without effective representation in the halls of legis-
lation. "What is the remedy? Courts of compulsory arbitra-
tion would do some good, but the fundamental constitutional
cure is Direct Legislation.
Labor unions recognize quite generally the importance of
Direct Legislation to them. As early as 1891 ten of the larg-
est national and international trades unions (with a member-
ship close to 200,000) were using Direct Legislation. The
THE INITIATIVE AND KEFEKENDUM. 337
same year Grand Master Workman. Powderly recommended
the adoption of the Referendum in political government.
From 1892 Direct Legislation was the only political demand
of the American Federation of Labor until 1894, when others
were added. It has been repeatedly and emphatically indorsed
by this powerful organization, and its president, Samuel Gom-
pers, is a firm believer in the movement. The Farmers' Al-
liance, also, as we have said, strongly advocates the Referen-
dum. For two or three years its Supreme Council passed res-
olutions favoring the discussion of Direct Legislation, and
recently an emphatic demand for it has been inserted in their
platform.
Any one who will examine the composition of councils and
boards of aldermen in our large cities, or of our legislatures
and congresses, will realize how small a chance there is that
our present law-makers will do full justice to labor. The fol-
lowing facts illustrate the situation :
53d Congress.
Senate. House.
64 lawyers. 245 lawyers.
10 manufs. or merchants. 14 bankers.
6 bankers. 21 manufs. or merchants.
1 doctor. 5 doctors.
1 farmer. 8 educators.
4 miscellaneous. 25 farmers.
28 miscellaneous.
Over 70 per cent, lawyers and nearly all the rest belong to
the "upper" classes. Wnat chance has Labor with such an
assembly?
There are some farmers, physicians, educators, etc., who
may perhaps be heard if the speaker is willing. But the
fanners are not, as a rule, ,the sort of men who hold the plow
themselves. They are farmers because they own farms. They
hire non-owners to do the work. Their financial interests are
not with labor.
Examine the present congress (55th):
22
338 THE END OF CORRUPT LEGISLATION.
Senate.
54 lawyers. 1 brewer.
11 public officials 2 journalists.
(very likely lawyers also). 2 newspaper proprietors.
1 railroad president. 1 literateur.
1 president of express co. 1 planter.
1 capitalist. 1 planter and journalist.
1 miner. 4 farmers.
2 manufacturers. 1 lawyer and farmer.
6 merchants. 1 retired.
Over 60 per cent, are lawyers, and nearly all the rest are
members of the professional and capitalistic classes. The Sen-
ate has been called a millionaire club, and it is a fact that
almost every member is wealthy, or so related in sympathy
and interest to the wealthy as to make it very unlikely that
he would vote for anything that would put much check on
the growth of great fortunes.
The House.
210 lawyers. 8 bankers.
17 public officials. 3 physicians.
11 manufacturers. 1 pharmacist.
12 merchants. 1 chemist.
3 "real estate." 2 "insurance."
3 lumbermen. 3 planters.
1 coal dealer. 20 farmers.
10 journalists. 1 stock raiser.
7 editors. 1 operator.
1 printer. 1 "machinery."
1 laboring man. 3 retired.
20 not given.
Over 60 per cent, lawyers again the president and 60 per
cent of both houses are lawyers, and is it not the very instinct
of a lawyer to follow the interests of his wealthiest clients? And
who are those clients but the great monopolies and trusts?
Is it any wonder that sugar has many friends at Washington,
and can get what it wants in the tariff? Is it any wonder that
THE POPULAR VETO.
all the efforts of the people to secure a postal telegraph have
been abortive? Is it any wonder that the express companies
have been able to prevent the establishment of a parcels post,
or that the government pays the railroads for transporting the
mails eight times the rates paid by the express companies for
the transportation of express packages?
The spoils of office under the absolute delegate system have
created conditions of nomination and election which naturally
produce class government. To be a sucessful candidate re-
quires, in general, time, money, address, a wide acquaintance
and a knowledge of the machinery of politics and law. A
workingman or farmer or business man of small affairs is not
very apt to be a candidate for any influential office, and if he
is a candidate his chances of election are small. He is too
busy to do the needful buttonholing; he has no money with
which to convince the "boys" that he is a good fellow, fit for
office; he has no acquaintance with leading men, and he lacks
the knowledge of political tactics which is so useful in win-
ning elections, as well as that really important understand-
ing of government and social affairs which is rightly regarded
as a qualification for public preferment. Lawyers, bankers,
brokers and brewers, leading merchants, manufacturers, jour-
nalists, corporation managers, professional politicians and
demagogues such are the men who carry elections and fill
the offices, and these are not the men most likely to be in real
sympathy with the great mass of the people, or to have inter-
ests identical with theirs, or to be capable of truly represent-
ing them; they are more likely to represent the great trusts
and corporations whose legislative and administrative interests
are, to a large extent, antagonistic to the public interest. If
the mass of the people were really represented, the tide of af-
fairs would be turned from the progressive congestion of
wealth toward the progressive diffusion of wealth.
In illustration of the sort of chemical composition that is
possible in a state legislature, I quote from a Hazleton (Pa.)
paper of last year (1897):
"In the next Pennsylvania Legislature will be found one gambler,
one base ball umpire, one preacher, eight men who declare they
340 THE OPEN DOOR OF PEOGEESS.
are 'gentlemen,' nineteen without occupations, twenty-seven law-
yers and one pugilist. Of the members, three were convicted of
larceny, one was tried for murder and acquitted, three have been
in insane asylums, while eight have been at Keeley cures and four
are divorced."
THE PEOPLE'S ISSUE.
18. Not the producing classes alone, but every other class
in the community will be benefited by the Referendum. It
must be clear by this time that all who wish justice and good
government will be benefited by Direct Legislation, and it is
equally true that even the bosses and tricksters will receive a
priceless boon by the removal of the temptations that help to
make them evil men, and the establishment of conditions tend-
ing to lift them to a nobler plane of life, Under the Refer-
endum, those who desire political power must become true-
hearted orators and public-spirited philosophers instead of ac-
complished wire-pullers.
The Referendum is in no true sense either a class-measure
or a party-measure. The latter point has already been brought
out by our review of the persons and platforms that favor Di-
rect Legislation, and by the record of actual referendum
votes, showing how independent of party lines the voting
usually is. A single case may serve to bring the matter
strongly to mind. In Nebraska, in 1896, the Republicans
submitted twelve amendments to the people and were de-
feated by the Populists at the polls, but the amendments re-
ceived majorities ranging from 54 to 70 per cent, of the votes
cast, while the Populist majorities on the eleven state officers
elected and on the Presidential electors ranged from a plur-
ality of 50 per cent, to a majority of 54 per cent.
A COEEOLLAEY FROM ESTABLISHED LEGAL PRINCIPLES.
SIMPLY AN APPLICATION OF THE LAW OF AGENCY.
19. Direct Legislation is simply an application of the
fundamental principles of Agency recognized in every court
of justice in the civilized world; viz: That an agent must
hold himself at all times subject to the command and approval
THE POPULAR INITIATIVE. 341
of his principal. If you employ an agent to manage your
business, he expects to do as you say in all things. He will
advise you, but if you are not convinced he must do your way
and not his; and if he is not willing to do your way, he resigns,
or you discharge him. He may plan, but you have the power
of instant veto, and you do not have to wait till the end of
the year. If you did, you might find your property mort-
gaged or sold or given away beyond recall.
Men often speak of their theories as tho they were facts.
Because of our theories of what government ought to be and
is intended to be, we have fallen into the habit of calling
our representatives and misrepresentatives the 'agents" of the
people; but it is not true. An agent may be instructed by
his principal at any time, and he is bound to obey; he must
submit his plans in respect to the principal's business to the
principal whenever requested to do so, and the principal may
reject them or amend them if they do not suit him; the agent's
power may be revoked whenever he misconducts himself; and
in every respect he is subject to the will of the principal; an
instrument to carry it into execution, and not a person to set up
his wiiVI ,/<-)position to the prir,g^^'s and override or disre-
gard the principal's wishes in his own affairs that sort of a
person is a master, not an agent.
To one who understands the nature of agency, and knows
that an agent is simply an instrument in the hand of the prin-
cipal to execute his purposes, it sounds very odd to call city
councilmen and state legislators "agents." They ought to be,
but they are not. They have some of the symptoms, but in
other respects they are found to be a very different sort of
animal. Queer agents who can sell or give away my prop-
erty against my wish and protest; queer agents who can re-
fuse to manage my business in the way I tell them to, and
who may violate my orders and disregard my instructions, and
still be safe from discharge till the term for which I em-
ployed them to act for me has expired. You engage an
architect to draw plans for your house, but you expect to
have the plans submitted to you before your money is spent
in building. Legislators are not agents, but masters; and the
342 THE CITY FOE THE PEOPLE.
people do not, for the most part, govern themselves, but
merely select the persons who are to govern them. These
legislative masters have many interests in common with the
rest of the people, and not infrequently wish to be re-elected;
so they act to a considerable extent as real agents would. But
they are not real agents, for they are not bound to act for the
principal's interest or according to his instructions, and every
now and then, when their interests are strongly opposed to
the people's, and they think they can act in such a way as
not to arouse public indignation, or they have a political ma-
chine at their backs assuring re-election whatever they do,
or the interest involved seems more important to them than
the chance of re-election then they give away franchises,
lease city gas works, make bad contracts, pass laws for their
private benefit, and act in public affairs in many a way they
would never dream of acting if the business in their charge
had been intrusted to them by an individual or company em-
ploying them as agents subject to the principal's supervision,
instruction, veto and discharge according to the universally
recognized principles of the law of agency. A man who can
give away my property^n gainst my protest an<V; p ;^out re-
dress, and can make laws that I have to obey ior a year or
two years or four years, till he goes out of office, is not my
agent, but my master for the term. 1
Our legislators and officials will never be really the people's
agents, the people's will will never be the actually and contin-
uously governing will, until the people claim the principal's
rights of instruction and veto, revocation and discharge.
EXPERIENCE.
20. Experience speaks strongly for the Referendum, not
onlv from its successful use in the United States, but also from
1 Not only the principles applicable to agents strictly so called, the class
to which legislators ought to belong, but also the laws and usages of dealings
with servants, contractors, etc., point to the Referendum Idea. If you have
a cook and she makes a broth you don't like, you do not have to swallow It,
and yon may discharge the cook if she won't make things right; but legisla-
n S oups you nave to take > no matter how unpleasant, and you are com-
>elled to wait one year, two years or four years to get rid of the rascally
cooks. If your tailor makes a suit of clothes that does not fit, you do not
nave to wear it, nor pay the tailor, either, unless he makes it the way you
pant It. But with the making of law you do not exhibit so much sense;
you have fixed things so that you are obliged to wear the misfit and pay
the tailor just the same as if it were a fit.
DIRECT LEGISLATION. 343
its use in England and Canada, and most eloquently of all
from the splendid results of its complete adoption in Switzer-
7 and.
In Canada the Referendum is often used to ascertain public
opinion on important measures, and has done some excellent
work in the same way as in our states and cities when used
voluntarily by the legislatures or councils.
In England the Referendum principle is very effectively
applied. Every "appeal to the people" after each dissolution
of parliament is practically a Referendum. Parties go to the
people, not with vague generalities muddled in a heap of
promises which the promisors never dream any one would
be so discourteous as to ask them to fulfil, but with a distinct
course of legislation clearly marked out, a definite and prac-
tical measure reduced to the very terms it is proposed to enact
into law, an actual bill which the people sit in judgment upon,
hear the advocates for and against and reject or approve, as
they see fit. England is slow in some things, but the mother
can teach the daughter a few good lessons if the young lady
will only listen with her nose at par or lower. "When the Eng-
lish make ap their minds, and elect a new parliament to carry
out a reform, the members meet at once and put the will of
the people into action. The old parliament is dead, and the
new one begins to move as soon as the victory at the polls is
assured. But with us it takes six months or a year for the
new Congress to get hold of the reins, and meanwhile the old-
boys, whom the people have repudiated, continue to drive to
destruction or anywhere else they please.
It is to Switzerland, however, that we must turn for the
fullest development of the referendum. Prof. Louis "Waurin,
of the University of Geneva, says: 1
"In the middle of this century the aristocratic regime in Switz-
erland was succeeded by that of representative democracy. The
pure representative system, however, was not destined to last long.
The people soon became aware that in the latter regime the coun-
try was overridden by political 'coteries,' prone to sacrifice the
general good to party or personal interests, and thus was brought
about the development of direct democracy. Then appeared two
institutions: The Referendum and the right of popular Initiative,
to which has of late been added, as a necessary complement, pro-
portional representation."
1 Progressive Review, Lond n, July, 1897.
344 GOVERNMENT BY AND FOR THE PEOPLE.
The evolution and effects of Direct Legislation in Switzer-
land are so important that a knowledge of its history there
seems almost essential to anything like a thoro understanding
of our subject. The following resume 2 will give the reader
the principal points:
Fifty years ago Switzerland was more under the heels of class
rule than we are to-day; political turmoil, rioting, civil war, mo-
nopoly, aristocracy and oppression that was the history of a
large portion of the Swiss until within a few decades. To-day the
country is the freest and most peaceful in the world. What has
wrought the change? Simply Union and the Referendum Union
for strength, the Eeferendum for justice. Union to stop war and
riot the Eeferendum to overcome monopoly, aristocracy and op-
pression. A solid confederation of the twenty-two cantons or states,
with a good constitution, was founded in 1848. Peace followed,
but the railroads, politicians, aristocrats and monopolists continued
to plunder the people. In 1858 a heavy subsidy was granted a
railroad by the legislature of Neuchatel. This opened the eyes of
the Switzers to the "beauties" of the representative system. They
began to cast about for a remedy. Some of the ablest citizens had
for years been calling attention to the value of the Referendum
(which was practiced in a few of the small forest cantons), urging
the extension of the method to other states and to the Union.
The people saw that it was of no use to put faith in parties strug-
gling for public office, or to continue trying to guess which candi-
dates might withstand the corruptions of power, and so they de-
cided to trust themselves. In 1863 and a few years following, six
of the leading cantons adopted the Initiative and Referendum, and
to-day Direct Legislation is practiced in all of Switzerland's cities,
most of its communes, in 21 out of the 22 cantons, and in the Fed-
eral Government. Fourteen of the cantons have the obligatory Ref-
erendum, and seven the optional. The Confederation adopted the
Referendum in 1874. The Initiative is in use in 17 cantons, and
the Federation adopted it in 1891. The Referendum clause of the
Federal Constitution reads as follows:
"Federal laws as. well as federal resolutions which are binding
upon all, and which are not of such a nature that they must be de-
spatched immediately, shall be laid before the people for accept-
ance or rejection when this is demanded by 30,000 Swiss voters
or by eight cantons."
The amendment of 1891 provides for the Initiative "when 50,000
voters demand the enactment, abolition or alteration of special
articles of the constitution." As constitutional lines are very loosely
drawn in Switzerland, the people will be able to initiate almost
any measure they choose. Let us look at the results. Mr. W. D.
1 A condensation for the most part from the writings of Mr. Sullivan,
Mr. McCrackan, Karl Burkli, Sir Francis Adams, and Hon. Boyd Winchester,
ex-U. S. Minister to Switzerland.
THE INITIATIVE AND EEFERENDUM. 345
McCrackan and Mr. J. W. Sullivan have made exhaustive studies of
Swiss affairs, and to them I owe most of the facts I give about
the Referendum there. Mr. Sullivan has the story of Direct Legis-
lation in writing from Herr Carl Burkli, of Zurich, known as the
"Father of the Referendum," who says: "The masses of the citi-
zens of Switzerland found it necessary to revolt against their plu-
tocracy and the corrupt politicians who were exploiting the coun-
try thru the representative system The plutocratic
government and the Grand Council of Zurich, which had connived
with the private banks and railroads, were pulled down in one
great voting swoop. The people had grown tired of being be-
headed by the office holders after every election. And politicians
and privileged classes have ever since been going down before
these instruments in the hands of the people."
The Referendum has been carried most nearly to perfection in
Berne, the great canton of half a million people, and in Zurich,
with its 340,000 inhabitants. The legislature of Zurich consists of
a single house of 300 members. It meets two or three times a year
for a two-weeks' session. It cannot grant a privilege to a corpora-
tion, nor create an office, nor grant a contract. Every enactment
and every appropriation above the ordinary limited sums for pur-
poses specified in the constitution, must go to the polls. And the
consequences let me quote Mr. Sullivan verbatim, so that there
may be no mistake: "The Zurich legislature knows nothing of
bribery. It never sees a lobbyist. There are no vestiges remain-
ing of the public extravagance, the confusion of laws, the parti-
san feeling, the personal campaigns, characteristic of representa-
tive governments When men of Zurich, now but
middle aged, were young, its legislature practiced vices similar to
those of American legislatures; the cantons supported many
idling functionaries, and the citizens were ordinarily but voting
machines, registering the will of the political bosses
To-day there is not a sinecure public office in Zurich; the popular
vote has cut down the number of officials to the minimum, and
their pay also There are no officials with high sala-
ries There is no one-man power in Switzerland.
Xo machine politician lives by spoils
The referendum has proved destructive to class law and class
privilege." In other words, Switzerland has rid the body politic
of its vermin it has taken politics out of the slums and civilized it.
Direct legislation has destroyed the power of legislators to legis-
late for personal ends, and so has punctured the heart of evil in
legislation.
One of the most valuable results has been the effect on the press.
The papers no longer deal in spite, prejudice, sensationalism and
slander, but aim at quiet discussion and solid argument. Says
Mr. Sullivan: "The advance of the Swiss press in power, in dignity,
in public helpfulness since the day of Direct Legislation in that
country has been one of the most remarkable facts connected with
the reform." I wonder if it really could give our papers dignity
346 THE END OF CORRUPT LEGISLATION.
and helpfulness, and a slight respect for the truth. Mighty Magi-
cian, we pray for thy speedy arrival.
The progressive power of the Referendum has been wonderful.
It has enabled the Swiss to settle quickly and easily many of the
serious problems over which Americans have long been puzzling
their heads, and in respect to which they seem little nearer a solu-
tion to-day than they were 10 or 15 years ago. We have spoken
of the elevation of the press, the overthrow of monopoly, the puri-
fication of politics and the economies resulting therefrom, and
from the absence of senates, unnecessary offices, high salaries
and complex laws; but that is not all. Thru the Referendum
Switzerland has secured public ownership of the liquor business,
the manufacture of distilled liquors being now a national monop-
oly, has adopted state life insurance, a national paper currency, a
greatly improved factory act, a uniform marriage and divorce law
more liberal and sensible than any of ours, established local op-
tion in capital punishment, declared that vaccination shall not
be compulsory, that religion shall not be entirely swept out of the
schools, and that her people are not yet ready to recognize gov-
ernmentally the right to employment when linked with a demand
for "an official status between laborers and employers, with demo-
cratic organization of the work in factories and workshops." [And
the Swiss are right. It would not be just for the public to attempt
such a reorganization until the public or the workers by purchase,
or the growth of co-operation, have come to own the shops. Dem-
ocratic organization before that would be confiscation.] All this
since 1875, and still we have not spoken of the two most important
movements of the referendum period, viz., improved taxation and
the nationalization of the means of communication both the re-
sults of Direct Legislation.
Tax reform has proceeded in two directions: First, the reduction
of the aggregate of taxation, rendered possible by the simplicity,
purity and economy of direct government; and second, the change
of the incidence of taxation from poverty to wealth. The latter
is one of the wisest and most significant movements of modern
times, and is making its claims felt in all advanced countries. In
Switzerland it has been carried far toward perfection.
Direct and non-transferable taxes have been substituted for in-
direct and transferable taxes, and the direct taxes have been made
progressive.
Indirect taxes, or those on commodities imported, manufactured,
sold, etc., are transferable from the person first paying them, to
the consumer, who has also to pay the said person interest and
profits on the capital he used to settle the tax in the first instance,
so that the rich importer or manufacturer may actually make
money out of the tax system instead of really contributing any-
thing out of his own pocket to the support of the government;
while the people who consume the commodities taxed, not only
have to pay all the taxes, but the dealers' profits on them besides.
The government treasury, after all, only receives $2 out of every
THE POPULAR VETO. 347
three the people pay on account of the tax system. If the taxes
are mostly on articles of ordinary use, the great body of the poorer
people bear the bulk of taxation, and a certain class of the wealthy
have no burden, but a profit instead. This trick of indirect tax-
ation is what the French statesman Turgot called "plucking the
goose without making it cackle." But the Swiss geese have
found out the trick, and have turned it into direct progressive
taxation, or the trick of plucking the goose where the feathers
are thickest, and where it will hurt the least. In several of the
more radical cantons the rich and well-to-do pay nearly all the
taxes. In Zurich fifty years ago all taxes were indirect; now $32
out of every $34, or over seven eighths of the whole, are raised
by direct and progressive taxation on incomes, inheritances and
real' estate.
In the case of incomes, the largest pay at a rate five times as
heavy as the moderate ones. In the case of property, the largest
fortunes pay at a rate twice as great as the smallest. In the case
of inheritances, the tax has increased more than six fold in the last
thirty years. The larger the amount of property and the more
distant the relative the heavier the rate.
The poorest laborer pays about 2 per cent, of his wages in taxes,
being 15 to 30 per cent, better off than before the present system
was adopted: the well-paid clerk pays 5 per cent, of his salary,
being 10 to 20 per cent, better off; the business man worth $50,000
' or more paj r s 10 per cent, of his profits, and rests about where he
was; while the large capitalist, worth half a million or more, pays
25 per cent of his income, and so gives back to the public a part
of the excess that he receives above what he earns. These laws
have done a great deal to aid the diffusion of wealth and check
the too rapid growth of overlarge fortunes, and the results are
seen in the fact that while Switzerland was until recently very
poor, the exchanges of wealth per capita there are greater to-day
than in any other country of the continent. "It is an extraordinary
fact." says Mr. Sullivan, generalizing from Mulhall's statistics,
"that the three million Swiss consume as much wealth as the fif-
teen million Italians." That is, one Swiss, on the average, eats,
drinks, wears, travels and reads five times as rmich as his Italian
neighbor.
Not less important, is the second great movement above men-
tioned the tendency of the government toward the full control of
monopolies, shown in the nationalization of the liquor business,
a portion of the forests, life insurance and the means of communi-
cation and transportation.
As a result of Direct Legislation Switzerland has adopted na-
tional ownership of railways, and has the best system of Federal
postoffice, telegraph, telephone and express service in ex ; stence.
If you receive money by postal order the carrier puts the cash in
your hands. The mail is delivered ereryicTiere. If you want the
express you send the order by the carrier. At any post office you
may subscribe for any Swiss publication, or for any of the several
348 ' THE OPEN DOOR OF PROGRESS.
thousands of the world's leading periodicals. Letter postage in
Switzerland is one cent local, general two cents, book one cent a
half pound, newspaper average two-fifths of a cent; express mat-
ter at corresponding ,rates. With the cheapest postage in the
world the profits of the system are large, because the Swiss post-
office does not have to pay the railroads monopoly prices for trans-
portation.
In respect to the public telephone, the American Consul at St.
Gall reported officially May 5, 1892: "The Swiss telephone service
is better and the rates lower than anywhere else in the world."
As to the national ownership of railroads in Switzerland, I refer
the reader to the circular issued by the National League for Pro-
moting the Public Ownership of Monopolies, and printed in Chap-
ter I of this book, at the close of the section on "Public Sentiment."
The wonderful success of the Swiss referendum is fully attested
by the Hon. Boyd Winchester, our former Minister to Switzerland;
Sir Francis O. Adams, the English Minister there; Professor Vin-
cent, of Johns Hopkins University; Mr. McCrackan, Mr. Sullivan,
Professor Moses, Professor Dicey, etc. Rev. Lyman Abbott's paper,
The Outlook, speaking of the strong words of approval eminent
observers have bestowed upon the Referendum, says: "Apparently
there is no conflict in the testimony." The only exception I know
of is Mr. A. B. Hart, who seems to have found some of the people
in Switzerland who have lost power and privilege thru the referen-
dum, and were, therefore, inclined to growl about the new insti-'
tution. Mr. Hart confesses that he went to Switzerland prejudiced
against the Referendum, and it is not surprising that he should
have found the society of ousted politicians and monopolists so
congenial that he neglected to form other acquaintances, and filled
his letter to the "Post" with assertions that the Initiative "suggests
bad measures" (but the legislature never does; no it will not even
suggest such things) ; that the Referendum sometimes "kills good
measures" (but of course the legislature never does) ; that the
"Swiss voters do not all come out" (like the Americans do!); and
that "the Referendum has disappointed its friends in Switzerland."
This "powerful" argument, quoted in substance from one so well
prepared by foregone conclusions to make it, would almost lead
one to believe that the famous ambassadors, professors and
authors previously mentioned had formed a conspiracy to deceive
the world about the Referendum, were it not that Mr. Hart, on
cross-examination, as it were, corroborates their testimony by
saying: "Switzerland is an atoll in the surging ocean of European
politics. Here the increasing strain which has come upon the rep-
resentative institutions of other countries is hardly felt. Here
the legislature is free from party organization, the business of the
country is well and promptly done, the people are content with
their representatives The process of invoking and
voting on a Referendum is simple and easily worked
The system undoubtedly leads to public discussion; newspapers
criticise; addresses and counter-addresses are issued; cantonal
THE POPULAR INITIATIVE. 349
councils publicly advise voters, and of late the Federal Assembly
sends out manifestoes about pending Initiatives." How does this
talk about doing the business promptly and well, and about the
people's contentment agree with what .Mr. Hart said about "dis-
appointment of the friends of the Referendum?" As to, this, one
of the leading friends of the -Referendum wrote to Mr. Sullivan
that it was "deeply rooted in the hearts of the whole people. All
parties who formerly opposed the Referendum, even the most
reactionary and aristocratic, have declared officially their adher-
ence to the Initiative and Referendum as a thoroly good institu-
tion." No one objects to it now but a few individuals who stood
in the path of progress and got hurt by the wheels of justice, and
who comfort themselves with ungracious talk.
There were objections in plentiful measure during the early
advocacy of the wi'de extension of the Referendum, but experience
has shown them all to be fallacious. Here are some samples: "It
would do well enuf in the little commune or the primitive forest
canton, but never would work in the grand canton of Berne, much
less in Federal affairs; that was visionary in the extreme. It was
an impracticable thing any way, and would keep the people vot-
ing from morning till night. Demagogues would rule the people
and pernicious tyrannical laws would be passed. The people were
inexperienced, short-sighted, capricious, passionate, and the Ref-
erendum would prove the source of great expense and a flood of
hasty, injudicious, partisan legislation."
As to expense, we have seen that taxes are lower than ever be-
fore, and the government more economical. Jobbery and extrava-
gance are unknoAvn, for the people who pay hold the strings of
the purse, and politics, since there is no money in it now, has
ceased to be a trade.
Instead of partisan laws, it has been proved that people vote
on the merits of the measures submitted, the fate of one proposi-
tion having no effect on that of another put out by the same or-
ganization, and partisanship is reduced to its lowest ebb, as even
Mr. Hart admits.
Instead of causing a nood of hasty legislation, the Referendum
has proved a drag on the making of laws. In the twenty years
from 1874 to 1894 the Swiss Federal Congress passed 175 laws, 19
of which were called to the polls by a petition for the referen-
dum. Eight amendments to the constitution were also passed
and two more suggested by the Initiative. So that the people
voted in twenty years 011 29 questions, ten of which were constitu-
tional amendments, which go to the people in our states now.
Sixteen of the laws and amendments were disapproved by the vot-
ers and thirteen approved. Every one of the questions received
remarkably lengthy consideration, and most deliberate and dis-
passionate discussion, the like of which is as yet unknown in
America. Passing less than a law a year is not much of a "flood"
of legislation from the Referendum, is it? Neither does the sug-
gestion of one law in each two years by the Federal Initiative
350 THE CITY JTOB THE PEOPLE.
peem much like a deluge. In twenty years the legislature of
Poleure passed 66 laws; all went to the people, the referendum
being obligatory; 51 were adopted at the polls and 15 rejected less
law-making, you see, on the face of the returns, than if there had
been no referendum. In twenty years the legislature of Berne
passed 68 laws; 50 were approved at the polls and 18 rejected.
Berne has half a million people, New Jersey a million and a half.
Berne, with the referendum, averages two and a half laws a year,
and New Jersey 450. So that per million of inhabitants 300 laws
are enacted in the United States to Switzerland's five, or 60 to 1.
It turns out, therefore, that the deluge is not with the Referendum,
but without it. The obligatory Referendum makes the entire
citizenship a deliberative body in perpetual session. It establishes
principles and avoids the flood of special legislation that sweeps
away all sense of virtue from our statute books. The mass of com-
plex, useless and evil laws that breeds lawyers, courts and police,
are in Switzerland not passed at all, with a great reduction in the
cost of litigation and police.
Mr. McCrackan says: "The Referendum is above all things fatal
to anything like extravagance in the management of public, funds;
it discerns instantly and kills remorselessly all manner of jobs."
And again: "Nowhere in the world are government places occupied
by men so well fitted for the work to be performed."
Boyd Winchester says in his "Swiss Republic:"
"One in visiting the chambers of the assembly is much imprest
with the smooth and quiet dispatch of business. The members
are not seated with reference to their political affiliations. There
is no filibustering, no vexatious points of order, no drastic rules of
cloture to ruffle the decorum of the proceedings. Interruptions are
few, and angry personal bickerings never occur
Leaves to print, or a written speech memorized and passionately
declaimed are unknown. There are none of those extraneous and
soliciting conditions to invite to 'buncombe' speeches. The debates
are more in the nature of an informal consultation of business
men about common interests. They talk and vote, and there is
an end to it. This easy, colloquial disposition of affairs by no
means implies any slip-shod indifference or superficial method of
legislation. There is no legislative body where important ques-
tions are treated in a more fundamental and critical manner.
"The members of the assembly practically enjoy life tenure.
Re-election, alike in the whole confederation and in the single
canton, is the rule. Death and voluntary retirement account for
nineteen out of the twenty-one new members at the last general
election. There are members who have served continuously since
the organization of the assembly, in 1848. To some extent this re-
markable retention of members of the assembly may be ascribed
to the fact that the people feel that they are masters thru the
power of rejecting all measures which are put to a popular vote.
"The members of the Federal Council can be and are continually
re-elected, notwithstanding sharp antagonisms among themselves,
DIRECT LEGISLATION. 351
and it may be between them and a majority in the assembly. They
also continue to discharge their administrative duties, whether
the measures submitted by them are or are not sanctioned by the
voters. The Swiss distinguish between men and measures. They
retain valued servants in their employment, even tho they reject
their advice This sure tenure of service makes those
chosen look upon it as the business of their lives. Without this
permanence, such men as now fill it could not be induced to do so."
Head also the following from Sir Francis Adams:
"The Swiss voter is quite ready to vote again and again for the
same candidates. He probably looks upon them as good, men of
business, with long experience of parliamentary and Federal af-
fairs, and he knows very well that if measures are passed of which
for some reason or other he does not approve, he and his fellows
can combine to reject them at the referendum There
have been hitherto only two instances of a member willing to
serve not being re-elected
"The debates are carried on with much decorum. There is sel-
dom a noisy sitting, even when the most important subjects are
discussed. Interruptions are few, and scenes such as unhappily
have of late been painfully frequent in our House of Commons do
not exist. The sittings strike the spectator as being those of men
of biisiness, tho the members are by no means devoid of eloquence."
And this from Karl Burkli, a prominent citizen of Zurich, Switz-
erland
"The smooth working- of our Federal, cantonal and municipal
referendum is, as a matter of fact, a truth generally acknowledged
thruout Switzerland. The initiative and referendum are now deeplj-
rooted in the hearts of the Swiss people Proportional
representation is going ahead in half a dozen cantons (Berne, Basle,
Zurich, Lucerne, St. Gall) just now, and six cantons (Tessin, Neu-
chatel, Geneva, Zug, Soleure, Fribourg) and the Federal city of
Berne have already proportional representation.
"Our city or municipal referendum goes likewise very well. So,
the town citizens of Berne voted this year (April), per referendum,
for instituting proportional representation, and last year the town
citizens of Zurich (now the largest city in Switzerland, about 130,-
000 to 150,000 inhabitants) voted for the appropriation and manage-
ment by the city of the tramways (street car lines).
"All these divers votings Federal, cantonal, municipal went on
without riot, corruption, disturbance or hindrance whatever,
altho with great agitation. So all is well with us, and you may
authoritatively say that there is no agitation for its repeal or
difficulty in its working, whether in federation or in the cantons
or in the cities, as Zurich, Geneva, Basle, Berne, tho these cities
are full of foreign elements. Our Swiss political trinity initiative,
referendum and proportional representation is not only good and
holy for hardworking Switzerland, but would be even better, I
think, too, for the grand country in North America."
Mr. A. A. Brown, speaking of what the Swiss have done with di-
352 GOVERNMENT BY AND FOE THE PEOPLE.
rect legislation says: "They have defeated monopolies, improved
the method of taxation, reduced the rate, avoided national scandals
growing out of extravagance; they have husbanded the public do-
main for the benefit of their own citizenship; they have destroyed
partisanship and established a government of the people; they have
quieted disturbing political elements, disarmed the politician, en-
throned the people; by vote of the people they have assumed au-
thority over railroads, express companies, telegraphs and tele-
phones, reducing freight rates, express charges and tolls more than
78 per cent, below the cost for like service under private control."
(Arena, Vol. 22, p. 98.)
With such a record how can we fail to favor the Referen-
dum? Switzerland has solved her problem by making an
intelligent selection of the best among many local forms and
extending its application. Is there not good reason to believe
that we can solve many of our problems in the same way?
21. Authority of the highest character favors the exten-
sion of the Referendum in America. This point was suffi-
ciently discussed in the first half of this chapter.
22. The drift of public sentiment sets strongly toward
the Referendum. (See above.)
23. The trend of events, the progress of civilization., the
evolution of democracy and the whole movement of modern
history is in the direct ion of more' perfect control of the gov-
ernment by the people, a path ichich leads straight io the
fuller use of Direct Legislation. (See above.)
24. The fundamental principles of religion and ethics,
the law of love, the Golden Rule and the brotherhood of man
necessitates the Referendum. Love and brotherhood deny
me the right and banish the wish to assume more power than
my fellows, or deprive them of equal participation in the de-
velopment resulting from decision and responsibility. Only
unavoidable necessity can justify unequal sovereignty, and no
such necessity exists in casea to which the Initiative and Ref-
erendum can be applied.
25. The final and fundamental political argument for
Direct Legislation is that it is necessary to true self-gov-
ernment. It and it only can and will establish public owner-
ship of the government. It is the only way to prove and
overcome misrepresentation with due precision and prompt-
THE INITIATIVE AND REFERENDUM. 353
ness. It is the only practicable means of destroying the great
Lawmaking Monopoly which holds us in its grip to-day, and
which is not only a terrible evil in itself, but the prolific parent
and protector of other monopolies and oppressions.
If the control of affairs is put in the hands of a few men
for life, without responsibility to the controlled, everybody
recognizes the fact that the government is an aristocracy. If
the control is put in the hands of a few for two or three years
without responsibility to the controlled during that time,
there is an aristocracy as much as before. The duration of a
government does not fix its character, but the nature of the
control; and even if time were of the essence of the case,
many a monarch's reign has been shorter than the terms of
our President and Senators. To have a government by the
people, the legislative agents must be subject to the control
of the people every moment. If for one instant they cease to
be subject to the orders of the people, for that instant they
cease to be servants and become sovereigns in place of the
people.
It is true that in the early history of America pure repre-
sentative government produced good results. It is perfectly
possible that in a rural community, where the people are
nearly on a level, and no strong class distinctions exist, rep-
resentative aristocracy might take a course quite close to the
one in which self-government would steer the ship of state.
But as the simplicity and homogeneity of primitive society
give place to the strong contrasts of rich and poor, million-
aire and tramp, Back Bay and slums, educated and ignorant,
nabobs and nobodies as the people crystalize into classes
under the influence of selfish competition, and class interests
grow intense, facing each other in bitter antagonism as or-
ganizations of men are formed to capture the government and
the offices for their own private benefit the divergence be-
tween the people's will and the will of the men who contrive
to get themselves elected under the name of "representatives"
grows larger and larger, until in some of our cities and states
scarcely a vestige of real representation remains, and the go^-
ernment is a despotism.
23
354 THE END OF CORRUPT LEGISLATION.
It lias come to be perfectly clear that representation does
not represent, and a little consideration will show that even
under the most favorable circumstances, delegate law cannot
be relied on to represent the people's will. The facts are
briefly as follows
1. It frequently happens that large masses of people have
no representative at all in the halls of legislation. In Minne-
sota about 44 peer cent, of those voting (or 101,000 out of
236,000) have no one in Congress to represent them no one
for whom they cast a ballot or who went from their state to
stand for their principles. 1
In Wisconsin 40 per cent, and in Maryland 46 per cent, of
the people have no representative in Congress. In 1892, out
of twelve millions voting, five and a half millions had no rep-
resentative in the national government, and in 1896 again
nearly half of those voting had no one in Congress in whom
they had expressed their confidence or whose selection as a
legislator they had endorsed with a ballot.
2. It is a common thing for one party to absorb far more
than its fair share of representation. In 1892 ISTew Jersey
cast 171,000 Democratic votes and 156,000 Republican votes.
The Democrats got six Congressmen and both Senators, or
one national representative to 21,000 voters. The Republi-
cans had two Congressmen) or one national representative
to 78,000 voters. A little irregular strip in the city of Cam-
den, containing a population of 12,725, constituted one legis-
lative district, and the rest of the city constituted another dis-
trict, containing 58,311 population; the first contained the
democratic strength of Camden, the second was republican;
each district had the same amount of representation in the
legislature. In Essex county, the 3d Assembly district (dem-
ocratic), contained a population of 11,349, while the llth
district (republican) contained 42,414, and the average popu-
lation of all the republican districts was double the average
population of the democratic districts.
1 Most of the figures at hand relate to state votings for national officers,
but the same general conditions exist In local votings.
THE POPULAR VETO.
355
Left us take the present congress (the 55th, elected in 1896)
and tabulate some of the striking facts.
Percent.
Number of
of votes
Congressional
east.
Diatrlcta.
With 5J* the Republicans of Md. carried erery one of the 6 districts.
" 55* "
' Iowa
n ii
11
" 58* "
Democrats " Ga.
"
.. a
" 5i* "
" Texas
12
" 13 "
66* "
Republican*
4 Mass.
12
" 13
61* "
1
Pa.
27
" 30
57* "
N.Y. 29
- H4
53*
'
Ohio " 15
" n
55*
111. " 17
22
60* "
'
N. J. " eTerr one
" 8
60* "
Wis.
" 10
These percentages are based on the actual votes for Congress-
men. The Republican or Democratic percentage of the vote for
Governor or other general officer is very often identical with the
same party's percentage in the congressional vote, but in some
cases varies a little above or below the latter. For the 54th Con-
gress some of the facts are even more remarkable than any of those
in the table. For example, the Republicans of Illinois had only
about 51 per cent, of the general state vote and 53 per cent, of
the district vote, and yet they elected all but one of the 22 Con-
gressmen. And the Republicans of Wisconsin, with 51 per cent.
of the vote for Governor, and 54 per cent, of the district vote,
elected every one of the 10 Congressmen. 1
In the 55th congress, the Democrats of Georgia and Texas
had both senators from their respective states, and the Re-
publicans had both Senators from Maine and Iowa, Illinois,
Massachusetts, etc. a fact which in connection with those
that precede, supplies the basis for some very interesting con-
clusions, viz.: That in Massachusetts 1 Republican has more
weight in national affairs than 4 Democrats. In Texas, 1
Democrat equals 5 Republicans. In Illinois, during the 54th
Congress, a Republican weighed more than 15 Democrats.
In Georgia now a Republican weighs nothing at all, and in
1 The district system naturally tends to exclude a very large proportion
(often 40 to 45 per cent.) of the people from representation in congresses,
councils, legislatures, etc., and in connection with the gerrymander or the
plurality rule, or both, it may even exclude a majority of the people. Im-
agine a legislative body elected by 40 to 60 per cent, of the citizens voting,
and estimate the representative quality of a law passed by a majority of
a quorum in such a body it might represent no more than 12 to 16 per cent.
of the voters If honestly passed not 1 per cent., perhaps, if corruptly
passed. Corruption may attain any degree of misrepresentation in any
legislative body it Is able to control. What is the representative quality of
a law passed at midnight in the closing hours of a session, with most of
the legislators asleep or inattentive, and nobody voting but the man who
drew the bill? What is the representative -quality of legislation under the
Iron rule of a presiding officer who recognizes no one to speak for a meas-
nue he wishes to exclude? Representation is but a shell without the
kernel, a nest from which the bird has flown. The Referendum will put
life once more into the dead form.
356 THE OPEN DOOR OF PROGRESS.
Maine and Iowa, a Democrat weighs nothing in national leg-
islation or deliberation.
3. The various classes of society are not duly represented
in legislative bodies not represented in anything like the
proportion they actually bear to the social total. We have
seen in paragraph 17 what the composition of a legislative
body is like. A few years ago I examined the census figures
of class 1 enumeration and the composition of Congress, with
the following results:
The lawyers, with their families, constitute one-third of 1
per cent, of the people, yet they have 60 per cent, of the Sen-
ate and House, and the President also more than 180 times
the representation that belongs to them. The bankers num-
ber one^tenth of 1 per cent, of the people, which entitles them
to one-half of one representative; but they have ten, which
is twenty times their fair share. 1
The farmers constitute 45 per cent, of the people, and
have one Senator and thirty-nine members of the House, or
9 per cent, instead of 45 per cent., as they should have one-
fifth of what belongs to them. The laboring people of all
sorts number nearly 80 per cent, of our citizenship. What
are their representatives? Where are the Senators and Con-
gressmen who are really workingmen and in full sympathy
with them and fit to represent them? The bulk of the com-
munity is entirely unrepresented by men of their own class
and condition, who are the only ones that can thoroly under-
stand their wants and wishes.
4. Ideas are not correctly represented. Voters in different
parties agree on some things and voters in the same party dis-
agree on some. The present methods of voting in city and
state elections afford no opportunity, as a rule, for registering
this agreement and disagreement. There is no definite repre-
sentation of the opinions of the voters on matters aside from
the main issue, and large bodies of men advocating special
measures are entirely excluded from representation in the
halls of legislation, not being able under the district system
In the 53d Congress the bankers had 20 representatives, or more than
times their fair share, and the farmers had much less than 1/5 of their
rightful representation in the 53d Congress, and also in the 55th.
THE POPULAR INITIATIVE. 357
of representation to elect any one at all to stand for even
their main idea. 1
5. Many a question arises after election during the dele-
gate's term of office which was not considered, perhaps was
not even foreseen, at the time of his election. The people
had no opportunity of expressing themselves upon it at the
polls, and the judgment of the representative in the premises
may and frequently does differ from that of his constituents.
6. Even where the people have exprest themselves quite
clearly, their views may change. They may elect men
pledged to certain legislation and afterward, before the pledge
is executed, perhaps, the people see reason to change their
minds; but without the Referendum the change cannot V>
ascertained. Imagine a business man telling his agent to-day
to buy certain lands or build a house for him, and to-morrow,
concluding he did not want the land or the house, but denied
the privilege of revoking his order or modifying his plan!
7. The delegate's self-interest may lead him to disregard
the will of the people, even when he knows perfectly well
what it is. 2 Under present conditions the delegates may give
1 Proportional representation will remove the evils of the district sys-
tem. It would enable each party or organized group of voters to obtain
Its due share of delegates in council and legislature. But classes, ideas and
interests would still be far from having a fair representation. The jumble
of Issues in party platforms and the mixture of measures with persona
would continue to make it impossible for the people to give definite ex-
pression of their thoughts and wishes. The boss, the ring and the machine
would still control nominations in a large degree; the lobby would still cor-
rupt the legislators; questions not considered at election time would con-
tinue to come up, and legislators could not be sure of judging as the people
would judge. Even in Switzerland, where, according to the latest reports,
eight cantons have proportional representation along with the referendum,
the legislators are not able to judge correctly of the popular will, and their
action is frequently reversed at the polls.
Proportional representation is good; it gives each body of citizens a
chance to get some of their ideas represented in the deliberations of legis-
lative bodies; it helps to make the legislative body a picture, on a small
scale, of the chief groups in the citizen body; but it leaves the legislative
body still subject to the fundamental defect of making law by final vote
of a body of delegates. The concentration of temptation, the divergence or
interest and thought, and the private monopoly of legislative power, with
all their attendant evils remain substantially as at present.
No sort of representation, proportionate or not, can be relied on as truly
representative unless it is always under the principal's direction and con-
trol, so that departures from his will may be corrected and his views and
changes of view be registered at any moment he sees fit. The essential
thing is the participation of the people at will In the making of the laws.
2 In a circular issued by the South Dakota Direct Legislation League I
find the matter strongly and clearly stated:
When the vote granting a franchise binds us forever, and our represen-
tative can get $5,000 for his vote, while we only give him $300 for his year's
work (even if we should re-elect him), where Is his responsibility?
The state or city is our farm. At present we give our servants (legisla-
tors, aldermen) almost unlimited power over it power to mar it; power to
358 THE CITY FOR THE PEOPLE.
away public property or take other action which will bind the
unwilling people beyond the reach of revocation. For ex-
ample, the Ohio legislature in 1896 passed a law permitting
cities to give 50 year franchises to street railway companies.
It is said that the friends of the people as against the corpora-
tions did not know of the bill till a few days before the legis-
lature met, and then they learned of the plan by overhearing
a conversation on a railroad train. They did their utmost
to defeat the measure, but failed. The people were strenu-
ously opposed to such monopolistic legislation, but before they
could secure a repeal of the law at the next session of the legis-
lature, the city government of Cincinnati was induced to
grant a 50-year franchise to the street railways of that city,
and the grant could not be withdrawn.
8. Even with the most virtuous delegates and under the
most favorable circumstances, representation cannot truly rep-
resent in the absence of the Referendum, because no man
thinks or feels just like another, much lees like ten thousand
-others of varying shades of thought and feeling. The records
of actual referenda set forth in the early part of this chapter
show how impossible it is for legislators to represent the peo-
ple. Time after time, when a number of constitutional
amendments and other measures prepared by legislative bodies
with the utmost care, have gone to the people, part or all have
been rejected, tho passed by legislature after legislature with
overwhelming majorities, and totally free from any suspicion
of fraud, being intended from the start for reference to the
citizens. 1
mortgage It reserving to ourselves scarcely any power except to discharge
them after the harm is fully accomplisht.
The ciiy is our stable, which we commit to these servants, reserving to
ourselves only the power to discharge them after they have allowed our
horses to be stolen.
The constitution is our pasture fence; the State is our carriage; our
legislators are our horses. With the present arrangements we harness our
horses, hitch them (often wild colts) to our carriage, throw away lines and
whip and trust ourselves to the tender mercies of Providence, which is
supposed to have special care of half-witted people. Our horses may balk
or lie down In harness, or they may wildly tear over the pasture, down
steep gullies, over rocky roads, and finally knock our trains out, but we
have all the time the comforting assurance that our bones will be found
newhere within the limits of the seven-rail pasture fence called the con-
tltution. \Vith the Initiative and the Referendum we would be at all
times masters of the situation, keeping the government constantly in our
own hands.
1 In 1850, before Switzerland had developt her system of Direct Legis-
lation, Martin Rittinghausen wrote a little book on "Direct Legislation by
DIRECT LEGISLATION. 359
In July, '98, St. Louis voted down by more than 4 to 1 a
number of charter amendments passed by the municipal as-
sembly. At a special election in '97, three amendments were
submitted to the people of 2^ew Jersey by the legislature;
two carried and the third was lost, yet this third amendment
was the very one that the press and political leaders had pre-
dicted would carry by a large majority, since it merely gave
women the right to school suffrage, which they had already
enjoyed for several years under a statute, and which has been
conferred in 26 states of the Union. In 1896 two amend-
ments, establishing biennial elections, were submitted to the
people of Massachusetts. They were passed by the legisla-
ture in the belief that the people would approve the change;
they were advocated by leading men of the highest character
and statesmanship, both in and out of the dominant party.
the People" In which he gave nine reasons why the "representative sys-
tem" (i. e., the unguarded system) should not be tolerated:
1. The representative system is a remnant of ancient feudalism.
2. It is absurd to represent a thing by its diametrical opposite, black
by white, the general interest of *be people by a particular Interest opposed
to it.
3. Representation in government is a fiction and nothing but a fiction.
Representation does not exist, unless that term is applied to a continual
antagonism of those whom one is alleged to represent.
4. Even if there happened to be a case of genuine representation thru
some undiscoverable paragon of a representative, the majority of the votes
of a country would still remain unrepresented.
5. In the elections the intriguer has the advantage over the honest man,
because he will not shrink from a number of methods that are disdained
by an honorable candidate; the incompetent has an advantage over the
man of ability, because three-fourths of the electors vote, and always must
vote, without knowing and without being in a position to judge the merits
of the candidate. Besides, in this mendacious system of government, the
election is itself an absurd sham. You either ask the voter to cast his ballot
according to his own personal convictions, upon the strength of his acquain-
tance with the capacity or honesty or the policy of the candidate, in which
case you ask the impossible; or you ask the voter to cast his ballot for
a candidate nominated by a convention, and then you have no election at all;
you merely have a nomination secured thru a small coterie, itself domi-
nated by motives of personal interest.
6. In a representative assembly many upright natures change their
character entirely; the honest man Is there, the readiest to repudiate his
convictions. There are temptations to which it is only possible to expose
men under penalty of seeing them succumb. One of these temptations Is
the power to enrich one's self or one's family, to rise in the worldly scale;
that is to say, to oppress one's fellow creatures without incurring any
responsibility whatever. Hence continual apostasies and the impossibility
of ever creating a well-ordered majority.
7. The fear of not being re-elected is absolutely without influence upon
the conduct of the unscrupulous representative. The more he violates the
confidence reposed in him, the more certain he may be of re-election.
Hence the most detestable politicians have the longest legislative careers:
they survive the fall of all regimes.
8. Under the influence of this same tendency every representative as
sembly must necessarily be worse than the one preceding it.
9. Representative assemblies are the incarnation of incapacity and evil
Intent, from a legislative and political standpoint. In legislation they make
continual onslaughts upon the liberties of the people or surrender the
Blender patrimony of the poor to speculators. Politically, the situation la
still worse, if that be possible.
360 GOVERNMENT BY AND FOE THE PEOPLE.
The amendments were lost. Grovernor Wolcott (who was an
advocate of the amendments) says in his annual address to the
Legislature for 1897:
"On both these important questions, which have demanded so
much time of your predecessors, the decision of the people is so
emphatic as to afford little encouragement for an early renewal of
the discussion."
The best of men, the ablest of statesmen, do not really
know what the people want. The only way is to ask the
people.
It is clear that the people are not truly represented by dele-
gate legislation. We have some attempts at representation,
together with geographical representation and boss represen-
tation, and machine representation, and corporation, trust
and combine representation. Harper's Weekly, discussing
"The Breakdown of Legislatures," says:
"Legislatures, as they were originally conceived, are breaking
down because the representative character of their members has
changed. They have not ceased to represent somebody. They are
as responsible now as they ever were in the past; but they repre-
sent a small organized element of the voters which is under the
control of the 'machine,' and they are responsible to the boss of
that machine."
The question of Direct Legislation is equivalent to the
question, "Ought the people's will to govern all the time,
or only now and then? Shall the ascertainment and execu-
tion of the people's will be made as easy and perfect as pos-
sible, or shall it continue imperfect and difficult?"
Senator Marion Butler says that no man can oppose Direct
Legislation "unless he is at heart opposed to popular govern-
ment 1
1 This Is bed rock. To deny the Initiative and Referendum is to deny
self-government and democracy; to affirm self-government and democracy
Is to affirm the Initiative and Referendum. The whole literature of the sub-
ject focuses upon that fundamental fact.
Any one who desires to go more fully into the matter will do well to
obtain J. W. Sullivan's "Direct Legislation thru the Initiative and Refer-
endum;" The Direct Legislation Record, edited by Eltweed Pomeroy, New-
ark, N. J. ; United States Senate Document, 340, 55th Congress, second ses-
sion, July 8, 1898, also edited by Pres. Pomeroy; Dr. E. P. Oberholtzer's
"Referendum in America" and "King People;" S. E. Moffett's "Suggestions
on Government;" W. D. McCrackan's "Swiss Solutions of American Prob-
lems," and the chapter on Direct Legislation in "The American Common-
wealth," by James Bryce. The larger histories of Swiss institutions men-
THE INITIATIVE AND REFERENDUM. 361
John Quincy Adams said that "the will of the people is
the end of all legitimate government on earth."
A bit of history and a closing illustration may emphasize
the clumsiness of present methods.
The Republican Congress did their best to please the people
in 1883, but in 188-i the people exprest their disgust by elect-
ing a Democratic President. The next four years of Demo-
cratic rule did not suit the nation either, and it returned the
Republicans to power in 1888. They began to apply their
favorite remedy, the revision of the tariff, and passed the Mc-
Kinley law in 1890. The people exprest their appreciation
by almost annihilating the Republican party in the elections
of November, '90, immediately after the said law was enacted,
and in 1892 Cleveland was again elected and the Democrats
had a large majority in Congress. They, too, appeared to
think that the tariff was the only thing above ground worth
the serious attention of a Congressman (after his own private
affairs are provided for, of course, if he is of the sort that has
private affairs), and they consequently got out a new edition
of the tariff in 1894. Again the people showed their disgust
by an overwhelming rebuke at the polls the Democrats were
completely snowed under, the Republicans again put in con-
trol of Congress, a large number of People's Party members
elected, about doubling their former representation, and in-
dubitable indications of the Republican triumph which came
in 1896. Poor, dumb people, with no chance to tell distinctly
what they do want, but driven to the clumsy method of chang-
ing agents once in two or four years in the hope that one of
them may sometime discover what they desire. Poor, de-
tioned in the text -when speaking of The Rising Tide of Thought may also be
read with advantage, and a number of valuable magazine articles may be
found by consulting Poole's Index and the bibliography in the Direct Legis-
lation Record, June, 1898, pp. 45-50. The reader will find that the first six
or seven references (Sullivan to Bryce), together with the present chapter,
will afford ample material for any ordinary purpose. This chapter follows
an original line of thought, contains a good deal of new matter and an
analysis of prior treatments. I owe most to the Direct Legislation Record
and Senate Document 340, which are invaluable to any student of Direct
Legislation.
Since this chapter was set up three valuable contributions to the lit-
erature of Direct Legislation have come to my notice: first. Eltweed Pom-
eroy's article, "Objections Answered," Arena, Vol. 22. p. 101; second, A. A.
Brown's article, "Direct Legislation now in Operation," Ibid. p. 97; and
third, the 4 page "Leaflet 1," and 12 page "Study 1," published by "The
Social Reform Union," of which the Rev. W. D. P. Bliss, of Chicago, is
president.
362 THE END OF CORRUPT LEGISLATION.
voted, hardworking agents, truly there is not much comfort
in your undertaking at best, for when you think you have got
things fixed up beautifully and ask for your reward, you re-
ceive a tremendous kick from your dumb employer. Instead
of this tedious method of kicking out one agent after another
till you find one with sense enuf to discover what is needed,
and goodness enuf to do it, how much better it would be if
the people were allowed to become articulate, able to express
their wish distinctly on each separate issue.
The people are now in the position of a deaf and dumb
man who was not permitted to tell what he wanted for dinner
except by picking out one of several bills of fare and ordering
it as a whole. Each bill of fare had the cook's name at the
top and a program for dinner, which in every case included
some things the dumb man wanted and some he did not want.
As he had to select a whole menu, with its cook, and could
not pick out particular dishes, and as the cook used her dis-
cretion as to which dishes on her list she would serve, if any,
and generally mixed up the food and seasoned it with more
regard to her own taste than to that of the dumb man, he was
naturally displeased with his diet, and kept discharging the
cooks as fast as he could, until at last a wiser and more
thoughtful cook than the rest devised the plan of sending a
blank sheet of paper and a pencil along with the bill of fare,
so that the dumb man could write "yes" after the roast lamb,
fried potatoes, charlotte russe, or whatever else he wanted,
and if there was anything he desired that was not on the bill
of fare he could write the name of it on the blank sheet.
After this everything went well with the dumb man; his diet
suited his taste and he grew healthy and happy; and he could
not do enuf to show his appreciation of the cook's skill in pre-
paring the dishes he called for.
SUMMARY STATEMENT.
Law making by final vote of delegates is not self-government, but
government by an elective aristocracy.
The REMEDY is the extension of Direct Legislation thru
the Initiative and Referendum.
THE POPULAJS VETO. 3 63
The Initiative is the proposal of a law by a reasonable percentage
of the voters.
The Referendum is the submission of a measure to the people
for final approval or rejection; obligatory, when all but ur-
gency measures must be submitted; optional, when submission
may be required by petition of a reasonable percentage of
voters; legislative, when the option of submission is in the
legislature or council; executive, when the option is with the
mayor or governor, etc.
Otherwise stated, the initiative is the right of provoking a decision
of the sovereign people, and the referendum is the right of
making such decision.
Direct Legislation is already in full use in town affairs. The Ref-
erendum is obligatory in the making of constitutions, and quite
generally in certain city matters, and it may be used in all city
and state affairs at the option of the legislative authorities.
All that is necessary is to put the option in the people in the case
of city and state enactments (or make the submission ob-
ligatory) and add the initiative. In this "way the principle
of Direct Legislation will be consistently applied from end to
end of the scale of legislation.
This has been done in South Dakota by constitutional amendment,
in Oregon and in Utah a similar amendment has passed the
legislature, Nebraska has a statute giving Direct Legislation
to cities at their option, San Francisco has the Initiative and
Referendum in its charter, etc.
The movement for Direct Legislation (or strictly speaking, the
movement for the extension of Direct Legislation) is growing
with astonishing vigor and unparalleled rapidity.
REASONS for Direct Legislation:
It will establish self-government in place of government by coun-
cils and legislatures; democracy in place of elective aristoc-
racy; government by and for the people in place of government
by and for the politicians and the corporate interests whose
instruments they are.
It and it only can and will destroy the private monopoly of legislative
power, and establish public ownership of the government. The
fundamental questions are, "Shall the people rule or be ruled?
Shall they own the government or be owned by it? Shall they
control legislation or merely select persons to control it?" The
Referendum answers these questions in favor of the people.
It will perfect the representative system, correcting the evils of
the unguarded method of making laws by final vote of a body
of delegates beyond the reach of any immediate effective con-
trol by the people.
It will give the representatives a keener regard for public opinion,
and enable the people to pass on their action before it takes
effect.
364 THE OPEN DOOR OF PROGRESS.
It will constitute "a curb to the never ending audacity of elected
persons."
It will remove the concentration of temptation by diffusing power;
it will no longer pay to spend much time and money bringing
strong pressure to bear on a few legislators, because their ac-
tion will not be final they cannot deliver the goods.
It will eliminate legislative corruption, kill the lobby, stop black-
mailing bills, discourage log-rolling, check the passage of pri-
vate and local acts, and close the door to franchise steals and
all other sorts of fraudulent legislation.
The writer of an unsigned article in one of our newspapers, after
explaining the workings of Direct Legislation, says with en-
thusiastic force: "See what splendid and irresistible control
i it gives the people over the acts of their faithless servants!"
It will destroy the power of legislators to legislate for personal
ends.
It will infinitely dilute the power of bribery. i
It will take politics out of the slums and civilize them.
It will abolish the obstructive power of unscrupulous minorities
in legislative bodies.
It will undermine the power of rings and bosses.
Under Direct Legislation a speaker can no longer play the Czar
to any purpose.
It will lessen the influence of demagogues.
It will check the interference of employers in elections and dimin-
ish their power to control the political action of employees.
It will diminish partisanship and tend to wipe out party lines in
discussion and voting. The records we have given of the use
of the Referendum in the United States and elsewhere prove
this.
In its complete form it will enable men to vote their convictions
without leaving their party or deserting its candidates, and so
will diminish the warping power of party allegiance.
It will elevate public questions above mere party considerations.
It will simplify and purify elections.
It will work an automatic disfranchisement of the unfit, and bring
out a fuller vote of the more intelligent and public spirited
who now so frequently stay at home because they do not feel
like endorsing any of the platforms or candidates presented.
It will simplify and elevate the law.
It will stop the prolific output of useless, or worse than useless,
laws and ordinances, and limit legislation to the few enact-
ments really needed. The body politic will no longer be dis-
graced by a fecundity natural only to organisms of a low order.
In conjunction with municipal home-rule in local affairs it will
relieve our legislators from the pressure of multitudinous pri-
vate, corporate and local measures, and enable them to give
proper attention to matters of real importance; 24,000 bills
THE POPULAR INITIATIVE. 365
introduced in one session of Congress, and in the New York
Legislature 1,200 bills, it is said, to change the charter of
Greater New York, to say nothing of the mass of other bills
in the same session; think of it!
It will increase respect for the law and aid its enforcement.
It will develop the people's interest in public affairs.
It will compel the people to think and act.
It will elevate the press and dignify political discussion.
It will suppress the inducements that tempt ambition to pervert
the government to private uses.
It will elevate the profession of politics, weakening the motives
that lead bad men into political life and strengthening the
attractions of public affairs for men of high character and
attainments.
It will add to the dignity of every citizen.
It will have a profound educational effect on the people intellectu-
ally, emotionally and morally.
It will favor stability, security and contentment in many ways,
affording a natural safety-valve for discontent, and preventing
its accumulation, bringing responsibility home to the people,
stopping the schemes of political aggressors, etc. Radical
changes of policy and delays disastrous to business will be-
come less frequent, because of the speedy consideration and
settlement of public questions in accordance with the popular
will. It is a guarantee against disorder. Revolution has little
chance where the people can easily mould the law.
It will do more than any other one thing except the growth of
sympathy and conscience to secure a peaceful solution of the
great industrial problems that are threatening our civilization.
It will furnish a strong decentralizing, counterbalancing force to
save us from the centralizing, combining, trust and monopoly
tendencies that are hastening us toward industrial despotism.
It will save the cost of innumerable impotent petitions and power-
less mass-meetings, lobby expenses, abortive investigations, ex-
cessive printing of special laws, local acts, private legislation,
etc. The cost of legislative sessions of councils, legislatures
and so forth could also be reduced; perhaps one chamber of
moderate size would be sufficient with the Referendum.
It will put honesty in power.
It will make the right of petition impartial and imperative.
It will open the door to all other reforms as fast as the people de-
sire them.
It will no longer be necessary to wait till the millionaires and po-
litical bosses are ready for the curtain to go up.
Neither will it be necessary to organize a new party in order to
carry a reform. The full sentiment in favor of a measure
may be exprest at each election and its growth recorded more
perfectly than is possible by party action. Existing parties
366 THE CITY FOE THE PEOPLE.
would be eager to endorse a measure that showed much
strength or rapidity of growth, and it would be carried long
before a new party could rally half the sentiment that might
exist in its favor. It takes a strong pull to break up party
organizations and get men away from life-long affiliations.
That difficulty in the path of reform would be removed by
Direct Legislation.
It is the only way to prove and overcome misrepresentation.
It means the enfranchisement of all voters on all questions at all
times, in place of the disfranchisement of nearly all voters
at nearly all times on all questions upon which they differ
from councilmen and legislators.
It means that the mighty power of the ballot may be used not
merely one day in the year, but any day the public good re-
quires that the great engine of popular sovereignty may be
made to move whenever the people see fit to turn on the steam.
It means that the people will have constant and effective control
of their government.
It is the fulfilment of Lincoln's grand promise and prophecy, "a
government of the people, by the people and for the people."
It is required by the fundamental principles of ethics and religion.
The law of love and the brotherhood of man cannot be satis-
fied without legislative equality. The rule of the few is un-
christian antagonism, not love; mastery, not brotherhood.
It is immediately and easily practicable.
It will make the interest of the lawgiver coincide with justice,
and identify power with the public good.
It will suppress class legislation.
It will tend to the diffusion of wealth by depriving the wealthy
of their overweight in government and placing the prepon-
derance of legislative power in the great middle and producing
classes, whose interests are opposed to vast aggregations of
private capital.
Every election is a reference to the people, a submission of certain
matters to voters for decision; what we call "Direct Legisla-
tion" simply extends the application of the principle and im-
proves the method. Shall we refer things in heaps for a com-
pound judgment on each heap, according to the antiquated
method of reference or shall we ask for a judgment on each
item?
The referendum will separate the judgment on men from the
judgment on issues.
It will disentangle issues and permit each one to be judged on its
own individual merits, thus ridding us of our conglomerate
politics, with its mixture of issues in complex, ambiguous
platforms, each mixture to be taken only with a specified can-
didate or set of candidates.
It will develop civic patriotism and intelligent participation in
public affairs.
DIRECT LEGISLATION. 367
It will make the government more flexible, more easily adapted
to changing- conditions. Constitutions could be changed
readily, statutes repealed or vetoed, new measures instituted,
"deadlocks" deprived of their force, and the law rendered ai
together less rigid than at present.
It will tend to unite the people. Interests and opinions on specific
measures do not follow existing lines of division. People will
be drawn together across the boundaries of the various or-
ganizations. The fibres of political fellowship will run over
and thru party walls. The upper classes will take a deeper
interest in the lower classes, come into closer sympathy and
more permanent contact with them and take a more active
part in their political education.
It is the simple common sense right of the people.
One delegate in legislative hall or council chamber can initiate a
measure; surely a thousand or five thousand or ten thousand
citizens ought to have as much right as a single delegate
elected perhaps by themselves.
It will help the people to understand their own affairs, their city,
state, nation, the age in which they live a matter of the ut-
most importance, which cannot be accomplished without the
Referendum, for the people will never thoroly understand
public affairs till they are called on to decide them.
Under the Initiative and Referendum, the people, with the co-
operation of councils and legislatures, will exercise the legis-
lative power.
Direct legislation will make it easier to elect good men and to
keep them good after they are elected.
It will give the chief power in effective form to the great body
of the common people, in whom the main hope of the future
lies.
It will give Labor its true weight and influence.
It is the working man's main issue, and is recognized as such by
organizations representing millions of the producing classes.
It is not a class movement, however, but will benefit all classes;
even the bosses and politicians who oppose it will be lifted
by it to a nobler plane of life.
It is not a party movement; leading members of all parties are
working for it. It has been demanded in Democratic, Populist,
Republican, Prohibition, and Socialist platforms, and some-
times every party in the state has advocated it at the same
time. It has been endorsed in 38 state platforms and by more
than 3,000 newspapers and magazines representing every shade
of political opinion and party affiliation.
Those who believe in private ownership of the government do not
like the Referendum, but other people favor it as soon as they
understand it.
368 GOVERNMENT BY AND FOR THE PEOPLE.
Many regard it as the primary measure, 1 and few progressive peo-
ple put it below the second place in the list of leading reforms.
Anti-monopolists say, "Public Ownership and Direct Legisla-
lation"; temperance specialists declare for "Prohibition and
the Referendum"; single- taxers write, "The single tax and the
Referendum," etc. There is a story of a group of Greek gen-
erals choosing a commander-in-chief . Each was to write down
his first choice and his second choice. When the ballots were
counted, it was found that the first choice votes were scatter-
ing, every general having one, but the second choice votes
were all for the same man. Each general cast his first vote
for himself or his pet friend, but when it came to his second
choice he exercised his unbiased judgment and then there
was no difference of opinion. This consensus of second choice
votes had vastly more weight than any of the scattering first
choice ballots and the man each general voted for next to him-
self or his pet hobby was recognized as the proper commander-
in-chief. The application is easy.
Indirect legislation is not much wiser as a rule than indirect love-
making. The people get what they want thru indirect legis-
lation about as well as Miles Standish got what he wanted
thru representative love-making.
Direct legislation means control of your servants instead of letting
your servants control you.
It is simply a common sense application of the establisht princi-
ples of agency, affording the principal his proper rights of
veto, instruction, direction, control and discharge.
Analogy calls for it on several essential grounds.
Evolution requires it. Nothing develops manhood like responsi-
bility in large affairs; nothing develops society like universal
thought and discussion, social judgment and concerted action
of the whole community.
1 The American Federation of Labor made Direct Legislation their first
and, for a time, their sole political demand. The National Social and Politi-
cal Conference at Buffalo, July 3, 18&9, by practically unanimous vote,
adopted Direct Legislation as the first in the list of measures urged upon
the people and to which the conference pledged its support in its famous
Address to the Public. Direct taxation, public ownership of monopolies and
government control of the medium of exchange are also urged in the order
stated.
Mayor Jones makes Direct Legislation with direct nomination of candi-
dates by the people, the first plank in the admirable platform on which he
stands as independent candidate for Governor of Ohio. Public ownership
of all public utilities is the second plank; an 8 hour day and better wages,
third; abolition of the contract system, fourth; and state action to secure
employment for the unemployed, fifth.
The Social Reform Union puts Direct Legislation with proportional
representation first; public ownership of public utilities, second; taxation of
land values, franchises, inheritances and incomes, third; money issued by
the government only and regulated in quantity so as to maintain a level
average of prices, fourth; and anti-militarism, fifth.
There can be no doubt that Direct Legislation is logically the first of all
progressive measures in order of time and importance. It is the key to the
whole situation. But in presentation I have usually found it best to speak
of the evils of monopoly and the benefits of public ownership first, to awaken
Interest and fill the thought with the vital problems which constitute the
great need for the initiative and referendum, thereby preparing the mind for
a fuller appreciation of Direct Legislation when it is presented.
THE INITIATIVE AXD REFERENDUM. 369
Justice and equality demand it.
It is necessary to good government.
If Thomas Jefferson was correct in saying that "Governments are
republican only in proportion as they embody the will of
the people and execute it," and "Government is more or less
republican in proportion as it has in its composition more or
less of this ingredient of the direct action of the citizens"
if these opinions of one of the greatest of those who formed
the national constitution are to be deemed correct in other
words, if Jefferson knew what he was talking about, then the
Referendum is required to fulfil the federal constitution, be-
ing necessary to carry out the provision \vhich guarantees the
States a republican form of government.
High authorities believe it is necessary to the perpetuity of free
institutions the only thing that can check the encroachments
of monopoly and corruption.
It is in harmony with American principles. In fact, it is the nec-
essary outcome of their logical application.
It is already a part of the American system of government. All
we need is an extension of methods now in use.
Experience in Switzerland, England, France, Canada, Australia and
the United States proves the great value of the Referendum.
It has shown itself to be wisely conservative and judiciously pro-
gressive, educating, elevating, purifying, non-partisan and
patriotic.
It makes for peace. Where the people decide, war will be rare. 1
Eminent statesmen, jurists, philosophers and philanthropists ad-
vocate it, and distinguished men and women in every sphere
of life favor its adoption.
No one of high authority opposes it, and rarely any one objects
to it except those whose political supremacy, legislative frauds,
franchise schemes or other selfish interests would be endan-
gered by it.
It is the line of least resistance in reform to-day.
The drift of public sentiment sets strongly towards the extension
of Direct Legislation.
The trend of events in this country is in that direction. 2 Professor
Bryce says (American Commonwealth, Vol. I, p. 447), "The
Americans tend more and more to remove legislation from
the legislatures and entrust it to the people," and the facts
of this chapter abundantly confirm this statement.
1 Switzerland has no standing army. It is forbidden by fundamental law.
2 In his article on Constitutional Law, in the American and English
Cyclopedia of Law, Mr. C. S. Lobinger says that the tendency toward Direct
Legislation has rapidly increast since the middle of the century, and has
manifested itself in several forms:
"1. In referring matters of local interest and administration to the
electors of the locality interested.
"2. In enlarging the scope of State constitutions by adding multitudinous
administrative provisions, all of them being submitted to the voters.
"3. In the great popular interest in the Referendum itself." (Vol. VI,
2d ed., p. 1022.)
24
370 THE END OF CORRUPT LEGISLATION.
The whole movement of modern history points to the Referendum.
It is the fulfilment of Liberty, Equality and Justice, for which the
American and French revolutions were fought and won.
Our century is filled from end to end with the growth of the peo-
ple's power, and the evolution of democracy must inevitably
lead to Direct Legislation along the whole line.
The progress of civilization means the uplift of the common peo-
ple. Once only the sovereign could make a law; all others
were his subjects; now the people make some laws, influence
to some extent the making of the rest, and have in theory the
right to exercise the whole power of government; at last the
theory will be realized and the people will be sovereign in fact
as well as in name, no laws will be made against their sov-
ereign wish, and all laws their sovereign majesty desires
will be enacted. a state of things impossible except thru Di-
rect Legislation.
OBJECTIONS.
Objections to Direct Legislation are made by those who do
not undertsand it those who overestimate the effects of other
reforms like proportional representation those who think
the referendum will interfere with the dignity and usefulness
of councils and legislatures those whose personal power
would be diminished, or their private interests subjected to
the public interest those who object because of natural in-
clination to take the other side, or chance prejudice derived
from dislike or opposition to the pe-rson bringing the matter
to their notice or prominently advocating it in their neigh-
borhood those who are conservative by inherited mental in-
ertia those who object to change on 'the general principle
that they are pretty comfortable as they are and those who
distrust the people and have aristocratic leanings.
Ignorance, prejudice, self-interest and doubt of democracy
appear to be the sources of objection to the initiative and ref-
erendum. Given a clear understanding of the facts, the na-
ture and workings of the referendum and of the unguarded
system of lawmaking by final voting of the delegates, and the
attitude on direct legislation depends on the answer the person
would give in his heart to the question, "Shall the government
belong to the people or to a class?"
THE POPULAR VETO. 371
UNDERSTAND.
1. Some persons say, "The Referendum icill keep the peo-
ple voting all tlic time, and the cost will be too heavy." They
seem to imagine that the legislature of a state would go on
passing six or eight hundred laws a year, and the people would
have to vote on them all, and so it would cost an enormous
amount of money and time. But we have seen that the great
mass of laws is local, and should be left to the municipality,
and if they were, the number would be small in each locality ;
and that the very existence of the referendum would remove
the motive and opportunity which produces the greater por-
tion of the laws which remain after subtracting the locals,
so that the people of a city or state would not ordinarily have
to vote more than once or twice a year, deciding anywhere
from one to a dozen questions perhaps each time. After the
change was fully made, this would be the case even under
the obligatory referendum; and during the transition the op-
tional referendum could be used, so that the amount of voting
done by the people need not be heavy at any time.
Most of the referendum voting will probably be done at
the regular elections, without additional expense of any
amount. And the cost of petitions and whatever special elec-
tions may now and then be needed will be more than balanced
by the great economies resulting from purer government and
fewer laws. All this is clear in reason as we have seen, and
has been proved in the history of Switzerland. But even if
it were not so, the matter of cost is infinitely insignificant in
the light of the political and social benefits of Direct Legisla-
tion.
During the campaign in South Dakota some of the citizens
thought that the whole of the law to be voted on would have
to be printed on the ballots and distributed to the voters.
This, of course, is entirely unnecessary. The law can be pub-
lished in the newspapers or in bulletin form and put within
easy reach of all the people. The citizens can study its pro-
visions at their leisure, and then a few words on the ballot to
indicate clearly which law is being voted upon will be suffi-
cient.
372 Till-; OPEN 1)001! OK PKOGIfKSS.
Finally, it must be remembered that to attain the end de-
eired by Direct Legislation-, it is by no means necessary that
the people should vote on every measure passed by councils
or legislatures; it is sufficient if they have the power to do so
whenever they wish. The very existence of the power of
popular revision and veto will obviate to a large extent the
necessity for its use by preventing the passage or even the
introduction) of the great mass of corrupt and private bills
which would have little chance of passing muster at the polls,
and which if passed by the legislature or council would almost
certainly be summoned before the people and vetoed by them.
An officer does not ordinarily have to use his billy or pistol
to stop a wrongdoer who is in possession of his senses. An
employer is not obliged to keep suing or discharging his agents
in order to get them to obey his instructions, the knowledge
that the principal possesses the power to enforce his wishes
impels the agents to respect them. So it will be with the
people's wishes under the Referendum. The larger part of
the most objectionable legislation will not have to be killed;
it will die of discouragement and the powers of Direct Legis-
lation will be invoked for the most part only to correct the
honest errors of judgment on the part of legislatures and coun-
cils.
2. Some other persons who don't understand say that "the
referendum is a foreign affair, an un-American idea." The
fact is, as we have seen, that the referendum has been prac-
tised in America from the beginning. But if it were a foreign
idea, that would not prove it a false one. I never heard that
the multiplication table, or the golden rule, originated in
America. They seem to be foreign ideas, but they are pretty
good ones, just the same. And even the steam engine is not
indigenous to the soil, altho we find it quite useful and en-
tirely worthy of adoption.
3. Sometimes Misconception says, "So you think direct
legislation is a panacea, do you? Well, you are altogether
mistaken; it will not accomplish what you hope from it"
The reply is that we do not deem Direct Legislation a panacea,
but merely a very valuable remedy. It cannot of itself cure
THE POPULAR INITIATIVE. 373
all diseases incident to humanity, but it will greatly improve
the circulation, purify the blood and give the natural recupe-
perative power full opportunity; and these in time may cure
the body politic completely. We know the referendum is
able to accomplish what we hope from it, because it has ac-
complished it wherever it has been given the chance, both in
Switzerland and in the United States.
4. A more specific objector may say, "The referendum
cannot overcome fraud and partisanship, for the power of
appointment to thousands of lucrative offices icill still re-
main in the hands of politicians and representatives" We
have not claimed that Direct Legislation would, of itself, over-
come all fraud and partisanship, but only legislative fraud
and partisanship; administrative abuses would remain until
the people adopted a proper civil service, the attainment of
which would be greatly facilitated by the referendum, for
nine-tenths of the people are strongly in favor of conducting
public affairs on sound business principles. The referendum,
of course, would not enable the people to execute the law in
person. But abuse of administration is much more easily
checked than corrupt legislation. You can tell what a man
does much better than what he thinks. To discover the secret
motive of a legislator is a far harder task than to watch the
actions of a mayor or governor. In this important distinction
lies a most vital political principle, of which the referendum
is the full expression. The law will have to be administered
by judges, police and other agents, whether legislation be di-
rect or indirect. But once in full use, the referendum will
substantially rid the country of legislative abuses, and give
the people an easy path to the destroying of administrative
abuses, especially if the Recall or Imperative Mandate be
put in vigorous use along with the legislative forms of initi-
tive and referendum.
OVERESTIMATE OF SOME OTHER REFORMS.
5. The second class of objectors tell us that all we need to
do is to elect better representatives proportional representa-
374 THE CITY FOR THE i'EOI'LE.
tion and care in the selection of candidates will give us a
good government without direct legislation. It is true that
much may be done along these lines; but they are not in them-
selves sufficient. We have already shown that representa-
tives cannot really represent their sovereign, even with pro-
portional representation and careful selection. Self-govern-
ment can never be complete without Direct Legislation.
Neither will the educating, simplifying and purifying effect
of the referendum be attained with anything like the same
ease and rapidity in any other way. We believe in the meas-
ures proposed by these persons, but the referendum is needed
also; we are not willing to take a couple of spokes in place of
a complete wheel.
DIGNITY OF COUNCILMEN A7TD LEGISLATORS.
6. The third class of objectors consists of honest legislators
and their friends, who think that "the dignity of councils
and legislatures would depart with the advent of the refer-
endum." We may remark, at the first, that if a measure is
for the public good, the dignity of a legislature has no excuse
for standing in the way; it must yield if it conflicts with a
just and beneficial movement. But in the second place, it
ia perfectly clear that legislative dignity and honor will not
suffer, but be exalted by the change. The dignity of a
delegate to a constitutional convention is greater than
that of a member of the legislature; yet all of the decisions
of the convention are subject to approval by the people. The
dignity and honor of the legislators in Switzerland is greater
since the introduction of the referendum, because a nobler
class of men go into politics. The referendum takes nothing
from the power of the legislature* but the power to keep the
people from having the laws they want nothing but the
power to do wrong. The people will still desire the aid and
advice of men of legal learning in the framing of their laws.
They will revere the legislative lights more than they do now,
because they will live in a purer atmosphere, and be farther re-
moved from suspicion of self-interest, and be more likely to
DIRECT LEGISLATION. 375
be men of hi^h ability and character on the average than now.
In another way the referendum will help the legislature;
when a law is passed that the people do not want, or a law is
not passed that they do want, instead of their having to
rise and turn out the legislators in order to obtain their will,
they can leave the legislators quietly in their seats and turn
down the law they object to, or propose the one they desire.
The referendum ought to commend itself to honest legisla-
tors, because it will do more than anything else to lift their
profession out of the mire and free it from scandal, and be-
cause it is in line with the duty they owe to their sovereign.
As Hon. Thomas McEwan told the New Jersey legislature
in committee of the whole, January 29, 1895:
"It is only going back to first principles; all the government
we have comes from it. We representatives are here only because
the people believe we will do what they wish; that is why they
sent us here. We are merely agents, bound in honor to do what
our principals want done. It is our duty first to carry out their
wishes as well as we can, and second, to recognize the fact that
we may err, and to provide therefore a simple way in which the
people may tell us whether we have done so. Sometimes in the
best of legislatures laws are passed that are unsatisfactory to the
people, and there ought to be an easy remedy in such a case, to
enable the real sovereign to say that the work of his agents does
not suit him. That simple remedy is the referendum."
WHAT USE WILL THE LEGISLATURE BE?
7. Another class of objectors is concerned not so much with
the dignity of the legislature as with its usefulness. "What
is the use of councils and legislatures," they ask, "if the
people are to wake the lairs?" One would think a person of
ordinary common sense would not need to ask this question,
yet it is asked time and time again by members of legislatures
before whom the referendum amendment, is advocated. The
referendum leaves summary measures for health, peace and
safety in the care of the legislators, as at present, and also
leaves them full powers in every other direction, subject only
to revision by the people. The legislature becomes the
mcrQCi\cy ruler and the universal advisor the most ira-
376 GOVERNMENT BY AND FOR THE PEOPLE.
portant advisory body in the commonwealth. Is that being of
no use? You might as well say, "Of what use is a constitu-
tional convention if the people are going to vote on the pro-
visions it recommends?" or "Of what use is the architect if
you are going to determine whether or no the plans he makes
shall be carried out?"
These objectors sometimes put their questions thus: "Why
not accept the work of the representatives as final?" This
whole chapter is an answer; two reasons may be restated:
First, because representatives are not rulers, but agents, whose
plans should always be subject to the principal's orders. Sec-
ond, because those who are called representatives are very
of ter wisrepresentatives, and the work they do is not in accord
with the people's will, as is shown by the frequent reverses
they meet in their candidacy for re-election, and by the dis-
approval of a considerable portion of their work when the
referendum is applied to it. Even when the legislator does
his best to represent the people he may not succeed, because
of the difference in reasonings, interests and prejudices; and
even if he succeeds, the fact cannot be known except thru an
expression of opinion by the people.
THE CONSERVATIVES.
8. The attitude of some, if put into words, would be some-
thing like this: "I'm pretty comfortable; let things alone"
Such a position will not be taken, of course, by any man of
sympathy and conscience he must be satisfied that other
men have comfort, liberty, justice; nor by any man of energy
and intelligence, for he will not be satisfied with present con-
ditions while improvement is possible.
9. The conservative does not generally put the true psychol-
ogy of the position into words, but finds some specific fault
with the movement. "It is unwise." Head over this chapter,
or the Summary Statement, please, and then look me straight
in the eye and say "The referendum is unwise." If you can do
that and give me a reason for such opinion other than a mere
prejudice or misconception or selfish interest, I will do my best
THE INITIATIVE AND REFERENDUM. 377
to have your name enrolled in the list of great discoverers.
Some people, when they do not like a thing, but have no rea-
son fit for publication, are accustomed to look very solemn and
say, "It is unwise."
10 "It is cumbersome," another conservative says. Well,
let us see. Which is the most cumbersome? to vote on a few
simple propositions now and then, or to pile up five hundred
laws a year in state after state? to sign a few petitions and
register a few decisions, or to bear the burdens of corrupt leg-
islation, lobby-made law, bosses, rings, machines, party des-
potism, private monopoly of government?
11. "It is dangerous to capital" says another. No, not
dangerous to capital., but dangerous to the unfair acquire-
ment, unjust distribution and corrupt use of capital not
dangerous to good wealth, but very dangerous to bad wealth,
or rather, to the schemes of the owners of it.
12. Another who has an aversion to change as a thing that
is totally opposed to his constitution and by-laws, looks at the
referendum and some of its claims, perhaps, and remarks in a
fretful or maybe a pugilistic tone, "Things are getting better,
why can't you let 'em alone" They never would have got
any better if they had been let alone, and the less they are
let alone the faster they'll get better. These conservatives
talk about the referendum and other needed reforms just as
the Chinese talk about the introduction of the railroad. "The
locomotive is a noisy monster. It screeches and keeps people
awake. The railroad will overrun our methods of transporta-
tion and destroy the dignity of our carts and palanquins. The
manners of the trainmen are bad, and traveling in the cars
makes many people ill. Sometimes persons are killed by pass-
ing trains and property rights are disturbed by railroads. It
it true that they carry freight and passengers more quickly
and cheaply than our methods can, and people would get
what they want when they want it more nearly than now,
but that is nothing compared to the noise and trouble of
change." It is almost impossible to convince these chronic
rebels against progress, because it is not a matter of reason
with them, but of feeling. Logic is a thing they have little
378 THE END OF CORRUPT LEGISLATION.
acquaintance with, or congeniality for, if it threatens their
ease or impinges upon their mental, moral or physical inertia. 1
The final answer to all the conservatives is that Direct Leg-
islation is more conservative than unguarded representation.
The people would pass some laws that the representatives
would not, but they would refuse io pass a far larger number
that the representatives would and do enact, many of them
the most dangerous and radical private and class enactments.
In the ten years from 1874 to 1885, eighteen measures
passed by the government of Switzerland were sent to the
referendum, and thirteen of the eighteen were rejected.
Other facts of the same nature will be found in the section on
"The Use of the Referendum." Boyd Winchester says: 'The
history of the referendum confirms the fact that as a rule the
people are not favorable to legislation, and that the necessity
must be great and the good ends aimed at very manifest to
withstand direct consultation of the constituencies."
DISTRUST C-F THE PEOPLE.
13. "Hasty Legislation!" says one of those who doubt
democracy. "The people will pass all sorts of laws without
sufficient consideration." For answer, in addition to what has
just been said, take this from Sir Francis Adams, British Min-
ister to Berne, Switzerland :
"The referendum has struck root and expanded wherever it has
been introduced, and no serious politician of any party would now
think of attempting its abolition. The conservatives, who violently
opposed its introduction, became its earnest supporters when they
found that it undoubtedly acted as a drag- upon hasty and radical
lawmaking."
1 There is a class of people who would not like to be classed as conserva-
tives (and some of them really have progressive Ideas of a tiniirt, hesitating
variety) who tell us they "believe In the Referendum, it will be a pood thing
when the time comes, but we are not ready for it yet." Not ready for it!
Not ready for pure government in place of corruption? Not ready for a
means of checking the overgrown power of monopolists and politicians? Not
ready to stop misrepresentation and establish a real republic in place of an
elective aristocracy? Not ready to let the sovereign people say what they
want? America not ready to take a progressive step already successfully
taken In Switzerland? Bless you, friend, invent something else.
j For a discussion by Eltweed Pomeroy, throwing additional light on the
inadequacy^ of the objections to Direct Legislation, see "Objections
Answered, Arenn, vol. '22. p. 101. appearing after this chapter was in type.
^~ THE POPULAR VETO. 379
And this from Professor Bryce's chapter on Direct Legisla-
tion in the United States:
"A general survey of this branch of the inquiry leads me to the
conchisioii that the people of the several states in the exercise of
this, their highest function, show little of that haste, that reck-
lessness that love of change for the sake of change with which
Eiiropean theorists, both ancient and modern, have been wont to
credit democracy."
14. Another objector tells us that "The people are not
competent to wake the laws. Many laws are too compli-
cated for ihe people to understand; it takes lawyers to com-
prclicnd them."
Exactly, and that is the kind of laws Ave want to stop. What
right has a court or policeman to arrest and punish me for
violating a law I can't understand, even if I read it and study
it? Have I to get a lawyer to explain the 13,000 odd statutes
to me every year? It wouldn't protect me if I did; for the
lawyers don't know what the laws mean a good deal of the
time, and are continually wrangling over them; the legisla-
tors that have passed them don't know what they mean, but
Have to ask the supreme court; and even the judges have a
good deal of trouble to find out the meaning, and frequently
disagree among themselves about it. It's these complicated
laws which people can't understand that we are going to get
rid of (for one thing) with the referendum.
But there is another answer to this objection : Even if some
of the laws submitted are complicated and the people consent
to consider them on their merits instead of ordering them
back for simplification, as they would be apt to do, still we
have seen by the records that there is an automatic clisfranchise-
ment of the unfit in most referendum votings, which is the
reverse of what takes place in many legislative votings on
private measures, etc.
.Moreover, it is hard to see why it is any more difficult to
vote for a complicated measure than for a complicated man
to vote for a man under present conditions is to vote for a
whole statute book full of complicated measures, many of
them not yet formulated or even dreamed o.
380 THE OPEN BOOK OF PROGRESS.
15. There are people who have no faith in popular gov-
ernment, regard it as dangerous to property and likely to re-
sult in unjust revolutionary measures "government by hold-
ing up of hands" "mob-rule," etc., and would like, with Car-
lyle, to hear the people cry, "O, my superiors! my heroes!
come down and rule me as thou seest best! compel me to do
thy sovereign will" provided they were recognized as among
the heroes.
Carlyle and all his spiritual relations have missed these two
great truths: First, mankind has discovered that no man can
be trusted to govern others according to his own sweet will,
or even to decide what the people's interests are; for prejudice
and self-interest and narrow knowledge make it impossible
for any one but the people themselves to give a correct de-
cision on that point; even the people may not always judge
rightly, but if they have reached a reasonable degree of devel-
opment they'll come much nearer to the truth for themselves
than any one else can be trusted to come for them. Second,
the true ideal is not a society in which the masses of the people
are incapacitated for self-control, but a society in which every
citizen is capable of self-government; wise enough and good
enough to be worthy of a voice in the management of the
social partnership. TVe do want government by our heroes,
but we also want government by all for all ; and the only way
to combine the two is to make all men heroes. It was for
that, ultimately, that the world dethroned its monarchs, and
gave the scepter to the mob. After humanity has so far de-
veloped that democracy does not involve an irretrievable loss
of progressive power, then the only way to transform the mob
into manhood and make it completely worthy of sovereignty
is to place the burden upon it and let the responsibility mould
it into fitness for the work. The people will learn how to
govern themselves much faster by doing it than by watching
the politicians do it, just as a boy will learn how to skate or
to play the cornet far better by skating or playing himself
than by looking at some one else perform.
The Carlylians fail to note that
Self-government is necessary,
THE POPULAR INITIATIVE. 381
1st. For liberty and justice.
2d. I^or education and manhood.
The people of the United States are not a mob; they have
not on the average so much genius as Garlyle, but they have
better digestion and more common sense.
16. To pursue this topic a little further, some of these
people who would reverse the wheels of progress, undo the
whole of modern history, abolish manhood suffrage and
establish a high property qualification or some other sort
of recognized aristocracy some of these radical retrogres-
sional objectors to popular sovereignty, the sovereignty of the
people, say that Direct Legislation is "a neic trick to get ivis-
dom cut of foolishness." Well, you can get it out of fool-
ishness sooner than out of corruption. But it will not come
out of foolishness. The average American citizen is quite
equal in sense to the average politician; much more pro-
gressive, and vastly superior in morality. He does not
know so much of legal forms as the legislator, and lie won't
refuse the guidance of the legislator in that respect; but when
a law is formulated, he can tell whether it will suit him or
not a great deal better than the legislator can, even if the
latter is perfectly honest.
If the masses of people are a condensation of foolishness,
it is curious that the greatest legislators all over the Union
should spontaneously and unquestioningly have entrusted
them with the adoption and amendment of the fundamental
laws of the states, the constitutions. And if the people can
be trusted with the settlement of the great principles of gov-
ernment, as experience has shown that they can be, surely
they can be trusted to determine the by-laws.
Moreover, the people do continually act upon the by-laws,
in town-meetings, city votes and the election of candidates on
party platforms. It will not be so difficult to vote on each
issue separately as to decide about three or four platforms, with
many issues in each, plus the personalities of several candi-
dates. It requires more intelligence to arrive at a clear judg-
ment on a lengthy platform than on propositions submitted
singly. Direct Legislation will simply enable the people actu-
382 THE CITY FOR THE PEOPLE.
ally to accomplish in an easy, inexpensive and scientific way
what they are and in this country always have been endeavor-
ing to accomplish in a very rough, expensive and ineffective
way.
PERSONAL INTEREST.
17. Another class of objectors consist of politicians, mo-
nopolists, lobbyists, and others who realize that their selfish
interests would be injured by the referendum, or, in fact, by
any improvement in legislation tending to bring it into closer
harmony with the public good. The motives of this class are
not very fragrant, but it is at bottom the most rational of all
the classes we are considering, for there' is no doubt of the
correctness of the idea on which their opposition is based. Of
course they do not say much about the real foundation of their
objection. They do not say, "We are making a good thing
out of tJie present system of legislation, and we don't want
to let the people in; we don't want so mamj partners on Hie
ground floor." Instead of such a frank avowal, they adopt
the errors and sophistries of preceding classes, and ring the
changes on "complicated laws" "hasty legislation," "foreign
idea," "too expensive," adding, perhaps, that the words 'in-
itiative and referendum" are pedantic and un-American,
which may be true, but has no more to do with the nature of
Direct Legislation and the advisability of adopting it than a
man's name has to do with his character and the wisdom of
employing him to clear out your stable or build your house. 1
18. "It is impracticable," I have heard monopolists and
politicians say. Get out your statute books and your histories
1 Persons of this class have even been known to say to the advocates of
the referendum, "You propose then that five per cent, of the voters shall
overrule the will of the majority?" Such was the question of the chairman
of the Senate Judiciary Committee, in a legislative investigation, Feb. 12,
1895. Did he really think that was what the referendum would do? or was
ho trying to "bluff" the witnesses a game which could only work in case
of their sublime ignorance, and the equally colossal incapacity of the listen-
ing legislators, who were to be influenced by the chairman's question. In
either case, if we have legislators who can ask or be influenced by such
questions as the above, after having the amendment carefully read tu
them, and knowing that the only right given to 5 per cent of the voters lf
the right to petition that a matter be submitted to the people for the very
purpose that the will of the majority may rule instead of the will of tn
minority, as is possible when such a vote is not taken if we have sucfl
legislators, it is surely a powerful reason for some change that shall take
the right of final decision away from such men.
DIRECT LEGISLATION. 383
ana see. Kead Oberholtzer's "Referendum in America" and
y mi- authorities on constitutional law. You monopolists oi
government and industry know very well that the reierenduin
is practicable, and that you are afraid of it.
19. "Because it icorks in Switzerland is ,<j sign it irill
work ho e." Yes it is some sign that it will work here. 'The
fact that it works in Swiss cities and cantons and in the nation
is a pretty good sign that it will work in our cities and states.
But we do not need this sign, for we have a better one 1 , viz.,
that it has worked in our cities and states in numerous trials
extending thru many years, and all we ask is a fuller use of
what we have abundantly shown our ability to use. We have
proved that we can swim; untie the rope. As to the na-
tion the problem may not be as clear as we might desire, but
the referendum in city and state comes first, and that is per-
fectly clear; the rest will be equally clear when we come to it.
20. "Direct legislation violates the representative prin-
ciple." This is not true; direct legislation is necessary to the
perfection of representation. It is lawmaking by final votj
of the delegates that violates the representative principle by
producing innumerable Misrepresentations. Speaking of this
objection ]\lr. Moft'ett says:
"The Teutonic device of representation was such a convenient
substitute for the unwieldy popular mass meeting that it gradu-
ally came to be looked upon as a political end in itself, instead
of as a convenient means of enabling the electorate to evade the
limitations of time and space. . . . The representative system
is a convenient medium for the transmission of political power,
just as a system of shafts and pulleys is a convenient medium for
the transmission of mechanical power, and it would be precisely as
reasonable to object to a plan for gearing a generator directly
to the machine it was to work as a violation of the shaft-and-pulley
principle, as to object to a practicable plan of direct legislation
as an infraction of the principle of representation."
21. "It icould reduce the legislature to an advisory body."
Not quite; it would be advisory as to matters which went to
the people, and acting agent as to the rest. To make the
legislature more than an advisory" body as to measures OD
which the people wish to express themselves, is to give th*
384 GOVERNMENT BY AND FOR THE PEOPLE.
legislature the power of overruling the .people and make them
sovereign in place of the people.
22. "The people can't frame the laws for an initiative;
they don't know enuf." There are plenty of experts the peo-
ple can. get to do that. The people can tell whether the law
is what they want when it is framed, and that is the important
matter for them.
23. "The people don't want to vote on measures; the vote
is always smaller than for candidates." Not always, but
usually it is so, because, as a rule, the less intelligent do not
understand the referendum and omit to vote. But this does
not show any lack of desire for the referendum on the part
of the great mass of the people. On the contrary, the growth
of the demand for direct legislation exceeds anything in the
history of reform.
24. One of the great standbys of the more intelligent of the
supporters of the legislative aristocracy is the assertion that
"the referendum will be unconstitutional, because it is not
a republican form of government." If so, every state in the
Union, except Delaware, has violated the federal constitution
by adopting and amending its state constitution thru the ref-
erendum, and there is only one valid state constitution in the
land, the rest being void, because made in violation of the
federal law. We have seen that Jefferson declared that the
republicanism of a government is proportioned to the direct
action of the citizens in it, 1 wherefore no form of government
can be completely republican without Direct Legislation; and
instead of forbidding Direct Legislation the National Con-
stitution requires its adoption in every state of the Union,
if the guarantee of republican government in every state is
to be completely and perfectly fulfilled. 2
1 "Government is more or less Republican in proportion as it has iii its
composition more or less of this ingredient of direct action of the citizens."
(P. 605, Vol. VI, of the H. A. Washington Edition of Jefferson's writings.)
2 The Standard Dictionary, latest of all, says: "Republic: A state in
which the sovereignty resides in the people, and the administration is lodged
in officers elected by and representing the people, * * * sometimes
military, as in Sparta and the earliest Roman republic, sometimes a well
nigh pure democracy, as in the first French republic, or as in Switzerland,
with its referendum."
The usage of English speaking peoples fully justifies the definition, for
the Greek democracies, where the people made the laws, and even sat
"en masse" to exercise the judicial function, are everywhere spoken of as
THi: T.MTIATIVK AXD REFEREXDTTM. 385
25. Thus all objections utterly fail, and the mighty array
of positive arguments is left without a breach. To pass the
main points in brief review :
The referendum will abolish monopoly in lawmaking, make
plutocracy impossible, establish a real government by the
voters, open the way to new reforms, bar the path of fraud,
rout the lobby, weaken the corrupting power of wealth and
monopoly, keep the representative to his duty, rebuke parti-
sanship, make gerrymandering useless and a deadlock impos-
sible, discourage favoritism, extravagance and legislative
theft, lower taxation, cut down exorbitant salaries and in
every way conduce to an economical administration of public
affairs, decentralize power, simplify elections and the law, stop
the killing or shelving of bills in committees and the passage
or introduction of blackmailing acts, save much of the time
now wasted in party disputes, personal politics and angry de-
bate, favor stability and careful legislation, disclose the
strength of malcontents and afford a safety valve to dis-
content, elevate the press, educate the people intellectually
and emotionally, develop their reason, sense, dignity and pa-
triotism, make the public welfare hinge directly on the moral-
ity and intelligence of the masses and bring the best men to
the front as their leaders. 1
Experience, reason and the drift of public sentiment com-
bine to emphasize the value and importance of the referen-
dum, and after all it is simply the putting in practice of the
American idea of the sovereignty of the people. The federal
constitution begins "We, the people, do ordain and establish."
republics. Webster's dictionary calls them republics. And Switzerland,
the land of the referendum, is known the world over as the "model re-
public."
Ifi South Dakota and Oregon, where direct legislative amendments have
been passed (and in S. Dakota adopted) there has been no claim of uncon-
stitutionality by the opponents of the measure.
If Direct Legislation was unconstitutional, it would not prove anything
except the necessity of amending the constitution.
For a fuller treatment of this objection, see my chapter on Objections in
Senate Document, 340, 55th Congress, second session, July 8, 1898, pp. 146,8.
1 Nomination 1>>/ dircrt ballot or petition of the people, instead of nomina-
tion by party caucus or convention, will help to make public spirit and
fitness for office the vital elements in the selection of candidates instead
of particular service and corporate or factional allegiance. The separation
of state and municipal elections by some .weeks or months, and insistance
on electing local officers on local issues and not upon national issues will
also aid in the due subjection of party. Everything that tends to over-
come the rvle of Mind unthinking partisanship ought to be welcomed by
all true-hearted public spir'ted citizens.
386 THE END OF CORRUPT LEGISLATION.
The first clause of Jefferson's formula for democracy is, "The
people to be the only source of legislation." Napoleon's eagle
Vision caught the truth when he said: "Free nations have
never allowed the direct exercise of their sovereign power to
be taken from them. This new invention of the representa-
tive system destroys the essential base of a republican com-
monwealth." May the time soon come when we shall make
good our loss, and the budding flower of liberty shall bloom in
full perfection!
Let us work for
Direct legislation by the people.
Direct nominations by the people.
Direct and immediate recall of recreant officers by the people.
i. e. .
Instruction, veto,
selection, discharge
by the sovereign people.
CHAPTER III.
HOME RULE FOE CITIES.
THE BONDAGE OF CITIES MUST CEASE.
Our law classes cities with women as having no right to self-
government a fact which may be regarded as affording legal
grounds for the custom of calling a city "she." A few illus-
trations will show how absolutely cities and towns are sub-
jected to the control of the state legislature.
1. One of the strongest illustrations of the severe State
paternalism to which our cities are subject is the fact that a
city of half a million people cannot connect two of its own
public buildings with an electric wire, the city being unable
to obtain legislative permission against the opposition of the
electric companies. Boston is the city of which I am speak-
ing. A little while ago she wished to run a wire from the
City Hall to the Old Court House, either over or under the
little back street 50 or 60 feet wide that lies between the two
buildings. The object was to enable the city to light the Old
Court House from the dynamo in City Hall. A bill was in-
troduced for the purpose, accompanied by petition of the
mayor of Boston (House Bill No. 747, 1898), but the electric
companies did not wish municipalities to us a dynamo in a
public building to operate lights outside of the building, and
the Legislature refused to pass the bill, and Boston cannot run
a wire between two of her own buildings over or under her
own street.
A municipality has no independent initiative of its own, and
it is the only human thing in America that hasn't got it. The
nation has a right of independent initiative in national affairs,
the state in state affairs and the individual in individual affairs,
but the municipality must have permission from the legis-
lature for everything it does. 1 If Portland wants to establish
1 It is bad enough to hold life as a tenant at will, but even that might
be endurable if the city were allowed to have the attributes of a living being
while entrusted with existence. But, to have no power of self activity; to
be required to get permission to move! that is unbearable.
887
388 THE BONDAGE OF CITIES
a gas plant, she must consult witn Augusta, and Bangor and
Dickeyville, and all the other towns and cities in the state,
and get the consent of their representatives in the legislature.
If Salem, learning of the great success of municipal telephone
exchanges in other countries, desires to build such a system
for herself, she must ask authority of a lot of men from Bos-
ton, Worcester, Springfield, Osterville, Lenox, etc., who
mostly know nothing about Salem, or municipal telephones
and are much more apt to feel an interest in the Bell Tele-
phone Company than in a municipal exchange in Salem.
When Syracuse wants to build an electric light plant, or a sub-
way, she must ask permission from a body of men representing
Albany, Buffalo, Rochester, New York, Brooklyn, Birming-
ham, Rynex's Corners, Smith's Mills, Phillips Creek, Pool-
ville, and all the other 3,000 cities and towns of the state, and
representing also, even more accurately perhaps, a large num-
ber of powerful corporations, whose interest it is to do all in
their power to prevent Syracuse or any other city or town
from establishing a municipal lighting plant, or taking any
steps in the direction of a municipal street railway. Such
undertakings are clearly beyond the individual sphere. Each
individual cannot build a street railway, or a telephone system
for himself. And they are not state interests. Albany and
Buffalo have nothing like a common interest with Rochester
in the water, gas, electric light, or telephone system of Roches-
ter, and should have nothing like equal powers of decision in
respect to the Rochester gas works, or telephone plant; yet,
under the present system, Buffalo and Albany have more to
say as to what shall be done with Rochester telephones and
gas pipes than Rochester herself. Yet the interest is dis-
tinctly local, and the final power of decision and right of con-
trol should be local, subject only to broad general pro-
visions, to give the people a firm grasp of the city government,
and secure deliberation, harmony and just dealing.
2. The legislature has such power over municipalities that
it can plan and construct the public buildings of a city without
reference to the wishes of the citizens, and then compel them
to pay for the work. In 1 870, the legislature of Pennsylvania
TO POLITICIANS AND MONOPOLISTS MUST CEASE. 389
arrived at the conclusion that Philadelphia should have a new
city hall; so it passed an act to that effect, naming certain gen-
tlemen as commissioners to erect the building, with absolute
power to create debts for that purpose, and require the levy of
taxes on the city for their payment. The act was held consti-
tutional, 1 and for about a quarter of a century the people of
Philadelphia have been paying enormous sums, millions more
than the buildings were fairly worth, for work they did not au-
thorize, and over which they have had no control, altho it con-
sisted simply of the construction of municipal buildings for
their own city a remarkable example of the intense patern-
alism (to use the mildest w r ord that suggests itself) . to which
the law subjects municipalities. It would be deemed a very
strange thing for the legislature to say to an individual citizen :
"Mr. Smith, your old brick house is getting a trifle small for
"you and your servants, and isn't very handsome anyway; you
"are able to build a palatial marble dwelling, and I guess we'd
"better have it done. I'll plan the thing, and see it con-
"structed to suit my taste, and you can pay for it, as you are
"the one who will have to live in it." The courts would not
allow the legislature to act in this way toward a single indi-
vidual, but a million individuals who constitute a city must be
left, in such a case, entirely at the legislative mercy.
3. Another proof of municipal infancy is the fact that the
legislature may compel a city or town to pay a claim made
against it, altho such claim has been denied by the courts and
may have no foundation in law or justice. 2 If the legisla-
ture ordered Mr. Smith to pay Mr. Jones the amount of a
claim made by Jones upon Smith, which had been tried in the
courts and rejected, or if the legislature should order the
Boston & Albany, or the Pennsylvania Railroad, or the
Adams Express to pay such a claim, the courts would unhesi-
tatingly declare the act unconstitutional; but a million men
in a public corporation have almost no rights which the legis-
lature is bound to respect.
(') Perkins v. Slack, 86 Pa. 270 (1878). -
( 2 ) 13 N. Y. 143. If the claim were manifestly without any foundation,
legal or moral, the legislative order might be held void as amounting to taxa-
tion for private purposes (see 64 N. Y. 92, 99). But, if the baselessness of the
claim does not appear clearly on the face of the facts before the court, the
legislative order will stand.
390 MUNICIPAL LIBERTY.
4. It is held that the legislature may take city water works,
or gas works, or other municipal properties entirely out of the
hands of the city, and give the management of them to state
officers. 1
5. A franchise granted by the legislature to a city or town
is not a contract. A franchise to establish, own and operate
ferries, water works, gas works, electric plants, street railways,
etc., is a franchise if granted to an association of stockholders
constituting a private corporation, and is protected by the
Federal Constitution, but is not a franchise if granted to an
association of individuals constituting a city, and is not pro-
tected by the constitution, or anything else, but may be taken
without compensation at the pleasure of the legislature. 2
6. The charter of a private corporation is held to be a con-
tract within the constitution, but the charter of a public cor-
poration is not. Municipal corporations are creatures of the
legislature. They have only such powers as may be given to
them by the legislature, which may, at its pleasure, alter,
abridge or annul their powers and privileges, divide them, or
consolidate two or more of them into one without their assent,
attach a condition to their continued existence, or abolish them
completely. 3 Imagine Congress passing an act to annex
Rhode Island to Connecticut, or divide New York state, or
declare that Illinois shall no longer be a state! Yet such an
act enforced without the assent of the states affected would be
an apt parallel to the arbitrary powers possessed and exercised
by many of our legislatures in respect to cities.
These illustrations of municipal dependence seem sufficient
to justify the conclusion that our cities are in bondage sub-
(') 44 Oh. St. 348; 7 Houst. (Del.) 44; some courts hold otherwise-see
below.
( 2 ) East Hartford v. Hartford Bridge Co., 10 H%w. (U. S.) 511. Legisla-
tive act taking away the Hartford ferry justified on the broad ground that
the grant of a franchise to a municipality Is not a contract. See also 77 Va.
214, and compare 10 Barb. (N. Y.) 223.
( 3 ) See 102 U. S. 472, 511; 93 U. S. 266; 4 Wheat. 518; 74 N. Y. 161, 166;
2? o- ud e D , lllon ' s famous legal text book on Municipal Corporations, 54,
64, 80, 89. the highest authority on the subject.
A municipality Is not only a creature of enumerated powers, but those
powers are for the most part strictly construed. It Is held that a municipal
corporation can exercise no powers except those granted to It in express
words, or necessarily or fairly implied in or incident to the powers ex-
pressed, or Indispensable to the declared objects and purposes of the cor-
poration, and "any reasonable doubt concerning the existence of the power
Is resolved by the courts against the municipal corporation, and the power
IB denied." \on Schmidt v. Wldber, 105 Cal. 151, 157
LOCAL GOVERNMENT BY THE LOCAL PEOPLE. 391
ject to external control in regard to matters which they ought
to have a right to decide for themselves. A state legislature
has no more right to impose its judgment upon a city in respect
to the local business affairs of that city than the Federal Gov-
ernment has to impose its judgment upon a particular state in
regard to the local affairs of that state. There is no more
sense or justice in requiring Baltimore to consult all the cities
and towns of the state as to what she shall do with her street
railways than there would be in requiring Mrs. Deland to con-
sult all the women in Boston and get permission before she
puts new paper on her hallways, or makes any other change
in her housekeeping.
THE REASONS FOR ALL THIS.
The reason sometimes given for the legislative power of
strangling a municipality is that it was created by the legisla-
ture, and as the breath of life was breathed into it by the state
authorities they have the right to withdraw the said breath at
their pleasure. On similar grounds a parent would have a
right to murder his child, and we should go back to the
Roman plan of placing the power of life and death in the head
of the family. Moreover, private corporations, as well as
public, are created by the legislature and if creation confers
a right of limitless modification even to dissolution in the one
case, why not in the other? Finally, cities and towns are not
created by the legislature. They may exist and frequently
have existed without any legislature, and before there was any
legislature. Their existence gives them the right of local
self government. People living together in the same locality
have a right to associate themselves for the accomplishment of
common purposes, and to control their local affairs without
dictation from distant cities and without permission from any
legislature. The legislature may use cities and towns to ac-
complish state purposes, and in that relation may properly
mold their governments and functions; but it has no more
right to deprive them of freedom and self control in local mat-
ters than congress has to deprive a state of its freedom and
i*elf control in internal concerns.
,'J92 THE CITY FOR THE PEOPLE.
The real reason for the present state of municipal law
appears to be a failure of the law so far to embody in its phil-
osophy, with sufficient fullness and precision, the fundamental
distinction between the functions of cities and towns as state
agencies for enforcing state laAvs, and their functions as local
business concerns. When the principles of the Common Law
were crystalizing, the functions of municipalities were almost
entirely confined to the first class, and the doctrine naturally
grew up that municipalities were merely creatures of the state,
doing a part of the state's work, and subject entirely to the
state's orders a doctrine fairly reasonable as long as muni-
cipal functions were confined to keeping order, administering
justice, attending to education and other state interests, but
wholly inappropriate in reference to the ownership and man-
agement of water works, gas works, electric light works, street
railway systems, lodging houses, wharves, ferries, printing
establishments, telephone exchanges, baths, and other local
business enterprises that have crept into the municipal field.
The precedent-loving law has clung to the rule of former
times, bending a little in the strong hands of two or three
liberal courts, but with no due regard as a rule for the modi-
fication required by the changes of modem life.
We may set it down as a reasonably certain conclusion, I
think, that the sweeping subjection of cities to legislative
authority that characterizes our law appears to arise from
the failure to distinguish between the two spheres of municipal
activity. So far as the municipality is an agent of the state
to carry out state policy in respect to state interests, such a3
education, order, administration of justice, protection from
disease, etc., large control by the legislature is right; but so
far as the municipality is a local co-operative business
concern, the legislature should have no more power over it
than it has over any other individuals or corporations engaged
in similar business.
LIMITATIONS ON THE LEGISLATIVE.
In spite of the law's rigidity, and the powerful trend in the
past toward state absolutism in municipal affairs, some notches
have been cut in this legislative omnipotence.
110.ME Kl'LE FOR OUK CITIES. 393
1. Taxation .must be for a public purpose, and one that per-
tains to tlie district taxed.
2. The legislature cannot deprive a city of the use of its
private property, such as water works, gas plants, etc. Even
if a city or town is abolished, such property rights are not de-
stroyed but go to the state in trust for the inhabitants of the
municipal area. The management of the property may be
taken away, but not the use of it.
3. A few courts hold that the legislature cannot take away
the muuuin'incnt of "private" property from the municipality,
there being an inherent right to local management and control
of local business, and local selection of the officers who are to
administer such business.
Inherent Riglit of Local Self-government.
In People v. Hurlbut, 24 Mich. 44 (1871). Chief Justice Campbell
and Justices Cooley and Christiancy held that the legislature could
not appoint a board of public works to control the public buildings,
pavements, sewers, water works, engine houses, etc., in the city of
Detroit, altho no express provision of the constitution negatived
the act. The court held that there is "a clear distinction between
"what concerns the state and that which does not concern more
"than one locality."
A municipal government has two sets of functions. It is a state
agency to attend to state affairs in its locality, and it is a municipal
agency to attend to business of a local nature, such as water works,
fire service, etc. In its sphere of state agency, the legislature may
control it except where express constitutional provisions may inter-
vene. But the people of a city or town have a right to the manage-
ment of their local concerns, and the selection of their local officers
who are to control such concerns, and this right cannot be taken
from them by the legislature, for it rests upon the principle of
self-government, which is inherent in free institutions, and un-
derlies the constitution as the purpose for which the constitution
was established.
Chief Justice Campbell and Justices Cooley and Christiancy gave
the matter great consideration and rendered separate opinions all
based upon the principle that local self-government of local affairs
is an essential part of our system. "The history of the country
"and the nature of our institutions" show "the vital importance
"which in all the states has so long been attached to local muni-
"cipal governments by the people of such localities, and their rights
"of self-government."
Chief Justice Campbell distinguishes People v. Mahaney, 13 Mich.
492, where the validity of an act establishing state control of city
394 THE BONDAGE OF CITIES
police is sustained, saying 1 the question was "whether the police
"board is a state or municipal agency," and added, "I think it is
"clearly an agency of the state government There is a
"clear distinction in principle between what concerns the state and
"that which does not concern more than one locality There
"is no dispute concerning the character of the public works act.
"Its purposes are directly and evidently local and municipal." He
decided that the municipality could not be deprived of the right
to choose the men who should manage its public works. "Our con-
"stitution," he said, "cannot be . understood or carried out at all,
"except on the theory of local self-government The
"confusion existing on this subject has arisen from the custom
"prevalent under all free governments of localizing all matters of
"public management as far as possible, and of making use of local
"corporate agencies whenever it can be done profitably, not only
"in local government, but also for purposes of state." (pp. 81, 84,
89.)
Judge Cooley made an extensive review of the pertinent, historic
facts and general principles, and concluded against the "legislative
"power to appoint for municipalities the officers who are to manage
"the property, interests and rights in which their own people are
"alone concerned. The municipality as an agent of government, is
"one thing; the corporation as an owner of property is, in some
"particulars, to be regarded in a very different light. . . In the
"case before us, the offices in question involve the custody, care,
"management and control of the pavements, sewers, water works,
"and public buildings of the city, and the duties are purely local.
"The state at large may have an interest in an intelligent, honest,
"upright, and prompt discharge of them, but this is on commercial
"and neighborhood grounds, rather than political." (pp. 103, 104,
105.)
In Board of Park Commissioners v. Detroit, 28 Mich. 228 (1873),
where the legislature appointed state officers to buy land and im-
prove it for a park for, and at the expense of, the city of Detroit,
Judge Cooley said: "We affirm that the city of Detroit has the
"right to decide for itself upon the purchase of a public park. . . .
"It is as easy to justify, on principle, a law which permits the rest
"of the community to dictate to an individual what he shall eat,
"and what he shall drink, and what he shall wear, as to show any
"constitutional basis for one under which the people of other parts
"of the state dictate to the city of Detroit what fountains shall be
"erected at its expense for the use of its citizens, or at what cost
"it shall purchase, and how it shall improve and embellish, a park
"or boulevard for the recreation and enjoyment of its citizens."
(pp. 241, 242.)
A passage from the opinion of the same judge in the former case,
24 Mich, at 97, is interesting in connection with the last quotation.
"The doctrine," says the learned judge, "that within any general
"grant of legislative power by the constitution there can be found
TO POLITICIANS AMJ MONOPOLISTS MUST CEASE. 395
"authority thus to take from the people the management of their
"local concerns, and the choice directly, or indirectly, of their local
"officers, if practically asserted, would be somewhat startling to our
"people, and would be likely to lead hereafter to a more careful
"scrutiny of the charters of government framed by them lest some-
"time, by an inadvertent use of words, they might be found to have
"conferred upon some agency of their own, the legal authority to
"take away their liberties altogether."
The Michigan constitution says, Art. XV, 14, that "judicial
"officers of cities and villages shall be elected, and all other officers
"shall be elected or appointed, at such time and in such manner,
"as the legislature may direct," but the Michigan judges hold that
in the light of history, and fundamental principle, the election or
appointment of municipal officers proper must be by local authority
in such time and manner as the legislature may direct.
In State v. Denny, 118 Ind. 382 (1888), an act creating a board of
public works to be appointed by the legislature, and to have con-
trol over streets, alleys, sewers, water works and lights, was held
invalid as infringing the right of local self-government inherent in
municipal corporations under our system of free institutions. The
right of local self-government ante-dated the constitution, and was
not surrendered by it. Judge Coffey, citing Cooley on Constitu-
tional Limitations, 5th ed., page 208, says:
"It does not follow that in every case the courts, before they
"can set aside a law as invalid, must be able to find in the consti-
tution some specific inhibition which has been disregarded
"If the authority to do an act has not been granted by the sover-
"eign to its representatives, it cannot be necessary to prohibit its
"being done" (pp. 394-395). The Court continues: "The constitu-
tion must be considered in the light of the local and state govern-
"ments existing at the time of its adoption The principles
"of local self-government constitute a prominent feature in both
"the federal and state governments. ... It existed before the
"creation of any of our constitutions, national or state, and all of
"them must be deemed to have been formed in reference to it,
"whether expressly recognized in them or not The object
"of g'ranting to the people of a city municipal powers is to give
"them additional rights and powers to better enable them to govern
"themselves, and not to take away any rights they possessed before
"such grant was made. It may be true that as to such matters as
"the state has a peculiar interest in, differing from that relating
"to other communities, it may, by proper legislative action, take
"control of such interests; but, as to such matters as are purely
"local, and concern only the people of that community, they have
"the right to control them subject only to the general laws of the
"state, which affect all the people of the state alike. The construc-
tion of sewers in a city, the supply of gas, water, fire protection,
"and many other matters that might be mentioned, are matters in
"which the local community alone are concerned, and in which the
396 MUNICIPAL LIBERTY.
"state has no special interest more than it has in the health and
"prosperity of the people generally, and they are matters over
"which the people affected thereby have the exclusive control, and
"it cannot, in our opinion, be taken away from them by the- legis-
lature."
In Evansville v. State, 118 Ind. 426 (1888), it was held that an
act placing the police and fire departments of certain cities, and
the property connected therewith, under the exclusive control of
State commissioners was void as a denial of the right of local self-
government. The court says that securing an efficient police
department is a State purpose, but the remainder of the act affected
purely local concerns (p. 437).
This Michigan doctrine of the inherent right of local selec-
tion of officers and management of property guarantees self-
government within the sphere of local business permitted by
the charter, but the charter itself is subject to limitation or re-
peal at the will of the legislature, and there is at best no power
of initiating a business or policy beyond the foreordained enu-
merations and permissions of the charter. Moreover, the
courts that take this position are few. The great majority
hold, with Ohio and Delaware, that the legislature may take
city property out of the hands of the city, and give its control
to state officials. 1
0) The reasoning by which this course Is sustained Is well expressed In
148 Mass. 375, at 383-6. "It is suggested, tho not much insisted on, that the
statute of 1885, c. 323, is unconstitutional, because it takes from the city
the power of self-government in matters of internal policy. We find no
provision in the constitution with which it conflicts, and we cannot declare
an act of the legislature invalid because it abridges the exercise of the
privilege of local self-government in a particular in regard to which such
privilege is not guaranteed by any provision of the constitution."
The court then referred to constitutional provisions to make "wholesome
regulations," etc., and to "erect municipalities" and "grant powers," etc.
The constitution did not say the legislature could take away powers once
granted, but this was held to be the case by the court which continued as
follows:
"Under these provisions," as is said by C. J. Chapman: 'There can be no
doubt that the power to create, change and destroy municipal corporations Is
In the legislature. This power has been so long and so frequently exercised upon
counties, towns and school districts, in dividing them, altering their boundary
lines, increasing and diminishing their powers, and in abolishing some of
them, that no authorities need be cited on this point. The constitution does
not 'establish these corporations, but vests in the legislature a general juris-
diction over the subject by its grant of power to make wholesome laws, as it
shall judge to be for the general good and welfare of the commonwealth.'
It 'may amend these charters, enlarge or diminish their powers, extend or
limit their boundaries, consolidate two or more into one, and abolish them
altogether, at its own discretion." "
"We have no doubt that the legislature has the right in its discretion to
' change the powers and duties created by itself, and to vest such powers and
duties in officers appointed by the governor, * * * instead of leaving
"such officers to be elected by the people, or appointed by the municipal
"authorities."
The law under consideration in this case established a state police for
Boston, and so was not within the limits of the Michigan and Indiana
decisions, but the reason covered the whole field, and is often referred to as
authority against the Michigan doctrine.
LOCAL GOVERNMENT BY THE LOCAL PEOPLE. 397
4. In some states, constitutional provisions have been
adopted securing more or less municipal freedom as a right;
and, as a matter of fact our legislatures accord municipalities
a considerable degree of self-control, tho only as a courtesy,
subject to recall at the pleasure of the legislature except where
the Michigan Doctrine or the constitutional provisions just
mentioned interfere with State absolutism. (See diagrams
below, Tables I and II.)
THE GENERAL SITUATION.
Summing up the situation it appears to be as follows :
1. Cities have no independent initiative of their own. They
belong to the dependent and defective classes.
2. They have as a rule no recognized right to choose their
own officers.
3. They have as a rule no recognized right to control and
manage their own property.
4. They have no recognized right to continued existence
no recognized right to life, liberty, or the pursuit of happiness.
5. Neither a franchise grant, nor the charter as a whole, is
regarded as a contract, or within the protection of the Federal
Constitution.
6. Cities cannot be taxed except for a public purpose, and
one that pertains to the district taxed.
7. The people in the municipal area have a right to the use
of the business property of the municipality, and perhaps of
its public property also.
8. Some courts recognize an inherent right in municipali-
ties to control their business property and manage their local
affairs, and elect their own officers to exercise such control and
management.
9. In fact, considerable local self-control exists by legisla-
tive permission as a revocable courtesy.
10. In some states, the prevailing rules of law as to muni-
cipal subjection have been altered by constitutional provisions,
and there is a strong movement of thought in favor of such
modification. (See diagrams and explanation.")
398 THE CITY *FOR THE PEOPLE.
CONSEQUENCES OF MUNICIPAL DEPENDENCE.
Some of the consequences of the present condition of muni-
cipal law are:
First. A chaotic mass of legislation and decisions, mighty
in bulk, complexity and conflict of opinion, but weak in the
definite simplicity, uniform interpretation, and steady har-
mony with fundamental principles that characterize the per-
fect law.
Second. An eternal running to the legislature for special
legislation. Turning to a pile of notes on special laws, the
first sheets I pick up contain a list of twenty acts passed by
the Virginia legislature in one year to authorize the building
of wharves by persons named in the acts. Here are a few
specimens. They are all substantially alike.
Major W. Pilchard to erect a wharf at Greenbackville.
C. W. Warner allowed to erect a wharf.
Tomlin Braxton to erect a wharf in King- William.
R. H. Atkerson to erect a wharf on Chuckatuck Creek, etc.
Taking another random handful of papers, I find a mass of
local laws enacted in Mass, in 1896, '97 and '98. Look in the
index of any Mass, blue book under the titles "Cities" and
"Towns" and you will find materials enough for a lengthy ser-
mon on special legislation. In 1896, there were 49 special
acts relating to street railways in 5 cities and 44 towns, and 25
acts about water, 8 relating to cities and 17 to towns. Those
are only two items. In 1897, there were 130 entries under
Cities, only 7 of them general laws. In 1898 the.-e were 255
entries under "Cities" and "Towns" and only 18 of them re-
ferred to general laws. A considerable number of the special
acts relate to municipal water works, and another large group
consist of acts permitting some railway to lay its tracks in some
town or city. Here are a few examples of what Mass, can do
in the way of special legislation :
Barre, the Barre St. Ry. Co. may lay its tracks and operate its
railway in,
Belchertown may accept a certain bequest.
Berkley, water supply.
Blandford, the Hudson Rv. & B. Rd. Co. may construct its rail-
road thru . (There are many of these Rd. acts.)
HOME RULE FOR OUR CITIES. 399
North Adams hospital may establish a school for training nurses.
Beverly, draw in Essex bridge may be relocated.
Boston, Aberdeen street may be laid out and occupied as a public
highway.
Boston may accept legacy of John L. Randidge.
Boston may grant a pension to John Rogers.
Boston may pay a sum of money to widow of C. L.
Boston may relocate Chilmark street.
Boston may pay a sum of money to widow of John (several
such acts).
Boston, sale of old public library building.
Boston, extension of Cove street.
Brockton, name of Franklin Meth. Epis. Chapel changed to the
Franklin Meth. Epis. Church.
Brockton, Taunton and Brockton St. Ry. may operate cars in,
Edgartown, taking of eels in oyster pond in,
water supply for.
New Bedford, Board of Public Works of, may elect a clerk.
Northfield, a bridge to be constructed in,
Somerville, appointment of certain members of fire depart-
ment in,
Springfield, salary of justice of police court in,
Wayland, bridge in may be removed.
Orange, the Orange & E. Street Railway may construct its rail-
way in,
These are from '97. A few from the long lists of '98 will
show that the quality is about the same from year to year.
Boston may pay a sum of money to (many such acts).
Boston, to change the name of Penitent Female Refuge,
Boston, relative to Bennington street in,
Boston, widening of Rutherford avenue.
Boston, relative to alleys in,
Boston may finish the construction of its public parks.
Bourne, the Plymouth & Sandwich St. Ry. Co. may construct and
operate its road in (many such acts),
Chicopee, filling of vacancies in board of aldermen.
Falmouth, water supply for (a number of such laws),
Salem, appointment of assistant assessors in,
Revere, election of selectmen in,
Taunton, custody of shade trees in,
"West Newbury may appropriate money for constructing a wharf.
Windsor, maj construct a telephone line to Dalton.
1^0 wonder Governor Russell advocated an enlargement of
the powers of municipalities. In his address to the
legislature, Jan. 8, 1891, pp. 24 to 26, he says:
400 THE BONDAGE OF CITIES
"Much special legislation is enacted in behalf of cities and towns
"and is made necessary by their limited powers. Twenty-three
"cities and forty-one towns were the subjects of special acts at
"the last legislature. In my opinion, greater powers can be given
"to cities and towns with safety and advantage, not only as a relief
"to the legislature, but as a just and proper extension of local self-
government." Speaking of the terms and conditions on which
street franchises should be granted, and of an act that passed the
House requiring the sale at auction of such franchises, he says:
"In my judgment, each community is best fitted, has the right and
"ought to have the power, to determine this question for itself;"
and he recommended the passage of a law allowing each muni-
cipality to fix the terms on which such grants should be made.
In his address of January 7, 1892, page 42, he again recommends
the "extension of the powers of cities and towns and of local self-
"government, especially in matters of taxation, control and sale of
"franchises, and extending the limits of municipal work and of
"municipal ownership."
And finally, in his address to the legislature, January 5, 1893,
page 12, et seq., under the caption "Right of Local Self-Government
in Town and City," the governor said: "The right of self-go vern-
"ment is an axiom of our political system. Wherever this right
"can be exercised directly by the people themselves, such exercise
"should be carefully conserved. . . Due regard for the right of
"local self-government requires not only non-interference bj r the
"State in the purely local affairs of cities and towns, but also the
"grant to them of greater powers in order that there may be the
"most successful treatment and control of the ever increasing prob-
lems of local concern. A reference to the acts of last year shows
"that nearly one-third of its four hundred and forty acts were
"special laws passed on the application of twenty-five cities and
"eighty-five towns [in respect to little local matters], and there
"were also eighty-seven special acts relating to other corporations,"
and he repeated his recomn^ndations of former years for the sake
of progress, for the relief of the legislature, and as a matter of
justice and right.
'The Fassett Committee appointed in 1890 by the New York
Senate to investigate municipal government in that state
found that in 6 years, 1884 to 1889 inclusive, the New York
legislature passed 1284 acts relating to the 30 cities of the state
390 of the acts affecting the city of New York. In 1886,
280 out of 681 statutes were local municipal laws. (See Sen.
Rep. Fassett Com. 1891, Vol. V, p. 459.) For examples of
New York special legislation, see Appendix II, S.
In Wisconsin in 1895 the General Laws occupied a volume
of 812 pages and "City Charters and their Amendments"
filled a second volume of 1360 pages. As specimens of some
TO POLITICIANS ANJJ MONOPOLISTS MUST CEASE. 401
of the local measures that absorb the attention of Wisconsin
legislators, we may name an act providing that bath houses
may be maintained at Hicks Lake, and an act to amend the
charter of Milwaukee in respect to sprinkling the streets.
In the Minnesota statutes of the last session (1897) I find:
Cities are authorized to compromise and settle claims.
Empowered to repair market houses and city property.
Authorized to issue bonds for water works, hospitals, etc.
Time for payment of local improvement assessments extended.
Empowered to prevent fights, disorderly conduct, etc.
Empowered to change abandoned cemeteries into parks.
Empowered to take bequests in trust for public libraries.
Cities over 50,000 authorized to buy any water plant or combined
water and light plant in operation in such city.
Fire limits may be prescribed by Councils, etc., etc.
Think of it! A city has to have legislative permission L o
compromise and settle a claim, to repair its own property, to
change its own cemetery into a park, buy a water or light
plant, or take a bequest for a public library! ISTo individual
of age and apparent discretion, nor any association of indi-
viduals whatever, except a municipality, would think of asking
pei-mission to repair its own property but a city or town
well, it would ask permission to sneeze if it needed to perform
that operation; it can't even stop a fight legally till the legisla-
ture says it may.
A large part of our state legislation consists of acts that deal
with insignificant local matters that should be left under gen-
eral laws, to the discretion of municipal and county authori-
ties. In Massachusetts more than a hundred towns and cities
apply in a single year for special legislation in their behalf to
the great overburdening of committees, the dissipation of legis-
lative energy, the decision of numberless local questions by
men who know little or nothing about the case, the prevention
of due consideration of important State affairs, the general
distraction of attention and encouragement of loose methods
of passing laws, or allowing them to pass without finding out
whether they ought to pass, and the serious congestion of the
statute book, entailing on the public treasury the needless cost
of printing hundreds of laws for the State every year, when
26
402 Ml'XICIPAL LIBERTY.
an entry on the books of a city, town, or county, would do just
as well, or better.
The New Jersey General Statutes, 1895. contain seven
special acts as to cities besid-^ numberless fragments affecting
them more or less. There is jm act concerning cities of the
first class, or those over 100,000 population; another as to
cities of the second class between 12,000 and 100,000, another
as to third class cities, all those not in the first or second
class, except Sea-side resorts; another as to Sea-side resorts;
another relating to cities between 6,000 and 10,000; another
about, cities below 5,000; and another as to cities generally.
There is an enormous amount of repetition the councils have
powers that are similar to a large extent in the different
groups, but there is difference enough so that it is almost im-
possible to tell just what the authority of a particular city is
under any given circumstances quite impossible without em-
ploying a lawyer to investigate the statutes and decisions. The
General Statutes are composed of three big volumes containing
4,098 enormous pages over 1,200 words to a page, and
nearly 5,000,000 words altogether, and every legislative ses-
sion adds another book of laws; 30 of the giant pages are given
to a dissertation on oysters and clams, and 400 pages, or nearly
50,000 words are devoted to cities and towns, besides the quan-
tities of scraps, to exhaust which one must search the imper-
fectly indetxed volumes under 40 or 50 heads.
This egregious violation of the laws of liberty and decen-
tralization, burdening the legislature with a mass of local con-
cerns about which they know little, and care little, taking their
time and attention from the broad interests they ought to deal
with, diminishing their respect for and interest in law mak-
ing, subjecting local business to irresponsible "foreign" con-
trol, and depriving municipalities of the benefits of self-gov-
ernment, constitutes one of the great evils of our time.
Third. Another result of our present system is a great lack
of elasticity and spontaneity in municipal action.
Fourth. The absence of municipal independence cripples
local patriotism, creates a disastrous apathy in many honest
citizens, forfeits the educational development that comes of
LOCAL GOVERNMENT BY THE LOCAL PEOPLE. 403
earnest attention to public questions. The people do not
manifest the interest in local business, especially in the larger
cities, which they would manifest if the right of decision and
initiative rested with them. As the Fassett Committee says:
"Our cities have no real local autonomy, local self-govern-
ment is a misnomer, and consequently so little interest is felt
in matters of local business that in almost every city in the
state it has fallen into the hands of professional politicians."*
As Prof. GcK>dnow says, msubtance: "The indifference which
has been too evident in many of our large municipalities, has
undoubtedly been due in part to the feeling of the people that
their efforts were of little avail. Citizens have little motive
or encouragement to act in New York when they know that
their efforts can be at any time, and as a matter of fact have
frequently been, frustrated at Albany."**
Fifth. Municipal dependence helps the politicians and
ringsters not merely thru the apathy it causes, but also by
shifting the scene of action to a field where corruption wins
more easily in respect to city affairs than it usually would in
the city itself. It is easier to persuade Mr. B. to favor a bill
that will take money out of A's pocket than it is to persuade
A to favor that bill. Mr. N., representative from Cleveland
draws up a bill to extend the franchise of a street railway com-
pany for which he is counsel. The representative from Col-
umbus, S, has a bill to establish a state commission to control
the city's water supply on the understanding that he, S, will
be appointed commissioner. Mr. Z, of Cincinnati, is engaged
in a law suit which will become more hopeful for him if a
law is enacted changing the remedy in that class of cases, and
so he introduces a bill for that purpose. In one case a legis-
lator who kissed a woman on the street without permission,
and was sued for damages, introduced a bill to the effect that
the damages for kissing a woman on the street should not ex-
ceed $250 the woman was pretty and he feared the jury
might give her heavy damages. Mr. X, of Toledo, has an equ-
ally public spirited measure on hand and so have other repre-
*(Senate Rep. Fassett Com., 1891, Vol. V., p. 13.)
** Polit. Sc. Quar., March. '05.
404 THE CITY FOE THE PEOPLE.
eentatives. 'N. says to S. Z. X. & Co. : "You vote for my bill,
and I'll vote for yours." "All right," say S. Z. X. & Co.
Some members vote as N. wishes because they are friends of
his, and have no interest in the Cleveland matter, and don't
know anything about it, and don't care. Other members are
too busy to pay any attention to the bill, tho it is part of the
business they are paid to attend to. So altogether, by negli-
gence, indulgence, log-rolling, and pressure of influence, and
of money if need be, many municipal and other measures are
enacted, which have no public purpose for a motive, but exist
for private advantage and profit. In this way, scheming men
are able, thro legislative influence, to secure the creation of
lucrative offices to be sustained at city expense, to line their
pockets with the people's money under color of municipal con-
tracts and public works which a really self-governing city
would never have authorized, and to obtain valuable fran-
chises in relation to water, gas, electricity, transit, etc., without
remuneration to the city whose streets are used, and often
without the consent of the people or their municipal agents.
And it happens not infrequently that a state senator or repre-
sentative from a city becomes, thru his power in the legisla-
ture, the virtual ruler of that city, subject of course to the big
politicians and bosses, like Croker, Platt, Quay, Hanna, etc.,
who can control not only cities, but anything else the legisla-
ture has a right to act upon, except, perhaps, a great railroad
or a giant monopoly. These industrial bosses and political
bosses understand each other so well that we have not had a
chance to see which would win in a fight to the finish.
Sixth. The path of progress and reform is obstructed or
blocked by the inertia consequent on the necessity of fighting
every upward measure thru the legislature against the force
of antagonistic private interests, the indifference of over-
crowded and more or less alien legislators, and the weighty
lack of local patriotism and public spirit due to municipal
dependence.
Sometimes the private interests opposed to municipal pro-
gress form a state wide union to resist with their whole power
any measure looking toward reform in any city. When a
HOME KULE FOR OUR CITIES. 405
bill was brought before the New York legislature to authorize
a municipal subway in Syracuse, a prominent lobbyist told the
mayor of Syracuse that he was wasting his time working for
the bill; it might pass the legislature but it would not become
law; it would be killed either in the legislature or afterward,
for all the electric companies in the state had put funds in a
pool in the hands of a lobbyist he knew (and named) to be
used against any bill tending toward public ownership. In
this case, the bill passed the legislature, but died in the Gov-
ernor's hands.
The lack of home rule hinders development in other ways
than those already mentioned. For example, Governor Pin-
gree tells me that if Detroit had possessed home rule a few
years ago, it would have been possible to accept the offer made
by a responsible syndicate to run all the street railways of the
city as one system on a uniform 2^ cent fare with free trans-
fers, and pay the interest on the sum expended by the city in
obtaining possession of the roads under the right of eminent
domain. It was a splendid offer, but Detroit was still in her
nonage, she could not act for herself, and the legislature was
not in session, and, if it had been, a long and costly fight with
the companies would have been necessary, with defeat for the
city perhaps at the end. The Governor knows whereof he
speaks, for he spent $75,000 of his own money fighting corpor-
ations while he was Mayor of Detroit.
THE REMEDY.
The cure for the evils of municipal dependence is muni-
cipal independence. A certain amount of dependence is good
essential to state and national organization, and the co-
ordination of effort for wide purposes; but over-dependence
is an evil, and the excess should give place to independence.
Instead of having to get permission for every move in local
concerns, municipalities should be free under general regu-
lations, to act in any way they please so long as they do not
conflict with superior law. This we may call Lie Manhood
Principle, as distinguished from the Infancy Principle,
whereby the child, or municipality, acts by permission. This
406 THE BONDAGE OF CITIES
rule would give nmnicipalitieb a strong initiative, a power of
self-movement, after the manner of living things, instead of
compelling them to remain motionless, like a lifeless machine,
till the legislature turns on the steam. The Manhood Prin-
ciple prevails in some countries of Europe, 1 is imperfectly ex-
(') In England, the same law holds respecting municipalities as in this
country; a city can do nothing without permission, but Parliament has
generally been quite liberal in granting permissions, and much good has
been done, especially by such sweeping enactments as the Tramways Act
of 1870, under which municipalities may build their own tramways if they so
desire, or if the city chooses to allow a private company to build the lines,
then at the end of 21 years, and of each subsequent franchise period of 7
years, the city has 2 years in which it may buy the railways at the actual
value of the physical plant. About one-quarter of the tramways of England
and Scotland are owned by municipalities, and additions to the list are being
constantly made as the franchise periods expire. Special permission, how-
ever, must be obtained if the city wishes to operate us tramways. This has
been secured by a number of cities without serious difficulty, but permissions
to buy up and rebuild the slum districts, and to own and operate a municipal
telephone system are not so easily obtained, as Glasgow has reason to know
the difficulty in the latter case being due to the reluctance of the postal
authorities to grant telephone licenses that will result in a duplication of
exchanges in the same locality, preferring to wait until the whole system
can become public at reasonable cost without incurring the complexities and
wastes of competition. Notwithstanding the absence of municipal sover-
eignty de jure, a number of English cities have made considerable progress
toward real self-government in local concerns. Glasgow, for example, the
second city in Great Britain, has control of her streets, owns and operates
her street railways, gas and electric works for public lighting and sale to
consumers, water works, hydraulic power works to supply motive power for
elevators, etc., hospitals, sanitary wash-houses, sewers, garbage and street
cleaning plants, municipal farm, model tenements, and lodging houses, public
baths and laundries, public markets, cattle yards and slaughter houses, parks,
play grounds, fire department and police (partly paid for by a government
grant, the maintenance of order being in theory and origin a general rather
than a local function), public ferries, steamships, docks, shipyards, in fact
the whole harbor and its various services.
The development of municipal control over local business affairs in Glas-
gow and Birmingham and other English cities in the last few decades has
had much to do with their transformation from among the most corruptly
governed to the front rank among the best governed cities of the world.
In France the dual character of the municipality is clearly recognized,
the mayor being distinctly understood to act in the double capa'city of agent
for the general government, and agent for the commune. The law expressly
ascribes to him this two-fold character. As agent for the nation, he must
attend to military matters, national taxes, registration of births, deaths and
marriages, and the general execution of all national laws in the commune.
As agent of the municipality, he is charged with the care and management
of the municipal property, the direction of public works of a local character,
leasing places in the markets, attending to various specified business trans-
actions in behalf of the commune, and in general with the carrving out of
the decisions of the municipal council.
Both in France and in Germany the rule of law is that a municipality is
free to do any act not contrary to the laws above it the exact reverse of our
rule. Here cities can do nothing without permission; there cities can do
anything unless forbidden.
In France, tho the principle is good, the limitations of the superior law
are great; but in Germany, municipal home rule really does exist to a very
substantial degree, and with marked advantages in awakening local patriot-
ism and securing men of high character and ability to manage city affairs.
In the 18th Century, the Prussian policy was to "sink the independence and
individuality of the municipalities in the absolutism of the state, going even
BO far as to treat municipal property as belonging to the state * *
But all this was changed by the legislation of 1808. Municipalities were
recognized as organic entities, with their own properties and functions, and
with the right of entire self-government witfcin the sphere of their strictly
local and neighborhood concerns. There are in the German conception of
city government no limits whatever to the municipal functions. It is the
business of the municipality to promote in every feasible way its own
welfare and the welfare of its citizens." The Germans regard' municipal
ownership and management of public utilities simply as part of a thrifty and
progressive municipal housekeeping. Everything is involved in the co'ncep-
Hpn of the municipal household and the full and unlimited responsibility of
the city for the welfare of its citizens. "The German city holds itself re-
sponsible for the education of all, for the provision of amusement and the
TO POLITICIANS AND MONOPOLISTS MUST CEASE. 407
pressed in the charters of some of our cities, and partly incor-
porated in the constitutions of Calif omia, Washington,
and some other states, and in the Missouri statutory powers
of first class cities, etc. While, however, this rule con-
fers on the municipal body the power of self-movement, and,
when joined with constitutional safeguards against special
legislation, and provisions securing the referendum, is a most
valuable contribution to municipal liberty, yet it does not pre-
vent legislative n! NJ ruction of municipal movement. The
legislature can still, by positive action, completely control the
municipality. To prevent this in matters that should be left
to local discretion, a limited sphere of local activity should be
clearly marked off and deeded to local self-government, to
belong to municipalities absolutely, to the positive exclusion
of legislative interference. The state and the nation each has
such a sphere; why not the city? The idea of assigning such
a local area of assured self-government for municipalities is an
means of recreation, for the adaptation of the training of the young to the
necessities of gaining a livelihood, for the health of families, for the moral
interests of all, for the civilizing of the people, for the promotion of indi-
vidual thrift, for protection" from various misfortunes, for the development
of advantages and opportunities in order to promote the industrial and com-
mercial well being, and incidentally for the supply of common services and
the introduction of conveniences." Such are some of Dr. Shaw's remarks in
his Municipal Government in Europe, pp. 305-329, and he goes on to speak in
detail of the splendid efficiency of German city governments in the prosecu-
tion of public works and enterprises, and the care that is taken with gas,
electric light and street railway franchises, etc., it being a common practice
when a franchise is leased to a private company to provide in the contract:
(1) for adequate payment to the city for the privileges granted, (2) for
municipal supervision of accounts and control of the service, (3) for reason-
able rates. (4) for city purchase at the fair value of the plant estimated ac-
cording to methods clearly stated in the contract, and (5) for cession of the
entire system of the city without payment at the end of the franchise term.
After speaking of these matters Dr. Shaw says: "In studying these German
contracts one is always impressed with a sense of the first class legal, finan-
cial, and technical ability that the public is able to command: while Ameri-
can contracts always impress one with the unlimited astuteness and ability
of the gentlemen representing the private corporations." Ibid. p. 350.
The conception of a city as a self-governing household fully responsible
for the welfare of the family, and fully able to provide for that welfare, is
very different from the conception of a city as a creature of the legislature,
intended simply to carry out the will of the legislature, having no powers
except such as the legislature may see fit to grant, and no ability to do any-
thing without express permission; and to this difference is largely due the
superiority of German municipalities. A similar difference is one of the
Important factors in Glasgow's wonderful development and magnificent
siu-cess. The conception of the city as an independent self-governing group,
responsible for the welfare of its citizens and with full right and ability to
provide for it, has not yet embodied itself in British law, but the conception
has taken possession of the people of a considerable number of English
municipalities, and has transformed them, governmentally, industrially,
socially, and the new sentiment will soon be too strong for any Parliament
to break. Home rule for cities may be practically assured in this country
also by the growth of a similar sentiment here, without constitutions./
changes; but the constitutional method seems the more rapid and definite
nd certain, and besides the discussion of the proposed amendment to oui
institution is one of the most effective methods of educating ourselves to a
.'gll understanding of the subject, and of developing public opinion in favor
>f Munii-ionl Home Rule.
408 MUNICIPAL LIBERTY.
application of what we may call the Democratic, or Popular,
or Distributed Sovereignty Principle the principle which
gives to each group of men the government of those affairs
which are specially and peculiarly their own, so that interest
and power may go together, and no one be given control, in
his own right, of matters that really belong to other people of
full age and capacity. The Manhood Principle and the Dis-
tributed Sovereignty Principle together make up the Liberty
Principle, or Home Rule and Self-government, de facto and de
jure, established and certain. The distinction between state
and local interests and the importance of municipal self-gov-
ernment have been frequently emphasized by legal authorities,
and tho not yet denned and protected as they should be, they
have had large influence in the framing of laws and govern-
ments. Dillon says: "The fundamental idea of a municipal
corporation proper is to invest the people of a thickly popu-
lated place, or district, with the power of regulating their own
local affairs, which are of a nature not common to the state at
large, and which it is supposed they can regulate for them-
selves better than the legislature can regulate them by general
enactments." (27.)
Interpreting a constitutional provision to the effect that
municipal officers must be elected, or appointed, by the muni-
cipal authorities, the New York Court of Last Resort has said :
"This right of self-government lies at the foundation of our
"institutions, and cannot be disturbed or interfered with even
"in respect to the smallest of the divisions into which the state
"is divided, without weakening the entire foundation; and
"hence it is a right not only to be carefully guarded by every
"department of the Government, but every infraction or in-
"vasion of it ought to be promptly met and condemned, especi-
"ally by the courts, when such acts become the subject of judi-
"cial investigation." 1
In People v. Ingersoll, 58 IS". Y. 1, The Court, said that the
relation of principal and agent does not exist between the
State and a municipal corporation in respect to the exercise of
corporate functions. "In political and governmental matters,
(') People v. Albertson, 55 N. Y. 50, 57 (1873).
LOCAL GOVERNMENT BY THE LOCAL PEOPLE.
the municipalities are the representatives of the sovereignty
of the State, and auxiliary to it; in other matters relating to
property rights, pecuniary obligations, they have the attributes
and distinctive legal rights of private corporations."
The powerful opinions of the supreme courts of Michigan
and Indiana have already been cited. Almost as strong are
the words of Chief Justice Dixon in Milwaukee v. Milwaukee,
12 AVis. 93, where it was held that the legislature could not
divest a town of its title to land without the town's assent, and
that an act annexing part of a town to a city did not divest the
right of the town to land in the annexed area, to which it held
the exclusive title. The Chief Justice distinguished between
the municipality "as a civil institution or delegation of merely
"political power, and as an ideal being endowed with the
''capacity to acquire and hold property for corporate and other
"purposes," and said "In its political or governmental capacity,
"it is liable at any time to be changed, modified, or destroyed
"by the legislature; but, in its capacity of owner of property,
"designed for its own or the exclusive use and benefit of its
"inhabitants, its vested rights of property are no more the sub-
"ject of legislative interference or control, without the consent
"of the corporators, than those of a merely private corporation
"or person."
In 127 Mo., 642 (1895), the Supreme Court of Missouri
drew a strong line between state interests and functions and
those which are "of merely local and municipal concern," and
held that the legislature could not modify the freehold
charters of the large cities in respect to local affairs.* (See
p. 424.)
CONSTITUTIONAL AMENDMENT.
The best institutional remedy would seem to be an amend-
ment to each state constitution drawing the line between state
and municipal interests as clearly as the fed#ral constitution
draws the line between state and national interests, providing
for municipal sovereignty within the defined sphere of muni-
cipal business, and full freedom to do any act even tho it may
* See further on this subject 51 Me. 362: 103 Mass. 490: 3 Hill. 531: 31
Pa. 183: 64 Pa. 180; 18 Cal.' 590: 28 Mich. 228, 237; 24 Mich. 44; Compare
14 Oreg. 98.
410 THE CITY FOR THE PEOPLE.
be beyond the said sphere, provided it does not conflict with
state or national law. This would establish the manhood rule,
plus the absolute exclusion of the legislature from a specified
reservation of local sovereignty. Or, the proper area could be
deeded to state sovereignty by metes and bounds, as the area
of federal sovereignty is marked out in the national constitu-
tion, leaving the remaining territory to bo divided between
individual and municipal sovereignty, under general princi-
ples and specific limitations, such as those applied to *tate
sovereignty in the constitution of the United States. The
better plan would seem to be to preserve a limited area foi
municipal sovereignty covering franchises and public enter-
prises of a local character, leaving all the rest of the existing
state sovereignty in its present indefinite shape. This would
seem best to begin with because it is less of a change from
present conditions than the other plan, and because it is very
important not to diminish too much the power of the state,
which is the unifying, systematizing, co-ordinating power
upon which we must depend for uniformity, and the equali-
sation of burdens and benefits within the state area. It is
quite as important not to deprive the state of the sovereignty
necessary for the vigorous and effective performance of its du-
ties, as it is not to deprive the city of the sovereignty necessary
for the vigorous and effective performance of its duties. Each
should have its proper share of sovereignty, a due balance
being maintained in the same proportion that state interests
bear to local municipal interests, just as a due balance is main-
tained between state and Federal sovereignties in proportion
to national and state interests.
Under such a Home Rule Amendment as we have suggested,
each city and town would make its own charter, subject to
general statutes regarding state interests, and in harmony with
the general principles and limitations above mentioned, just as
each state now makes its own constitution subject to federal
limitations.
HOME RULE CHARTERS AND THE REFERENDUM.
In order that such municipal charters, and the ordinances
HOME RULE FOR OUR CITIES. 411
made tinder them, may be in accord with the will of the people
(male citizens of full age and of apparently or presumedly
sound discretion) it is necessary to have constitutional pro-
visions guaranteeing the initiative and referendum in the
making and amending of charters and ordinances. Other-
wise, municipal independence might simply mean the substi-
tution of mayor and councils, or mayor and aldermen for
governor and legislature a change that would generally be
of some benefit, since mayor, aldermen and councilmen belong
in the city they rule, understand something of its condition,
are elected by the citizens of the city, and have interests thru
which they can be made to feel the local public sentiment to
some extent, while the state legislature is almost wholly com-
posed of men from other cities and towns, who have little or
no acquainance with the city under consideration, do not
Understand its needs, have no direct interest in it, were not
elected by its citizens, and do not feel the slightest responsi-
bility to them. Nevertheless, home rule, without the refer-
endum, would still be government by the few, and tho govern-
ment of local business by a few who live in, understand, and are
elected by the city, is likely, as a rule, to be superior to govern-
ment of local business by a few who don't live in, nor under-
stand, nor owe allegiance to the city; yet government by a few
in any form is likely to be far less honest, just, progressive and
beneficient than government by the whole body of American
citizenship. As soon as a community has reached a stage of
evolution whereon it is able to govern itself without a break-
down, it should exercise self-rule, for, thru that exercise alone
can come the full justice and development of a perfect
democracy.
SEPARATION OF STATE AND MUNICIPAL AFFAIRS.
A municipal government is of a two-fold character; on the
one hand it is an agency of the state to deal with state affairs,
and on the other hand it is an agency of the municipality to
deal with municipal affairs. In the first relation its functions
are political and governmental; in the second, its functions are
largely similar to those of the directors of a business corpor-
412 THE BONDAGE OF CITIES
ation whose stockholders are the citizens of the city. Most of
the difficulty and confusion in municipal law has come from
the failure of constitutions, legislatures and courts of law to
draw the line between these two sets of functions with proper
strength and clearness.
The remedy lies in establishing a separation of state and
municipal interests, similar in substance to the separation es-
tablished by the federal constitution between state and
national interests; the principle of decentralization, or the
nearest possible approach to individual freedom, being always
the guide; no liberty should be taken from the individual and
given to any public body unless the transfer is clearly for the
public good; no liberty within the public sphere should be
taken from the municipality and placed in a wider grasp unless
the wider public good requires it; and no liberty of the wider
class should be taken from the state and given to federal power
unless the national good demands it.
As a business corporation dealing with property for muni-
cipal revenue, service, or advantage, establishing water works,
gas plants, telephone, electric light, and street car systems,
markets, bridges, ferries, parks, etc., the city should have the
fullest discretion subject only to broad limitations in respect
to debt, unanimity, submission of measures to the people at the
polls, etc., to prevent improper haste or ill-considered action,
or possible tyranny of majorities, or injustice to private indi-
viduals or companies.
In this relation, the municipality is an organization for the
common benefit of its citizens, and its government an agency
whose duty it is to do all in its power for the prosperity and
advantage of its principals. In respect to state interests, the
municipality occupies a subordinate position ; yet even here it
should be free to act so long as it does not conflict with state
arrangements. For example, the preservation of order and
prevention of infection are state affairs; but they are also of
prime importance to every municipality, and it should be free
to establish a police or health department of its own where the
state does not act, or in addition to the state agencies where it
does not deem them sufficient; in other words, it should have
TO POLITICIANS AXU MONOPOLISTS MUST CEASE. 413
a sort of concurrent jurisdiction of state interests within its
own domain, wherever the state does not claim exclusive juris-
diction.
It may not be an easy matter to arrive at a satisfactory
division of state and municipal functions, but it can hardly be
more difficult than the separation of state and national func-
tions that was so. satisfactorily accomplished by the makers of
the federal constitution. Perhaps it might be well to try a
similar plan in the present case ; a convention of distinguished
judges, statesmen, philosophers, etc., might at least be able to
arrive at conclusions that would greatly facilitate a solution
of the problem, and give the courts and constitution makers
of the various states a standard that would help to mould the
law of the country into at least a semblance of consistency and
wisdom on this vital topic.
After the division of sovereignty is made, it would be well
to have state and municipal elections on different days some
months apart, so that the choice of men to manage the water-
works and grade the streets might be more dependent on fit-
ness and less upon the candidates' opinions about free silver,
or the tariff, or his affiliations with any state or national organi-
zation or party.
STEPS TOWARD HOME RULE.
On the way toward the solid independence outlined in the
last two sections a number of partial reforms may be of ad-
vantage. When it is not possible to get a whole loaf, half a
loaf is better than none.
A. Broad statutes may be passed giving cities larger
powers, especially in. regard to the granting of franchises, and
the right to own and operate local business enterprises. A
considerable movement has taken place in this direction in the
last few years, but it often requires a hard fight to pass such
bills, and they are apt to be narrowed in scope, and gorged
with wind and red tape, and assassinated with ingenious
amendments and limitations. For example, it required a
three years' struggle to get the Massachusetts law permitting
cities and towns to establish municipal electric light works, and
414 MUNICIPAL LIBERTY.
even then its corporation enemies succeeded in crippling it
with amendments which made it of little practical use.
In spite of all the imperfections of legislative enlargement
of municipal powers, much good has been done in this way,
and in conservative states it is probably the line of least resist-
ance, and the greatest immediate hope. We have seen that
Governor Russell of Massachusetts was a powerful and per-
sistent advocate of this reform.
B. The second partial remedy lies in the possible adoption
of the Michigan Doctrine by the courts of other states. This
is probably not the most hopeful line of attack, but is worth
the effort wherever occasion affords an opportunity to ask for
a ruling in line with the principles laid down by Judge Cooley,
as above stated.
C. Greater help is likely to be derived from the insertion
of particular provisions in the state constitutions such provi-
sions, for example, as the following:
1. For the local election of municipal officers.
2. Against special legislation for laying out, or vacating
streets, granting franchises to railways, turnpikes, femes, etc.,
creating corporations, or granting corporate powers, creating
municipal offices, or prescribing their duties, creating or
amending municipal charters, or regulating municipal affairs,
etc. It is a marked advance to take away from the legislature
its power to pass special acts, and yet by means of grouping
the cities in classes the legislature may be able to almost, or
quite, attain the same individual or specific action under what
is called "general legislation" (or legislation affecting all the
cities of the same class) that it formerly attained by means of
what was called "special legislation."
3. Provisions requiring local consent to street railway, gas,
electric light or telephone franchises.
4. Or, still better, provisions transferring from the state to
the municipality the power to grant such franchises, prescribe
*hoir conditions, and regulate their exercise.
6. Or, better yet, provisions establishing the right of cities
and towns, not only to grant and regulate, but to own and
operate, water works, gas works, street railways, telephone sys-
LOCAL GOVERNMENT BY THE LOCAL PEOPLE. 415
terns, etc., best when the clause is a sweeping one that gives
all municipalities the right to own and operate any public
work on the people's vote to that effect.
6. It is most important to secure the initiative and refer-
endum upon all municipal business, franchises, ordinances, etc.
Nebraska took a step in this direction in a statute passed last
year, but it is much better to secure the right by constitutional
provision as was done in South Dakota this fall (1898). Some
state constitutions have partial provisions requiring local con-
sent to incorporate street railway, electric light, telephone and
other franchise grants, but I know of no constitution,, as yet,
that secures the citizens of cities their full rights of veto and
initiative.
7. A measure more comprehensive than any in this section,
except the last, is to be found in a constitutional clause per-
mitting municipalities to make their own charters. If the
line between state and municipal affairs is also drawn by the
constitution and legislative action excluded from the special
municipal sphere, we have the final remedy already spoken of :
but even without this, a simple clause allowing cities to make
their own charters subject to state enactments has been found
very useful. Mo. (1875), Cal. (1879), Wash. (1890), and
Minn. (1896), have put provisions of this kind in their consti-
tutions; and, by a statute of Louisiana, passed in 1896, any
city or town in that state (except Neic Orleans) may adopt a
charter of its own. 1
HOME-MADE CHARTER LAWS.
The first constitutional provision was adopted by Missouri
in 1875; cities over 100,000 population (I. e., St. Louis and
Kansas City) may make their own charters. The city may
elect 13 freeholders to draw up a charter, which should be sub-
mitted to the voters of the city, and if ratified by four-fifths of
the qualified electors voting should supersede the former
charter, and all amendments thereto. Such charter may be
amended by proposal of the law making authorities of the city
published thirty days in three newspapers of largest circulation
In the city, submitted to the voters sixty days or more after the
P) Detroit may amend Its charter by direct legislation. (See Appendix I.)
416 THE CITY FOR THE PEOPLE.
publication of the proposals, and accepted by at least 3/5 of
the qualified voters of such city voting at a general or special
election, and not otherwise (Missouri constitution, 1875, Art.
IX. 16). ~No provision is made for legislative approval of
the amendment. The section merely says after the words just
given, "but such charter shall always be in harmony with,
"and subject to, the constitution and laws of the state."
Section 20 of the same article gives the local authorities of
St. Louis authority to appoint an election at which the citizens
may choose a board of 13 freeholders to make a charter which,
if adopted by a majority of the qualified electors voting should
become the organic law of the city.
In the next year, Aug. 22, 1876, St. Louis adopted a free-
hold charter, and Kansas City followed, April 8, 1889.
In the other states named, the city's population does not
have to reach the 100,000 home rule mark established in
Missouri. In "Washington, cities of 20,000 or more; in Cali-
fornia, cities over 3500, and in Minnesota, all municipalities
may make their own charters. The Louisiana statute adopts
exactly the opposite view from that of Missouri, and excludes
New Orleans from the privileges of home rule, apparently
deeming large population a (disqualification, or perhaps an
extra enticement for the complete retention of legislative man-
agement. On petition of a majority of the property owners
of any city or town (except New Orleans) to the mayor and
council of such city or town, praying a referendum on a new
charter (a copy of which must accompany the petition), a vote
is to be taken, and if adopted it is to be the charter of the city
or town. (Laws of La., 1896; No. 135, p. 190.)
By the amendment to article IV. of the constitution pro-
posed by the legislature in 1895, and adopted by the people
in 1896, any city or village in Minnesota may frame a charter
for itself consistent with and subject to the laws of the state.
The legislature is to provide for a board of 15 freeholders to
be appointed by the district judges of the judicial district to
which the municipality belongs. The charter proposed by
such board must be submitted to the people and adopted by
4/7 of the qualified electors voting. The charter does not re-
HOME RULE FOE OUR CITIES. 417
quire legislative approval; but "before any city shall incor-
"porate under this act, the legislature shall prescribe by law
"the general limits within which such charter shall be
"framed." The board of freeholders is permanent and amend-
ments to the charter are to be proposed by it, and accepted by
3/5 of the electors voting.
In 1897, chap. 255, the legislature enacted that the judges
should appoint freeholders " whenever requested by an
"ordinance passed by the common council of any city, or vil-
"lage, or by petition signed by at least 8 per cent, of the legal
"voters thereof," and that the charter might be so framed as
to give the city control of street franchises, provided that no
perpetual franchise or privilege should be granted nor any ex-
clusive franchise or privilege unless the grant shall be sub-
mitted to the people and approved by a majority of the electors
voting, and even then the grant must not be for a longer period
than ten years.
The legislature of 1897 proposed a new amendment limit-
ing the term of the freeholders to six years, and providing that
charter amendments should be submitted to the people upon
petition therefor, signed by 5 per cent, 'of the legal voters of
the municipality.
This will give the people a strong initiative 8 per cent, can
compel the making and submitting of a charter, and 5 per
<?ent. can secure the submission of an amendment to it.
In any city of Washington state having more than 20,000
people, the legislative authority of the city may order an
election for the choice of 15 freeholders, who must convene
within 10 days and prepare a charter "consistent with and sub-
"ject to the constitution and laws of the state," which charter
shall be published in two newspapers in the city for at least
30 days before submission; and if a majority of the voters of
the city ratify the proposed charter, it supersedes the existing
charter including amendments thereto, and all special laws
inconsistent with the said. new charter. It may be amended
by proposal of the legislative authority of the city, published
as above and adopted by a majority of the voters (Wash.
Const. 1890, Art. XL 10).
27
418 THE BONDAGE OF CITIES
The favorable experience of St. Louis caused an effort in
the California Constitutional Convention of 1879 to secure
similar privileges of self-government for San Francisco. At
that time the charter of San Francisco was a volume of 319
pages of fine print. Originally, it covered only 31 pages, but
more than 100 supplemental acts had been passed leading to
much confusion and numerous evils. Many of these acts, says
Oberholtzer, had been passed in the interests of single indi-
viduals and corporations. Half a dozen men framed them
and took them to Sacramento, and had them passed without
the wish, and often without even the knowledge, of the people
or even the officers of the city.*
Those in the convention who opposed home rule declared
that San Francisco would break loose from the rest of the state
and set up an independent government of its own. "This is the
boldest kind of an attempt at secession," they said, and offered
an amendment that the state should give the city all the privi-
leges and consideration accorded the most favored "foreign
"nations, and should provide a duly accredited minister as
^representative of the state to the city."
In spite of all opposition, the California constitution of
1879, Art. XL 8, permitted any city of more than 100,000
population to elect 15 freeholders to frame a charter to be
published in two local papers for 20 days, submitted to the
people within 30 days after the ceasing of such publication,
adopted by a majority of those voting, and approved by the
legislature. Amendments can be made at intervals of not less
than two years by proposals submitted by the legislative au-
thority of the city to its voters and ratified by 3/5 of the quali-
fied electors voting, and approved by the legislature. In
1887, the privilege of home made charters was extended by
constitutional amendment to all cities over 10,000, and in
1890 all cities above 3500 were admitted to freehold charter
privileges. The legislature must approve or reject the charter
as a whole.
Under these ia\v>, St. Louis, Kansas City, San Francisco,
E. P. Oberholtzer In Annals of the Amer. Acad. of Pol. and Social
Science, Vol. 3, p. 736, et 804.
TO POLITICIANS AND MONOPOLISTS MUST CEASE. 419
Sacramento, Oakland, Los Angeles, Stockton, San Diego,
Seattle, Tacoma, etc., have established charters of their own
making.
The St. Louis charter gives the city power to grant fran-
chises, construct street railways, buy and hold property, real
and personal, to be used for the erection of water works, or
gas works, to supply the city with water, or light, for the
establishment of hospitals, or poor houses, etc., or for any
other purpose; secures the local election or appointment of
the city officers required by the charter; and provides that
amendments to the charter shall be submitted to the people
separately. The people have no initiative, however, as to
amendments, and neither initiative nor referendum as to
ordinances.
In the Los Angeles charter, the 23d corporate power is as
follows:
"To exercise all municipal powers necessary to the com-
"plete and efficient management and control of the municipal
"property, and for the efficient administration of the muni-
"cipal government, whether such powers be expressly enumer-
"ated or not, except such powers as are forbidden or are con-
trolled by general law." That is suggestive of the principle
I have spoken of as the Manhood rule, but the explicit separ-
ation of municipal and state affairs, and exclusion of the
legislature from the distinctively municipal field are still miss-
ing, and a strict construction of such indefinite phrases is apt
to take the life and liberty out of these broad clauses.
The new charter adopted by the voters of San Francisco in
May, 1898, Art, II. , Chap. 1, 13, provides that "upon
"petition signed by a number of voters equal to 15 per cent,
"of the votes cast at the last election, asking that an ordinance
"to be set forth in such petition be submitted to the voters,
"the Board of Election Commissioners must submit such pro-
"posed ordinance to the vote of the electors at the next elec-
tion."
The initiative and referendum upon amendments to the
charter is also secured to the voters thru a similar 15 per
cent, petition. (22.) The purchase of laud more than $50,-
420 MUNICIPAL LIBERTY.
000 in value, the lease or sale of any public utility, or the
grant of any franchise for the supply of light or water must
be submitted to the electors no-petition is necessary. (21.)
The people, I hope, will use their initiative to secure an amend-
ment placing street railway and other important franchises
on the compulsory referendum list. The granting of fran-
chises is in the hands of the city (Art. II, Chap. I, 13, Chap.
II., 6, 7, etc.) and Art. XIL, p. 124, entitled, "Acquisition
of Public Utilities," opens with this remarkable passage :
"It is hereby declared to be the purpose and intention of
"the people of the city and county that its public utilities shall
"be gradually acquired and ultimately owned by the city and
"county. To this end,, it is hereby ordained" then follow
provisions that upon a 15 per cent, petition favoring the acqui-
sition of any public utility, the Board of Supervisors shall im-
mediately take steps to procure plans and estimates of cost and
enter into negotiations for the permanent acquisition of such
utility by construction, condemnation, or purchase, so that it
may, within six months after said petition, formulate a pro-
position to be submitted to the voters. Or, the supervisors
may themselves pass an ordinance embodying the idea of the
petition.
There is another clause that does not require a petition for
public ownership to put it in operation. It is to the effect that
"within one year of the date the charter takes effect, and at
"least every two years thereafter, till the object of this article
"shall have been fully attained, the supervisors must procure
"plans and estimates of the actual cost of the original con-
struction and completion by the city of water works, gas
icorks, electric light works, steam, icater and electric power
works, telephone lines, street railroads, and such other
public utilities as the supervisors or the people by petition
may designate."
Article XHI, "Civil Service," requires the mayor to
appoint three persons "known to be devoted to the principles
of civil service reform" to act as a civil service commission, and
no two of the commissioners can at any time belong to the
same political party. These commissioners are to classify
LOCAL GOVERNMENT BY THE LOCAL PEOPLE. 421
employments, and establish "public, free, practical, competi-
tive examinations." Each appointment to the classified
service must be made from a list of three applicants having the
highest rank for excellence in the examinations for health,
capacity and fitness for the duties of the position to which they
aspire. The appointment is on probation for six months. At
or before the expiration of this period, the head of the depart-
ment or office in which the candidate is employed may, with
the consent of the commissioners, discharge him on assigning
in writing to the commissioners his reason for so doing. After
the period of probation, the appointee "cannot be removed,
"except for cause, upon written charges, and after an oppor-
tunity to be heard in his own defence," the trial to be before
the commissioners, or some officer or board appointed by them.
"Laborers" are not examined, but appointed according to
priority of application.
The officers put in the classified service make a long list,
including the county clerk, assessor, tax collector, sheriff,
auditor, the board of public works, the police department, the
fire department, the board of election commissioners, board of
health, and all boards or departments controlling public utili-
ties.
A splendid charter: civil service, public ownership, initia-
tive and referendum, and a very substantial degree of home
rule three cheers for San Francisco and yet some of the
reformers of 'Frisco complain that the charter is imperfect;
very well, friends, you have the initiative; educate the voters
and perfect it. What more do you want than the initiative,
and a free press? You have the future in your own hands
subject only to the possible contingency of adverse legislation.
The constitutions of California, Washington, etc., and
the charters of many municipalities contain a clause de-
claring that: "Any county, city, town or township may
"make and enforce within its limits, all such local, police, sani-
tary, and other regulations as are not in conflict with general
"laws." (Cal. Const. Art. XL, 11.) This gives munici-
palities considerable freedom, whether they have freehold
charters or not; in fact, so far as regulations are concerned, it
422 THE CITY FUK THE PEOPLE
is the Manhood Principle itself. But the word "regulations"
is not broad enough to cover radical changes of structure or
policy, or purchase or sale of large properties, or launching
into large business enterprises. 1 If the clause gave the city
power to do any act not in conflict with general law, we
should have the Manhood Principle.
Section 25 of Art. IX. of the Missouri constitution says
that "notwithstanding the provisions of this article the general
"assembly shall have the same power over the city and county
"of St. Louis that it has over other cities and counties of this
"state." That is, it has almost unlimited power to pass
general laws, and is not entirely debarred from special legis-
lation. By Art. IV., 53, however, the general assembly is
forbidden to pass any local or special law :
Regulating- the affairs of counties, cities, townships, wards, or
school districts;
Authorizing the laying- out, opening, altering, or maintaining,
roads, highways, streets, or alleys;
Vacating roads, town plots, streets, or alleys;
Eclating to ferries or bridges, except interstate;
Incorporating cities, towns, or villages, or changing their char-
ters;
For the opening and conducting of elections, or fixing or chang-
ing the places of voting;
Creating offices, or prescribing the powers and duties of officers
in municipalities;
Regulating public schools;
Exempting property from taxation;
Regulating labor, trade, money, or manufacturing;
Creating corporations, or amending, renewing, extending, or ex-
plaining the charters thereof;
0) Regulations will not cover an attempt to change the charter, or abro-
gate a fire department established by an act which forms part of the charter.
(People v. Wiltshire, 96 Cal. 605, 1892). Neither will the clause justify a
violation of fundamental principles of Justice and liberty. An ordinance pro-
hibiting the carrying on of a laundry in town, except in specified blocks, and
with a written permit upon consent in writing of a majority of the real
property owners in the block, was held to be beyond the authority conferred
by the clause, such ordinance being considered an unreasonable interference
with the inalienable right to engage in a lawful occupation, and with the
right of the owner of property to devote it to a lawful purpose. (Ex parts
Sing Lee, 96 Cal. 354, 1892.) But, the courts have held the clause to be "a
broad far reaching power, enabling cities to pass any regulation not in con-
flict with general laws or fundamental principles of constitutional liberty.
(Ex parte Lacey, 108 Cal. 326, 328, sustaining an ordinance prohibiting steam
shoddy machines or steam boating machines within 100 feet of any church,
or school-house, residence or dwelling.) The clause was intended to make
cities more independent of legislation. (In re Guerrero, 69 Cal. 88; in re
Smart. (11 Cal. ',',14.) Under it an ordinance of San Francisco regulating The
Bale of liquors, was held good (Ex parte Hayes,- 98 Cal. 555); and. another
ordinance regulating the sale of opium, and prohibiting it except under
proper restriction, was sustained (Ex parte Hong Shen, same volume).
HOME RULE FOR OUR CITIES. 423
Granting- to any corporation, association, or individual any special
or exclusive right, privilege, or immunity, or to any corporation
association, or individual, the right to lay aown a railroad track;'
Legalizing- the unauthorized or invalid acts of any state or
municipal officer;
In all other cases where a general law can be made applicable,
no local or special law shall be enacted; and whether a general law
could have been made applicable in any case is hereby declared a
judicial question, and as such shall be judicially determined, with-
out regard to any legislative assertion on that subject.
Nor shall the general assembly, indirectly, enact such special or
local law by the partial repeal of a general law, but laws repealing
local or special acts may be passed.
There are other provisions against special legislation, but
these are all that materially affect municipalities. One might
think that local legislation had been abolished, but that is not
quite true. At the last session (1897) the Missouri legislature
passed a special act denning the boundaries of the city of
Palmyra, and another to give the city of Poplar Bluff au-
thority to vacate a cemetery.
Section 54 of Article IV., provides that NO local or special
law shall be passed unless a notice of it stating its substance
shall be published in the locality affected at least thirty days
before the introduction of the bill in the general assembly.
The constitutions of all the other four states we have been
considering provide quite fully against special legislation,
largely in the same words as those just quoted from Missouri,
so that the freehold charters are not likely to be much inter-
fered with except by general legislation. 1 They are clearly
subject to this to some extent in all the states named, and in
some of them, at least, no portion of the municipal business,
(*) "A law Is general and constitutional when It applies equally to all
persons embraced m a class founded upon some natural or intrinsic or con-
stitutional distinction, it is not general if it confers particular privileges, or
imposes peculiar disabilities or burdensome conditions in the exercise of a
common right upon a class of persons arbitrarily selected from the general
body of those who stand in precisely the same relation to the subject of the
law." City of Pasadena v. Stimson. 91 Cal. 238, 251; see also Rauer v. Wil-
liams. 118 Cal. 401.
Legislation affecting cities having 150,000 or more inhabitants is an im-
proper attempt '/.// tlir net itself to create a class of municipal corporations for
a special purpose, without reference to the existing classification by general
law, and is local and special legislation. Denman y. Broderick, 111 Cal. 96.
Classification must be founded on differences defined by the constitution,
or which are natural, and suggest a reason which might rationally be held
to justify the diversity in the legislation. In a general law. none must be
omitted that stand on the same footing regarding the subject of legislation.
Legislatures cannot, by special act. create a class of cities of a population
Between 10,000 and 25,000 for the purpose of increasing the salaries of pollc?-
nen in a particulai city; act void, Darcy v. San Jose, 104 Cal. 642.
424 THE BONDAGE OF CITIES
however purely local it may be, is secure from legislative con-
trol. 1 The freehold charters themselves may be changed by
the legislature, and the constitutional provision as to amending
charters at intervals of not less than two years by proposal sub-
mitted to the voters by the city authorities does not prevent
the Legislature from changing the charter by general legis-
lation within the two years. 2 In California, the cities making
home charters found themselves so hampered by general laws
that they secured a new amendment to the constitution. By
the constitution, the charters were to supersede existing
charters and all special laws inconsistent with such charters.
In Davies v. Los Angeles, 86 Gal. 37, 40, it was held that a
general law relating to the opening and widening of streets
1 Ewing v. Hoblitzelle, 85 Mo. 64, 78, general law about elections in
cities of 100,000 or more, was held to apply to St. Louis in spite of its free-
hold charter, and it overruled the provisions of this charter as to the regis-
tration of voters. See also 122 Mo. 68 and 126 Mo. 652.
In Kansas City v. Scarritt, 127 Mo. 642, however, the court distinguishes
these cases and others dealing with laws affecting state interests from cases
dealing with laws affecting local interests, and an act giving cities organized
under Art. 9, 16 (the freehold charter clause of the constitution), a right to
take land for parks and boulevards thru a board of park commissioners, was
held void as .amounting to a legislative amendment of the freehold charter in
respect to internal municipal affairs. The court said that under the consti-
tution the freehold charter could be amended by vote of the people "and not
otherwise." It remarked that the legislature might pass general laws as to
state interests and they would be paramount to the freehold charters, and
referred to 85 Missouri, etc., just cited, but said: "These decisions should
"not be held to warrant the exercise of state legislative power over such
"city charters, so far as relates to the government of subjects of merely
local and municipal concern." This distinction and decision in 127 Mo.
excludes the legislature from altering the freehold charters (even by general
laws) in respect to matters of purely local concern. That ought to be the
law, but. I doubt if it is as yet, unless the courts are ready to carry the
Michigan doctrjne to its logical limit. In view of the fact that the constitution
says that the freehold charters shall "always be subject to the laws of the
state," it seems clear that the "not otherwise" in the clause relating to
charter amendments nmsf be confined to amendments, as such. The effect
upon a charter by reason of its subjection to a general law of the state is-
not called an amendment by the constitution, and the court in doing so
goes outside of and beyond the constitution, and makes a constitution for
itself. There is no distinction in the constitution between general laws
affecting state interests and general laws affecting municipal interests the
charters are subject to all general legislation. II a law affecting the charter
is an amendment and void, as a violation of the provision that the charter
shall only be amended by vote of the people, then the law considered in
85 Mo., which concerned elections and affected the charters was an amend-
ment and void as a violation of the said provision, by which rule the legis-
lature could pass no law affecting the freehold charters, and the provision
subjecting those charters to state legislation would be abrogated. I wish
the decision in 127 Mo. were good, but I fear it is not. At least the reason
given by the court will not stand. If the court had based its decision on
the broad principle of inherent right of local self-government carrying out
the line of thought suggested and acted upon by the Michigan and Indiana
courts, we might hope for much from the decision; but as it is it is not likely
to be of much benefit.
None of the other constitutions in the freehold charter states are like
the Mo. constitution in the "not otherwise" clause, except the Constitution
of Minnesota, which says that the freehold charter may be amended by a
vote of "three-fifths of the qualified voters of such city 'or village voting" at
the next election, and not otherwise; but such charter shall always be in
harmony with, and subject to the constitution and laws of the State of
Minnesota."
'People v. City of Coronado, 100 Cal. 571 (1893).
TO POLITICIANS AND MONOPOLISTS MUST CEASE.
controlled the city in spite of its freehold charter In San
Diego all street work had to be done under state law, the city
police court was deprived of its charter jurisdiction, and the
board of education could not operate according to the charter.
Finding that this unlimited subjection to general laws largely
nullified the advantages of the new charters, the cities united
in a demand for a new amendment leaving out the word
"special.'' The adoption of this change by a vote 3 to 1 was
declared Dec. 30th, 1892. And now 8 of Art. XI of the
Cal. constitution provides that "any city containing a popu-
lation of more than 3500 inhabitants may frame a charter for
its own government consistent with and subject to the con-
stitution <ni<I lairs of this state," which charter "shall become
the organic law thereof, and supersede any existing charter
and all amendments thereof, and all laics inconsistent with
such charter." The charter is to be consistent with and sub-
ject to the laws of the state, and yet it is to supercede all laws
inconsistent with it. The supreme court does not appear to
have construed this amendment, but it may probably be in-
terpreted to mean that the charter supersedes existing laws,
general or special, that conflict with it, but is still subject to
any valid general laws passed by the legislature after the
adoption and approval of the charter.
It is quite clear that the legislature can modify, limit or
annul the powers and privileges of cities under their freehold
charters in any of the states above named, but it is equally
clear that the charter liberties will very soon gather about
them a public sentiment that will protect them, and lead in
the course of time to an efficient demand for a specific, de-
finite, constitutional division between state and municipal
functions. A city that enjoys self-government in local busi-
ness for a few years, originating and deciding for itself, with-
out legislative intervention, will soon come to regard the privi-
lege as an inalienable right. The limitation of legislation to
general laws tends to prevent unjust and oppressive interfer-
ence in municipal affairs because a bad general bill having a
wider incidence will rouse more opposition than a special act.
In every way the provisions of the constitutions under discus-
426 MUNICIPAL LIBERTY.
sion appear \n <:tiiistitute a marked advance, and to lead inevi-
tably to a strong acceleration of the movement toward assured
home rule in local municipal concerns, with free initiative
under general law along the whole line.
Thru the growth of public sentiment, crystallizing finally
into constitutional enactment, the control of streets and local
franchises, water works, gas works, electric light plants, street
railways, telephones, fire departments, bath-houses, lodging-
houses, hospitals, parks, market-houses and other business and
proprietary matters of peculiarly local character, will be se-
cured to the municipality free of legislative intervention, sub-
ject only to the requirements of the initiative and referendum,
the broad principles of justice and liberty that underlie and
permeate our institutions, and the regulative rules to secure
co-ordination, uniformity, symmetry, equalization, etc., that
are or may be incorporated in our constitutional law.
Thru and beyond the guaranteed field of exclusive local
sovereignty will go the all embracing right of free initiative
and decision except where state or national law forbids. By
these two improvements, with reasonable guards against
special legislation, municipal independence will be achieved.
POINTS FOE CHARTER LAWS.
It is probable that in the near future other states will adopt
constitutional provisions in favor of home rule. In view of
the movement along the Missouri line, it is well to note that:
(1) The initiative in calling an election to choose free-
holders to make a charter should not rest entirely with the
city officials the people should be able by petition to start the
ball, as in Minnesota and Louisiana.
(2)' The charter should be required to contain provisions
securing the initiative and referendum on amendments and
ordinances.
(3) If the approval of the legislature is required, as in Cali-
fornia, the constitution ought to declare that the charter, when
approved, should be deemed a contract and protected as such.
(4) An effort should be made to get the constitution not
merely to authorize municipalities to make their own charters,
LOCAL GOVERXArENT BY THE LOCAL PEOPLE. 427
subject to the general law of the state, but to define a certain
area of local business in which the city should be supreme, anci
from which the legislature should be absolutely excluded ex-
cept so far as it may be specifically empowered by the consti-
tution; and in addition to this it should authorize cities and
towns under proper restraint in respect to the referendum, etc.,
to act in public matters beyond the specified area, in any way
they may see fit so long as they do not infringe the law above
them. This would open the doors of freedom wide to all
municipalities whether they made new chart ers or not, and
give them a limited field of assured self-government beyond
the interference of the legislature a bit of real sovereignty,
or home rule <lc jure, instead of mere home rule dc facto at
the pleasure of the legislature.
(5) The constitution should contain full safeguards against
improper special legislation.
'SUMMING UP WE FIND THAT!
The cure for the evils of excessive dependence is a reason-
able independence. The remedy for municipal subjection is
municipal sovereignty. A city has a right to manage its
local business without interference, and should be free to act
outside the distinctive local sphere so long as it does not in-
fringe a positive law of state or nation.
The best method of establishing Home Rule would be thru
Constitutional provisions:
Drawing a line between state affairs and local interests as
clearly as the line between state and federal intersts is drawn
in the National Constitution;
Excluding the legislature from the field of local municipal
business, so that the city may be sovereign in its OAVH peculiar
sphere just as the state and nation are sovereign in their
spheres; free to act in its own concerns, subject only to broad
limitations such as those applied to states in the federal con-
stitution :
Affording proper safeguards against special legislation, even
in matters wherein municipal life merges into state life;
Guarantying the local selection of local officers:
428 THE CITY FOR THE PEOPLE.
Securing to every city and town the right to do any ad
whatever, whether inside the field of local sovereignly or be-
yond it, so long as it does not conflict with state and national
law; reversing the present rule, and instead of the principle
that a city can do nothing without permission, establishing
the principle that a city can do anything unless forbidden
a difference as great as that between servitude and liberty;
And according to every municipality the right to frame its
own charter;
Thus may be secured a reasonable independence for muni-
cipalities from improper legislative control, but
Civil service regulations,
The Initiative and Referendum upon ordinances and charter
provisions,
And the public ownership of monopolies
must be established also, else freedom from legislative bossing
may mean subjection to councils, local politicians and pri-
vate corporations.
Under such Home Rule provisions each city and town might
make its own charter, choose its own officers and govern itself
subject only to the broad limitations of state and national law.
Nothing could do more than such local self-government for
the cause of municipal progress and purity. And on that
cause hangs the future of the Republic. A hundred years ago
only one-thirtieth of the population of the United States dwelt
in cities. In 1890 one-third of our people were in cities of
more than 8000 inhabitants. It will not be long before half
the people live in cities, and when we include the towns, it
appears that municipal problems already affect directly at least
five-sixths of our people, and indirectly, but nevertheless most
vitally, all the rest.
Dr. Shaw, who is probably the highest authority on muni-
cipal government on this side of the sea, or perhaps in the
world, has expressed himself in these strong words: 1
0) In the last few years municipal home rule has been favored by several
other writers and speakers of high authority; Dr. Edward Everett Hale,
Hon. Seth Low. Senator Fassett, Prof. F. J. Goodnow of Columbia, Dr.
James of Chicago University, and E. P. Oberholtzer being among the number.
Hon. Seth Low's address on "Municipal Home Rule," at Brooklyn, October
6. 1882, Dr. Hale's article in the "Cosmopolitan," Vol. 16, p. 736 (1894), Prof.
Goodnow's "Municipal Home Rule," McMillan & Co., 1895, Oberholtzer's
HOME RULE FOR OUR CITIES. 429
"Good government and progress in our larger cities will
1)6 greatly aided by the extension of their powers of local self-
government, or the establishment of municipal home rule, so
that the people may feel that they have their own municipal
welfare clearly and definitely in their own hands."
And again, discussing the New York charter: "We shall
never reach a permanent basis in this country until we have
attained simplicity and unity, so that the people of a large
town may feel that they have their own municipal weal or woe
clearly and definitely in their own hands. Then a strong
piiUlc opinion trill arise to protect such municipal home
rule, and with or without constitutional safeguards, we shall
find that municipal government will go on steadily."
On the way toward the solid independence outlined above.
a number of partial reforms may be of advantage. When it
is not possible to get a whole loaf, half a loaf is better than
none.
A. Constitutional provisions may be adopted covering part
of the ground. This has been done to a considerable extent
already as is shown in the accompanying diagrams.
B. The Michigan Doctrine may be followed by the courts
of other states. Efforts to secure such rulings even if unsuc-
cessful cannot fail to do good by directing attention to the
fundamental importance of local self-government and the
weighty opinions of Judge Cooley and others.
C. Broad statutes may be passed giving cities larger powers,
especially in regard to the granting of franchises, and the right
article in the "Annals of the Amer. Academy of Political and Social Science,"
the Fassett Report, and Dr. Shaw's "Municipal Government," already re-
ferred to. are specially valuable.
At the convention of the League of American Municipalities, held at
Detroit in August, 1898, and containing mayors a-nd aldermen and other
officials from a large number of the leading cities of the country, the principle
of municipal home rule was most enthusiastically and almost unanimously
endorsed; and at the conference of the National Municipal League, held at
Indianapolis, December, 1898, a committee consisting of Dr. Albert Shaw,
Clinton Rogers Woodruff. Professor Frank J. Goodnow, Horace E. Denning,
Chas. Richardson. Professor Leo S. Rowe, and Geo. W. Guthrle, reported in
favor of constitutional amendments giving all cities of 25,000 people the
power to frame their own charters, restricting state action to matters re-
'nuiring state uniformity, and forbidding the legislature to pass acts apply-
ing to single cities or groups of cities except by a vote of the cities them-
selves. The committee also recommends civil service reform, a single council
elected for 6 years, concentration of all administrative power in the mayor,
separation of legislative and administrative powers, and constitutional pro-
visions preventing councils from granting franchises for more than 21 years,
and requiring itemized accounts from operating companies. Proportional
representation, the initiative and referendum and the recall, and some other
things are needed to make 'the list a perfect one.
430 THE BONDAGE OF CITIES
to own and operate local business enterprises. A considerable
movement has taken place in this direction in the last few
years, but it often requires a hard fight to pass such bills, and
they are apt to be narrowed in scope, and their usefulness im-
paired by amendments and limitations introduced by corporate
influence. Moreover, they are subject to legislative alter-
ation or repeal. In spite of all their imperfections, however,
they are very important aids while on the way to solid consti-
tutional measures, and the growth of public sentiment around
them gives them, in the course of time, a practical stability
much greater than that which they possess theoretically.
The following tables with their explanations afford an indi-
cation of the present condition of municipal law on some of
the most important lines:
In examining the tables it must be remembered that the
finer shades of legislation are not indicated in them. The
crosses in each column represent general legislation of some
sort in reference to the subject stated at the head of the col-
umn. But the cross opposite Missouri, for example, in a
given colunm may represent a very different law from that
represented by another cross in the same column opposite
Idaho or California. Under special legislation the provisions
are for the most part quite similar down the whole length of
each column, the w r ording in many cases being identical; yet
even here there are some differences, especially in column B
(see below). It is in columns A, K and L, however, that the
widest variations occur.
I. Constitutional provisions requiring the local selection
of local officers are of great importance. In Massachusetts,
Pennsylvania, Missouri, Wisconsin, etc., a few counl y officers
must be locally chosen. In Ohio, Georgia, etc., county
officers, in general, are to be elected by the people of the
county. In Minnesota, county and township officers are to be
locally elected. In Kansas, township officers, and in Ken-
tucky, county and district officers, mayor and council and
police judges in towns and cities must be locally elected. In
New York the constitution provides that municipal officers
shall be elected by the electors of the ininiiciiHiliti/, or ap-
TO POLITICIANS AND MONOPOLISTS MUST CEASE.
431
TABLE I.
MUNICIPAL FREEDOM
SECURED BY CONSTITUTIONAL PROVISIONS
(including amendments to date).
B
n
E
H
States ~ = = -
and dates of g = o.=
Constitu- ~ ~*a
tionB. iff.:: . ^2
r" i. ?" *
g o c ^ '3
Forbidding Special Legislation.
o .
I-- talilishing riu'ht of iiiu-
nicipaliiios to make their
own charters.
3 3
"3 5
To regulate municipal
affairs.
o
"*
II
;
c
As to Franchises and Cor-
porate Powers
Requiring local consei
incorporation, or for
ry, gas, elec. 1.. etc.
Ferries and
bridges.
Railroad tracks.
III
til
S
ifi
5*3
-
^ 5
^ Maine. ..1819
O N. HU...1889
tj Vt 1793 co
X
X
X
X
B Mass 1780 co
w R. I 1842 X X
fc Conn 1875 Xd
a X. Y 1895 S x
H N.J 1S75 Xd x
o Penna. ..1874 co x
13 l>el 1897 co
2 Md 1867 co
E \V.Va....l872 cd
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
ft Ohio 1857 co
C Ind 18M D
111 1870 cd
X
X
X
X
X
xxxxx
X
X
X X
X
xxxxxx
X
X
X
X
X
X
X
. Mich 1850 D
"3. Wise 1848 co
% Minn.. ..1857 cd
Mo 1*75 x
c Iowa 1846
*s Kans 18-59 T
S I^eb 1875 cd
S S. Dak...l889 cd
N. Dak..l88'J co
XXX
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
xxxxxx
x x
X
X
Va 18fi9 S
X
X
X
X
X
X
X
X
X
X
X
*
X
X
X
S N. Oar...l876 cd x
w S. Car..,.189S
5 Ga . 18?7 co
JFla 1885 cd x
Ala 1875 cd x
A Miss isgo Xd
a La 1879 cd x
^ Texas. ..1876 cd x
- Ark 1874
a Teiin ....1870 co
a Ky 1891 S
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
xxxx
X
stat.
^ Mont 1889 co
S Ida 18*9 co
Colo ^76 cd
_: Utah 1895 S
S Nev .... 1864 cd
* Wyo 1889 co
X
X
X
X
X X
X X
X X
X X
X X
X
X
X
X
X X
X X
I X
X X
xxxxxx
X
X
X
X
X
X
X
Oreg 1857 co
S Wash 1891.
Cal 1879
X
X X
XXX
X
X
X
X
X
X
X
X
X
X
X
X a provision on the subject indicated at the head of the column. See
next page.
432 Mr.MCll'.U, LIBKRTY.
pointed by the authorities thereof. It has been held under
this that police commissioners and similar board are not muni-
cipal officers, but state officers; and may still be appointed by
the governor or selected in any way the legislature may direct.
(15 X. Y. 532; 36 K Y. 285.) But 55 K Y. 50, holds that
police commissioners of a city or town are municipal officers,
and protected by the constitution, so that the state cannot
appoint them, except where it combines several cities or coun-
ties in a metropolitan police district, as was the case in 15
X. Y. The Virginia constitution requires the local election
of officers of cities and towns. In Utah also there is a sweep-
ing provision requiring the election of local officers. In
Michigan and Indiana, as we have seen, the courts take the
ground that the local selection of local officers is an inherent
right that exists without any express provision. An attempt
has been made in column A to indicate the shades of enact-
ment co, meaning county; d, township or district; ct, county
and district or county and township; x, municipal officers;
S, a sweeping provision, and D a sweeping decision in favor of
local selection of officers. My idea at first was to indicate the
various shades in every column, but it proved impossible to do
this in some columns Avith any satisfactory approach to accur-
acy and exhaustiveness, and so the uniform sign x is u<r<l to
sh<,\v simply that the state has a law of the kind indicated
by the words at the top of the column, the shades of legisla-
tion bo-ing given in the text accompanying the tables.
2. Columns B and J inclusive relate to constitutional
safeguards against special legislation. In many states such
legislation is forbidden for some or all of the specified pur-
poses laying out or vacating streets, granting franchises to
railways, turnpikes, femes, etc., creating corporations or
granting corporate powers, granting to any corporation, asso-
ciation or individual the right to lay down a railroad track, or
any special or exclusive privilege, immunity or franchise what-
ever fill., Pa., etc.), creating municipal offices or prescribing
their duties, creating or amending municipal charters or
regulating municipal affairs, etc. (See Pa., 111., Mo., Mont,
Colo., Wy., etc.)
LOCAL GOVEBXMENT BY THE LOCAL PEOPLE. 433
It is a marked advance to limit the legislative power of pass-
ing local and special acts, for the chance of enacting bad
general laws without arousing effective opposition is very
much less than in the case of special laws which affect fewer
people. Yet great as the advantage is, there are some dis-
advantages. First, the legislature, if left free to classify
municipalities, may be able to attain almost or quite
the same individual and specific action under "general
legislation" (or such as affects all the . cities of the same
class) that it formerly attained by means of what is
called "'special legislation." To prevent this the constitution
should specify the classes into which municipalities are to be
divided. Second. A city or town may desire special legisla-
tion in its behalf, of a perfectly proper sort, in cases where it
does not seem best to pass a general law. To provide for such
cases, a provision should be inserted allowing special legisla-
tion upon petition of the municipality or municipalities
affected, a favorable referendum vote in such municipalities
being required either on the petition or on the law that may be
secured by it.
The constitution may require notice of special legislation to
be sent to the municipality affected, and re-enactment of the
law by the legislature if the city or town objects to it a sort
of mild municipal veto on local legislation (as in N. Y.) In
some constitutions notice must be given of the intention to
introduce a special bill so that those who object may be pre-
pared to fight the measure, but no veto or re-enactmen . is pro-
vided for (1ST. J., Pa., 1ST. Car., Fla., etc.) The notices thus
provided for are very important as a means of preventing the
practically secret passage of special acts, which is one of the
prominent evils of the existing system in several of our states.
Sometimes it is provided that there shall be no special legis-
lation in any case where a general law is applicable. (W<. Va.,
Minn., la., Kans., S. Dak., S. Car., G-a., Ala., Miss., La., Tex.,
Ky., Mont., Colo., Nev., Wy.j Where the constitution also
says, as in Minnesota and Missouri, that the question "whether
a general law could have been made applicable in any case is
hereby declared a judicial question," the provision is good;
28
434 THE CITY FOR THE PEOPLE.
otherwise, it is of little value, for, in the absence of such ex-
press declaration, the applicability of a general law is held to
be a matter for the legislature to decide (113 111. 315, 8 Col.,
122, 19 Kans. 303, 29 Ind. 409, etc.).
In column I, New Jersey provides that corporations shall
not be created by special act, but "corporations" is held not to
include municipal corporations. In several states the pro-
vision against creating corporations by special act expressly
excepts municipal corporations. (Md., Mich., N. Oar., Ala.,
Mont., Col., Oregon Wis. excepts cities.}
3. The principle of local consent is recognized in fifteen
constitutions. Massachusetts, Pennsylvania, South Carolina
aad Wyoming require local consent as a prerequisite to the in-
corporation of a city. ~N&w York, West Virginia, Illinois,
Missouri, Nebraska, South Dakota, South Carolina, Georgia,
Alabama, Kentucky, Idaho, Colorado and Wyoming, require
local consent for the construction of a street railway. In some
states the provisions are broader. Kentucky does not permit
the construction of any street railway, gas, water, steam heat-
ing, telephone or electric light system in city or town without
its assent. South Carolina requires local consent for street
railways, telegraph, telephone, electric light, water and gas.
Wyoming requires such consent for the first four just named,
and South Dakota for the first three.
4. Constitutional provisions transferring from the state to
the municipality, the power to grant street railway, telephone,
water, gas, electric light and other local franchises, would be
very valuable.
5. Also provisions establishing the right of cities and towns
to own and operate water works, gas works, electric light
plants, telegraph and telephone systems, street railways, etc.,
best when the clause is a sweeping one that gives all munici-
palities the right to own and operate any public work or ser-
vice on the people's vote to that effect, proper provision being
made respecting the purchase of existing plants. By South
Carolina's constitution (1895) cities and towns are empowered
to build or buy water works or light plants and supply the
inhabitants on a majority vote of the people. (See comments
on Table II.)
HOME RULE FOR OUR CITIES. 435
6. The last column is probably the most important of all
in its bearing on future progress. The subject has already
been dealt with in the text, but a very condensed summary
may be useful at this point. (For the Freehold. Charter
amendments in full see Appendix I.)
Five states have given municipalities the right to make their
own charters. Mo.. 1875; Cal., 1879; Wash., 1890; Minn., 1896, by
Constitutional provision, and La. by statute in 1896. In Mo. the
provision applies to cities over 100,000 population, in Washington
to cities over 20,000; in California to cities over 3,500; and in
Minnesota, to all municipalities. The Louisiana statute adopts a
rule precisely opposite to the Missouri principle, and permits all
municipalities except New Orleans to make their own charters.
In Missouri the city elects thirteen freeholders who prepare a
charter which is submitted to the people, and if ratified by four-
fifths of the qualified electors voting, it becomes the charter of the
city. St. Louis was given special authority to adopt a charter by a
majority vote. Amendments may be submitted by the legislative
authorities of the city, and adopted by a two-thirds referendum
vote.
In Minnesota, the charter is prepared by a board of fifteen free-
holders appointed by the district judge and must be adopted by a
four-sevenths vote of the people; amendments by a three-fifths vote.
By a statute of 1897 freeholders are to be appointed whenever eight
per cent, of the voters of the city or town petition to that effect.
And the legislature of 1897 proposed a new amendment to the con-
stitution providing charter amendments should be submitted to the
people on a five per cent, petition of the voters.
In Washington, the legislative authority of the city may order
the election of fifteen freeholders to prepare a charter to be adopted
by a majority vote of the people. Amendments proposed by coun-
cils and adopted by majority referendum vote. By statute the city
council must order an election of freeholders upon a petition of
one-fourth of the voters of the city.
In California, fifteen freeholders are elected to make the charter
which must be adopted by a majority vote at the polls, and ap-
proved by the legislature. Amendments, at intervals of not less
than two years, submitted by the legislative authority of the city
and ratified by a two-thirds vote at the polls, and approved by the
legislature.
In Louisiana, on petition of a majority of the property owners
of any city or town (except New Orleans) praying a referendum
on a neve charter, a copy of which must accompany the petition,
the mayor and council shall submit the proposed charter to a
referendum vote, and if adopted, it is to be the organic law of the
municipality.
In all the states named the home-made charters are subject to
the laws and constitution of the state.
436
THE BONDAGE OF CITIES
X=Statute Provision
c=Constitutional Provision
G=broad "
XC=both Stat. and Const. Pro.
TAB
MUNICIPAL
ACCORDED BY LEGISLATIVE POLICY
States.
Conferring local power to establish, construct, build, buy, organize, own,
Streets.
J,
?1
Water Works.
Gas Works.
Electric light
Plants.
05 .
it
m
13
II
$pS
H
Ferries.
Wharves.
Markets.
Franchises
a
if
"* lr
Local power ti>
gram fr. and
location.
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^ Del
3 Md
* W.Va
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t Ind
S 111
~ Mich
w Wise
S Minn
Mo
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3 Kaus ,
S Neb ....
S 8. Dak
N. Dak
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3 N.Car
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g Fla
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^ Utah
| Nev
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xxx
3 Wash
Cal
Under these provisions St. Louis, Kansas City, San Francisco,
Sacramento, Oakland, Los Angeles, Stockton, San Dieg-o, Seattle,
Tacoma, etc., have established charters of their own making. The
St. Louis charter gives the city power to grant franchises, construct
street railways, buy and hold property, real and personal, to be
TO POLITICIANS AND MONOPOLISTS MUST CEASE.
437
LE II.
FREEDOM
EXPRESSED IN GENERAL LAWS.
co=County
P=power to proTide for lighting
l=a law with very important
exceptions
States.
operate, manage, control, deal with, grant, &c. .
Proyid'g fo
Debt Limit
lor
Municipalities
fixed by
Constitution
.or Statute.
Schools.
Libraries.
1
~
Hospitals.
Cemeteries.
Poor Houses.
Jails, work
houses, houses
of correction.
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Maine. ..
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5$ (const.)
2 & 2}<T, (stat.)
Stf (stat.)
N. H
Vt
Mass
R. I
N. Y
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10< (const.)
7 cons. 1$ stat.
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N. J
Penna
Del
Md.
W. Va
Ohio
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CO
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xxxxxx
xxxxxx
1$ (const.)
5f (const.)
5f (const.)
10 (slat.)
Ind
Ill
Mich ,
Wise
Minn ,
Mo
xxxxxx
XXX
X XXXX
X
X
X
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X
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X
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1
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5'c' (const.)
10^ 2d cl. (stat.)
10 - (stat.)
<onst.)
5f: (const.)
Iowa
Kans
Neb
S. Dak
N. Dak
Va
xxxxxx
X
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X
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CO
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l'< (stat.)
tf> bond lim.
(Cull St.)
N. Car
8. Car
Ga
Fla
Ala
Miss
XXXX X
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CO
CO
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La
Texas
Ark
Tenn
Kv
Mont
xxxxxx
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X XXXX
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X
CO
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3ff + (stat.)
U% (bond stat.)
'Aff -t- (const.)
2fi + (const.)
Ida ..
Colo
Utah
Nev
Wyo
Ore
X
X
X
X
X
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X
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X
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CO
X
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1
XXX
2,500 (stat.)
5 (stat.)
Wash
Cal
used for the erection of water works or gas works, to supph' the
city with water and light, for the establishment of hospitals or poor
houses, etc., or for any other purpose; secures the local election or
appointment of the city officers required by the charter; and pro-
vides that amendments to the charter shall be submitted to the
438 MUNICIPAL LIBERTY.
people separately. The people have no initiative, however, as to
amendments, and neither initiative nor referendum, as to ordi-
nances.
The banner charter of all is the one adopted by the voters of
San Francisco in May, 1898. It contains strong- civil service rules,
declares for public ownership and operation of street railways,
water, gas, electric light plants, telephone systems, etc., announces
the policy of gradual absorption of all such monopolies, and pro-
vides for a popular initiative and referendum upon these questions,
and upon ordinances of all sorts and upon amendments to the
charter, upon petition signed by a number of voters equal to fifteen
per cent, of the votes cast at the last preceding election.
The charter is not equally good in all its parts, but these
admirable provisions make it possible for the people to mould the
charter easily to any form they desire.
The people of San Francisco appear to have their own destiny
more completely in their own hands than the people of any other
large city in the country. Their control is subject only to general
laws, and the approval of the legislature to charter amendments,
which, it is said, it not likely to be withheld in the case of any
reasonable amendment.
In Table II, as in the former one, two crosses in the same
column may represent widely different laws; both will be
general laws relating to the subject at the head of the column,
but one law may be much broader than the other. The mass
of statute law behind this table is too great for anything like
full treatment here. "We can only comment briefly on a few
of the more important columns, and note a few general acts
that fall outside the limits of the table.
One of the interesting columns is that which relates to the
limit of municipal indebtedness with its frequent exceptions
in favor of water works, and its expandibility by special vote,
as in o^orth Dakota, where by the constitution the municipal
debt is not to exceed 5 per cent, on the taxable property, ex-
cept that a city may expand the limit, 3 per cent. (i. e., make
it 8 per cent.) by a two-thirds vote, and neither limit is to pre-
vent the raising of funds to establish water works. There are
also statute provisions requiring a referendum 011 the issue of
bonds for buildings, fire apparatus, water works, sewers, street
improvements, etc.
Another attractive part of the Table is that relating to local
selection of local officers, especially the police column, and the
LOCAL GOVERNMENT BY THE LOCAL PEOPLE. 439
results of experimsntlng with state boards and metropolitan
ponce laws in reference lo New York and Boston and other
large cities in various states. The matter of jails, poorhouses,
cemeteries and hospitals is very important, and the question
of schools, libraries, parks and baths, which may do much to
relieve the pressure on the aforesaid, is also of vital moment.
Education is undeniably a state interest. But it is also a muni-
cipal interest. The state properly determines the broad lines
of policy. The municipality properly carries on the schools
upon those lines, with wide discretion, local ownership and
large control. The state may fix a minimum, co-ordinate all
parts of the system and stimulate progressive movement, but
the city or town should be free to go as far beyond the mini-
mum as it can, and have large liberty to express its individu-
ality.
The difference of quality in the measures behind the crosses
in these columns is sometimes very great. For example, in
New York free public baths must be established in 1st and
2cl class cities. In Massachusetts, towns may establish public
baths. So in most cases the provision regarding the establish-
ment of libraries is permissive, but in Michigan a free library
Diiixf be established in every township, and the clause is in the
constitution. The difference in quantity is also considerable
as well as in quality and force. Sometimes the provision only
applies to one or two classes of municipalities, as just noted in
the New York bath law; probably the smaller cities of New
York state are not so much in need of compulsory washing as
dusty New York and smoky Buffalo. As a rule, however, the
whole group we are studying (including all cities, towns and
villages) is behind each cross.
The most interesting columns of all are those relating to the
streets and the local services which usually involve street fran
chises; as gas, electric light, street railways, telegraph and
telephone systems, local consent and power to grant franchises.
It would be profitable to take each state in order, bring to a
focus the substance of all its provisions on these subjects and
then note unities and contrasts and draw conclusions. Space,
however, will not permit us to write out the record fully here
THE CITY FOR THE PEOPLE.
We \vill say a word about street railways and telephones, and
then take municipal lighting and local control of franchises
for a somewhat fuller treatment, choosing these subjects for
detailed discussion because they represent the area of greatest
movement most rapid advance toward municipal liberty in
the last few years.
In five states there are general laws empowering municipali-
ties to own and operate street railways. In Minnesota, any
city or village may, on a two-third refer endum.vote, buy and
operate street railways. In California, the power to build or
buy, own and operate street railways is given to 6th class cities
(those of less than 3,000 inhabitants). The same full power
is conferred in Indiana upon cities of 35,000 people or more,
belongs to every city council in Utah, and to every incorpor-
ated city and town in Washington. (See Laws of 1897, Chap.
112, and Washington "Codes & Statutes," 1897, 1076.)
In 11 states there are general laws authorizing municipal
telegraphs or telephones or both, and in 6 of the states the
power is commercial. Maine, Massachusetts and "Venimnt
give their towns a general right to put up telegraph and tele-
phone wires for their own use. North Dakota and Utah allow
cities to erect municipal fire signals. (Cities would have this
right anyway under the general police power, without any
specific law either general or special.) 1 In Kentucky, 3d class
( J ) It ts well to remember, In dealing with Table II, that the absence of
general legislation does not always indicate the absence of municipal power.
For example, some states have no general laws conferring on cities or towns
the right to establish fire departments, yet it is practically a universal fact
that cities and towns have that right under special provisions of their
charters or as an implied authority under the broad power to provide for the
safety and welfare of the community. (Dillon, 143.) Perhaps authority to
establish a telegraph or telephone system for the' use of city police and other
officials might also be implied under the general police power. Markets may
be established by municipalities under implied authority based on ancient
usage. (23 Pick. 71, C. J. Shaw.) Power to establish cemeteries and hos-
pitals will doubtless be implied from the general welfare or police clause
usual in municipal charters, and I think the power to establish public parks
and bath houses, which may help to make hospitals unnecessary, ought also
to be implied from the said clause. The lighting of streets, being a measure
strongly favoring safety and morality, should fall in the same class.
A municipality having power to pass ordinances respecting the police of
the place, and to preserve health, is authorized as a sanitary and police
regulation, to procure a supply of water and may bore an artesian well or
take any other requisite steps. (Dillon, 146, 8 Mich. 458; 66 Ind. 396; 31
Ala. 542.) But while the right to establish water works is within the ordi-
nary broad charter powers and needs no express grant, yet it Is subject to
arbitrary revocation by the legislature at any time. Foi; example, the city
of Memphis spent $30,000 getting plans, etc.. for water works, then the
legislature granted a private company the exclusive right to build water
works in Memphis. This was held to revoke the city's right, altho it had
begun to build. (Memphis v. Memphis Water Co., 5 Heisk. 495.) For gas,
electric light, street railway, telephone and other plants, for serving the
inhabitants generally, there is no doubt that authority will not be implied,
HOME RULE FOR OUR CITIES. 441
cities (8,000 to 20,000) may supply inhabitants with tele-
phone service. In Washington, 3d class cities (1,500 to 10,-
000) and towns (all municipalities of less than 1,500 inhabi-
tants) have authority "To permit under such restrictions as
they may deem proper, the laying of railroad tracks and the
running of cars drawn by horses, steam, electricity or other
power thereon, or the laying of gas and water pipes in the
public streets, and to construct and maintain and to permit
the construction and maintenance of TELEGRAPH, TELE-
PHOXE (and electric light) lines therein." (Track and Pipe
clause, Codes & Statutes, 1897, 938, 13.) Note that the
general charter laws for 1st class cities (those over 20,000) and
2d class cities (those between 10,000 and 20,000) do not con-
tain the above clause. 2d class cities, however, in common
with 3d class cities and toicns "may purchase, leceive, have,
take, hold, lease, use and enjoy property of every name and
description, and control and dispose of the same for the com-
mon benefit." One not familiar with legal ways of doing
things might think that this would cover the telephone and
everything else, and it might be so held in court. If such a
grant of power stood alone it would be very broadly construed,
but as it is accompanied by a long enumeration of powers to
establish water works, hospitals, docks, etc., the courts may
construe the broad power in reference to the enumeration and
hold that the broad clause gives authority to acquire and hold
property of all sorts when needful for the specific purposes
named in the express enumeration of powers.
In California, 3d class cities (15,000 to 30,000) have the
same Track & Pipe clause as in Washington except that the
italicized words and those in parenthesis are omitted 4th,
5th and 6th class cities (which three classes include all munici-
palities under 15,000 inhabitants) have the Track & Pipe
clause, italicized words, and all except the parenthesis. 1st
class cities, or those over 100,000, have no "Track & Pipe"
clause except this: "To permit the laying down of railroad
that special requests are apt to meet with strenuous opposition and frequent
defeat, and that no substantial liberty in these directions is possessed by
municipalities in the absence of general laws or constitutional provisions.
The same thing is true in respect to the columns that deal with franchises,
local consent and power to grant.
442 THE BONDAGE OF CITIES
tracks and running of cars thereon along any street, for the
sole purpose of excavating and filling in a street, and for
such limited time as may be necessary for the purpose afore-
said and no longer." The only power such cities have under
general law to construct and operate lines for the transfer of
intelligence by wire, is to maintain fire alarm and police tele-
graphs in the city or city and county.
We find, therefore, that in California, municipalities under
15,000 have unrestricted power to build and operate telegraph
and telephone systems, but for larger places there is no general
provision authorizing anything more than a fire alarm and
police telegraph. The law so exactly mirrors the interests of
the corporations that one cannot help having a suspicion that
municipalization of the telephone is not permitted in the large
cities because the private companies want to keep those cities
for themselves, while municipalization is permitted in small
places because there is little or no inducement for the big
corporations to go there they can use their money "to better
advantage" in the larger cities.
In Minnesota, any city or village, on a 2/3 referendum
vote, may buy and own and operate a telephone plant. And
in Indiana, a general law provides that any city of more than
35,000 inhabitants may build or buy and operate telegraph
or telephone lines to serve the city and its inhabitants, or may
purchase and hold a majority of the stock of any corporation
organized for such purpose. (For Wise, see Appendix II, U.)
MUNICIPAL LIGHTING LAWS.
We come now to municipal ownership of lighting-plants
and will then consider local control of franchises. In dealing
with gas and electric light, we shall try to give an idea of the
provisions that go with the light laws; so that they may be
seen in true relations to their surroundings. We shall find
that this method will lead us by almost insensible gradations
to the study of local consent and powers of grant.
In Maine, Vermont, Rhode Island, Delaware, Maryland,
South Dakota, Virginia, North Carolina, Alabama, Louisi-
ana, Arkansas, Nevada and Wyoming, there appears to be
TO POLITICIANS AKD MONOPOLISTS MUST CEASE. 443
no general legislation permitting cities and towns to own and
operate gas or electric light plants. 1
New Hampshire, Illinois, North Dakota and Texas have
general laws allowing municipalities to provide light for
streets. Under this authority a municipality may build works
of its own or contract with others to light the streets. (Levis
v. Newton, 75 Fed. 884.)
In Idaho, a city of village may provide light for public pur-
poses and, by the laws of 1897, may grant exclusive gas fran-
chises to light the streets.
In New York, gas may be furnished for public use by any
village owning water works.
In Ohio the law permits any city or town to erect or pur-
chase gas-works whenever the council deems it expedient. 2
And a city may procure its own gas-works, and supply the city
and its citizens, altho a gas company incorporated before this
law w T as enacted is in operation in the city and is not in any
default. The construction of gas-works by the city under such
a law does not impair the obligation of contract. The gas
companies took their charters subject to such contingencies,
which might arise at any time by the exercise of legislative
power to authorize municipal works. 3 (See Appendix II, U.)
In Georgia, a town or village may erect gas works. In
Oregon, any city or town may build gas works. In Montana,
all municipalities may build gas or electric light works, and in
Mississippi, all municipalities may buy gas or electric light
works.
Connecticut gives all municipalities the right to build or
buy gas or electric light works and sell to the citizens. No.
115 of Michigan's laws for 1891 gave any city or incorporated
village the right to build or buy, maintain and operate, works
to supply the city or village and its inhabitants with gas,
0) I say it "appears to be" because it is not easy to be absolutely certain
about a negative relating to large masses of miserably indexed statutes.
Great care has been taken and every volume of statutes has been examined
under 30 odd topics or index heads. Still some pertinent facts may have
escaped the notice of the writer or his assistants, and if any reader discovers
en error of omission or commission, it will be appreciated as a favor if he
will call attention to it by a line to the writer at Boston University Law
School.
( J ) Ohio Statutes, Revis. of 1897, 2486-7; State v. City of Hamilton, 47
Ohio St., 52; Hamilton Gas Light Co.'V. Hamilton City, 146 U. S., 258, 265-6
(1892).
( s ) Hamilton Gas Light Co. v. Hamilton City, 146 U. S., 258, 268 (1892).
444 MUNICIPAL LIBERTY.
electric or other light. On petition of 100 voters the common
council or board of trustees must submit to a referendum at
the polls the question whether the city or village shall avail
itself of the provisions of the law. On such referendum the
law required a 2/3 favorable vote. This law was superseded
by No. 186 of the same year, 1891, which provided that any
city or incorporated village may build or buy, maintain and
operate works to supply the city or village and its inhabitants
with gas, electric or otter light, or contract for furnishing the
same. Then follow initiative and referendum provisions like
those above except that a majority vote is sufficient, and then
we find a proviso that the clause relating to purchase, con-
struction, maintenance and operation shall not apply to
cities having more than 25,000 inhabitants. Law IsTo. 139
of 1893, provides that any city or incorporated village of not
more than 8,000 population, which already owns and operates
electric light works for its streets, may supply the inhabitants
also. The private companies evidently wish to keep com-
mercial lighting in the big cities for themselves as long as
possible.
In Tennessee, all cities of more than 36,000 population may
build or buy gas and electric light works to supply streets and
public buildings and may supply gas to the people.
In West Virginia, the council of a city, town or village may
erect or authorize or prohibit the erection of gas, electric light
or water works.
In Iowa, a city or town may purchase, establish, erect,
maintain and operate, within or without the corporate limits,
water works, gas works, electric light and power plants, and
may grant to individuals or corporations authority to erect
and maintain such works. The term is not to exceed 25 years.
No exclusive franchise is to be granted, and no such plants can
be authorized, established, erected, purchased, leased or sold,
or franchise extended or renewed unless the proposition is
favored by a majority of the electors voting on it at a general
or special election. Under these provisions, it is held that a
municipality may supply its inhabitants with light or water
by a plant of its own altho a franchise for the same purpose
LOCAL GO VEHEMENT BY THE LOCAL PEOPLE. 445
may previously have been granted by the municipality to a
private company. (Thomson Houston Elec. Co. v. Newton,
42 Fed. Rep. 723 bill to enjoin the city from erecting an
electric plant, the company having spent $20,000 in building
a plant under its franchise previously granted it by the city,
and being able to furnish all the electricity needed. See
Iowa Code, 1897.) This is according to the principles of com-
petitive business acted on by the corporations themselves
if you're not sharp enough to make a cast iron contract that
will protect you all round, you must suffer the consequences
but it is not justice, any more when a city disregards what is
fair to others than when a private company does it.
Colorado gives all municipalities the right to build or buy
water or light works or grant light or water franchises. But
no water or light works shall be constructed or authorized un-
til sanctioned by vote of the people. Where municipalities
have the power to grant franchises together with a general
power to build or buy without limiting words, full commercial
power or authority to sell to private consumers as well as to
light streets and public places, would seem to be implied.
Utah's statutes in a single clause give city councils power
to construct and maintain water works, gas works, electric
light works, street railways, or bath houses, or to authorize
the construction and maintenance of the same by others, or
to purchase any or all of said works from any person or cor-
poration.
In Ncic Jersey, all cities may buy electric or gas or other
light, or water works, and the franchise, and supply the city
and its inhabitants.
In Wisconsin, any city or village may buy water works or
light plants; municipalities may build lighting plants for
street service, and may buy commercial plants, or, if there are
none or none willing to sell, the city may erect such plants.
In Pouixi/h'ania, boroughs may light the streets, and 3d
class cities (those under 100,000 population) have the exclu-
sive right to supply the city with gas or other light, or with
water, and to erect works or authorize others to supply gas,
light or water. The councils of any 3d class city, if author-
446 THE CITY FOR THE PEOPLE.
ized by a referendum vote at the polls, may buy (for such
price as may be agreed on between the councils and the com-
pany's stockholders) all property of a water, gas or electric
light company, and exercise all its rights. It is further pro-
vided that at any time after 20 years from the introduction of
water or gas into any place by a private company, the town,
borough, city or district in which the said company is located
may become owners of the property by paying the net cost of
erecting and maintaining the same, with interest thereon at
10 per cent, per annum, deducting from said interest all divi-
dends theretofore paid. No company is to go in where the
municipality has built works, except by consent of the muni-
cipality.
In 1891, Massachusetts passed an act permitting cities and
towns to manufacture and distribute gas and electricity, build
or buy, maintain and operate, gas or electric light works, and
supply light to the city or town and its inhabitants. An
amendment in 1894 permitted municipalities to furnish gas or
electricity for heat and power except for operating electric
cars. A city must have a 2/3 vote in each council and ap-
proval of the mayor in each of two consecutive years, and rati-
fication by the majority of the electors at an annual municipal
election. A town must have a 2/3 vote in each of 2 legal
town meetings, 2 to 13 months apart. The municipality must
buy suitable existing works if the owners file a schedule of
property and terms of sale with the clerk of the city or town
within 30 days after the final vote to establish municipal
works. The price of the property "shall be its lair market
value for the purposes of its use (no portion of such plant to
be estimated however, at less than its fair market value for
any other purpose) including as an element of value the earn-
ing capacity of such plant based upon the actual earnings
being derived from such use at the time of the final vote.
Such value shall be estimated without enhancement on ac-
count of future earning capacity or good will, or of exclusive
privileges derived from rights in the public streets." Any
locations or similar rights acquired from private persons must
be paid for, and damages suffered by the severance of any por-
HOME RULE FOR OUR CITIES. 447
tion of the property lying outside the municipal limits are
allowed, except where the main plant lies outside. Within 60
days after the filing of the schedule, either party may petition
the Supreme Court to appoint special commissioners to esti-
mate the price, and appeal lies from these commissioners to the
Supreme Court.
The Florida acts of 1897 contain a statute modelled thru-
out on the Massachusetts law. It does not, however, require
double adoption a 2/3 vote of council, approval of mayor
and ratification by the voters at the polls being sufficient with-
out repeating the operation the following year. If the propo-
sition fails at the polls, no similar proposal can be submitted
for ratification within one year. The extreme restrictions in
Massachusetts are due to the strenuous efforts and powerful
influence of the corporations. It took a three years' hard fight
to get the law, and even then it was not possible to pass it
except with corporation amendments which seriously dimin-
ish its value.
In Minnesota, any municipality may build or buy water,
gas, electric light or heat plants and sell to inhabitants, and
under another law may buy street railways or telephone or
power plants. (See below.)
In Missouri, any municipality may build or buy water, gas,
electric light or power plants and sell water, gas, etc., to in-
habitants.
In Kansas, under the laws of 1897, any municipality may
build or buy water, gas, electric light or power, water or heat-
ing plants, and sell to inhabitants.
In Nebraska, 1st and 2d class cities may build or buy gas
or electric light plants and sell the product.
In California, there are general provisions, 1st, that the
common council may provide for lighting the city; 2d, that
6th class cities (all municipalities under 3,000 inhabitants)
may acquire, own, construct, maintain and operate street rail-
ways, telegraph and telephone systems, gas and other works
for heat and light; 3d, that 5th class cities (municipalities be-
tween 3,000 and 10,000 population) may purchase, lease or
construct water or electric light works and sell water, heat
light and power
448 THE BONDAGE OF CITIES
South Carolina's constitution, 1895, provides that any
city or town, on a vote of a majority of its electors, may build
or buy water works or light plants and supply its inhabitants.
The Washington statutes of 1897, Chap. 112, provide that
any incorporated city or town may construct or buy, own and
operate, water works (within and without its limits), gas, elec-
tric light, or other light plants (to serve the city or town and
its inhabitants with public or private supplies of water, light,
heat and power), and cable, electric or other railroads within
its limits for the transportation of freight or passengers. A
referendum is necessary, and if debt is to be incurred the
proposition must be adopted by a 3/5 vote at the polls.
The "Indiana Statutes," of 1896, contain three most inter-
esting provisions as to franchises: one relating to cities of 35,-
000 to 50,000 population, another to cities between 50,000
and 100,000 and a third to cities over 100,000. The three
long enactments are identical. Their substance is that the city
board of public works (appointed by the mayor) shall have
power to purchase or erect, by contract or otherwise, and oper-
ate gas works, electric light works, street cars and other lines
for the conveyance of passengers and freight, telegraph and
telephone lines, steam and power houses and lines, to supply
the city and its inhabitants, or to purchase and hold a majority
of the stock of corporations organized for either of the above
purposes. Also to contract for the furnishing of gas, steam or
electricity, light or power to said city or the citizens thereof,
and in such contract fix charges. To authorize and empower
by contract, telegraph, telephone, electric light, gas, steam,
or street car or railroad companies to use any street, and pre-
scribe terms and conditions of such use, except that franchises
are not to be for longer term than 25 years nor for a less re-
turn than 2 per cent, of the gross receipts. The exercise of all
these powers is subject to the approval of the city council
which has "exclusive control of the streets." New Jersey,
Missouri, Texas and Kentucky also have provisions giving
municipal authorities "exclusive" control of streets.
In Kentucky, 2d class cities (20,000 to 100,000 people)
may provide lights, by themselves or others, for streets and
TO POLITICIANS AND MONOPOLISTS MUST CEASE. 449
inhabitants; 3d class cities (8,000 to 20,000 people) may pro-
vide the city and its inhabitants with water, light, heat, power,
and telephone service by contract or works of its own; 4th
class cities may light public places by gas or otherwise; and
in 1st class cities (over 100,000 i. e., Louisville) the board of
public works has exclusive control of the lighting and use of
streets. The Kentucky constitution of 1891 provides, 163,
that "no street railway, gas, water, steam heating, telephone
or electric light company in any city or town" shall lay its
tracks, pipes, wires, etc., without consent of the local legisla-
tive authority, and 164 declares" that "no county, city, town,
taxing district or other municipality shall be authorized or
permitted to grant any franchise or privilege or make any con-
tract in reference thereto for a term exceeding 20 years. Be-
fore granting such franchise or privilege for a term of years,
such municipality shall first, after due advertisement, receive
bids therefor publicly, and award the same to the highest and
best bidder. But it shall have the right to reject any and all
bids. This section shall not apply to a trunk railway."
This principle of sale of franchise to the highest bidder is
also recognized in New York, Ohio, "Wisconsin, Missouri,
Louisiana and California. In all, the method has been applied
to street railway franchises, and in California, Wisconsin and
Kentucky it has a much wider application. Generally the sale
is to the company bidding the highest percentage of gross
receipts, but the bid may be for so much cash down, as in New
Orleans, or the franchise may be sold to the company agreeing
to serve on the lowest fare, as in the Ohio provision (relating
to 2d class cities, i. e., Cleveland). New Orleans has sold
street railway franchises for cash at various times since 1879
when she first advertised for sealed proposals. Chap. 370 of
Wisconsin's laws of 1897, provides for publication of full
specifications, rates, etc., and advertisement for bids, before
any city or village can grant a franchise to> establish and oper-
ate a street railway, gas or electric plant, or water works or
telephone system or other franchise involving the use of the
streets. Chap. 361 provides for the submission of water and
lighting grants to the voters at the polls, and requires such
submission if 20 per cent, of the voters petition for it.
29
450 MUNICIPAL LIBERTY.
In California, by the laws of 1897, "every franchise or
privilege to erect or lay telegraph or telephone wires or con-
struct or operate street railways on any public street or high-
way, to lay gas or water pipes, erect poles or wires for trans-
mitting electric power, or light, or to exercise any other privi-
lege whatever hereafter proposed to be granted by the board
of supervisors, trustees, county commissioners or other govern-
ing body of any city, county or town (excepting steam rail-
roads, telegraph lines, and renewals of franchises for piers,
chutes and wharves) shall be granted on the following con-
ditions," viz: the application must be advertised for 10 days,
with a statement that bids of so much per cent, (not less than
3 per cent.) of gross receipts will be entertained. The bids
must be opened in open session and the franchise or privilege
must be awarded to the highest bidder. The gain to the
people from such notice and sale is a matter of much interest,
as is also the exception clause.
By a Missouri statute of 1895, cities, towns and villages
are to sell all franchises for electric light, gas, water or transit
to the bidder offering the highest percentage of gross receipts.
In New York state, since Jan. 1, 1875, the legislature has
been under constitutional prohibition in respect to special
legislation granting the right to lay down railroad tracks, or
confer exclusive privilege, franchise or immunity, and has not
been able even under general law to give street railway com-
panies a right to construct and operate roads in the streets of
cities and towns, the consent of the local authorities being re-
quired for this by the constitutional amendment of Nov. 3,
1874; in force Jan. 1, 1875. In 1884, the legislature gave
any incorporated city or village the right to sell street railway
franchises at auction. The law did not require such sale. It
was merely optional, and the New York Board of Alderman
took advantage of this fact to give the Broadway Surface Rail-
road Company the right to operate a road from Union Square
to South Ferry, exacting nothing but the 3 per cent, of gross
receipts (5 per cent, after the first five years) which was the
minimum allowed by the law. The Cable Railway Company
had offered $1,000,000 cash in addition to the statute per-
LOCAL GOVERNMENT BY THE LOCAL PEOPLE. 451
centages, but the Broadway Surface people bribed aldermen
at the rate of $20,000 each and secured the franchise at a
cost of $500,000 for bribes, lobby expenses, etc. 1 half a
million went to a few for corruption, in place of a million to
the public for an honest franchise. Almost all the aldermen
and officers of the Broadway Company were indicted, and a
few convicted, and public indignation over the transaction led
to the Cantor Act of 1886, which provided that all incorpor-
ated cities and towns must sell their street railway franchises
at auction (except in case of companies already organized in
municipalities of less than 40,000 people). The public sale
of street railway franchises was now obligatory instead of
optional. But as public sentiment and attention lapsed, cor-
porate interests made themselves felt, and in 1890, the auction
plan was restricted to cities above 90,000 inhabitants. In
1892 the Cantor plan was further eliminated from the law so
that it ceased to exist except as to the single city of New York,
and now the charter of Greater New York leaves it in doubt
whether the auction principle has not been banished even
from that city. The charter says that "nothing in this act
shall repeal or affect the existing general laws of the state in
respect to street' surface railroads," but 77 looks the other
way and 73 and 74 (see below) quite clearly indicate an
intent to substitute full discretion and publicity for the obliga-
tory auction plan. It would seem, therefore, that at present
cities and towns in New York may sell street railway fran-
chises at auction if they wish, but are not obliged to.
Several remarkable sales have occurred. In 1887, a
premium of 26.3 per cent, of the gross receipts was bid for the
28th and 29th Street franchise, and 35 per cent, for the Ful-
ton Street line in New York. The latter agreement was com-
promised after 6 years by the Sinking Fund Commissioners
for 5 & 1/8 per cent., as the company claimed that it was losing
money, and the 28th and 29th Street crosstown line was not
operated till the Commissioners agreed to let the company off
for half of 1 per cent, above the 3 per cent, statute minimum.
In 1895, the Third Avenue Extension was sold for $250,000
N. Y. Senate Doc. 79, 1886, Report of Road Com. on Broadway S. R. Co.
452 THE CITY FOB THE PEOPLE.
cash and a premium of 38-J per cent., making, 1 with the sta-
tute minimum, 41-J per cent, each year for the first five and
43 per cent, each year afterward besides the $50 car tax. In
the same year The People's Traction Company and its com-
petitors carried the bidding into the clouds for the capture of
a short route important to the People's Company as a connect-
ing link between its system and a prospective line outside the
city limits. At the end of the day's bidding, the People's
Company had offered 6975 per cent., or about 70 times the
entire gross receipts. The next day the People's Co. and one
of its rivals were ready to go on bidding, but a third company
got out an injunction on the sale. The case went into the
courts, and the franchise was awarded to the People's Co. for
100 per cent., but an appeal has been taken. It is said that the
People's Co. could afford to pay many times the receipts of the
short line rather than lose the link in its contemplated system.
And it is also said that the company could arrange to make no
charge for transfer over the short route so that the gross re-
ceipts would be nothing and the city would get nothing how-
ever high the bids might run, since 6975 per cent, or 10 mil-
lions per cent, of nothing is still nothing.
The charter of Greater New York provides (16) that the
municipal assembly may grant street railway franchises, and
establish, maintain and regulate ferries. By 71 the rights of
the city in and to its water front, ferries, wharf property, land
under water, public landings, wharves, docks, streets, avenues,
parks and other public places are hereby declared to be in-
alienable. By 73, no franchise or right to use the streets
shall be granted by the municipal assembly for more than 25
years, but the grant may, at the city's option, -contain a pro-
vision for renewals (at fair revaluations) not exceeding 25
years in the aggregate. The grant may provide that, at the
end of the term, the whole property of the grantee shall be-
come the property of the city without further compensation,
or it may provide for a valuation and payment of that valua-
tion. If the property becomes public without money pay-
(') This sale was annulled on the ground that the cash bonus was beyond
the law, and that the extension included two routes. Beckman v. Third Are.
R. R. Co.. 153 N. Y., 144.
HOME RULE FOR OUR CITIES. 453
ment, the city may operate it, or lease it f r a term not exceed-
ing 20 years. If the city takes the property by payment it
must operate it for at least 5 years, after which it may con-
tinue to operate it or may lease it for limited periods in the
same manner as it does its docks and ferries. By 74, the full
terms of every proposed grant of franchise or right to use
the streets must be published in the City Record for 20 days
before the grant is made and at least twice in 2 daily news-
papers, must be approved by the board of estimate and appor-
tionment, must receive a 3/4 vote by ayes and noes in each
branch of the assembly and the approval of the mayor. A
5/6 vote of each branch is necessary to pass a franchise over
the mayor's veto, and at least 30 days must intervene between
the introduction of any franchise granting ordinance and its
final passage.
The New York Charter is complexly careful or carefully
complex, and yet it does not adopt the most important of all
checks upon corrupt or injudicious franchise grants, the in-
itiative and referendum, which we have found in the new
freehold charter of San Francisco, and in a less complete form,
in the laws of Wisconsin, Michigan, Massachusetts, Florida,
South Carolina, Colorado, Washington, Pennsylvania, and
Iowa. Other examples will occur as we proceed.
LOCAL POWERS OF CONSENT, GRANT, &C.
The reader has doubtless noted, that as I predicted, we have
drifted from powers of ownership to powers of grant. The
laws often deal with the two in the same paragraph, and they
are in reality merely complementary portions of the right of
local self government in respect to local franchises. We have
covered the entire body of statute law, and find that there is
but one state in the Union (Louisiana) that has no general
legislation requiring local consent for street railways, water,
gas, electric light, telegraph, telephone and other street ser-
vices, or empowering municipalities to grant such franchises. 1
DelaAvare, Maryland and Nevada have almost nothing, but
(^ Perhaps the Louisiana law of 1896 empowering municipalities to make
their own charters should be considered as an indirect contribution under
this head.
454 THE BONDAGE OF CITIES
still there is a glimmer of light even in Delaware, it being
enacted that a street railway shall not use a county bridge or
road without consent of the county levy court elected by the
citizens of the county a mere scintilla of local self govern-
ment in respect to franchises, but enough to save Delaware's
general laws from Egyptian darkness. Maryland requires
consent of municipal authorities for water works, and Nevada
authorizes cities and towns to grant gas and water privileges.
From these minimum recognitions of local right we pass by
a series of gradations thru the meagre measures of Alabama,
North Carolina, Georgia, Arkansas and New York up to the
larger provisions of Massachusetts, South Dakota, Pennsyl-
vania, Ohio, Illinois, Colorado and Montana, and the sweeping
laws and constitutional safeguards of Indiana, Iowa, Wis-
consin, Minnesota, Missouri, Kansas, California, Kentucky,
Tennessee, Rhode Island, Utah, Wyoming, Washington,
South Carolina and Florida.
One of the commonest recognitions of local right to control
street services is a provision requiring street railways to get
local consent to construct their tracks and subjecting their
locations to municipal control. In 16 states (California,
Wyoming, Utah, Montana, Kentucky, Alabama, North Da-
kota, Kansas, IOWA, Missouri, Minnesota, Wisconsin,
Indiana, Ohio, New York, Rhode Island) there are effective
provisions relating to the grant of street railway rights and
franchises by municipalities. The states in italics provide for
sale of the franchise, and Iowa requires a referenda- a. Thirty-
five states expressly require local consent, and generally it is
a necessity, there being no appeal from the local decision. In
13 states (New York, West Virginia, Illinois, Missouri,
Nebraska, South Dakota, South Carolina, Georgia, Alabama,
Kentucky, Idaho, Colorado, and Wyoming) a provision re-
quiring street railways in cities and towns to get the consent
of the local authorities has been put in the constitution.
A constitutional clause of this kind is of course bed-rock,
not liable to be overturned by legislative action or appeal to
state commission or court a .bit of real municipal sovereignty.
In Kentucky, as we have . seen, the provision requir-
TO POLITICIANS AND MONOPOLISTS MUST CEASE. 455
ing local consent includes steam-heating, gas, water, street
railway, telephone, and electric light in cities and towns, and
in every case the municipality must sell the franchise to
the highest bidder for a term not over 20 years. In
South Carolina also, consent of the municipal authorities
is necessary by the constitution not only for street railways,
but for any railroad track, gas or water pipes, telegraph, tele-
phone or electric light wires. In Wyoming, the constitutional
clause covers the telegraph, telephone and electric light, and
in South Dakota it covers the telegraph and telephone.
Twenty-six states make local consent necessary for gas (con-
stitutional provision in Kentucky and South Carolina, statute
elsewhere), and 15 of these states with 14 others confer upon
local authorities the right to grant gas privileges. A right to
grant must be distinguished from a requirement for local con-
sent. The latter clearly indicates a policy of local control, but
accords no right of initiation; while authority to grant gives
power of initiation, but unless the authority is exclusive it
affords no certainty of control. A mere power to grant does
not exclude the idea of independent grants by the legislature
directly ; it is on its face only a concurrent power. A require-
ment of local consent is on its face a veto power and may be
more valuable than a right to grant unless it is exclusive, in
which case it includes the local consent idea, and is a creative
and a veto power in one.
Twenty-one states require local consent for electric light
(constitutional provision in South Carolina, Kentucky and
Wyoming); 10 of the 21 and 14 others confer the right of
grant. Eighteen states recognize by general law the principle
of local consent in respect to telegraph (Kentucky, South
Carolina, South Dakota and Wyoming in the constitution);
5 of the 18 and 8 others accord to some or all municipalities
the right to grant telegraph privileges. With the telephone
it is local consent in 17 states (same 4 in constitution); 6 of
the 17 and 10 others, grant. (See Appendix II, U.)
These summaries afford some idea of the almost universal
recognition of the right of local self government in respect
10 streets and franchises. The field of this recognition is o*
4~>) MUNICIPAL LIBERTY.
course much broader than this discussion. We have not at-
tempted to deal with municipal regulation of local services
a topic of enormous girth. The lowest forms of power that
might fall within the lines of local consent and right of grant
are what may be called the right of designation (which is
really a regulative power) and the right of consultation. An
example of the first is the local right to designate locations for
railway tracks or telegraph posts without the right to refuse
all locations. (See below.) An example of the second is the
right of selectmen to grant or revoke licenses for telegraph,
telephone or electric light poles and wires, subject to appeal
to the Superior Court, as in New Hampshire.
The highest form of authority is a sweeping statute, or bet-
ter still a constitutional provision, giving complete and ex-
clusive powers of grant and revocation, purchase, erection,
ownership and operation to every municipality, subject to the
initiative and referendum, and possibly, in some cases, to the
consent of a majority of the property owners chiefly affected.
The principle of the initiative in respect to these franchises is
recognized in the general legislation of three states (Wiscon-
sin, Michigan and Nebraska), and the referendum in eleven
(Colorado, Florida, Iowa, Massachusetts, Michigan, Minne-
sota, Nebraska, Pennsylvania, South Carolina, Washington
and Wisconsin). In most cases these principles are only parti-
ally applied, as follows:
Colorado, gas, electric light and water.
Florida, gas, electric light.
Iowa, gas, water, electric light and power, telegraph, tele-
phone and street railways.
Massachusetts, gas and electric works.
Michigan, gas, electric or other light.
Minnesota, gas, electric light, street railway, water, tele-
phone, heat and power.
Pennsylvania, 3d class cities, gas, electric light, water.
South Carolina, gas, electric light, water.
Washington, gas, electric or other means of light, heat,
power, water, cable, electric or other railways.
Wisconsin, gas, electric light, water.
LOCAL GOVERNMENT BY THE LOCAL PEOPLE. 457
Nebraska, municipal initiative and referendum covering all
contracts, grants, franchises and ordinances of every
sort (law of 1897), but the percentage of voters re-
quired to demand the referendum is high.
South Dakota, general state and municipal initiative and
referendum (amendment to constitution, passed
legislature, 1896, adopted by the people in Nov.,
1898, by a large majority).
We have included water where it occurred in connection
with the franchises specially discussed, but have not searched
specially for referendum provisions relating to water works,
or possibly the list would be somewhat longer.
The consent of property owners is required by general laws
as follows:
Connecticut (see below) electric light, telegraph, telephone.
Illinois, gas, electric light, L roads.
Kansas, cities over 40,000, street railways.
Missouri, street railways.
North Dakota, street railways.
New York, (see below) street railways.
Sometimes the owners of more than half 'the frontage must
assent (as in Illinois, North Dakota, etc., see below); some-
times the owners of half or two-thirds of the value (see New
York below); sometimes a majority of the persons owning pro-
perty on the line (see Kansas below).
In Connecticut and New Hampshire, the local authorities
have exclusive direction of the places of tracks.
In Connecticut, no telegraph or telephone or electric light
company, or company distributing electricity by wires or
similar conductors, or using wires or conductors for any pur-
pose, can place them in the streets or highways without con-
sent of the adjoining proprietors or of two county commis-
sioners (appointed by the General Assembly). Subject to
this and to appeal to the superior court (appointed by the
Governor and Legislature), the council of a city and selectmen
of a town have full control of the location, re-location or re-
moval of the aforesaid wires and conductors. In New Hamp-
shire, appeal lies to the supreme court from the decision of
458 THE CITY FOR THE PEOPLE.
selectmen respecting telegraph and telephone privileges. In
Maine, the local consent to street railways provided for by the
Laws of 1895, p. 81, is subject to appeal from the municipal
officers to the supreme court. The state lets the municipality
go out of doors and walk around a bit, but keeps a pretty big
string tied to it; except the right to build or buy light works,
it has really nothing but rights of consultation, designation
and regulation no power of veto, little power of construction,
very little real sovereignty.
Several of the sweeping provisions above mentioned have
already been noted while speaking of municipal ownership
(see paragraphs about Indiana, Iowa, Wisconsin, Missouri,
California, South Carolina and Kentucky a few pages back).
The Minnesota Statutes (1894) 2592, provide that no cor-
poration shall establish gas, electric light, heat, transportation,
or other improvement except on obtaining a franchise from
the city or village council, and making just compensation, and
at the end of each and every franchise period of five years the
council may, on a two-thirds vote of the electors of the city or
village, buy at eminent domain value and own and operate
the gas, electric light, street railway, water, telephone, heat or
power works. That is something worth having in the way of
local self government. Take out the five year limitation, ex-
tend the referendum to the granting of franchises, add the
initiative on a 5 per cent, petition, authorize cities to build at
the start, and put the whole thing in the constitution, beyond
the reach of legislative interference, and municipal freedom
and sovereignty would be established in respect to the most
important local services of a monopolistic character.
In Kansas, by the laws of '97, any municipality may grant
gas, electric light, water, heat or power privileges for a term
not exceeding 20 years, and it may be terminated in 10 years.
Forty days notice of application for a franchise or renewal
must be published, and the municipality must reserve rents
for the use of streets. Provision is made for filing items of
construction cost, income and outgo by the companies, the
items to be open to public inspection. In 1st class cities (those
of more than 15,000 inhabitants) the mayor and council may
HOME RULE FOR OUR CITIES. 459
grant rights of way for telegraphs, telephones and electric
light works; may grant street rights for laying gas, water and
*rteam pipes and conduits for electric light wires; provide for
and regulate and grant railroad and street railway rights in
streets, but cannot give an exclusive right ; and may grant per-
mits to mine coal. No city of more than 40,000 people can
grant street railway rights without the assent of a majority
of the persons owning property on the line.
Tennessee requires local consent for water, gas, and street
railways and provides that all municipalities may grant privi-
leges in the streets. Florida requires local consent for tele-
graph and telephone; authorizes cities and towns to grant
water, gas and electric light privileges ; and provides that fran-
chises to use the streets for a public use shall be granted
only by the mayor and council. Utah requires local consent
for street railways, telegraphs and telephones, and provides
that city councils may grant franchises for water, gas, electric
light, street railways and wires in streets, and may permit or
prohibit railroad tracks. In Wyoming, the constitution makes
local consent necessary for street railways, telegraph, tele-
phone and electric light, and by statute local consent is re-
quired for gas, and any city or town may grant gas, or electric
light privileges, and street railway franchises are not to ex-
ceed 10 years on reasonable conditions. In addition to the
sweeping power of grant stated on p. 444, the Iowa statutes
provide that a city or town may authorize or forbid street rail-
way or any railroad construction in the streets. In Missouri
also, besides the constitutional necessity of local consent for
street railways, and the broad statute requiring cities, towns
and villages to sell water, gas, electric light and transit fran-
chises to the highest bidder, there is a statute relating to cities
of the 3d class (3,000 to 30,000) which provides that the
council shall have exclusive power to grant street railway
franchises with the assent of property holders along the route.
Rhode Island provides that a city or town may grant "rights
and franchises in, over or under highways," for water, gas,
electric light, heat or power, street railways, and telephones.
The franchise granted may be exclusive for a term not exceed-
460 THE BONDAGE OF CITIES
ing 25 years. With the exception of California and Missouri,
the great states containing the giant cities have not taken a
very advanced position in respect to municipal control of
franchises. The Constitution of New York, Art. 3, 18,
makes consent of the local authorities necessary to the con-
struction or operation of a street railway in a city or town.
The consent of the owners of at least half the property (that is,
half in value) abutting on the route is also required, or else
the assent of three commissioners appointed by the Appellate
Division of the Supreme Court, which assent, when confirmed
by the court, will answer instead of the consent of the property
owners, but nothing will take the place of the consent of the
local authorities. Under this constitution, the right to con-
struct and operate a road in the streets of a municipality can
only be obtained from the local authorities and on such terms
as they choose to impose. (People v. O'Brien, 111 N.Y., 1.) The
legislature can authorize and regulate the organization of
street railway companies, but only the city or town can give
those companies the right to build and operate in their streets.
This is a little bit of real sovereignty. By statute, the consent
of the owners of two-thirds of the abutting property is neces-
sary to constitute owners' assent to a street railway in a town,
owners of half value will do in a city. (1896 vol. I, p. 777.)
A gas or electric company must get municipal consent to use
the streets.
The Illinois constitution requires local consent for street
railways. 'By statute, local consent is necessary also for tele-
graph and telephone wires and railroad tracks. No L road can
be built except by permission of the council or trustees on
petition of the property owners on the route. No city council
or president and trustees of a village or incorporated town can
grant a franchise or right to lay gas pipes or wires for electric
light except on petition of land owners representing more than
half the frontage on the streets, alleys, etc., to be used. (Laws
of 1897, p. 100. See also Kev. Stats., 1895 and 1898.)
In Pennsylvania, local consent is necessary for street rail-
ways, gas, electric light, heat and power and for telegraph
poles and wires.
TO POLITICIANS AND MONOPOLISTS MUST CEASE. 461
Iii Massachusetts, the aldermen of a city and selectmen of
a town may, after a hearing, grant or refuse locations for street
railways. Local consent is also necessary for gas and electric
light. In the case of telegraph and telephone companies with
state franchises the local authorities may designate (but can-
not refuse) locations for posts, etc., and may make reasonable
regulations subject to appeal to state courts. Aside from this,
the selectmen of a town may grant telegraph and telephone
franchises to individuals or companies and control them en-
tirely. (Pub. Stat. c. 27, 45, 48.) 45 reads as follows:
"The selectmen, upon such terms and conditions as they
may prescribe, and subject to the provisions of chapter 109,
as far as applicable, may authorize any person to construct a
line of electric telegraph for private use upon and along the
public ways of the town. Upon the erection of such line, the
posts and structures thereof within such ways shall become the
property of the town, and the selectmen may regulate and con-
trol the same, and may at any time require alterations to be
made by the parties using the same in the location or erection
thereof, and may order the removal thereof, having first given
such parties notice and an opportunity to be heard. The town
may at any time attach wires for its own us to such posts and
structures and the selectmen may permit other persons to attach
wires for their private use thereto or to posts and structures
established by the town, and may prescribe such terms and
conditions therefor as they deem reasonable."
A similar law exists in Vermont.
Xote the clause making the telegraph posts and structures
municipal property immediately upon erection. Why should
not the same principle be applied to every local service that
builds its works in the streets? Allow a reasonable franchise
term, but put the title to the property in the municipality
either at the start or at the expiration of the franchise period,
without further compensation than that involved in the fran-
chise grant for the said term.
A great deal more space could be devoted to these matters,
but we will content ourselves with the following summary in
tabular form, which shows at a glance the principal provisions
relating to local consent and powers of grant.
462
MUNICIPAL LIBERTY.
TABLE III.
St. Ry.
Gas
Elec. 1.
Teleg. Teleph.
Water
Rds.
Heat Power
Me
1 c
1. c.
I.e.
g.
I.e.
1. c.
g.
I.e.
1. c.
N H
I.e.
1. c. a.
I.e.
M.c.
\ g-
I.e.
I.e.
1. C. 0.
a.
I.e.
1. c. a.
f l g c.
I g-
g. d.
1. c. a.
A
g g d .
g.
I.e.
g.
Vt
Mass
I.e.
g-
1. c.
I.e.
e 'i
R I
1. c. o.
a.
1. e.
1. C. 0.
8.
1. C.
{
g. exc.
1st cl.
N. Y J
N J
1. c C
lo'
1. c. o.
g. b.
1 c
1 c
Pa
1 c.
1 c
1. c.
I.e.
1
Pel
I.e.
1. c.
l g e.
, g ,
L. 1. c.
&o.
1. c.
Md
W Va
1. c. C.
g.b.
I.e.
lr*r
(I.e.
JA
I g.
, g r
1. C.
l g e.
g-
g-
Ohio
I.e.
, g n
I.e.
l g r
Ind |
" 1
L Kds
1. c. & o
I.e.
g.o.
g.o.
fl.c.
t ,g-
1. c.
g. b. E.
1. c.
I.e.
g.
g-R.
1. c.
I.e.
g.R.
1. c.
Wise . {
g.b.
1. c.
g-b.
1. c.
1. c.
Mo -1
Iowa -j
Kans <
Neb
1. 1'C.
g.b.
0.
I.e.
g.R.
1. c.
g. 1st. cl.
o. 40.0iiO
1. c. C.
1. c. C.
I.e.
g.o.
]. c.
g-
g.b.
g.R.
1. c.
g-
{ f
I.e.
1. c.
, g o
g-
g.b.
g.R.
I.e.
g.
, g ,
1. c.
g-
g.R.
g-
g.R.
g-
g.b.
g-R.
1. c.
g-
g-
1. c. C.
g.
g-
g-
I.e.
g-
l g e.
1. c.' C.
g-
1*0.
g.R.
g.
g-
ft
g.R.
g-
g-
g.b.
g.
I.e.
g-
g'
,.c g :c.
g.
g.
g. 1st cl.
g. 1st cl.
8. Dak
1. c. C.
I.e.
I.e.
1. c. C.
1. c. C.
1.0.
l g e.
1. c. C.
N. Dak |
V
N. Car
I.e.
1. c. C.
I,
g.
g-
M.c.
( g-
I.e.
1. c. C.
8. Car
Qa
1. c. C.
1. c. C.
Fla
g-
g
I.e.
g-
I.e.
g-
Ala. .
1. c. C.
Miss
La
1. c.
Ark
g-
Tenn j
Ky....
l C c.
I. c.'c.
g-
l C c.
1. c g> C.
g.
1. C.
,A
A
U.R.
1. c.'c.
A
1. c g .'c.
l g .
,.e g C.
l g e.
1
Mont i
l g e.
I.e.
......
Idaho
Colo
g-
1. c. C.
1. c. C.
I.e.
g-
I.e.
g.R.
I.e.
I.e.
Utah |
Nev
1. P
1 c
. g.
if.
g.
g.
g-
g-
g.
g. Istcl.
g-
,g-
1. c.
g.b.
Wyo {
Ore. ...
1. c. C.
l g .
l g c.
g.
g-
fr
1. c. C.
g-
g. 1. c.
1. c. C.
1. c. C.
g.(3?lcl.) g.(3dcl.)
Wash
Cml 1
g-b.
g.b.
g-b.
g.b.
See explanation on next page. Dots are run across blank spaces to carry
the eye where there is any further entry on the same line.
LOCAL GOVERXMEXT BY THE LOCAL PEOPLE.
In this table 1. c. means local consent, 1. c. o. or o. alone means
consent of owners of property along the line of railway, etc.
d, means right to designate locations,
a, means appeal to court or commissioners,
g^, means local power to grant,
g. b. means sale or grant to highest bidder.
R, means referendum necessary.
L, means elevated road,
C, means by constitutional provision.
A power of grant, if exclusive, is of course equivalent to requir-
ing local consent, altho the laws of the state may contain no specific
provision as to local consent.
Municipalities that have been given control of their streets may
grant street railway and other rights in them. (Thompson's Law
of Electricity, 26.)
The legislative tendency to scatter provisions relating to -a, given
topic thruout big volumes of statutes, putting some in solitary con-
finement in secluded spots, and tucking others cosily under the
wings of statutes apparently belonging to an entirely different
species, together with the very imperfect indexing that character-
izes many of our statute books, has made it very difficult for the
writer and his assistants to be absolutely sure that all the provis-
ions relating to local consent for street franchises, etc., have been
captured. If any reader notes an omission and will send to the
author or publisher a reference to the omitted statute, the favor
will be deeply appreciated.
A municipal right arising from statute may, of course, at
any time, be altered or repealed. Theoretically, therefore, no
number of such rights can constitute any real municipal sov-
ereignty or assured power of self government, such as state
and nation enjoy in respect to their particular affairs, and such
as cities and towns should enjoy in respect to their local busi-
ness concerns. The practical fact accords with the theory to
a considerable extent. New laws and old ones not much used
are easily changed if corporate interests require it. It is not
necessary to repeal. A little insignificant looking amendment
that may pass without attracting any general attention can
take the life all out of a law. "\Vhen, however, a law confer-
ring important privileges has grown into the life of the people
and has come to be regarded as part of their natural rights,
it is apt to be so jealously guarded, that it takes on something
of the stability of a constitutional provision, tho it cannot
attain quite the same vigor and certainty unti] we have the ref
464 THE CITY FOR THE PEOPLE.
erendum, for the legislature can act counter to the people's
interest and wish if the motive be sufficient, no matter how
powerful the protest may be.
The statutes contain many laws affecting municipal rights
which fall outside the scope of Table II. Some of these are
very interesting. For example, the Montana laws of 1897
provide that cities and towns may establish free employment
offices, regulate and prohibit the wearing of hats and bonnets
at theatres or public places of amusement, provide for planting
trees, etc. In Maine, any town may raise money to propagate
fish, and I am told that a number of towns have "from
ancient times" municipalized the catching of a variety of shad.
Cities may buy and keep hay scales. This privilege is ac-
corded municipalities by general law in a number of states.
Also the right to establish standard weights and measures.
By the Vermont statutes of 1896, any city or incorporated
town can vote money for free musical entertainments, and in
New Hampshire any city or town may provide coasting and
skating places. Pretty soon wo may have general laws em-
powering cities and towns to purchase bicycle pumps and
fasten one to every mail-box post, or fix them at other con-
venient intervals, and provide free lunches for bicycle parties
on condition that the women do not wear skirts less than 2
feet in length ; but what we really want is municipal freedom
in the full sense, by constitutional enactment granting the in-
itiative and referendum, and not statutes granting privileges
in comparatively trivial affairs.
THE AWKWARD SQUAD AND THE HONOR LIST.
Considering the whole range of legislative and constitu-
tional provisions in favor of municipal liberty,
DELAWARE AND MARYLAND ,
Take their places at the tail of the class. They seem strongly
inclined to shirk general legislation favorable to municipal
rights. They are almost total abstainers from the performance
of their diities in this regard.
HOME EULE FOB OUR CITIES. 465
Virginia, North Carolina, Alabama, Arkansas and Nevada
are only a little further advanced, and
as a whole has not very much to be proud of. Neither has
New York, and Louisiana would surely have a place at the end
of the procession were it not for the law of 1896 in relation to
home made charters.
Turning to the head of the column, let us note the states
in the front ranks of progress toward municipal liberty. Con-
sidering the volume and value and the universality of the
rights accorded to municipalities, and taking into account the
attitude of the courts on common law principles, the use of
constitutional safeguards, and the initiative and referendum,
we may perhaps be justified in placing on the roll of honor the
names of the following states:
MINNESOTA, CALIFORNIA, WASHINGTON, MISSOURI,
SOUTH CAROLINA, KENTUCKY, WISCONSIN, MICHIGAN,
INDIANA, IOWA, KANSAS, NEBRASKA, COLORADO AND UTAH.
But even in the best states the law is very imperfect. Frag-
mentary legislation, unconscionable repetition and miserable
indexing characterize the bulk of our statutes, and make the
study of statute law a soul-exasperating business. Massive
enactments loaded with ponderous verbosity and repeated
almost or quite verbatim at intervals thru the statutes under
each division of municipalities and perhaps various other heads,
together with shreds of legislation touching the same topics,
scattered thru thousands of pages, tied up with other bundles
with which they may be related in some way, nestling in some
proviso, or paragraph, or section of a big chapter whose head-
ing may not lead you to examine it for the subject you have
in hand and whose molecular constitution is not correctly and
completely registered in the index these things and ambigu-
ous wordings, conflicting decisions and multitudinous diver-
gences in the laws and customs and charters of the various
states make it almost impossible to ascertain what the law is.
And then the terrible waste of time and space and printer's
ink. Khode Island is not very large, but her legislative acts,
30
466 THE BONDAGE OF CITIES
resolutions and reports come out each year in a volume as bi^
as a young dictionary. The Massachusetts Public Statutes,
compiled in 1882 make a big-paged book of 1,400 pages; the
supplement to these Public Statutes for 1882 to 1888 is a
volume of 1,500 pages; the supplement for 1889 to 1895 is
an enormous volume of 1,700 pages; three big volumes with
4,600 oceanic pages. In addition to all this the legisla-
ture is manufacturing a fat blue book every year and
every one is conclusively presumed to know the law. The
contrast between the efficiency of our watch factories, water
works, fire departments, post office and navy, and the ineffici-
ency of our legislative factories is awful. We have already
spoken (p. 402) of Xew Jersey's delicate creations in the statute
line, occupying over 4,000 pages and five million words. The
city acts alone fill 360 big pages with the customany repeti-
tions as to elections, corporate powers, duties of officers, etc.
Besides all this, there are 40 big pages on towns, and then we
have 30 blanket pages on oysters and clams, which are not
more indigestible than these statutes, altho the legislature does
not put that conclusion in the book.
One is tempted to say : "Throw the statutes away and begin
all over and make the law simple and concise so that any one
can find it and understand it when he finds it." For all local
services and franchises involving the use of streets, let us have
one little paragraph according full powers of construction,
purchase, maintenance and operation of works and systems, to
supply the municipality (city, town or village) and its inhabi-
tants with water, gas, electric or other light, heat, power, street
railways or other transit facilities, telegraph, telephone, tele-
lectroscope or any other local service requiring a special use
of the streets, or rights of way and conferring exclusive powers
of grant and control upon municipalities in respect to such
franchises and services. A few such clauses carefully worded
would cover the whole field of distinctively municipal busi-
ness, including markets, femes, wharves, harbors, parks,
baths, lodging houses, etc. Add a clause conferring the right
to do anything not forbidden by valid law of state or nation.
Put all these clauses in one small section of the constitution,
TO POLITICIANS AND MONOPOLISTS MUST CEASE. 467
with another section providing for the initiative and refer-
endum and recall, another for the merit system of civil service,
and another for proportional representation including the
women then give municipalities, subject to these provisions^
the right to make their own charters (on legislative approval
as to portions that go beyond the said provisions), and you
have municipal liberty and a simplified law, so far as it is pos-
sible to get them in a state which by necessity places the final
appeal upon the law^s interpretation in a supreme court, a
condition which might at times weaken, but on the whole
would be far more apt to strengthen the proposed constitu-
tional guaranties. If, after our states have done some think-
ing on these lines, they will join in a great convention that
may lead to the adoption of simple uniform provisions on these
and other fundamental questions, the future will be filled with
the hope that legislation may some day become a science.
CONCLUSIONS.
In going over the laws and constitutions of these forty-five
states from early times to the present year, a few conclusions
of special breadth and moment have forced themselves upon
my attention :
First: There is a powerful trend towards careful definition,
regulation and limitation of legislative power.
Second: There has been in recent years a tremendous and
ever accelerating movement toward legislation favorable to
public ownership and operation of local utilities, particularly
those that involve any special or privileged use of the streets.
Third: There has been an equally emphatic movement
toward a fuller recognition of the principle of local consent,
and the right of the people to be consulted about important
measures and vote directly upon them, and the correlative
right to initiate legislation if they so desire.
Fourth: The local right to grant local franchises, elect local
officers and manage local property, and the right of munici-
palities to frame their own charters have also received recogni-
tion.
Such are some of the principal streams that make up the
468 THE CITY FOK THE PEOPLE.
current of enactment that is moving toward municipal liberty
and independence in respect to local affairs. And yet it must
be admitted that no real home rule has been established be-
yond the reach of legislative interference. Legislatures still
have power to alter or abolish charters, and may practically
annul even freehold charters, for they are all expressly sub-
ject, by constitutional proviso, to the general laws of the state.
We have as yet no setting apart of a local field from which
state legislation shall be excluded, as national legislation is ex-
cluded from state interests. Some of our states have made a
splendid beginning, but the end is not yet.
CHAPTER IV.
THE MERIT SYSTEM OF CIVIL SERVICE.
That the guide in filling public places by appointment or
promotion should be merit, determined by impartial tests of
fitness for the work to be done, and that tenure should be se-
cure during good behavior and efficient service are proposi-
tions too plain to need argument except for those who regard
public office as a species of private property, to be wrestled
for and used for the personal advantage of the winner.
If public employees were only appointed for merit after
examination and trial during a reasonable period of probation,
under the supervision of an intelligent non-partisan commis-
sion; if heads of departments and superior officers in general
were taken, not from outsiders, but as far as practicable out of
the rank next below in the same department, and promotion
depended on merit alone; if appointments were always for life
or good behavior; if every appointment, promotion and dis-
charge were subject to review in open court at the suit of an
injured applicant or employee; in other words, if the public
business were conducted on sound business principles, partisan
politics would receive a deathblow, bosses would lose their
power because their control of the offices would be gone the
temptation to manufacture a lot of needless positions, with
heavy salaries and little to do, with which to reward the faith-
ful, would vanish; party assessments would not be paid, jus-
tice, economy and efficiency would have a chance, and the
people's servants would attend to the people's business instead
of working to carry elections to keep their places.
The need of a change from the spoils system to the merit
system is abundantly proved by the facts recited in preceding
chapters and has been emphasized several times already in
this book, but a brief discussion of the nature and results of
civil service reform, in a chapter of its own seems necessary to
469
470 THE CITY FOR THE PEOPLE.
throw the subject into the strong relief its importance de-
mands.
The evils of the prevalent plan of treating public offices as
private property or party spoils, are only too well known to every
one acquainted with governmental affairs especially in our larger
cities. Large numbers of men spend their lives seeking office, not
for the public good, but for their private emolument. Election
trickery, "political pull," party organization, ring-building, gang-
construction, and the formation of personal constituencies of every
sort, occupy their minds to the exclusion of the public good. These
men who make a business of capturing and keeping the offices,
acquire a knowledge of political methods and possibilities, and
possess a degree of unscrupulousness, that give them a great ad-
vantage over the ordinary citizen with the average conscience and
the average knowledge of politics. They gather about them masses
of personal adherents who will vote for them regardless of the
issues at stake. They pack primaries and conventions; spend
money freely and promise fat offices to their constituents. When
they win power, they reward their most active supporters with
lucrative positions or boodle contracts. If the salaries are too low,
they have them raised. If the offices are too few, they create
new ones. Their appointees are not selected because they are fitted
to do the work well, but because they can be depended on to help
re-elect the appodnter and his party or clique. They are not ex-
pected to serve the public but their official creators. Such men
and methods are happily by no means in universal control even
in our most imperfect cities, but wherever they have gained the
mastery, inefficiency and extravagance have been the results. It
has been estimated that in the various city departments where
these methods have prevailed in New York, Philadelphia, Chicago
and other cities, the public has had to pay from 10 to 200 per
cent more than the service rendered would have cost if the work
had been done by a reasonable quota of men well fitted for it
and devoting themselves to the public business instead of party
or personal politics.
Great as are the financial evils of private officialism, however, they
are insignificant compared to the political and moral evils. The
making of politics attractive and lucrative to some of the worst
elements in society; the control of large masses of public business
by the unscrupulous instead of the conscientious; the disgust of
good men with political affairs which often seem to them to be
controlled by evil forces beyond their reach; the debasement of
government and lowering of the ideals of youth; are of infinitely
more consequence than the money loss, great as it doubtless is.
To banish these evils is of vital importance, but by no means easy,
because the great political organizations are largely based in fact
upon the spoils idea, and, whatever they say in their platforms,
they are apt to resdst its destruction in practice as a man resists
THE MERIT SYSTEM OF CIVIL SERVICE. 471
the destruction of that upon which his life and success depend.
There is hope, however, for Chicago and San Francisco have adopted
the Merit System (Chicago by 50,000 majority on a referendum vote,
and San Francisco in her new charter also adopted byareferendum) ;
the movement is growing in various states and in the national
service; and it is so clearly in the interests of the people as a
whole that it is sure to come with the growth of civic enlighten-
ment and political common sense. The growth of public owner-
ship will force civil service reform. And direct legislation, by
weakening partisanship and putting the power of reform directly
in the hands of the people, will hasten the movement.
The Merit System in its turn will help to abolish partisanship.
So long as large numbers of men hold office for a settled term,
those in office will organize to carry the next election so as to
keep their offices, and those who wish to be in office but are not,
will organize to carry the election to get their innings. The
ins and the outs use every possible argument and persuasion to
win voters to their side in the contest, and political parties and
campaigns degenerate into squabbles of two sets of office-seekers.
Nothing would do more to rid our cities and states of the wastes
and demoralizations of partisan politics than the abolition of the
term system.
Civil service reform means simply that appointments and pro-
motions shall be governed by merit instead of political influence,
party fealty, relationship or personal interest of the appointing
officer, and that offices shall be held during good behavior and
efficiency instead of being held for a set term or at the whim of
a superior.
The economic value of such a change is a matter of record. In
the Brooklyn Navy Yard according to the statement of Command-
ant Erwin, the cost of building warships was reduced 25 per cent
by the civil service rules the first year they went into effect (1891).
In a single department at Washington (the office of the Commis-
sioner of Immigration), $76,526 a year were saved by the abolition
of useless positions when the civil service rules were applied. 1
Department heads say that it takes a new clerk 6 months to
attain the efficiency of an old employe, and for the last 6 months
of his term, the spoils system officeholder devotes his thought and
his energy largely to politics to the serious injury of the business
of his office.
The subjection of large numbers of employes to dismissal at the
arbitrary will of a public officer is even more objectionable than
the term system. It is simple common sense and justice that
merit should determine appointments and promotions, and that
1 Hon. Carroll D. "Wright, who had charge of the last Census Bureau, esti-
mates that $2,000,000 and more than a year's time would have been saved if
the Census force had been brought into the rlassified service. He adds: "I
do not hesitate to say that one-third of the" imount expended under my ad-
ministration was absolutely wasted, and wasted principally on account of
the fact that the office was not under Civil Service rules."
472 THE CITY FOR THE PEOPLE.
employes should not be dismissed except for cause. Merit should
be ascertained by impartial methods, and employes dismissed for
alleged cause should have a right of appeal to the courts that
the cause may be judicially ascertained. Aside from the economic
waste of needless changes among the employes, it is unjust to
deprive an honest, efficient worker of the position and opportunity
on which he and his family depend for their daily bread, quite
as unjust as to take from him arbitrarily any other right, prop-
erty or possession of equivalent value to him.
Some points are well put in a leaflet issued by the Civil Service
Association and the Good Government League of Phila., as follows:
Under the Spoils System the Head of a Department instead of
being free to exercise his own judgment, is practically forced to
select those who have the most political influence, and to pay
but little if any regard to their ability or fitness. Under the Merit
System the appointing officer is not only enabled but obliged to
select for appointment or promotion those who will give the public
the best obtainable service. Under the Spoils System each ap-
pointment makes more enemies than friends. Under the Merit
System no unsuccessful applicant can complain of anything but
his own deficiencies. Under the Spoils System the offices are almost
monopolized by men of small capacity and few scruples, and the
most desirable class of employees are unwilling to apply. Under
the Merit System the examinations are open to every citizen, and
the best are eager to compete because their employment, retention
and promotion are made to depend solely upon their merit and
fitness, and because the work is honorable, the pay is certain, and
the opportunities for advancement are many. The Public should
always be able to secure the most desirable applicants, but the
plan of selecting employees for any other reasons than merit and
fitness for the duties to be performed, is ruinous to any business,
and there is no reason why the public interests should be sub-
jected to a system which is so utterly absurd and unbusinesslike,
and so prolific in all kinds of corruption and bad government.
The Spoils System converts the offices which the people pay
for into bribes and rewards for the use of corrupt and demoralizing
methods by unscrupulous men. Under the Merit System the public
offices can only be secured or retained by superior efficiency and
proved integrity.
Under the Spoils System elected officials must devote themselves
to the peddling of offices and the division of patronage. Under the
Merit System they can give their time and energies to the legisla-
tive or executive duties for which they have been chosen and by
which they can best serve and secure the gratitude and esteem
of their constituents.
Under the Spoils System a public employee is the political ser-
vant or henchman of those who have secured his appointment.
Under the Merit System he is an American freeman, and can be
honest and faithful to his public duties without fear of punishment
or dismissal.
PROPORTIONAL REPRESENTATION. 473
The most difficult question is that of method. Competitive ex-
aminations under the supervision of non-partisan commissioners,
probationary service, promotion on the basis of ability and devo-
tion as manifested by quality and quantity of service, and the right
of appeal to judicial decision in case of unjust discharge, appear
to be the most important points.
The government of Massachusetts, the Federal Government and
some of our cities have made considerable progress in the right
direction, but there are still large classes of public employes who
have not been brought within the Merit System, and the regula-
tions are by no means perfect, especially in respect to promotion
right of appeal, retirement, pensions and relief.
Aside from the Federal navy yards, perhaps the most effective
rules are those adopted in Chicago, and in the new charter of San
Francisco (see Chap. Ill, p. 420). The Detroit electric plant is a
good example of the results of adhering to the Merit System and
excluding the spoils system (see chap. I, sec. XVII). The reader
who wishes to go more deeply into this subject should send for the
reports of the state and national commissioners, get copies of the
various laws enacted and proposed, write to the men who are de-
voting themselves specially to the movement, gather the pamphlets
and addresses issued by the civil service associations in Boston,
Xew York, Philadelphia and other cities and consult the articles that
appear from time to time on the subject in the leading reviews. 1
1 In Boston, R. H. Dana, Morefleld Storey, and Edwin D. Mead are lead-
ers in this movement, also Pres. Capen, of Tufts, in New York, Carl Schurz,
and Geo. McAneuy, the secretary of the association there; in Chicago, Edwin
Burritt Smith and John W. Ely: and in Philadelphia, Herbert Welsh (Pres.),
Henry C. Lea (V. Pres.), and R. Francis Wood (Sec.). Charles Richardson
and Clinton Rogers Woodruff of the executive committee, the last being
also President of the National Municipal League, member of the Pennsyl-
vania Legislature and author of the civil service bill introduced into the last
session, which would be given here if it did not take so much room.
The student should not fail to get the reports of the U. S. Civil Service
Commission on which the Hon. Theodore Roosevelt did such efficient work
some years ago. He would do well to visit the Brooklyn Navy Yard or one
of the other Federal yards, to talk with the men and study the workings
of the system, and by all means write to the Secretary of the Navy for a
copy of the Navy rules.
Civil service laws or correlated laws should not fail to provide for death
benefits in case of meritorious employes, aid in case of sickness or disability
and retirement on pension in case of incapacity after long and faithful
service. This principle is recognized in this country and is broadly applied
in England. Mayor Quincy of Boston, and his successor Mayor Hart, strongly
advocate this measure for all city employes. Mayor Quincy says it is valid,
simply as a business proposition, even aside from humanitarian considerations.
Heads of departments do not like to discharge old employes when they be-
como unable to do a good days work. Superintendent Bell of the Street De-
partment. Boston, says that 90 per cent of the workers stay on year after
year in spite of changes at City Hall; 25 per cent of the force are old men,
many of whom should be retired if full efficiency in the department is to be
attained. If a pension bill were passed this could be done. One-half the fund
for pension disability paymts, etc., might be raised by taxatn and the other
half taken from the wages of employes 2 to 3% per cent of wages being suffi-
cient according to the experience of Liverpool, Birmingham and other cities.
The increased efficiency of the departments would more than repay the city
for its share of the paymts. Mayor Quincy thinks, and relief of the workers
from subscriptn calls on deaths, accidents, etc., would go far toward balanc-
ing the slight detentions from wages. Our Mass, civil service law provides
for the incoming of the workers but not for their outgoing. This measure
would complete tin- civil service law. Feileryted labor in Boston seems to be
a unit in favor of the plan.
CHAPTER V.
PKOPORTIONAL KEPRESEOTATIOK
The initiative and referendum will put the vital control
of legislation in the hands of the people; but emergency
measures will in practice be left to representatives as a rule,
and many other laws will be initiated and formed, and some
will be decided upon in representative bodies. Besides adopt-
ing direct legislation, therefore, it is necessary to secure pro-
portional representation or representation of each class in the
community in proportion to its size, in order that the deliber-
ating and voting in legislative bodies upon emergency meas-
ures (and other bills that may be passed or voted down in
decisions of councils and legislatures that we allowed to stand)
shall be as fair a substitute as possible for the deliberating
and voting that would take place if the whole community
considered the question directly in a giant town meeting, or
a series of small town meetings in all the wards or districts.
Direct legislation presents serious or lasting misrepresentation
in the final adoption or rejection of laws; proportional repre-
sentation eliminates one source of error in the delegate system
arising from the non-representation of considerable masses
of voters under the district plan, and so is an aid in preventing
serious or lasting misrepresentation in the deliberations and
votings of legislative bodies whether the deliberations and
votings are preliminary or final, advisory or conclusive. Direct
legislation secures due weight to every class and interest in
the decision of questions brought before tihe people at the
polls; proportional representation tends to secure due weight
to every class and interest in the decisions of legislative bodies,
and in forming their advisory, amendatory, educative, repres-
sive or other preliminary action in reference to questions that
go to the referendum. Direct legislation and proportional
representation supplement each other; each can accomplish
474
PROPORTIONAL REPRESEXTATIC-X. 475
much without the other, but they belong together, and can
do their best work only in double harness as we find them in
Switzerland. Direct legislation alone leaves the advisory
and emergency action of legislators and councilmen very im-
perfectly representative, and proportional representation alone
leaves the legislators and councilmen subject to the tempta-
tions that beset them now and the errors of judgment that
warp their decisions from the people's will. Of the two meas-
ures, direct legislation is, of course, vastly the more important,
but every friend of democracy and good government ought
to support proportional representation also, for it is a corollary
from the same fundamental principles of justice and common
sense that prove the case for direct legislation.
The Legislature of a State is called a representative body. If
the citizens of a State were few in number and close together they
would meet in person to deliberate upon public affairs and pass
such laws as they deemed necessary. But when they number mil-
lions and live far apart, they cannot meet in this way, and they
have to select a few persons to meet in their place and deliberate
and legislate for them, just as the stockholders of a corporation
choose a board of directors to manage the business for all con-
cerned. In early times, the laws were made in the way first men-
tioned, and the local laws of many townships are still enacted di-
rectly by the citizens assembled in town meeting. This method
is a very just and perfect one, for every citizen has a right to pre-
sent his ideas to his fellow voters, and no law is passed without
giving a full opportunity for hearing to those who may object to it.
When the increasing size of the State or city compels the people
to resort to the representative system, they are not always careful
to guard the new plan against injustice. If there are 200 Republi-
cans, 180 Democrats and 20 populists in a certain town, the ideas
and interests of the three classes will have a relative strength of
two, eighteen and twenty in the town meeting. If there are 200.000
Republican voters in a certain State, and 180,000 Democratic voters
and 20,000 Populists, the relative strength of the parties in the
Legislature should be two, eighteen and twenty, or one, nine and
ten, or some multiple of these numbers. If not, the Legislature
does not truly represent the people. If, for example, the legisla-
tors are all Republicans, the Legislature clearlj- does not correctly
represent the State, for the State is only half Republican, the other
half being Democratic and Populistic. In order that any legisla-
tive body may be really representative, the relative voting strength
of each class and interest in the electing community must be re-
produced in that body, otherwise the' deliberating and voting in
the legislative body can have little chance of being a fair substi-
476 THE CITY FOE THE PEOPLE.
tute for the deliberating and voting- which would take place if the
said classes and interests could come together and legislate for
themselves directly, as in early days.
There are two methods of electing representatives; the one is
called the "District System" and the other the "Proportional Sys-
tem." The former divides the State, or city, or nation, into as
many districts as there are representatives to be chosen, and then
the people in each district elect one representative. The other
plan divides the number of votes in the State, or nation, or city,
by the number of representatives to be chosen, and takes the quo-
tient as the number of ballots that will elect one representative,
no matter whether the citizens casting those ballots live close
together or are scattered all over the State. By this plan, if there
were 400,000 voters in a State and 200 representatives, 2000 votes
would elect a representative; any 2000 voters who chose to unite
on the same man could elect him, whether those voters were lo-
cated in a single town or district or were scattered from one end
of the State to the other; 2000 Prohibitionists or Populists could
elect a representative, altho there might be only a few such voters
in any one part of the State. By the direct plan, on the contrary,
the Prohibition Party, or People's Party, or any small party could
not elect a representative unless it had a majority in some par-
ticular district.
Of course, the party in power favors the District System, because
it enables it to crowd out the others. It can divide up the State
so that its own voters shall have a majority in all or almost all the
districts. Sometimes this is carried so far that half the citizens
of the Commonwealth are practically disfranchised. For example,
in Alabama (1892) 138,000 Democrats elected nine Congressmen, and
94,000 Populists and Republicans elected none. In North Carolina,
133,000 Democrats got eight Congressmen, and 145,000 Republicans
and Populists only one. In Indiana, under a Democratic gerry-
mander, 259,000 Democratic votes elected 11 Congressmen, while
253,000 Republican votes elected only 2. At the next Congressional
election (1894), 284,447 Republicans elected the whole 13 Congress-
men, and 238,281 Democrats elected none. New Jersey, Massachu-
setts, and many other states besides those above mentioned, have
used this Gerrymandering process, as it is called, from the name
of the man who invented it. 1 In a Republican State the process
1 Continuing with 1892, 219,215 Republicans in Iowa elected 10 Congress-
men, or 1 to 21,921 votes, while the whole 201,923 Democratic votes only
elected 1 Congressman. In Kentucky the Democrats got 10 Congressmen
with 174,360 votes, or 1 Congressman for every 17,436 votes, while the* Re-
publicans with 122,308 votes got but 1 Congressman. In Maryland 113,931
Democrats got all the 6 Congressmen, or 1 to 19,000 votes, while 91,762 Re-
publican votes failed to secure a representative. In Maine 65,637 Repub-
licans got all 4 Congressmen, or 1 to 16,400 votes, while 55,778 Democrats got
none. In the whole election 12,032,203 votes were cast, and 5,531,965 of them
had no representative in Congress. A majority of a quorum, or 26 per cent.
of the members, representing 13 per cent, of the voters, can make a law, so
that in a country supposed to be governed by the majority we find minority
rule as an organized system, the representatives of about % of the voters
being able to make laws for the other %.
General Garfleld said in the House of Representatives in 1870, "In my
Judgment it is the weak point in the theory of representative government,
PROPORTIONAL REPRESENTATION. 477
consists in ascertaining the location of Republican and Democratic
voters, the strength and color of the vote in every locality, and
then mapping out the districts so that there shall be a majority
of Republicans in every district, or if that is not possible, at least
the bulk of opposing parties can be put by itself in a few districts
and the Republican force spread out over many districts, with
a majority in each.
If there are 200,000 Republican voters in the State, 180,000 Demo-
crats and 200 districts, it is clear that the Republicans can carry
every district if they can arrange the districts so that there shall
be about 1000 Republicans and 900 Democrats in each locality. If
this is not possible, the next best move, in the politician's sense,
is to mark off the localities that are almost wholly Democratic.
A district with 1800 Democrats and only 100 Republicans uses up
a lot of Democratic ammunition in order to hit the mark once.
If there are 30 such districts the Democrats have to waste 54,000
votes in antagonizing and overcoming 3000 Republican votes, leav-
ing the Democrats only 126,000 votes against 197,000 Republicans
in the other 170 districts, so that the Republicans have an average
of 1160 against 750 in the rest of the State, and can arrange the
battle quite easily.
Gerrymandering politicians do not confine themselves to divi-
sions which keep the total vote of each district at its true level.
They often call a large body of the opposition a district, and a
smail body of their own party also a district. A Democratic town
of 11,000 people may be marked off as one district and allowed
to elect one representative, while a Republican region of 42,000
people will also be constituted a district, and allowed to elect one
representative.* By such methods one Democratic vote may be
made to count as much as four or five or more Republican votes,
and vice versa. In Iowa, with a little over half the votes, we have
seen the Republicans elect all but 1 of 11 Congressmen. In
as now organized and administered, that a large part of the people are
permanently disfranchised. There are about 10,000 Democratic voters in my
district, and they have been voting there for the last 40 years without any
more hope of having a representative on this floor, than of having one in the
Commons of Great Britain."
Equal suffrage is a clear deduction from the principle of proportional rep-
resentation every class in the community of full age, good character, sound
discretion and civic interest, should be represented in proportion to its size.
Twenty-six states have recognized this in part by giving women the school
suffrage, and four states by according them equal suffrage on the same terms
as men. The development of this subject, however, lies outside the lines
laid down for this book.
* The figures given in the text are not imaginary, but are taken from
the actual facts of the New Jersey Gerrymander of 1891-2, already referred
to in chapter I. Judge Gaskill, of Mount Holly, who was President of the
State Republican League, had large colored maps made of the Gerrymander
and posted them all over the State. The tortuous lines of the district divi-
sions, running regardless of justice or geometry, even leaping into the
middle of another district to take out a dangerous town, and the enormous
difference between the little Democratic districts and the large areas
marked off for Republican districts startled the citizens of New Jersey when
brought clearly before their eyes in maps 3 by 4 feet in size, carefully
drawn and printed in brilliant colors. It -was one of the best plans ever
adopted for the rapid education of the voters, and it was one of the
chief causes of overturning the Democratic ring, and making New Jersey
a Republican State, and better, a reasonably well-governed State.
478 THE CITY FOR THE PEOPLE.
Maine, not many years ago, with 53 per cent, of the voters, they
elected every Congressman. In Kentucky, the case was reversed,
and the Democrats, with 56 per cent, of the votes, elected all but
1 out of 10 Congressmen a Democrat in Kentucky weighed as
much as 7 Republicans. In Iowa a Democrat weighed only one-
ninth as much as a Republican, and in Maine a Democrat weighed
nothing at all. It may help the eye if we vary the form of pre-
sentation by tabulating some of the facts.
MASSACHUSETTS, 1894.
Vote. Repres. in Leg. Repres. In Cong.
Sen. House. Sen. House.
Republicans 189,000 36 195 2 13
Democrats 124,000 4 46
One Democratic State Senator to 31,000 Democratic votes, and
one Republican State Senator to 5200 Republican votes. A Re-
publican counts for six Democrats in the State Senate, and in the
National Government the Democrats don't count at all. On the
whole, a Republican in Massachusetts has more than ten times
as much representation and influence in legislation as a Democrat.
A proportional division would give the Democrats 15 State Sena-
tors, 96 State Representatives, 1 United States Senator and 5 mem-
bers of the House.
NEW YORK, 1895.
Vote. Repres. in Leg. Repres. in Cong.
Sen. House. Sen. House.
Republicans 600,000 35 103 28
Democrats 510,000 14 47 2 6
Prohibitionists 25,000 )
Labor Party 21,000 I 1000
People's Party 7,000 J
PENNSYLVANIA, 1895.
Vote. Repres. in Leg. Repres. in Cong.
Sen. House. Sen. House.
Republicans 456,000 43 174 2 27
Democrats 282,000 6 29 1
The Democrats, with more than a third of the voters, have only
one-twelfth of the total representation (one-seventh in the State
Senate, one-sixth in the State House, none in the United States
Senate, one twenty-eighth in the United States House, equals one-
twelfth of the entire representation, counting each of the four
legislative bodies as an equal unit in the government).
PENNSYLVANIA, 1896.
Representation in
Vote for Pres. State Sen. House. Congress.
Republicans 728,300 44 171 27
Democrats 433,228 6 33 3
Prohibitionists 19,274
Others 13,553
Total 1,194,355
1 seat in Congress to each 39,811 votes of the total ballot.
Republicans got 1 seat in Congress to each 27,000 of their vote.
Democrats got 1 144,000
PROPORTIONAL REPRESENTATION. 479
A fair division of seats in Congress would have given the Re-
publicans 18, instead of 27; the Democrats 11, instead of 3, and the
Prohibitionists 1, instead of none.
NEW YORK, 1896-7.
Representation in
Vote for Pres. State Sen. House. Congress.
Republicans 819,838 35 114 29
Democrats 551,369 14 35 5
Scattering- 50,000
1 N. Y. Republican in Congress to each 27,000 Rep. votes in the State.
1 N. Y. Democrat 100,000 Dem. votes
With over one-third of the votes the Democrats have one-sixth
of the representation or 54 of the 232 seats in Legislature and Con-
gress. With 60 per cent of the votes the Republicans have nearly
80 per cent of the members; in the Legislature, 1 Republican mem-
ber to 5,400 votes and 1 Democratic member to 11,000 votes; in
Congress, 1 New York Republican to 27,000 votes and 1 Democrat
to 110,000 votes.
GEORGIA, 1896-7.
Representation in
Vote for Pres. Vote for Gov. Leg. Congress.
Republicans 60,091 4
Democrats 94,232 121,049 179 11
Populists 96,888 36
With less than 60 per cent of the votes the Democrats had over
80 per cent of the legislators and 100 per cent of the Congressmen.
GEORGIA, 1898-9.
Representation in
State Vote. State Sen. House. Congress.
Populists 51,580 050
Democrats 118,557 43 170 11
In the State Senate the Democrats have 1 representative to each
3,000 Democratic voters, while the Populists have 51,580 votes and
no representatives. As the total vote shows about 4,000 votes to
each seat in the Senate, a fair apportionment would give the
Populists 13 Senators and the Democrats 30. In the House the
Democrats have 1 representative to 700 votes and the Populists
1 to 10,300 votes. In Congress the Georgia Democrats have 1 mem-
ber to each 11,000 votes, while the Populists have no representa-
tives to 51,580 votes.
IOWA, 1898-9. r "
Representation in
State Vote. State Sen. House. Congress.
Republicans 236,524 38 62 11
Fusionists 173,000 12 38
1 la. Republican in Congress to each 22,400 Rep. votes in the State.
la. Fusionist 173,000 Fusion votes
Here the case is reversed: the Republicans have 1 representative
in the National Senate and House to each 22,400 votes, while the
Democrats and Populists have 173,000 and no representation in
Congress.
KANSAS, 1898-9.
Representation in
State Vote. ' State Sen. House. Congress.
Republicans 149,853 12 90
Fusionists 133,983 28 32 1
1 Kansas Republican in Congress to each 21. 000 Rep. votes in the State.
1 Kansas Fusionist 133,983 Fusion votes
480 THE CITY FOE THE PEOPLE.
The State Senate was a holdover from a preceding election, but
the House shows 1 Republican to about 1,600 votes and 1 Fusionist
to about 4,000. And in Congress the Kansas Republicans have 1
representative to 21,000, while the Democrats and Populists have
1 to 133,983 votes.
VIRGINIA, 1897-8.
Representation in
State Vote. State Sen. House. Congress.
Democrats 109,655 35 95 10
Republicans 56,840 440
1 Va. Democrat in Congress to each 10,960 Dem. votes in the State.
Va. Republican to 56,840 Rep. votes
The Republicans with over one-third of the votes have less than
one-sixteenth of the State representation and no representation, in
Congress; 34 per cent of the total vote and a trifle over 5 per cent
of the seats.
WISCONSIN, 1898-9.
Representation In
State Vote. State Sen. House. Congress.
Republicans 173,137 31 81 10
Democrats 135,353 2 19
1 Wis. Republican In Congress to each 17,314 Rep. votes in the State.
Wis. Democrat to 135,353 Dem. votes
The Democrats have over 40 per cent of the votes but less than
20 per cent of the representation.
OHIO, 1898-9.
Representation in
State Vote. State Sen. House. Congress.
Democrats 347,074 18 47 6
Republicans 408,213 17 62 15
The Republicans have 1 man in Congress to each 27,000 votes, and
the Democrats 1 to 57,000. A fair division would give the Demo-
crats 10 and the Republicans 11.
MICHIGAN, 1898-9.
Representation in
State Vote. State Sen. House. Congress.
Republicans 210,721 26 81 12
Democrats 139,307 000
S. M. D 30,729 6 19
Scattering 14,000
1 Mich. Republican in Congress to each 18,000 Rep votes in the State.
Mich. Democrat to 139,300Dem. votes
The Republicans with 54 per cent of the votes have all the Con-
gressmen; 1 national representative to each 18,000 votes, and 184,-
000 Democratic and other votes with no representative in the
National House or Senate. With proportional representation the
Republicans of Michigan would have but 7 places in Congress,
instead of 12.
PENNSYLVANIA, 18&8-9.
Representation In
State Vote. State Sen. House. Congress.
Democrats 358,300 13 71 10
Republicans 476,206 37 127 20
Pro. & Pop. Fusionists 127,804 060
1 Pa. Republican in Congress to each 23,800 Rep. votes In the State.
1 Pa. Democrat 35,800 Dem. votes
Pa. Fusionist 127,800 Fusion votes
PROPORTIONAL REPRESENTATION. 481
With, less than half the votes the Republicans have two-thirds
of the representation, while the Fusionists with 13 per cent of the
votes have only about 2 per cent of the representation; 1 Penn-
sylvania Republican in Congress to each 23,300 votes, 1 Democrat
to 35,800 votes, and no Fusionist to 127,800 votes.
MASSACHUSETTS, 1898-9.
Representation In
State Vote. State Sen. House. Congress.
Kepublicans 191,146 33 165 10
Democrats 107,760 7 65 3
1 Mass. Republican in Congress to each 19,114Rep. votes in the State.
1 Mass. Democrat 36,000 Dem. votes
1 Mass. Republican in the State Sen. to each 5.800 Rep. votes in the State.
1 Mass. Democrat 15,400Dem. votes
With over one-third of the votes the Democrats have about one-
sixth of the representation in the State Senate and one-fourth of
the Congressional representation; 1 Republican in the State Senate
to 5,800 votes and 1 Democrat to 15,400 votes.
The trouble exists in respect to City Councils and Boards ot
Alderman as well as Legislatures and Congresses. In 1892, with
59 per cent of the votes, Tammany elected every one of the 30
Aldermen. Even with a minority of the votes it has been able
to elect 21. In 1897, with 48 per cent of the votes, Tammany
elected 86 per cent of the Borough Council of Manhattan and
Bronx (New York proper). Councllmen
One should have
Vote for Councilmeu Council- been
Mavor. Elected. man to apportioned.
Tammany 143,666 31 4,630 votes 17
Citizens Union 77,210 4 19,300 " 9
Republicans 55,834 1 55,834 " 7
Jeffersonian Dems 13,076 2
Socialists 9,796 1
Scattering 1,357
Total vote 300,939
or 8,360 votes to each seat in Council.
Here the Republicans elected only 1 Councilman with 55,834 votes,
while Tammany elected 1 Councilman for every 4,630 Tammany
votes.
Wherever the student may be. if he will compare the composi-
tion of the vote at any election with the membership of Legislature
or Council resulting from that vote, he will discover a condition
of things similar to that above described. The composition of the
Legislature is not like the composition of the vote. The Legisla-
ture does not represent the people, it misrepresents them it over-
represents some classes and under-represents others. The weaker
parties are crowded out. Xew ideas have little chance. The doors
of debate are closed against them. Progress is retarded. Injustice
is done. Government of the people, by the people and for the peo-
ple is transformed into government of the people by a class and
for a class.
Several reforms are neceSsary to overcome the injustice and
perversion of governmental functions that have followed the
31
482 THE CITY FOR THE PEOPLE.
change from direct government by the assembled people to rep-
sentative government so called. One of these reforms is Propor-
tional Eepresentation, as already explained, and is the only method
by which a legislative body can be made to represent truly the
people who elect it. 1 Under this system, if there is one representa-
tive to each 2000 voters in the State, 2000 voters can unite on a
man to represent their views, and can elect him. There can be no
portioning off into districts, with a majority of opposing votes in
every district to leave our 2000 voters in a hopeless minority in
each locality, as is continually the case in every State and city to-
day. Under Proportional Representation, the Republicans can have
one representative for every 2000 votes they possess, and the Demo-
crats, Populists, Prohibitionists, Social Democrats every class and
shade of interest and opinion may also have just as many repre-
sentatives as it has multiples of 2000 votes. Every class will enter
into the Legislature in substantially the same proportion that it
enters into society. The Legislature will become a miniature of
the State a political photograph true to the life, instead of a
grievous caricature, as it is at present.
The justice of the proportional plan appeals very strongly to
every honest man as soon as he knows the facts. States and cities
are so big and complex that we do not stop to cipher out their
operations very carefully, and this negligence of the people gives
1 For a detailed discussion of the methods by which the principle of pro-
portional representation may be put in practice, see the book on Proportional
Representation, by Professor John R. Commons, President of the National
League for Securing Proportional Representation. See also Direct Legisla-
tion Record, Vol. VI., p. 47. where a detailed account is given of the actual
use of proportional representation in electing the Committee on Resolutions
at the Buffalo Conference. A brief description of an actual case (except as
to the names by which the candidates were called) may make the method
clear to those unacquainted with the system. Suppose a city council of 12
members is to be elected. Each voter writes on his ballot the names of 12
candidates in the order of his preference, or he places numbers from 1 to 12
In the order of preference, in front of the names he chooses on a printed list
of candidates. Suppose 1800 votes are cast. Dividing 1800 by 12 the number
to be elected we find that 150 votes will elect a councilman. The ballots
are sorted into piles according to the first choice names and the piles ar-
ranged in order according to the number of votes in each pile. Treatem and
Pullem and Buyem have 210, 195 and 167 votes respectively, and Popular
Confidence has 300, so 60. 45, 17 and 150 votes are taken from their piles to
be distributed to the other piles, each ballot being given to the first candi-
date in the order of preference named on it who is in need of a vote. Then
we go to the foot of the twenty piles (or whatever the number of candidates
voted for may be) and find 3 candidates with only 1 first choice vote each;
these are declared out of the count and their ballots distributed as above.
Next we find, at the bottom of the line, 2 candidates with 3 votes each, and
these are declared out and their ballots distributed. Then the lowest can-
didate is found to have 15 votes and these are distributed. So we continue
going up the list, redistributing at every step the ballots In the smallest pile
until only 12 piles remain, when the candidates to whom those piles belong
are declared elected.
Another plan, where there are distinctly marked parties witt party
tickets in the field, is to distribute the representation among the parties in
proportion to the vote of each. If there are 20 councilmen to be elected and
the Republicans cast one-half the votes they would have 10 seats in council
to be filled by the 10 Republican candidates polling the highest votes. If
the total vote were 50,000. the unit of representation, or number of votes
entitled to one representative, would be 50,000 divided by 20 (the number of
sents). or 2.500, and each party would have as many representatives as it has
"units." If there are remainders, the odd seats go to the largest remainders
(in the order of their size) till all the seats are distributed.
In Its ethics and Its political effects the plan of expressing first and sec-
ond choice, etc., and giving the seats to 'the individual candidates having
the requisite "unit" number of votes is far preferable to the division of
representation on party lines.
PREFERENTIAL VOTING. 483
the rascals their chance. If 50 men had some business they could
not attend to in person, and 20 were interested to have it managed
one way, and 30 wanted it another, and they agreed to choose 5
men to manage the business for them, every one would see at once
that the 30 owners should elect 3 of the managers and the 20 own-
ers the other two. But in politics the 30 would be apt to capture
the entire 5. If that were done in the simple case w r e just put,
the 20 owners, defrauded of their rights, would vigorously rebel
they would see that it was just the same as if every member of a
board of arbitration was chosen by one party to the controversy;
but in politics the thing is so big and misty, for lack of careful
thought on our part, that we allow our rights to be trampled upon
with impunity, and in Republican States, hundreds of thousands
of Democrats and Populists pay taxes without representation, and
vice versa in Democratic States, and never dream that they are sub-
mitting quietly to far greater injustice than that which caused
their fathers to break into open rebellion in 1776. No rebellion is
needed now, but only a little discussion, a little organization and
a few thoughtful votes.'
a Illinois has provided for the local submission to the people of the ques-
tion of minority representation in the city council or legislative body of
the city. (111. Rev. Stats., 1898.) A number of Swiss cantons have pro-
portional representation in full operation (see p. 351) and Belgium has just
adopted the system.
CHAPTER VI.
PREFERENTIAL VOTING
OR
EXECUTIVE ELECTIONS BY MAJORITIES IN PLACE OF PLURALITIES.
While we seek thru proportional representation to make
oiir legislative bodies represent the whole people so far as
possible, we should adopt the majority ballot or preferential
vote (election of the condidate preferred to all others by the
majority of citizens voting) for the filling of sole offices, so
that our executive and administrative officers may also repre-
sent the whole people so far as possible. Under our present
system of district and plurality voting, executive officers may
be, and frequently are, elected by a minority of those voting
at the election, and legislative bodies may represent a minority
or a small majority, whereas executive officers should repre*-
sent a majority, and legislative bodies should represent sub-
stantially the whole people. The latter may be accomplished
by proportional representation so far as the election of per-
sons can accomplish it, and the former object may be attained
by effective or preferential voting. A few words will make
the matter clear.
When three or more candidates stand for the mayoralty or
other sole office, a plurality elects; whereby it frequently happens
that the successful candidate is chosen by a minority of the citizens
voting. Mayor Van Wyck elected in New York in 1897 had only
a minority of the votes cast. Theodore Roosevelt was elected Gov-
ernor of New York (1898) by a minority of the votes cast. 1 And
the same was true of Governor Stone elected in Pennsylvania the
same year. Here is the list of the Presidents of the United States
who were elected by minorities:
1 Good men may be elected by plurality vote. The very same men who
would be elected by majority vote, very likely, If the preferences of the
people were fully expressed. In another class of cases the majority choice
might be inferior to the plurality choice. But in a larger class of cases the
majority choice would probably be superior. The man chosen by the majority
would, on the average, be more likely to have the interests of the whole
people at heart and be a fair representative of the whole community, than
the man chosen by a minority. Whatever the result in any particular case,
If we are to have government by the people we must register the choice of
the majority.
484
PREFERENTIAL VOTING. 485
Polk, 1844. Hayes, 1876.
Taylor, 1848. Garfield, 1880.
Buchanan, 1856. Cleveland, 1884 and 1892.
Lincoln, 1860. Harrison, 1888,
Lincoln had less than 40% of the popular vote in 1860. The de-
tails of two or three cases will show how the plurality rule works
toward such results.
Vote for President, 1892.
Rep. Dem. Pop. Pro. Plurality.
Wisconsin 170,790 177,335 9,909 13,132 6,544 I>
Ohio 405,187 404,115 14,850 26,012 1,072 R
Nebraska 87,213 24,943 83,134 4,902 4,079 R
Here were 23,000 Populist and Prohibition voters in Wisconsin,
40.000 in Ohio, and 88,000 in Nebraska, who were substantially dis-
franchised since they had no voice in deciding the vital isssue
between the Republican and Democratic candidates. In order to
express their deepest convictions they had to throw away their
votes. There is not the least necessity for this injustice, nor the
smallest justification for minority rule thru executives chosen by
pluralities below the majority line.
I have no complete list of Gubernatorial elections, but upon the
partial lists at hand I find the following cases of
Election of Governor by a Minority of the Votes Cast.
Illinois, 1888. Nevada, 1898.
Iowa, 1891. New York, 1898.
Kansas, 1882, 1890. North Carolina, 1896.
Massachusetts, 1892. Ohio, '85, '87, '89, '91.
Michigan, '78, '82, '84, '90. Pennsylvania, 1898.
Minnesota, '86, '90, '92. Rhode Island, '90, '91, '93.
Nebraska, 1894. Tennessee, '92, '94.
In Kansas, 1890, the Governor-elect had less than 40 per cent of
the votes cast. In Nebraska, 1898, the vote stood:
Rep. Dem. Pop. Silver. Plurality.
3,548 2,060 813 3,570 22 S
The Silver candidate, with only about 37 per cent of the votes
cast was elected Governor on a plurality of 22, but 1,425 short of
half the votes cast. One or two thousand majority might really
have preferred one of the other candidates to the Silver man if
the choice had been narrowed to two men, so that each voter could
express himself on the real issue, or if the candidates had been
grouped in couplets and every voter had stated his choice in each
couplet. This in effect is what Preferential Voting accomplishes,
not by actually dividing the candidates into couplets so as to pair
each candidate with every other, but by asking each voter to
designate his second choice as well as his first choice, thus ascer-
taining the preferences of the citizens and giving the election to
the candidate who is preferred to the other candidate by the majority
of the voters.
Suppose Richard Croker, Theodore Roosevelt, and Henry George
are running for Mayor of New York, and the vote stands, Croker,
120,000; Roosevelt, 100,000, and George, 80,000; by the plurality rule
486 THE CITY FOK /HE PEOPLE.
Croker would be elected, and yet very likely all or nearly all the
George men would prefer Eoosevelt to Croker, and all or nearly
all the Roosevelt men would prefer George to Croker, the real
majority sentiment of the community being against Croker, even
to putting him third on the list instead of first, and his election
being due simply to the division of his opponents and the plurality
rule which practically disfranchises a large part of the citizens
by preventing any expression of their wishes as to part of the
issues at stake. The 80,000 George men were allowed to express
themselves on the issue George v. Eoosevelt, and on the issue,
George v. Croker, but on the issue Croker v. Roosevelt they had
no opportunity to state their decision, they had no voice in deter-
mining the election as between Roosevelt and Croker. The 120,000
Croker men had nothing to say on the issue George V. Roosevelt.
And the 100,000 Roosevelt men were disfranchised so far as the
choice between Croker and George is concerned. They were al
lowed to express themselves on the issue Roosevelt v. George and
on the issue Roosevelt V. Croker, but not on the issue George v.
Croker.
There are three ways of overcoming the difficulty. (1). A second
election may be held in which only the two candidates standing
highest in the first election are voted for again. (2). Second, third,
etc., elections may be held without restriction as to candidates
until some one receives a majority of the votes cast. (3). Each
voter in the first election may express his first choice and his
second choice, and the candidate who is preferred above all others
by the majority of voters will be elected. The first method is often
used in meetings where the voters are assembled and can wait
the result of the first ballot. It would be too expensive in a city
or state election, and is very imperfect anyway, since the third
or fourth candidate on the list of the first choice votes, may be
preferred by the majority to any of the candidates preceding him
on the list. The second method is used in nominating conventions,
but could not be used in state or municipal elections because of
the time and expense it involves. The third method, however,
solves the problem for general elections. It is very simple when
once understood, and is inexpensive and effective.
Suppose it were applied in the Croker, George, Roosevelt case
above suggested, with the following vote:
Preferential Vote for Mayor of New York.
A number of
voters equal to 65,000 55,000 | 95,000 5,000 | 80,000
write or mark
as their
1st choice Croker, Croker | Roosevelt, Roosevelt | George,
2d choice. .Roosevelt, George j George, Croker | Roosevelt
The ballots which name Roosevelt before or to the exclusion of
Croker (100,000 Roosevelt firsts and 80,000 George firsts with Roose-
velt second) are counted as so many preferences for Roosevelt above
Croker. And the ballots which name Roosevelt before or to the
THE ELECTRIC BALLOT. 487
exclusion of George (100,000 Roosevelt firsts and 65,000 Croker firsts
with Roosevelt second) are preferences for Roosevelt above George.
Taking each couplet or possible combination of two candidates
and working out the majority preferences 1 we have:
175,000 voters prefer George to Croker.
180,000 voters prefer Roosevelt to Croker.
165,000 voters prefer Roosevelt to George.
Roosevelt is preferred to either of the other candidates, and is
elected by 30,000 majority over George, and 60,000 majority over
Croker, instead of Croker's - being elected by 20,000 plurality, as
would be the case under present methods. If there were four can-
didates instead of three, each voter should state his third choice as
well as his first choice and second choice. I have found the system
very simple in practice and its justice appeals to every fair mind.
Those who believe in proportional representation should push for
preferential voting also, for it is based on the same principle, 2 and
accomplishes the same purpose in reference to the election of sher-
iffs, mayors, governors and other executive or administration offi-
cers, that is accomplished by proportional representation in re-
spect to the election of legislative officers, or members-at-large of
boards and commissions, i. e., it makes the election of officers con-
form to the principle of representing the whole people so far as
possible.
1 In summing up the preferences only the results that represent majority
preferences are put in the list from which the final result is deduced. For
example, 120.000 ballots put Croker first, and 5,000 ballots put Roosevelt
first and Croker second, so that 125,000 voters prefer Croker to George, but
as this is less than a majority we do not put it in the list of effective prefer-
ences. The total vote being 300,000, and only 125,000 preferring Croker to
George, we should find the remainder, 175,000, preferring George to Croker,
which is the case, 80,000 placing George first, and 95,000 Roosevelt first and
George second. This being a majority preference we place it in our list.
2 It is the correlative also of direct legislation in respect to one of the
most important uses of the referendum. Direct legislation enables the voter
to express himself clearly on each measure issue, and the preferential ballot
enables him to express himself distinctly on each candidate issue.
CHAPTER VH.
THE AUTOMATIC BALLOT,
OB
VOTING AND COUNTING BY MACHINERY.
The hopes of America cluster about the ballot box. All
the great movements discussed in preceding chapters are based
on the ballot. To secure the best means of recording the
popular will is a matter of the utmost moment, and in this
connection the recent invention of voting machines, in which
the vote is automatically recorded beyond the reach or knowl-
edge of tampering officials or unscrupulous politicians, offers
an improvement worthy the careful attention of all honest
and progressive citizens, particularly municipal officers en-
trusted with the execution of the ballot laws, state legislators
who make those laws, and others specially related to the con-
duct of elections.
A secret ballot is very essential to honest and independent voting.
It prevents the briber from knowing -whether or no the purchased
voter does as he was bidden. The employer cannot tell how his
workmen vote, and so their positions are safe. It was thought
that the Australian ballot would meet this want, and to a consid-
erable extent it does. It is, however, by no means fraud-proof.
Scheming men have found a way to make it their ally, instead of
their foe. They obtain a blank ballot from a corruptible officer, or
one of the ring, when he goes in to vote, puts the ballot in his
pocket, and votes something else. Then they mark the ballot, and
give it to No. 1 purchased voter; he conceals it, goes into the
booth, puts the blank that is given him into his pocket, votes the
marked ballot, and returns with the blank, as the condition of
getting his vote money; this blank is marked for the next pur-
chased vote, and so on all day.
There is a method, however, which overcomes this and several
other defects of the present system I mean the ballot by elec-
tricity, or by automatic voting machines, which have been tried in
a number of places with splendid success. The voter goes alone
into a closed booth; the names of the candidates are on the wall,
the ticket of each party being on a special color, so that a voter
can tell the candidates, even if he cannot read their names. After
the name of each candidate is a button, which, if pushed, records
one vote for that candidate, and locks itself, and all the buttons
4S8
THE ELECTRIC BALLOT.
of other candidates for the same office. When the voter comes out
of the exit door, the entrance door and all the buttons are released,
and the booth is ready for the next voter. The votes are counted
by electric machinery, and as soon as the polls are closed the un-
biased electric count, protected from tampering hands by netted
wire, is disclosed to the public.
This system puts an absolute stop to ballot stuffing and tfox steal-
ing and false counting. It checkmates bribery by its perfect se-
crecy no marked ballot, no going into the booth with a voter,
no telling whether the voter did as he agreed to or not he may
have taken the money and voted his own opinion after all a very
discouraging outlook for tne buyer. The electric ballot is cheap
after the first cost, securing a marked economy over our present
methods by lessening the number of voting booths and election
judges, saving in printing, etc. It is rapid and accurate, and can
be adapted to preferential voting, proportional representation and
the referendum. It does not prevent repeating, however, nor the
nomination of bad men, nor will it pull the apathetic citizens of
the wealth}- districts to their duty at the polls. Increased weight of
public business, thorough civic education, lively good-government
clubs and nominations by direct referendum vote of the people are
the medicines needed to cure those diseases. The ballot machine
will not do everything, but it has nevertheless a most useful part
to perform in the purification and simplification of elections.
Several states have alreadj- authorized the use of automatic
ballot machines.
Massachusetts, Chap. 465, Laws of 1893; Chap. 498, 1896.
New York, c. 764, 1894; c. 73, 1895; c. 168 and c. 340, 1898; c. 466. 1899.
Connecticut, c. 263 and c. 335, 1895. (See also p. 712, Laws of 1895.)
Michigan, c. 97, Compiled Laws 1897.
Indiana, c. 155, 1899. (See also Chap. 151, 1895.)
Minnesota, c. 315. 1899.
Nebraska, c. 28, 1899. (Action by authorities or on 10 per cent, initiative.)
Ohio, p. 277, 1899. (Referendum adoption of machines necessary.)
The Massachusetts laws authorize the use of the "McTammany"
voting machine. 1 Connecticut has authorized "Myers" and "McTam-
many." The other states named permit the use of any reliable
voting machine. The most important test yet made of voting by
machinery, so far as I know, wa<* the one which occurred at Roch-
ester, X. Y., Nov. 8, 1898. The experiment was a great success,
and established beyond doubt the perfect practicability, and im-
mense utility of the automatic balllot. 2
1 The Massachusetts law of 1896 provided for the purchase by the State
of McTammany machines to be supplied to cities and towns by the Secretary
of the Commonwealth, on request of the board of aldermen or selectmen.
From the Secretary's office I learn that the McTammany machines were
tried in Worcester, but did not prove satisfactory.
The first law in Massachusetts only authorized the use of the automatic
ballot for the election of town officers. The later law included all officers.
And the Connecticut law includes all public officers and all propositions to be
voted upon. This is much the better form as it makes the law broad enuf
to cover the use of the automatic ballot for referendum voting.
2 At the elections in Rochester, 73 "Standard" voting machines were used.
The "Standard" operates even more simply and conveniently than the
machine described in the text. Levers or handles are used instead of electric
buttons and the votes are not recorded or fixed until the voter's exit, so that
changes may be made and mistakes rectified up to the moment of leaving the
booth. The citizen who wishes to vote "straight" can vote his whole ticket
490 THE CITY FOR THE PEOPLE.
by moving a single lever. Or he may vote for individuals here or there on
two or more of the tickets by moving the handles opposite the names of the
candidates he selects. Arrangements are also made for voting for persons
not named on any of the tickets, a column of openings being provided each
covered by a steel slide, which, when pushed back, locks the corresponding
office line, and permits the voter to write the name of any person he chooses
on a roll of paper.
The New York State Commission on Voting Machines (consisting of P. F.
Dodge, President of the Mergenthaler Linotype Co., Robert H. Thurston,
Professor of Mechanical Engineering, Cornell University, and H. B. Parsons,
Mechanical Engineer, New York) reported January 10, 1898, that the Stand-
ard Machine was accurate and effective, safe, strong, reliable and rapid.
One machine will register, under reasonable cooditions, the votes of 600
voters within election hours.
Neither the writer nor the publisher have the slightest pecuniary interest
in the Standard. We speak of it so fully simply because it was the machine
used at Rochester in the most important test of voting machines yet made,
so far as we know. In reference to the use of these machines in Rochester,
Hon. Geo. E. Warner, Mayor of the city, writes:
Mayor's Office, Rocliester, N. Y., Nov. 15, 1898.
In the light of the experience had in the recent election in R9Chester,
and from the unqualified approval of all the city and election officials, and
the general satisfaction expressed by men of all parties, from the leaders to
the humblest voter, I cannot see that anything is wanting to constitute a
perfect voting machine.
It stood the test without a hitch of any character. It would seem the
long-sought perfection in a voting system has at last been found, and I
doubt not its adoption will become general in the very near future.
Its opponents in the city all seem to be converted, and the verdict is
unanimous.
The following items from Rochester papers immediately after the elec-
tion throw additional light on the subject:
Rochester Democrat and Chronicle. Voting by machinery is unquestionably
a vast Improvement upon any of the methods heretofore employed, aside
from the celerity and accuracy with which the results are made known, the
ease with which the vote is registered must commend itself to every citizen.
Rochester will get out of the election much cheaper than the other cities
of the State by reason of the use of the ballot machines. They will save the
city about $5,000 annually.
Rochester Post Express. The Standard Voting Machine was used in the
city yesterday and the result was a triumph for the new method. Returns
were received so promptly that The Post Express extra issued before 7
o'clock gave the full vote of the city. The total vote in the city was known
at 6 o'clock, the polls having closed but one hour before.
Union and Advertiser. The Standard ballot machines worked perfectly.
In no other city in the country was the result known as early as in
Rochester.
Rochester Herald. Messengers on bicycles carried the returns to head-
quarters. The first came at 5:06, just 6 minutes after the polls closed, and
the last came at 5:37. The exact figures of the city vote were announced 3
hours earlier than usual. * *
The Rochester record of complete returns for 73 districts in 37 minutes
is indeed a revelation. (If we had municipal telephones the result would be
known in 10 or 15 minutes in a city like Rochester. F. P.) There were no
errors in- the election, no breaks in the machines, no delays in the voting,
and no voters disfranchised.
In respect to the last point, it may be noted that according to the returns
given by the New York Secretary of State, 122,080 defective ballots were
thrown out of the election of 1897.
With the voting machines there is no such thing as a defective ballot;
no throwing out of votes; no miscount, no fraudulent returns. The auto-
matic count is there in full view of the public as soon as the voting is done.
No tell-tale marks or heavy print reveals the attitude of the voter. No
ballot box officials can tell how the citizen votes. The machine affords each
voter an opportunity to vote in absolute secrecy; to vote rapidly, and in the
most convenient way possible; to vote a straight party ticket, by operating
one knob which moves all the indicators on that ticket; to vote as he may
choose from candidates from any party, or for persons not named on any
ticket; and to examine the ticket he has voted and make any changes he
desires, until he is satisfied with his choice, before registering it and leaving
the booth. The register of the total vote is in full view thruout the election
so there can be no stuffiing the ballot by ringing up votes before the polls
are opened.
Buffalo has bought 108 Standard voting machines and will use them in
November, 1899. Wm. E. Corcoran, Deputy City Clerk of Buffalo, writes
that "For several years the City of Buffalo has been discussing the advisa-
bility of conducting its elections by the use of machines, but it was not until
this year that the project took definite shape. After a most thorough and
comprehensive examination into the merits of the different voting machines.
the saving that could be accomplished by their introduction, and the accuracy
with which the returns could be filed, it was finally decided to purchase 108
of the Standard voting machines. By buying these machines the number
THE EXPERIENCE OF ENGLAND. 491
of voting precincts in the City were cut down from 155 to 108, resulting in a
saving of four inspectors of election, two poll clerks and two ballot clerks
in each of the 47 election districts, and the saving of two ballot clerks in the
remaining 108 districts. This, with the saving on the printing of ballots
and other incidental expenses, will result in a saving to the City of Buffalo
of about $20,000. The machines cost $55,000, and, thru an arrangement
with the manufacturers, they are paid for out of the saving made, one-fourth
to be paid each year; the first payment to be made in cash, interest bearing
warrants being issued for the balance of the payments; these to be taken up
each year from the appropriation made for election expenses. Thus, within
about three years the City will own all of the machines and, at the same
time, the expenses of elections will be materially reduced. After the
machines are paid for there will be an annual saving of over $20,000 in the
expenses of conducting elections.
"One of the machines has been on exhibition in the office of the City
Clerk for several weeks, and in that time over 3.000 people all strangers to
the machine have operated it and studied it. some of them giving it very
severe usage, but up to the present time the machine has not failed to
operate properly. Every one who has examined the machine is enthusiastic
over it, because of its simplicity, the freedom of the voter from losing his
vote or spoiling his ballot, and the rapidity with which the returns can be
filed after the close of the election."
A note from the Typographical Journal has just come to hand (Nov.
1899) to the effect that the voting for officers this year in Typographical
Union, No. 1., was conducted on a Turner voting machine, which proved a
great success. The largest vote that was ever known to be polled in the
history of No. 1 was cast. The result was known five minutes after the
polls closed. The machine does its own counting; makes its own tally
sheets. It eliminates all possibility of fraud.
CHAPTER VIII.
THE BEST MEANS OF OVERCOMING POLITICAL
CORRUPTION.
THE EXPERIENCE OF ENGLAND.
In order to overcome, we must understand the nature of that
which is to be overcome. In the old story of Sampson, as soon as
the Philistines found out that the length of their enemy's hair
was the source of his strength, they easily overcame him; and
when afterward, in his blindness and captivity he succeeded in
getting his arms about the pillars that supported the temple of
iniquity, he brought it in ruins to the ground. We may imitate
his example in respect to the temple of fraud, only I hope the
people who pull it down will not be buried in the ruins.
Let us investigate the nature and causes of political corruption.
In the early days, when the people met together and made the
laws directly, and elected men well known to them all, to enforce
those laws, and kept the strict and continuous watch of their
officers that is possible in a little town, corruption was almost,
or quite unknown. But when the Commonwealth grew too large
for such methods, and representatives were sent to a distant city
to enact the laws, and most of the officers commissioned to admin-
ister the law were not personally known to their constituents-
many of them being appointed and not elected when large en-
terprises were to be undertaken by the public, heavy contracts to
be awarded, rich franchises to be bestowed, innumerable offices
to be filled then fraud began to grow. It would be hard to buy
up the whole people to vote against their own interests, but it
is easy to go to a few men away off in a legislative chamber out
of the reach of the people, and buy up some of them to vote, not
against their own interests, in a worldly sense, but merely against
the people's interests. So corrupt legislation crept in through
the gap that was made by removing legislation from the body of
the citizens to a few representatives comparatively safe from popu-
lar surveillance so long as the people do not possess the power of
reading the minds of their legislators, but have to be content with
reading their speeches.
The increasing size of the community makes it easier also to
corrupt the administration of the law. In a small town every
one knows what is being done, and a hue and cry is raised at
once if it bears a suspicious look. But, in a large city, or in a
State, the very distances and the enormous mass and intricacy of
the public business discourage and defeat the watching of it. The
-192
THE EXPERIENCE OF ENGLAND. 493
president of a great corporation can take the mayor or an alder-
man to dinner at some puff hotel they may have a good talk,
and five or ten thousand dollars may pass, and no one know it but
the two concerned. And with a few repetitions of such ceremonies
it may be possible that the board of aldermen will see 'that the
improvement of the city requires the giving of a new privilege to
the great corporation. A builder of roads may have a few similar
interviews in person, or through his fast friends, or paid agents,
and get a fine contract for paving the streets at double the worth
of the sort of work he puts in. Officers of law may make some
money in other ways than taking bribes for franchises, or going
shares in the unjust profits of public contracts. They may sell
the appointments they control to the highest bidder, or fill the
places with men who will turn over part of their revenue to the
appointer, or they may levy a tax on violators of the law for im-
munity from arrest and prosecution, or pursue the innocent with
false charges, and compel them to pay for a cessation of the an-
noyance.
It may happen that honest legislators are elected and honest
officers appointed. The bribers, contractors and blackmailers are
baffled, but only ior a moment. "If the people are going to put
such men as this in office, we must carry the elections ourselves,
that's all." In general, the wicked do not need a blockade in order
to turn their attention to the capture of the ballot box. The value
of the legislative and administrative power in facilitating their
business, giving them contracts, franchises, fat offices and oppor-
tunities of plunder, is too apparent to leave them long in doubt
as to the advisability of combining to carry the elections in their
own interests. So they cook up the nominations, capture the prim-
aries, bribe voters, hire repeaters, stuff ballot boxes and count by
an arithmetic of their own invention, of peculiar flexibility and
adaptation to the needs of the case in hand. So the "ring," or
gang of robbers succeeds in seating its own creatures on legislative
cushions and aldermanic chairs, and the government becomes a
private enterprise in which the rascals squeeze the public a sys-
tematic scheme to transfer as large an amount as possible of the
people's wealth to the coffers of the ring and its friends. If there
are not enough offices to accommodate the said friends, new offices
are easily made. If the salaries are not large enough, they are
easily made larger. It is astonishing how easy it is to do what
one wants to do when one has the absolute power of government
over a wealthy people, too ignorant, or apathetic to audit the plans
of their rulers.
Open your eyes and glance at a few of the pustules, carbuncles
and cancers that adorn the body politic. Go to Chicago and find
the board of aldermen giving away franchises worth five millions
a j'ear for personal considerations running from one or two hun-
dreds to $25,000 a vote. Go to Philadelphia and hear the statement
of a lormer political boss, that only three members of the Select
Council refused the $5,000 fee offered by the Reading road when it
494 THE CITY FOR THE PEOPLE.
was struggling to overcome the opposition of the Pennsylvania
road to its terminal on Market street, and remember his added
remark, that he was not one of the three. Go through the South
and look at the delicate system of stealing and stuffing ballot
boxes, counting by poetic license, shooting objectors and reform-
ers, etc. look, but don't make too many remarks, or you may
acquire wings prematurely. It is a crime to express your thoughts
in Georgia, Mississippi and Alabama, unless they agree with the
ideas of those in control, but it is a very virtuous action to whip
or shoot a black man if he votes the wrong ticket, and to send
in 140,000 Democratic votes from a district where there are not
over 30,000 voters, all told, is not only a highly meritorious and
public spirited act, but one that strongly partakes of the miracu-
lous powers of olden times, which some skeptical people have en-
deavored to make us believe exist no more. Come North again,
and go to Washington, and see how the Sugar Trust makes our
laws; read the long records of election frauds, purchased seats,
Credit Mobilier scandals, Star Route frauds, subsidy steals and
railroad robberies of well toward 200 millions of acres of public
land and many millions of money. Then visit Harrisburg, and
find that the Pennsylvania Eailroad Company knows just how to
press the button to make the Pennsylvania Legislature dance any
jig that suits the railroad fancy. It defies the constitution of the
State, but the legislature remains in a kneeling posture, and even
the Supreme Court is said by a prominent legal writer to be com-
pletely under its influence. Move on to Jersey City and investigate
its records. You will imagine, at first, that you have returned to
the bosom of the South. But you will note after a little that you
can speak without danger of cold lead. The science of voting, how-
ever, has been cultivated almost as successfully in Jersey City as
in any part of Dixie. A ward politician, in control of an assembly
district, doctored the returns and put his party in power. The
fashion spread, and the Abbett ring became the absolute masters
of city and State. An alliance was made with the infamous
gambling dens of Guttenburg and Gloucester, and as we have seen,
the State was gerrymandered in the hope of securing perpetual
power. Great masses of Republican voters were mapped in a single
district, so as to have but one representative, while small bodies of
Democratic voters were constituted separate districts, so as to
give a Democratic voter more than four times the weight of a Re-
publican; innumerable new bureaus and superfluous offices of all
sorts were created for the ringsters, public expenditure and tax-
ation rose alarmingly. In 1892, sixty-five enactments were passed
providing for new and needless offices that involved the appoint-
ment of 2624 persons, and swelled the salary list of the State over
a quarter of a million. The second year of Abbettism the expendi-
ture was $916,339 in excess of former figures over 60 per cent ad-
dition to the State expenses nearly a million a year transferred
from the people to the ring. Jersey City suffered the most. The
local government was all in the hands of the ballot stuffing ring,
THE EXPERIENCE OF EXGLAXD. 495
ind the robbery was enormous. Taxation intensified accordingly,
and property declined in value in proportion. Prices of real estate
fell more than 50 per cent, in two or three years. "The Bacot
House," I quote from the New York Tribune of April 7, 1892,
"which cost $23,000, brought only $8, )00. The Vredenberger House,
which cost $25,000, was sold for $8100, and the Davy Mansion,
which cost $40,000, was disposed of for $17,000. These are only
specimens; they are classed among the finest properties in the
city."
At first, ballot box stuffing was a fine art, and was carefully
done. Then it became a recognized profession, highly rewarded,
and after a time it became so common that no art was employed;
it was simply unskilled labor, and the roiigh hands boasted of
their work in public places. Then a reaction came. The Grand
Jury indicted some of them. It was proved that the voting lists
contained thousands of bogus names; that locksmiths had been
employed to pick the locks of ballot boxes; that numbers of small
ballots had been voted inside the larger ones; that other ballots
had been milled and stamped in a private machine, and voted in
handfuls. Some of the stuffers were sentenced many of the worst
ones were, by some powerful influence, saved from prosecution,
and even the sentenced men were carefully provided for by their
warm friends and allies in power. Every one of the rogues, and
the lawyers who defended them, received an appointment, and
some of the sentenced stuffers were continued as officers in control
of elections. But a change has come. The Coal Combine legisla-
tion of 1892 (undoubtedly bought through both Houses at heavy
cost), and the infamous laws of 1893, protecting certain forms of
gambling in the interests of the Gloucester race track syndicate,
and the posting of the Gerrymander maps all over the State, roused
the people, and they threw off the yoke of their oppressors.
Take a trip across the river to New York, and turn the pages of
a few of her massive investigations and judicial records of fraud
and corruption; learn from the treasurer's testimony how the
New York Central spent $200,000 a year to get legislation it wanted;
and examine Jay Gould's evidence that the Erie expended more
than a million in a single year to control legislation. Watch the
movements of the Oil Trust, as it buys judgeships, senatorships,
cabinet positions even, and bends the National Government, State
Legislatures and a score of railroads to act its will. Read the
fearful records of the Lexow Investigation, proving the police force
to have been corrupt from top to bottom an organized body of
brigands, systematically protecting criminals and breakers of the
law for the sake of robbing them of the profits of their unlawful
pursuits. To the government of New York a law seemed merely
an opportunity for personal aggrandisement thru the pressure it
put upon some corporation or class of citizens, who could be made
to yield blackmail and immunity money. True, the people have
risen against the ring. But will their virtuous indignation last"?
I hope so, but history is not encouraging. It was not so very long
496 THE CITY FOB THE PEOPLE.
ago that this same city of New York, after being systematically
robbed of tens of millions during a period of five or six years,
rose in rebellion and dethroned the Tweed Ring, and then went
home to let Tammany mature a new plan to capture the public
pocket a task it speedily accomplished. The people become
aroused to adequate exertion only when things become utterly
unendurable, and then let their public spirit go to sleep until the
rogues once more surpass the bounds of possible endurance. This
spasmodic, geyserlike virtue will never do we must have a steady
Niagara to wash out the filth from our public life and keep it out.
Leave the city and travel through the State about the time of
election; you will find the workers of both parties busily engaged
in raising funds and studying voters preparatory to buying the
election. A careful record of purchasable voters is kept, with the
price of each. In some parts of New York these purchasable voters
oiitnumber the membership of either party. In many localities
20 to 35 per cent, of the voters can be and have been bought. In
one township not more than 30 out of 400 votes are incorruptible;
in another place not one of the 200 voters is proof against money.
Sometimes 40 or 50 voters are sold in a lump by one leader. Prices
ordinarily run from $2 to $5 a head, but in close years competition
sometimes puts the figures up to $8, $10 or even $20, and there is
an account of a good (?) church deacon and his son who sold their
votes for $40 each to the manager of their own party, who wished
to keep them from deserting to the enemy. Similar facts come to
us from Vermont, Rhode Island, New Jersey, Michigan and other
States. It is said that such methods prevail to a greater or less
extent in all the Northern and Western States; they are not neces-
sary in the South, for much quicker and moi'e reliable methods
have been discovered there. 1
The funds for all this merchanting of citizenship are obtained
by voluntary contributions and by assessments upon those who
hold office, from policemen 'up, and upon those who wish to hold
office. In New York city a candidate for mayor is assessed $20,000,
a congressional candidate the same, an alderman about $12,000,
and so on the whole of the asessments upon candidates in an
average year amounting to about $200,000. The assessments upon
office-holders, together with contributions, make $200,000 more, and
the total expenses of election in the city run up to $700,000; in a
Presidential year much more; a single candidate has been known
to spend $190,000 in one election. Millions for fraud and not one
cent for justice.
Now, let us return to Boston, not with vanity in our own com-
parative purity, for the West End scandal, the Bay State Gas vil-
lainy, the Fisher land fraud, the Beverly Farms bribery, &c.. are
sufficient to remind us that we need the same medicine as our
sister cities not in elation let us come home, but in shame for
1 The facts of this paragraph and the following one are taken from
Bryce on "The American Commonwealth," and from "Money In Politics,"
by Profesor J. \V. Jenks, of Cornell, In the Century, Oct., 1892, p. 940.
THE EX.PEEIENCE OF ENGLAND. 497
our country, and in stern determination to do all in our power _o
purify the public life of which we form a part. How can it be
done?
There are two ways of overcoming an evil. We may take away
the inner causes, or remove the external conditions. We may make
a man sober by removing the appetite for liquor, or the weakness
that leads him to yield to that appetite, or by making it impos-
sible for him to get liquor. The internal causes of corruption are
ignorance, partisanship, selfishness and apathy. It is our duty
to do all we can to banish these primal authors of iniquity. But
it is a long task of education and development to do this com-
pletelj'. and meanwhile a part of the work of overcoming political
corruption may be directly accomplished, at the same time aiding
the educational and character building processes by changing the
external conditions, which fall into two classes, first, the conditions
which create or intensify the motives to corruption, viz., the poverty
of the people, the power of wealth and corporate influence, the
chances of large gains by disreputable methods, &c., and second,
the conditions which afford opportunities for corruption, viz., the sep-
aration of legislation from the people, the system of arbitrary ap-
pointments and removals, the contract system, the imperfection
of our election machinery, &c. It is needful, therefore, that we
should aim to educate and inform the people, develop their patriot-
ism and public spirit, and rouse them to action; that we should
seek to raise the standard of living, close the doors to degraded im-
migration,take public charge of the great monopolies, adopt a better
system of taxation and finance, and in every possible way endeavor
to aid the diffusion of wealth, in order that the power of purchase
and the temptation to be bought may be diminished; that we
should establish direct legislation, proportional representation and
woman suffrage to close the door against legislative fraud and
oppression, and secure due influence in our politics to the purest
and most progressive forces in the community; that we should
adopt a solid civil service reform to reduce political patronage and
spoils to the lowest possible terms, and take the wind out of the
sails of partisanship; that we should abolish the contract system,
and put the contractors' profits into higher wages for those who
do the work, or into the public treasury what is the use of employ-
ing a board of public works simply to look after private contract-
ors let the board be composed of experts, and employed to look
after the work directly, so as to save the contractors' profits; 1 that
1 The Hon. Josiah Quincy, the progressive mayor of Boston, who has
established a municipal printing plant, free public baths and free public
lectures, has said that "The city should perform directly for itself all the
work which It is practicable to so perform with reasonable economy," and
again, speaking of the repairs of buildings and other municipal services,
he says: "I think it would have a decidedly beneficial effect upon municipal
politics to place this work upon a basis where it would no longer be com-
peted for by a large number of contractors." The reasons are obvious.
Mayor Jones, of Toledo, in his message -of October 24, 1898, advocates
complete abandonment of the contract system. The document is a remark-
able one. It urges the establishment of civil service reform in all depart-
ments, municipal gas and electric light plants, free employment
32
498 THE CITY FOR THE PEOPLE.
we separate local and national elections, so that confusion of issues
may cease; enact better naturalization laws to protect the suf-
frage; adopt the automatic ballot; pass an efficient corrupt practices
act. and organize good government clubs, that shall persuade good
men to go to the primaries, make wise nominations, watch the polls,
stop repeating, bring out a full vote, elect reliable officers, so far as
possible, sustain them while in office and pursue to the extent of
the law all officers who disregard their duty.
Some of these measures have been dealt with in this volume
and others may be developed hereafter. The remainder of this
chapter will be devoted to a brief description of the movement
of English political history in the last hundred years. The story
is condensed from the histories of Judson and Mackenzie, chiefly,
and it contains some of the most momentous lessons for American
statesmanship that are to be found in the history of mankind or
the literature of the world.
I ENGLAND IN 1789.
At the beginning of the French Revolution, England was freer
than any other country of the world. She had her Magna Charta,
her House of Commons and her Bill of Eights; there was no serf-
dom and the press was free. Still, England was very far from
being either democratic or well governed. The Crown and the
Peerage were hereditary, and even the House of Commons was not
representative of the people.
1. The suffrage was very limited, there being a high property
qualification.
2. The distribution of representatives was very faulty; some
of the districts, with a small population, had large representation,
and some with large population had little representation.
3. Bribery and office buying were very prevalent, which en-
abled the small class of wealthy landowners to control the House
of Commons, so that England was ruled by a landed aristocracy.
In the 17th century Cromwell tried to make Parliament more
truly representative. Toward the end of the 18th century Chatham
and his great son, William Pitt, renewed the effort, but the French
Revolution drove away all ideas of reform. All political questions were
set aside, driven out of mind by the rush of the irar with France.
II THE REFORM BLLL. 1332.
The war closed at Waterloo in 1815, and after a time attention re-
turned to the political questions that had been under consideration
before the war. Matters had grown worse in the interval. The
Crown had not reapportioned the parliamentary districts since
1660. On the one hand, districts, or boroughs, had been depopu-
lated, but retained their ancient representation in the Commons;
while on the other hand, great cities, like Manchester and Leeds,
had grown up without any representation. In 1831 Birmingham,
with 100,000 people, had no representation in Parliament. Leeds
and Sheffield, each with fifty thousand; Paisley, Stockport and a
number of other cities with from ten to twenty thousand each,
agencies, play grounds, public baths; kindergartens as part of the public
school system, larger appropriations for public parks, for street improve-
ments and for music in the parks, the sprinkling of the streets by the city
Itself and the getting out of the directory by the city itself, deprecates any
grant or extension of franchises without approval of the people, and advo-
cates municipal home rule and the popular referendum on all ordinances.
THE EXPERIENCE OF ENGLAND. 499
likewise had no representative. The ten southern counties, with
three and one quarter million population, had 235 members, while
the northern counties, with three and one-half million population r
had only 6G members. Cornwall had one member to each 7500 peo-
ple, while Lancashire had one member to each 100,000. Even thi
was not the worst; the owners of the land in depopulated districts
controlled their representatives, sometimes the owner sold his seat
in Parliament. The regular market price of a borough returning
two members was $50,000. Some borough owners did not sell, but
used their influence. A man who owned a borough could usually
command a peerage, or an embassy for himself, a pension for his
wife or an appointment for his son, by placing one of the seats at
the disposal of the Government.
Some boroughs not controlled by any one man were the scenes
of gross bribery. The borough of Sudbury advertised itself for
sale to the highest bidder. At one time the election contest in
Northampton cost the candidates about $150,000 each, and we
read of as much as a million dollars being spent in a single elec-
tion. It is clear that Tammany Hall was not the original discov-
erer of political corruption.
After the Napoleonic wars, bill after bill was introduced for re-
form, but the measures were stoutly opposed by the vested inter-
ests that controlled the House. The two or three hundred rich
men who owned the majority of the Commons did not propose to
give up their property. Lord Wellington, the prime minister, was
a strong conservative; he thought the representative system just
as it stood the masterpice of human w r isdom, and said, "If I had
to make it over, I would make it just as it is, with all its repre-
sented ruins and all its unrepresented cities."
In 1831 the Eeform Party (Whig) was successful. A reform bill
was passed by the Commons, but promptly rejected by the Lords. In
March, 1832, another bill passed the Commons; the Crown had a
constitutional right to create new peers, and the ministry now in-
formed the Lords that the King was ready to create enough new
liberal Peers to swamp the Tory majority, so the Lords yielded, and
the Eeform Bill became a law in June, 1832. It reap portioned the rep-
resentation, extended the suffrage and transferred power from the
icealthy and titled to the great middle classes. The farm laborers and
artisans, however, were still out in the cold.
Fifty-six rotten or decayed boroughs, where there were only a
few inhabitants, were deprived of 143 members in the House, which
were given to counties and cities like Manchester and Birmingham.
The franchise in counties was extended from freeholders to all
who leased or rented property worth $250 a year clear rent. The
borough franchise was put on a uniform basis, including all house-
owners whose houses were worth fifty dollars a year.
Ill THE REFORM PARLIAMENT.
The first Eeform Parliament, elected under the Eeform Act, met
in January, 1833. The Eadicals wished to abolish slavery, tithes,
poor laws, closed corporations, corn laws, game laws, &c., pass a
further reform bill and establish the ballot and free labor and mu-
nicipal self-government.
What did the Liberal Parliament do?
1. It abolished slavery thruout the British Empire, to take
effect August 4, 1834, the planters being paid the value of their
slaves.
:.'. Poor laws were remodelled so as . not to encourage idle-
ness, or improvidence or depraved marriage.
3. A factory act was passed providing that children under
13 should not work more than 8 hours per day, and youths between
13 and 18 not over 69 hours per week.
500 THE CITY FOB THE PEOPLE.
IV THE COBN LAWS.
The corn laws of 1815 and the following 1 years were a sort of
prohibitive tariff, forbidding 1 the importation of grain, whenever
the price of domestic grain fell below a specified minimum, and
fixing duties at other times. The laws were intended to protect
British agriculture, but in fact the laws worked ruin to the work-
ing classes by keeping up the price of grain. In 1838 a corn law
league was established, with Richard Cobden and John Bright as
leaders; they flooded England with pamphlets and speeches against
the corn laws, and they won. In 1846 the corn laws were repealed,
and by 1852 protective duties were all gone. This movement, by
education and the ballot, probably saved England from a serious
revolution.
V THE CHARTISTS, 1838-48.
The Reform Act of 1832 gave power to the Middle Classes. The
laboring Classes were dissatisfied, of course, and began to agitate
for a People's Charter, or, a more democratic constitution, that
would enfranchise the masses; they wanted universal suffrage, the
ballot, equal election districts, annual election of Parliament, aboli-
tion of property qualification for members, and salaries for members,
so that poor men might take part in the House of Commons.
These purposes were "for the most part good, but the Chartists
were violent in their talk and methods, and this alarmed the peo-
ple, so that their demands failed of success. Later, however, some
of the demands were taken up by the great Liberal Party and car-
ried to success.
VI THE BEFOKM BILL OF 1867.
The Reform Bill of 186.7 enfranchised lodgers in the boroughs
and greatly lowered the property qualification in the counties. It
was passed by the Conservatives, with Disraeli at their head.
VII. JUDICIAL DECISION OF ELECTION DISPUTES.
In 1868 it was enacted that election disputes should thereafter
be decided in court. They are now quietly and judiciously decided
upon evidence, instead of upon party grounds, as formerly.
VIII GLADSTONE AND THE SECRET BALLOT.
In the first Liberal Parliament (1833) one of the Conservative
members was William E. Gladstone; he did not remain a Conserva-
tive; in 1872 he was the Liberal leader and head of the Govern-
ment, and he carried through a "ballot act" substantially like the
Australian system. Until this time voting had been viva voce,
which made bribery and intimidation very easy.
IX THE COBRUPT PRACTICES ACT, 1883.
Money and influence were still used corruptly to secure votes and
appointments, and the next important measure was aimed directly
at these evils. In his second ministry, Gladstone had a strong law
passed against bribery, treating, undue influence, personating &c.,
the penalties being fine and imprisonment, at hard labor, and dis-
franchisement for seven years; even the taking of voters to the
THE EXPERIENCE OF ENGLAND. 501
polls in wagons was forbidden. A maximum was placed beyond
which a candidate's expenses might not go, and a public account
must be rendered of every penny spent. A corrupt practice, by
or with the knowledge and assent of a candidate, will prevent him
from ever holding a seat in the House of Commons. If a political
agent commit a corrupt act, a candidate for whom he is working
cannot take his seat if elected. 1 This is the vital fact in the law
a corrupt practice in behalf of a candidate, even though unknown to
him, defeats him. Each party, therefore, watches the others with
the utmost keenness to discover any violation of the law, since
that is the surest means of defeating the opposition. "The risk
from corruption is so great that warnings not to violate the law
are put forward most prominently by all parties, and the dangers
of doing so are fully explained." 2
The forfeiture of elections and disqualification for office attached
to corrupt practices by this English Act of 1883 have worked a
revolution for purity in the politics of Great Britain. 3
X THE SUFFKAGE BILL, 1884.
In that same second administration, Gladstone secured a law ad-
mitting the agricultural laborers to the franchise, adding almost
three million voters to the list. The qualifications in the counties
and in the boroughs were made the same, namely, every house-
holder and lodger whose holding, or use and occupation is worth
$50 a year, may vote. This is now the basis of English suffrage,
not universal suffrage, but still a very wide suffrage. The law of
18S4 also rearranged the election districts upon the American plan,
accoi-ding to population. 4
1 See "The British Corrupt Practices Act," by Henry James, the author
of the law. Foruin, Vol. 15, p. 129.
2 Suppression of Bribery in England, by Prof. J. W. Jenks. Century, Vol.
25, pp. 781 to 789.
3 We have what are called "Corrupt Practices Acts" in some of our states,
but their vitality is small compared to that of the English act because they
do not make political success depend on political honesty in elections. They
provide for fine and imprisonment, but the campaign managers care nothing
for that if they can only win. They do not even care to enforce the law
against opponents who break it. They may find it convenient to break it
themselves, and at any rate fining or imprisoning opposing agents and man-
agers cannot retrieve the lost election. But make bribery and corruption on
the part of managers or authorized election workers a cause of forfeiture of
the offices sought to be won by such corruption, and you make success depend
on purity. Each side watches the other to discover fraud or corruption and
is eager to enforce the law because it will knock out the other side if a
breach is shown. Let the decision rest with a non-partisan court: begin with
municipal elections; decree forfeiture against all candidates in whose behalf
it can be shown that fraud or intimidation was used: if no candidate with
untainted ballot receives a sufficient number of votes to elect him under the
rules of proportional representation and preferential voting, let the prior
incumbent continue to hold the office till the next regular election unless a
special election is called for by petition of 20 per cent, of the voters. It is
somewhat less drastic to declare a forfeiture in England than in this country
because the relations between candidates and political agents are more direct
in theory at least than with us. But this very fact will be apt to give the-
law additional force here, and the hardship upon individuals will not be very
different since candidates in both countries have to trust the selection of
political workers for the most part to the party leaders.
4 One of Gladstone's reforms in Ireland, tho not directly in line with
the governmental movement recorded in the text, is, nevertheless, so impor-
tant in itself and has such a direct bearing- upon some of our own problems,
that a few words must be given to it in a note.
Ireland hns suffered greatly from the fa(5t that so many of those who-
till the soil have no ownership or interest in it, a small class of absentee
landlords holding titles to a large part of Ireland, and a mass of poverty
502 THE CITY FOR THE PEOPLE.
XI CIVIL SERVICE REFORM.
In the early part of the century public offices in England were
filled by patronage and partisanship; the spoils system was in full
play, and each member of Parliament insisted on his share of the
patronage. Reform, in this instance, came from the Executive,
not by act of Parliament. A commission was appointed in 1853
to investigate the office holding and appointment system, and it
reported in favor of appointment on competitive examination. In
1855 this was tried with all candidates, and the result was a great
improvement in the quality of the whole service; members of Par-
liament were relieved from the importunities of office seekers. The
House of Commons at first opposed the change, but afterward saw
its value and approved it. In 1870 the commission was given power
to require a competitive examination in all cases. Offices are held
during good behavior, and only forty or fifty heads of departments,
who are regarded as political officers, lose their places in case a
new party comes into power. English politics now turn on meas-
ures rather than men, and parties are not made up of groups of
men seeking to win or hold office, but they are made up of groups of
men who unite because they wish to carry out a certain policy in
public affairs.
stricken tenants, unable for the most part to get more than a bare sub-
sistence, plus the rent, out of the soil, and not always so much as that.
Improvements were discouraged by the fact that if the tenant making them
left his holding, or were evicted, he got nothing for them, and heartless
land agents might evict a thrifty tenant for the very purpose of obtaining
his improvements without compensation, and then demanding a higher rent
of the next tenant on account of them. Such has been the economic situation
that has constituted the basic cause of Ireland's distress the paper titles
of the descendants of a band of conquerors counted for more in the control
of the land and the distribution of its products than the lives of the tenants
and producers.
In 1870 the Gladstone government gave the tenant a right to demand
pay for his improvements in case of his eviction, and offered to loan two-
thirds of the purchase price to any tenant who would buy the land, the aim
being to change Ireland into a state full of homes instead of a state full of
tenements.
In 1881 Gladstone provided: First, that the tenant might sell his interest
In the improvements; second, that the rent should be fixed by court, and
third, that no eviction should take place except for just cause non-payment
of rent, injury to property, etc. free sale, fair rent and fixity of tenure.
In 1885 the Gladstone government offered to loan the whole purchase price
to tenants who would buy the land, repayment to be at .j per cent, a year for 49
years. This has greatly increased purchases, and Ireland is fast becoming
a land of homes, her tenant serfdom rapidly disappearing under the en-
lightened policy of the English government.
In Equity Series, No. 1, we saw what great benefit Pennsylvania de-
Tived from a somewhat similar policy in her colonial days. I am satisfied
that a policy of this sort now would turn large masses of our unemployed
and landless classes into thrifty owners, especially if instructions were given
In the best methods of cultivating the soil, either on Governor Pingree's
plan or in some other effective way.
Scarcely anything is of more importance than the changing of the drifting
masses and the tenant classes in city and country into Jwmc-ownrrs, and
until the time is ripe for the common ownership and co-operative cultivation
of productive land the fostering of small holdings by producing owners is
liardly less important than the development of home-owning. The strong
and successful means adopted by the "Grand Old Man" to accomplish those
purposes in Ireland affords at once an added lustre to his name and a
weighty lesson to our statesmanship.
THE EXPERIENCE OF ENGLAND. 503
XII CONCLUSIONS.
Thus, by a few peaceful measures, within the period of an ordi-
nary lifetime, the government of England has been changed from
corruption to purity, and from aristocratic despotism to a con-
dition much closer to democracy. Historians tell us that less than
a hundred years ago the English elections were the most corrupt
that the world has ever seen. Now there are none purer. The
secret ballot, the corrupt practices act and civil service reform have
made the English government a model of honesty and efficiency.
It is not j'et perfect by any means, but it has made a progress un-
exampled in the history of the world, especially when we con-
sider that it has been made by peaceful legislation. From an ex-
ceedingly limited suffrage, a monstrous representative system, out-
rageously corrupt elections and unblushing administrative abuses,
England has come to an almost universal suffrage, a much fairer
rerpesentation, astonishingly pure elections and an administrative
system, the honesty and effciency of which are the admiration of
the world. We see in British history during the last hundred years,
as in the history of every great nation in Europe, the irresistible
sweep of thought and institutions toward democracy; we see an
industrial revolution averted by a vigorous campaign of education,
and agitation resulting in the repeal of the corn laws; we see the
strong hold of partisanship destroj-ed and the spoils system ban-
ished; and we see corruption in elections practically abolished.
If England has made such progress in a lifetime from conditions
so unpromising as hers in 1830, what may not we accomplish
in the next few years, starting from conditions on the whole so far
superior to those of England at the beginning of her great move-
ment toward justice and equality?
SHALL I WISH MY BROTHER TO BE MY INFERIOR
IF I LOVE MY NEIGHBOR
AS MYSELF
WILL I NOT WISH HIM TO BE AS WELL OFF
AS I AM ? HOW THEN CAN
PRIVATE MONOPOLY
COMPORT WITH BROTHERHOOD
OR MAKE ITS PEACE WITH THE GOLDEN RULE?
IT CAN NOT
EVEN ANSWER THE QUESTIONS
OF ENLIGHTENED SELFISHNESS, FOR IT KEEPS
THE WORLD AND MAN FROM THE FULLER DEVELOPMENT
AND RICHER LIFE OF AN ALL-UPLIFTING AGE
IN WHICH CO-PARTNERSHIP SHALL BANISH MASTERSHIP
AND MUTUAL HELP DISPLACE DEBASING CONFLICT,
AND SO DEPRIVES
EVEN THE MONOPOLIST HIMSELF
OF THE NOBLER LIFE HE MIGHT ENJOY
IN A CO-OPERATIVE WORLD.
PRIVATE MONOPOLY
IS SIMPLY UNENLIGHTENED SELFISHNESS.
504
APPENDIX I.
LEGISLATIVE FOKMS.
Forms of Constitutional and Statute Provisions Relating
to Direct Legislation, Freehold Charters and Public
Oivnership.
The subject of Public Ownership
t>. Private Monopoly is probably
better adapted to awaken the in-
terest of the average citizen, and
give him a realizing- sense of the
need of better government and bet-
ter industrial methods than any
other subject within the scope of
this book. There was good reason,
therefore for opening the discussion
of progressive measures with "Pub-
lic Ownership." But when the
discussion is over and action
is in order, there can be no
doubt that Direct Legislation
should have the first place;
it is the Initiative and Refer-
endum that must be relied upon
to make the people really sover-
eign; to clear away the obstruc-
tions to progress, and put in mot-
ion the machinery of the law for
the vigorous accomplishment of
any purpose that may be decided
upon.
We therefore ask attention first
to
DIRECT LEGISLATION LAWS AND
AMENDMENTS.'
South Dakota Amendment.
I. The Constitutional Amendment
recently adopted (1898) by the peo-
ple of South Dakota is as follows:
Section 1. (Amendment.) That sec-
tion one of article three of the constitu-
tion of the State of South Dakota be
amended so as to read as follows:
See. 2. (Questions submitted.) The
legislative power of the State shall be
vested in a legislature which shall con-
sist of a senate and house of represen-
tatives, except that the people express-
ly reserve to themselves the right to
propose measures, which measures the
legislature shall enact and submit to a
vote of the electors of the State, and
also the right to require that any laws
which the legislature may have enacted
shall be submitted to a vote of the
electors of the State before going into
effect (except such laws as may be nec-
essary for the immediate preservation
of the public peace, health or safety or
support of the State government and
its existing public institutions).
Provided, That not more than 5 per
centum of the qualified electors of the
State shall be required to invoke either
the Initiative or the Referendum.
This section shall not be construed so
as to deprive the legislature, or any
member thereof of the right to propose
any measure. The veto power of the ex-
ecutive, shall not be exercised as to
measures referred to a vote of the
people. This section shall apply to mu-
nicipalities. The enacting clause of all
laws approved by vote of the electors
of the State shall be, "Be it enacted
by the people of South Dakota." The
jegislature shall make suitable provis-
ions for carrying into effect the pro-
visions of this section.
Sec. 3. (Submission.) This amend-
ment shall, if agreed to by a majority
of the members elect of each house of
the legislature, be submitted to a vote
of the people at the next general elec-
tion.
For text of the law passed to carry
out this amendment, and of laws pro-
posed in Dakota, and by the National
Direct Legislation League, see Direct
Legislation Record, June. 1899 and
March, 1898, published by Pres. Eltweed
I'omeroy, Newark, N. J.
Comment. The 5 per cent, limit
is wise and the application of Di-
rect Legislation to municipalities
also. The latter provision might
be fuller and more definite with
advantage. The "enact and sub-
mit" clause is not as good as a pro-
vision that if tlie legislature amends
or does not pass the measure petit-
ioned for, tJie Governor shall submit,
etc. The minimum time within
which law-s shall go into effect
should be stated. And it should be
specifically provided that the Initi-
ative and Referendum may be used
to amend the constitution; and
that -laws enacted by the people
shall not be repealed or altered
without submission to them.
505
506
APPENDIX I.
Oregon is the second state to have
a Direct Legislation Amendment
passed by both houses of the Leg-
islature. If approved by the next
Legislature, it will be voted on by
the people in 1902. The movement
appears to be entirely non-partisan
in Oregon.
Tltf Oregon Direct Legislation Amend-
ment.
SECTION 1. The legislative authority
of the State shall be vested in a leg-
islative assembly, consisting of a Sen-
ate and House of Representatives, but
the people reserve to themselves pow-
er to propose laws and amendments to
the constitution, and to enact or reject
the same at the polls, independent of
the legislative assembly, and also re-
serve power at their own option to ap-
prove or reject at the polls any act
of the legislative assembly. The first
power reserved by the people is the In-
itiative, and not more than 8 per cent,
of the legal voters shall be required
to propose any measure by such peti-
tion, and every such petition shall in-
clude the full text of the measure so
proposed. Initiative petitions shall be
filed with the Secretary of State not
less than four months before the elec-
tion at which they are to be voted upon.
The second power is the Referendum,
and it may be ordered (except as to
laws necessary for the immediate pres-
ervation of the public peace, health or
safety), either by petition signed by 5
per cent, of the legal voters, or by- 'the
legislative assembly as other bills are
enacted. Referendum petitions shall be
filed with the Secretary of State not
more thn 90 days after the final ad-
journment of the session of the legis-
lative assembly which passed the bill
on which the Referendum is demanded.
The veto power of the governor shall
not extend to measures referred to the
people. All elections on measures re-
ferred to the people of the State shall
be held at the biennial regular general
elections, except when the legislative
assembly shall order a special election.
Any measure referred to the people
shall take effect and become the law
when it is approved by a majority of
the votes cast thereon and not other-
wise. The style of all bills shall be,
"Re it enacted by the people of the
State of Oregon." This section shall
not be construed to deprive any mem-
ber of the legislative assembly of the
right to Introduce any measure. The
whole number of votes cast for Jus-
tice of the Supreme Court at the reg-
ular election last preceding the filing of
any petition for the Initiative or for
the Referendum shall be the basis on "
which the number of legal voters nec-
essary to sign such petition shall bo
counted. Petitions and orders for the
Initiative and for the Referendum shall
be filed with the Secretary of State,
and in submitting the same to the
people he and all other officers shall
be guided by the general laws and the
act submitting this amendment until
legislation shall be specially provided
therefor.
Utah is the third State to pass
(1899) a Direct Legislation Amend-
ment, which is to be submitted to
the people at the next general elec-
tion. The amendment is not as
definite as it should be; too much
is left to Legislative provision, even
the number or percentage of peti-
tioners is not fixed, and a two-
thirds A r ote of the Legislature ex-
cludes Direct Legislation entirely.
Yet with all its defects it is much
better than no Direct Legislative
provision, for every Direct Legisla-
tion measure, however poor, se-
cures important vantage ground
for the obtaining of a better Direct
Legislation measure.
The Utah Direct LeriisJation Amend-
ment.
BE IT RESOLVED and enacted by the
legislature of the Senate of Utah, two-
thirds of all the members elected to
each House thereof concurring therein:
Section 1. That Section 1 of Article
(i of the Constitution of the State of
Utah, to be amended to read as fol-
lows:
Section 1. The legislative power of
the State shall be vested:
1. In a Senate and House of Repre-
sentatives which shall be designated
the Legislature of the State of Utah.
2. In the people of the State of Utah,
as hereinafter stated.
The legal voters or such fractional
part thereof, of the State of Utah as
may be provided by law, under such
conditions and in such manner and
within such time as may be provided by
law, may initiate any desired legislation
and cause the same to be submitted
to the vote of the people for approval
or rejection, or may require any law
passed by the Legislature (except those
laws passed by a two-thirds vote of the
members elected to each house of the
Legislature) to be submitted to the vo-
ters of the State before such law shall
take effect.
The legal voters or such fractional
part thereof as may be provided by law,
of any legal subdivision of the State,
under such conditions and in such man-
ner and within such time as may be
provided Uy low, may initiate any de-
sired legislation and cause the same to
lie submitted to a vote of the people of
said legal subdivision for approval or
rejection, or may require any law or
ordinance passed by the law-making
body of said legal subdivision to lie
submitted to the voters before such law
or ordinance shall take effect.
Sec. 2. Also, that section 22. of Ar-
ticle 6. of the Constitution of the State
of Utah be amended to read as follows:
Sec. 22. The enacting clause of every
law Shall be "Be it enacted by the
Legislature of the State of Utah," Ex-
cept such law as may be passed by
the votes of the electors (is provided in
subdivision 2, section 1 of this article,
LEGISLATIVE FORMS.
507
ami such laws shall begin as follows:
"Be it enacted by the people of the
State of rt:ih." Xo Bill or Joint U>-s-
olutious shall be passed, except with
the assent of the majority of all the
members elected to each house of the
Legislature, and after it has been read
three times. The vote upon the final
passage of all bills shall" be by yeas
and nays: and no law shall be revised
or amended by reference to its title
only; but the act as revised, or sec-
tion as amended, shall be re-eiiacted
and published at length.
Sec. 3. The Secretary of State is
hereby ordered to cause this proposition
to be publisht in at least one news-
paper in every county in the State
where a newspaper is publisht, for two
months immediately preceding the gen-
eral election.
Sec. 4. This proposition shall be sub-
mitted to the electors of this State at
the next general election for their ap-
proval or rejection. The official Ballots
used at said election shall have printed
thereon, "for the amendments, sections
1 and 22 of article 6 of the constitu-
tion." "against the amendment, sections
1 and 22 of article 6 of the constitu-
tion." and such designation of title as
may be provided for by the law. Said
ballots shall be received and said vote
shall be taken, counted, canvassed and
returns thereof be made in the same
manner and in all respects as is pro-
vided by law in case of election of
State officers.
In 1897 Nebraska enacted a Di-
rect Legislation statute applying
to municipalities by local option.
It is over long and full of detail,
requires 15 per cent., which is too
high, and gives the councils the
right by a two-thirds vote to alter
or annul an act of the people after
one year from the vote at the polls.
The Direct Legislation sections
of the New Freehold Charter of San
Francisco, are as follows:
Tlie Direct Legislation Sections of
Charter.
Section 20. Whenever there shall be
presented to the Board of Election Com-
missioners a petition or petitions signed
by fifteen per cent, of the legal voters at
the last preceding general election of
the city and county, equal in number to
fifteen per cent, of the votes cast at
the last preceding general election, ask-
ing that an ordinance to be set forth
in such petition, be submitted to a vote
of the qualified voters of the said city
and county, it shall be the duty of the
Board of Election Commissioners to sub-
mit such proposed ordinance to the vote
of the qualified electors of said city
and county at the next election.
The signatures to said petition need
not all be appended to one paper, but
each signer shall add to his signature
his place of residence, giving the street
and number. One of the signers of each
such paper shall make oath before an
officer competent to administer oaths
that the statements therein made are
true, and that each signature to said
paper appended is the genuine signature
of the person whose name purports to
be thereto subscribed.
The ballots used in such election shall
contain the words "For the Ordinance"
(stating the nature of the ordinance)
and "Against the Ordinance" (stating
the nature of the ordinance).
If a majority of the votes cast upon
such ordinance shall be in favor of the
adoption thereof, the Board of Election
Commissioners shall within a reasonable
time, not exceeding thirty days, pro-
claim such fact, and, upon the publi-
cation of such proclamation, such or-
dinance, thus adopted, shall have the
same and equal force and effect as an
ordinance adopted and ordained by the
Board of Supervisors and approved by
the Mayor, and the same shall not be
repealed by the Board of Supervisors.
But the Board of Supervisors may sub-
mit a proposition for the repeal of such
ordinance, or for amendments thereto,
for vote at the next election; and
should such proposition, so submitted,
receive a majority of the votes cast
thereon at such election, such ordinance
shall le repealed or amended accord-
ingly.
Sec. 21. Upon petition of 15 per cent,
of the legal voters of the city and coun-
ty of San Francisco to the Board of
Supervisors, it shall be the duty of the
said board to submit to the qualified
electors of said city and county any
amendment or amendments to this char-
ter as set forth in said petition.
The Board of Election Commissioners
shall make necessary provisions for
submittng such amendment or amend-
ments to the qualified voters, as here-
in provided, and to canvass the vote
in the same manner as herein provided
for the canvassing of other election re-
turns.
The Detroit CJiartcr Lair.
In Michigan the Direct Legisla-
tion League did not quite succeed
in obtaining the passage of a Di-
rect Legislation Amendment by the
last legislature (1899), but they did
secure an act by which the people
of Detroit can amend their own
charter. The Common Council on
its own initiative ma}' submit a
charter amendment to a referen-
dum of the people or 5,000 voters
by an initiative petition may force
the Council to submit a charter
amendment.
On the urging of the Leagtie, the
Common Council on August 2d, by
a unanimous vote, agreed to sub-
mit at the November election the
following amendment to the people
of Detroit:
"The Common Council of the City of
Detroit shall not grant to any person
508
APPENDIX I.
or corporation a franchise: nor extend
the life of any existing franchise for
the use or control of any public utility,
unless such franchise shall have been
first submitted to a vote of the people
of said city, and until the same shall
have been approved by a majority of
the electors of the municipality voting
thereon at such election. All grants in
contravention of this provision, and
which shall not have been first sub-
mitted to a vote of the people and ap-
proved by a majority of the electors
voting thereupon, shall be null and
void. The Common Council of said city
may in its discretion submit to the
electors of said municipality, either at
a general or a special election called
for that purpose, any proposition em-
bodying the granting of rights, privi-
leges or franchises for the use or con-
trol of public utilities in the City of
Detroit.
"Provided, that any one and all prop-
ositions which are to be submitted to
a referendum vote shall be publisht,
by title and in full at least once a week
for eight successive weeks immediately
preceding said election, in at least four
newspapers publisht in the City of De-
troit, and at least six half-sheet poster
notices displayed conspicuously in each
precinct of the city; and the Common
Council may require that any or all ex-
penses thereby entailed shall be paid
by the party or parties applying for
franchise. And be it further
"Provided, That this amendment shall
not apply to the granting of any fran-
chise for an extension not exceeding
one and one-half (1%) miles in length
on any street where a street railway
franchise exists, for a term equal to
the unexpired term of the franchise on
the line so extended."
In Pennsylvania, 1899, the Direct
Legislation League and prominent
members of the Municipal League
of Philadelphia tried to secure the
passage of the following bill, sub-
jecting franchise grants to refer-
endum petitions. It was reported
favorably in the House and passed
first reading, but in the Senate it
died in committee.
Franchise Direct Legislation Bill Pro-
posed in Pennsylvania.
An act providing that no ordinance
for the sale of real estate or for a
lease or contract covering more than
five years or for granting a franchise
shall be operative in any city until it
shall have been approved by a majority
of the voters, if such approval shall
be demanded within sixty days by three
thousand voters, or by a number equal
to live per rent, of the total of votes
cast at the last preceding election, and
providing for the submission of such or-
dinances to the voters at general or
special elections.
SECTION 1. Be it enacted, etc. That
from and after the passage of this Act,
no ordinance for making or authorizing
a sale of real estate or a lease or a con-
tract covering more than five years, or
for granting a franchise to perform a
public service, or make use of public
property, shall be operative in any city
of this Commonwealth until after sirty
days from the date of its passage; and
if in any such case and during such per-
iod of sixty days three thousand of the
qualified voters, or a number equal to
five per cent, of the total number of
votes cast at the last preceding elec-
tion in such city shall demand that the
ordinance shall be submitted to a Ref-
erendum, or direct vote of all the vo-
ters, such oridnance shall not be valid
or operative until it shall have been
so submitted and approved by a ma-
jority of those voting upon it.
SECT. 2. In every such case the pa-
pers containing the demand for the
Referendum, or direct vote, shall be
filed with the County Commissioners
within the time specified, and each sign-
er shall write his occupation and resi-
dence after his signature, and the gen-
uineness of the signatures on each paper
must be attested by the affidavit of a
qualified voter.
SECT. 3. Such submission of an ordi-
nance shall be made at the next regu-
lar election or at a special election to
be held within ninety days of the fil-
ing of the Referendum papers, as the
County Commissioners may determine.
SECT. 4. In every such Referendum
the County Commissioners shall have
clearly printed upon the official ballots
the title of the ordinance, with the
words "For" and "Against" in conspicu-
ous capital letters, and each of the
said two words shall be followed by
a square enclosed space for the voter's
mark.
SECT. 5. Except as herein otherwise
provided, every such election shall be
governed by the general laws of this
Commonwealth.
SECT. 6. All laws and parts of laws
inconsistent with this Act are hereby
repealed.
FREEHOLD CHAHTEK AMENDMENTS.
The subjoined constitutional
amendments giving cities the right
to make their own charters to be
adopted and amended by popular
vote, are scarcely less important
than the Direct Legislation meas-
ures of the last section. The Wash-
ington amendment is commendable
for its brevity and its provision for
adopting and amending charters by
majoriti/ vote; the requirement of a
four-sevenths vote for adoption in
Minnesota and Missouri (except St.
Louis), and three-fifths for amend-
ment in Minnesota, Missouri and
California, is unnecessarily burden-
some. If a majority vote is suffic-
ient to amend the constitution of a
State, it surely shotild be sufficient
to amend the charter of a city. It
may be well to require a three-
LEGISLATIVE FORMS.
509
fifths or three-fourths or four-sev-
enths vote for sudden action, or for
legislative action without recourse
to the people, but to demand three-
fifths or more when the people are
voting after due notice and delib-
eration, is simply to enable a small
minority to govern the majority.
The provision in California and
Missouri (St. Louis) against amend-
ment except at intervals of two
years is also objectionable. The
people of each city should deter-
mine for themselves how often they
will allow their charter to be
amended. The Minnesota clause
commanding the board of freehold-
ers to submit amendments on pe-
tition of 5 per cent, of the voters
is admirable. By statute the board
of freeholders to frame a charter,
etc., is to be appointed by the dis-
trict judge on petition of 8 per
cent, of the voters of the munici-
pality. Minnesota also lead's in the
universality of her amendment, no
class of cities, large or small, being
excluded from its benefits. If we
could join in one provision the good
points of these various amend-
ments, brevity, majority rule, 5 per
cent, initiative, to set in motion the
machinery of adoption or amend-
ment, universal application to all mu-
nicipalities, and then add a clause
excluding legislative interference in
any way with local self-government
in respect to specified local affairs, in-
cluding street franchises and other lo-
cal business matters, then we should
have an amendment that would se-
cure real municipal liberty. The
people of a city could adopt direct
legislation in respect to ordinances,
and popular sovereignty in local
government would be assured.
Here are the amendments so far
passed :
The Washington Charter Amendment.
The Washington Constitution,
1889, Article XI, Section 10, pro-
vides as follows:
Corporations for municipal purposes
shall not be created by special laws,
but the legislature, by" general laws,
shall provide for the incorporation, or-
ganization, and classification, in propor-
tion to population, of cities and towns,
which laws may be altered, amended,
or repealed. Cities and towns hereto-
fore organized or incorporated may be-
come organized under such general laws
whenever a majority of the electors
voting at a general election shall so
determine, and shall organize in con-
formity therewith; and cities and towns
heretofore or hereafter organized and
all charters thereof framed or adopted
by authority of this constitution shall
be subject to and controlled by gen-
eral laws. Any city containing a popu-
lation of twenty thousand inhabitants
or more shall be permitted to frame a
charter for its own government consis-
tent with and subject to the constitu-
tion and laws of this state and for
such purpose the legislative authority
of such city may cause an election to
be had, at which election there shall
be chosen by the qualified electors of
said city fifteen freeholders thereof,
who shall have been residents of said
city for a period of at least two years
preceding their election, and qualified
electors, whose duty it shall be to con-
vene within ten days after their elec-
tion, and prepare and propose a char-
ter for such city. Such proposed char-
ter shall be submitted to the qualified
electors of said city, and if a majority
of such qualified electors voting thereon
ratify the same, it shall become the
charter of said city, and shall become
the organic law thereof, and supersede
any existing charter, including amend-
ments thereto, and all special laws in-
consistent with such charter. Said pro-
posed charter shall be published in two
daily newspapers published in said city
for at least thirty days prior to the
day of submitting the same to the elec-
tors for their approval, as above pro-
vided. All elections in this section au-
thorized shall only be had upon notice,
which notice shall specify the object of
calling such election, and shall be giv-
en for at least ten days before the day
of election in all election districts of
said city. Such elections may be gen-
eral or special elections, and, except as
herein provided, shall be goverened by
the law regulating and controlling gen-
eral or special elections in said city.
Such charter may be amended by pro-
posals therefor submitted by the, legis-
lative authority of such city to the elec-
tors thereof at any general election, af-
ter notice of said submission published
as above specified, and ratified by a ma-
jority of the qualified electors voting
thereon. In submitting any such char-
ter or amendment thereto, any altern-
ate article or proposition may be pre-
sented for the choice of the voters, and
may be voted on separately without
prejudice to others.
The Minnesota Charter Amendment.
In Minnesota a freehold charter
amendment was adopted in 1896.
In 1897 an amendment to the
amendment was proposed by act of
the legislature and it was adopted
by, a vote of more than 2 to 1 in
1898. The amendment in its final
form reads as follows, and is part
of Art. 4, of the State Constitution:
510
APPENDIX I.
City or Village may Frame its own
Charter.
Section 36. Any city or village in
this state may frame a charter for Its
own government as a city consistent
with and subject to the laws of 'this
state, as follows: The legislature shall
provide, under such restrictions us it
deems proper, for a board of fifteen
freeholders, who shall be and for the
past five years shall have been quali-
fied voters thereof, to be appointed by
the district judge of the judicial dis-
trict in which the city or village is
situated, as the legislature may deter-
mine, for a term in no event to exceed
six years, which board shall, within six
months after its appointment, return to
the chief magistrate of said city or
village a draft of said charter, signed
by the members of said board, or a
majority thereof.
Charter to be submitted to Voters.
Such charter shall be submitted to
the qualified voters of such city or vil-
lage at the next election thereafter, and
if four-sevenths of the qualified voters
voting at such election shall ratify the
same, it shall, at the end of 30 days
thereafter, become the charter of such
city or village as a city, and super-
sede any existing charter and amend-
ments thereof: Provided, That in cities
having patrol limits now established,
such charter shall require a % majority
vote of the qualified voters voting at
such election to change the patrol limits
now established.
Legislature to Prescribe General Limits of
Charter.
Before any city shall incorporate un-
der this act the legislature shall pre-
scribe by law the general limits within
which such charter shall be framed.
Duplicate certificates shall be made set-
ting forth the charter proposed and its
ratification, which shall be signed by
the chief magistrate of said city or vil-
lage and authenticated by its corporate
seal. One of said certificates shall be
deposited in the office of Secretary of
state, and the other, after being re-
corded in the office of the register of
deeds for the county in which such city
or village lies, shall be depositel among
the archives of such city or village,
and all courts shall take judicial notice
thereof. Such charter so deposited may
be amended by proposal therefor made
by a board of fifteen commissioners
aforesaid, published for at least thirty
days in three newspapers of general
circulation in such city or village, and
accepted by three-fifths of the qualified
voters of such city or village voting at
the next election and not otherwise;
but such charter shall always be in har-
mony with and subject to the consti-
tution and laws of the State of Min-
nesota.
Amendment* to be Submitted upon Appli-
cation of 5 per cent, of Legal Vo/<r.s.
The legislature may prescribe the du-
ties of the commission relative to sub-
mitting amendments of charter to the
vote of the people, and shall provide
that upon application of 5 per cent, of
the legal voters of any such city or vil-
lage, by written petition, such commis-
sion shall submit to the vote of the
people proposed amendments to such
charter set forth in said petition. The
board of freeholders above provided for
shall be permanent, and all the vacan-
cies by death, disability to perform du-
ties, resignation or removal from the
corporate limits, or expiratiom of term
of office, shall be filled by appointment
in the same manner as the original
board was created, and said board shall
always contain its full complement of
members.
Mayor and Legislative Body.
It shall be a feature of all such char-
ters that there shall be provided, among
other things, for a mayor or chief mag-
istrate, and a legislative body of either
one or two houses; if of two houses,
at least one of them shall be elected by
general vote of the electors.
Articles of Amendment may be Submitted
Separately.
In submitting any such charter or
amendment thereto to the qualified vo-
ters of such city or village, any altern-
ate section or article may be presented
for the choice of the voters and may
be voted on separately without preju-
dice to other articles or sections of the
charter or any amendments thereto.
General Laws for Cities by Divisions of
Population.
The legislature may provide general
laws relating to affairs of cities, the ap-
plication of which may be limited to
cities of over fifty thousand inhabitants,
or to cities of fifty and not less than
twenty thousand inhabitants, or to
cities of twenty and not less than ten
thousand inhabitants, or to cities of ten
thousand inhabitants or less, which
shall apply equally to all such cities
of either class, and which shall be par-
amount while in force to the provisions
relating to the same matter included In
the local charter herein provided for.
But no local charter, provision or ordi-
nance passed thereunder shall supersede
any general law of the state defining
or punishing crimes or misdemeanors.
Voted upon at the general election
held November 8, 1898 and adopted by
a vote of 68,754 in favor of said amend-
ment to 32,068 against the same.
Proclamation of the vote issued by the
Governor, December 29, 1898.
The California Charter Amendment.
Section 8, of Art. XI, of the
California Constitution, as amend-
ed in 1891, is as follows:
Any city containing a population of
more than three thousand five hundred
inhabitants may frame a charter for
its own government, consistent with
and subject to the Constitution and laws
of this State, by causing a Board of
fifteen freeholders, who shall have been
for at least five years qualified electors
thereof, to be elected by the qualified
voters of said city at any general or
special election, whose duty it shall be,
within ninety days after such election,
to prepare and propose a charter for
LEGISLATIVE FORMS.
511
such city, which shall be signed in du-
plicate, by the members of such Board,
or a majority of them, and returned,
one copy to the Mayor thereof, or other
chief executive officer of such city, and
the other to the Recorder of the coun-
ty. Such proposed charter shall then be
published in two daily newspapers of
general circulation in such city, for at
least twenty days, and the first publi-
cation shall be made within twenty
days after the completion of the char-
ter: (Prodded, That in cities containing
a population of not more than ten thou-
sand inhabitants, such proposed charter
shall be published in one such daily
newspaper;) and within not less than
thirty days after such publication it
shall be submitted to the qualified elec-
tors of said city at a general or special
election, and if a majority of such qual-
ified electors voting thereat shall ratify
the same, it shall thereafter be sub-
mitted to the Legislature for its ap-
proval or rejection as a whole, without
power of alteration or amendment.
Such approval may be made by con-
current resolution, and if approved by
a majority vote of the members elected
to each House, it shall become the char-
ter of such city, or if such city shall be
consolidated with a county, then of such
city and county, and shall become the
organic law thereof, and supersede any
existing charter and all amendments
thereof, and all laws inconsistent with
such charter. A copy of such charter,
certified by the Mayor, or chief exec-
utive officer, and authenticated by the
seal of such city, setting forth the sub-
mission of such charter to the electors,
and its ratification by them, shall, after
the approval of such charter by the
Legislature, be made, in duplicate, and
deposited, one in the office of the Sec-
retary of State, and the other, after
being recorded in said Recorder's office,
shall be deposited in the archives of
the city, and therafter all Courts shall
take judicial notice of said charter.
The charter so ratified may be amended
at intervals of not less than two years
by proposals therefor, submitted by the
legislative authority of the city to the
qualified electors thereof, at a general
or special election, held at least forty
days after the publication of such pro-
posals for twenty days in a daily news-
paper of general circulation in such
city, and ratified by at least three-fifths
of the qualified electors voting thereat,
and approved by the Legislature, as
herein provided for the approval of the
charter. In submitting any such char-
ter, or amendments thereto, any altern-
ative article or proposition may be pre-
sented for the choice of the voters, and
may be voted on separately without
prejudice to others.
The Missouri Charter Amendment.
The Constitution of Missouri
(1875), Art. IX. Sections 16 and 17
provide that [new section] :
Sec. 16. Any city having a population
of more than one hundred thousand in-
habitants may frame a charter for its
own government, consistent with and
subject to the Constitution and laws of
this State, by causing a board of thir-
teen freeholders, who shall have been
at least five years qualified voters there-
of, to be elected by the qualified voters
of such city at any general or special
election; which board shall, within nine-
ty days after such election, return to
the chief magistrate of such city a draft
of such charter, signed by the members
of such board or a majority of them.
Within thirty days thereafter, such pro-
posed charter shall be submitted to the
-J8D a^Bojjdnp v 'joajaqj sjuempuecuB
pins Jrtjau'qj 3ui)sixa A'III; apesaadns pin:
qualified voters' of such city, at a gen-
eral or special election, and if four-
sevenths of such Qualified voters vot-
ing thereat shall ratify the same, it
shall, at the end of thirty days there-
after, become the charter of such city,
tificate shall be made, setting forth the
charter proposed and its ratification,
which shall be signed by the chief mag-
istrate of such city and authenticated
by its corporate seal. One of such cer-
tificates shall be deposited in the office
of the Secretary of State, and the
other, after being recorded in the office
of the recorder of deeds for the coun-
ty in which such city lies, shall be de-
posited among the archives of such city,
and all courts shall take judicial notice
thereof. Such charter, so adopted, may
be amended by a proposal therefor, made
by the law-making authorities of such
city, published for at least thirty days
in three newspapers of largest circula-
tion in such city, one of which shall
be a newspaper printed in the German
language, and accepted by three-fifths
of the qualified voters of such city,
voting at a special or general election,
and not otherwise; but such charter
shall always be in harmony with and
subject to the Constitution and laws of
the State,
[new section]
Sec. 17. It shall be a feature of all
such charters that they shall provide,
among other things, for a mayor or
chief magistrate, and two houses of
legislation, one of which at least shall
be elected by general ticket; and in
submitting any such charter or amend-
ment thereto to the qualified voters of
such city, any alternative section or
article may be presented for choice of
the voters, and may be voted on sep-
arately, and accepted or rejected sep-
arately, without prejudice to other ar-
ticles or sections of the charter or any
amendment thereto.
Special provision for St. Louis
was made in sections 20 to 23 in-
clusive, of the same article, as fol-
lows:
[new section]
Sec. 20. The City of St. Louis may
extend its limits so as to embrace the
parks now within its boundaries, and
other convenient and contiguous terri-
tory, and frame a charter for the gov-
ernment of the city thus enlarged, upon
the following conditions, that is to say;
The council of the city and county
court of the county of St. Louis, shall,
at the request of the mayor of the city
of St. Louis, meet in joint session and
order an election, to be held as pro-
vided for general elections, by the qual-
512
APPENDIX I.
Ifled voters of the city and county, of
a board of thirteen freeholders of such
city or county, whose duty it shall be
to propose a scheme for the enlargement
and definition of the boundaries of the
city, the reorganization of the govern-
ment of the county, the adjustment of
the relations between the city thus en-
larged and the residue of St. Louis
county, and the government of the city
thus enlarged, by a charter in harmony
with and subject to the Constitution
and laws of Missouri, which shall,
among other things, provide for a chief
executive and two houses of legislation,
one of which shall be elected by gen-
eral ticket, which scheme and charter
shall be signed in duplicate by said
board or a majority of them, and one of
them returned to the mayor of the city
and the other to the presiding justice
of the county court within ninety days
after the election of such board. With-
in thirty days thereafter the city coun-
cil and county court shall submit such
scheme to the ^qualified voters of the
whole county, and such charter to the
qualified voters of the city so enlarged,
at an election to be held not less than
twenty nor more than thirty days after
the order therefor; and if a majority
of such qualified voters, voting at such
election, shall ratify such scheme and
charter, then such scheme shall become
the organic law of the county and city,
and such charter the organic law of
the city, and at the end of sixty days
thereafter shall take the place of and
supersede the charter of St. Louis,, and
all amendments thereof, and all special
laws relating to St. Louis county in-
consistent with such scheme, (a)
[new section]
Sec. 21. Scheme and charter, how au-
thenticated Judicial Notice. A copy of
such scheme and charter, with a cer-
tificate thereto appended, signed by the
mayor and authenticated by the seal of
the city, and also signed by the pre-
siding justice of the county court and
authenticated by the seal of the coun-
ty, setting forth the submission of such
scheme and charter to the qualified vo-
ters of such county and city, and its
ratification by them, shall be made in
duplicate, one of which shall be depos-
ited in the oflice of the Secretary of
State, and the other, after being ' re-
corded in the office of the recorder of
deeds of St. Louis county, shall be de-
posited among the archives of the city,
and thereafter all courts shall take ju-
dicial notice thereof, (b)
[new section]
Sec. 22. Charter, how amended. The
charter so ratified may be amended at in-
tervals of not less than two years, by
proposals therefor, submitted by the
law-making authorities of the city to
the qualified voters thereof at a gen-
eral or special election, held at least
sixty days after the publication of such
proposals, and accepted by at least
three-fifths of the qualified voters vot-
ing thereat, (c)
[new section]
Sec. 23. Charter in harmony with con-
stitution and laws various provisions un-
der. Such charter and amendments
shall always be in harmony with and
subject to the Constitution and laws of
Missouri, except only that provision may
be made for the graduation of the rate
of taxation for city purposes in the
portions of the city which are added
thereto by the proposed enlargement of
its boundaries. In the adjustment of
the relations between city and county,
the city shall take upon itself the en-
tire park tax; and inconsideration of
the city becoming the proprietor of all
the county buildings and property with-
in its enlarged limits, it shall assume
the whole of the existing county debt,
and thereafter the city and county shall
be independent of each other. The city
shall be exempted from all county tax-
ation. The judges of the county court
shall be elected by the qualified voters
outside of the city. The city, as en-
larged, shall be entitled to the same
representation in the General Assembly,
collect the State revenue and perform
all other functions in relation to the
State, in the same manner, as if it
were a county as in this Constitution
defined; and the residue of the county
shall remain a legal county of the State
of Missouri, under the name of the
county of St. Louis. Until the next ap-
portionment for senators and represen-
tatives in the General Assembly, the
city shall have six senators and fifteen
representatives, and the county one
senator and two representatives, the
same being the number of senators and
representatives to which the county of
St. Louis, as now organized, is entitled
under sections eight and eleven of ar-
ticle IV of this Constitution, (d)
PUBLIC OWNERSHIP AMENDMENTS
AND STATUTES.
The Constitutional .Amendment
of South Carolina and the
sweeping laws of Indiana, Wash-
ington and Minnesota deserve spec-
ial attention. Combine the good
points and put a condensed far-
reaching provision like that of In-
diana into Constitutional form with
reasonable initiative and referend-
um clauses, so that the option of
taking action under the provision
to build or buy, etc., may rest with
the people, instead of the councils,
and you will have a measure of ad-
mirable scope and effectiveness.
South Carolina.
The South Carolina Constitution,
Art. VIII, provides:
Street Railways, etc.
Sec. 4. No law shall be passed by
the General Assembly granting the
right to construct and operate a street
or other railway, telegraph, telephone or
electric light plant, or to erect water
or gas works for public uses or to lay
mains for any purpose, without first
obtaining the consent of the local au-
thorities in control of the streets or
public places proposed to be occupied
for any such or like purposes.
LEGISLATIVE FORMS.
513
Water TTo/'A's and 1'lnnts for Furnishing
Li'jMa.
Sec. 5. Cities and towns may acquire,
by construction or purchase, and may
operate, water works systems and plants
for furnishing lights, and may furnish
water and lights to individuals, firms
and private corporations for reasonable
compensation: Provided. That no such
construction or purchase shall be made
except upon a majority vote of the
electors in said cities or towns who are
qualified to vote on the bonded indebt-
edness of said cities or towns.
Indiana Statutes.
The Indiana Statutes (1896) give
exclusive control of streets to the
Common Councils (Section 4154)
and require street railways to ob-
tain consent of councils to street
locations.
Under "Powers of Board of Public
Works in cities of 35.000 to 49,000"
Section 7163, thirty-fourth line, I find
this REMARKABLE passage:
"To purchase or erect, by contract or
otherwise, and operate water works, gas
works, electric light works, street car
and other lines for the conveyance of
passengers and freight, natural gas
lines, telegraph and telephone lines, for
the purpose of supplying such city and
the suburbs thereof, or to purchase or
hold a majority of the stock in cor-
porations organized for either of the
above purposes: Provided, That none of
the powers conferred by this paragraph
shall be exercised except pursuant to
an ordinance specifically directing the
same."
Washington Statutes.
Chapter 112 of the Washington
laws of 1897 provides for municipal
construction (or purchase) and op-
eration of water, light, heat, rail-
way and power plants and for the
issue of bonds, etc. The preamble
and sections 1 and 2 are as follows:
An Act authorizing cities and towns
to construct, condemn and purchase,
purchase acquire, add to, maintain, con-
duct and operate water works, systems
of sewerage, works for lighting, heat-
Ing, fuel and power purposes, cable,
electric and other railways, with all
land and property required therefor,
providing for payment therefor.
Be it enacted by the Legislature of the
Stnt-~ of Washington:
HIuniHpaUty may Buy. Conduct and Oper-
ate Wattr Work*. Light. Heat and Power
Plants. Stnrt Railicays. etc.
Section 1. That any incorporated city
or town within the state be and is
and purchase, purchase, acquire, add to,
maintain, conduct and operate water
works within or without its limits for
the purpose of furnishing such city or
town, and the inhabitants thereof, and
any other persons with an ample sup-
ply of water for all uses and purposes,
33
public and private, including water
pnwer or other power derived therefrom,
with full power to regulate and control
the use, distribution and price thereof;
and to construct and maintain systems
of sewerage, with full jurisdiction and
authority to manage, regulate and con-
trol the same, within and without the
limits of the corporation; and to con-
struct, condemn and purchase, purchase,
acquire, add to, maintain and operate
works, plants and facilities for the pur-
pose of furnishing such city or town
and the inhabitants thereof and any
other persons with gas, electricity and
other means, power and facilities for
lighting, heating, fuel and power pur-
poses, public and private, with full au-
thority to regulate and control the use,
distribution and price thereof; and to
construct, condemn and purchase, pur-
chase, acquire, add to, maintain and
operate cable, electric or other railways
within the corporate limits of such city
or town, for the transportation of
freight and passengers, with full author-
ity to regulate and control the use and
operation thereof, and to fix, alter, reg-
ulate and control the fares and rates
to be charged thereon. (Chap. 128 of
the Acts of 1899 amends this law by
adding power to cities and towns to
authorise others to construct electric, gas
or heating plants, and to buy electrical
power from them and regulate the use
and price of it.)
May Provide Therefor by Ordinance Sub-
mitted to the Voters.
Sec. 2. Whenever the city council or
other corporate authority of any such
city or town shall deem it advisable
that the city or town of which they are
such officers shall exercise the authority
conferred upon them in relation to water
works, sewerage, works for lighting,
heating, fuel and power -purposes, or
cable, electric or other railways, any
or all thereof, the corporation shall pro-
vide therefor by ordinance, which shall
specify and adopt the system or plan
proposed and declare the estimated cost
thereof as near as may be, and the
same shall be submitted for ratification
or rejection to the qualified voters of
said city or town at a special election,
of which thirty days notice shall be
given in the newspaper doing the city
or town printing, by publication in each
issue of said paper during said time;
Provided. That if the said city or town
is to become indebted and issue bonds
or warrants for such water works, sew-
erage system, lighting, heating, fuel and
power works or railways, the said prop-
osition and authority to become so in-
debted shall be adopted and assented to
by three-fifths of the qualified voters of
said city or town voting at said elec-
tion, except as to the adoption or rejec-
tion of the system or plan of said im-
provements, which may be adopted by
a majority vote. When such system or
plan has been adopted, and no indebted-
ness is to be incurred therefor, the
corporate authorities may proceed forth-
with To construct and acquire the im-
provements or lands contemplated, mak-
ing payment therefor from any avail-
able funds. When the system or plan
has been adopted and the creation of an
indebtedness by the Issuance of bonds
514
APPENDIX I.
or warrants assented to as aforesaid,
the said corporation shall be authorized
and empowered to construct and acquire
the improvements or lands contemplat-
ed, and to create an indebtedness and
to Issue bonds or warrants therefor, or
for combinations thereof, as hereinafter
provided, to wit:
Minnesota Statutes (1894).
Section 2592. Works of internal im-
provement.
Any number of persons not less than
five, may associate for incorporation and
become incorporated under and accord-
ing to this title, for the construction,
maintenance and operation of any work
or works of internal improvement re-
quiring the taking of private property,
or any easement therein, for public use,
Including railways, telegraph lines, ca-
nals, slack-water or other navigation
upon any water course, bay or lake,
dams to improve or create a water sup-
ply or power for public use, and any
work or works with all requisite sub-
ways, pipes and other conduits for sup-
plying the public with water, gas light,
electric light, heat or power; and any
citizens of the United States, not less
than nine in number, owning any rail-
way now or hereafter constructed for
public use within this state for trans-
portation of persons or property, or or-
ganized for the purpose of maintaining
and operating under any lease or con-
tract, a railroad constructed for like
public use may, by making and filing
articles of association under and accord-
ing to this title, acquire and enjoy the
rights, powers, privileges and franchises
hereinafter granted, and may, by filing
in the office of secretary of state a res-
olution of such corporation expressing
Its intent to construct, maintain and
operate any branch line, become empow-
ered to construct, maintain and operate
the same in connection with its main
line, subject, however, to the provisions
of this title and the general laws of
this state, and any corporation formed
hereunder may construct, maintain and
operate telegraph lines along or over its
lines of railroad, and any corporation
formed hereunder or under any act
hereby amended, may charge and col-
lect a reasonable compensation for Its
service. But no corporation farmed un-
der this title shall have any right to
construct, maintain or operate upon or
within any street, alleys or other high-
way of any city or village, a railway of
any kind or any subway, pipe line, or
other conduit for supplying the public
with water, gas light, electric light,
heat, poiver or transportation or any
improvement of whatsoever nature or
kind, without first obtaining a franchise
therefor from such city or village ac-
cording to the terms of its charter and
without first making just compensation
therefor as herein provided: Provided,
That the state of Minnesota shall at
all times have full power and authority
to supervise and regulate the business
methods and management of any cor-
poration existing and operating hereun-
der, and shall also have full power and
authority at all times to fix the com-
pensation which shall or may be charged
or received by any corporation existing
and operating hereunder. And any cor-
poration organized under this act shall
be subject to any condition from time
to time imposed by such village or
city thru its board of trustees or city
council: And provided further. That the
Common Council of any city and the
board of trustees of any village at the
end of each and every five years from
and after the granting of any franchise
for the construction of any street rail-
way, telephone, water works, gas and
electric light, heat or power icnrks, or
any or all of them, shall have tin- n</ht,
when authorized so to do by a two-
thirds vote of the electors of such mu-
nicipality as hereinafter provided, to ac-
quire the same by purchase and there-
after operate the same, upon paying to
the company, corporation or person own-
ing the franchise the full and true cost
and value thereof, to be determined by
the usual proceedings for acquiring pub-
lic property for public use under the
right of eminent domain upon petition
of the authorities of such municipality.
Except that none of the commissioners
so appointed to appraise the same shall
be residents of said municipality, and
except further, that all the property,
if any thereof, owned by the corpora-
tion in interest, under and in connec-
tion with said franchise shall be in-
cluded in such proceeding and purchased
and acquired hereuuder. Before any
such property shall be acquired by any
municipality or such proceedings be in-
stituted, the proposition to acquire the
same shall be submitted to a vote of
the electors of the said municipality, at
a special election called for that pur-
pose within the three months immedi-
ately prior to the expiration of any five
years of said franchise and then only
when authorized by two-thirds of the
votes cast at said election. The con-
sideration paid for any such works or
property acquired under this provision
shall be first applied to the payment
of any bonds upon the property or
works acquired and the balance, if any,
to the person, company or corporation
owning said franchise.
Kansas Statutes.
The Kansas laws of 1897, chap.
82, after providing- that water, gas
and other corporations may oper-
ate under regulations laid down in
the act and such others as the mu-
nicipalities may prescribe, and en-
acting- that as a condition prece-
dent to procure a renewal or orig--
nal grant, lease or contract from
any city of the first, second or
third class, to furnish lig-ht, power,
water or heat, the companies must
furnish an itemized account of all
materials used in constructing
their plants and the value of them,
proceeds as follows:
City Authorized to Provide Plants.
Section 8. That all cities of the first,
second and third class of the state of
LEGISLATIVE FORMS.
515
Kansas are hereby granted full power
and authority on behalf of such cities
to purchase, procure, provide and con-
tract for the construction of, and to
construct and operate gas plants, elec-
tric light plants, electric power or heat-
Ing plants, and water works, and to
secure, by lease or purchase, natural
gas or other lands, for the purpose of
supplying such cities and the citizens
thereof with water, light, gas, power
or heat for domestic use and all other
purposes: Provided, That nothing in this
act shall prevent any such city from
constructing any such plant at any time
after the act takes effect.
Sec. 9. That for any and all indebted-
ness created for any of the purposes
mentioned in section eight of this act,
any city of the first, second or third
class, is hereby granted full power and
authority to issue the bonds of the city
to an amount equal to said indebted-
ness; the said power to create such in-
debtedness and to issue bonds being in-
dependent of and in addition to like and
other powers heretofore granted such
cities; but such bonds shall not be is-
sued in amount to exceed twenty per
cent, of the assessed value of such city
as shown by the last preceding assess-
ment. Said bonds shall not be issued
In denominations of less than ten dol-
lars, nor more than two hundred dollars,
and shall run for a period of not to
exceed twenty years, and shall bear in-
terest at a rate not to exceed 6 per
cent, per annum, and may be used in
payment in the purchase or construction
of the plant or plants to such persons
as will receive them and to whom such
city may become indebted in the con-
struction or purchase of any such plant
or plants, at not less than their face
value, and as directed by the mayor and
council of said city; and said bonds
shall be receivable in the payment of
city taxes in an amount not to exceed
ten per cent, of said taxes in any one
year.
To Vote on Issue of Bonds.
Sec. 10. On presentation of a petition
signed by two-fifths of the resident tax-
payers of any such city as shown by the
last assessment roll, the acting mayor
of such city shall issue a proclamation
for a city election to be held, giving at
least thirty days notice thereof in a
newspaper published and of general cir-
culation in said city, for the purpose of
submitting to the electors of such city
a proposition to issue bonds of such city
for any and all purposes mentioned in
the last two preceding sections, and sec-
tion twelve of this act.
Sec. 11. If, upon a canvass of the re-
turns of said election, it shall appear
that a majority of the electors voting
at such election are in favor of issuing
said bonds, the corporate authority of
the city shall issue the same for the
purpose and In the manner and to the
amount specified in this act.
Limit of Grani.
Sec. 12. No renewal or original grant,
lease or contract provided for in this
act shall continue for a longer period
than twenty years, and any such grant,
lease or contract may be terminated at
any time after the expiration of ten
years from the making of the same, or
such less time as may be fixed at the
time of making such grant, lease or con-
tract, and the city may acquire title
to any gas light, electric light, electric
power, water works or heating plant of
any private corporation upon the expi-
ration of any existing grant, lease or
contract now in force with any such
corporation, or upon the termination of
any future grant, lease or contract made
in accordance with this act; and all
the rights, privileges and property
thereto pertaining, in the following
manner, to wit: The city may, upon the
termination of any grant, lease or con-
tract now in force with any such cor-
poration, or at any time after the ex-
piration of ten years from the making
of such grant, lease or contract under
this act, or after the expiration of such
less time as may be stipulated in the
grant, lease or contract, file a petition
in the district court of the county in
which said city is situated, against the
owner or owners of any such plant and
others interested therein, which petition
shall contain a general description of
the plant or property, setting forth the
interests or property rights of said cor-
poration or others therein, as near as
may be done, and praying that the city
may be permitted to acquire a title
thereto in .the manner provided in this
act. Thirty days notice shall be given
to all persons interested in said prop-
erty at the time for the hearing of the
said application, by publication in three
successive issues of some weekly news-
paper printed in such city, having gen-
eral circulation therein, the first of
which shall not be less than thirty days
prior to the time of the hearing, and
also by delivering a copy of such notice
to the manager of such plant, if such
manager can be found within the count-
ty. In such proceedings, petition and
notices, it shall not be necessary to
state the names of any of the parties
interested as defendants, except those
of the reputed owner or owners.
Appoint Commissioners.
At the time set for the hearing of
such petition, the court shall appoint
three disinterested commissioners, non-
residents of the city, one of whom shall
be named by the court and the other
two by the county commissioners of
said county. The commissioners so ap-
pointed, after having taken and sub-
scribed an oath to faithfully and im-
partially discharge their duties as such
commissioners, shall forthwith proceed
to determine the then present value of
such plant, exclusive of the city's fran-
chise or property element therein,
which value shall be a fair value there-
of. The commissioners so appointed
shall have power to administer oaths,
to subpoena and compel the attendance
of witnesses, and the production of
books and papers, and any citizen tax-
payer or officer of the city may appear
before them and be heard as to the
city's interest. Within thirty days after
their appointment, unless, for good
cause -shown, the time be extended by
the court or the judge thereof, the com-
missioners shall file their report witl
the clerk of said district court, f any
commissioner so appointed shall fail to
516
APPENDIX I.
act, or liis place become vacant for any
other reason, the court shall lill such
vacancy. The action of a majority of
such commissioners shall be deemed to
be the action of the commissioners.
Within ten days after the filing of such
report, any citizen of such city or other
person interested may file exceptions
thereto, and thereupon the court or the
judge thereof shall appoint a time not
more tha"n thirty days from the filing
of such report, for the hearing of such
exceptions, which exceptions shall be
heard in a summary manner without
pleading, and upon such hearing the
court may confirm the said report or
may set the same aside as shall be
just, and appoint new commissioners.
In the event such report shall be set
aside, further proceedings shall be had
in all respects as in the case of the
original appointment of commissioners,
until the award of the commissioners
shall be confirmed by the court. No ap-
peal shall lie from the action of the
court upon the hearing of exceptions to
any award of the commissioners. Said
commissioners shall be allowed three
dollars per day for services rendered,
to be paid out of the city treasury. At
any time within four months after the
confirmation of such award by the dis-
trict court, the city may deposit the
amount of the award with the treasurer
of the county for the use of the owners
or others interested in such plant; and
if, for any cause, such commissioners
so appointed shall fail or refuse to make
and lile their report within the time
limited therefor, the court, by attach-
ment, may compel such filing, or may
discharge such commissioners and ap-
point new ones from time to time un-
til commissioners shall be appointed,
two of whom shall agree upon a report.
From the time of making such deposit
with the county treasurer the city shall
be absolute owner of any and all priv-
ileges, property, and property rights of
any such corporation, and all others in
any way interested in any such plant,
free and clear of the claims of all per-
sons theretofore interested therein. Up-
on application of the city, writs of as-
sistance shall be granted by said dis-
trict court, directing the sheriff of the
county to put such city into possession
of such plant. The court shall deter-
mine as to the proper disposition of the
sum so awarded, including the rights
of incunibrances, owners, and all others
Interested therein, and any such person
aggrieved by such determination may
review the same by petition in error in
the supreme or appellate court.
There are strong ideas in this
law, but it is unnecessarily wordy,
it omits street railways, telephones,
telegraphs, etc., and does not au-
thorize cities to acquire plants by
purchase of a majority of stock,
which is sometimes the best and
easiest way to do the work. For
brevity and comprehensiveness the
Indiana law above cited is most
admirable, as are also the italicized
clauses in the Minnesota statute.
j.*. clause covering (/// street fran-
chises and local public utilities,
authorizing all municipalities to
build, buy, or (/rant, with the refer-
endum and a 5 per cent, initiative,
that is what public ownership
needs, such a clause put into the
constitution of every state, beyond
the reach of legislative interfer-
ence, will give us in large degree,
public ownership, direct legislation
and municipal home-rule all in one.
SUGGESTIONS FOR AMENDMENTS AND
LAWS.
Made after Reviewing the Whole Body of
Legislation Relating to the Main Topics
of This Bonk, with the Hope of Improv-
ing on Past Models, Especially in respect
to Brevity, Clearness and Comprehensive-
ness.
Municipal Home-Rule.
1. Any city or town may frame a
charter for itself. On motion of
the local legislative authorities or
petition of 8 per cent, of the voters
to the Executive, 15 freeholders
shall be elected to draw up a char-
ter to be submitted to the people
at the next election. Such charter
shall be publisht thoroly to the cit-
izens at least one month before
said election, and, if adopted at the
polls, shall become the organic law
of the municipality subject to the
constitution and laws of the State.
2. Such charter may be amended
by referendum vote on the initia-
tive of the mayor, or councils, or
a 5 per cent, petition of the voters
to the Executive.
3. Municipal serviced, such as pri-
vate corporations may engage in,
and all affairs of a purely local
business nature, shall be given over
to municipal sovereignty free of leg-
islative interference. In their rela-
tion to State interests municipali-
ties shall remain fully under the
control of the legislature acting
thru general laws, or thru such,
special laws as may be asked for,
or adopted, by referenda! vote in
the municipalities affected.
Direct Legislation. General Amend-
ment.
1. On petition of 5 per cent, of
the voters of the State (measured
by the vote at the last preceding
general election) proposing any
law or amendment to the Constitu-
tion, or demanding the referendum
LEGISLATIVE FORMS.
517
on any law passed by the Legis-
lature, the Governor shall cause
such law or amendment to be sub-
mitted to the people at the next
election, for adoption or rejection
at the polls. A law enacted by the
Legislature shall not go into effect
till 90 days after passage and pub-
lication, nor until approved by the
people, if within said 90 days a 5
per cent, petition for the referen-
dum on it is filed with the Gover-
nor: provided, that this 90-day rule
shall not apply to mere matters of
routine which are substantially the
same at every session, and that
urgency measures necessary for the
immediate preservation of the pub-
lic peace, health or safety, may be
passed by a 2/3 vote of the Legis-
lature and may take effect at once,
and shall be valid and effective
during the time necessary to sub-
mit the matter to a referendum, if
one is called for, and until repealed
or altered at the polls or by the
Legislature.
2. These provisions shall apply
to cities and towns, reading Mu-
nicipality for "State," ordinance in
place of "law," charter for "Con-
stitution," mayor for "Governor,"
councils for "Legislature," 30 days
instead of 90 days.
3. Subject to the popular veto as
above, the Legislature may enact
such laws as may seem needful to
enforce these provisions, and estab-
lish such penalties for forging
names on initiative and referendal
petitions, or taking names of non-
voters upon them, as may be re-
quired to protect the purity of
such petitions.
4. All officers in charge of print-
ing ballots or otherwise connected
with elections, shall accord every
reasonable facility in their power
and do every act necessary for the
clear, concise and accurate printing
of referendal questions upon the
ballots, the thoro information of
voters upon the questions to be de-
cided, and the thoro working out
of the substance and spirit of this
amendment.
[It would be more In harmony with
common usage to make the petitions
returnable directly to the city clerks
and the Secretary of State (or other
officers in charge of printing ballots)
Instead of sending them to the Mayor
or Governor; but we suggest that the
latter plan has some advantages in re-
spect to the atmosphere and dignity of
the petitions and the sentiment that
gathers about them, and in respect to
holding the executive (the most care-
fully selected officer in city or State)
directly responsible for the due execu-
tion of the all-important referendum
law.
The South Dakota precedent of 5 per
cent. Initiative and referendum petitions
may be found too high in more popu-
lous States. If it so appears when di-
rect legislation is put in operation It
will be easy to reduce the per cent, for
State petitions or petitions in very large
cities, or adopt a fixed number as sug-
gested on p. 300 In analogy to the law
by which 10 citizens of a New England
town may by petition have any muni-
cipal matter they choose put In the war-
rant and brought before the town meet-
ing.] i
Municipal D. L. Specific.
Referendum.
1. Ordinances and acts of city
councils (excepting matters of
routine and urgent measures for
public health or safety) shall not
go into effect for 30 days after
passage and publication, and, if
within that time 5 per cent, of the
voters of the city petition the ex-
ecutive for a referendum on any
such act or ordinance, it shall not
go into effect until approved by the
people at the polls. Questions
raised by such petitions shall be
thoroly publisht thru newspapers
and posters or equivalent means
for at least three weeks and shall
then be submitted at the next reg-
ular election, or at a special elec-
tion 6 to 15 weeks after filing the
petition, provided 15 per cent, of
the city's electors ask for such
special election and deposit funds
to pay for it. The mayor or 1/3
of either council may order a refer-
endum, and the mayor, with 1/3 of
councils, may order a special elec-
tion.
Initiative.
2. Any desired ordinance may
be proposed for decision at the
polls by 5 per cent, petition of the
city's voters filed with the execu-
tive, publication and submission
being governed by the same pro-
visions as in 1.
3. All grants, extensions or re-
newals of important franchises
(such as water, gas, electric light,
railway, telegraph and telephone
privileges) must be submitted to the
people.
518
APPENDIX I.
4. A measure rejected by the
people cannot be again proposed
the same year by less than 20 per
cent, of the voters, nor substan-
tially re-enacted by councils, ex-
cept by 2/3 vote and then must go
to the polls without petition; nor
shall a measure approved by the
people be altered or repealed with-
out a referendum: Provided, how-
ever, that councils by 2/3 vote may
adopt urgency measures for the im-
mediate preservation of the public
peace, health or safety, to be valid
during the time necessary to sub-
mit the matter to a referendum,
if one is called for.
.Local Option.
5. These provisions shall apply
to any city upon their adoption by
the electors, and the executive may
and upon 5 per cent, petition shall
submit the question of their adop-
tion to the voters at the next elec-
tion.
(If it is desired to make the pro-
visions absolute and not subject to
local option, the fifth section
should be omitted.)
Oily D. L. C risp.
1. Either Council may, and on
petition of voters of the city
amounting in number to 5 per cent,
of the votes cast at the preceding
city election, shall submit to the
voters for decision at the next city
election (or at a special election if
so ordered by council or by 15 per
cent, petition of voters) any ques-
tion which might lawfully come be-
fore such council.
[A bill composed of this section all
by Itself (except of course the opening
and closing phrases common to all bills)
might prove an excellent first step
where D. L. sentiment is not strong
enough in the legislature to carry a
more extensive measure. The gain will
be greater however if a bill can be
passed including one or more of the
following sections. It is a good plan to
have two or more bills introduced by
different members, and get the best law
the legislature is willing to enact.]
2. The mayor may, and on pe-
tition as aforesaid, shall submit
any municipal question at the next
city election (or at a special elec-
tion if he chooses or it is ordered
by either council or by 15 per cent,
petition).
3. Ordinances or acts of councils
shall not take effect for thirty days
after passage and publication, nor
until approved at the polls if a 5
per cent, petition for referendum
thereon be filed within the thirty
days: Provided, however, That this
30 day rule shall not apply to mat-
ters of mere routine and that coun-
cils by a 2/3 vote may adopt urgen-
cy measures necessary for the im-
mediate preservation of the public
peace, health or safety, which may
go into effect at once and remain
in force till repealed or modified by
councils or by referendum.
4. Petitions may be addressed to
the mayor or either council and en-
tered in the office of the city clerk,
who shall record their nature and!
date of entrance and transmit them
to the authority addressed. It
shall be the duty of such authority
and also the duty of the city clerk
to see that questions duly called
for are concisely and clearly
printed on the ballots, and all offi-
cers connected with elections shall
afford every reasonable facility and
do every act wdthin their scope that
is necessary to carry out the spirit
and purpose of this act.
[Sections 1 and 2 might be combined
The mayor or either council may, or
* * * shall * * * (special election
ordered by mayor or * * ) any ques-
tion which may lawfully come before
(or be dealt with by) the legislative au-
thorities of the city, or that one of them
ordering or petitioned to order th<; ref-
erendum.]
Public Oicn crship. Broad.
1. On a vote of the people to
that effect, any city or town may
build or buy, own and operate,
water, gas, electric, street railway,
telegraph or telephone plants to
serve the municipality and its in-
habitants; or may take such works
by lease or contract, or purchase
and hold a majority of the stock
controlling any such plant or
plants.
2. Cities and towns may unite
in the, purchase, construction, oper-
ation, etc., of such plants.
3. The executive may submit
such qiiestions at any election, and
on petition of 5 per cent, of the
voters, or request of councils in
case of a city, must submit them
at the next election, first notifying
the citizens fully of the matters to
be voted upon by thoro publication
LEGISLATIVE FORMS.
519
at least three weeks before the
vote.
4. Pubic works shall not be sold
or leased except in accord with a
referendum vote.
[If It Is desired to give cities and
towns the right to force the purchase
of private works, the following clause
may be Incorporated in the law or
amendment, \iz.-Cities and towns shall
have the right to purchase such works at
the cost of dupliration, and may enforce
such right l>y proi-i-rdings at law as in
taking land for public use by right of
eminent domain. In States where fran-
chises are revocable, as in Mass., there
Is no legal necessity of paying more
than the cost of duplicating the physi-
cal plant, and the same rule holds in
any State in respect to a purchase made
at the end of a franchise term.]
Bonds.
Bonds may be issued to secure
public works, provided, they shall
not exceed in amount the value, of
the works; and bonds issued to se-
cure revenue producing 1 works shall
not be counted in estimating the
indebtedness of the municipality in
relation to the debt limit.
Gas and Electric Works. General.
(With referendum clauses adapt d to states in
which the town meeting system prevails.)
1. On a vote of the people to that
effect, any town or city may build
or buy, own and operate, gas, elec-
tric or other works to supply the
municipality and its inhabitants
with light, heat or power, or may
take such works by lease or con-
tract, or may purchase and hold a
majority of the stock controlling
any such local plant or plants sup-
plying its inhabitants.
2. Cities and towns may unite in
the purchase, construction and
operation of such works.
3. The mayor of a city may
cause the question of such purchase
or construction, etc., to be submit-
ted to the voters of the city at any
election, and upon petition of 5 per
cent, of said voters, or of either
council or board of aldermen, shall
cause such question to be submit-
ted at the next election, first noti-
fying the citizens fully of the mat-
ters to be voted upon by thoro pub-
lication at least three weeks before
the vote.
In a town the matter may be de-
termined by putting the question
in the warrant in the regular way
and deciding it by vote at town
meeting.
4. The construction, mainten-
ance, and management of such pub-
lic works may be placed in such
hands and conducted on such plan
as may be decided upon by town
meeting, or, in a city, by ordinance
or 5 per cent, initiative petition rat-
ified in either case by the voters
at the polls.
5. Hereafter no grant or exten-
sion or renewal of any franchise or
street privilege for the manufac-
ture or distribution of gas or elec-
tricity for the supply of light, heat
or power in any municipality, shall
be valid until ratified by the people.
6. Public works shall not be sold
or leased except upon and in ac-
cordance with a vote of the people
in town meeting or at the polls.
[If thought best the following form
may be used for Sec. 4 instead of the
clause just given: Sec. 4. The construc-
tion, extension, maintenance and man-
agement of such municipal works, em-
ployment of superintendent, etc., and
all matters of direction and operation
shall be in charge of a non-partisan
board of three members (no two mem-
bers from the same political party) ap-
pointed by the mayor or selectmen, one
member to hold 1 year, another to hold
2 years and a third to hold 3 years,
and each year after the first one new
appointment to be made to hold 3 years.
Or, if desired the board may be elec-
tive; or the works may be put in con-
trol of a single officer appointed or elec-
ted. On the whole, the first form of
Sec. 4 according local option and full
municipal liberty in this matter of
management, seems much the prefera-
ble form. A town or city has as much
right to determine the plan on which
its own particular business affairs shall
be managed, as an individual or firm
or partnership of six or a dozen have
to determine the plan on which their
own particular business affairs shall be
managed.]
Gas and Electric Works. Special.
Where the law gives cities au-
thority to "build or buy," the mat-
ter is reduced to its lowest terms.
The building option will generally
bring the companies to reasonable
terms, and the good sense, self-
terest and justice of the people may
be relied upon to prevent ruinous
competition with a company hav-
ing suitable works and willing to
sell, them at a reasonable price. If,
however, it is deemed desirable to
provide more specifically for the
purchase of private works the fol-
520
APPENDIX I.
lowing forms may be found useful.
They are intended to apply where
franchises are revocable at will as
in Mass., but may easily be adapted
to purchases at the expiration of
franchise terms, or to the purchase
of works with outstanding fran-
chise terms. They may be incor-
porated in the last bill just after
section 2 above.
Sec. 3. Where gas or electric works
established for the purpose the munic-
ipality has in view, and reasonably fit
tnerefor, already exist and their owners
are willing to sell as hereinafter pro-
vided, the purchase of such works (or.
If two or more distinct plants of differ-
ent ownership exist for said purpose
In the same municipality, the purchase
of at least one of such plants) shall be
a condition of the rights of municipal
construction, operation, etc., set forth
In section 1.
(a) In case of a gas or electric plant
lying within the limits of a city 01
town, it may buy the same at its actual
value.
fb). In case of a plant lying partly in
one municipality and partly in another:
FIRST, all municipalities concerned
may co-operate and buy the whole
plant at Its actual value; or
SECOND, the municipality in which
the main gas works or central light-
ing station of the plant is situated,
may purchase the whole plant at the
said actual value and may operate
the plant within and without the
municipal limits; or
THIRD, any municipality may pur-
chase the portion of such plant with-
in Its own limits at the actual value
of such portion, plus the damages
due to the severance of such portion
from the rest of the plant; and as
between two municipalities each de-
siring to own a given portion of such
a plant, this third right shall be
paramount to the second or to any
ownership acquired under the sec-
ond.
Sec. 4. The said actual value shall
not Include any allowance for franchise
or for privileges in the streets, nor take
any account of good will or earn-
ings, past, present or future, but
,51+ ?_shall be simply the actual value
of the physical plant (or portion there-
of), to be found by taking the cost of
establishing a new plant (or portion)
of equivalent capacity and equally good
materials and workmanship, and sub-
tracting the portion of this value repre-
senting the inferiority of the existing
plant as compared with a new one of
equivalent capacity, by reason of age,
wear and tear, progress of Invention
and discovery, or other source of de-
preciation.
The estimates of cost, depreciation,
actual value and damages for severance,
If any, shall relate to the time of the
vote for purchase, the prices of labor,
materials, machinery, etc., and other
conditions at that date being used, in
making the calculations.
Sec. 5. Upon a vote for purchase, the
mayor or selectmen shall forthwith give
notice of such vote to the person, firm
or corporation owning the works to be
bought, and such owners, if they de-
sire to sell, shall, within 15 days after
said notice, appoint some person to act
as arbitrator; within the same time a
second arbitrator shall be appointed by
the mayor or selectmen; and these two
shall choose a third who shall not be
an officer of the municipality, nor an
officer or stockholder of the company,
or otherwise interested in said works
to be bought. Within 60 days the arbi-
trators shall report to the mayor or se-
lectmen and to the person, firm or com-
pany owning the works, their determi-
nation as to the reasonable fitness of
the works, and the aforesaid cost, de-
preciation, actual value, and damages
for severance, If any. If no two of the
arbitrators agree, or arbitration fails in
any way after the appointment of an
arbitrator by the owner or owners of
the works, or if either party feels ag-
grieved by the results of the arbitra-
tion, or refuse to execute the sale or
purchase in accordance with the award
of two arbitrators, petition will He
within 15 days, to the supreme judicial
court or any justice thereof, on which
a trial shall be had in the manner of
hearings in equity, and the decree of
the- court shall be final and binding, and
the court shall have jurisdiction in eq-
uity to compel compliance therewith on
behalf of either party.
On payment of the aforesaid actual
value and damages for severance, if
any, as determined by award, or by de-
cree If the matter is taken into court,
the municipality shall have a right to
the title and possession of said works
(or portion) free of all incumbrance. or
it may pay over the difference between
the amount of said value and damages,
and the amount of any Hen, mortgage,
or other incumbrance on the property,
and take the works subject to such in-
cumbrance.
Sec. 6. Upon the purchase of such
works (or portion) by a municipality, all
rights of the former owners or others
to make or distribute gas or electricity
in that municipality shall cease, except
as far as expressly agreed to the con-
trary between such persons and the mu-
nicipality in pursuance of an ordinance
ratified at the polls or a vote in town
meeting; Provided, however, that if two
or more distinct plants exist in the mu-
nicipality and It does not buy them all,
those remaining unbought shall retain
all rights of manufacture, distribution,
etc., as if the municipality had not en-
tered the field.
Sec. 7. If the owners of said works
refuse to sell or decline to arbitrate as
above provided, the city or town may
proceed to build works of its own.
Sec. 8. If no suitable works exist In
the town or city it may construct them
and extend, enlarge, own, control, main-
tain and operate them.
Publicity.
All business done by virtue of, or
in connection with, any public
franchise, shall be subjected to fre-
quent and thoro inspection and au-
diting by public officers, and the re-
sults shall be placed on file in pub-
lic offices in convenient places in
LEGISLATIVE FOBHS.
521
the localities interested, and shall
be open at all times during ordi-
nary business hours to examination
by any person.
The legislature shall forthwith
enact laws to carry this provision
into effect and provide penalties
against any person, firm or corpor-
ation doing such business and in-
terfering with or refusing proper
aid and facilities in the execution
of this law.
Reduction of Rates.
The rates charged for water, gas,
electric light, transit, telephone
and other monopolistic services,
shall not exceed the rates required
to cover operating expenses (in-
cluding depreciation) and a rea-
sonable percentage of interest or
profit on the real present value of
the actual legitimate investment,
or the actual value of the physical
plant (cost of duplication less de-
preciation) plus the present value
of any amount legitimately paid
for franchises considering the pro-
portion of the franchise term still
unexpired.
The legislature shall forthwith
enact laws to carry this provision
into effect, and shall amend such
laws from time to time as experi-
ence may show to be necessary to
accomplish the purpose and exe-
cute the spirit of this amendment.
Taxation and Overcapitalization.
Corporations and combines shall
be taxed upon the actual value of
their tangible property at the same
rates that similar values in individ-
ual hands are taxed, and if either
the face or market values of the
stock and bonds or other securities
of any company or combination
reaches a total in excess of the said
actual value of its tangible proper-
ty, they shall be taxed on such ex-
cess at triple rates upon the full
amount of the excess.
Progressive Taxation.
All incomes of persons, firms or
corporations, of $2,000 or more per
year shall be classified in groups
ascending in geometric progression,
and these groups shall be taxed at
rates ascending in arithmetic pro-
gression, to wit:
Per cent .
tax.
... 1
... 2
... 3
.. . 4
... 5
... 6
7
Per oent.
IE come. tax.
$2,048,000. .11
4,096,000.
8,192,000.
16,384,000.
32,768,000.
65,536,000.
131,072,000.
262,144,000.
524,288.000.
1.048,576,000.
.12
.13
.14
.15
.16
.17
.18
.19
.20
$2,000.
4,000.
8,000.
16,000.
32,000.
64,000.
128,000.
256,000.
512,000 9
1,024,000 10
This is a mild form; the tax
would not be likely to go beyond
16 or 17 per cent, in any case;" the
following is more thorogoing:
Incomes of persons, firms or cor-
porations, of $2,000 or more, shall
be classified in groups ascending
by twos as far as $10,000, then by
fives to $25,000, and from there on
in geometric series. These groups
shall be taxed at rates ascending
in arithmetic series to 10, and then
by steps of 5 up to 60 per cent,
on 100 millions as follows:
Percent. Percent.
Income. tax. Incom*. tax.
$2,000 1 $200,000. ... .15
4,000 2 400,000 20
6,000 3 800,000 25
8,000 4 1,600,000 30
10,000 5 3,200,000 35
15,000 6 6,000.000 40
20,000 7 12.800,000 45
25,000 8 25,600,000 50
50,000 9 51,200,000 55
100,000 10 102,400,000 60
Inheritances, bequests and de-
vises above $10,000 to be taxed at
the same rates as incomes, except
such as accrue to public institu-
tions.
In his great book, "The Wonderful
Century," the eminent scientist, Alfred
Wallace advocates a progressive income
tax of 10. 20. 30 and 40 per cent, on
the surplus over the same number of
thousand pounds in the income, "rising
ing to 100 per cent, on the surplus
above 50,000," and "a corresponding
or even larger increase in the death
dues." This is much more drastic than
the measures we have proposed.
The per-centage of tax should rise
rapidly with the high incomes, but a
scale running up to 100 per cent of all
above $250,000 seems much too steep a
slope for present conditions in this
country.
The tax should be progressive as
to time as well as to amount of in-
come, that is, all the percentages
should be increased every few years
till a reasonable diffusion of wealth
is attained or co-operative industry
takes the place of private monopoly
and competition, in either of which
cases incomes will be fairlv equal-
ized. (See pp. 528, 530, 347 Swiss,
169 New Zealand.)
522
APPENDIX I.
Special Legislation.
Special legislation affecting mu-
nicipalities shall be invalid, except
so far as asked for or adopted by
the municipality affected. For the
purposes of this provision, cities
and towns are divided into three
classes: 1st, those below 8,000 popu-
lation; 2d, those between 8,000 and
100,000, and 3d, those above 100,000.
Street Franchises 1.
Each city and town shall have
full control of its streets, and all
grants, extensions or renewals of
water, gas, electric railway, tele-
graph, telephone, or other import-
ant franchises and privileges there-
in shall be on such terms as the
local authorities may prescribe,
subject to the referendum at the
option of the executive or 1/3 of
either council, or upon petition of
5 per cent, of the voters.
Street Franchises 2.
Street franchises and local public
works of a business nature such
as water and lighting plants, street
railways and telephone exchanges,
shall be matters of sole municipal
sovereignty beyond the interfer-
ence or control of the Legislature,
and subject only to + his constitu-
tion: Provided, that all ordinances
or acts granting, extending, or re-
newing such franchises or provid-
ing for the construction, purchase,
sale or lease of such works, shall
be subject to the referendum upon
petition of 5 per cent, of the voters
of the municipality filed in the
executive office within 30 days
after passage and publication of
said act or ordinance.
Sometimes one of these single-
minded provisions can be passed
where nothing can be done with
the broader measures. Work to
get whatever can be obtained now,
even if it be only a clause against
special legislation. Every step in
the right direction makes future
progress easier.
THE TRUE CITY
IS THE CITY WHERE JUSTICE AND MANHOOD
ARE MORE REGARDED THAN MONEY
THE CITY WHERE POWER AND PROSPERITY ARE FOR
THE WHOLE PEOPLE
AND NOT
FOR THE PRIVATE POSSESSION
OF A FEW POLITICIANS AND MONOPOLISTS.
APPENDIX II.
Notes Made after tlie Chapter Proofs were Paged.
A. Gas. I. The Haverhill Gas Co.
charges $1.10 per thousand and
says that its operating expenses are
71 cents per thousand and that its
plant is worth over $400,000, or
about $4.3 per thousand feet of an-
nual output. The actual amount
of money that has been paid in by
the corporators is only $75,000;
wherefore if the company's state-
ment of value is correct, $325,000
or more of profits have been put
into the plant after paying an aver-
age of 10 per cent, dividends a year.
The people have been made to pay
large interest on the actual invest-
ment and in addition have paid the
cost of new construction and im-
provements quintupling the value
of the plant. It seems clear that at
least $325,000 of the Haverhill plant
really belongs to the people; it has
been built with their money; money
taken from them by unjust rates;
rates yielding 10 per cent, plus a
large surplus are certainly unfair.
If the people wish to buy the plant
they should be allowed to do so on
payment of $75,000, less deprecia-
tion. And until they elect to buy
the plant rates should be reduced
so as to cover operating expenses,
taxes, depreciation (on the private
capital in the plant at least) and a
fair interest on the present value
of the investment put into the
plant by the capitalists (i. e. in-
terest on $75,000, less depreciation.)
At present (Nov., 1899) the city is
asking the Gas Commission for im-
mediate reduction of rates to 90
cents per thousand, which, on the
company's own showing, will yield
a good profit on the real investment
of the owners. Last year the com-
pany paid dividends equal to 50 per
cent, on the paid-in capital and had
a surplus of 20 per cent, more, mak-
ing 70 per cent, profit on the in-
vestment really made by the capi-
talists. The city also asks permis-
sion to see the returns made by the
company to the Gas Commission,
believing that the alleged operating
cost of 71 cents per thousand is
much above the truth. This request
the Commission has denied. The
legislature will be askt to pass an
order preventing the suppression
or hiding of returns in the office of
this public Commission, and allow-
ing public inspection of said re-
turns as of all other public records.
For further particulars see p. 539.
2. Gas at 50 Cents and a Big Bonus
Offered for the Franchise.
New York, Dec. 19. The Common
Council of Passaic, N J., was about to
close a contract with ex-Mayor Andrew
McLean, who guaranteed to supply gas
in Passaic at 50 cents a thousand, main-
tain fifty-three gas lamps for the city
and furnish a different lamp at about
two-thirds their present cost by means
of a gas plant controlled by Dr. Chis-
holm, of San Francisco. Upon this the
United Gas Improvement Co. offered to
pay $20,000 for seventeen years to the
city, $20,000 to each of the hospitals,
$28,000 for a new school, will give the
police and firemen's relief fund $10,000
each, and will also furnish Passaic city
with 50 cent gas and private consumers
at the same rate. (No wonder the U.
G. I. Co. strained so many nerves to
get the right to sell gas at one dollar in
Philadelphia. The Passaic offer created
a big surprise, and caused no action to
be taken on the gas question. The ac-
tual cash outlay provided for in the
United Gas Company's offer is $928,000
besides the penalties Incurred. (Phila-
delphia Ledger.)
If the United Gas Improvement
Co. can afford to furnish 50 cent
gas in Passaic and pay a large bo-
nus for the privilege, what sort of
monopoly profits is it making on
100 cent gas in Philadelphia, 170
cent gas in Trenton, etc.?
B. Electric Light. 1. Jacksonville
(FJa.) Public Electric Light Plant.
When the municipal plant was es-
tablisht, the private companies were
charging 28 cents per kilowatt.
The city plant reduced the charge
at once to 7 cents per kilowatt and
has "kept it there. For a 2,000 c. p.
arc burning all night the companies
charged $15 a month; the city plant
523
524
APPENDIX II.
fixt the rate at $7.50 a month. For
midnight arcs the 'old private rate
was $13, and the new city rate,
$6.50. The old companies were
forced to meet these rates, and the
price of gas was also forced down
from $3 to $1.50 per thousand feet.
Prior to the establishment of its
municipal plant the city was pay-
ing $8,000 a year for lighting its
streets with gas. Xow the streets
are lighted free by electricity; also
the public buildings, jails, fire sta-
tions, armories, hospitals and all
charitable institutions. The street
and commercial lines are being con-
stantly extended out of earnings.
A considerable sum is being- laid
by for a sinking fund, and the busi-
ness is paying 5 per cent, interest
on the investment. At present
(Oct., 1899) with 160 arcs and 300
30 c. p. incandescents in the pub-
lic service, and 85 arcs and 15,000
16 c. p. lamps in the commercial
system, serving 1,250 customers, the
total operating expenses are at the
rate of $36,000 a year, extensions
$2,100, receipts $45,000, besides pub-
lic lights worth $20,000 a year at
present commercial rates. Invest-
ment $150,000. Profits at the rate
of $24,000 above operation and de-
preciation; most of it in the shape
of free public lights. It is esti-
mated that the municipal plant
saves the people 75 per cent, of the
former cost of light for equal ser-
vice. From the data in my posses-
sion I can only figure out 65 to 70
per cent, saving including reduced
rates, cash profits and free lights
and subtracting interest. By the
reduction of rates alone (gas and
electric, public and private) the
people are now saving at a rate
that Avill amount each year to more
than the entire cost of the munici-
pal plant. Thru the entire history
of municipal control of public
works in Jacksonville not a breath'
of suspicion of political jobbery has
been attached to the management.
(See City Government, Nov., 1899.)
C. Street Transit. 1. Cost in*Neic
York. According to Mr. H. H. Vree-
land, president of the Metropolitan
Street Eailway Co., the nickel street
car fare is divided as follows: For
labor, 1.95 cents; materials, .485
of a cent; taxes, .265 of a cent; in-
terest and dividends, 2.3 cents.
Under public ownership free of
debt a 2 1 /-- cent fare would pay for
labor and materials, even without
considering the reduction of cost
per passenger sure to result from
the increased traffic consequent
upon low fares. Including the trans-
fers as so many additional rides,
the present average fare per ride
on the Metropolitan system is only
3 1-3 cents, and as 46 per cent of
the fares go for interest and divi-
dends, less than 2 cents per ride
would pay running expenses under
full municipal ownership without
considering the increase of travel
sure to come with a 2-cent or 2%
or 3-cent fare.
2. Defiance of Law 'by Street Rail-
way Companies. The following ac-
count is taken from The Outlook,
Nov. 25, 1899:
"Highway Robbery.
Within the past few weeks news-
papers in this city and its vicinity have
abounded in such titles as "Streets
Stolen." "Tracks Torn Up," "Roads
Ruined." The cause is found in several
unusually audacious and impudent at-
tempts on the part of rivaj trolley cor-
porations to violate the rights of the
public and even to defy the law itself.
The usefulness of the trolley roads be-
tween suburban towns is unquestioned,
but their rapid extension has led to
gross carelessness in the matter of pro-
tecting the roads. Thus, Westchester
County, where the particular outrages
above referred to took place, has been,
at great cost and labor, provided with
many fine macadamized roads, leading
often through beautiful scenery; their
use forms one of the most agreeable
of country pleasures to be had near
New York, to say nothing of their great
and increasing practical utility. That
such roads as these should be wantonly
and repeatedly torn up without sanc-
tion of law and while litigation as to
rival franchises is still pending yes,
even when injunctions are in force to
prevent this very thing justifies the
epithet high-handed robbery. In one re-
cent case the two rival companies put
five hundred men (about evenly divided)
THE LATEST XOTEt
525
tit work simultaneously on a short sec-
tion of road, laying their rival tracks
side by side and absolutely ruining the
road unless it be entirely rebuilt.
Fights between the laborers of the two
gangs were common, and something
very like a pitched battle has been re-
peatedly threatened. In this case one
of the companies had only the most
shadowy. second-hand, semi-defunct
claim, and the residents along the road
were striving to obtain an opportunity
to be heard in the matter. At another
place in the same county a city gov-
ernment was obliged to remove forcibly
a line of rail and to protect its laborers
by a platoon of police against a threat-
ened armed attack by the corporation's
employees.
Of tie bribery of small city and vil-
lage officials men to whom a hundred
dollars is a strong temptation of the
pulling of political wires for corpora-
tion ends, and of the incessant employ-
ment of legal trickery and subterfuge,
there are constant accusations and clear
moral evidence. But what we note here
Is the increasing tendency of these con-
tending litigants, the rival trolley com-
panies, to forestall the decisions of
courts and grants of franchises by ac-
tual violence. This sort of thing grows
with immunity. It is time that an ex-
ample should be made of the more flag-
rant violators of the law. Confiscation
of roads and road privileges has become
altogether too common and too easy.
The prize in these vicious rivalries is
usually not Immediate profit, but the
rich future possibilities of gain. The
people, too. should look to the future,
and fight vigorously for their parkways,
bear.tiful residence streets, and costly
highroads. (From the Outlook, Nov.
25, 1S99).
D. Telephone and Telegraph.
1. Telephone Taxes.
Columbus, O., Dec. 19. By a decision
of the Supreme Court to-day a new
method of tax valuation far reaching
In its effect will be establisht in Ohio.
The decision directly affects the tele-
E hones of the Bell Company, which are
eld to be taxable at their rental value,
estimated at $2.'!3 each, instead of their
actual cost, $3.40 each. The authorities
estimate that there are 25.000 Bell tele-
phones in use in the State. If each of
these instruments earns $14 net for the
Bell Telephone Company, it represents
a value of $233 to each instrument.
On 25.000 instruments it represents an
earning in the State of Ohio of $5,833,-
O'K). The Attorney General claims that
on this basis the company owes the
State ?80,000 annually.
The probability is that the aver-
age net return to the company is
considerably more than $14 per
phone. The attorney General's es-
timate appears to be quite conser-
vative.
E. Private Monopoly. 1. Possible
Perpetuation Vandal Kiiin. Macau-
Wfiniinfi. If a united body of
men owned all the guns in the com-
munity and the magazines of pow-
der and shot, and the rest of the
people had no weapons, the powder
monopolists cotild do what they
pleased with the government and
the people. But distribute the guns
and ammunition so that each citizen
shall have a supply, and, with rea-
sonable public spirit, military des-
potism will be impossible. The pri-
vate monopoly of franchises and
magazines of wealth has had effects
in some degree similar to the ef-
fects of the concentration of mili-
tary in power in the hands of a
conquering army or hereditary no-
bility. Only industrial diffusion
can overcome industrial despotism
and bring us full liberty and dem-
ocracy.
It is not difficult to see how pri-
vate monopoly might possibly per-
petuate its power if the people
delay too long. The growth of mo-
nopoly reduces larger and larger
masses of people into industrial
subjection. Dependence stifles re-
sistance and saps the fountains of
inanhood. Custom and training
may make our workmen helpless
parts of a great machine, and even
make them believe in the righteous-
ness of the conditions that oppress
them. Industrial serfs may not
only be made to vote as their mas-
ters direct, but to think as they
wish. Men may be taught to rev-
erence their opressors, applaud the
doings of industrial despots, and
fight for their monopolistic mas-
ters as they did in former times,
for their emperors and kings. I do
not agree with those who think
this is likely, but it is certainly
conceivable in the light of history
and the laws of human nature, and
if we would avoid the possibility
we must act while the people have
independence enuf to resist the en-
croachments of monopoly, and man-
hood enuf to make their resistance
effective. Let us make the great
franchises and natural monopolies
public property then we maybe able
to battle successfully with monopo-
lies of association till the growth of
co-operative thought shall solve the
remainder of the problem by the
development of voluntary co-opera-
tion.
There is another possibility that
must not be forgotten, viz., that
526
APPENDIX II.
the growth of monopoly and sub-
jection without a corresponding- de-
velopment of slavish sentiment and
submission might produce volcanic
conditions.
In 1852, referring- to the argu-
ments used by Gibbon and Adam
Smith to prove that the world
would not again be flooded with
barbarism, Macaulay said that "civ-
ilization itself might engender the
barbarians who should destroy it.
It had not occurred to them (Gib-
bon and Smith) that in the very
heart of great capitals, in the
neighborhood of splendid palaces
and churches and theatres and li-
braries and museums, vice and ig-
norance might produce a race of
Huns fiercer than those who marcht
under Attila, and of Vandals more
bent on destruction than those who
followed Genseric."
We may be inclined to think Ma-
caulay's fears unfounded, but we
must admit that a new emphasis
has been given to his words by the
recent rapid growth of cities, the
increase of the slums, the sundering
of classes, the intensification of an-
tagonisms, the widening breach be-
tween rich and poor, the vast con-
centration of political and indus-
trial power in the hands of a few
unscrupulous men, and the grad-
ual pressing down of the middle
classes toward the proletariat.
Every man that monopoly
squeezes out of the middle classes,
each independent owner reduced to
a dependent wage worker, each
skilled mechanic or artisan trans-
lated into a mere discretionless cog
in a big machine, every workman
thrown out of employment by the
concentration of industry without
adequate provision for the redistri-
bution of displaced labor, lowers
the average level of our industrial
life and adds to the forces tending
to increase the proletariat and
every accession to the proletariat
is a new drop in the sea that may
submerge our civilization. Let us
do what we can to develop thought,
character, sympathy and consci-
ence: establish justice, insure do-
mestic tranquillity, provide for the
common safety, promote the gen-
eral welfare, and secure the bless-
ings of liberty to ourselves and our
posterity, by ordaining diffusion in
place of congestion, government by
the people in place of government
by an elective aristocracy, and the
partnership of public ownership in
place of private monopoly a union
of all for all instead of a mastery
of most by and for a few.
2. The growth of direct legisla-
tion, public ownership and co-oper-
ative industry with the manhood
they express and develop, is the
hope of the future. None are more
interested in this movement than
the wealthy. If they resist the cur-
rent that sets toward full democ-
racy in government and industry,
if they persist in seeking to in-
trench and perpetuate private mo-
nopoly and industrial aristocracy
till the people lose patience and the
forces of democracy burst into re-
bellion, their power and riches will
be swept from them and even
their lives may be in danger ;
whereas if they join the march to-
ward industrial justice they may
easily place themselves at the head
of the column and become respect-
ed and honored leaders in a new
evolution instead of being trampled
under foot in a new revolution, and
shorn of their possessions in a new
and violent emancipation.
When talking of industrial de-
mocracy sometimes I have heard
men of wealth remark: "Yes, it is
coming; I can see that clearly enuf,
but it will not come in my time,
and I shall continue doing business
on the old plan." This is not only
a selfish attitude, but short-sighted
selfishness at that. History some-
times moves very fast. In the fif-
ties the Southern planters did not
dream of forcible emancipation in
the next decade. In 1785 no one
dreamed that the French aristoc-
racy would fall in a few brief years.
Americans will never establish a
reign of terror under any circum-
stances, but if justice is delayed too
long the people may be tempted
to destroy monopoly without due
care as to the fair distribution of
the burden of the change thruout
the community to be benefited by
it. I have heard the leaders of an
organization that is rapidly grow-
ing in strength, advocate the social-
ization of capital without compen-
sation, urging that every fortune
was a social product and ought to
belong to the people: and I have
seen great audiences of good-look-
THE LATEST XOTES.
527
ing- working- people applaud the
proposition. It has been the com-
monplace of history for those in
power to resist till the people rode
over them rufshod. Can we not
have a chang-e? Can we not learn
something- from the past? Will
not the wealthy iise their heads and
their hearts and join with the work-
ers to secure just conditions by
jusr and moderate methods? Will
the wealthy manage and direct the
train of progress, or will they be
found beneath its wheels?
:;. 77(e Standard Oil Trust offered
$4(H).000 to Hon. Frank S. Monnett,
Attorney General of Ohio, if he
would simply do nothing in a cer-
tain suit so that the case against
the Oil Combine for violation of the
trust laws should not be pushed.
Mr. Monnett, tho a poor man, re-
fused the bribe, pushed the suit and
made the outragfeous offer public.
Dec. 27, 1899. Mr. Monnett spoke
to the Twentieth Century Club in
the lecture hall of the Boston Uni-
versity Law School. The next
evening he was to speak in Cooper
Institute, New York, but he was
not allowed to speak as announced,
because, it is said, the Oil Trust
people threatened to withdraw
their subscriptions to Cooper In-
stitute work if Monnett were per-
mitted to speak. As said subscrip-
tion amounted to a large sum
($300,000 it is reported) the Insti-
tute management thot best to omit
Mr. Monnett. Half a million would
not buy Mr. Monnett, but three
hundred thousand can keep him
from speaking in Cooper Institute.
Such gag-rule fits very nicely into
Standard Oil history. The Cooper
Institute case belongs with the
Bemis expulsion from Chicago's oil
university because he said too
much about the benefits of munici-
pal ownership of gas works as dis-
closed by his investigation into
that subject. In Monnett's His-
tory, of the case of State vs. Stand-
ard Oil Co., in Ohio (a bulky book
of 400 pages) one of the most en-
lightening portions consists of the
testimony (pp. 153, 189, 22(5) about
the Trust's burning its books to
keep its transactions from ever ap-
pearing- in court or coming clearly
to light in any way. The Oil Trust
is not proud of its biography. Gag-
g-ery goes naturally with the brib-
ery and perjuring it has so often
practiced (see above pp. 88, 89),
and the btvrning of account books
is a fit companion to the theft and
mutilation of public records (see
above pp. 63, 89.)
4. Publicity. In the great effort
of John R. Dos Passos, of No. 20
Broad street, New York, to justify
and defend the trusts before the
Industrial Commission at Washing-
ton, Dec. 12, 1899, it is noteworthy
that the demand for more publicity
of corporate and combine affairs
was strenuously opposed (Passes'
Arg., p. 61). That is the key of the
corporation and trust position. If
they can keep their transactions
secret they are comparatively safe.
But they know that if the people
knew what they know about their
history and methods their power
would be shortlived. That is why
they refuse to produce their books
and burn them rather than allow
them to be inspected. This pub-
licity which the corporations and
trusts are so much afraid of is
evidently the very thing the public
should insist upon. Dos Passos says
it is none of the public's business.
But I do not think the public will
agree with him. W T here the public
siipplies a franchise it is clearly a
partner and entitled to full knowl-
edge of the company's affairs. And
where the aggregation of capital is
a combine seeking to control the
market it is under the ban of both
common and statute law and the
State has the same right to inves-
tigate its doings as in the case of
any other wrongdoer. The public
also has the right of inspection of
all concerns to whatever extent it
may deem necessary to -prevent vio-
lations of law or departures from
public policy.
We can clip the wings of the
trusts by insisting on publicity.
We can tax monopolistic combines
at a higher rate than ordinary busi-
ness, at the same time putting
specially low taxes on co-operative
business as being of exceptional
value to the public. And with pub-
lic ownership of the railroads we
could refuse transportation to
goods made by concerns not freely
open to inspection or not doing
528
APPENDIX II.
business on a co-operative, or at
least on a profit-sharing- and labor
co-partnership basis. We can make
the disadvantages of aggregating
capital on the aristocratic, anti-pub-
lic, ring-for-private-profit plan, so
emphatic; and the advantages of
aggregating capital for co-operative
industry, so pronounced, that capi-
tal will crystallize along co-opera-
tive lines, and offer employees and
consiimers a reasonable share in
the benefits of the combine. A
trust is a good thing for those in-
side of it; let the people inside and
it will be all right. The union of
capital is most excellent, if it is a
union for service and not for con-
quest. The -working people of this
country have it in their own hands
to say whether united capital shall
be their servant or their master.
Piit big burdens on air-tight, all-
for-ring trusts, and high premiums
on open, co-operative, fair-show-
for-the-people trusts, and the latter
will grow like morning glories in
a sunny garden, while the former
will die like grass beneath a heavy
plank.
5. For years the Philadelphia
Councils have been tampered with
by corporate infhiences to prevent
proper repair and improvement of
important public works in order to
build up an excuse for selling or
leasing them to private syndicates.
This policy with the gas works cul-
minated in the recent shameful
lease which was really a gift by
Councils to their sin-dicker-ate
friends of a privilege worth proba-
bly not less than 40 or 50 millions,
considering the present known cost
of gas making and the probability
of still further cheapening of cost
in the period of the lease.
With the water works the same
policy has been pursued (see art.
in Nov. Forum, 1899, by Hon. Clin-
ton Rogers Woodruff), but the
Mayor and his committee of ex-
perts, together with the Municipal
League and various other citizen's
organizations, succeeded in rousing
sufficient public sentiment and ac-
tion to secure the submission of a
12 million loan for the improve-
ment of the water works, and the
people voted yes 114,000, to 24,000
noes, so the wrecking policy which
has made Philadelphians drink
their allotted pecks of dirt with
undue rapidity in recent years, has
met with its little Waterloo, and
Philadelphia water will cease to
make the traveler think he is in
the land of mixed drinks, and coal-
tar-linty-clay washing fluid.
6. Land Monopoly; Unearned Incre-
ment, etc. Private monopoly of
land is undoubtedly productive of
serious injustice, and may endanger
freedom and democracy ii indi-
vidual holdings are very unequal,
or a number of owners combine
against the landless. It is unjust
that vast increments of value due
to the growth of the community
and the development of civilization,
and in no way to the effort or
merit of the owners of the favored
lands, should accrue to suc-h mrin r-^t.
Values produced by the commu-
nity belong to the community.
Again, if some ha>e large domains
while others have none, or if a
large number of moderate holdings
are. combined under a single control
amounting to united ownership as
against the landless class, then the
further evils of class and mastery
develop, and become specially pro-
nounced where the landlords are
few and mostly absent from the
country. To prevent the conges-
tion of wealth by private absorbtion
of values created by the growth of
society and civilization, to elimi-
nate land aristocracy, and to secure
to all persons their just rights to
the use of the earth, it is necessary
that land should become public
property in effect, (whether title
passes or not) either by purchase
or by absorbtion of the rental value
in the form of taxes, the change in
either case to be gradual and upon
fair compensation, for those who
seek justice must be willing to do
justice. All fiiture unearned incre-
ment may rightly be taken in taxes
as John Stuart Mill so forcefully
tirged (see Eqiiity Series No. 2).
And progressive taxation of rents in
common with similar taxation of
other monopolistic and capitalistic
incomes would be perfectly just.
Such taxation should be progres-
sive both as to time and as to ex-
tent of holding and amount of rent
- the per cent, increasing with the
size of the individual income or
holding, and all percentages in-
THE LATEST NOTES.
529
creasing by easy stages every 3 or
4 years. These measures together
with the gradual public purchase
of lands beginning with those
which form the basis of productive
and distributive monopolies, will- I
believe, afford a reasonable solution
of the problem.
The "single-tax" idea contains a
great truth and a great error. Its
purpose, to restore to the people the
beneficial ownership of the soil, is
right; but its method, the concen-
tration of all taxes on land values,
taking practically the whole rent
due to land-values at one sweep
without compensation, is very
wrong. It is wrong because it is
confiscation, class oppression,
grievously unequal compulsory
contribution to a common public
purpose, and because it neglects
other matters even more vital than
the unearned increment from land.
If A and B earn and save $2,000
each, and A buys land while B
invests in goods or buildings, both
acting under the sanction of ex-
isting law, it is not fair to relieve
B of all taxes and place on A the
whole burden of the common gov-
ernment; to deprive A of substan-
tially the whole value of his in-
vestment by a land value tax with-
out compensation for his land
which is virtually taken from him
for public use is simply confisca-
tion and would not be permitted
by either State or Federal Consti-
tutions, nor by the sense of jus-
tice which underlies those consti-
tutions. Neither one man nor a
million nor ten millions have any
right to take the rent of that land
(which is the same as taking the
ownership of the land) until they
have bought the land and paid for
it or otherwise acquired a just title
to it, which cannot be done simply
by passing a law that the benefi-
cial ownership of land shall be
forthwith transferred from the
present holders to the public. Only
a military situation similar to that
which justified the emancipation
of the slaves without compensation,
could justify siich an emancipation
of the land. The single-tax theory
also makes a mistake in thinking
that the abolition of private mo-
nopoly in land is all that is neces-
sarj r to solve our industrial prob-
lems. The private monopoly of fran-
chises, and the private monopoly of
capital would still remain, and the
single-tax would not "free labor,"
nor even lift wages permanently.
No matter how free land might be,
labor could not successfully com-
pete in the production of cotton
cloth without big cotton-mills and
money, nor in the production of
steel rails without costly furnaces,
rolling-mills, etc., nor in transpor-
tation, gas, electric light, telephone
service, etc., without franchises.
To make even agriculture a success
takes more than land, it takes
buildings, stock, machinery, capi-
tal, and knowledge. Laboring men
would show the same inability and
disinclination for agriculture that
they show now; they would still
cluster about the towns and cities
and press into manufactures and
commerce, and the mill-owners and
franchise lords could make their
terms just as they do now (perhaps
even lowering wages by an amount
equal to the temporary drop in
rents that would follow the single
tax) and labor would be under the
heel of capitalism as truly as it is
to-day. Wall Street would like
nothing better than the single-tax,
throwing all burdens on land and
leaving their stocks, bonds, mort-
gages and franchises free.
In this country at present the
private ownership of land is not as
a rule so centralized or dangerous
a form of monopoly as the private
ownership of street railways, tele-
graphs, telephones, railroads, etc.,
or the private ownership of govern-
ment. It does not corrupt legisla-
tion, or debase employees, or water
stock, or issue false accounts, or
give rebates or passes, or sustain
lobbies, or control elections, or
threaten the existence of free insti-
tutions, as do the great franchise
monopolies and monopolies of com-
bination for the control of indus-
trial and political powers. As the
soil is divided now in this country
the great mass of land-owners do
not belong to the class of danger-
ous monopolists. The single-tax
would be a blow at the farmers
and home owners all over the land,
a blow at the friends of democracy
and progress. It is not well to
bombard our own forces in order
530
APPENDIX II.
to hit a few aristocrats. Neither is
it fair to fire at one class of aris-
tocrats and leave a worse class
alone. Progressive income and in-
heritance taxes hit aristocrats of
every sort, land magnates, fran-
chise lords, princes of market and
factory hit them fairly and justly,
but fly over the heads of the com-
mon people those are the arrow's
with which to make war for de-
mocracy. Direct legislation, mu-
nicipal home-rule, good civil ser-
vice, progressive taxation, compul-
sory arbitration, profit sharing and
co-operation, publicity of corpora-
tion, trust and combine books and
accounts, and public ownership of
the great franchise monopolies that
have their hands on the throat of
the government and are exacting
enormous tribute from the people
these are the things that will
help the farmers and mechanics
and carry us toward a truer de-
mocracy and a more Christian in-
dustry. We must not forget, how-
ever, our great debt to the single
taxers for the valuable discussion
they have awakened, and the ear-
nestness with which they have
argued their just plea against land
monopoly; nor should we overlook
the promising fact that some of the
best of these earnest reformers have
come to see that other movements
are valuable also, and to advocate
direct legislation and the public
ownership of franchises.
F. Municipal Ownership in Great
Britain. The following facts from
the Municipal Year Book of the
United Kingdom for 1899 are of
great interest:
"Remarkable activity has been shown
by the local authorities thruout the
country In promoting Bills for the next
session of Parliament. The list almost
creates a record. A glance through the
Bills gives a further indication that the
local authorities, great and small,are deter-
mined to secure control, wherever possible,
of all Tramways, Electric Lighting
Schemes, Water and Gas Supplies, and
other common necessities. It is interest-
Ing to note that an unusually large
number of Urban District Councils are
proposing to buy out the local gas and
water companies before the capital of
these undertakings is unduly swollen by
the needs of an increasing population "
(P- 1.)
Electric Light. The supply of elec-
tricity for light and power "is fast be-
coming one of the leading municipal
Industries in the country, (p. 423)
"Some of the oldest electric undertak-
ings are under municipal control, and
municipal works in existence or in prog-
ress outnumber the other by more than
two to one. (p. 424). At 'the end of
1898, 138 works were in operation
81 under municipal management
a$>d 57 in private hands. There
were 63 installations being laid
down 51 by public bodies and 12 by
companies; while public authorities held
104 provisional orders and presumably
had works in contemplation, and 11
were held by companies. Private sup-
ply of electricity has, therefore, almost
come to a standstill, and will have to
confine its progress to the area already
under its control. This was illustrated
in last year's applications for provisional
orders. There were 42 applications by
public bodies; every one was granted.
There were 13 applications by compa-
nies, and only 5 were granted, (p. 424).
Over 70 applications for provisional or-
ders for electric lighting have already
been made by local authorities for 1899,
and several towns are proceeding by
way of bills to buy out existing com-
panies." (pp. 1 and 426).
"Municipal Corporations have always
one great advantage over Electric Light-
ing Companies: they can become their
own best customers; they can light
their streets and their public buildings
with electricity. This privilege has. no
doubt, enabled them in many cases to
establish a paying business soon, but
it is not necessary to success. Hull Cor-
poration, for instance, supplying only
currents to private lamps, had a net
surplus in its second year of 1,053, and
in its third year of 1,263. A further
advantage in favor of municipalities is
that they can borrow capital at excep-
tionally low rates of interest 2% and 3
per cent. On the whole, municipal en-
terprises have been very successful."
(p. 425).
Tramways. "There are 11 local au-
thorities applying for Provisional Orders
to construct and work tramways, and
It is interesting to note that half of
these are Urban District Councils; '27
Tramway Bills are being promoted, and
In the majority of cases the powers
sought for are for the conversion of
systems and extensions. A noticeable
feature in these Tramway Bills is the
desire of the large Corporations, who
own tramways to secure working pow-
ers in outside districts, to buy out ex-
isting companies, if necessary, and to
co-operate with smaller local authori-
ties. The Darwen Corporation proposes
to amalgamate with Blackburn for
tramway purposes, and the Bill pro-
moted by that authority provides for
the establishment of a Joint Board."
(pp. 1, 2).
"No branch of municipal enterprise
has made such rapid progress during
the past year as that relating to tram-
ways. Almost without exception every
large town has completely municipal-
ized the tramways or is about to do so.
It is now recognized that no tramway
service can be of the fullest benefit to
the people, unless it is operated, as well
as owned, by the municipality. Every
town is also seeking to introduce elec-
tric or other mechanical traction. As
in almost every instance corporations
THE LATEST NOTES.
531
own the electric lighting supply, the
introduction of electric traction will
prove of great advantage both to the
lighting and tramway departments, en-
abling both to lower their charges (p.
439). In January of this year the Lon-
don County Council took over the un-
dertaking of the London Tramway Com-
pany 25 miles of tramway track in
South London. The undertakings of
other companies of London will fall into
the hands of the Council in a few years.
and in the meantime, extension schemes
and new connections are being planned.
In cases where the leases of tramway
companies have some years to run. the
Councils in many parts of the country
are buying the undertakings. * * * *
The Liverpool Tramways Company hud
still 18 years to run when the entire
concern was bought out last year by
the Liverpool Corporation at a price o'f
567,373, representing an amount of 12
15s. for each 10 share. * * * Man-
chester lias also decided to take tram-
ways into its own hands at the expi-
ration of the leases in 1901." (p. 44U1.
Great as has been the municipal tram-
way movement in the last three years,
"even greater activity is being shown
by municipal authorities thruout the
country in the promotion of schemes
for the session 1899. The authorities
applying for provisional orders to con-
struct and work electric tramways are:
Audenstraw Urban District.
Harking Town Urban District.
Clayton (Yorks) Urban District.
Devonport Corporation.
Eccles Corporation.
Ilford Urban District.
Ilkestou Corporation.
Matlock Urban District.
Queensbury Urban District.
Reading Corporation.
Southport Corporation.
"In addition to these bodies the Cor-
porations of Aberdeen. Blackpool, and
Halifax are applying for orders to con-
struct and work additional tramways.
"The. following towns and districts
are promoting Bills to construct and
work tramways to use electric traction,
or to extend existing systems:
Ayr, Leeds,
Belfast, Manchester,
Barking Town, Moss Side,
Blackpool, Newcastle.
Birkenhead, Nottingham,
Bradford, Oldham.
Darweii, Khondda,
Derby, Salford,
Dundee. Stockport.
Edinburgh, Stretford,
Glasgow, Sunder-land,
Great Yarmouth, Wallasey,
Hastings. Withington,
Kirkaldy, Wolverhampton.
"Several of the above towns, includ-
ing Manchester, Bradford, Glasgow,
Leeds, Oldham, Wolverhampton, etc..
are seeking power to construct and
work tramways outside their own bor-
oughs, and in some instances to pur-
chase existing undertakings. Provision
is made in some of the bills for large
towns to supply the outside districts
with electrical energy to work tram-
ways." (p. 441).
Gas. "Over two hundred municipal
authorities in the United Kingdom sup-
ply gas. More than that number of
urban communities have municipal sup-
plies, as in a number of cases one au-
thority supplies several towns and su-
burban districts. Nearly all the large
towns have the gas supply in their own
hands; the more notable exceptions are
London. Liverpool, Dublin, West Ham,
Croydon anl Newcastle, (p. 403). Many
gas undertakings owned by private com-
panies will shortly pass into the hands
of local authorities. Bills are being
promoted by 16 towns and districts to
acquire rights and works." (p. 2.)
Water. "The supply of water is a
branch of public service which has come
under the control of municipalities to
the greatest extent. * * * Of the 141
boroughs other than county boroughs
in England and Wales, 139 have mu-
nicipal supplies. Out of 766 urban dis-
tricts just about half have municipal
water. * * * The only "great towns"
in England which have not a municipal
supply are London, Bristol, Newcastle-
on-Tyne. Norwich, Gateshead, Ports-
mouth and West Ham. Including the
great towns, there are 64 county bor-
oughs in England and Wales, and in
all but 19, the water supply is under
public control. In all the large towns
of Scotland Glasgow, Edinburgh, Dun-
dee, Aberdeen, Leith, Greenock, Pais-
ley, Port Glasgow and Perth the water
supply is also in public hands. In Ire-
land. Dublin ' has a municipal supply;
Belfast's supply is under a commission
partly elective, and Cork has a munici-
pal service. With the exceptions above
mentioned, the towns without munici-
pal supplies are, in the majority of
cases, small or old towns." (p. 373).
Parliament will have before it this year
a large number of important water
schemes. The most comprehensive is
that brought forward by the London
County Council, which once more pro-
poses to buy out the 8 metropolitan
water companies." (p. 2.).
Markets and Slaughterhouses. Lists are
given of the "principal" municipalities
owning slaughterhouses and markets;
the former lists contains 50 municipali-
ties and the market list 117.
2. Growth of public ownership,
see The Outlook for August, 1899,
and Progress for December, 1899.
G. In his Political Economy, Bk.
V, Chap. II, paragraph 11, John
Stuart Mill, after stating- that com-
petition does not really take place
among 1 gas and water companies,
says, "the charge for services which
cannot be dispensed with, is, in sub-
stance, quite as much compulsory
taxation as if imposed by law."
H. Dr. Hale. In a letter just re-
ceived (Dec. 16, '99), from "Boston's
most 'eminent citizen," Rev. Dr.
Edward Everett Hale, the following-
points are made respecting public
ownership:
532
APPENDIX II.
"I am an old New Englander, one of
those who believe that the fathers
'builded better than they knew': (1.)
The fathers establisht common schools
for everybody. They would never have
dreamed of having anybody but the
town own the school-house. (2.) The
fathers establisht bridges and roads for
everybody. They imposed no taxes
when a man crossed the bridge over the
canal at the North End. When they did
establish toll bridges and turnpikes, the
whole thing was exceptional; it broke
down entirely, and the public has been
obliged to accept those turnpikes and
bridges and make them a part of the
public property. (3.) When it came to
water, which everybody needs, it very
soon proved that private corporations
for the distribution of water were a
mistake, and that the public must own
the water supply and administer it.
(4.) The same rule applies in the mat-
ter of the post, which is of service to
everybody. (5.) The same rule applies
in the matter of lighthouses, which are
of service to everybody. (6.) There is
no reason whatever known to me why
the stone pavement of a street should
belong to the public, and that part of
the pavement which is made up of iron
should belong to some favored corpora-
tion. I have never seen any pretense
at any justification of it on principle.
(7.) This means, in general, that what-
ever is intended for the good of everybody
is better in the hands of the public."
I. Rev. Dr. Washington Gladden,
a famous minister and one of the
foremost leaders of thought, says:
"There is one class of capitalistic ag-
gregations, based on monopoly, against
which popular indignation is likely to
be kindled even sooner than against the
so-called trusts. I refer to those which
are founded on municipal franchises.
Most of the companies owning these
franchises have issued capital far in ex-
cess of their actual investment, have
disposed of the stock thus issued and
are charging enuf for the services ren-
dered the public to pay the dividends
on all this watered stock. If they were
content with a fair return on what the
plant has actually cost them, the price
of the service could be greatly reduced.
A fair return on their actual invest-
.ineut nobody grudges them, but the priv-
ilege of taxing the community to pay
dividends on two or three times as much
money as they have invested is going
to be questioned one of these days.
When the reckoning day comes to our
monopolies some sharp inquisition may
be made into the fundamental equities
of many of these institutions. Vested
rights will be respected, I have no
doubt; but vested wrongs may be called
to account." And again: "Shall we be
able, by purely moral agencies, by
teaching, preaching, witnessing, suffer-
ing for righteousness' sake, to arrest
the spread of the mercantilism which
now ravages society, corrupting politics,
tainting education, defiling religion?
One ought not to be hopeless who fights
with such weapons, for they are mighty
to the pulling down of strongholds.
We may be very certain that there can
be no permanent victory over these de-
structive forces until there is a radical
change in the thoughts of men con-
cerning the relative values of material
and spiritual things. Our final resort
must always be to the weapons that
are not carnal. Yet the children of
the light must be wise enuf in their
generation to seek the aid of the best
environment. That some methods of in-
dustrial organization are more favorable
than o_thers to the development of char-
acter is altogether probable. Not many
students of society in these days would
hesitate to say that the system of
slave labor or the feudal system was,
on the whole, unfavorable to morality;
to go back to either of these would
certainly involve a serious moral loss.
The moral and spiritual forces would
be at a greater disadvantage under
either of those Systems than they are
now. In point of fact, we have found
that the present system, with all its
demoralizing influences, produces better
men than were produced under feudal-
ism or slavery. The moral and spiritual
forces have, then, been assisted by
changes in the forms of social organiza-
tion; and what has been may be. It
is certainly possible that some modifica-
tion of the existing industrial order
would give freer play to the moral
forces, and check the influences which
tend to humanize men and undermine
the State. We might easily extend the
area of co-operation thru the state or
the municipality; we might have more
things in common; we might thus greatly
limit the action of the principle of strife,
and fix the thought of men more upon
the things which they enjoy together,
and less upon those for the possession
of which they are contending. We do
already co-operate in many things; we
might co-operate in many more. There
seem to be certain classes of industries
to which the principle of common owner-
ship naturally applies, and it is precisely
these industries which arc now employed
most mischievously for the aggrandizement
of the few at the expense of the many,
for the building up of an arrogant plu-
tocracy, for the enthronement of false
ideals of success, and for the corruption
of public virtue."
J. Hon. 8. M. Jones, Mayor of
Toledo, proposes that the veto
power be taken away from the
mayor so that he may become pure-
ly an adminstrative officer, direct
legislation, or the veto by the peo-
ple, taking the place of the Mayor's
veto. He was nominated for Gov-
ernor of Ohio by popular petition
independent of party action, and
received 107,000 votes.
K. Professor Bemis, in his Study
on Municipal Monopolies issued by
the Social Reform Union, says:
"Competition as a permanent factor
in these vitally necessary undertakings
(lighting, transit, etc.) being out of the
question, and a monopoly having every-
where an irresistible tendency to extor-
THE LATEST NOTES.
533
tlon or poor service if not controlled
in the interests of the people, there
remain but two possible ways of giving
the people their proper dues: public
regulation thru state commissioners,
city councils, etc., on the one hand, and
regulation thru state commissions,
on the other."
The Professor then shows that regu-
lation even in Massachusetts has secur-
ed only the most insignificant reductions
of rates. Only 14 companies ordered to
reduce gas rates since the creation of
the board in 1884, and no orders for re-
duction since March. '96 (to Dec. '99).
For electric lights there have been but
two orders for reduction, and in both
Instances the companies were small.
There have been only two or three cases
of reduction of street railway fares, and
no reduction below 5 cent's. He em-
phasizes the failure of regulation in
Mass, to secure publicity, the most vital
facts collected by the commissioners
relating to salaries, repairs, extensions,
wages and cost of production being
withheld from the public. He says: "I
believe ir is much harder to regulate
private ownerships than it is to operate
under public ownership."
The main objections to public owner-
ship relate to the spoils system and
the possible hesitation on the part of
public bodies in introducing the latest
improvements in machinery and meth-
ods. "These dangers have been entirely
overcome in England, where the oper-
ating expenses in electric light, gas and
street railways are found to average
lower in public than in private under-
takings under similar conditions."
The change to municipal owner-
ship will produce the conditions
most likely to put an end to the
spoils system.
Under public ownership a minis-
ter or lawyer, or editor or business
man can attack the spoils system
or other possible abuse of govern-
mental management with far less
danger than he can attack the
abuses of the monopolies owned by
the rich and influential citizens of
his city, whose personal profits are
injured by the latter sort of attack,
whereas under public ownership
the interest of this class would be
with the attack upon abuses. The
financial interests of the rich and
influential are with good govern-
ment under a system of public
ownership and largely against good
government under private owner-
ship.
For another reaswu abuses under
public ownership *je likely to be
more easily remedied than the
abuses of private monopoly. Under
public ownership if a city council
is bad this year we may correct
the trouble next year. But under
private ownership as at present a
bad city council may make a 30-
year contract or a 50-year contract,
and then what is to be done?
(The courts of the future may hold
void a contract made by a legisla-
tive body in manifest antagonism
to the interests of the public or in
fraud of the people's rights, just as
they would hold void a fraudulent
contract made by an individual
agent. Even this, however, would
only transfer the battle to the
courts, and at best there would be
a wide margin between really fair
legislation and legislation in which
the crookedness w r as clear enuf to
cause it to be set aside. Already
the courts hold that a city cannot
make a contract with a street rail-
way or other company fixing rates
for a term of years. The power to
reduce rates is part of the sovereign
power of the state and no city can
make a contract that would prevent
the exercise of that right.)
L. Dr. Lynian Abbott, the leading
religious editor of America, says:
"The sooner our cities own the lines
of railroads, the better both for the
convenience of the people and the
purity of our municipal govern-
ments."
.!/. Monopolistic Objections and
Objectors. Mr. Robert P. Porter, who
was superintendent of the 10th cen-
sus, says:
"The value of the lines of railroads
which Dr. Abbott thinks we should at
once own will in 1900 be in the neigh-
borhood of sixteen hundred millions of
dollars ($1,600,000,000), add to this an-
other one thousand million of dollars
($1,000,000,000) for municipal gas works,
and we have a total of two thousand
six hundred million of dollars ($2,600,-
000,000). If state constitutional barriers
could be overcome to accomplish this,
the municipal indebtedness of the coun-
try would be more than quadrupled, or
increased from eight hundred million
dollars ($800,000,000) to three thousand
four hundred millions of dollars ($3,400,-
000,000), which is simply a preposterous
proposition."
Mr. Porter does not appear to be
able to imagine that a city should
pay for a gas plant or street rail-
way. He does not tell us why
it is any worse for a city to issue
bonds or other securities than for
a private company, nor does he in-
form us that large portions of the
values he quotes are fictitious, and
that we expect to squeeze the wind
534
APPENDIX II.
and water out of them by public-
ity of accounts, reduction of rates
and taxation of face and market
values before their purchase by the
public.
Mr. Porter is intensely antago-
nistic to public ownership, and in
his latest effusion, the address to
the Syracuse Convention of the
League of American Municipalities,
he gives us 11 columns of opposition
without a single fact relevant to his
conclusions. There are a few ad-
verse statements that may look
like facts to those unacquainted
with the matter, but the trouble
with them is that they are not true.
Mr. Porter does not seem to have
any affinity for facts. He does not
even attempt to answer the thirty-
odd charges brought against pri-
vate monopoly, its inflated capital,
watered stock, excessive rates, tax-
ing the community to pay divi-
dends on two or three times the
real investment, its anti-democracy
and congestion of wealth, its
strikes and lockouts, its defiance
of law, its corruption of govern-
ment, its antagonism to i.*e public
interest, etc., etc. He ignores these
matters. Thru almost the whole
address he ignores all but the low-
est financial considerations, and
even upon the financial plain he
ignores the important facts and
misstates the few unimportant ones
he cites.
He says: ''In no single instance can
the municipal working of tramways be
demonstrated to be a commercial suc-
cess." He evidently has not seen the
Glasgow reports nor the British Mu-
nicipal Year Book, which show such
great successes that towns and cities
by the dozen are going over to public
ownership and operation of tramways.
Again he says: "Municipal ownership
has not made anything like the head-
way in the United Kingdom which
many would have us believe. Some ac-
counts would seeni to indicate that Eng-
land has municipalized such undertak-
ings as water, gas, electric lighting,
and street railways to a much greater
extent than the facts warrant. Should
we consider the four important branch-
es of service the supply of water, gas.
electric light and street railways to-
gether, it would be safe to say that
honors in favor of the municipalization
of these undertakings would be about
equally divided in the two countries."
To understand how utterly false
this is, the reader has but to com-
pare the citations above made from
the English Municipal Year Book
with the statistics of municipal
ownership in the United States re-
corded in Chap. I. Compare also
the following statements of Mr.
Porter four columns further along
in the very same address:
"The old aspect of municipal admin-
istration dealt with the paving and
lighting of streets; the supply of water;
the construction of sewers: in maintain-
ing order and occasionally in the es-
tablishment of parks. The new phase
of municipal administration, in its most
.imbitious form, aims to deal with every
question that directly or indirectly af-
fects the life of the people. Carried to
the extent which it has been in some
British cities, it is in fact municipal
socialism. The new school of munici-
pal admin istra ton in England enters in-
to the life of the people. It not only
takes upon itself the unprofitable side
of the local budgets, but argues very
plausibly that a well-governed munici-
pality can afford to give no privileges
by which corporations may enrich them-
selves at the expense of the community;
that such profits belong to the commu-
nity at large, or should be used to pro-
mote the general welfare. Beginning
with the municipalization of gas and
water, the idea has extended to tram-
ways, markets, baths, libraries, picture
galleries, technical schools, artisans'
dwellings, cricket fields, football
grounds, tennis courts, gymnasia for
girls as well as boys, regulation of re-
freshment tariffs, free chairs in the
parks, free music, and, last tho not
least, it is proposed to municipalize the
ginshops and public houses."
* * * "The real, vital, debatable
question, which the growth of the mu-
nicipal idea or municipal spirit is forc-
ing to the front, is: How far can mu-
nicipalites go in this direction without
undermining the whole fabric of free
competition? In thus becoming its own
builder, its own engineer, its own manu-
facturer, does ;i municipality enter too
much into direct competition with pri-
vate industries? Does it undertake
work which individuals are at least
equally able to perform If this be so,
is there not danger of those of us who
applaud the tramway enterprfse of Glas-
gow, the real estate scheme of Bir-
mingham, the municipal tenements of
Liverpool, the hydraulic power and ship
anal venture of Manchester, the aboli-
tion of slums in Bradford, and the
grand municipal achievement of Leeds,
ultimately finding enterprises other than
those in the present catalogue taken vip
by municipalities."
In lucid intervals, this defender
of private monopoly admits the
benefits of present municipalization
even in its most advanced forms,
but he fears its extension and so
opposes the whole system except in
said intervals.
Mr. Porter's "argument" con-
densed amounts to this: It is good
for the people to own some things,
TIIK LATEST XOTES.
535
but it's bad for them to own those
thing-s because it may tempt them
to own other things which Mr.
Porter thinks they ought not to
own because it would undermine
free competition. It is doubtless
good for you to eat beef, but
you must not do so else you may
tret into the habit of eating meat
to such an extent that you may
be tempted TO eat mutton, and so
undermine or destroy the excellent
butting processes that keep me he-
sheep in active health and make
Tlie wool grow.
V. The Referendum in Bn>*t<i,
Dfi .. '99. Among the many benefits
of direct legislation, there is reason
to lay special stress on its ten-
dency to improve the conditions of
labor, and to destroy the rule of
monopoly. These points have been
enforced by the advocates of direct
legislation both by history and phi-
losophy they have been true in
fact, and they must be true in the
nature of things and now we have
a new and brilliant illustration of
the strength of the referendum in
the directions just indicated. The
people, of Boston have just voted
overwhelmingly to adopt the 8-
hour day for all city laborers. an;l
to refuse the street railway mo-
nopoly the privilege of replacing its
tracks on Boylston and Tremont
streets in the heart of the city.
The legislature gave its consent,
but the people turned down the
monopoly. Here are the votes:
On the 8-hour question:
Yes, 62,625; No. 14,518.
On relaying the car-tracks:
Yes, 26,254; No, 51,585.
The track affair shows that altho
a giant monopoly may manage the
legislature and control the press,
it is not able to bend the people to
its will. It is only a little while
since the tracks on Tremont and
Boylston streets have been taken
up. These streets used to be crowd-
ed to stagnation with cars and
other vehicles. The subway was
voted by the people and built on
purpose to relieve this congestion.
It was part of the plan To take
up the surface tracks in the heart
of the city. The company was re-
quired to do this. We now go in
5 or 10 minutes the distance that
used frequently to require 20 or .'50
minutes, and carriages Travel with
reasonable speed on the streets
where the tracks used to be. The
subway is far from being used up
to its capacity, yet the Boston Ele-
vated Co., which controls the street
railways, wishes to relay the tracks
on Boylston and Tremont streets.
The people vote a subway to re-
lieve the congestion in the heart
of the city and get rid of the tracks
about the Common, and a few
months after it is done the com-
pany asks to be allowed to relay
the surface tracks. The legislature
was agreeable: would have passed
the act without a referendum it is
said if Governor Wolcott had not
made it understood that a bill with-
out a referendum would be vetoed.
The papers were filled with the com-
pany's arguments: only one I be-
lieve took ground against the re-
laying and even it was loaded with
instructions to "Vote Yes" on the
track question, put in large type
on the front page and paid for as
advertising matter. Yet in spite of
all the monopoly could do, it was
snowed under by the people.
The D. L. Eecord for Dec., 1899,
contains accounts of various refer-
endal votings in 16 states at the
November elections. The data fur-
nish new proof of the fulness, in-
telligence, public spirit and non-
partisanship of popular votes on
measures.
In the Ohio campaign four par-
ties had D. L. planks in their plat-
forms. Their vote was as follows:
Democratic 368,176
Xon-partisan. (Jones' vote) . 10.6,721
Union Reform 7,799
Socialist-Labor 2,439
Total 483,135
The other two parties who did
not oppose D. L., but who did not
say they favored it, are:
Republican 417.199
Prohibition 5,825
423,024
Majority for D. L. platforms 62,111
The mixture of issues make it
improbable that all the 485,135
voters were in sympathy with the
D. L. plank in their platforms. The
Union Reform Party made D. L. its
sole issue, and Mayor Jones made
536
APPENDIX II.
it one of his principal issues, if not
his very chief issue, and any man
sensible enuf to vote for Jones
is probably sensible enough to be-
lieve in the referendum, but we
cannot so surely count on all the
Democrats and Socialists. On the
other hand, however, a great num-
ber of Republicans and Prohibi-
tionists are known to favor Direct
Legislation, so that it does not
seem unreasonable to conclude that
this vote in connection with other
known facts indicates a large ma-
jority in Ohio in favor of Direct
Legislation.
0. The Merit System.
The change in public temper is plainly
Indicated in the view of municipal man-
agement which is constantly gaining
ground, that the city business is not
political, but the administration of a
corporation for the benefit of those who
compose it. Here are two examples
from the last election which are in-
structive. San Francisco has a new
charter which provides for the merit
system in making municipal appoint-
ments, and it is worth notice that at
the time the new charter was just going
into effect the election gave an oppor-
tunity to test the standing of the two
parties on the principle involved. It came
in the form of a question whether city
affairs should be managed on a business
basis or as an adjunct of national poli-
tics. The Democrats stood for the for-
mer proposition, and won. They declar-
ed that it should be the party policy
"to confine its municipal platforms and
its deliberations in municipal conven-
tions to the discussion of the princi-
ples of Democracy solely in so far as
they apply to municipal affairs." The
Republicans urged the election of their
candidate because the election of a Dem-
ocratic mayor would be a rebuke to the
Republican national Administration.
In Baltimore, which also elected a
Democratic mayor, the successful can-
didate has declared his position on Un-
civil service promptly and utunlstaka-
ably. He says that the police, fire and
school departments shall be put on the
merit system, "if it is possible for me
to bring it about," and adds that he
will guarantee that there shall not be
a school commissioner of his appoint-
ment who "can be touched by the poli-
ticians on either side." (Quoted from
the Hartford Times by the Boston
Transcript, Nov. 23, '99.)
P. Civil Service and Separation of Local
from State and National Isxitfft.
The inaugural address of Mayor
Hayes, of Baltimore, who was elected
last spring, met the fullest expectations
of the reformers who urged his election.
In spite of the recent victory of his
party in city and state, he pledged him-
self to a non-partisan administration as
but few public officials have done. "The
use of a municipal position by a subor-
dinate," he said, "to advance the in-
terests of any politician or party will
be at once proper reason for the re-
moval of such subordinate: and if the
head of the department does not re-
move such subordinate. I will remove
the head of the department." With re-
gard to the police force, also, he thoroly
indorsed the legislative measures of the
Reform League, requiring a civil ser-
vice examination of all appointees. In
Syracuse, N. Y., also, the municipal
election just held demonstrated the
advance of the principle of non-parti-
sanship in city government. The pres-
ent Mayor, Mr. McGuire, was first
elected as a Democrat because of a di-
vision in the Republican party. He was
re-elected thru a similar division. This
year the Republican factions were ap-
parently united against him, and had
as their candidate a man of fine char-
acter and ability. The city is strongly
Republican, and, had party ties deter-
mined the votes of the citizens, Mayor
McGuire would have been defeated.
He and his friends, however, conducted
a campaign on municipal issues, with
tracts and lantern slides showing what
had been done in matters of city house-
keeping during the four years he had
been in office. No National question
was touched upon, and Mayor McGuire
was re-elected by a substantial major-
ity. In San Francisco, California, a
similar success was achieved. Mayor
Phelan, who made himself the leader
of the anti-machine Democrats of the
city by his fearless and uncompromis-
ing fight against Boss Bulkley a few
years ago, was the Democratic candi-
date for re-election. The Republicans
had carried the city last November, and
attempted to carry it again by urging
the supreme importance of National is-
sues. Mayor Phelan conducted his cam-
paign strictly upon municipal issues,
risking on that account an organized
revolt within his own party, and won
the election by a plurality of more than
seven thousand. He will administer
San Francisco under the new and ad-
mirable charter which he helped to se-
cure, and men of all parties are ex-
pecting a pure and progressive govern-
ment. If this practice of selecting mu-
nicipal officials on municipal issues shall
go on making headway until voters no
longer feel that their ballots for or
against city candidates will be inter-
preted as ballots for or against expan-
sion or silver or tariff, the gain will
be immeasurable. On this matter, how-
ever, the chief obligation rests upon the
press not to misinterpret the signifi-
cance of local elections in order to
make party capital out of municipal
overturns. (From The Outlook, Nov. 25,
'99.)
Civil Service and Home Rule.
Mayor Hart, of Boston, in his
1900 message, and Governor Crane,
of Massachusetts, in his inaugural
speak strongly in favor of munici-
pal home-rule, and the Mayor en-
dorses the merit system as follows:
"The civil service law, in its letter
and spirit, will be complied with,
and applicants for employment in
THE LATEST NOTES.
537
the public service should learn that
the law is their good friend, not
an enemy, except to evil doers.
And let all know that this is to
be a government of law and order,
not of partisanship or spoils." Two
excellent, enlig-htened, forceful
documents, the message and in-
augural of these two officers who
place their allegiance to city and
state above their allegiance to the
Republican party that elected them.
Q. Election Frauds. One of the
most difficult forms of corruption
to meet is the bribery of voters by
a promise conditioned upon the
success of the candidate or ticket
the briber is working for. The
corruptionist says to the boss: "If
our ticket wins in this ward (or
district or polling- place) there'll
be $5 for every boy that votes our
way : but if our ticket does not win
here you won't get a cent for your-
self or any of the boys." The au-
tomatic ballot makes false counting
and box stuffing impossible, and
discourages ordinary individual bri-
bery because the voter can take his
bribe and still vote his own way;
but it does not meet these condi-
tional agreements. Nothing can do
that apparently under present con-
ditions of average conscience and
intelligence, except great watchful-
ness on the part of honest citizens
and a strong corrupt practices act
to make such agreements too dan-
gerous to risk.
2. Philadelphia Election Fraud*.
At a hearing in Philadelphia, Xov.
10, '99, it was shown, by the tes-
timony of one who took part in the
affair, that in the 13th Division of
the 7th Ward a large number of
folded ballots (about 200 the wit-
ness thought) were put in the bal-
lot boxes before the polls were
opened. Additional fraudulent votes
were put in during the day, and a
number of genuine votes were de-
stroyed. The number of votes ac-
tually cast was 124. while the re-
turns showed over 340, 337 votes
being- returned for the republican
candidate for State Treasurer. The
fraud was accomplish! by collusion
among one of the inspectors of elec-
tion and persons impersonating tin-
other inspector and the judge of
election who was ill. Some of the
men concerned came on
Washington, and their hotel billa
were paid by a well-known local re-
publican. Several prominent re-
publican politicians were impli-
cated by the testimony.
The Pennsylvania Constitution
does not require personal registra-
tion by the voter, and the law is
otherwise very loose. Any voter may
take another person into the booth
with him, so that bribery and in-
timidation are easy. The Munici-
pal League of Philadelphia, the
Prohibitionists and The Business
Men's Republican League, have
been hard at work detecting and
punishing fraudulent registration
in that city, and they think the
fraudulent vote has been reduced
this year to about one-half its
usual dimensions, but even this re-
duction is thought to leave some
15,000 fraudulent votes. In a re-
cent letter to the President of the
Business Men's Republican League
John Wanamaker says:
"Wo have not had an honest election
in Pennsylvania for years. When the
host of Pennsylvania freemen, supposed
to be enlightened and independent,
march to the polls, each individual
voter knows that he is acting under a
remorseless espionage from which there
is no refuge or escape; that he must
answer to his party, his boss, or his
industrial master, if he is in any wise
dependent; that his ambitious may be
crusht, his employment terminated, his
bread stopt, if he consults his own con-
science and votes according to his judg-
ment; while for those who are liable
to such temptations the bribes of money
and drink are offered on every side.
These transactions in votes awful, ter-
rible in the aggregate go on before all
eyes. We see an enormous proportion
of the voters all over the State, a pro-
portion increasing instead of diminish-
ing, going into booths, each accompa-
nied by another."
The self-respecting majority in the last
Legislature voted to submit constitu-
tional amendments that would make
registration and ballot reform laws pos-
sible, but Governor Stone vetoed them.
Mr. Wanamaker justly urges that the
election of a Legislature pledged to call
a Constitutional Convention to provide
for Immediate ballot reform is the
State's supreme need.
R. Another Legislature Corrupted
by the Purchase of a U. 8. Senator-
shiii. Xow conies Senator Carter,
of Montana, presenting to the U. S.
Senate a memorial against the va-
lidity of the pretended election of
\Vm. A. Clark as his colleague. The
memorial says that $30,000 paid to
members of the Montana Legisla-
ture by Mr. Clark or his agents for
538
APPENDIX II.
votes, has been produced in open
session of the Legislature and is
now in the treasury of Montana.
The document is signed by the
Speaker of the Montana House and
27 legislators, and is accompanied
by a petition signed by the Gov-
ernor of the state and many promi-
nent citizens, wherein it is affirmed
that certain members of the Legis-
lature, whose names are given, re-
ceived for their votes specified sums
aggregating $500,000. The charges
have been virtually sustained by
the unanimous decision of the Su-
preme Court of the State disbarring
Clark's alleged agent (Wellcome)
upon indubitable evidence of his
having bribed Senators in Clark's
behalf. It is not pleasant to have
this bucket of political filth from
Montana thrown over our civic gar-
ments as we cross the threshold
of 1900, but the action of the Su-
preme Court is refreshing, and the
air will clear decidedly if the U. S.
Senate will do its duty by Clark
as well as the Supreme 'Court has
done it by Wellcome.
Is it not time that U. S. Senators
were elected by the people, to help
the elimination of corruption from
legislative bodies, state and nation-
al, and to allow the election of
state legislators in reference to
state issues and not in reference
to the selection of Senators to de-
termine the national policy?
8. Special Legislation. The N. Y.
Laws of 1899, contain special
laws relating to cities, towns and
villages to an extent requiring over
five large pages to index the acts.
Here are a few examples:
Albany, Beaver Park, grading and Im-
provement of.
Auburn, paving of portion of South
street.
Binghamton, brick pavement on Court
street.
Buffalo, charter amended (11 different
acts).
Surfacing Niagara street.
Dunkirk, charter amended.
Elmira, charter amended.
Damages for changing grade of
Walnut street.
New Rochelle, damages arising from
change of grade,
bchenectady, charter amended.
Organization of fire department
Sewer act amended.
Water supply act amended.
Saratoga Springs, disposal of sewage
Syracuse, charter amended (5 different
acts).
Bridge over Onondaga creek, tar
for.
Maps of city, tax for.
Waterford, paving of Broad street.
Now York City, blind, licenses to.
Auctioneers, licensing, etc.
Amsterdam avenue, laying street
railway tracks in.
Alumni Assoc. of the Presbyterian
Hospital Training School for
Nurses In.
Dalrymple, John D., reappoint-
ment of, as fireman.
Hamilton, Archibald, reappointment
of, as policeman.
Sheehan, Michael, claim allowed.
Wynn Bros., claim of, against city,
payment of.
All such acts as these and many
others should be left to local au-
thorities and the courts.
'77;e Bush nell ('(immission. The
Ohio Commission appointed by
Gov. Bushnell to formulate a code
for municipal administration re-
ports:
1. That there should be but two
classes of cities recognized in the
law those of 3,000 people or more,
and those of less than 3,000. This
is to checkmate special legislation.
The Ohio constitution forbids spec-
ial legislation, but this has been
nullified by an elaborate classifica-
tion of cities, thru which an act
controlling a "class" often applied
to only a single place. (The pro-
posed classification would not pre-
vent the legislature from passing
acts to take effect only in such
cities as might adopt its provisions
by vote of the councils or by vote
of the people. The latter sort of
law I think should not be barred,
but objectionable measures might
frequently be passed with the coun-
cil option. To adjust this it might
be well to provide that in case of
option laws beyond the mere regu-
lation of government routine, the
option of adoption must be placed
in the people.)
2. That as city councils are really
boards of business directors, there
should be one board, instead of two
bodies with concurrent powers to
undo or deadlock each other's work.
3. Strong maj'or with full power
of appointing and removing heads
of departments.
4. City employees forbidden to
attend party conventions or make
political contributions. (Question
THE LATEST NOTES.
539
the wisdom of depriving- any man
of equal civic rights.)
5. Examining- boards to deter-
mine fitness of all candidates for
appointive positions.
6. No alienation of franchises
without consent of voters.
7. Voters shall have the right to
order the municipal purchase and
operation of all municipal monop-
olies.
Good!
T. Multiplicity of Laics. The Eng-
lish Railway Commission of 1867 re-
ported that in addition to the acts
of universal application, the rights
of railways and of the public in re-
lation to them were scattered thru
3,100 acts of Parliament. And Chas.
Francis Adams in 1870 speaks of
"the 3,200 railway acts on the stat-
ute-book of Great Britain, and the
1,000 on that of Massachusetts
nine-tenths of them, in each case,
special legislation to meet the re-
quirements of an organized mo-
nopoly." (Chapters of Erie, pp. 372,
423).
U. Statute Notes relevant to Chap-
ter III on Home Rule for Cities.
The volumes of laws passed in va-
rious states come straggling in,
some of them being distributed
with such deliberation that even
yet (Dec. 22, 1899), last winter's
session laws for Del., Ga., Fla.,
Miss., and Ariz, are not to be found
in Boston libraries. A few points
coming too late for full entry in
Chap. Ill may be noted here.
Wisconsin. (Telephones, etc.) Chap.
309, 1899, gives any country, town, vil-
lage or city the right to issue negotia-
ble bonds for the purchase, construc-
tion, maintenance and operation of tele-
phone lines and exchanges, or to build
or buy water works, gas or electric plants,
purchase fire engines, etc.
Nevada. (Telephones.) Chap. 76, 1899.
Upon petition of two-thirds of the tax-
payers of the county the county com-
missioners may purchase or construct
telephone lines, if they think it would
be for the interest of the county to
own such lines.
North Dakota. (Telephones.) Chap 40.
1899. City councils may grant right of
way to telephone companies if the ma-
jority of stock is owned by residents
of, and the principal place of business
Is In. the State.
Colorado. (Water, gas and electric
light). Chap. 153. 1899. A city or town
may purchase, erect or authorize water,
gas or electric light works, but uo works
shall be erected or authorized except
upon a majority vote of the taxpayers.
When a city or town authorizes the
erection of such works by others, or
the extension or renewal of such a
franchise, it shall be upon the express
condition that the city or town shall
have the right to purchase such works
at any time at the actual cash value
<if the works, ("excluding the value of
tlio franchise, right of way thru the
streets, contract with municipality,"
etc.)
Mixxotirt. (Street railways.) P. 105,
1 *:'.. Cities may grant the use of streets
for street railway tracks only on peti-
tion of one-half the owners on the
street.
Ohio. (Gas or electric works.) P. 60,
1v. i! i, the council of any city or village
may erect or purchase gas or electric
works.
Municipal Debt Limit. The Comp-
troller of New York City, Mr. Bird
S. Coler, in a speech before the
City Club (Dec., 1899) vigorously
advocates municipal ownership of
municipal industries, including the
water system, docks and the under-
ground railway. He believes that
the limit put by the Constitution
on the power of the city to incur
debts should be so modified as to
separate debts incurred for public
utilities that yield a revenue from
debts incurred for services that are
not self-sustaining, and that a debt
u-hich will not be a charge upon tJie
taxpayer should not be included in
those charged against the borrowing
capacity of the city. We believe the
Comptroller is certainly right in
this and the point is a very im-
portant one.
The people of the city have voted
overwhelmingly to own the under-
ground railroad. It is to be built
with capital raised on city bonds,
under a contract by which the com-
pany building the road pays inter-
est and clears off the debt so that
at the end of 50 years the city will
own the whole property free of
debt, without a dollar of taxation
for either principal or interest.
(Outlook, Dec. 23, 1899.)
Havcrhill Gas Case (continued
from p. 523). At the hearing be-
fore the Gas Commission it ap-
peared from admissions of the com-
pany's treasurer and other evidence
that for the year ending June 30,
1899, the company made profits
amounting to 77 per cent, on the ac-
tual investment of the owners in
640
APPENDIX II.
the property; that the company
charged $1.19 net for gas during
said year, while the operating cost
was reported at less than 63 cents,
including taxes and repairs; and
that the company was in the habit of
putting into the operating expenses
under the item of repairs "heavy
charges which were in reality for
new construction." The dividends
paid since the organization of the
company in 1853 have averaged 10
per cent, a year, in addition to
which over $325,000 of new assets
have been accumulated out of earn-
ings. For the last 13 years the div-
idends average 14 per cent, a year,
with an increase of assets in the
same time of more than $300,000,
all paid for out of earnings. In ad-
dition to paying a large interest on
the real capital invested by the
company, the community has paid
for over 4/5 of the present plant,
the legal title to which is not in the
community that has paid for it, but
in the gas company, which uses the
plant built with the citizens' money
to make and distribute gas to those
citizens at rates yielding the com-
pany 77 per cent, profit.
With the present output, about
8 cents per thousand feet would
amount to a 10 per cent, dividend
on the true capital; the im-
proper items included in the
operating account quite likely
balance depreciation, but to
make sure we will add 9 cents
on that score, making the op-
erating cost with depreciation 72
cents at the outside, and the total
fair price of gas not more than 80
cents, including the 10 per cent,
dividend on capital. Accordingly.
Mr. G. W. Anderson, counsel for
the city, on the gas petition of
Mayor Chase, asked the Commis-
sion to order the price of gas in
Haverhill reduced to 80 cents.
In his argument he called atten-
tion to the fact that thru the me-
dium of a second corporation, the
corporation laws of Massachusetts
have been broken into splinters.
Mr. Nevins, of New Jersey, bought
the Haverhill gas stock for
$500,000, and organized "The Hav-
erhill Gas Securities Company," to
do a brokerage business, purchase
and hold stocks, etc. The Securi-
ties Company issued $500,000 of
stock. Then the Haverhill Gas
Company and the Securities Com-
pany joined in a mortgage of the
property and franchises of the Gas
Company to the Old Colony Trust
Company as trustee, to secure
$500,000 of bonds of the Securities
Company, which bonds have been
issued, and in large part sold, but
none of the money has gone into
the treasury of the Gaslight Com-
pany. In other words, a plant
worth $400,000 and actually costing
the real investors only $75,000, ap-
pears now in effect to be capital-
ized at $1,000,000 thru transactions
in utter violation of both the letter
and spirit of Massachusetts laws
a violation which in part is crim-
inal under the provisions of our
law.
Counsel called attention to the
fact that in the case of these nat-
ural monopolies, especially when
made legal monopolies as in Massa-
chusetts, by the definite exclusion
of all competing companies, the
only refuge of the people, aside
from municipal ownership, is abso-
lute publicity of corporate busi-
ness, and fair adjudication of rates
by an impartial tribunal.
"The publicity required by the
second proposition lies at the basis
of the regulation stated as the
third proposition. Without public-
ity, regulation is a fraud, a farce,
a mere sop thrown to the public;
a cover under which to hide
schemes of extortion and specula-
tion. The new system requires the
consumer, when these exorbitant
rates are being charged him, to
come here and ask for a reduction;
he cannot invoke competition.
Without publicity, withoiit inform-
ation as to the cost, of the product
delivered to him by the legalized
monopoly, he cannot tell whether
exorbitant rates are being charged
him or not. In England the most
absolute publicity is required of
these quasi-public corporations."
"What has been the policy of this
Board relative to publicity of re-
turns? From the time this Board
was organized in 1885 until to-day,
it has. with the exception of one
short period, by majority votes re-
fused to allow the public to find
THE LATEST NOTES.
541
out the cost of the product of the
companies given, by the statute
creating this Commission, an abso-
lute monopoly in their communi-
ties. Bound to make public reports
for the supposed purpose of inform-
ing- the public of the facts requisite
to enable them to invoke the judic-
ial powers of this Board for the
reduction of extortionate rates, it
has never made a report from
which the ordinary citizen can de-
duce, even by careful study, wheth-
er his gas company is charging
him 10 per cent, or 75 per cent,
profit on the product furnished."
"In 1894 Haverhill petitioned for
a reduction in the price of gas.
The company was charging $1.40.
The cost was about 80 cents. The
company was making 60 cents per
thousand feet profit and this Com-
mission suggested that it should
only make 50 cents; they reduced
the charges 10 cents, leaving the
company a profit of 62 per cent, on
the cost (or 38 per cent, on the in-
vested capital)."
"Can anyone state any legitimate
reason why, when the gas consum-
ers of Haverhill came before this
Board and asked for a reduction in
the price of gas, this Board should
throw them a ten-cent per thou-
sand sop, render an opinion, four-
fifths of which is in no way perti-
nent to the case presented, and
leave the company to go on charg-
ing gas consumers a profit of over
60 per cent (on the cost) for five
years more, until the accumula-
tions of that company have become
so great that the foreign speculator
could not resist the temptation to
come here and by illegitimate and
criminal methods seek to recapital-
ize the business. I make bold to
say that the policy of this Board as
a regulator of public-service cor-
porations has been a failure; that
it has not protected the public;
that the statute under which this
Board was organized has en-
trenched monopoly and deprived
the people of the poor protection
that competition formerly gave
them. I assert that the Haverhill
case, now presented before you,
where a $75,000 corporation has
been recapitalized for $500,000 or
$1,000,000, is a natural and legiti-
mate result of the policy of this
Board."
"When j'ou permit an entrenched
monopoly to earn from 50 per cent,
to 100 per cent, upon the capital
originally invested, you make it
absolutely certain that some pro-
moter will come forward and seek
in some way to capitalize that
earning power. I have little to say
in denunciation of the stockholders
of the Haverhill Gaslight Company,
who sold out their stock for
$500,000, par being $75.000. Who
\\ould not have done it? I have
little to say in denunciation of
the Messrs. Nevins, who saw or
thought they saw, an opportunity
to make a half a million dollars by
selling futures on the monopoly en-
trenched under the wing of this
Commission."
"This Commission has afforded
the opportunity for this exploita-
tion. Who can blame these people
for grasping the opportunity of-
fered? If the petition of 1894 had
been dealt with as the facts and as
justice required, the Haverhill Gas-
light Company stock would never
have been worth $500,000."
"A company may, if it chooses,
charge twenty cents on every 1,000
feet as made for current repairs,
which it is really expending for
part of a new plant, and the re-
turns to this Board will not show
it, much less the report of this
Board to the public. The company
may easily conceal under an exor-
bitant salary which you do not
publish at all, although it is re-
quired by the statute ten cents
per 1,000 feet. I don't know any
reason why these gentlemen who
now own the legal monopoly
known as the Haverhill Gaslight
Company, if they want to pay
$20,000 salaries, cannot do it; under
the policy of this Board the people
have nothing to say about it. They
must not even know about it, for
that would be "unwise." They
might bring a petition for a reduc-
tion of price."
"/ submit to this Board, that not
merely the question of the reduction
of rates in HaverhiU is on trial, but
the question of the power and the
usefulness and the existence of this
542
APPENDIX II.
Commission, in on trial before the
people of this Commonwealth"
In closing 1 , Mr. Anderson said
that "the price of gas in Haverhill
should be somewhere from 70 to 75
cents certainly it should not ex-
ceed 80 cents," and also suggested
that proceedings should be insti-
tuted for the forfeiture of the char-
ter of the gas companies for viola-
tion of law in transferring- its fran-
chise without authority.
The company claimed at the
hearing that, with due allowance
for repairs, the cost of operation
was 70 cents last year, and judging
by the four months ending Oct. 30,
1899, the cost next year would be
85 cents; but the city showed that
during- those four months 2% miles
of new mains had been laid and
paid for, and that in other respects
the estimate was unreliable.
The result of this vigorous attack
is an order bj/ the Gas Commission
reducing the gas charge in Haverhill
to 80 cents. This is a remarkable
victory, and great credit is due to
Mayor Chase and his counsel, Mr.
Anderson, of the Tremont Building-,
Boston, and Prof. Bemis, of New
York, who assisted in the statisti-
cal part of the investigation. The
outcome will be likely to rouse
other communities paying 30 or 40
or 50 cents a thousand too much.
Even the consumers of $1 gas in
Boston may wake up and do some-
thing. The cost of making and
distributing gas is much less per
thousand in Boston than in Haver-
hill and the people here also have
paid for many years large excesses
of profit beyond real cost and rea-
sonable dividends. If 80 cents is a
reasonable price in Haverhill, and
you may be sure the Commission
would never have given the order
till certain it was not too low a
rate to yield a good profit if 80
cents is fair in Haverhill, 60 cents
would probably be fair in Boston,
and in the light of the Passaic
offer, noted on p, 523. 60 cents
would seem more than fair.
The Referendum Again.
In a New England town any 10 voters
can bring a question before the people
for decision a petition signed by 10 vo-
ters puts the matter in the warrant to
be acted on at town meeting that is,
less than 1 per cent, of the voters In
a large town, or 2, 3, 5 or 10 per cent,
in smaller towns can initiate any de-
sired action and secure a vote of the
people upon it. Why should not the
voters of cities have equivalent rights
of self-government? Why should not
1,000, 3,000 or 5,000 voters in a city
have at least as much power to initiate
measures and bring them before the
people for decision, as 10 voters in a
town?
A year ago Immense mass meetings
were held in Chicago in opposition to
the 50 year street railway franchise,
and the proposal to hang Yerkes arid
any councilmen who voted for the fran-
chise was vigorously applauded; In ef-
fect, "a tremendous mob, having prac-
tically the backing of Mayor Harrison,
overawed the city council and forced <t
to reconsider its determination to give
the street car monopolies a 50-year fran-
chise." Not long ago a similar "iiiob in
St. Louis defied the police and fright-
ened the House of Delegates of that
city Into quickly passing a law provid-
ing for the proper lighting of the
streets." (Civic and Social Probs., Feb.
1, 19000
If the people were reallv sovereign
they would not have to mob the jrovern-
ment to get the laws they want. If
cities had the referendum the people
would not have to threaten to han^
councils, nor defy their own police in
order to pass a law. A petition would
do the work.
The Contract System.
The street cleaning department of
Washington, D. C., has been testing the
relative cost of direct employment and
contract work and it finds the cost of
hand cleaning by direct employment to
be 18 cents per 1000 sq. yds., while the
contract rate was 32 cents per 1000 sq.
yds., or about 80 per cent, more than
the cost of doing the work without
contract, and this in face of tin-
fact that the City paid the labor-
ers 25 per cent, higher wages than
the contractors paid (contractors paid $1
a day, and the street department paid
$1.25 a day.) For the year ending June
30, 1899, the city cleaned by direct
labor, 75,356,385 sq. yds. and saved
thereby some $10,550. To clean the en-
tire paved area of the city every day for
270 days at the contract rate In force
during the period of this test, would
cost $311,040, without contract the same
work could be done at an annual cost of
$174.960, a difference of $136,080 in favor
of the abolition of the contract system.
(Quoted in substance, and the last part
verbatim, from p. 4 of the Report of the
Sup't of the Street Cleaning Depart-
ment of the District of Columbia, Sept.
20, 1899.)
SUPPLEMENT
TO
The City for the People. (Equity Series Nos. 3 and 4, March and June, 1899.)
Errata and .Addenda
Note ike points at the proper places in your book, or cut up this supplement andplace
the pieces in the book on the pages referred to, or paste the whole statement in the book
and make a marginal reference to it on each page involved.
Page 30. In the last column of the table opposite Milan, the 2 cents average fare should
be 1.8 cents.
Page 59. In the 2nd line below the second table the word "out" is omitted after the
word " cut "- the legislature had cut out the bogus bond and forced down the capi-
talization see p. 80.
Page 81. In the 7th line from the bottom, " Chapter of Erie " should be " Chapters of
Erie."
Page 161. In the i2th line from the bottom of the left-hand column the word "and"
should be omitted.
Page 431. Below the table, X should be X=.
Referring to page 520, sec. 4, an excellent rule for determining the actual value ot
property taken for public use is the one adopted by the Mass. Legislature in chap. 473,
sec. 13, Acts of 1897, authorizing the municipal purchase of the Stoneham water works, at
"the fair value of the property without allowance for past, present or future earnings, or
earning capacity, good will, or any franchise or privilege of said company." In chap. 474,
sec. i of the Mass. Acts of 1894, relating to the purchase of water works in Newburyport,
the Legislature provided for compensation at the " fair value of the property for the pur-
poses of its use, such value to be estimated without enhancement on account of future
earning capacity or good will, or on account of the franchise of said company." The
company wanted compensation on the basis of past and present earnings, but the com-
missioners ruled out earnings as a measure of value altogether, as also all privileges in
the streets, but allowed $40,000 in a total valuation of $275,000 (the par capitalization of the
company was $300,000) because the plant was a "going concern, " tested by experience
and ready for the city to begin operation without the delay incident to constructing the
works, connecting with customers and building up a good business. These rulings were
sustained by Justice Oliver Wendell Holmes, Jr., in 168 Mass. 554, referring in the course
of his decision to Water Works Co. vs. Kansas City, 62 Fed. Rep. 853 where the court
said that "basing the value upon earnings is in effect valuing a franchise which no longer
exists." It is clearly true that a valuation based on earnings involves a valuation of the
franchise, which is one of the chief factors in securing these earnings, and it is also true
that in states where franchises are revocable at the will of the legislature or the municipal-
ity nothing should be paid on account of franchise when the property is taken for public
use. It certainly seems fair to add something to the structural value of the plant where it
is a going concern reasonably adapted to the purpose in hand. If the city should build, it
would have to lose interest and depreciation during the time necessary to construct the
works and form connections with a sustaining body of consumers. The rule adopted in
the Newburyport case, sustained by the Supreme Court and reaffirmed by the legislature
in the Act of 1897, above cited, seems eminently just and should be extended to gas and
electric light, telephone, street railways and other franchise properties, wherever they are
taken for public use.
Page 542. The Haverhill Gas Co. has applied to the Federal Courts to enjoin the en-
forcement of the order of the Gas Commission reducing the price of gas to 80 cents
per thousand feet.
INDEX OF SUBJECTS.
ACCIDENTS
on railways and street railways, 67
leaky gas, electric wires, grade crossings, etc., 66-8, 88, 93
fewer under pub. ownership, 150
railroad, in U. S. and Germany, 150
Brooklyn Bridge and N. Y. st. rys., 150
relief payments to municipal employees in case of, 473
ACCOUNTS
omissions and misstatemts iu private co.'s, see FALSE STATEMENTS
AND SUPPRESSN of FACTS
of public plants apt to be honest, 152-3
ADMISSIONS
of H. A. Foster in regard to pub. ownrship, 145, 242
ADULTERATIONS
monopoly tends to eliminate, 64
AMERICAN FEDERATION OF LABOR
resolutu on pub. ownership, 165, L'^ii
favors direct legislatn, 289, 337, 368
ARISTOCRACY
of wealth, 91
of privilege (franchise monopolists, etc.), 100
fonstitutn .guards agust titles, but not agnst the substance of aristoc-
racy, 174
pub. owurship opposes, 174
of law making delegates, 255
direct legislatn opposes, 306. 313, 353, 259-263, 288, 295, 360
ASSESSMENTS ON BETTEUMTS. 178-9
AUCTION
sale of franchises, 44!--ir>2
AUSTRALIAN
ballot system not perfect, 488
AUTHORITY
favors direct legislation, 352, 286. 289, 291, 296, 368
favors municipal home-rule, 399, 428-9
favors pub. ownership, 211-229
AUTOMATIC BALLOT. Chap. VII. pp. 488-490
secret and honest ballot vital, 488
Australian system not perfect, 488
voting machines better, 488-490
abolishes box-stuffing and false counting, 489
and helps to defeat bribery, 489 (compare 537)
(don't stop repeating, however, nor bad nominations, etc.), 489
laws authorizing use of ballot machines, 489
Rochester's successful experience, 489-490 n
Buffalo following suit, 490
BALLOT
by machines, see AUTOMATIC BALLOT, 488
Australian system not perfect, 488
BANKERS
undue share of representation, 356
BRAMKAMP WIRE NAIL CASE, 32
BATHS, PUBLIC
Boston, 196
Glasgow, 196
BAY STATE GAS CO.
Investigation of, 23, 44, 58, 59, 77-81, 84
profits, 23, 35
overcapitalization, 77
frauds, 77-81
defiance of law, 84
BELL TELEPHONE CO. (See Telephone)
rates excessive, 31
profits excessive, 38
inferior service, 65 (compare 117, 151)
unjust discrimination, 69
violation of law, 86
stocks material for gambling, 90
BETTERMENTS, assessments on, 178-9
BONDS
for revenue producing utilities not to be counted against the debt limit,
229, 519, 539
544 INDEX OF SUBJECTS.
BOSTON ELEVATED
estimated cost of, 54
BRIBERY
of legislators and officials by monopolists, 70, 71-3, 75, 140
Philadelphia franchises, 494
Broadway franchise, 71
Chicago franchises, 493
Standard Oil, 88, 89
West End case (Boston), 496
of TOters, 496
stopped in Eiig. by corrupt practices act, 500
BROADWAY SURFACE RD
fraud in franchise, 55, 71, 306
BROOKLYN BRIDGE. (See INDEX OF PLACES)
BROOKLYN NAVY YARD
fine results from ciTil service rules, 471
BROTHERHOOD
requires public ownership of monopolies, 172-3
requires direct legislatn, 352
BUFFALO CONFERENCE
favored direct legislatn, pub. ownershp, etc., 229, 368
BUSINESS
increase of under pub. ownrship. (See TRAFFIC)
CABLE ROADS. (See STREET RAILWAYS)
CAPITALIZATION. (See OVERCAPITALIZATION: STOCK, MONOPOLY)
CHAOS
of prices, 22, 27. (See MONOPOLY, C. I.)
of laws, 318, 320, 398, 402, 465-6
CHARACTER
debased by private monopoly, 99-100
CHARGES. (See RATES)
CHARTER
of city not a contract, 390
freehold charters, 272, 280, 415-426, 431, 435-8
see HOME-RULE (7) (9) (12)
of San Francisco, 229, 279, 419-421, 438
direct legislatn, 419
pub. ownrshp, 420
civil service reform, 420-1
of Greater New York, 280, 452
model, Nat'l Muuic. League's plan for, 228-9
CITIES. (See HOME-RULE, PUB. OWNERSHIP, D. L., etc.)
rapid growth of, 7, 8
concentration of wealth in, 9
problem of, 9
Bubjectn to legislature, 387, 390
ought to be free and independent in respect to local business, 10
Inherent right to local self-govt, 393
dual nature of, 392. 412
franchises given to, not contracts, 390
charters of, not contracts, 390
suggested legislation, 516-522
CITIZENSHIP
improved by public ownershp, 156
high wages paid by pub. plants to improve, 250
CITY COUNCILS
working libraries for, 190-1
CIVILIZATION. (See PROGRESS)
one test of, is advance of co-operation, 210
CIVIL SERVICE, MERIT SYSTEM OF. (Chap. IV, 469-473, 536)
1. necessary to reliable public ownership, 18
necessary to true municipal liberty, 428
pub. ownership likely to create demand for, 18, 157-8, 216-251, 471
proof from Chicago, 251, from Detroit, Wheeling, etc., 157-8
direct legislation will help, 471
has done so in Switzerland, 350
Boston, 536
San Francisco, 420-1, 536
Baltimore, 536
Chicago and Detroit, 471, 473
Mass, and the Federal Government, 473
necessary to due efficiency, 471, 472
economic value of merit system, 471
Brooklyn Navy Yard, 471
Carroll D. Wright's opinion, 471
helps to abolish partisanship, 471
method of, 469, 471, 472, 473
death payments, pensions, old age and accident relief, etc., 473
references, 473
2. evils of spoils system. 470
financial, political and moral, 470
Inefficiency, 471
Tlolation of labor's rights, 471-2
INDEX OF SUBJECTS. 545
CIVIL SERVICE, MERIT SYSTEM OF continued
develops partisanship and places It above patriotism, 471
treats public offices as private property, 470, 472
fills offices with those who have "pull" instead of those who have
merit, 472
converts offices into bribes and rewards for corrupt carrying of
elections, 472
makes public officers vassals of party and bosses, 472
burdens executives with peddling of offices instead of leaving them
free for statesmanship, 472
contrast between spoils system and merit system, 472
3. merit system adopted in England, 502
COAL COMBINE
extortions of, 32
COMBINES. (See TRUSTS AND COMBINES)
COMMON LAW
private monopoly void by settled principles of, 10. 40 41
CONGESTION
of population in cities, 7, 8
of wealth and power, 91, 3
dangerous to free institutions, 92-3
(Opinions of Chief Justice Sherwood, Senator Hoar aud Daniel
Webster)
CONGRESS, COMPOSITION OF, 337-8, 356
CONSENT, LOCAL. (See FRANCHISES: HOME-RULE (13)
CONSTITUTIONAL PROVISIONS
limiting legislative power over municipalities, 392, 397, 431 table
home-rule amendments, 409-410, 415
freehold charter, amendments, 415-425, 431, 435-8, 508-511 full text
suggested forms, 516 et seq.
forbidding special legislation, 422-3. 431 table. 432-4, 522
as to local consent to and power of granting franchises, 431 table, 434.
436, 522
on public ownership, 431 table, 434, 436, 448
suggested forms, 518 et seq.
on direct legislation. 269. 271, 282-3, 456, 505-8 full text
(See HOME-RULE (15), DIRECT LEGISLATION (D)
So. Dakota, 282-3, 457, 505
Oregon, 283. 506
Utah, 283, 506
suggested forms, 516-7
submission of, to the people, 273-5. See D. L. (C)
CONTRACT SYSTEM
inferior to direct employment, 143 n, 54li
Washington experiments, 542
CONTROL
the essence of ownership, 17
CO-OPERATION
the benefits of monopoly come from the co-operative element in it, 100-1
pub. ownershp a step toward complete, 167
CO-OPERATIVE BUSINESS
may be encouraged by taxing it at specially low rates, 527
CO-ORDINATION
of industries cannot be complete except under public ownership, 141, 142 n
examples of, 142-3
CORRUPT PRACTICES ACT
English, makes political success depend on honesty, 501
fraud forfeits offices, 500-1
our acts much less effective, 501 n
COST. (See WATER, GAS, ELEC. LIGHT, ST. RYS., TELEPHONE, etc.)
does not determine charges, gas, 22, electric light, 25-27.
1. of water supply, 123 table
of operation in various water works, 21
withholding data of (water co.'s), 22
2. of electric light, 25-27, 523
of full arc, testimony of Pres. Marks of Phila., 26 u
3. of operating xtrect railways, tables, etc., 28-30, 60 n. Pres. Vreeland on
elements of cost in New York, 524
electric light plants. 129-135
gas works, 22-24, 59, 127, 523
telephone exchanges, 117-119, 128
4. of constructing gas plants, 43
street railways, horse, electric, etc., 4S-.V>. 51-2
cable, 49, 50, 52
L. Rds., 48, 53-4
1 1- ( trie light plants, 62
telephone lines, 117-119
5. false statements of cost of operation and construction, 59-62
suppressn of facts (see FALSE STATEMENTS and SUPPRESSION) see
(1) above
DEATH
aid to families of municipal employes, 473
35
546 INDEX OF SUBJECTS.
DEBT
neither taxation nor, nec'y in securing public ownship, 184
DEBT LIMIT
municipal, 437 table, 438
bonds for revenue producing utilities not to be counted, 229, 519, 539
DECISIONS
Hamilton gas case, 178
Mass, fuel yard, 175
Mich, "internal" improvmts (Detroit st. ry. case), 176-7
Mich, and Ind. inherent right of local self-govt, 393-6
sustaining reduction of rates by law, 182-3
if rates yield any profit it is suft, 182
co. can't claim rates suft to yield profit on fictitious capital, 182
city may establish gas or electric works, etc., of its own, altho it has
previously given a franchise to a private co., 443, 445
DEFIANCE OF LAW
street railway battles and destruction of property, 81
attempted nullification of the 3 cent fare ordinance in Detroit. 82
street railways preventing enforcement of law in Cleveland, 82
violation of tax laws, Cleveland street railways, 82
St. Louis and Kansas City street railways, 82-3
Chicago street railways assesst at 2 or 3 per cent., 84
Boston electric light co.'s, 85
lawless gas co.'s, Bay State gas broke a dozen statutes and the common
law, 84
Cleveland gas co. defying ordinance reducing rates, 84
escaping reduction by manipulating pressure, 84-5
electric light co.'s, 85
resistance to laws and ordinances reducing rates a common practice of
municipal monopolies, 84
other great law breakers, the Niiil Trust, telegraph monopoly, Bell Tele-
phone Co., railroads, sugar trust, 86-7
Standard Oil monopoly (summary of atrocities), 87-89
DEFINITIONS
monopoly, 19
public ownership, 17-8
direct legislatn, initiative, referendum, etc., 257-8, 303
DEMOCRACY
private monopoly destructive of, 92-3, 100
private monopoly leads to congestn of wealth and power in few hands
which is dangerous to free institutions, (opinions of Chief Justice
Sherwood, Senator Hoar, ;uid Daniel Webster), 93
Inconsistent with law-making by final vote of delegates, 255-6
requires direct legislation, 258-20:$, 288, 294, 296-8, 352, 370
DESPOTISM
private monopoly is actual or potential, 16, 40
no legislature a right to grant a monopolistic franchise, 41
DESTRUCTION
by gas co.'s of inconvenient report of investigation, 22 n
of public documents, 63
of life and property by carelessness of monopolists and illtreatnit of em-
ployees, 66-8
of property by street railway battles, etc., 81
of rival properties by oil trust, 87, 88
of public documents by monopolists adversely affected by them, 63
In strikes, 94-8 (st. rys.), 166 table
DETROIT
street railway case, 176-7
DEVELOPMENT (see PROGRESS, GROWTH)
of public ownership, 203-210
five stages of (Seligman), 210
of morality, favored by pub. ownrship, 172
of manhood, favored by pub. ownrship, 178
of liberty, favored by pub. ownrship, 173, 158-9, 200 (8)
of democracy, favored by pub. ownrship, 173-4
of unity, favored by pub. ownrship, 175
of aesthetic life, favored by pub. ownrship, 171
of pure govt, favored by pub. ownrship, 153-5, 156, 157-8, 159
of pure govt, favored by direct legislatn, 306-314, 350, 352
DIFFUSION
of wealth and power, opposed by private monopoly, 90-3
favored by public ownershp, 168-9
and by progressive taxatn of incomes, etc., 169
favored by direct legislatn, 258, 259-263, 296-8
DIRECT LEGISLATION. (Chap. II, 255-386)
(A) in early times legislatn was by whole body of citizens. 2.">.">
growing size of community caused change of method, 255
legislatn by final vote of delegates, 255
establishes mastership and aristocracy, 255
opposed to democracy and popular sovereignty, 255-6
problem, to keep benefits of representative system and eliminate the evils
of unguarded representation, 256
INDEX OF SUBJECTS. 547
DIRECT LEGISLATION continued
remedy, a representative system guarded by initiative, referendum and
recall, 256-7
definitions, 257-8, 303
enables the people to start or stop legislatn at will, 258
veto laws they don't want, 2r>8, 303
secure laws they do want, 258, 303
gives us the service of our legislators but frees us from their mastery, 259
makes it unnec'y to mob or threaten councils in order to get them "to do
the people's will, 542
(B) necessary to self-govt, 288, 204. ::r>2
self-govt does not consist merely in choosing some, one to govern vou
259-260
duratn of a lease of power don't determine its character, 260
it may be despotic tho its term is short. 2>o
he is sovereign whose will is in control, 261
the people not continuously and effectively sovereign, 261
but only intermittently, spasmodically, and to a large extent In-
effectively, 261
architect illustratn, 262
well to take counsel of legislative agts, but not place them above
the people's reach, 2<>i:-:;
(C) referendum in use in America, 263-278
I. already a fundamental fact in our govt, 263
all we need is an extension of fundamental principles. 264
town govt, 264-269
people cling to it even after town grows very large, 26(5
Brookline, 266-7
wins out against county system (Illinois). 2t>.s
opinions of Jefferson, Fiske, and Bryce, 264-5
constitutn making, 264, 369 n
early govt of Mass., 264
large number of referendal clauses in our laws, 26!), 3<>!) n
illustratns from la., 269, 271, 444, 4.".t;
may be used thruout legislation if legislative agts so choose. 271
only change nec'y is to put the OPTION in the PEOPLE, 271
small percentage of voters in a New Eiig. town may initiate measures
and bring them before people for decision, voters of cities should
have similar rights, 542
II. lllustratus of use of referendum, 272-275, 535
New Jersey, Cal., N. Y., 272
Boston, Minneapolis, 272
Greater New York charter submitted, 280
freehold charters, 272, 280
purchase or erectn of water, gas, electric plants, etc., 272
grant of street franchises, 272, 535
New Orleans, 272-3
Many matters of local interest are submitted to the local electors,
369 n
fixing county seats, etc., 273
local option on liquor question, etc., 273
constitutional amendmts, submitted (1896), Mass., N. Y., 273
Minn., Mo., Neb., Colo., Id., 274
Mont., Cal., La., Tex., Ark., Ga., Dak., Wash., 275
Mich., 275
Boston referendum (1899), 535
III. generalizatns established by experience with ref.. 275-8
discriminatn in voting on measures, 275
independence of party, 275, 340
unguarded representatu doesn't represent, 276, 354, 358-9
referendum wisely conservative, 276
defeats ambiguous measures, 276
and those involving jobs or tricks, 276
automatic disfranchisemt of the unfit in many cases, 276, 323
referendum readily used by our people, 277
controls both ends of the ordinary scale of legislatn and is open
to engagemts at intermediate points, 277-8
no trouble where it controls, but heaps of trouble elsewhere, 278
shown itself the best legislative method, 278
wisdom requires extension of its use, 278
national legislatn not included in this discussion. 277 n.
(D) movement to perfect rep. system by fuller provisn for D. L., 2i9-298
I. accomplished facts, 279-283, 505-6
San Francisco's charter, 279, 419, 507
Alameda, Seattle, etc.. 279
freehold charter provisns, 280, 508-511
Detroit charter law, 507
laws requiring referendum on franchises, pub. ownership, issue o
bonds, etc., 280, 442, 444, 448, 449, 456-7, 522; see HOME-
RULE us)
laws providing for popular initiative on franchises, pub. o., etc.,.
280, 456 (see HOME-RULE, 15)
548 INDEX OF SUBJECTS.
DIRECT LEGISLATION continued
Nebraska's municipal D. L. law, 280-1, 457
Arizona's municipal D. L. law, 282
So. Dakota's D. L. const, amendmt, 282-3, 457, 505
Oregon's D. L. const, amendmt, 283, 505
Utah's D. L. const, amendmt, 283, 506
II. efforts, 284-6
bills introduced in many states, 284-5
some passing one house or both, 284-5
III. the rising tide of thought, 286-296, 369 n
Dicey, Winchester, Moses, Freeman, McCrackan, Sullivan, Pom-
eroy, 286
popular movemt largely due to Sullivan and Pomeroy, 287
large part of the press favorable (over 3000 papers and magazines),
287
a non-partisan movemt, 287
men and platforms of all parties for it, 287
all who believe in govt by the people favor extension of the refer-
endum, 288, 294, 352, 360
only shortsighted plutocrats and politicians, and persons unwilling
to trust the people, oppose it. 288. 360
Wanamaker, Pingree, Bryan, St. John, Lloyd, Ely, Howells,
Sheldon, Abbott, Lorrimer, Mills, Conwell, Gladden, and 50
other eminent men and women registered in favor of it, 289, 290
opinions, 291-296
Wm. Dean Howells, 291
Rev. Lyman Abbott, 291
Hon. John- Wanamaker, 291
Pres. Francis E. Willard, 291
Henry D. Lloyd, 201
Hon. Wm. J. Bryan, 292
Pres. Samuel Gompers, 292
Lord Salisbury, 292
Mayor Jones, 368. 535
Rev. B. Fay Mills. 292
Prof. Lecky, 293
Prof. Geo. D. Herron, 293
Pres. Geo. A. Gates, 293
J. St. LOP Strackey (Ed. London Spectator), 293
Andrew Jackson, 293
Gov. Pingree, 293
Prof. Geo. Gunton, 293
Hon. John G. Woolley, 294
Thos. Jefferson, 295
Abraham Lincoln, 295-6
Farmer's Alliance, Labor Unions, etc., 289
American Federation of Labor, 289, 368
Christian Endeavor, Epworth League, etc., 289
Social Reform Union, 368
Buffalo Conference, 368
D. L. sentimt as indicated by Ohio vote (1899). 535
the referendum movemt is part of a world movemt toward liberty,
democracy and peace, 296-8
diffusion of power thru D. L., 298
few wars if the people voted them, 298. .'iU'.i
(E)the practical details, 299-303
analysis of D. L. law or amendmt, 299-300 (see 516-7)
obligatory ref. the better form ultiintitcJy, 301, see 257 n.
more economical, 301
more secret, 301
less affected by human inertia, 302
optional form best at start except as to street franchises, const.
amendmts, etc., 302
>|F) reasons for direct legislation, 303-362
1. progress, it will open the door to all other reforms as fast as the
people want them, 303-6
words of Buckle and Wendell Phillips, 305
it will give the sovereign people the power of voluntary movemt,
305
prevent the corporate ganglia from paralyzing the progressive
muscles and the conscience of the body politic, 305
separate of measures aids reform, 305-6
experience of Switzerland, 344, see below (F), 20
2. purify govt, 306-314, 350, 352
destroy the conccntratn of trmptatn resulting from the power of a
few to take final action. 306
Broadway Surface Franchise, 306
Phila. gas lease, 306-7
it won't do to leave the referenda! option with the legislators, 307
they submit questns on which they are acting honestly, 307
but never submit a franchise steal, 307
Reading Terminal bribery, 308
corporate voting $100,000 to buy Chicago council, 308
IXDEX OF SUBJECTS.
DIKECT LEGISLATION continui (7
prices of legislators, 308
citizens too numerous to buy, 308
referendum greatly dilutes the power of bribery, 309, 310 n
lobbying, log-rolling, and blackmailing undermined, 310
class legislatn checked, 311, 344
separatn of legislatu from the people (a great cause of fraud)
abolished, 492
private monopoly in law-making destroyed, 311, 353
3. demagoguery. and polit. influence of employers over employees di-
minished, 312
4. power of rings, bosses and monopolists crippled, 313, 535
5. partisanship weakened, 313-4, 311
6. elections simplified, 314-316
easier to vote on a measure than on a man and a platform, 314-5
disentangling of issues very important, 315
mixture of issues fatal to self-govt, 315-7
or real representatn, 315-7
Mr. Moffett's illustratn, 316
7. simplify and dignify the law, 317-321
multitudinous unnec'y laws, 318-320, 4U6, 539
N. J.'s law factory compared with Swiss records, 318
Gov. Grigg's views, 318, 319 n
Senator Bradley's opinion. 325
Massachusetts, 466, 539
overproduction a sign of low developmt, 321
legislatn is in the fish epoch, 321
dignity of law greater under D. L., 321
examples of undignified legislatn, 321
8. increase respect for law and aid its enforcement, 321-2
9. elevate professn of politics and bring men into it, 322
10. develop civic patriotism, 323-4
increase the vote and interest of better citizens, 323
and eliminate in large degree the votes of the less intelligent, 323-4.
276
11. elevate the press. 325. 345
12. educate the people, 3_!5-7
D. L. the people's university, 325
Switzerland, 326
ancient Athens, 326
13. develop morals and manhood, 327
14. favor stability the social fly-wheel, 327-334
give discontent a peaceful vent, 328-9
tend to prevent strikes. 329
people not so apt to find fault with what they do themselves, 330
contrast between disgust manifested toward legislative bodies, and
quiet acquiescence in popular verdict at the polls, 3;50-4
peace favored, 369, 298
wars few if people voted them, 298, 369
no standing army allowed in Switzerland, 369 n
no longer uec'y to mob or threaten councils to make them do
justice, 542
15. large economics resulting, 334
stopping jobs, franchise steals, etc., 334
save much expense in printing laws, 334-5
lower taxatn, 346
16. identify power with public interest, 335-6
17. give labor its true weight in govt, 336-9
jabor's interest in the referendum, measureless, 336
it is par excellence the workingman's issue, 336
labor unions recognize its value, 336
Amer. Fed. of Labor. 337
no real representatn of labor in many legis. bodies. 337-9
60 and 70 per cent of legislatures and congresses are lawyers,
largely corporatn attorneys, 337-9, 356
18. benefit all classes the people'* issue, 340
not a class measure, nor a party measure, 340
19. merely an application of established principles of law of agency. 340-2
we call our legislators "agts," but they are not, 341
and never will be till the people claim the principal's rights of in-
struction and veto, revocatn and discharge, 342
20. experience proves value of D. L., 342-352
Canada and England, 343
Switzerland, 343-352
formerly cursed with evils of unguarded rep. system, 343
class-rule, monopoly, corruptu, etc., 344
adopted direct legislatn. 344
and it has dethroned the politicians and monopolists. 345
abolished bribery, class-law, and machine politics, 34."i
rid the body politic of its vermin. 345
destroyed the power of legislators to legislate for personal ends,
345
650 INDEX OF SUBJECTS.
DIRECT LEGISLATION continued
elevated the press, 345
given great impetus to wise reform, 346
reduced taxatn, 346
and changed its incidence from poverty to wealth, 346-7
direct progressive taxes, in place of indirect taxes, 346
indirect taxatn is "plucking the goose without making It
cackle," 347
Swiss pluck the goose where the feathers are thickest, 347
income tax, 347
monopoly charges greatly reduced, 352
public ownership advanced, 347
telegraph, telephone, express, etc., 347-8
railroads, 347, 230-1
great success of referendum fully attested, 348
deeply rooted now in hearts of whole peo_ple, 340
favored now even by those who opposed its adoption, 349
objectns proved baseless by experience, 349
D. L. economical, pure, non-partisan, 349
proved a drag on hasty legislatn, 349
fatal to corruptn and extravagance, 350
favors merit and good business principles, :Ci<
excellent officials, 350
legislators practically a life tenure thru repented re-electn, 350
people can reject a law and retain the law-maker, 35O-1
decorous debates, 351
proportional rep. being widely adopted, 351
21. high authority in favor of D. L., 352, 289-291, see above (D III)
Jefferson, Lincoln, 295
22. drift of public seutiint strong toward D. L., 352, see above (D III)
23. trend of events, progress of civilizatn, evolutn of democracy, 352,
370, 296 above
24. brotherhood, law of love, religion and ethics, 352
25. D. L. essential to self-srovt the key to the whole sitn.-itn. 288, 294,
259-263, 352, 360^
private monopoly of law-making, 353, 311
unguarded representative system does well in early times with
homogeneous society, 353
but in our complex society delegate law cannot be relied on, 354
"representation does not represent," 354, 259
present system not entitled to the name "representative." 259
large masses of voters have no representative in the halls of
legislatn, 354
parties not fairly represented, gerrymandering, etc., 354-5 table
classes not fairly represented, 356, 337-9, see (17) above
Ideas not fairly represented, 356-7
many questns arise after olectn, 357
the people may change their views on campaign issues after
election, 357
delegate's self-interest may deflect his vote, 357
even honest delegates many times fail to represent the people
because they cannot tell what the people want, 358-9
Hittinghausen's indictment of the representative (or wtsivpre-
sentative) system, 359 n. 276
proportional rep. will remedy some of these defects but by no
means all, 357 n
the breakdown of legislatures (Harper's Weekly I. :{(>U
the basic questn, 360
references, D. L. Record, etc., 360, 378, 385
the dumb people and the parties, 361-2
the dumb man and the cooks with their complex bills of fare the
whole menu or none of it, 362
<G) summary statement, 362-370
(H) objectns, q. v., 370-386
(I) D. L. an essential element in true plan of pub. ownershp, 18, 190
(J) nec'y also to true municipal home-rule, 411, 428
(K) correlative with proportional rep'n, 474
and preferential voting, 484
(L) suggested forms for D. L. laws and const, amendnils. 51(5-7, compare
280-3, 505-6
DISCRIMINATION
in gas rates, 87
In price of oil, 88
In railroad rates, 88
street railway passes for ward heelers, etc., 68
free water, gas, electricity, telephones, etc., for men of influence, 69
against newspapers too critical of telegraph monopoly. 69, 81 n
against even IT. S. business in favor of speculative- messages, etc., 81 u
less under pub. ownershp, 149
DISTRIBUTION
of wealth in U. S., 91-2
of stock among influential people, 70. 75. 76
INDEX OF SUBJECTS. 551
DISTRICT SYSTEM (see PROPORTIONAL REP.)
gives dominant party undue power, 476, 355
practically disfranchises large masses of citizens, 476, 355 table, and note
Garfleld's statemt, 476 n
gerrymandering, 476-7, 354
X. J. case and Judge Gaskill's exposure of it, 477, .T>4
in Ky. a democrat weighs as much as 7 repubs., 478
In Me. a democrat weighs nothing, 478
lllustratns of disproportional representatn, 478-481
ECONOMY
of public ownrshp, 16 reasons for, 136-141
objectn ansd, 242-5
water-works, 192-4, 195
street railways, J.98
telephones, 117 *
direct employment cheaper than contract system, 143 n, 542
direct legislatn favors, 334, 349-350
civil sen-ice reform favors, 471
inefficiency and wastefulness of spoils system, 471
EDITORS (see PRESS)
liberated from monopoly pressure by pub. ownshp, 159
EDUCATION
aided by direct legislatn, 325-7
EFFICIENCY isee ECONOMY)
ELECTIONS (see AUTOMATIC BALLOT, PROPORTIONAL REPRE-
SENTATION, PREFERENTIAL VOTING)
simplified by direct legislatn, 314-316
easier to vote on a measure than a man and a platform, 314-
disentanglemt of issues very important, 315
Mr. Moffett's illustratn. 316
plurality rule, unjust. 484 (see PREFERENTIAL VOTING)
by minority choice, 484-6
presidents, governors, mayors, etc., 484-5
frauds in, 492. see POLIT. COEEUPTN (1)
systematic bribery of voters, 496
assessmts of officeholders and candidates, 496
disputes as to, judicially decided (Eng.), 500
ELECTRIC LIGHT (see LEGISLATIVE FORMS)
1. cost and charges
excessive charges for, by private co.'s, 24-7
cinnmercial rates of public plants about half the private rates, 24-5
chaos of private rates. ^."-7
e. g., St. Louis pd. $75. while Boston pd. $237 for same service, 25
heavy losses to taxpayers by extortns of the co.'s, 25-7
cost per 1000 watts, 25
cost per standard arc. Pres. Marks' testimony, 26
report of comm. of Boston Council, 26 n. 228
charges not fixed by cost of productn, but by ratio of pub.
spirit to the power of monopoly in the control of govt, 27
cost in public and private plants compared, 128 table, 135
H. A. Foster's figures, 243-5
M. J. Francisco, 245-7
cost before and after pub. ownshp in same place, 129 table, 250
Peabody, Aurora, Elgin, 130
Detroit. Allegheny, 131
Fairfield, Bay City, 132
Jacksonville, 132. 523
Jamestown, Lansing, 132
Springfield (111.), Logansport, 133
present cost in public plants. 134 table
Chicago's case, 250-1
2. profits of private co.'s exorbitant. Boston. Philadelphia, New York, etc., 36
3. poor service of private co.'s, 64-6 (compare 151)
dangerous wires, 66
4. free, to men of influence (discriniinatn), 69
frauds of co.'s, electrical politics, etc., 73, 74
omitting important facts from investigatn, 61
misreprosentatns of M. J. Francisco. 245-7
co.'s defiance of law, 85
stocks material for gambling, 90
5. lighting monopolies tend to non-progressiveuess, 94
low character product, 99-100
and undemocratic congestn of wealth and power, 90-3
6. competn in, impracticable, 101
regulatn a failure where most needed. 106-112
experience of Mass., 110-112. compare Haverhill case, 523, 539-542
7. economy of public ownership, 16 reasons for it, 136
savings by public ownership. 144
ro-ordinatn with other industries, 142, 143
companies confine their attentn to "paying" districts, pub. ownership puts
wires and lights where they are needed, 14.">-6
Foster's admissns, 145, 242
ervice better under public ownership. 151 (compare, t'>4-0)
552 INDEX OF SUBJECTS.
ELECTRIC LIGHT continued
merit system favored by public ownership, 107-8
experience in Detroit, 157
in Chicago, etc., 158
employees better treated under public ownership, 101
8. methods of securing public ownershfp, 175, 251
reductn of rates by law to squeeze water out of capitalizatn. 179,180-3,521
taxatn of face and market values of securities to squeeze out water,
179, 181, 521
public ownership secured without taxatn or debt, 184
Berlin contract, 184-5
Minneapolis offer, 1&5
Des Moines offer, 188
Springfield contract, 187
9. satisfaction with pub. ownership, 202
. growth of pub. ownership, 205, 530, Eng.
10. municipal home-rule as to elec. 1., 431, 436, 462 (see HOME-RULE)
constitutional provisions, 431, 402, So. Car., 448, Ky., 449
statutes about franchises and pub. ownership, 436 table. 462 table
local consent and grant, 430, 443-5, 455, 462 table, 539
sale of franchises at auctn, 449-452
pub. ownership, 442-9, 539
referendum, 456, 280-3, 269 (see STATUTES)
HOME RULE (15); DIRECT LEGIS., (D)
suggested legislatn, 518, 519. ."L'l
ELEVATED ROADS, 29, 48, 53, 54. 61
EMPLOYEES
illtreatuient of by street railway co.'s, 95-99
arbitrary discharge, 97, 99 n
faithlessness of co.'s, 97
vestibules to keep motormen from freezing, refused, 98
overworking of motormen, etc. (accidents resulting), 67
long hours and low wages caused by overcapitalization and
struggle for dividends on water (Judge Gaynor's opinion),
95, 96, 98 n
street railway strikes Cleveland, Brooklyn, Philadelphia, etc., 95-98
losses by strikes, 166 table
better treated under public ownership, higher wages, shorter hours, more
freedom, Brooklyn Bridge railway, 115, 116, 150, 160
street railways, Glasgow, 160
Huddersfleld and Sheffield, 161
gas and electric works, 161
labor's interest in pub. ownership, 161 (summary)
contrast Boston police and street railway employees, 162
employees of Western Union and English Postal Teleg., 162, 163-4
employees of Western Union and U. S. mail carriers, 162-3, 164-r>
hours and wages, public and private, 165 table
no costly strikes and lockouts under pub. ownshp, 166
under pub. ownship employes are co-partners, 160, 162
resolution of Amer. Fed. of Labor on pub. ownshp, 165, 229
high wages pd. by pub. plants to improve conditn of, 250
better off under direct pub. eniploymt than under contract system, 542
old age and accident relief, 473
ENGLAND
public telegraph, 162, 163-4, 199-202
For analysis see PUB. OWNSHP (H. 3)
growth of public ownship in, 188-9, 530
ENLARGEMENT OF FACILITIES
under public ownership, 145-6
EXPERIENCE
proves evils of private monopoly (see MONOPOLY)
Bhows political corruptn to be largely due to corporate pressure anil the
separatn of legislatn from the people, 492
proves advantages of public ownership (see PUBLIC OWNERSHIP, I.)
gas, 125-128
electric 1. before and after, 129 (see also 128 and 130-5)
telephone. 117-9, 128
water works, 192-5, 119, 128
Glasgow's enterprises, 11)5-199
English telegraph, 199-202
shows that pub. ownshp aids civil service reform, 157-8
of U. S. and Switzerland proves benefits of direct legislation. o42-352
Sec DIRECT LEGISLATION (C) (F 20)
proves objectns to D. L. baseless, 349-351
generalizatns established by. in case of the referendum, 275-8
of Rochester with voting machines, 489-490 n
of England in overcoming political corruptn, 498. See 1'OLIT. COR-
Rl'I'TN CH
with private and pub. telegraph, 199-202
EXTENSION
of facilities, pipes, lines, etc., under public ownership. 145-15
INDEX OF SUBJECTS. 553
EXTORTIONS OP MONOPOLIES (see MONOPOLY)
FACILITIES
extension of, under pub. ownershp, 145-6
FAILURE
alleged, of pub. plants, 245-7
FALSE STATEMENTS AND SUPPRESSION OF FACTS, 22 58-63 70 79
82-3, 245-8 (compare 152)
Bay State gas, 58, 79
suppressn of vital facts by gas cominissn. 59, 79
suppressn by gas co.'s of the N. Y. Sen. Corn's report, 1885. i"J n
suppress!! of facts by niutilatn or theft of public documts, 63
withholding data of operating expenses, etc. (water co.'st. 22
false stateruts of cost of making gas, 59
false statemts of cost of construct!! and operatn, street railways, water.
electric light. Go -I 1
statemts of value, 55
returns to state officers, 58, 79, 82-3
concealing profits, 152
charging constructn cost to operating expenses, 61
refusal of street railway co.'s to give any aid in iuvestigatn, 83 (St. Louis),
84 (Chicago)
refusal to produce books in court or legislative investigate 62, 63
burning account books foil trust), 527
perjury, theft and mutilatn of public records. 63, 89
rrancuco'fl ruisrepreseiitatns as to alleged failure of pul>. plants, etc.,
245-7
fake report of Mass, gagtnvestigntn written by gas attorney, 247
freak pamphlet by a street railway manager, 247-8
FAKES (see STREET RAILWAYS. RATES)
FARMERS
no adequate representation in Congress, 356
FARMER'S ALLIANCE
favors direct legislation, 289, 337
FENDERS
cushioned fenders not adopted, cheaper to maim people, 68, 93
FICTITIOUS VALUES (see OVERCAPITALIZATION)
FORMS (sec LEGISLATIVE FORM Si
FRANCHISES
grant of. to a city, not a contract, 390
local consent and power to grant, 431 table, 484. 436 table, 443-446, 448-9,
458-461. 462 table (see HOME-RULE (13) (14)
property owners consent to, 457. 459, 460, 462 table
sale of, at auction, 449-452
public ownership of. 436, 438-449 (and see PUBLIC OWNRSHPi
Mass, law as to, 181
suggested legislatn, 522
FRAUD AND CORRUPTION. See MONOPOLY. FALSE STATEMTS, etc.,
22, 42-63. 69-80, 140-1. (Compare 153-5)
watering stock and inflating capital, 42-57 (see OVERCAPITALIZATION;
Broadway franchise fraud, 55
charging up new constructn to operating expenses. 61
packing investigatn committee with vassals of monopoly, 61
omitting important facts from corn's report of investigatn. 61
false statemts of cost, constructn and operation, 60-62
false statemts of value, 55
false return to state officers, 58
concealing profits, 152
suppressn of vital facts by gas commissn, 59
purchase and destructn by gns <-<>.'s of report of N. Y. Senate Investigat-
ing Com., 1885. 22 n
refusal of co.'s to give aid in investigatn, 83. 84
refusal to produce books in court or legislative investigation. 62. 63
burning account books. 527
mutilation of public documents by agents of affected monopolies. 63
theft of public documents by agents of affected monopolies. 63
fraud and corruptn the foundation of extortn, 70
and made possible by extortn. 70
inflated constructn contracts, 70. 77
excessive rates and monopoly taxes, 70, 7!>
exorbitant salaries, false commissions, etc.. 70, 79, 141
false statemts, perjured return and suppressn of facts, q. v.. 58-63, 70,
79, 82-3
see-sawing traffic, paying unearned dividends or otherwise manipulating
stock values, 7"
inflating values and securities, 70, 85
overissue of stock, etc., upon consolidation, or paying high prices for the
consolidating properties, 78
distributing stock among influential people, 70. 75, 76
giving free passes and free service in unjust discriminatn, 70
effort of co.'s to spoil low-fare experiment in Detroit. 82
scheming to wreck and capture public plants or rival private works, 70,
74-r,. o-s
554 INDEX OF SUBJECTS.
FRAUD AND CORRUPTION continued
Mich. City electric plant, 74
Phila. gas and water works, 75, 528
electn frauds, 492, 537
buying voters, 496
gerrymandering, 495
assessments on officeholders, 496
buying U. S. Senatorships, 89, 537
bribing legislators and officials, 70, 71-3, 75, 88, 89, 140, 306
trying to bribe attorney-general of Ohio, 527
dodging taxes, 82, 84
bulldozing employees, 70
few cars, overpressure of gas, undercurrent of electricity, etc., 70, S4, 85
seeking to mislead and control public- opinion in private interest, news-
papers and colleges, 70
stealing inventns or suppressing them, 70
ruining opponents by expensive litigation, 70
unreasonable rebates and ring contracts, 71, 77-8 '
guaranteeing heavy rents or profits on leased lines, 71, 79, 98 n
or leasing plant A to plant B at a moderate rental in order that a few
may absorb dividends that would otherwise go to a large body of
stockholders, 96 (Judge Gaynor's letter)
Pingree says street railways "owned council," 71
they tried to bribe the Mayor himself, 71
street railways have controlled Cleveland, 71
Broadway franchise obtained by bribing aldermen, 71, 306
Philadelphia's "trolley grab" and "Kailway Bass Act," 7'J
Philadelphia gas lease, 306-7
Reading Terminal, 308
Boston street railway lobbying, 73
bribes for street railway franchises in Chicago, 73
co. voting $100,000 to buy Chicago council, 308
prices paid legislators, 71, 308
electric light co.'s in politics, 73-4
John Wanamaker's statemts, 75-6 n, 537
gas frauds and corruptions
keeping stock in hands of editors, legislators and prominent business
men, where it will do good, 76
Philadelphia gas lease, 75, 249
Cleveland case, 76
Mass. Pipe Line Co., 76-7
Bay State Gas Co. and Boston Gas Trust, "The Beans Mystery." 77-S1
attack and conquest, "Give us your business or we'll ruin you," 79
frauds of telegraph and other monopolies, 81 n
frauds of oil monopoly, 81 n, 87-9, 527
corrupting oil inspectors, etc., 88-9
trying to bribe attorney -gen'l of Ohio, 527
see STANDARD OIL CO.
less fraud and corruptn under public ownership, 153-5
It is not public plants that buy votes and maintain lobbies, 153
public ownership relieves govt from many corrupting relatns with
rich men and giant co.'s, 154
changes interest of rich to the support instead of the destruction of
honest govt, 154
experience shows that public ownership tends to diminish corruption,
154 (gas)
high authority to same effect, Prof. BemSs and Commons, 154
Dr. Shaw, Prof. Ely, Gov. Pingree. 155. see also 214 (Ely)
Dr. Lynian Abbott and Dr. W. S. Rainsford, 213, 216
concent nitti of trmptatn resulting from law-making by final vote of dele-
gates, 300
less, under direct legislatn, 306-314
lobbying, log-rolling and blackmailing undermined, 310
class legislatn checked, 311, 344
demagoguery and political influence of emnlovers over employees
diminished, 312
rings and bosses crippled. 313
partisanship weakened, 313-4
D. L. fatal to corruptn, 350
bribery, class law and machine politics abolished, 345
power of legislators to legislate for personal ends destroyed. 345
municipal dependence favors log-rolling, bossism and corruptn, 403-4
municipal home-rale will lessen corruptn, 428-9
lessened by the automatic ballot, 488-490
nature and causes of political corruptn, see POLIT. CORRUPTN, 492
best means of overcoming, 497-8
England's experience, 498-503
Reform Bill, 1832, 499
judicial decisn of electn disputes, 500
efficient corrupt practices act, 500
fraud forfeits office. 500-1
political success made to depend on honesty, 501
civil service reform, 502
INDEX OF SUBJECTS. 555
FREEDOM (see LIBERTY)
FREEHOLD CHARTERS (see CHARTERS)
FUEL YARD DECISN (Mass.), 175
GAMBLING
in stocks, one of the evils of private monopoly, 90
public ownership eliminates, 153
GAS (see LEGISLATIVE FORMS)
1. cost arid charges (see 7, below)
excessive charges by private co.'s, 22-4, 523 Haverhlll case
the chaos of prices, 22
Bronson Keeler's data, 22
cost of productn and the co.'s charges, 22-4
charges raised by co.'s upon consolidate, 102 n
raised by oil trust, 88
New York Senate Investigate, 1885, 22
suppressn of report by the co.'s. 22 n
New York investigatn, 1897, Prof. Bemis testimony, 23
Boston gas, price and cost in 1892. 23
Bay State gas investigatn, 23, 35, 44, 58-9, 77-81, 84
Chicago co.'s, 23
Prof. Bemis on cost of gas, 23
cost in England and the U. S. compared, 24
Topeka, 24
Kansas City, 24
Trenton, 24
offer of 50c. gas and heavy bonus for the franchise, 523
2. overgrown profits of private co.'s, 34-5
St. Louis, Topeka, Trenton, New York, 34-5
Boston, Cleveland, 35
Haverhill, 35, 523, 539-542
3. overcapltallzatn, 43-5, 57. 77, 78
Boston, New York, Chicago, Rochester, St. Paul, Jersey City, San
Francisco, Baltimore. St. Louis, 44-5, 77, 78
4. inferior service of co.'s, pipes only where they will pay dividends, 65
(compare 151)
lack of due care for public safety, 66
5. free to men of influence (discriminatn), (59
discriminatn in rates, 87
fraud and corruptn, 70. 75, 76-81
Philadelphia lease, 75, 249, 528
Cleveland case, 76
Bay State gas case, 77-81
bribing city councils, 140
false returns to state officers, 58, 79. 82-3
concealing profits even in returns to gas commissn, 152
suppressn of vital facts by Gas Commission, 59, 79, 541-2
false report of Mass, "investigatn" written by Boston gas attorney, 247
defiance of law by gas co.'s, 84-5
Btocks form material for gambling. 90
6. private monopoly tends
to unprogressiveness except when- progress will help dividends, 93
to low character product. 99-100
and to undemocratic congestn of wealth and power, 90-3
competitn in, tried many hundred times, always failed and must fail, 101,
102 n
regulatn a failure where most needed, 106-112
experience of Massachusetts. 110-112
a ray of light, Haverhill case, 523. 539-542
7. reductn of rates by pub. ownership, 125; by law, 179, 180-3. 521
Hamilton, Charlottesville, Wheeling, Henderson, Indianapolis, Dayton,
and Toledo, 125
Richmond and Washington, 125-6
Fredericksburg, Duluth, Waketield, 127
England, 127
comparison <>f public and private rates in Va., W. Va.. I'a.. Ky., and
Ohio. 126
present cost of, in public works. 1_!7
economies of productn under pub. ownership, 16 reasons for, 136-141
excessive salaries pd by big gas co.'s, 140
co-ordinatn of gas works with other Industries under pub. ownership, 142
cash savings by public works, 144. in England, 145
8. co.'s confine their attentn to populous districts, 145
consumption larger under pub. ownership, 148
service better, under pub. ownership, 151 (compare 65)
fraud and corruptn less under public ownership, 153-5
proved by experience of every city that has public gas works (Prof.
Bemis' results), 154
merit system favored by pub. ownership. 158
employees better treated under pub. ownership, 161
fl. satisfactn with pub. ownership, 202
growth of pub. ownership, 205, 531 Eng:
10. methods of securing pub. ownership, 175, 251
publicity, 183, 251
556 INDEX OF SUliJF.CTS.
GAS continued
reductn of rates by law to squeeze water out of capitalizatn. 179, 180-3
taxatn of face and market values of securities to squeeze out water, 179,
181, 521
pub. ownership secured without debt or taxntn. 1M
municipal home-rule as to gas (see HOME-IU'LEj
constitutnal provisns, 431, 462, S. Car., 448, Ivy.. 449
statutes about franchises and pub. ownership, 4:i<i tnble, 462 table
as to sale of franchises at auctn, 449-452
as to pub. ownership, 442-9, 539
as to local consent and grant, 4156 table; W2 table. 443-5, 454-5, 539
See HOME-RULE (13) U4)
as to referendum, 456, 280-3, 269
See STATUTES, HOME-RULE (15) and DIRECT LEG. (D)
suggested legislation, 518, 519, 521
GERRYMANDERING, 476-7
New Jersey case and Judge Gaskill's method of exposing it, 477, :5.">1
GOOD CITIZENSHIP (see POLITICS)
increased by public ownership directly, 156
high wages pd by pub. plants for sake of, 250
lOD GOVERNMENT
GOOD
aided by pub. ownership, 153-159
less fraud and corruptn, 153-5 (compare 22, 42-63, 69-81, 140-1)
better men attracted into politics, 156
civic patriotism developed, 156
civil service reform aided, 157-8
editors, preachers, teachers, etc., liberated from the pressure that
silences their criticism, 159
labor better treated whereby the ballot is improved in temper and
intelligence, 160-7
high wages paid by pub. plants to elevate labor. 250
GOVERNMENT (see SELF-GOVERNMENT)
free, not consistent with private monopoly (opinion of Chief Justice Sher-
wood), 93
Senator Hoar and Daniel Webster to the same effect, 93
Federal, savings by putting in its own telephones in Department of In-
terior, 117
good, aided by public ownership. 153-159 (see GOOD GOYT.i
sphere of, as to industry, 238
republican, Jefferson on nature of, 295, 384-5
purified by direct legislutn (see I). L., F. 2)
loans by English, to Irish tenants, 501-2 n
GOVERNMENT OWNERSHIP
not always the same as public ownership, 17 (see PUBLIC OWNERSHIP)
GOVERNORS elected by minorities, 484-5
GRANT (see FRANCHISES)
GROWTH
of cities, 7, 8
of wealth, 9
of fictitious capital, 44-5
of business under public ownship. 146-9. 192-5. 198, 200-1
of pub. ownship, 203-210. 188-9, 530-1 (st>e PUB. OWNSHIP (K)
waterworks, 203-4 (531 Eng.)
gas and electric works. 205 (530-1 Eng.)
street railways. 206, 188-9 (530 Eng.)
telegraph and telephone, 206-8
railways, 208, 230-1
of direct legislation, 279-298; for analysis see DIRECT LEGIS. (D)
of referendum sentimt, Ohio vote, 535
of world movemt toward liberty and democracy, 296-S
HAMILTON GAS CASE, 178
HAVERHILL GAS CASE, 523, 539
HISTORY
movement of, toward union and co-operation, 208-210
liberty and democracy, 296-8
test of civilization, 210
of victory over corruptn in electns, etc. (Eng.), 498; see POLIT. COR-
of standard oil atrocities, q. v., 87-89, 527
of Bay State Gas, q. v.. 77-81
HOME-RULE FOR CITIES. M'hiip. Ill, 3S7-4CS)
1. importance of subject, 7-11. 4is:>
cities like women, 387
legislative paternalism, 387
city can't connect two of its own buildings with a wire except by permis-
sion of legislature, 387
no Independent initiative, 387, 406 (Eng )
must get permissn to move, 387
can't own or run local water, gas or telephone service without consulting
the other cities and towns of the state, 388
legislature can plan pub. bldgs for a city and make it pay for them, 388-9
compel city to pay claim rejected in court. 389
take water works, etc.. out of city's hands ('<), 390
INDEX OF SUBJECTS. 557
HOME-RULE FOR CITIES continued
city's franchise not a contract. 390
city's charter not a contract, 390
cities in bondage, 390-1
reasons for subjeotn of cities, 391-2
dual nature of municipality state agency and local business concern
key to the sitiiatn, 392, 412
2. limitations on legislative omnipotence, 392-7
inherent right of local self-govt, 393
Michigan doctrine (Mich, and Ind. cases), 393-6
contra, 396 n.
3. rights of cities general situation, 307 summary
4. consequences of municipal dependence, 398-405
chaos of laws, 398, 539 (318-320, 402, 465-6)
special legislatn, 398-402. (422 and 538)
lack of elasticity, 402
local patriotism crippled, 402-3
log-rolling, corruptn and bossism favored, 403-4
progress obstructed, 404-5
5. remedy, municipal independence in local business, 405
the manhood principle, 405-6
assigned sphere of local sovereignty, 407-9
const, amendmts, 409, 415
home-rule charter and the referendum, 410-1, 415, 428
direct legislatn, merit system, and pub. ownshp nec'y, else freedom
from legislative bossing may mean subjectn to local politicians and
monopolists, 411, 428
separata of state and municipal affairs, 411-3, 536
6. stops toward home-rule, 413-5, 429-430
7. freehold charter amendmts, i229> 415-425, 431, 435-8, 508-511 full t*xt.
516 suggested form
Missouri, 415-6, 435, 511 full text
Louisiana, 410, 435
Minnesota. 416-7, 435, 509 full text
Washington, 417. 435, 509. full text
California, 418, 435, 510, full text
St. Louis' charter, 418-9, 422
Los Angeles' charter. 419
Ban Francisco's charter, 419-421, 438. 507
initative and referendum, 419, 507
pub. ownship. 420
merit system of civil service, 420-1
the charters still subject to the legislatures, 424-5
8. special logislatn forbidden, 422-3, 431. 431-4, 522
recommendations of the Ohio commissn, 538
ft. points for future charter laws, 426. 516
10. summary of discussn so far, 427-430
11. Dr. Shaw's views. 428-9
Gov. Russell's views, 399, 400
Gov. Crane, and Mayor Hart, 536
Natl. Municipal League, model charter, 228, 229
Ohio commissn, proposed municipal code, 538
12. constitutional provisns affecting municipal liberty, 431 table, 432-8. 455,
505-6 (426. 516)
safeguards against special legislatn. 431 table, 432-4 (see 422-3. 398-402)
local consent required, 431 table, 434
franchise grants, municipal power, 431 table, 434, 448-9
public ownership, municipal power, 434
charter making, municipal power, 431 table, 435-8 (415-425 see above)
13. statute provisns affecting municipal liberty, 436-7 table
debt limitatns, 437, 438 (see 229, 518, 539)
proposal not to count bonds issued for revenue producing utilities,
229, 519, 539
local choice of local officers, 437. 438-9
municipal baths, libraries, etc., 439
street franchises, 439
municipal ownership, 436 table
street railways, 436 table, 440. 447, 448
telegraphs and telephones. 436 table, 440-2, 447-9, 539
gas and electric light laws. 436 table, 442-9, 539
city may build plant tho it has previously granted franchise to a
private co., 443, 44."> (sec 178)
hay scales, bicycle pumps, etc.. 464
eale of franchises at auction. 449-452
charter of Greater New York, 4r>2
local consent and powers of grant. 436 table, 453-461, 462 table
street railways. 454, 458, 448-9, 459-461. 462 table, 539
electric light, 455, 443-5
telegraph and telephone, 448-9. 459." 460, 461, 462 table. 539
gas, 455, 443-5
gas, water, elect. 1., st. rys., telephone, 454-5 sweep,
property owners assent, 457, 459-460. 462 table
558 INDEX OF SUBJECTS.
HOME-RULE FOR CITIES continued
appeal to court, 457, 461
14 sweeping provisns best. 456, 454-5, 458, 508-510 (518)
Minn., 447, 458, 514. la., 444
Wash., 448, 513. Cal., 447
Ind., 448, 513. S. Car., 448, 512
Ky., 448-9. Wise.. 449
Kans., 459, 514. Mo., 450
15. referendum provided for, 456 summary
Minn., 442, 456, 458 sweep
Wash., 448, 456 sweep
la., 444, 456 sweep, (see 2C'.J-271)
Wise., 449, 456 (Initiative also)
Mich., 444, 456 (Initiative also)
Nebraska, 457 (Initiative also) see 280-1
So. Dakota, 457 (Initiative also) see 282-3
16. statute provisns easily changed, not very reliable, 4ti.">
but important laws soon gather about them a sentimt that protects.
them, 463
17. the honor list and the awkward squad, progressive states and backward
states, 464
18. even the best statute books very imperfect, 465
legislatures afflicted with intellectual indigestion, ponderous ver-
bosity, exasperating repetitn, chaos of enactmts, largely useless or
worse, R. I., N. J., Mass., etc., 465-6. (398, 318-320, 539)
19. a few brief sweeping well considered measures worth more than m:is.-.rs
of ill-digested statutes, 466 (see 505, 508-516, Sltj-.vj-j)
20. conclusions, 467-8
ILL TREATMENT (see EMPLOYES)
IMPERATIVE MANDATE
or recall of a public official by petition and vote of the people, 313,
373, 386
INCOMES
progressive taxatn of in New Zealand. 169
in Switzerland, 346-7
means of raising funds to build or buy public works, 178-9
INDIANAPOLIS CASE (reductu of st. ry. fares), 183
INDIVIDUALISM
two kinds, co-operative and antagonistic, 237
the latter, a remnant of barbarism, is opposed to pub. ownership :uid
co-operative industry, 230-7
INITIATIVE (see DIRECT LEGISLATION)
INTEREST
not a charge on public plants free of debt, 138
municipalities borrow at low rates. 139
INVENTIONS
suppression of by Western Union, 94, 171
adoptn by English teleg., 171
INVENTORS
better treated under public ownership, 171
INVESTIGATIONS
1. street railways, spec. com. Chicago council, 47-!>. 84
111. Labor Bureau (Chicago), 47
Mo. Labor Bureau (St. Louis and Kans. City), 48, 68, 82-3
special com, N. Y. Legis, (1896), 49, 51, 52, 55
New York, 49-55; Broadway franchise, 55, 71, 386
Albany, Syracuse, etc., 51
Milwaukee, 48
Cleveland, 48, 52, 82
Philadelphia, 36. 46, 52
Boston, 52, 53, 54, 60, 61, 73, West End Lobby; 107
Mass. Rapid Transit Comssn, 54, 61
Mass. Spec. Com. on st. rys. (1898), 223 n
refusal of co.'s to give aid in investigations, 83, 84
2. electric light, spec. com. Boston Common Council, 26 n
com. of Pa. senate, 26 n, 61, 73
Phila. councils and electricial bureau, 26, 61, 73
3. gas. New York Senate (1885), 22, 34, 44
New York (1897), 23
Mass, Senate Com., 247
Bay State Gas Case, 23, 35, 44, 58-9, 77-81, 84, 107
Cleveland Gas Case, 35, 85
4. water works, pub. and private, 121. 192-5 N. Y.
comparative consumptn, 146-7, 192 et. seq.
Syracuse Investigatn, 146
6. telephone profits, N. Y., 38
telegraph, 31
6. trusts, 32, 39, 56; 87-89
wire nail, 32; whiskey, 32
coal combine (Cong, and N. Y. Sen.), 32
oil, 87-89
IRELAND
govt loans to tenants to enable them to become home owners. 501-2 n
INDEX OF SUBJECTS. 559
LABOR (see EMPLOYES)
has deep interest in pub. ownership, 161
under pub. ownership workingmen are co-partners, 100, 102
American Fed. of Labor, resolution. 105, 22!>
high wages paid for elevation of labor, 250
Glasgow tramways, improved conditions, 107
deeply interested in direct legislation, 289, 330
labor unions recognize its value, 336
Amer. Fed. of Lab.. 289, 337, 368
interest in merit system of civil service, 471
spoils system a violation of labor's rights. 472-2
LAND MONOPOLY, 528
LAUNDRIES, PUBLIC. Glasgow. 197
LAW (see CONST. PROVISIONS, STATUTES, LEGISLATION. LEGISLA-
TIVE FORMS)
violated by monopolies, 16, 40. 41, 81-89
curious examples of erratic, 321
use of referendum in our, 203-278 (see I). L. (C
referendum increases respect for. 321
simplifies and dignifies the, 317-321
favors stability of. 298, 327-334, 369
multiplicity of statutes and chaotic state of, 31S-:;-jn. :;'.is, 4112, 405-6 539
New Jersey, 318-9, 402, 466
Mass., 466
may be passed by representatives of 16 per cent of voters, 355 table ;ind n
or less, by help of a Czar speaker, or by means of corruption, 355 n
on pub. ownership, 434. 436 table. 440-449, 512-510, 518, 539 (see HOME-
RULE (12) to (14); LEGISLATIVE FORMS (3) and (4)
on direct legislatu, 279-283, 505-6; legislative forms, 517-8
on rights of municipalities (see HOME-RULE)
LAWYERS
predominance of in legislative bodies. 337-8
LEAGUES AND ASSOCIATIONS
American Federation of Labor, 235. 368
Natl League for Promoting Pub. Ownership of Monops, 218
Natl Municipal League, 22S. 47:;
League of American Municipalities, 228
Buffalo Conference, 368
Social Reform Union, :!i;.s
Natl D. L. League. 287
Civil Service Leagues, 473
Good Govt Clubs, 13
LEGISLATION (see STATUTES, LEGISLATIVE FORMS, LAW, CONSTI-
TUTIONAL PROVISIONS: DIRECT LEG1SLATN)
special, forbidden, 422-3, 431, 432-4, 522
illustratns of special, 398-402, 538
curious examples of erratic, 321
by final vote of delegates, undemocratic. 255-6
separatn of from the people, a cause of corruptn, 492
corruptn of (see FRAUD and CORRUPTN)
cities subject to state, 387-391. see HOME-RULE (1) to (4)
limitations of, by const, provisn, 392, 397, 422-3, 431-4
by inherent right of local self-government, 393
contra, 396 u
Is in the fish stage overproductn a sign of low developmt, 321
multiplicity of laws, 318-320. 398, 402. 465-0, 539
for personal ends, destroyed by referendum, 345
class, checked by referendum, 311
corrupt, checked by referendum. 310, 313
hasty, checked by referendum, 349
LEGISLATIVE FORMS
1. direct legislation, 505-8 (suggested form, 516i
South Dakota amendment, 505
Oregon's proposed amendment, 5iit>
Utah's proposed amendment, 506
In San Francisco's charter, 507
Detroit charter law, 5i)7
proposed law for D. L. on franchises, 508
2. freehold charter amendments, 508-511; suggested form, 516
Washington, 509
Minnesota, 509
California, 510
Missouri, 511
3. public ownership, 512-516 (see 444. la., 447-9, 454-6); suggested forms,
518-519
South Carolina Const. Amendment, 512 (448)
Indiana, 513 (448)
Washington law, 513 (448)
Minnesota law, 514 (447, 448)
Kansas law, 514 (459)
4. suggested forms for amendments and laws
municipal home-rule, 516 (see 426; see also above (2)
560 INDEX OF SUBJECTS.
LEGISLATIVE FORMS continued
direct legislation-general, 516 (see 300, see also 1 above)
" " municipal specific, 517 (see 300)
city D. L. Crisp, 518
municipal ownership broad, 518 (see 3 just above and references given
there)
gas and electric works, general, 519 (see 3 above)
gas and electric works, special, 519
bonds, 519
publicity, 520
reduction of rates, 521
taxation of overcapitalization, 521
progressive taxation, incomes, etc., 521
special legislation, 522
street franchises, 522
LEGISLATURE (see LEGISLATION)
no right to grant monopolistic franchise, 41
private monopoly void by fundamental principles of free govern-
ment, 40-4
corruption of, 72, 73. 330, and see FRAUD AND CORRUPTION
composition of, 337-9, 356
dignity of, and the referendum, 374, 321, 351
use of, and the referendum, 375, 259, 262-3, 322
power over cities, 387-391
limitations on
by const, provision, 392, 397
by inherent right of local self-govt, 393
contra, 396 n
in Switzerland (see DIRECT LEGISLATION) (F. 20)
LIBERTY
of press, pulpit and school aided by pub. ownership, 158-9
of press, aided by socialization of telegraph in England, 200 (8)
objectn that pub. ownership will interfere with liberty and private Initia-
tive, 236-7, 240
demands pub. ownership and direct legislatn, q. v.
LIBRARIES
for city councils, 190-1
LIMITATION
of municipal debt, 437
of legislation, 392-397
LINSEED OIL TRUST
extortions of. 32
LOANS
by English govt to Irish tenants to enable them to become home-
owners, 501-2 n
LOCAL CONSENT, see FRANCHISES, STATUTES, HOME-RULE (13) (14),
446, 443-5, 453-461, 462 table
MAJORITY
election by, 484 (see PREFERENTAL VOTING)
MANHOOD
developed by the referendum, 327, 325, 352
developed by public ownershp, 173
MERIT SYSTEM OF CIVIL SERVICE
necessary to reliable public ownershp, 18
pub. ownrshp likely to create demand for, 18. 157-8
proof from Chicago, 251, from Detroit, Wheeling, etc., 157-8
METHOD, 175-190, 251-4. 505-522
(A) of securing and maintaining pub. owurshp (see LEGISLATIVE FORMS)
authority by statute or constitutional provision. 175-8
judicial limitations, Mass, fuel yard decision, 175
Michigan "internal improvement" case (Detroit), 176-7
what constitutes a "public purpose," 176 n
Hamilton gas case, 178
ways and means, analysis, 178-9
squeezing out fictitious values by taxing them, 179. 181
and by reduction of rates, 179, 180-3
Mass, laws as to stock, franchises, etc., 181
co. cannot claim rates sufficient to yield profits on fictitious
capitalization (U. S. Supreme Crt.), 182
if the rates established by law yields any profit the courts can-
not interfere, 182
reduction of telephone rates sustained, 182
" st. ry. rates sustained (Buffalo, Lincoln). 1S2-:;
" water rates sustained, Indianapolis case. IN:;
publicity and public supervision of corporate accts, 183
raising funds by assessments on betterments, progressive i.-i-.-a'ion
of incomes, etc., 178-9
not a dollar of debt or taxation necessary in attaining public
ownership, 184
French telephone franchise, 184
Berlin electric light contract, 184-5
Leipsic contract and Minneapolis offer. 185
INDEX OF SUBJECTS. 501
METHOD continued
Hamburg street railway contract, 185
Toronto street railway contract, 185
Springfield (111.) elec. 1. contract, 187
Des Moines elec. 1. offer. 188
street railway municipalizatiou in England, 188-S)
London proposal, 189
Australian method, 189
Milan agreement. 189
Mudapcst plan, 190
non-partisan boards to control public works, 190
no sale or lease except on referendum vote, 190 (see 18)
economic working libraries for city councils, 190-1
first practical steps, 251-254
I minis for revenue producing utilities not to be counted against muni-
cipal debt limit, 229, 539
(B)of securing and operating direct legislation, see DIRECT LEG. and
LEGISLATIVE FORMS
(C) of securing and operating municipal home-rule, see HOME-RULE
See CIVIL SERVICE, PROPORTIONAL REP., PREFER-
ENTIAL VOTING, AUTOMATIC BALLOT, BEST
MEANS OF OVERCOMING CORRUPTN
METROPOLITAN STREET RAILWAYS, NEW YORK
overcapitalization of, 49, 50-1, 54-5
Pros. Vreeland as to cost of operation, 60, 524
MICHIGAN DOCTRINE
inherent right of local self-govt, 393-6
MILLIONAIRES
list of, Tribune, 91-2
110 prejudice against honest, as persons, 1G8
MINORITY
rule by, unfair, 484
government by, an organized system. 355 table and note
election of presidents, governors, etc., by, 484-5
MODEL CHARTER
Nnt'l Munic. League's plan for, 228-9
MODEL LODGING HOUSES
Glasgow, 196
MONOPOLY (see PUBLIC OWNERSHIP, DIRECT LEGISLATION)
(A) definition, 19
odious to our form of government, and destructive of free institutions
(Chief Justice Sherwood), 40
(B) problem of, most pressing of the age, 9, 14
(C) evils of private monopoly, 14, 19-101, 199
result from antagonism of interest between monopolistic owners and
the public, privilege, unequal rights, breach of democracy, con-
gestu of wealth and power, 14
1. excessive charges, 19-33, 199-201, 250, 523 (compare, 115-136)
water, 20-22 (compare, 119, 128)
gas. 22-24, 523 (compare, 125, 128)
electric light, 24-27 (compare, 128, 129, 134)
transit, 27-31, 216-7
telephone service, 31 (compare. 117-9, 128)
telegraph service, 31, 201 (compare, 117)
other monopolistic services, 32-33
2. overgrown profits, 33-42
water companies, 33
gas companies, 34-35, 523
electric light co.'s, 36
street railways, 36-38
telephone co.'s, 38
telegraph co.'s, 39, 201
other monopolies. 39
private monopoly means taxation (531) without representation and
for private purposes, 16, 40, 216-7
contrary to settled principles; of the common law and the nature of
free government, 16, 40, 41
every grant of private monopoly void, 40, 41
no legislature in a free country has a right to grant a monopolistic
franchise, 16, 41
monopoly involves sovereign powers wherefore only the people have
a right to own a monopoly, 16
3. watered stock and overcapitalization, 42-57 (compare, 153^
resorted to in order to defraud the public, conceal profits and put
up a barrier against public ownership, 42-3
gas co.'s, 43-45, 57
electric light co.'s, 85-6
street railways, 45-56, 57
telegraph and other monopolies, 56-7, 201
a pernicious practice protecting extortion, interfering with reason-
able rates and obstructing public purchase, 57-8
36
562 INDEX OF SUBJECTS.
MONOPOLY continued
4. false statements and suppression of facts, 22, 58-63, 70, 7!), 82-.'?, 245-8
Bay State Gas, 58, 79
suppression of vital facts by Mass. Gas Commissn, 59, 70, 023
West End Street Railway reports, 60
charging construction cost to operating expenses, 61
omitting important facts from report of investigation 01 (com-
mittee packed with vassals of monopoly)
withholding data of operating expenses, etc. (water co.'s), 22
false statements of operating cost, 00, 61, 62
and cost of construction, 62
false statements of value, 55
false returns to state officers, 58, 79, 82-3
concealing profits, 152
refusal of co.'s (St. rys.) to give aid in investigation, 83, 84
refusal to produce books in court or before legislative committees,
r,2. 63
burning of account books, 527
perjury, theft and mutilation of public records, 63, 89
Francisco's misrepresentations as to alleged failures of pub. plants,
245-7
false report of "investigation" by Boston gas attorney, 247
freak pamphlet by a street railway manager, 247-8
6. poor service and lack of service, 63-66, 201
private monopoly aims at dividends not service. 14, It;. <;.">
no absolute monopoly as yet, however, so that service is in some
degree related to dividends, 63
Btreet cars crowded and illheated, 64
poor electric light, 64-5
Inferior telegraph and telephone service, 65, 152 n
Insuft. facilities, pipes, wires, rails, etc., not extended to country
districts, small towns neglected, 65-6
distributn of telephones better under pub. ownership. O.VO
6. disregard of public safety, 66-8
grade crossings, 66
leaky gas pipes, 66
electric wires, 66-7
trolley accidents, 67
rip cushioned fenders, cheaper to run over people, 68
oil below legal quality, 88
dangerous railroad stones, 93
7. unjust discrimination. 08-9
street railway passes, 68
free water, gas, electricity, telephones, etc. for men of influence, 69
8. fraud and corruption q. v., 69-81, 140, 141, 24!) (compare, 153-5, 213,
214, 216)
the foundation of extortion, 70
and made possible by extortion, 70
inflated construction contracts, 70. 77
excessive rates and monopoly taxes, 70, 79
exorbitant salaries, false commissns, etc., 70, 79, 141
false statements, perjured returns and suppression of facts, q. T.,
58, 63, 70, 79, 82-3
see-sawing traffic, paying unearned dividends or otherwise manipu-
lating stock values, 70
Inflating values and securities, stock watering, etc., 70, 85
overissue of stock, etc., upon consolidation, or paying high prices
for the consolidating properties, 78
giving free passes and free service in unjust discrimination, 7i>
distributing stock among influential people, 70, 75, 76
scheming to wreck and capture public plants or rival private works,
trying to spoil low-fare experiment in Detroit, 82
70, 74-5
Michigan City electric plant, 74
Philadelphia gas and water works, 75, 249, 528
bribing legislators and officials, 70, 71-3, 75, 88, 89, 140, 306
dodging taxes, 82, 84
bulldozing employees, 70
few cars, overpressure of gas, undercurrent of electricity, etc., 70,
84, 85
seeking to mislead and control public opinion in private interest
newspapers and colleges, 70
unreasonable rebates and ring contracts, 71, 77-8
ruining opponents by expensive litigation, 70
stealing inventions or suppressing them, 70
guaranteeing heavy rents or profits on leased lines, 71, 79, 98 u
or leasing plant A to plant B at a moderate rental in order that a
few may absorb dividends that would otherwise go to a large
body of stockholders, 96 (Judge Gaynor's letter)
Pingree says street railways "owned council," 71
they tried to bribe the Mayor himself, 71
IXDEX OF SUBJECTS. 563
MONOPOLY continued
street railways have controlled Cleveland, 71
Broadway franchise obtained by bribing aldermen, 71
Philadelphia "Trolley Grab" and "Hallway Boss Act," 72
bribes for street railway franchises in Chicago, 73 ;
Boston street railway lobbying, 73
electric light co.'s in politics, 73-4
John Wanamaker's statements, 75-6 n
gas frauds, keep stock in hands of editors, legislators, and
prominent business men, where it will do good, 76
Philadelphia Gas Lease, 75, 249
Cleveland case, 76
Mass. Pipe Line Co., 76-7
Bay State Gas Co. and Boston Gas Trust, "The Beans Mys-
tery," 77-81
attack and conquest, "Give us your business or we will ruin
you," 7'J
frauds of telegraph and other monopolies, 81 n
frauds of oil monopoly, 81 n, 87-8'.); corrupting oil inspectors, etc..
88-9
trying to bribe attorney-gen'] of Ohio, 527 (see STANDARD OIL.
CO.)
H. defiance of law, 81-89 (compare 150)
street railway battles and destruction of property, 81, 524
attempted nullitication of the 3-cent fare ordinance in Detroit. 82,
street railways preventing enforcement of law in Cleveland, 82
violation of tax laws. Cleveland street railways, 82
St. Louis and Kansas City street railways, 82-3
Chicago street railways assesst at 2 or 3 per cent. 84
Boston electric light co.'s, 85
lawless gas co.'s Bay State Gas broke a dozen statutes and the
common law. 84
Cleveland (Jus Co. defying ordinance reducing rates, 84
escaping reduction by manipulating pressure, 84-5
electric light co's, 85
resistance to laws and ordinances reducing rates a common prac-
tice of municipal monopolies, 84
other great law breakers, the nail trust, telegraph monopoly, Bell
Telephone Co., railroads, sugar trust, 86-7
Standard Oil Monopoly, summary of atrocities, 87-89
10. gambling in stocks, 90 (compare, 153)
11. concentration of wealth and power in few hands, 90-93 (compare, 168-9)
congestion of wealth in U. S., 91
largely due to monopolies, as is shown bv the Tribune Millionaire
List, 91-2
farmers and mechanics pay tribute to monopolists, 02
private monopoly dangerous to free institutions and repugnant of
the instincts of a free people (opinion of Sherwood), 93>
(see 100)
Senator Hoar and Daniel Webster to the same effect, 93
12. non-progressiveness except where progress will help profits, 93
old rails, dangerous stoves, overhead wires, failure to extend lines
into towns and country districts, suppression of inventions,
etc., 94
monopolists want to get full wear out of their old capital and
machinery, and can do it because they are protected from the
moving force of competition, 93-4
13. ill-treatment of employees, strikes, etc., 94-99, 201 (compare 160-167.
200-1)
street railway strikes, history of,
Cleveland, 95
Brooklyn. 95-6
Philadelphia, 97-8
long hours and low wages, caused by overcapitalization and
struggle for dividends on water, 95, 96, 98 n
arbitrary discharge, 97, 99 n
faithlessness of co.'s breaking agreement with men as soon as they
were in its power, 97
vestibules to keep motormen from freezing, refused, 98
overworking motormen, etc., and accidents resulting, 67
14. low character product, debasement both of monopolists and those they
control. 99-100
15. denial of democracy, special privileges for a few, aristocracy, 100
16. widespread discontent, 201
(D) advantages of monopoly, 64, 100-1
tends to eliminate adulterations, 64
economy, eliminates within its field the wastes and conflicts of
competition, 100-1
(E)the problem is to keep the benefits and get rid of the evils, 102-4
the good arises from the element of union and co-operation that is in
monopoly, 102
564 INDEX OF .SUBJECTS.
MONOPOLY contin ucd
the bad results from the fortified antagonism of interest between the
owners and the public incident to private monopoly, 102-4
the antagonism illustrated in detail ist. rys. i, 104
(P)the solution is not competition which forfeits the benefits. 105
and is not practicable in water, gas, transit, etc., 100-101
nor regulation which, tho capable of doing some good, cannot remove
the antagonism of interest, the congest n of benefit, nor the ex-
istence of privilege, 14, 105
and in practice has failed Ignominlously ;it the most vital points,
106-112, 533
but public ownership which alone can solve the problem by substi-
tuting harmony, diffusion and democracy for antagonism, con-
gestion and aristocracy, 14, 16, 105, 112-114
it is not monopoly that is bad but private monopoly, 113
monopolies sure to exist, only question is whether they shall exist
for the benefit of all or for the benefit of a few. whether they
shall be owned by the people or the people be owned by them,
16, 115 n
maxim of business that property should be managed in the interest
of its owners, 103, 113
if the people want the water, light, transit, and other monopolies
run in their interest, they must own them, 113
same agents that manage the monopolies in the interest of a few
stockholders now would manage them in the interest of the
larger body of owners under public ownership, l:j-4
See PUBLIC OWNERSHIP
'(G) government may be a private monopoly, 17 isee DIRECT LEGISLATION)
private monop. in law-making destroyed by direct legislation, 311. 353
>(H) possible (not probable) perpetuation of private monopoly Macanlay'i
Warning, 526
the hope of the future, 526
(I) land monopoly unearned increment, 528
single tax theory, 529
(J) first steps toward relief, 251-254. 51C-522. M'SO 51 .5-514
MORALITY
favored by direct legislation, 327. 3nti -:\1-\. ::52. see I). L. (F. 2, 13, 24)
favored by public ownership, 172
MOTIVES
of those who oppose pub. ownership and those who favor it, 24.3
of those who oppose direct legislation (see OBJECTIONS)
of monopolies compared with public institutions, 16, 199, 231
MOVEMENT
for extension of public ownership, see PUBLIC OWNERSHIP (K)
causes, 18
extent, see GROWTH
street railways, 206, 228, 188-9 (Eng.)
for extension of direct legislation, see D. L. (D)
world-wide, toward liberty, and democracy, 296-8
of history toward union and co-operatn, 208-210
of street railways to get 50-year franchises, 229
MUNICIPALITY
dual functions of, 392, 412
subjectn to legislature. 387-391, see HOME-RULE (1)
consequences, 398-405
rights of, 397, summary
charter of. not a contract, 390
independence of, how can be secured, 405. See HOME-RULE (5) to (10)
MUNICIPALIZATION, see PUB. OWNERSHIP. STREET RAILWAYS,
WATER, GAS, ELECTRIC LIGHT, TELE-
PHONE, ETC.
MUNICIPAL OWNERSHIP (see PUBLIC OWNERSHIP)
NAIL TRUST
extortionate charges of, 32
breaking contracts, wrecking machines, etc.. sti
NEWSPAPERS
subsidized by monopolists, 70. 75. 76
bought or silenced by oil trust, 87, 88
discriminated against by telegraph co., 69
freedom interfered with by telegraph co.. 81 n
freedom increased by public ownership. l.~>s-'.!
helped by .socialization of telegraph in England, 200 (8)
NEW YORK WATERWORKS, 192-5
NOMINATION
by direct ballot or petition of the people, 385 n, 386
NON-PARTISAN BOARDS
to control public works. 190
NOTES AFTER CHAPTERS WERE MADE UP. 523-542
gas, Haverhill case, 523, 539
50-cent gas offered and a big bonus for the franchise. 523
electric light, Jacksonville public plant. 523
Street transit elements of cost in New York, r.24
1-XDEX OF SUBJECTS. 565
NOTES AFTER CHAPTERS WERE MADE UPcontiniud
street railway defiance of law. 524
telephone taxation, Ohio method. ."2."
private monopoly possible perpetuation, 525
Macaulay's warning, 52i;
the hope of the future. r>:Ji;
Standard Oil and Hon. Frank S. Monnett, 527
Standard's effort to bribe attorney-general of Ohio. 527
trust burning its books, 527
publicity feared by trusts, argument of Dos Passes, 527
Philadelphia waterworks, councils and corporations, 528
land monopoly, unearned increment, 528
single tax theory, 529
municipal ownership in Great Britain, 530 (see 188-9, comp., 203-2101:
electric light and tramways, 530
gas and water, 531
growth of public ownership, references, 531
mill or monopoly taxes, 531
Hale, Rev. Dr. E. E., letter on public ownership. 531-2
Gladden, Rev. Washington, on monopoly and public ownership, 532
Jones, Mayor, on the veto, 532
Bemis, Prof., tract on municipal monopolies, 532
on regulation in Mass.. etc., 533
Abbott, Rev. Dr. Lyman, on public ownership of railroads, 533
Porter, Robert P., objections to public ownership, 533
the referendum in Boston, Dec., 99, 535
referendum sentiment as indicated by the Ohio vote, 535
merit system in San Francisco and Baltimore, 536
separation of local from state and natl. issues, 536
civil service and home-rule. Mayor Hart, and Gov. Crane, 536
election frauds, 537
in Philadelphia, 537
Wanamaker's statement, 537
TJ. S. senatorship bought in Montana. 537-8, see 89
popular election of senators. 538
special legislation in New York (1899), 538
proposed municipal code. Buslmell commission, Ohio, 538
multiplicity of laws, 539
statute notes on home-rule
telephones in \\ is.. NVv., N. Dak., 539
gas and electric works in Colo, and Ohio, 539
street railways in Mo., 539
municipal debt limit, 539
bonds for revenue producing utilities not to be counted, 539, see 229
OBJECTIONS
1. to public ownership, 233-251
patronage, 233-5
paternalism, 235-6
socialism, 236
individualistic liberty, 236-7
not the govt's business. 238
vested interests, 238
municipal debt and extravagance, 239
non-progressive. 240-1
inefficient, 241-2
not economical, 242-5
Mr. Foster's elect, light figures. 243-5
failures, 245-251
M. J. Francisco's misrepresentations, 245-7
Mass, committee to investigate gas works investigations made and
report written by attorney of Boston gas co.'s. 247
freak pamphlet by a street railway manager, 247-8
Philadelphia gas works, 248-9
Chicago electric light plant. 249-251
Robt. P. Porter. 533
motives of those who favor and those who oppose pub. ownership. 248
2. to direct legislation. 370-386
classes of objections, 370
causes and motives of objections, 370
don't understand
cost too much, 371
keep people voting all the time. 371
un-American idea. 372
not a panacea, 372
can't overcome fraud and corruption, the offices will remain. 373
overestimates of other reforms
all we need is to elect better men., 373
proportional representation will do the work, 373
the dignity people
dignity of Legislatures will depart. 374 (see 321 1
(it won't take a large vehicle to carry it now in some cases)
what use will legislatures be. 375 (see 259. 262-3. 322)
566 INDEX OF SUBJECTS.
OBJECTIONS continued
the conservatives
I'm pretty comfortable, let things alone, 376
the referendum is unwise, 376
it is cumbersome, 377
it is dangerous to capital, 377
things are getting better, let 'em alone, 377
good thing when the time comes, not ready for it yet, 378 n
distrust of the people
hasty legislation, 378
people not competent, 379
mob-rule, a la Carlyle, .'iSd
a trick to get wisdom out of foolishness, 381
too expensive, 382
impracticable, 382
Swiss success no sign it will work here, 383
violates representative principle, 383
personal interest, rings changes on all above
reduce legislature to advisory body, 383
people don't know enuf, 384
people don't want to vote on measures, 384
it's unconstitutional, 384
resume, 385-6
experience has proved objections to direct legislation baseless, 349-351,
see DIRECT LEGISLATION (F. 20)
OBLIGATORY REFERENDUM (see DIRECT LEGISLATION)
definition, 257
best form ultimately, 301
used in making and amending constitution, etc., 257 n
used in Swiss cantons, 344, 345
OFFICES (see CIVIL SERVICE (2) ELECTIONS)
OIL (see STANDARD OIL TRUST)
OLD AGE
relief for employes in, 473 n
OPTIONAL REFERENDUM (see DIRECT LEGISLATION)
definition, 257
better form to begin with, 302
OVERCAPITALIZATION, 42-57 (compare, 153)
a pernicious practice frequently resorted to in order to protect extortn,
conceal profits, defraud the public, prevent the due reductn of rates
and obstruct public purchase, 42-3, 57-8
may arise from false bookkeeping, careless or intentional, 55
gas co.'s 43-5, 57, 77-8 (Boston)
of electric light co.'s, 85-6
street railways, 45-56, 57, 181
New York table, 49
telegraph, 56
sugar trust, 56. 57
oil monopoly, 56, 57
banks, railways, etc., 57
causes long hours and low wages and produces strikes (.opinion of Judge
Gaynor), !)5, 96, 98 n
eliminated by reductn of rates, 179, 180-8, 521
by taxatn of excess, 179, 181, 252, 521
suggested legislatn, 521
OWNERS
of abutting property, consent of to franchises, 457, 459, 460. 462 table
assessmts on to pay for pub. works, 178-9
OWNERSHIP isee PUB. OWNERSHIP)
control the essence of, 18
PARTISANSHIP
developed by spoils system, 471
weakened by civil service reform. 471
weakened by direct legislation, 311-2. 313-4
guarded against by non-partisan boards, 190
PATERNALISM
objection made to pub. ownership, 235
PATRIOTISM (Civic)
developed by public ownership, 156 .
by direct legislation, 323-4
by municipal home-rule, 428-9
crippled by subjectn of cities to legislature, 402-3
PATRONAGE
objection to public ownership, 233-5
PEACE
cause of. aided by direct legislatn, 298, 327-334, 369
few wars if people voted them, 298, 3t>9
no^standing army in Switzerland, 369 n
for employes, 473 u
PLURALITY
election by, unfair, 484
INDEX, OF SUBJECTS. 567
POLITICAL CORRUPTION, BEST MEANS OP OVERCOMING. Chap
VIII, pp. 492-503
1. to overcome we must understand, 4'.I2
nature and causes, 492
separation of legislation from the people, 492
large communities and massive affairs, 492
organization for plunder, rings, machine nominations, bribery, false count-
ing, etc., 493
a few illustrations.
Chicago franchises. 493
Philadelphia franchises. 4!>4, 528
Southern methods, 494
Sugar Trust. Credit Mobilier, 494
Pennsylvania legislature. 4!4
election frauds in Philadelphia, 537
Wanamaker's statement, 537
Jersey City and the Abbott ring, 494-5
New York Central, Gould, Oil Trust, Lexow Investigation, 495
systematic bribery of voters, 496
-Mnents of office-holders and candidates, 496
West End case. Bay State gas villany, etc., 496
purchase of U. S. senatorships, 89, 537
2. two ways of overcoming remove inner causes, or external conditions. 497
internal causes, 497
conditions creating motive, or affording opportunity, 497
what should be done, 497-8
3. England's experience, 498-503
oppression and corruptn early in the century, 498-9, 503
the reform bill (1832), 499
re-apportioned representation, 499
greatly extended the suffrage, 499
transferred power from wealthy to middle classes, 499
the reform parliament. 499
the chartist's ideas, 500
suffrage further extended (1867>. 5OO
judicial decision of election disputes, 500
Gladstone's secret ballot act, 500
efficient corrupt practices act (1883), 500
fraud forfeits office, 500-501
political success made to depend on honesty, 501
suffrage extended to 3 million agricultural laborers, 501
government loans to enable Irish tenants to buy land and become
home-owners, 501-2 u
civil service reform, 502
in a single life-time England has come by peaceful legislation from cor-
ruption to remarkable purity in elections and government, 502
from aristocracy and despotism to a large degree of democracy, 502-3
education and wise legislation will solve our problems also
POLITICS
improved by public ownership. 153-159
less fraud and corruptn, 153
better men attracted into, 156
civic patriotism developed, 156
civil service reform aided, 157-8
editors, preachers, teachers, etc.. liberated from the pressure that
silences their criticism. !.">!
labor better treated, 160-7, whereby the ballot is improved in temper
and intelligence, 160-7
improved by direct leglalatn, see DIRECT LEGISLATN (F 2, to 5 and 9)
PREACHERS
liberated from monopoly pressure by pub. ownership, 158-9
PREFERENTIAL VOTING. Chap. \'i. pp. 484-7
correlative- of I). L. and Propor. Rep.. 484
plurality rule unjust, 484
it often enables a minority to rule, 484
presidents and governors and mayors elected by minorities. 484-5
really disfranchises many voters, 485-6
majority rule may be secured in 3 ways. 486
effective or preferential voting the best way in general elections. 48(3
method of operation. 486
PRESIDENTS
elected by minorities. 4S4-5
PRESS i see NEWSl'APKRS)
liberty of invaded by monopolists, 69. 70. 75-6, 81 n. 87-8
of increased by pub. ownership. 15S-9. 200
aided by socialization of telegraph in England, 200 (8)
elevated by referendum. :',2.". ::4."i
PltlCKS (see RATES)
PROBLEM
of the city, 9
of monopoly, n, 14, 102
of liberty and self-govt, 9-12
566 INDEX OF SUBJECTS.
PROFITS
1. of private companies
water, 20-22, 33
gas, 22-24, 34-5, 78, 79, 523
electric light, 25, 27, 36
street railways, 27-31. 36-8. 46
telephone co.'s, 31, 38, 117
telegraph co.'s, 31, 39
trusts and combines, 32-33, 39, 57, 78, 79
concealed by overcapitalization, q. v.
the main aim of monopolists, 14, 16, 63
co.'s 110 right to profit on fictitious capital, 182
may be squeezed out by laws reducing rates, 179, 180-3
2. of public' plants. 143
water "works, 143-4
electric light works. 144, 132-3
gas works, 144-5, 126-7
street railways, 198
3. of private monopolies saved by public ownership. 143, 132-3, 117
telephone, 117, 31, 38
4. of private contractors saved by direct employment of labor by the city,
143 n, 542
PROGRESS
sacrificed to profits by private monopolies, 93-4
favored by pub. ownership, 169
proofs from water, gas, and electric works, tramways, postoffice, etc.,
170
inventors better treated, 171
inveiitns adopted by English teleg. and suppressed by Western L'niou,
171
objectn answered, 240-1
favored by direct legislation, 303 et seq.
See DIRECT LEGISLATN (F)
of civilization is toward liberty, equality and democracy, 296-8
toward public ownership. 208-210
toward direct legislatn, 352, 370. See DIRECT LEGISLATN (D and
F 20)
one test of, is advance of co-operation. 210
PROPORTIONAL REPRESENTATION. Chap. V, p. 474-483
the correlative of direct legislation, 474-5
each class and interest should be represented in legislative bodies in same
proportion as it exists in the community, 475
the district system fails to secure this, 476
gives dominant party undue power, 476
practically disfranchises large masses of citizens, 476
Garfield's statement, 476 n
gerrymandering, 476-7, 354
N. J. case and Judge Gaskill's exposure of it, 477, 354
in Ky. a Democrat weighs as much as 7 Republicans, 478
in Me. a Democrat weighs nothing, 478
illustratns of disproportionate representatn in various states, 478-481
in New York City, 481
by prop. rep. the voting strength of each class is reproduced in the legis-
lature or council, 475, 482
makes the legislature a miniature or political photograph of society, true
to life instead of a grievous caricature, 482
method of, 482-3
adopted in a number of Swiss cantons. 351-483
in Belgium, 483
local option as to use of, in cities, adopted in Illinois. 483
PUBLICITY
of corporate accounts, 183 (see also FALSE STATEMENTS and SUP-
PRESSION)
feared by trusts and monopolies, 527
a first step in reform, 252
suggested legislatn, 520
PUBLIC OWNERSHIP. Chap. I., 17-254 (14, 16)
(A) not same as government ownership unless the people own the govern-
ment, 17
of government, necessary to reliable pub. ownership of industry, 17
direct legislative and merit system, part of true plan of, 18
(B) nominal pub. ownshp may lead to real, 18
causes of growing demand for, 18
means change of purpose from private profit to public service. 16, 190, 231
(C) evils of private monopoly, see MONOPOLY, 14, 16. 19-101
(D) benefits of monopoly. 64. 100-1
tends to eliminate adulterations, 64
economy, stops, within its field, the wastes and conflicts of competi-
tion, 100-1
(E) problem is to keep benefits and banish evils, 102-4
the good arises from elemt of union and co-operatn in monopoly. 102
the bad comes from the fortified antagonism of interest between the
owners and the public. 102-4
INDEX OF SUBJECTS. 56
PUBLIC OWNERSHIP conMnwed
(F) the solution is not competitu, 100-1, 105 see MONOPOLY (Fi
nor regulatn, 106-112. See MONOPOLY (F)
but public ownership, 14. 16, 105, 112-114. MONOPOLY (F)
it is not monopoly that is bad, but private monopoly, 113
(G i advantages of pub. ow., 115-175
1. lower rates, 115-136, 242-5, 246, 249, 250-1, 523 (comp. 19-33)
roads. Glasgow tramways, Brooklyn Bridge, etc.. 115
Brooklyn and St. Louis bridges, 115 table
telegraph, reduction of rates when Eng. took, 117, 200-1 (comp. 31)
telephone, 117-9, 12S table (compare 31)
saving of Federal Govt, by putting in its own phones, 117
Trondjhem, 117, Stockholm, 118, France. 118
co-operative exchanges, Sweden, 118
co-operative exchanges, America, 118-119
companies independent of Bell, 119
con versa tu charges, 128 table
water. 119, 128 table. 195 (comp. 20-22)
Schenectady, Auburn. Syracuse, 120
Randolph 22, Prof. Ely's statement. 22
facts from Baker's Water Manual, 120-4
private co. charges 43 per cent, above pub. rates, 122. 20
still greater difference between private rates and the real cost
of pub. service, 123 table
Brookline, Hyde Park, Milford, etc., 124'
London and Glasgow, 123
more water for less money in pub. works, 22, 192, 19p
gas, 125. 128 table, 249 (comp. 22-24)
reduction by pub. ow. (a dozen cities) 125-7
pub. and private rates compared (5 states), 126
present cost of gas in pub. wrks, 127
Phila. case, 249 (75, 528)
electric light, 128, 129 and 134 tables, 242-5 (comp. 24-27)
a few crisp contrasts, 128 table
cost before and after pub. ow., 129 table, 250 Chicago
Peabody, Aurora, Elgin, 130
Detroit, Allegheny, 131
Fairfleld. Bay City, 132
Jacksonville, 132, 523
Jamestown, Lansing, 132
Springfield (111.), Logausport, 133
present cost, in pub. plants. 134 table
pub. charges much below private, 135
Foster's figures, 242-5
Chicago's case, 250-1
street railways, 197 (524)
2. economy, 136, 250-1
16 reasons why pub. ow. can produce at lower cost, 136-141
summary statement, 136
direct employment better than contract system, 143 n, 542
wages above competitive rate are paid for manhood and good citi-
zenship, not for light, etc., 250
3. co-ordination of industries, 141
cannot be so complete under private as under pub. ow., 141, 142 n
examples. 142-3
4. profits go to the people, to all instead of a few, 143-5
water profits in Phila.. N. Y., Chicago, 143-4
electric profits. 144, 523
gas, 144-5, (Eng., 145)
street railways. 198 Glasgow, 524
5. enlargemt of facilities, 145-6, 194, 200-1
gas and water pipes, turnpikes, etc., 145, 194
electric light, Foster's arlmissns, 145
post, telephone, telegraph. 146. 200-1
6. increase of business, 146-9, 192-5, 198, 200-1
water, consumptn much larger under pub. ow.. 22, 146-7 table, 192-5
gas. street railway and teleg. traffic greatly developt, 148, 198, 200-1
7. more impartial treatment of customers, no secret rebates, etc., 149
8. safety better provided for, 150
railroads in U. S. and Germany. !."><
Brooklyn Bridge and N. Y'. st. rys., 150
9. obedience to law, 150 (compare Sl-'.>
10. better service, 150-2, 195, 198, 200-1 (comp. 64-6)
proof from water, gas, elec. 1.. st. rys., 151, 195. 198
teleg. and teleph.. 151. 152 n. 117, 200-1
11. true accounts, 152 (comp. 55. 58-62, 79, 82-3)
everything open to public and no motive to falsify as in case of a
private co., 153
12. no watered stock, or inflatn of capital, 153 (comp. 42-57)
13. no stocks to gamble with, 153 (comp. 90)
14. less fraud and corruptn. 153-5 -omp. 22. 42-63. (.9-81. 140-1. 24!>i
it is not pub. plants that buy votes and maintain lobbies, 153
570 INDEX OF SUBJECTS.
PUBLIC OWNERSHIP continued
pub. ow. relieves govt. from many corrupting relatns with rich men
and giant co.'s, 154, 533
changes financial interest of rich to the support instead of de-
struction of honest govt, 154, 533
experience shows that pub. ow. tends to diminish corruptn, 154
high authority to same effect, Profs. Bemis and Commons, 154
Dr. Shaw, Prof. Ely, Gov. Pingree, 155 (also 214, Ely)
15. attracts better men into politics, 156
16. tends to develop civic interest and patriotism, 156
producing a better citizenship, 156
17. aids civil service reform, 157-8, 216, 251
Prof. Ely's statemt, 157
Detroit's experience, electric commissn's report, 157
Chicago, Wheeling, 158
pub. gas works, Prof. Bemis' statemt, 158
18. tends to better govt., as above and in other ways, 158
liberates speakers, editors, preachers, teachers, 158-0
safer here to criticise govt. and pub. affairs than the big monopo-
lies, 158-9
many papers and pulpits owned and controlled by monopolists,
none by the govt., 159
the monopolists will not have their papers and pulpits defeating
their schemes at the State House, 159
pub. ow. means freedom of press, pulpit and school from the chains
of monopoly, 159
19. a pub. plant can be trusted with an unrestricted franchise, 159
20. better treatment of labor, 100-7, 250-1 (cornp. 94-9)
under pub. ow. the workers are co-partners, 160, 162
st. rys., Brooklyn Bridge and Glasgo\y, 160
Huddersfield, Sheffield, 161
gas and electric wks, Wheeling, Richmond, 161
Chicago electric works, 250-1
labor's interest in pub. ow., 161 summary
condtn of Boston st. ry. employes and police compared, 1G2
contrast between Western Union and Eng. teleg., 162-4
contrast between Western Union employes and U. S. mail carriers,
162-3, 164-5
hours and wages, pub. and private, 165 table
federated labor recognizes value of pub. ow. to labor, 165
21. no costly strikes and lockouts, 166
losses by strikes, etc., 166, table
22. a good step toward complete co-operatn, 167
23. adds to social strength and cohesion, 167
24. pub. assets citizens^ riches, 167
better for a man to own a good business himself than have some
one else own it all, and samo is true of a citv, 167
25. tends to diffusion of benefit, 168-9, (comp. 90-3)
no prejudice agnst honest millionaires as persons, 168
but the congestn of wealth is an economic, political and social evil,
168
Judge Marshall's opinion, 168
pub. ow. and progressive taxatn stopping congestii of wealth in
New Zealand, 169
26. favors progress, 169, Topeka, 170. Chicago, etc., 158, 250-1
proofs from water, gas and electric 1. wrks, st. rys., post office, 170
inventors better treated, 171
inventns adopted by Eng. teleg. and suppressed by West. Un., 171
27. favors aesthetic developmt, 171
28. favors moral Improvmt, 172
29. favors developmt of manhood, 173
30. favors liberty of press, pulpit, school, court and legislative hall, editor,
preacher, teacher, workingman and voter, 173
see 158-9, and number (18) above, also 200 ^8)
31. favors democracy and self-govt, 173
opposes industrial aristocracy, 174
Federal Const'n guards against the name of aristocracy, but does
not protect us agnst the substance. 174
32. favors unity and harmony, identifying the interests of owners and
public, 175
(H) method of attaining pub. ownership, 175-192, 251-4
authority by statute or const., 175-8
judicial limitations, Mass, fuel yard decision, 175
Michigan "internal Improvmt" case (Detroit), 176-7
what constitutes a pub. purpose, 176, n.
Hamilton gas case, 178 (see 443, 445)
ways and means, analysis, 178-9
publicity, and pub. supervision of corporate accts, 183, 229. 252,
520, 527
squeezing out fictitious values by taxing them, 179, 181, 521
and by reduction of rates. 179, 180-3, 252, 521
co. cannot claim rates suft. to yield profit on fictitious capitali-
zation (U. S. Supreme Crt), 182
INDEX OF SUBJECTS. 571
PUBLIC OWNERSHIP continued
if the rates establish! by law yield any profit the courts can't
interfere, 182 (?)
rednctn of teleph. rates sustained, 182
" st. ry. rates sustained, 182-3
" water rates sustained, 183
Mass, laws as to stock, franchises, etc., 181
raising funds by assessmts on bettermts, progressive taxation of
incomes, inheritances, etc., 178-9
not a dollar of debt or taxation nec'y in attaining pub ow 184
French teleph. franchise, 184
Berlin elect. 1. contract, 184-5
Leipsic contract and Minneapolis offer, 185
Hamburg st. ry. contract, 185
Toronto st. ry. contract, 185-7
Springfield (111.) elec. 1. contract, 187
Des Moiues elec. 1. offer, 188
st. ry. municipalizatn in Eng., 188-9
London proposal. 189
Australian method, 189
Milan agreemt, 189
Budapest plan, 190
New York Underground Railways, 539
non-partisan boards to control pub. wrks, 190
no sale or lease except on referendum vote, 190 (see 18)
economic working libraries for city councils, etc., 190-1
first practical steps, 251-254, 518-521, 527
municipal bonds issued for revenue producing utilities not to be
counted against the debt limit, 229, 519, 539
<I) experience proves benefits of pub. ownership, 192-202
many proofs already given, further illustratns, 192
1. waterworks of New York State, 192-5
pub. wrks show larger consumptn, r.>2-.">
greater efficiency, 192-4
greater tendency to extend lines to suburban districts, 194
better fire protection, 195
cheaper service, 195
large savings, 195
2. Glasgow's municipal enterprises, 195-199
city farm, ferries, steamers, wash houses, etc., 196
results, 196
model lodging houses, 196
public baths (and Boston note). 196
public laundries, 197
pub. tramways, 197
coiiditns of labor improved by pub. ow.. 197
fares greatly reduced, 197
service improved, 198
traffic greatly increased, 198
profits in pub. treasury, 198
change of purpose from private profit to public service, 199
:i business owned by the people is MORE apt to be run in the in-
terests of the people, than a business owned by a Morgan syndi-
cate or a Rockefeller combine, 199
3. English Postal Telegraph, 199-202
England tried private co.'s for over 25 years, 201
extortns, delays, errors, wastes and inadequacies the result, 199
investigated pub. systems in other countries, 199
and resolved on pub. ownshp, 200
objectns of co.'s, 200
govt. bought the lines (1870), 200
splendid results, 200-1 summary
compared with our telegraph record, 201
4. Chicago's elec. light plants, 250-1. 134
<J) satisfaction with pub. ownshp, 202-3, 242
gas and electric light, 202
Glasgow enthusiastic, 202
telephone and teleg., 202 (201)
railroads, post, etc., 203
Foster's admissions, 242
Francisco's misrepresentations exposed, 245
< K) growth of pub. ownshp. 203-210, 530, 531
waterworks, 203-4, 531
gas and electric works. 205, 530-1
street railways, 206 (188-9 Eng. and 530)
telephone, 206-7
telegraph, 207-8. 200
railways, 208, 230-1
<L)movemt of history toward union and co-operation. 208-210
test of civilization, 210
shall we go back: shall we give the postoffice to a Rockefeller trust, 210
the five stages of developrnt, 210
572 INDEX OF SUBJECTS.
PUBLIC OWNERSHIP continued
(M)sentimt and authority favors extension of pub. ownshp, 211-231
Jefferson and Jackson, 211-2
Clay, Sumner, Grant, Edmunds, Wanamaker, Ely, Abbott, Lloyd,
Lowell, Brooks, Walker, etc., 212
congressional reports on telegraph, 213
opinions of eminent men on pub. ownship of st. rys, etc.
Rev. Lyman Abbott, 213, 533, Felix Adler. 213- 4
Prof. Ely, 214, 221, Wm. Dean Howells, 214
Henry D. Lloyd, 214-5, Dr. Rainsford, 215-6
Dr. Spahr, and Dr. Taylor, 216-217
Rev. E. E. Hale. 531-2
Rev. Washington Gladden, 532
Hon. S. M. Jones, Mayor of Toledo, 219
Hon. John MacVicar, Mayor of Des Moines, 220
Dr. Albert Shaw, 221-3
Prof. Bemis and Commons. 223, 532
Hon. Josiah Quincy, Mayor of Boston, 223-4
Hon. James D. Phelan, Mayor of San Francisco, 22.~i
Hon. Hazen S. Pingree, Gov. of Mich., 226-7
Hon. Carter H. Harrison. Mayor of Chicago. 227
Gov. Rogers, Ex-Govs. St. John and Larrnbee, and other dis-
tinguished men, 227
movemts for municipalizatn of st. rys., 228
Natl. League for Promoting Pub. Ow. of Monopolies, 218
Natl. Municipal League, 228
plan for model charter, 228-9
League of American Municipalities, 228
Boston Common Council favorable action on pub. o\v. of elec. 1.,
228 n
Buffalo conference, 229
American Federation of Labor, 229, 165
increase of statutes opening the way for pub. ow., 229
San Francisco charter, 229, 420 (279, 419-421, 438)
concerted rnovemt of co.'s to intrench themselves behind 50-year
franchises, 229
Swiss railroads, growth of sentimt and final vote for pub. ow.. 230-1
(N) summary of argument for pub. ow. of monopolies, 231-3
(O)objectns, q. v., 233-251, 533
motives of those who favor and those who oppose pub. ow.. 248
cause of pub. ow. aided by direct legislatn, 347, 230-1, 303-0. .".44. (See 17.)
pub. ow. nec'y to true municipal liberty, 428
laws relating to pub. ownership, 434, 436 table. 440-9. 512-f,. .">:',!
see HOME RULE (12) to (14); LEGISLATIVE FORMS (Hi and (4)
San Francisco's freehold charter, 420
suggested forms for future enactment, 518 et seq.
PUBLIC PURPOSE
what constitutes, 176 n
PUBLIC SENTIMENT
sets toward public ownrshp of monopolies. 211-231
for analysis see PUB. OWNRSHP (Mi
sets toward direct legislatn, 352, 286-296
for analysis see DIRECT LEG. (D III) and (F 22)
PULPIT
liberated by pub. ownrshp of monopolies, 158-9
PURPOSE
changed by pub. ownership from dividends for a few to service for all,
16. 199, 231
public, what constitutes, 176 n
RAILROADS
growth of pub. ownrshp, 208, 230-1
Swiss, 230-1, 347
RATES (see WATER, GAS, ELECTRIC LIGHT, ST. RYS., TELEPHONE,
etc.)
(A) of private monopolies, excessive, 19, 70, 79; see MONOPOLY (C. 1)
gas, 22-24, 77, 79, 102 n. 523
discrimination in, 87
raised by gas co.'s upon consolidation, 102 n
raised by political corruption. 140-141
electric light, 24-27, 128-9, 250, 523
transit, 27-31, 524
telephone and telegraph service. 31
for other monopolistic services, 32-33
raised by trusts, 32-3, 88 oil
reduction of by-laws and ordinances resisted and defied by co.'s, 82, 84
(B) lower under pub. ownership, 115-136
16 reasons for economy of pub. ownership, 1H6-141
1. roads. Glasgow tramways. Brooklyn Bridge, etc.. 115
table comparing Brooklyn and St. Louis bridges. 116
2. telegraph, reduction when England took. 117, 20U-1 (compare 31)
telephone. 117-9, 128 table (compare 31)
saving of Federal Government by putting in its own phones, 117
INDEX OF SUBJECTS. 573
KATIES (telephone)-(wifniHcd
Trondjem, 117
Stockholm. 118
France, 118
co-operative exchanges in Sweden, 118
in America (Grand Rapids, Wis., etc.) 118-119
companies independent of Bell, 119
conversation charges, 128
3. water, 119, 128, table, 105 (compare 20-22)
Schenectady, Auburn, Syracuse, 120
Randolph, 22
Prof. Ely's investigation and opinion. 22
facts from Baker's Water Manual, 12D-4
private co. charges 43 per cent above public rates, 122. 20
still more difference between private rates and the real cost of
public service, 123 table
Brookline, Hyde Park. Milford, etc., 124
London and Glasgow, 125
more water for less money in public works, 22. 195
4. gas. IL'."). 128 table, 249 (compare 22-24 1
reduction by pub. ownership, 125
Hamilton. Oharlottesvllle, Wheeling, Henderson, Indianapolis,
Dayton, and Toledo, 125
Richmond and Washington, 125-6
Fredericksburg, Duluth, Wakefleld, 127
England. 127
compaiisou <>l private and public rates in Va.. \V. Va., Pa., Ky.
and Oh., 126
present cost of gas in public works, 127
5. electric light. 128 Table. 12U table. 134 table, 242-5 (compare 24-27)
it few crisp contrasts, 12S table
cost before and after public ownership, 129
Peabody, Aurora, Elgin, 130
Detroit, Allegheny, 131
Kail-field. Bay City, Jacksonville, 132
Jamestown, Lansing, 132
Springfield (111.). Logansport, 133
present cost of in public plants, 134 table
public charges much lower than private, 135
Foster's figures, 243-5
0. street railways, 197
(Ci reduction of rates by law, sustained by courts, 182
telephone, 182
street ITS., 182-3 (Indianapolis case, 183)
water, 183
Me. method of squeezing water out of capitalization, 179. 180-3. 521
co. can't claim rates suft. to yield profit on fictitious capital, 182
if rates will yield any profit it is suft., 182
READING TERMINAL
bribery case, 308
RECALL, POPULAR
of a public oflicial by petition and vote of the people, 313, 373. 386
REDUCTION ()K KATES (see KATES), 179, 180-3. .'21
Haverhill case igasi. ri23. 539-542
suggested amendmt, to secure, 520
REFERENCES
on direct legislation, 360, 378, 385
on civil service reform, 473
to municipal leagues, etc., 13
REFERENDUM (see DIRECT LEGISLATION i
REGULATION
can do some good, 179, 180-183
an important means of squeezing water out of capitalization, 180-3
but fails at the vital points. 14. 105-112
failure of in Mass.. 533, compare 539-542 Haverhill case
RELIEF
for municipal employes in sickness, accident, old age, etc., 473 u
REMEDIES
for evils of private monopoly. 14. 16, 105, 112-114 (see MONOPOLY (F)
for defects of representative system
direct legislation q. v., 256-7
proportional representation q. v., 474
equal suffrage. 477
majority choice. 484 (see PREFERENTIAL VOTING)
for municipal dependence. 405 (see HOME-RULE) (5)
for political corruptn q. v., 492-503
REPRESENTATION
does not represent, 259. 276. 354-359
unless guarded by the referendum (sec DIRECT LEGISLATION) (A)
(B) (F 25.)
and proportionate representation. 474-483
farmers and workingmen, not duly represented. :J."(!
574 INDEX OF SUBJECTS.
REPRESENTATION continued
lawyers and bankers overrepresented, 336
laws may be passed by representatives of 10 per cent.,
of voters, 355
or less with tlio Speaker's help, or bv -norms of corruption, 355 n
REPRESENTATIVE SYSTEM (see REPRESENTATION)
REPUBLICAN GOVERNMENT
Jefferson on nature of, 295, 384
RIGHTS
of cities, 397, 415, 431, 436, 462
see HOME-RULE for Cities
of labor violated by spoils system, 471-2
by monopoly (*>ee MONOPOLY, EMPLOYEES, PIT,. O\VNEUSH1P>
RINGS AND BOSSES
crippled by direct legislatn, 313
SAFETY
disregard of, 66-8
grade crossings, 66
leaky gas pipes, 66
electric wires, 06-7
trolley accidents, 07
no cushioned fenders, cheaper to run over people, 68
oil below legal quality, 88
dangerous railroad stoves, 93
better provided for under public ownership, 150
railroads in U. S. and Germany, 150
Brooklyn Bridge and N. Y. street railway accidents compared, 150>
SALARIES
exorbitant, paid by monopolists, 70, 79, 140
SALE of franchises at auction, 441M52
SATISFACTION
with pub. ownership, 202-3, 242
gas and electric 1., 202
Glasgow's enthusiasm, 202
telegraph and telephone, 202 (201)
railroads, postoffice, etc., 203
Foster's admissns, 242
Francisco's misrepreseutatns exposed, 245
with direct legislation, 349, 330-4
deeply rooted In hearts of whole people (Switzerland), .'n;
people's verdict accepted quietly by all while legislatures are scored
(U. S.), 330-4
town-meeting govt, a^id constitutu making universally regarded as our
best legislation, 264-1), 278
with merit system of civil service. 471, 473
with voting by machinery, 489-490 u
SELF-GOVERNMENT
justice, liberty and developmt demand, 9
basic principle of our jurisprudence, 9
but not thoroly applied, 10-12
as to areas cities, 10
as to departments of life industry, 11
as to methods elective aristocracy, 11
what is needed for complete self-govt, 12-13
home-rule for cities, 12
direct legislatn, etc., 12
public ownership and co-operative business, 12
private monopoly destructive of, (opinion of Chief Justice Sherwood) 9?v
Senator Hoar and Daniel Webster to the same effect, 9.3
does not consist in choosing some one to govern you, 259-263
direct legislation essential to. 259-263, 288, 294/311, 352-3, 300
mixture of issues fatal to, 315-7
Inherent right to local. 393-6
not generally recognized in our states, 387-392, 390 n
see HOME-RULE (1) to (4)
but in fact much liberty given to cities, 431, 430. 4:i >
city's right to make and amend Its own charter. 415. 4i'.~>. 4:11. 4.">5-8. see
HOME-RULE (7)
SENATORS U. S.
fraudulent election of, 89, 537-8
popular election of, 538
SENTIMENT (see PUB. SENTIMENT)
SEPARATION
of measures aids progress, MO.VO
disentangling issues very important. 314-316
of state and municipal affairs, 407-9, 411-413
of local and natl issues, 536
SERVICE
private monopoly aims at dividends not service, 14, 16. G3
no absolute monopoly as yet, however, so that service is in some degree
related to dividends, 63
street cars crowded and ill-heated, 64
INDEX OF SUBJECTS. 575
SERVICE coiitiiniKl
poor elecric light, C4-5
Inferior telegraph and telephone service, 65
insufficient facilities, pipes, wires, rails, etc., not extended to country dis-
tricts, small towns neglected, 65-6
better under public ownership, 150-2
Glasgow tramways, 198
English telegraph, 200
SINGLE-TAX THEORY, 529
SOCIALISM
objectn raised agnst pub. ownership, 236
SOCIAL REFORM UNION
favors direct legislatii. proportnal reprcs.-ntatn, pub. ownership, etc., 368
SOVEREIGNTY (Bee SKI,F-G< >VKRNMKXT)
of people, not fully secured, 261. 305
requires direct legislatn, q. v.
SPECIAL LEGISLATION
illustrations of, 398-402
in X. Y.. 538
provisions against, 422-3, 431-4
suirirested measures to proven . r>:.'2. -~:'S
SPOILS SYSTEM (see CIVIL SERVIC1;, i'i
a violatn of labor's rights, 471-'-'
STABILITY
favnred by referendum, 327-334
STANDARD OIL TRUST
invading the municipal field, seeking to control, gas. electric light and
street railway co.'s in large cities, 87
excessive charges of, 33
exorbitant profits, 39
overcapitalization, 5(i-7
frauds of, 81 n, 87-91
violations of law, summary of oil atrocitirx, 87-8!).
trustees indicted, 87.
manipulating judges, 87.
blowing up rival refinery. 87.
controls gas cos. in various cities. S7.
subsidizes or buys up antagonistic papers, 87
or silences them with threats, 88.
tried to destroy Toledo's credit so as to defeat public gas works, 87
gets up fraudulent "protest." 87
discriminates in rates, 87, 88
plugs rival pipe, destroys machinery, tears up pipes, 88
makes outrageous contracts with railroads. 88. NH
raises prices, 88
trick to beat the Pacific oil fields, 88
corrupts inspectors and sells oil below legal quality, 88-9
persecution of Rice, Matthews, etc., 89
capturing the widow's refinery, 89
swindling inventors, 89
indictment for bribing public officers, 89
dodging taxes, 89
perjuring, theft and mutilation of records, etc., 63, 89
billing cars far below weight, and when investigation was threatened,
crippling it by painting out the numbers of the cars, 89
buying a U. S. senatorship, 89
burning account books, 527
trying to bribe Attorney-Gen'l of Ohio, 527
STATUTES (see LAW, LEGISLATIOX. LEGISLATIVE FORMS)
affecting municipal liberty, 436-7 table, 438-463, 539
as to public ownership, 438-449. 539, 512-516 (suggested forms, 518-519)
street railways, 440, 447, 448
telegraphs and telephones, 440-442, 447, 448, 449
gas and electric light. 442-44!), 519
requiring sale of franchise at auction, 449-452
about local consent to and grant of franchises. 443-6, 448-9, 453-461
see HOME-RULE (13) (14), 462 table, 539
providing for the referendum, 280-3, 456 (505-8), (suggested forms, 516)
(see DIRECT LEGISLATION) (D)
great number of referendal clauses scattered thru our law, 269, 369
n, 456
Illustrations from la.. 269, 271. 444, 456
Minn., 442, 456, 458 (sweeping clause)
Wash., 448, 456
Wise., 449, 456 (Initiative also)
Mich., 444, 456 (Initiative also)
Nebraska. 457 (Initiative also), 280-1
South Dakota, 457 (Initiative also), 282-3
Arizona, 282
authorizing use of voting machines, 489
multiplicity and chaotic state of, 318-320, 398, 402, 4C5-6, 539
New Jersey, 318-9, 402, 466
Mass., 466, 539
576 INDEX OF SUBJECTS.
STOCK
watering of inanimate (gee OVERCAPITALIZATION)
distributing among influential people, 70, 75, 76
gambling in, one of the evils of private monopoly, 9(
taxatn of face or market value of. 179, 181
Mass, laws as to. 181
STREET RAILWAYS
1. cost and rates (see (9) below)
fares too nigh, 27
fares in Buffalo, 27
f;iros in various cities of Europe and America, table, et
offers in Chicago, 28
Detroit, 28
cost of operating in various cities, tables, etc., J8-.30
elements of cost in New York, 524
2. profits, exorbitant, Philadelphia, 36
Detroit, Montreal, Washington, New York, 37
Mr.. Higgins' statemt, 37
monopoly taxes, 216-7
rapid growth of traffic and earnings, 38
3. overcapitalization, 45-55, 181
a pernicious practice, protecting extortn, concealing profits, aein
ing the public, preventing due reductn of rates and obstructing
public purchase, 42-3, 57-8
may arise from false bookkeeping, careless or intentional, 55
Philadelphia railways, 45-6, 52
Boston railways, 45-6, 52, 54
Chicago railways, 46, 51
Milwaukee railways, 48, 51
Cleveland, 48, 52
Washington, 48, 52, 53
New York, 49-51, 53-55, table, 49
Springfield, Mass.. 51
Toronto, 49
4. poor service, crowded and ill-heated cars, etc., 64-0
disregard of public safety, accidents, dangerous bridges. r>7
cushioned fenders not adopted, cheaper to n:an>i people, 68
grade crossings, 66
dangerous wires, 66
overworking motormen, etc., 67
5. free passes to ward heelers, etc., 68
frauds of co.'s. political corruptn. etc.. 71-3
"owned the council, body and soul." ill Dutroit. says IMngree. 71
"all powerful in Cleveland politics." says Dr. Hopkins, 71
Broadway franchise secured by bribing aldermen. 71
Philadelphia "Traction Grab," and "Railway Boss Act," 72
boodle franchises in Chicago, 73
the West End Investigate in Boston, 73
trying to kill low fare road in Detroit. 82
false statemt and suppressn of facts, 55, 60 (West End), 247-8 (Sullivan)
refusal to aid investigate 8:5. JS4
R. P. Porter's difficulties with facts. 533
report of Mass. Spec. Com. on St. Rys., unfairness exposed by Prof.
Bemis, 223
defiance of law by, 81-4, 524
smashing property, 81, 524
nullifying ordinance, 82
defying reductn of rates. 82, 83
breaking tax laws, 84
stocks material for gambling, 90
6. tend to non-progressiveness except where progress will help dividends, 93
low character product, 99-100
and undemocratic congestn of wealth and power, 90-3
7. ill-treatmt of employees, 94-9
strikes In Cleveland, Brooklyn and Philadelphia, 05-8
long hours, low wages, etc.. produced by overcapitalization and the
struggle for dividends on water (Judge Gaynor's opinion). 95. 96.
98 n
breaking faith with employees, 97
arbitrary discharge of union men. 97. 99 n
vestibules to keep motormen from freezing, refused. 9S
8. competition impracticable, 101
regulatn has done some good, 181, 182-3, an important means of squeezing
water out of capitalization, but fails where most needed, 1U6-112
experience of Mass., 110-2
9. lower rates under public ownership. Glasgow. Brooklyn, etc., 115-6, 197
economy of public ownership, 16 reasons for, 136
excessive salaries pd. by big co.'s, 140
co-ordinatn with other industries, 141, 143
increase of traffic by low fares under pub. ownership, 148
10. safety better provided for under pub. ownership. 150
Brooklyn Bridge and N. Y. street ry. accidents compared, 150
INDEX OF SUBJECTS. 577
STREET RAILWAYS continued
service better under public ownership, 151 (compare 64-6)
11. corruptn less under public ownership, 153-5
Prof - Ely - Dr - Abbott and Dr -
merit system favored by pub. ownership, 157, 216
12. labor better treated under pub. ownership, 160-2, 165
workers under pub. ownership are co-partners, 160 162
13. opinions of eminent men in favor of pub. ownership of st. rys 213-7 533
14. Glasgow's tramways, 197
conditns of labor improved under pub. ownership 197
fares greatly reduced, 197
service improved, 198
traffic largely increased, 198
profits go to public treasury, 198
change of purpose from private dividends to public service 199
15. pub. ownership may be secured without debt or taiatn, 184
Hamburg contract. 185
Toronto contract, 185-7
Australian method with st. rys., 189
Milan agreemt, 189
London proposal, 189
Budapest plan, 190
munieipalizatn of, in England, 188-9, 530
movemts in U. S. for municipalizatn of, 228
growth of pub. ownershp sentiment and practice, 206, 213, 197
concerted movement of co.'s to get 50-year franchises, to head off pub
ow., 229
steps toward public ownership, 175, 251
16. general method, analysis, 175 et seq.
publicity, 183, 251
reductn of rates by law, sustained, 182-3
Indianapolis Case, 183
reductn of rates by law to squeeze out water in capitalizatn, 179, 180-3,
252, 521
taxatn of face and market values of stock and bonds (if more than actual
value of plant) in order to squeeze out water, 179, 181, 252, 521
municipal home-rule as to st. rys., 431, 436, 462
See HOME-RULE
constitutional provisns, 431, 434, 436, 462
statutes about franchises and pub. ownership, 436, 462 (see HOME-
RULE (13), (14), (15)
local consent and grant, 462 table. 436 table, 439, 448-9, 454, 458, 459-
461, 539. see HOME-RULE (14)
sale of franchises at auctn, 449-452
public ownership, 436 table, 440, 447. 448. see HOME-RULE (14)
property owners consent, 457, 459. 460. 462 table
referendum, 456-7, see STATUTES or HOME-RULE (15)
STREETS
local control of, 436 table
franchises in, see FRANCHISES, HOME-RULE (13)
STRIKES
street railway, in Cleveland, Brooklyn, Philadelphia, 95-9
causes of, 95-98
are industrial rebellions judicial settlemt, education and the ballot,
better and more hopeful remedies, 99
losses occasioned by, 166 table
eliminated by public ownership, 166
direct legislatn tends to prevent, 329
SUBJECTN OF CITIES (see HOME-RULE)
SUFFRAGE
extension of in England, see POLIT. CORRUPTN (3)
equal, 12
a corrollary from the principle of proportional representatn, 47 1
but subject outside the limit set for this book, 477
SUGAR TRUST
extortionate charges of, 33
exorbitant profits, 39
overcapitalization, 56
defiance of law, 87
SUPPRESSION (see FALSE STATEMENTS)
of inventions by telegraph monopoly, 94
TABLES and SUMMARIES
1. public ownership, summary statemt, 231-233
economies of pub. ow., 136-7
National League for promoting, 218
The Two Bridges, 116
a few crisp contrasts (pub. and private charges) 128
electric light before and after, 129
" present cost, in pub. plants, 134
" commercial prices, pub. and private, 24
" " arcs, private co.'s, 25, 26
" " plants, growth of public, 205
37
578 INDEX OF SUBJECTS.
TABLES AND SUMMARIES continued
gas, cost in pub. plants, 126
" Bay State Co.'s property returns, 58-9
water-works, Indianapolis, 20
San Francisco, 21
New York State, 193, 195
" cost of operatn, various cities, 21
" rates in pub. and private plants, 120, 122
" consumptn in pub. and private plants, 123, 147
street railways, operating cost per car mile, 29 (60)
' fares, 30
dividends, Phila., 36
' Phila., stock values and amts pd. in, 46
' growth of earnings, 38
inflated capitalization, New York, 49
' cost of constructn, 51
' cost of lobbying in Boston, 73
' growth of pub. ownership (Eng), 206
telephones, ratio to populatn, 66
Trondhjem, 117
telegraph rates, 32
Western Union compared with Eng. teleg. and with our Post Office, 164
labor's interest In pub. ownership, 161, 162
hours and wages, pub. and private, 165
losses by strikes, 166
2. monopoly, antagonism to pub. interest, 104
oil trusts biography, 87-9
distribution of wealth, 91
3. direct legislatn, summary statement, 362-370
eminent men and women favoring D. L., 290
use of referendum in U. S., 272-7
statutes requiring initiative and referendum on franchises, etc., 456,
269 la.
D. L. amendmts, laws and charters, 279-283, 505 et seq.
analysis of points for D. L. law or amendmt, 299, 516 et seq.
mixture of issues In platforms, 316
expenditure for army and educatn In various countries, 326
Swiss referendum on railroads, 230
Swiss referendum results, see analysis In PUB. OWNERSHIP (F) 20
4. misrepresentation, "represen'atlon don't represent." 354, 359 n
representatives out of pi-oportn to vote, 355, 478-481
composltn of congress, 3.37, 338
mixed issues, 316
6. municipal dependence, summary, 397
consequences of, 398
home-rule, summary, 427, 431 table, 43t table
" charter amondmts, 435-8, 508-511
steps toward home-rule, 413
prohibitns on special legislatn, 422
city rights, ownership, local consent and power to grant, etc., 431, 436,
462 tables
conclusion about home-rule, 467
constitutional provisions relating to municipal liberty, table 431
statute provisions relating to municipal liberty, table 436-7
6. statutes on rights of cities, 436-7
relating to local consent and power to grant, table 462
requiring initiative and referendum on franchises. 456
" consent of abutting owners to street franchises, 457
permitting use of voting machines, 489
7. minority elections, presidents and governors, 485
preferential vote for mayor, 486
automatic ballot laws, 489
political reform in England, 498-503
TAXATION
justifiable only for a pub. purpose, 41
for benefit of enterprise in private control, not for a pub. purpose (de-
cision), 41
without representation, private monopoly involves, 16, 40
violation of tax laws by co.'s, 82-85
progressive, of incomes, etc., 521, 528, 530
stopping concentration of wealth in New Zealand, 169
benefits of, in Switzerland, 346-7
means of getting funds to build or buy public works, 178-9. -'">:!
should be progressive both as to time and as to amount of income, 5US
"equality in taxation means equality of sacrifice," (Judge Coolcy, Mill,
Walker, etc.), 253
incidence changed from poverty to wealth (Switzerland*. 34(5-7
Indirect taxes unfair^ 346-7
pub. ownership may be attained without (or debt either). 184
of face and market values of corporate securities, 171*. 1S1. 521
(a method of squeezing water out of capitalization)
of trusts and combines at specially high rates, 527
of co-operative business at specially low rates, 527
INDEX OF SUBJECTS. 579
TAXES (see TAXATION)
dodging of, by street railways, etc., 82-4
paid by public to street railways, 216-7
TEACHERS
freed from monopoly pressure by pub. ownership, 158-9
TELEGRAPH (see WESTERN UNION)
reduction of rates when England took, 117
economies of co-ordination with the post office, 143
great extension of lines under public ownership (Eng ) 146
use of, largely increased under public ownership, 148
' 1 ' Publlc owuershi P (Eng.), 151, 152 n, compare 65-
England tried private co.'s over 25 years, 201
extortns, delays, errors, wastes and inadequacies, the result, 199
investigated pub. systems in other countries, 199
and resolved on pub. ownership, 200
objections of co.'s, 200
govt bought lines (1870), 200
splendid results, 200-1 (summary)
compared with our telegraph record, 201
satisfaction with pub. ownershp, 202, 207
growth of pub. ownership, 207-8, 200
apply also to telegraph
1. Bell rates excessive, 31
profits exorbitant, 38
inferior service, small towns and country districts neglected etc 65-6
compare 146. 151
unjust discriminations, 69
Btocks material for gambling, 90
private monopoly tends to non-progressiveness, 93
low character product, 99-100
and democratic congestn of wealth and power, 90-3
2. savings by public ownership of, 117-119, 128 table
Federal Government, 117
Stockholm, 118
Trondjhem, 117
conversation charges, 128 i
16 reasons for the economy of public ownership, 136
co-operative exchanges in Sweden, etc., 118
in the United States, 118-119
companies independent of Bell, 119
3. competition impracticable, 100
regulation a failure where most needed, 106-112
4. co-ordination with telegraph, etc., 143
co.'s confine their attention to populous districts, 146
otherwise with public lines, 146
service improved uiider public ownership, 151, 146, 117 (compare 66-6)
f>. satisfaction with pub. ownership, 202
growth of pub. ownership, 206
0. method of securing pub. ownership. 175, 251
publicity, 183, 252
reduction of rates by law, sustained, 182
reduction of rates by law to squeeze out water in capitalization, 179, 180-3
taxation of face and market values of stock and bonds to squeeze out
water, 179, 181, 252, 521
pub. ownership secured without debt or taxation, 184
French telephone franchise, 184
7. statutes as to franchises, local consent and grant, 448-9, 454-5, 459, 460.
461, 462 table, 539
as to pub. ownership, 440-2, 447-9, 539
See HOME-RULE (13) (14) (15)
THIRD AVENUE CABLE LINE. NEW YORK
overcapitalization of, 49, 50
TIN PLATE TRUST
extraordinary profits of. 39
TOWN-MEETING SYSTEM
excellent results. 264
people cling to it, 266
Brookline, 266-7
wins out agust county system (111.), 268
TRAFFIC
' greatly increased under pub. ownership, 14G-9
water consumptn, 22, 146-7, 192-5
gas, 148
street railways,. 148, 198
telegraph, 148, 200-1
TRIBUNE MILLIONAIRE LIST, 91-2
TRUSTS AND COMBINES
might be checked by taxing them at specially high rates, 527
might be controlled thru public ownership of railroads, 527-8
argument for. 527
580 INDEX OF SUBJECTS.
TRUSTS & COMBINES continued
extortionate charges of, wire nail, coal, linseed oil, whiskey, sugar,
standard oil, 32-33
exorbitant profits, 39, 78, 79
Boston gas trust, inflated capitalization, profits, etc., 44, 78, 79
UNEARNED INCREMENT, 528
UNITED GAS IMPROVEMENT CO.
reported offer of 50-cent gas to Passaic, N. J., plus a large bonus for the
franchise, 523
fraudulent lease of Philadelphia gas works, 75, 249, 306-7, 523
VESTED INTERESTS
objectn to pub. ownership, 238
VESTIBULES
often refused by street railways till compelled by law to give them, 98
VOTING
machines, 488-490
by preferences, 484-7
WAGES (see EMPLOYEES)
above competitive rates in pub. works, are paid for the lifting of labor not
for the production of light,, etc., 250
WARS
direct legislate tends to prevent, 298, 369
would be few if people voted them, 298, 369
WATER
1. private charges excessive, 20, 122
cost of operatn in various works, 21
profits of co.'s sometimes very high, 20-2, 33
Indianapolis, 20
San Francisco, 21
2. average daily consumptn in various cities, 21
inferior service of private co.'s, pipes only where they will pay dividends,
65 (compare 155)
3. withholding of data by private co.'s, 22
free to men of influence (discriminatn), 69
fraud in obtaining franchise or securing lease, 75
effort to capture Philadelphia works, 528
4. competitn undesirable and impracticable, 100-1
5. benefits of public water supply, Prof. Ely on, 22
public works afford low rates and low cost, 119-125, 128 (compare 20, 122)
case of Randolph, N. Y., 22
Schenectady, Auburn, Syracuse, 120
facts from Baker's Manual of Amer. Water Works, 120-4
private co.'s charge 43 per cent, more than public, 122, 20
still more difference between private rates and real cost of public
service, 123 table
Brookline, Hyde Park, Milford, etc., 124
London and Glasgow, 125
more water for less money in public plants, 22, 192, 195
16 reasons for economy of pub. ownership, 136, 140
co-ordinatn of water service with other industries under public owner-
ship, 142
savings by public operatn, 143
profits of public works, 143-4
extensn of pipes under pub. ownership, 145 (compare 65)
consumptn larger under public ownership. 22, 146-7, 184 et seq t
pub. and private works in N. Y. state, 192-5
pub. works show larger consumptn per family, 192 et seq.
greater efficiency, 192-4
greater extensn of lines into suburban districts, 194
better fire protection, 195
cheaper service, 195
large savings, 195
growth of pub. ownership, 203-4, 531 (Eng.)
-6. methods of securing pub. ownership, 175, 251
publicity, 183, 252
reductn of rates by law to squeeze excessive value out of capitalization,
179, 180-3, 252, 521
reductn of rates by law sustained, 183
taxatn of face and market values of securities to squeeze out excess,
179, 181, 252, 521
pub. ownership secured without taxatn or debt, 184
municipal home-rule as to, 436, 462 (see HOME-RULE)
constitutional provisns, 431, 462, S. Car., 448, Ky.. 449
statutes about franchises and pub. ownership, 436 table
462 table
as to local consent and grant, 454-5, 462 table, see HOME-RULE
(13) (14)
as to sale at auctn, 449-452
as to pub. ownership, 438-449, 539
as to direct legislate, 456, 280-3
see STATUTES, HOME-RULE (15), DIRECT LEG. (D)
WATERED STOCK (see OVERCAPITALIZATION)
INDEX OF SUBJECTS. 581
WATER WORKS
of New York State. 192-5
WEALTH
concentratn of in cities, 9
concentratn of, in hands of monopolists, 90-92
dangerous to free institutions, 92-3
(opinion of Chief Justice Sherwood, Senator Hoar and Daniel
Webster, 92-3)
distribution of, in U. S., 91-2
diffusion of, aided by public ownership, 168-9
aided by progressive taxatn of incomes, etc., 169
WEST END STREET RAILWAY (now controlled by the Boston Elevated)
overcapitalization, 45, 52
cost of duplicating, 52
erroneous reports of operating cost, 60
lobbying, Mass, investigatn, 73
WESTERN UNION TELEGRAPH CO.
rates excessive, 31
profits excessive, 39
John Wanamaker's statement, 39, 75-6 n
inferior service, 65, 151, 152 n
unjust discrimination, 69, 81 n
interfering with freedom of newspapers, 81 n
resort to liberty, 75 n
frauds of, 81 n
violations of laws, 81 n, 86
suppression of inventions by (Wanamaker's statement), 94
stocks material for gambling, 90
contrast between employees of, and English Postal Telegraph employees,
162, 163-4
contrast between employees of, and U. S. mail carriers, 162-3, 164-5
WHISKEY TRUST
extortions of, 32
WIRE NAIL TRUST (see NAIL TRUST)
WOMAN SUFFRAGE (see SUFFRAGE)
WORKINGMEN (see EMPLOYEES)
labor's interest in pub. ownership, 161
under pub. ownership, are co-partners. 160. 162
American Fed. of Labor Resolution on Pub. Own., 165, 229
no adequate representative in Congress, 356
THE CITY FOR THE PEOPLE
MUST BE FREE FROM ALL PRIVATE MONOPOLY
IN GOVERNMENT AND INDUSTRY;
A CITY UNDER SUCH MONOPOLIES IS NOT A CITY
FOR THE PEOPLE
BUT A CITY FOR THE MONOPOLISTS
INDEX OF PERSONS AND PLACES.
Abbott, Rev. Lyman
on direct legislation, 291.
on municipal ownership of st. rys.,
213, 533.
Adams, Gbas. Francis, Jr.
Chapters of Erie, 81 n, 539
multiplicity of laws, 539
Adams, John Quincy
on the will of the people, 361
Adams, Sir Francis
on referendum in Switzerland, 351,
378
Addicks, J. Edw.
Bay State Gas transactions, 77-80
Adler, Felix
municipal ownership st. rys., 213-4
Alameda, Cal.
direct legislation in, 279
municipal electric plant in, 243, 244
Albany, N. Y.
street railway cost, 51
waterworks, 204
Alexandria, Va.
public gas plant, rates and cost, 126,
127, 145
lack of progressiveness, 170
Allegheny, Pa.
electric lights, 130, 131, 133, 134, 135,
170, 246
city loans, interest on, 139
Alton, 111.
water charges in, 123
consumption in. 124
Ames, la.
electric lights, cost of, 133
Anderson, Ind.
electric plant in, 243
Andrews, Dr. E. B.
N. P. O. League, member of, 218
Arizona
referendum in, 282
Arkansas
referendum in, 273, 275, 284
legislature, corruption in, 332
Arrowsmith, Mr.
on referendum, 324
Auburn, N. Y.
water rates reduced by public owner-
ship, 120
comparison of private and public
ownership, 128, 140
gas, comparison of public and private
ownership, 128
Aurora,
water charges in, 123
electric lights, cost of, 129, 130, 131,
133, 134
and water works together, 142
Australia,
referendum in, 288
street railways in, 189, 208
telephones, public ownership of, 207
Austria, telegraph rates in, 32 u
telephone in, 207
railways of, 208
methods of, 189
Badger, J. S.,
on electric traction, 60
Baker, M. N.,
jnunicipal monopolies, chap, on water
works in, 75, 203
table of water rates, 120-121
on advantages of city ownership, 137,
142, 234
Manual of American Water Works, 20,
122, 123, 144
on decisions in N. Y. and Pa., 178 n
Baltimore,
street railway earnings, growth of, 38
gas companies, union of advanced
prices, 102
rates compared with Philadel-
phia, 126
date of. 205
merit system in, 536
Bangor, Me.
electric lights, cost of, 129, 130, 136
Barrett, Chief.
on electric light, 135, 250
Batavia, 111.
water works and electric lights co-
ordinated, 142
Bay City, Mich.
electric light, cost of, 129, 130, 132
Belfast,
street railway fares, 30, 31
water works in, 204
Belgium,
telegraph, rates in, 32 n
telephone co-ordinate with, 143
service in, 138
public ownership of, 208
telephones of, 206, 207
railways of, 208
local option of cities in, 483
Bellefontaine, Ohio,
gas rates in and cost, 126, 127 ,145
spoils system in, 234
INDEX OF PERSONS AND PLACES.
583
Belmont, Mass.,
water supply of, 142
Beinis, Prof. E. W..
on gas, cost of, in New York, 23
in England and U. S., 23, 43
gas capitalization, 45
Philadelphia gas plant, 75, 249
Mass. Gas Commission, 109, 152
Virginia gas plants, 126
gas works, 144 n-145, 148, 151, 170,
234-5, 241, 242
Wheeling gas plant, 158
on street railway bribery, 73
fares, 82
report of Mass, special committee
on street railways, 223
Mass. Ry. Commission, 112
on electric lighting, 135
on lighting companies, and political
corruption, 94. 140
on municipal corruption, 154
on public ownership, 202, 206, 532-3
on Francisco's statistics, 246
Berlin,
street railways in, 30, 185
electric light contract, 184-5
Berne, Switzerland,
direct legislation in, 257
Birmingham, Eng.,
compared with Boston, 266
public gas works, 205
home rule in. 406
Blackpool, Eng.,
street railways in, 206
Blacksburg, Va..
direct legislation in, 279
Bliss, Rev. W. D. P.,
on Cleveland strike, 95
Bloomington, 111.,
water works and electric light, co-
ordinated, 142
economy of electric plant, 228
Boston,
gas, price and cost in 1892, 23, 85
Bay State Co., 23, 35, 44-5, 58-9,
77-81, 84. 107
Increase in watered stock of, 44-5
political bribery by Co., 76
union of cos. with N. Y. and Chi-
cago. 101
inefficiency of regulation of cos.,
107-8, 110
president's salary, 140
Capt. White on consolidation of
cos., 101
street railways, operating cost of, 29,
60, 61
fares, 31
profits, 37
cost of construction, 52, 53, 54
earnings of, 38
Boston (street rys) continued
capitalization of, 45
money paid to influence legisla-
tion, 64. 73
great strike on, 94
recognize employees' associations,
99
saving by consolidation, 101
rates compared with Glasgow,
115
compared with Toronto, 186
passengers compared with Glas-
gow, 198
public ownership of, 206
electric lights, rates and losses by ex-
tortion of cos., 25-7
evasion of tax laws, 85
report of Com. of Common Coun-
cil, 26. 228
profits, 36
ex-Mayor Matthews on, 136
telephone service, 66
overhead wires, danger of, 67
operations of Standard Oil Co., 87-8
legal services for L, Road, cost of, 137
city loans, interest on, 139
water supply, 142, 204
contrasted with Brookllne and Birm-
ingham, 266-8
referendum in, 272, 535
value of, 304
home rule in, 387
Bradford, Pa..
water charges in, 123, 124
Bradley, Senator James
on multiplicity of laws, favors refer-
endum, 320
Braintree,
street railways, operating cost of, 29 n
electric lights, cost of, 133
city loans, interest on, 139
Breidenthal, Hon. John, 218
Bridgeport, Conn.,
account of trolley accident in, 67
Brockton, Mass.,
town meetings in, 266
Brookline,
electric light rates and losses by ex-
tortion of cos., 25, 27
water works, public plant, 124
contrasted with Boston. 266-8
Brooklyn,
electric light rates and losses by ex-
tortion of cos., 25, 27
street railways, operating cost of, 29
capitalization of, 49
cost of construction, 53
political bribery by, 74
. great strikes on, 94-5, 96-7
low rates on bridge road, 115-6
compared with St. Louls^ 116-7
safety of, 150
584
INDEX OF PEESONS AND PLACES.
Brooklyn continued
Sugar Trust profits, 39
capitalization of, 56
danger of overhead wires, 67
gas, price unaffected by reduction, 85
" co.'s owned by Standard Oil, 87
oil prices during 1892, 88
Bridge, employees of, 160
progresslveness of, 170, 206
Navy Yard, Civil Service in, 471
Brooklyn Bridge,
public railway on, lower charges and
higher wages than private railways
In N. Y. and elsewhere, 115, 116
compared with St. Louis Bridge, 116,
table
railway accidents on, less than on pri-
vate systems, 150
excellent treatment of employees, 160
Brown, A. A..
on direct legislation, 289, 351-2
Brown, E. C.,
on gas capitalization, 43 n
Gas Directory, 126
Bryan, W. J..
on direct legislation, 288, 292
Bryce,
on Gas Ring of Philadelphia, 72
on town meetings, 266
on direct legislation in the U. S., 379
on political corruption, 496
Buckle,
on origin of reforms, 305
Buckley, Wash.,
direct legislation in,. 279
Budapest, Hungary,
street railways in, 190
operating cost of, 29
fares, 30, 190
fenders, 68
plan of, 190
Buffalo,
street railway fares, 27,. 28y 30
operating cost of, 28, 29, 60
oil rates in 1882, 88
voting machines in. 490-491
Burkli, Herr Carl.
on referendum in Switzerland, :54.">, 351
Bushnell, Gov^.
Commis'sioH to formulate code for city
administration, 538-9
Butler, Sen. Marlon.
on direct legislation, 360
California,
compelled to buy oil from oil com-
bine, 88
direct legislation in,, 269, 272, 275, 284,
288
water works in. 204
municipal home rule- In, 257, 415, 418,
424, 435
California continued
city may own street railways, 440
telephones, 440, 447
lighting plants, 447
street railways, 447
freehold charter amendment, 510-11
Cambridge, Mass.
electric light rates and losses by ei-
tortion of cos., 25, 27
gas companies in, 43 n
city loans, interest on, 139
referendum in, 273
Canada,
water charges in, 122
water works in, 203, 204
telegraph in, 207
referendum in. 343
Capen, Pres..
leader in civil service reform, 471!
Carlyle, Thos.,
on self-interest of representatives, 312
on "mob-rule," 380-1
Charlottesville, Va.,
gas, reduction of rates upon public
ownership, 125. 127
rates in and cost, 126, 127, 145
spoils system, ' 234
private electric plant, 142
Chicago,
gas, cost and price, 23
profits In, 54
union of companies, 101
capitalization compared with
Boston, 106
Mutual Gas Co., 43-4
street railways, fares of, 28
operating cost of, 28, 2!). GO
capitalization of, 4.~>-,s, r>n
earnings of. 38
cost of construction. 51. 53
political bribery by. 7:',-4
de-fiance of law by. 81-2
taxation of cars, 84
union of 101
strike on, 106
telephones, service, 66
offer by capitalists to decrease
rates, 117
Standard Oil Co., operations of, 87
discrimination of railroads to, 88
electric lights,, cost of, 133^ 139, 228
wages, 161
progressiveaess. 170. 240-251
water works of, 144, 204
"White City." 172
Clark, Wm. A.
elected to Senate by bribery. 537-8
Clay, Henry.
on a national telegraph, 212
Cleveland, G rover.
elected by a minority, 485.
IJTDEX OF PERSONS AND PLACES.
585
Cleveland.
street railway earnings, growth of, 38
capitalization, 4S
cost of construction, 52
bribery of councils by, 71
resisting laws, 82
taxation of, 82
great strikes on, 94, 96
gas case, 35, 76, 84
gas bills larger after reductn of rates
than before, 85 n
affected by regulation, 126
oil combine, freight agreements with
railroads, 88
raising of prices by, 88
Coler, Bird S.
on municipal ownership, 53&
and debt limit, 539
Colorado,
attempts by oil combine to shut out
oil fields in, 88
direct legislation in, 269, 274, 284
referendum on franchises, 456
municipal public works, water, 53&
lighting, 539
Columbus, Ind.
water works and electric light co-
ordinated, 142
Columbus, Ohio.
Standard Oil Co. owns gas cos. in, 87
Commons, Prof. John R.
on municipal ownership of electric
light, 65
on electric lighting, 135, 151
on municipal corruption, 154
on Francisco's statistics, 246
N. P. O. League, member of, 218
analysis of Tribune millionaire list,
91
Distribution of Wealth, 92
on Proportional Representation, 482
Connecticut.
water charges in, 120, 121
town meetings in, 268
automatic ballot machines in, 489
Conwell, Rev. R. H.
N. P. O. League, member of, 218
Cooley, Justice.
on inherent right of local self-govern-
ment, 393. 394
equality in taxation means equality
of sacrifice. 253
Cowdery, E. G.
on gas business. 241
Cowles.
A Gen'l Freight and Passenger Post,
81n
Crane, Gov.
on home rule, 536
Creswell, Postm. Gen'l.
telegraph rates, TJ. S. as compared
with Europe, 31 n
Cross, Henry M.
on large size of gas bills in Boston
in 1892, 85n
Dakota.
twp. local option, 269
referendum in, 275, 284
(See South Dakota.)
Danrers, Mass.
electric lights, cost of, 133-134
Danville, Va.
gas, reduction of rate under municipal
ownership, 125
rates in and cost, 126, 127, 145
spoils system in, 234
Dayton, Ohio.
gas rate in, 125
Delaware.
constitutional amendments in, 257
direct legislation in, 284
Denver, Colo.
water works in, 2O3
Depew, Chauncey M.
charged with violation of law thru
use of stoves on railways, 94
Des Moines.
water rates, 62
corporations, resistance to laVs by. 84
electric light offer, 188
Detroit,
electric light, cost of, 130, 131
poles used by other companies,
142
service of, 151, 170
Commissioner's report, 157-8
civil service in 473
water works in, 204
referendum, value of, 304
home rule in, 405
D. L., charter law of, 507
street railways, fares, 28, 3O
profits, 36-7
earnings, 38
comparison of cost with Boston,
60
bribery of councils by, 71
strikes on. 94. 9
laws concerning, 177
value of. 180
public ownership of, 20C
efforts to kill low fare experi-
ment, 82
Dicey, Prof. A. V.
on referendum, 286
Dillon, Judge.
on nature of municipal corporations,
' 390, 408
Dixon, Judge,
on municipal heme rule in Wise., 409
686
INDEX OF PERSONS AND PLACES.
Doherty, Mr.
advice to Ohio Gas Light Ass'n by, 76
Dow, Alex.
on electric plants, 135, 167-8
Du Bois, Jas. F.
on Switzerland railroads, 230
Dublin.
street railway fares, 31
water works in. 204
Duluth, la.
gas, reduction in rates under muni-
cipal ownership, 127
private electric plant, 142
referendum in, 272
Dunkirk, N. Y.
electric lights, 134, 135, 136, 170
city loans, interest on, 139
water works and electric plant, co-
ordinated, 142
Edinburgh.
street fallway fares, 31
Elgin, 111.
water charges in, 123
electric lights, cost of, 129, 130
Elkhart, Indiana.
telephone independent of Bell, 119u
Ellicott, Edw. B.
on electric plants, 251
Elliott, Hon. M. J.
on direct legislation, 284-5
Ely, Prof. R. T.
on benefits of pub. ownership of
water works, 22
on telegraph service in U. S. as com-
pared with Europe, 65, 151
on competition among gas companies,
lOln
on political corruption, 155
on industrial reform, 157
on railway accidents, 150
on municipal street railways, 214
on public ownership, 221
Elyria, Ohio.
telephone Independent of Bell, 119n
England, (see Great Britain)
Europe.
telegraph rates as compared with U.
S., 31
telegraph service, 149
telephone service as compared with
U. S., 65. 66
Standard Oil prices lower than In
America, 88
gas works in. 205
public vs. private enterprise in, 241
Fairfield, la.
electric light, 129, 130, 131, 132, 243
Fall River.
electric light rates and losses by ex-
tortion of cos., 25, 27
gas companies in, 43n
Fassett Committee.
investigation of municipal government
Field, David Dudley.
on enactment of local laws, 318
Fiske, Prof. John,
on town meetings, 266
Civil Government, 269
Florida.
gas and electric light law, 447
referendum on franchises in, 4."it
Flower, B. O.
on Brookline, 267
Foote, Allen R.
on municipal ownership, 141, 159
Fort Scott. Kansas.
telephones, co-operative plant in, 118
Foster, H. A.
admissions on public ownership. 145
242
figures on electric light, 242, 243-5
Fostoria, Ohio,
control of gas co. by Standard Oil co.,
88
France,
telephones, rates compared with U. S.,
31
franchise of, 184
reduction of rates by public
ownership, 118
taking by the public, 207
telegraph, rates compared with U. S.,
31, 32
public ownership of, 207-8
railways of. 208
municipal home rule In, 406
Francisco, M. J.
misrepresentations as to public owner-
ship of electric light, 245-6
Fredericksburg, Va.
gas, reduction in rates under munici-
pal ownership, 127
private electric plant, 142
Garfleld, Gen. J. A.
on disproportionate representation.
476-7
elected president by a minority, 485
Gaskill, J-udge.
exposure of N. J. gerrymander by, 477
Gates, Dr. G. A.
on direct legislation, 293
Gaynor, John A.
on telephones in Grand Rapids, Wise.,
119
Gaynor, Justice, Wm. J.
Brooklyn street railway strike, action
in, 956
letter on, 96-7
Georgia.
water charges, 120
referendum in, 273, 275
disproportionate representation in, 479
INDEX OF PERSONS AND PLACES.
587
Germany,
telegraph rates in, 32n
co-ordinated with telephone, 143
public ownership of, 207-8
telephone service of, 146
public ownership, 207
railways of, 203. 208
gas plants in, 205
municipal contracts in, 222
municipal rule in, 406, 407
Gladden, Rev. W.
N. P. O. League, member of, 218
on monopoly, overcapitalization and
public ownership, 532
Gladstone, Wm. E.
the secret ballot, 500
efficient corrupt practices act, 500-1
gov't loans to Irish tenants to enable
them to become home owners, 501-2
Ql&agow.
municipal enterprises, 195-199
city farm, ferries, steamers, wash-
houses, slaughter houses, etc., 196
results, 196
model lodging houses, 196
public baths and Boston baths, 196
public laundries, 197
public tramways, 197
operating cost of, 29, 60
fares, 30. 31, 115. 148
service, 151
employees, 160-1
progressiveness, 170
date of operation, 206
conditions of labor improved
under public ownership, 197
fares greatly reduced, 197
service improved, 198
traffic greatly increased, 198
profits go to public treasury,
198
change of purpose from dividends for
a few to service for all, 199
a business owned by the people is
more apt to be run in the interests
of the people than a business that is
owned by a Morgan or Rockefeller,
syndicate, 199
water works in, 125
gas works in, 205
telephone in, 207
municipal liberty in, 406, 407
effect In purifying govt, 406
Gompers, S.
on direct legislation, 292
N. P. O. League, member of, 218
Goshen, Ind.
water works and elec. lights co-ordin.
ated, 142
Gould, Jay.
on power of Western Union, 174
on political bribery by the Erie Ry, 495
Grand Rapids, Wise.
telephones, co-operative plant, 119
Gray, Prof. John H.
on gas capitalization, 45n
on Mass. Gas Commission, 109, 110, 111
Great Britain.
gas, cost of compared with U. S., 24
English rates in public plants, 127
profits of public plants, 145
telegraph, cost of services, 32, 148
rates compared with U. S., 31
under private ownership, 146,
171
reduction upon pub. ownership,
117
experience, 199, 202, 208
telephone co-ordinated with, 143
service of 148, 151, 152
telephones of, 206
Eng. rates compared with U. S.,
31
under private ownership, 146
railroads of, 240
street railways in, 188, 198, 206
Eng. law on, 180
municipal home rule in, 406
municipal ownership in, 530-1
referendum in Eng., 288, 343
water works in Eng., 204, 531
political history of Eng., 498 et seq.
Greenough, M. S.
on public gas plants, 247
Griggs, Gov.
on restricting volume of legislation,
318
Gunton, Prof. Geo.
on direct legislation, 293-4
Hale, Dr. Edw. E.
on public ownership, 531-2
X. P. O. League, member of, 218
Hamburg, Ger.
street railway contract, 185
Hamilton, O.
gas, competition between public and
private companies, 102, 125
rates and cost of. 126, 127, 144
court decision concerning, 178
spoils system in, 234
Hancock, N. Y.
force used at by Standard Oil Co. to
prevent competition, 88
Hanover.
street railways, operating cost of, 29n
Harrisburg.
gas, prices advanced upon consolida-
tion of cos., 102
city loans, interest on, 139
Hart, Mayor,
.on municipal home rule and the merit
system, 536-7
Haverhill.
gas case, 35, 523, 539-542
588
INDEX OF PERSONS AND PLACES.
Haynes, Prof. Geo. H.
on Representation and Suffrage, 264
Henderson, Ky.
gas, reduction of rate nnder municipal
ownership, 125
private plants of State compared
with, 126
cost and rates in, 127
Herron, Prof. G. D.
on direct legislation, 293
member N. P. O. League, 218
Hickok, H. T.
on reduction of price of gas, 85n
Higgins, Edw. B.
on street railway profits, 37
cost of construction, 46n, 51, 53
security of investment in, 56
Higginson, Col. T. W.
on public ownership, street railways,
etc., 239-40
member N. P. O. League, 218
Hoar, Senator,
efforts toward investigation of oil
combine, 89
words of, about the power of the
monopolies to overthrow govern-
.ment, 93
Holmes, O. W. (Chief Justice)
on municipal fuel yards, 175 : 6.
Holt, Byron W.
on the trust as a law-breaker, 87-9
Holyoke, Mass.
water works, public plant in, 124
gas, public plant voted for, 127
Hopkins, Dr.
on political power of corporations, 71
on street railway power to resist tin-
law, 82
capitalization in Cleveland, 48
cost of construction, 52
Howells, Wm. D.
on direct legislation, 291
on municipal street railways, 214
member N. P. O. League, 218
Huddersfield, Eng.
tramways of, 161, 206
Hyde Park, Mass,
water works, comparison with Brook
line, 124, 142
Idaho.
referendum in, 269, 274, 284
Illinois,
water charges, comparison betweer
public and private, 122, 123, 124
town meetings in, 268
referendum in, 284, 288
street railways, capitalization of, 181
water works, 204
legislature, closing scenes of, 332
local option for cities in, 483
Indiana.
law requires vestibules on street cars
in, 98
public water works, 120, 188
referendum in, 284
municipal ownership law, 51:;
street railways,
capitalization of 181
fares of, 183
city may own, 440, 448
legislature, disgraceful scenes in, 332
cities may own telephones, 442
lighting plants, 442
gerrymandering in, 476
automatic ballot machines in, 489
Indianapolis.
water works, 20, 144, 203
corporations, resistance to laws by, 84
gas, low rate compared to Standard
Oil gas interest, 125
Iowa.
direct legislation in, 269, 284
referendum on franchises in, 456
street railways, capitalization of, 181
water works in, 204
public lighting plants. 444
disproportionate representation in, 478,
479
Irwin, Hon. R. W.
direct legislation, 285
Ithaca, N. Y.
working library for councils, 191
Jackson, Andrew.
on the direct legislation principle 293
on public ownership, 211
Jacksonville, Fla.
pub. electric light plant, 132, 5'-'::
James, Prof. E. J.
on gas capitalization, 43n
discussion in Pubs, of Econ. Asso.
on gas competition, 101n-102
James, Henry.
"The British Corrupt Practices Act,"
501
Jamestown, N. Y.
electric lights, cost of, 132
.Jefferson, Thos. J.
drafted referendum provision, 265
on the town meeting, 265-6
on direct legislation, 295
on public works, 211
on the nature of republican govern-
ment, 295, 384
on democracy, 385
Jenks, Prof. J. W.
on Money in Politics, 496
on Suppression of Bribery in Eng.,
501
Jersey City,
oil prices in 1892, 88
election frauds in, 4i4
INDEX OF PERSONS AND PLACES.
589
Jones, Mayor Saui'l.
on citizenship, 150-7
on municipal ownership, 219
N. P. O. League, member His
platform of during campaign for gov-
ernor, 368
message on contract system, free em-
ployment bureau, etc., '497
on veto power, 532
Kansas.
direct legislation in, 269, 284
public plants, water, 447
lighting, 447
municipal public ownership in, 458-9,
514
disproportionate representation in, 479
governor elected by a minority in 1895,
485
Kansas City,
gas, 24
street railways, cost of operating, 29n
cost of construction, 51, 53
free passes on, 68
assessment of cars, 83-4
electric light companies, political brib-
ery by, 74
referendum in, 272
freehold charter of, 416, 418
Keeler, Bronson.
on chaotic state of gas charges, 22
article in Forum, Nov., 1889, lOln
Kentucky,
gas, rates of private plants compared
to public, 126
town meetings, i_'(iS
direct legislation in, 269
street railways, capitalization of, 181
cities may own telephones, 441
water works, 449
sale of city franchises in, 449
disproportionate representation in, 478
Kirke, Edmund.
on the referendum, 296
Lansing, Mich.
electric lights, 132
La Salle, 111.
water charges in, 123, 136
water works and electric light co-or-
dinated, 142
Lawson, J. D.
on power of Penna. Rd. over Pa.
Supreme Court. 86
Lawson, Thos. W.
on cost of charter of Mass. Pipe line,
77
Lecky, Prof.
on direct legislation, 293
Leeds, Eng.
street railways in, 206
Legate, H. R.
on gas rates, 85 n
on public water works, 125
Leicester, Eng.
gas works in, 205
Leipsic, Ger.
lighting contract in, 185
Lewiston, Me.
water charges in, 123
electric light rates, 129, 136
Lexow, Sen.
investgation of N. Y. Police, 4!C.
Lincoln, Abraham.
on referendum princple, 295
elected by a minority, 485
Lincoln, Neb.
decision concerning street railways in,
183
Lisbon, la.
electric lights, cost of, 135
Livermore, Mary A.
N. P. O. League, member, 218
Liverpool.
street railway fares, 31
owned by city, 206
Lloyd, H. D.
on Sugar Trust, 39n, 63
on Standard Oil Company, 56, 63,
81n, 87n-89, 151
on railroad discriminations, 69
on defiance of law by railroads, 86 n,
87n
on direct legislation, 291
on New Zealand, 169
on municipal street railways, 214
member of N. P. O. League, 218
Lobinger, C. S.
constitutional law, 271n
on tendency toward direct legislation,
369
Logansport, Ind.
pub. electric light plant, 133, 135
London.
tramways, fares of, 30, 31, 206
offer, 189
lines owned by pubic, 189
water works of, 125, 204
Lorimer, Dr. Geo. C.
N. P. O. League, member of, 218
Los Angeles, Cal.
referendum in, 272
freehold charter in, 419
Louisiana.
referendum in, 275, 284
municipal home rule in, 415, 41 ;. i:;."i
freehold charters, 257
sale of city franchises, 449
Lowell, Mass.
electric light rates and losses by 'x-
tortioa of cos., 25, 26
gas company, capitalization of, 43n
street railway capitalization, 4.~i
Luxembourg.
telephone service in, 118, 146
public ownership of, 207
590
INDEX OF PERSONS AND PLACES.
Lynn.
street railways, capitalization of, 45
Macaulay, T. B.
prediction concerning industrial op-
pression, 328. 520
MncVlcar, Mayor,
on electric light, 62
public ownership, 220-1
Maine.
water charges, 120, 121, 123
town government of, 265, 268
direct legislation in, 284
telephones, towns may own, 440
disproportionate representation in, 478
Manchester, Eng.
street railways in, 188
gas works in, 205
Manhattan, Kans.
telephone independent of Bell, 119n
Marks, Wm. D., Pres. Edison Elec. Co.
testimony as to cost of electric arcs,
26n
Marshall, Justice.
on monopolies, 168
Marshalltown, la.
electric lights, cost of, 129, 136
co-ordinated with water works,
142.
Martiusville, Iiid.
water works and electric light co-or-
dinated, 142
Massachusetts,
gas companies of, 43, 77-80, 148, 151
commission of, 107-111
street railways, capitalization of, 46
wages, hours, vestibules, etc., 98
commission, 112
water works, charges, 120-1
comparison between public and
private, 122, 170
plants of, 204
telephones, service in, 65
towns may own, 440
regulation of monopolies in, 107-8
direct legislation in, 264-5, 273, 284.
288
referendum on franchises in, 456
towns of, 266, 268. 285
public works, grants of, 180-1
lighting, pioneer law, 229
monopolies in, 94
statistics of. 243
public plants, law on, 446-7
political corruption in, 308, 332
local self government In, 398
selectmen of towns may grant tele-
graph rights in, 461
multiplicity of statutes in, 466
disproportionate representation in,
478, 481
Massachusetts continued
automatic ballot machines in, 489
fuel yard decision, 175
Matthews, C. B.
fight with oil combine, 89
Matthews, Mayor N.
on gas profits, 35n
Bay State Gas case, 79, 80, 84, 44
on electric light charges, Kit;
McCrackan, W. D.
on direct legislation, 286, 345
McEwan, Hon. Thos.
on direct legislation, 285, 288, 375
Mcllhenny, John.
opinion on gas profits, 35
Mead, E. D.
leader in Civil Service reform, 473
N. P. O. League, member, 218
Medford, Mass.
water supply of, 142
Meriwether, Hon. Lee.
on street railway assessments, 83
capitalization in St. Louis, 48
Michigan,
law requires vestibules on street cars,
98
regulation of corporations in, 108-109
town meeting method, 268
referendum in, 275, 288
on franchises, 456
initiative 011 franchises, 4.~>t;
"internal improvements," (Detroit
st. ry. case), 176-7
street railway capitalization, 181
water works in. 204
political corruption in, 308
legislature misrepresents the people,
332
doctrine of local self-government,
393-6
public lighting plants, 443
disproportionate representation in, 480
automatic ballot machine in, 489
Michigan City.
public electric light plant, how cap-
tured by private company, 74
direct legislation In, 284
Middleborough, Mass.
gas, reduction of rates under muni-
cipal ownership, 127, 144
Milan.
street railway fares, 30
agreement with, 189
Milford, Mass.
street railways, operating cost of, 29n
water works, comparison with Brook-
line, 124
Mill, John Stuart.
equality in taxation is equality of sac-
rifice, 253
INDEX OF PERSONS AND PLACES.
591
Mill, John Stuart continued
on taxing of future unearned incre-
ment of land value, 528
on monopoly taxes, 531
Mills, B. Fay.
on direct legislation, 292
X. P. O. League, member, 218
Milwaukee.
gas company, capitalization of, 43n
electric light companies, political brib-
ery by, 74
street railways, deal with employees
thru employees association, 99n
capitalization of, 48
cost of construction, 51
Minneapolis.
street railways, political bribery by, 74
referendum in, 272
electric light offer, 185
Minnesota,
street railways, vestibules required on,
98
capitalization of, 181
city may own, 440, 447
referendum in, 274, 280, 284, 288'
on franchises, 456
freehold charters in, 257, 415, 435
constitutional amendments, 509-
510
local option by township, 269
water works in, 204
municipal government in, laws on,
401, 458
municipal ownership law, 514
telephones, cities may own, 442, 447
public lighting plants, 447
automatic ballot machines, 489
Mississippi.
referendum in, 273, 284
Missouri.
constitutional amendments, 257 n
local option by county, 269
on direct legislation, 511-2
referendum in, 274, 284
street railway capitalization, 181
city may grant franchise, 534
municipal home rule in, 415, 416, -422,
435
sale of city franchises in, 449
Moffett, S. E.
on politilal bribery, 310
on "Mixture of Issues," 315-7
on representative system, 383
Monnett, Hon. Frank S.
Standard Oil case in Ohio, bribery,
burning of acct. books, etc., 527
Montana.
direct legislation in, 269, 275, 284
water works in, law concerning, 178
purchase of U. S. Senatorship in, 537
Montreal,
street railways, operating cost of, 29n
profits of, 37
Moses, Prof. B.
on Swiss government, 280
Nebraska.
local option by county, 269
street railway capitalization, 182
water works in, 204
municipal home rule in, 415
initiative and referendum on fran-
chises, 456. 457
referendum in, 274, 280, 284, 288
automatic ballot machines in, 489
Nevada.
direct legislation In, 269
telephones, counties may own, 539
Newark, Del.
electric lighting, cost of, 135
Newcouib, Prof. S.
on telegraphic service In U. S. as com-
pared with Europe, 65
New Haven.
street railways, operating cost of, 29n
water works in, 203
New Jersey,
street railways, vestibules voluntarily
used on, 98
referendum in, 272, 284, 285
laws, number passed in, 318. 466
cost of, 334-5
on municipalities, 402
gerrymander of 1892, 354, 477
political corruption in Jersey City, 494
New Orleans, La.
referendum in, 272-3
water works in. 203
sale of franchises, 449
New York City,
gas, investigation in 1885 and 1S97,
22. 23
profits in, 34
union of companies, 101
advance of rates under consolida-
tion, 102
capitalization compared with Bos-
ton, 108
comparison with Philada. rates,
126
street railways, earnings of, 38
capitalization of, 45, 49, 50, 51
cost of construction, 50, 52-5
cost of operating, 28-9, 60
false statements in Manhattan L.
Rep't, 61
heating the cars, 64
political bribery by, 71, 74
resistance to laws, 82
safety of, 150
vestibules on, 08
wages on, 98
LNDEX OF PERSONS AND PLACES.
New York City continued
men dare not join unions, 99
L roads, union of, 101
low rates on bridge, 115
compared with St. Louis, 116
passengers, 98
electric lights, charges, 25-6
poor service, 64, 151
profits, 36
telephone service, 6G
danger of overhead wires, 67
oil charges in, 88
city loans, interest on, 139
referendum In, 272, 273, 280, 284
water works, law on pub. constructn,
178
charges, 120, 144
history of, 204
home rule in. 429
Greater, charter of, 280, 452
disproportionate representation in, 481
New York State,
water works in, 192-5, 204
legislature, reduction of laws by, pos-
sible, 318
composition of in 1895, 331
Fassett Comm. on municipal govern-
ment, 400
sale of city franchises in, 449-452
disproportionate representation in, 478,
479
automatic ballot machines in, 489
town meeting method, 268
New Zealand.
stopping concentration of wealth, 169
progressive taxation and pub. owner-
ship, 169
North Carolina.
direct legislation in, 284
North Dakota.
cities may erect fire signals, 440
telephones, city councils may grant
right of way, 539
Norway,
telephone service in, 65-66, 117-118,
146, 207
co-ordinated with telegraph, 143
telegraph in, 207
railways of, 208
Nottingham, Eng.
public gas plant, 145, 205
Oakland, Calif.
home rule in. 419
Oberholtzer, Dr. E. P.
on referendum, 271, 275
on municipal home rule in California,
418
Ohio,
political corruption in by Oil combine,
89
law requires vestibules on street cars
In. 08
Ohio continued
gas, public plants, 126, 443, 539
effect of law on city regulation of
rates, 126
referendum in, 280, 284, 288
street railways, capitalization of, 181
law concerning, 358
sale of city franchises in, 449
disproportionate representation in, 480
automatic ballot machines In, 489
telephones, earnings of in, 525
Opdyke, Rev. H. D.
on direct legislation, 285
Oregon.
water charges in, 120, 121
direct legislation in, 269, 283, 284, 288
proposed constitutional amendment,
506
Orton, Mr.
on telegraph operators, 163
Paris, France,
telephone rates, public compared with
private, 118
Paris, 111.
electric corruption, 74
co-ordination with water works,
142
Passaic, N. J.
offer of 50 cent gas plus a large bonus
for the franchise, 524
Payne, Sen. Henry B.
Senatorship purchast by oil combine,
89
Peabody, Mass.
electric light, cost of, 130, 132, 135, 170
city loans, interest on, 139
water works in, 204
Pennsylvania.
defiance of law by railroads of, S6n
oil rates in 1882, 88
oil combine evading taxes in, 89
street railways, vestibules voluntarily
placed on. 98
water charges in, 120, 121, 123, 124
gas, rates of private plants, 126
water works in, 204, 445-6
legislature, disgraceful scenes in, 331
composition of, 339-40
home rule for cities in, 388
public lighting plants in, 445-6
referendum on franchises, 456
proposed franchise direct legislation
bill, 508
disproportionate representation in, 478
colonial land policy of, 502
Pooria, 111.
water works, compared with Spring-
field, 124
Pliclan, Hon. Jas. D.
on public ownership, 225-6
mayoralty campaign in San Francisco,
536
IXDEX. OF PERSONS
PLACES.
593
Philadelphia, Pa.
electric lights, rates and losses by ex-
tortion of cos., 25, 21
cost of arc. 26
profits, 36
investigation of, 61
testing output, 64
street railways, operating cost of, 28,
29, 60
profits, 36
earnings, 38
cost of construction, 52
resistance to ordinances, 68, 82
political bribery, 12, 73, 74
strike in 1895, 97-98
consolidation, 101
legal services for, 137
comparison with Toronto, 186
public ownership of, 206
gas, municipal plant, 154, 248-9
lease of, 75, 127, 248, 261, 271,
.-,-:;. 528
rates, 126
cost of. 145
date of. 205
salary of head, 1 4"
spoils system in, 234
investigation of by Mass., 247
history of, 248-9
referendum refused, 304, 306-7
telephone service in, 66
water works of, 143-4, 172, 204
attempts to wreck public plant.
528
Standard Oil Co., operations of," 87
postal cars are vestibuled, 98
Atbara bridge contract, 240-1
city hall in. 389
city loans, interest on, 139
Phillips, Wendell.
en origin of reforms, 305
on educational value of presidential
elections, 325
Pinirree, Gov. H. S.
on corporations in politics, 71, 155
suit against Detroit street railways, 84
aid in street railway strike, 99
on friendly relations of Mich. Com-
missrs. to corporations, 109
on direct legislation, 293
on public ownership, 226-7
N. P. O. League, member of, 218
on value of home-rule to Detroit, 405
fight with corporations, 405
Pittsburg.
oil rates, increase in, 88
water works of, 148
Pomeroy, Eltweed.
on direct legislation, 287, 378
on N. J. laws, 318
D. L. movement largely due to, 287
Pres. Natl. D. L. League, 287
Port Arthur, Ont.
street railways, municipal ownership
of, 143, 206
Porter, Robt. P.
objections to municipal ownership,
533-4
Portland,
sale of municipal light plant, how
forced, 74
Portsmouth, O.
water works and elecfric light co-or- .
dinated, 142
Powderly, Ex-Grand Master "Workman
on referendum, 337
Prussia.
railway system of, 208
Quay, Senator M. S.
John Wanamaker on influence back of,
76
Quincy, 111.
water works, compared with Spring-
field, 124
Quincy, Hon. J.
municipal statistical dep't established
by, 191
on public ownership, 223-4
and contract system, 497
Rainsford, Dr. W. S.
on municipal street railways. 215-6
N. P. O. League, member, 218
Randolph.
public water works, 22, 120
Rhode Island.
water charges in, 120. 121
early referendum in, 265.
town meetings in, 268
statutes, 465-6
Rice, George.
fight with Standard Oil combine, S
Rifhmond, Va.
gas, capitalization, 43 n. 145
private electric plant, 142
gas plant, rates, 125, 126, 127
cost, 127
political effects. 154
wages, 161
progressiveness of, 170
referendum clause concerning. 190
date of, 205
spoils system, 234
Mass, false rep't of, 247
Rittinghausen, Martin.
on direct legislation, 358-9
Rochester. i
street railway, operating cost, 29n
earnings, growth of, 38
city loans, interest on, 139
automatic voting machines in, 488-490
Rockford.
electric light rates, 62
594
INDEX OF PERSONS AND PLACES.
Rosewater, Victor.
refutation of Francisco's statement
concerning, 246
, Roosevelt, Hon. Theodore.
on civil service reform, 473
elected by a minority, 484
Rossitur, C. L.
on electric traction compared with
horses, CO
Russell, Gov.
on municipal home rule, 399, 414
Sacramento.
electric light bribery, 74
home rule in, 419
Salisbury, Lord.
on direct legislation, 292
San Diego, Calif.
home rule in, 425
San Francisco, Calif.
water works, 21, 203
electric light rates, 25, 26
freight rates for oil, 88
referendum in, 272, 279, 419
street railways in, 225
freehold charter in, 229, 279, 418, 419
421, 438
sections on direct legislation, 507
pubic ownership, 420
civil service reform, 420-1, 536
Savannah.
street railways, operating cost of, 29n
water charges in, 123
Schenectady, N. Y.
water rates reduced by public owner-
ship, 120
Scotland.
water works in, 204
Scott.
cancelling railroad rates to oil com-
bine, 88
Seattle, Wash.
direct legislation In, 279
home-rule in, 419
Sellgman, Prof.
on public works, 210
The Five Stages of development, 210
Sergeant, Gen'l Man'g'r.
electric traction vs. horses, 60
Shaw, Dr. Albert.
on political corruption, 155
Berlin Electric Light Works, 184-5
Glasgow public works, 197
public ownership, 221-3, 230
municipal contracts in Germany, 407
local self-government, 428
Sheffield, Eng.
tramways of, 161, 188, 206
Sheldon. Rev. ('has. M.
member pub. ownership league, 218
Sherwood, Chief Justice.
monopoly dangerous to freedom. 03
Sidney, Ohio,
control of gas co. by Standard Oil Co.,
88
Skelton, Pres.
on dangerous overhead wires, OG, 67
Sloane, S. J.
on direct legislation, 286
Smith, Almon E.
on water works of New York State,
192-5
South Carolina,
direct legislation in, 269
constitutional amendment on, 512-3
city may build water works, 448
light plants, 448
referendum on franchises, 45i
South Dakota,
referendum, 282, 284, 415
circular of D. L. League. 357
referendum on franchises, 457
constitutional amendment on direct
legislation, 505
South Norwalk, Conn,
city loans, interest on, 139
electric light, 151, 170
Spahr, Dr. Chas. B.
on distribution of wealth, 90
on street railways, capitalization of,
187
municipalizatioii of, 216
Speirs, Prof. F. W.
on street railway profits, 36 n
capitalization, 45 n 4Cn
political bribery, 72
Spencer, Herbert.
on government, 238
Springfield, 111.
water works, public plant, 124
electric lights, cost? of, 133
contract, 187
public plant, 187-8
Springfield, Mass,
electric light rates, 25, 26
gas companies in, 43 n
street railway capitalization, 46n
cost of construction, 51
Stanton, Elizabeth C.
N. P. O. League, member, 218
Stead, W. T.
on political bribery, 73
Stickney, A. B.
The Railway Problem, 69, 81 n, 86n
St. Louis, Mo.
electric light rates, 25, 26
gas profits in, 34
street railways, earnings of. ;;s
capitalization of, 48
taxation of, cars, 82-3, 84
public ownership of, 206
telephone service, 66
oil prices in hands of independent co.,
88
INDEX OF PERSONS AND PLACES.
595
St. Louis, Mo. continued
Bridge rates compared with N. Y. and
Brooklyn, 116-7
referendum in. 272
freehold charter in, 416, 418, 419
direct legislation, 511
Stockholm, Sweden,
telephone competition between public
and private, 102
rates in, 65-66, 118
St. Paul,
street railways, operating cost of, 29n
earnings, growth of, 38
Strachey, J. St. Loe.
on direct legislation, 293
Sullivan, J. W.
on direct legislation, 286, 345
movement for D. L. largely due to, 287
Sullivan, P. F.
on street railways, 247-8
Summer, Chas.
national telegraph, favored by, 212
S wanton, Vt.
electric lights, cost of, 135
Sweden.
telephone service In, 65-66, 118, 146
competition between public and
private plant, 102
co-ordinated with telegraph, 143
public ownership of, 207
telegraph in, 207
Swene, Fire Marshal.
on danger of overhead wires, 66
Swift, Mayor.
on political corruption, 154
Switzerland. See DIRECT LEGISLA-
TION (F), 20
telegraph rates in, 32
public ownership of, 208, 347-8
railroads of, 208, 230-1, 347
referendum in, 301, 303, 343
history of, 344-352
reversal of actions of legislators,
357
laws, reduction in number of, 318
telephones, service of, 65-6, 118, 146,
231
co-ordinated with telegraph, 143
public ownership of, 207
expenditures for education and the
army, 326
no anarchy in, 329
no standing army in, 369
proportional representation in, 351
progressive income tax in, 347
incidence of taxation changed from
poor to rich, 346-7
monopoly charges greatly reduced, 352
local option in many cantons of, 351,
483
Syracuse,
street railways, cost of construction,
51
water works, rates reduced by public
ownership, 120
comparison of public and private
ownership, 128, 170
investigation of water commsrs.,
146
gas, comparison of public and private
ownership, 128
city loans, interest on, 139
municipal home rule in, 405
merit system in, 536
Tacoma, Wash,
referendum in, 272
home rule in, 419
Taylor, Dr. C. F.
on street railway charges, 216-7
Tennessee,
referendum in, 273
liafhting provisions In, 229
Texas,
water charges in 120
comparison between public and
private, 122
referendum in, 273, 275
legislature, corruption of, 333
Toledo, O.
gas, Standard Oil Co. control over,
87, 88, 125, 151
low rates under municipal owner-
ship, 125
Topeka.
gas, 24, 34
electric plant in, 170
Trenton.
gas, 24. 34
Trondhjem, Norway,
telephone service In, 65-66, 117-118,
151, 207
United States.
water, average rates, public and pri-
vate, 20
plants in, 121-2, 203
gas, cost of compared with Great
Britain, 24
public plants in, 170
telephones, rates compared with Eng-
land and France, 31
telegraph, rates compared with Eu-
rope, 32
service compared with Groat Brit-
ain, 148
ownership of, 207
operators of contrasted with mail
carriers, 163
railroads, safety of, 150
distribution of wealth in, 91
growth of pub. ownership. See
GROWTH.
use of referendum in, 269. See DI-
RECT LEGISLATION.
596
INDEX OF PERSONS AND PLACES.
Utah,
direct legislation in. 283
constitutional amendment on, 506
street railways, city may own, 440
cities may erect fire signals, 440
municipal public ownership in, 445
Vanderbilt.
cancelling railroad rates to oil com-
bine, 88
Vauderlip, Mr.
letter -about Chicago street railwys,
47n
Van Wyck, Mayor.
elected by a minority, 484
Vermont.
town meetings in, 268
telephones, towns may own, 440
Vienna.
street railway fares, 30
telephones in. 207
Virginia.
water charges in. 120
gas, cost and rates in, 126-127
spoils system in, 235
referendum in. 265
town meetings, 268
direct legislation in, 269
disproportionate representation in, 480
Vreeland, Pres.
on electric traction compared with
horses, 60
salary of, 140
on 5 cent street railway fare, how ap-
portioned, 524
Vrooman, W.
"Government Ownership," reference
to, 209. 238
Waite, Chief Justice,
on State laws, 183
Wakefleld, Mass.
gas, reduction of rates under munici-
pal ownership, 127
Walker, Pres. F. A.
on telegraph service in U. S. as com-
pared with Europe, 65, 151-2
equality in taxation means equality
of sacrifice, 253
Wallace, Alfred R.
on progressive income tax, 521
Wanainaker, Hon. John
on telegraph profits, 39
on inventns supprest by Western
Union, 94 n
on bribery and political methods of
monopolies, 75-6n
on direct legislation, 291
on a postal telegraph, 303
on Pennsylvania elections, 537
Washington.
freehold charters in, 257, 415-7, 435
text of freehold charter amend-
ment, 59
Washington, D. C. continued
direct legislation in, 269, 275, 284, 288
municipal ownership, statutes, 513-4
referendum on franchises, 456
city may own telephones, 441
lighting plants, 448
water works, 448
street railways, 448
Washington, D. C.
electric light rates and losses by ex-
tortion of the cos., 25, 27
street railways, operating cost of, 29
cost of construction, 52, 53
profits of, 37
capitalization of, 48, 50
grants to, 180
gas company, capitalization of, 43
high pressure to increase price, 85
comparison with Richmond, 125-6
comparison with Philadelphia, 126
telephone, comparison between ratea
public and private, 117
water works, comparison between
rates public and private, 122
political corruption in, 308
contract system and direct employmt,
comparative cost. 542
Waurih, Prof. Louis.
on referendum in Switzerland, 343
Webb, Sidney.
on individualism, 237-8
Webster, Daniel.
opinion that free government cannot
endure where the tendency is to
rapid accumulation of wealth in few
hands, 93
Webster, Noah.
early Pa. constitution, 265
Weir, Mayor.
electric bribery, 74
West, Dr. Max.
on New York franchises in Municipal
Monopolies, 71n, 148
Westfield. Mass.
gas, reduction of rates under munici-
pal ownership, 127
West Troy, N. Y.
electric lights, cost of, 134
West Virginia.
incorporation of street railway com-
pany in to evade N. Y. taxes, 96 n
water charges in, 120, 121
gas, comparison between public and
private plants, 126
direct legislation in, 269
Wheeling, W. Va.
street railway strike, 94
gas capitalization, 43 n
reduction of rate under municipal
ownership, 125. 126
wages, 161
rates and cost, 127, 145
INDEX OF PERSONS AND PLACES.
597
Wheeling. "\V. Va. (gas) continued
corruption under municipal owner-
ship, 154. 234-5
board, 190
electric lights, cost of, 134, 135, 136
service of, 151
Willard, Frances E.
on direct legislation, 291
on poverty, 173
member N. P. O. League, 218
Williams, Hon. George Fred.
Bay State Gas case, 80, 84
Wilson, Woodrow.
on the representative system, 316-7
Winchester, Boyd.
on direct legislation in Switzerland,
286, 350
Wisconsin.
vestibuled cars required, 98
laws on municipal government in, 400
public lighting plants, 445, 539
water works, 445, 539
direct legislation in, 284
on franchises, 456
sale of city franchises, 449
telephones, cities may own, 539
Wolcott, Gov.
on decisions made by the people. 360
Woodruff, Hon. C. R.
on Phila. gas lease, 75
on public water plant of Philadelphia,
528
Woolley, Hon. Jno. G.
on direct legislation. 294
Worcester.
electric light rates, and losses by ex-
tortion of cos.. 25. 27
gas companies in, 43n ,
water works in, 204
Wright, Carroll D.
on Chicago railway strike, 81
on civil service reform, 471
Wyoming.
combine to shut out oil fields in, 88~
direct legislation in, 269
Terkes.
on overhead wires, dangers of, 66
declination to answer railway commit-
tee's questions, 84
Zurich, Switzerland.
street railways, operating cost of, 29n
direct legislation in, 257
CHE first form of government in this country was colonial. After the
revolutionary war, state governments naturally succeeded the colonial
governments. Then only about 3 persons in 100 lived in cities of
over 8000 inhabitants, while now about 35 persons in 100 live in cities of over
$000. Then there were no cities of great size, and they were not compact
as our cities, of necessity, now are. Lighting was simple and primitive ;
ach household had its one or several "tallow dips," and there was no
public lighting to speak of. Lanterns, rather than street lights, were de-
pended upon to guide footsteps in dark streets. This was the entire situ-
ation concerning lighting, both domestic and public. As gas was not known,
there could be no municipal gas question. As to water, there was a well in
nearly every back yard ; and if not, the corner pump was near by ; and the
wells in so sparse a population were not unhygienic. This was the entire
water question of that time. As the people in the cities of that time could
easily walk from home to business, and even walk home for mid-day dinner
and back to business again in the afternoon, there was no local transporta-
tion question as we have it now. Hence, with a population so largely rural,
and with our present municipal necessities unfelt and unknown, a state govern-
ment fulfilled every need. But now with our population so largely urban, and
our cities grown to such gigantic size, new necessities have rapidly come into
being. Now we are toucht a dozen or a score of times by our city government
to once by our state government ; for example, the condition of the water we
drink, the condition of the streets, the cost and quality of gas, which is now
a necessity, the public order and our private safety, etc., etc., etc., depend
upon our city government. This then has become of direct and constant im-
portance to us. While state government was all that was needed a century
ago, now the importance of municipal government is by far the greatest. As
those who planned our state governments in the i8th century could not foresee
the needs that would arise in the igth century, they could not be expected to
provide for them. W who now see aud feel these new needs, should be
zealous in our endeavors until our cities are made completely free from the
interference of state legislatures in local matters (freedom not needed then
but sorely needed now), and until the people of our cities are also made
completely free from the domination of councils and politicians, by the
introduction of the initiative and referendum.
book may be had bouinl in cloth Price,
EQUITY SERIES. pub $ 1 i 1 TO e pe?Y a ea?. rly ' Single Numbers, 25c -^
' c
c
VOL. I. No. 1. SEPTEMBER, 1898.
RATIONAL MONEY
PARSONS.
A NATIONAL CURRENCY
INTELLIGENTLY CONTROLLED IN THE INTERESTS OF THE WHOLE PEOPLE
AND CAREFULLY REGULATED IN REFERENCE TO THE TRUE
COMMODITY BASIS, THE REAL CONSTANT OF
EXCHANGE, BY MEANS OF
THE MULTIPLE STANDARD
IN SUCH A WAY THAT
THE DOLLAR SHALL REMAIN CONSTANT IN ITS PURCHASING POWER
FROM MONTH TO MONTH AND YEAR TO YEAR,
REPRESENTING ALWAYS THE SAME AVERAGE AMOUNT OF COMMODITIES AND SERVICES
AND GIVING TO ITS POSSESSOR AT ALL TIMES THE SAME AVERAGE COMMAND
OVER THE WORLD OF PURCHASEABLE THINGS.
No Copyright.
On the coutrarr, an invitation is extended to all to do their utmost
in every way to pread the truth contained in the following pages.
Newspapers and magazines are at liberty to quote as freely as they will,
due credit only being respectfully asked.
PUBLISHT BY
C. F: TAYLOR
1520 CHESTNUT STREET, PHILADELPHIA, PA.
SAMPLE PAGES OF "RATIONAL MONEY."
age to age an ethical, impartial, democratic dollar, si dollar that
will act as a fly wheel to keep the national engine working smooth-
ly all the time, instead of producing or aggravating industrial dis-
aster and explosion. The price line must become a sate horizontal
instead of the dangerous zigzag of a bolt of lightning.
PRICE LINE 1866-1898- GOLD PRICES
ALDRICH DATA 1666-1691 "AMERICAN" DATA 1691-8.
1660
1870
1680
1890
j
1898
-140
- 130
-120
-110
-100
-90
-80
SAMPLE PAGES OF "RATIONAL MONKY.'
Since 18 < 3 the .chain lightning of prices has been golden (see cut on
page \) before that time it was bimetallic (as shown in this cut).
Neither of these monetary thunderbolts appear to have much affection for
the safe and honest horizontal.
PRICE LINE 1837-1673 BIMETALLIC PRICES
ALDRICH DATA fMO- 1873.- 183?- 1&40 BROAD ESTIMATE FROM
DATA OF W* G. 5l/MNER & MUIHAU'S CITATIONS .
1640
1850
I860
1870 1873
K
-130
-120
-no
-100
- 90
If the weekly or even the quarterly variations had been noted, -the
lines in both of these diagrams would have .Men full of saw teeth. If the
maximum and minimum price levels had been marked instead of the yearly
average, the extremes would have been far greater than those shown the
drop in a panic being sometimes more than double that shown by the
yearly averages (see p. 57). It actual prices had been taken (instead of metallic
prices), we should have found that during the war period of unregulated
issue of Imperfect legal tender paper, the price line would have soared 76
points above the top of the diagram. Altogether these diagrams, full of
ruin and injustice as they are, are yet mild representatives of the pres-
ent money system. They tell part of Its evils, but by no means all, nor do
they give full emphasis to what they do tell.
I*
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Ill
No. 2 of "EQUITY SERIES" is
The Land Question from Vari-
ous Points of View*
It is a book of 246 pages, consisting of special articles by
various writers and investigators. Price only 25 cents.
The following outline of its contents will give an idea of
its scope :
1. A Brief History of Land Tenures and Titles from
Earliest History and Various Countries.
This is a brief historical review of the relation of man to
land from earliest time to the present.
2. Distribution of Land 1 in Various Countries.
This chapter passes in rapid review the known statistics of
land distribution in each of the leading countries of the globe,
particularly noting the tendencies of recent decades in relation
to land distribution.
3. Alien Landlordism in America.
This chapter, written by ex- Congressman John Davis, of
Kansas, contains facts and figures that will stir the thought of
the most indifferent mind.
4. Our System of Distributing the Public Lands.
This is a chapter of 55 pages, written by a gentleman in
close touch with the Interior Department, and therefore familiar
with all the facts, which are substantiated by references to
public documents. He characterizes our system of distribution
as follows: "It has been an instrument of fraud, injustice
and demoralization." This chapter is perhaps the most inter-
esting account of the history of this branch of our public ser-
vice that was ever written. To the land student it is of great
importance, and to the general reader it is more interesting
than a thrilling romance.
5. Provisions of our Federal and State Constitutions
relating to taxation, showing what property must
be taxt and what property may be exempt from
taxation, thus showing what constitutional ob-
structions there are to the various land reforms
now being proposed.
This chapter was prepared by a trained lawyer, employed
for the purpose, and is of great value to those interested in the
single tax or other proposed land reforms. Each constitution
is considered seperately, followed by comments strictly legal
and impartial in character, relative to the possibility of the
proposed land reforms under present constitutions. The legal
research involved in this chapter is of peculiar value to land
reformers.
6. Religion of the Land Question.
The author of this chapter, Ernest H. Crosby, 01 New
York, may fittingly be called the Tolstoi of America. This
contribution is fully up to his usual high standard.
7. Two Parables.
All that is necessary to say is that these are by the gifted
writer, Bolton Hall. These brief parables throw a strong light
on the wrongs of unjust land conditions.
8. Forestry.
" Land 'Reformers " have given very little attention, as a
rule, to forestry. Many ancient nations passed away, and the
countries became deserts, because of the neglect of forestry.
By wise forethought, some of the European nations, notably
Germany, are avoiding this fatal mistake. France is endeav-
oring to correct past mistakes in this direction, and Spain and
Italy should do so. Examination of facts shows that we are
rushing rapidly toward the danger line. In the space of 18
pages this subject is presented, clearly and vigorously, giving
all the leading facts and statistics for this and other countries,
together with a synopsis of the legislation in this country, both
state and national, that has been accomplished thus far.
g, 10, and n
These three chapters are devoted to the discussion of the
Single Tax, both pro and con. In this discussion practically
all the leading arguments both for and against, may be found.
These chapters will enable those unacquainted with the Single
Tax theory to post up quickly and easily.
12. John Stuart Mill's Plan of Land Reform.
Here is perhaps where the advocates and opponents of the
Single Tax may meet and compromise. This chapter is a
fitting close to a book that covers, tersely but amply, the entire
subject of land reform.
SAMPLE PAGES OF
" THE LAND QUESTION FROM .VARIOUS POINTS OF ULH.
PREFATORY REMARKS.
The land question is a very old question, and a many sided
problem. Many theories have been proposed to solve this problem.
Many books have been written on this subject, but their purpose
has usually been to propagate some special theory. My purpose
has been to produce a book which, will present the problem from
various points of view, and from, the pens of various writers. No
such attempt has, in my knowledge, ever been made before. How-
ever, I will feel flattered if others will follow with the same broad
object in view, and improve on this attempt as much as possible.
The broad question of land value might be divided into four
general heads:
1. The agricultural value of land; depending upon productivity
and convenience to markets.
2. The timber value of land; depending on the kind, size and
number of the trees, and convenience to markets.
3. The mineral value of land; depending upon the mineral bear-
ings, whether rocks, metal, coal or oil, and convenience to markets.
4. The site value, or communal value, of land; that is, the value
which is created by the presence of the community.
While numbers 1, 2 and 3 depend in great measure upon access
to communities, for communities are "markets," number 4 depends
entirely upon the presence of the community. It is not strange
that problems arising from land and its various values from various
sources, with all the mighty interests involved, should have, from
time to- time, engaged the attention of philosophers, theorists and
statesmen; and, being still unsettled, that they should now press
for rightful settlement.
A primeval forest contains valuable timber which no human
hand has planted or protected. By the advance of ^civilization, and
its improved .methods (as rail-roads, etc.), this forest becomes ac-
cessible. To whom does that timber belong?
Amid the indescribable geologic turmoil gone thru by our mother
Earth in past ages, valuable mineral deposits were made here and
there- beneath the surface. Do they belong to the accidental dis-
coverer, to the local community, or to the general government?
While these are large questions, in which the community enters
as a factor in giving value, of recent years the battle has waged
chiefly in reference to values created entirely by the community.
Perhaps this is because of the unprecedented creation and develop-
ment of these values during recent years, to the extent that, in
several instances, communal land values in a single large city now
exceed the agricultural value of all the land in an average size
state.
Instead of treating the question under separate heads, as sug-
gested by the above, I have adopted the historical method in plan-
SAMPLE PAGES OF
' THE LAND QUESTION FROM VARIOUS POINTS OF VIEW.'
HISTORY OF LAND TENURES. 27
in times of war the yeomanry tenants protected and defended
their lords, and also their lands, in which they had a common
interest. There were land and homes and work for all, and
beggars and tramps were unknown. This happy condition
continued for centuries. The fatal change came in the six-
teenth century under the reign of Henry VIII, that human
monster who "never spared man in his anger nor woman in
his lust." For the double purpose of taking revenge upon the
church for refusing him a divorce from his faithful wife
Catharine, and of satisfying his unprecedented extravagance
and maintaining in grand style his "fifty palaces," be con-
fiscated the lands of the church, comprising as they did about
one-third of the land of the kingdom, and upon which there
lived, almost rent free, thousands of industrious, self-support-
ing families. These lands were sold by the king in large
tracts, at very low prices, principally to merchants and
other capitalists living in the towns and cities, who bought the
land as an investment, and they immediately began to enor-
mously increase the rents. The feudal lords soon saw what
profits the merchants were making out of their lands, and
they too caught the commercial spirit and began to raise the
rents of their lands, and they also began to buy and maintain
large residences in the towns and cities and to live in grand
style. All this made it necessary for them to extort still
higher rents from their tenants. In the same century, under
Edward VI, the guild lands were confiscated and sold to grasp-
ing landlords. The public commons and pasture lands were
then eagerly seized and enclosed by the adjoining landowners
as soon as it was discovered that they too might be put to com-
mercial uses. In this way all of the lands of the kingdom were
in a marvelously short time changed from a public trust to a
private monopoly, and the people were suddenly placed at the
mercy of mercenary absentee landlords. Because of the high
price of wool and meat the landlords discovered that they
could make more by converting their lands into sheep and
cattle pastures than by renting them to the small farmers, so
the latter by thousands were turned out of their homes into the
highways, and as the great preacher Hugh Latimer said from
SAMPLE PAGES OF
"THE LAND QUE-STION FROM VARIOUS POINTS OF VIEW."
DISTRIBUTION OF LAND. 41
knows the enormous increasing power of accumulated capital.
As these large estates increase in size and number, the greater
will be their power to absorb the smaller farms adjoining them.
Our farms of 500 acres and over would now cover an area'
more than five times the size of the great state of Indiana, with
its two millions and over inhabitants. That is to say, about
115,940 men own a vast area of about 126 millions of acres
of the best farming land in the world, and which should be
divided among ten millions of people, and which is capable
of giving support, self-employment, homes and happiness to
that vast number of people. And when we consider the
further awful fact that about one-half of this vast expanse
of 126 millions of acres of land, which within the memory of
men still living was parcelled out by our government to our
citizens in small farms, is now at this early day absorbed by
and owned by 31,546 men and corporations, the situation is
still more alarming. In one of his speeches Daniel Webster
once said : "A free government cannot long endure where the
tendency of laws is to concentrate the wealth of the country
in the hands of a few, and to render the masses poor and de-
pendent." In the light of the above facts can there be any
doubt as to the tendency of our present land laws, and that
radical changes in our land laws are absolutely necessary?
The extent of many of these large estates is simply astound-
ing, as is shown by the following list of a very few of the
large land owners of this country:
NAMES. NO. OF ACRES.
Col. D. C. Murphy 4,068,000
Texas State Fund Ass'n (owned by 4 men) 3,000,000
The Standard Oil Company 1,000,000
John W. Dwig-ht a farmer in N. Dakota (nearly
as large as Ehocle Island) 704,000
Ex-Senator Dorsey 500,000
E. C. Sprague 500,000
Miller and Lux (San Francisco) 450,000
Mr. McLaughlin of California 400,000
William A. Chapman 350,000
New York syndicate 300,000
Surveyor-Gen. Beals 300,000
Texas Land and Cattle Company 240,000
Bixby, Flint & Co. 200,000
SAMPLE PAGES OF
" THE LAND QUESTION FROM VARIOUS POINTS OF VIEW
^ DISTRIBUTION OF PUBLIC LANDS.
of the General Land Office at "Washington, or to the officers
of the district in which the land lies. To settle this question,
Congress, on May 14, 1880 (21 Stat., 140), passed an act, the
first section of which is as follows:
"When a pre-emption, homestead, or timber-culture claimant
shall file in the local land office a written relinquishment of his
claim, the land covered by such claim shall be held as open to settle-
ment arid entry without further action on the part of the Commis-
sioner of the General Land Office."
Observe how this act has been made use of to defraud hon-
est seekers for homes.
An unscrupulous lawyer for convenience of reference let
us call him "Ketchem" locates himself in a region where
there is government land. He makes use of everybody in the
village or county, or elsewhere, with a sufficiently elastic con-
science. Such confederate may be less than twenty-one years
of age, or a foreigner, or a resident of anywhere or nowhere;
he does not have to swear to his qualifications; all he is wanted
for is to sign his name perfunctorily to a pre-emption declara-
tory statement, which (when signed) the lawyer sends to the
local office. The local officers mark upon thedr plats and
record books that the tract described in the application re-
ceived has been "filed upon" by the party named therein.
This is the first step in the fraud to cover as many tracts as
possible with "bogus" pre-emption filings. One lawyer in
South Dakota filed in the local office applications in the names
of his youngest son (aged four months), of his deceased father
and grandfather, of his wife under her maiden name, and
several of his and her down-east relatives, and of his saddle
mare. The local officers had no means of knowing that
"]N"ancy Ketchem" had four legs. This plan of using ficti-
tious names, however, can not be adopted unless some notary
public is taken into the "ring," and then the profits of the
transaction must be divided among three instead of two; so
it is generally better to have a "live" human confederate, and
hoodwink the notary public as well as the local officers.
Mr. Strange (let us call him) comes into that region from
the east an honest man, honestly seeking for a quarter sec-
SAMPLE PAGES OF
THE LAND Q'JESTiON FROM VARIOUS POINTS OF I/IEH.
170 FORESTRY.
Ninth. Forests are also desirable from an esthetic point
of view. They add greatly to the beauty of a country.
The destruction of forests by nations which were ignorant
of the foregoing facts has frequentlyresultedin.converting fer-
tile countries into treeless, sandy, gullied, uninhabitable des-
erts. Assyria and Persia have especially suffered in this re-
gard, and vast scopes of territory in other countries of Asia
have been converted into deserts by the destruction of forests.
The terrible famines in India and China are the result of
drouth caused by the destruction of their forests. Shall we
profit by their experience?
In Europe, Italy has suffered most from this cause. Many
portions of that country have been almost ruined by the wan-
ton destruction of forests. Early in this century, France
was fast approaching the danger line, but by active and vig-
orous measures she has partially repaired the damage done.
All of Europe and Asia is aroused to the necessity of forest
preservation and restoration.
While the countries in Europe and Asia have been taking
vigorous measures to preserve and restore their forests, we
in the United States, until quite recently, have been doing
our utmost to destroy our forests. It is estimated that from
1860 to 1878 we destroyed twelve millions of acres of forests
in order to bring the land under cultivation, and this is but
a sample of our wanton destruction of forests for many pre-
vious decades, as well as since then. Until late years we have
also carelessly and criminally allowed our forests to be burned
at the rate of millions of acres every year by hunters and
campers.
The injurious effect of this policy has been seriously ex-
perienced in our Eastern states, in the change of climate,
barrenness of soil and diminution of streams that always re-
sult from a destruction of the forests of a country. Many
of the former ever-living small streams are now dry during
a part of the year. Streams that were formerly navigable
are now unnavigable. As already stated, even the water line
of the majestic Hudson has been lowered nearly five feet.
In the Mississippi valley the tremendous and formerly un-
^DATE DUE
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1977
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GAYLORD
PRINTED IN U.S.A. 1
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