LIBRARY 
 
 OF THK 
 
 UNIVERSITY OF CALIFORNIA 
 
 GIFT OF 
 
 Class 
 
Vested Wrongs 
 
 BY 
 
 ROBERT P. PORTER 
 
 An address read at the Third Annual 
 Convention of the League of American 
 Municipalities, held at Syracuse, New 
 York, September 19-22, 1899 * <* * + 
 
 NEW YORK 
 
 Leonard Darbyshire 
 
 100 Broadway 
 
 1900 
 
Vested Wrongs 
 
 By 
 
 ROBERT P. PORTER 
 
 An address read at the Third Annual 
 Convention of the League of Ameri- 
 can Municipalities, held at Syracuse, 
 New York, September 19-22, 1899. 
 
 NEW YORK 
 
 Leonard Derbyshire 
 
 WO Broadway 
 
 1900 
 
VESTED WRONGS 
 
 By Robert P. Porter 
 
 IT is now nearly twenty-five years ^ 
 ago since I first took up 
 the fiscal problems relat- 
 ing to our states, counties 
 and municipalities, and 
 twenty years since I was 
 called upon by the United 
 States Government to write 
 a history of the debt of each 
 state of the Union, and 
 prepare a report on the 
 wealth, debt and taxation 
 of our cities and towns. 
 The result of those inquir- 
 ies may be found in Vol- 
 ume VII. of the Tenth 
 Census [i88o].f Soon after 
 the war a craze set in for municipal 
 improvements, similar to the present 
 epidemic for owning and operating pub- 
 lic utilities, and as a result local in- 
 debtedness and taxes had increased so 
 rapidly that in many instances the burden 
 upon the taxpayers became almost un- 
 bearable, and in some important cities 
 repudiation was publicly advocated. The 
 alarm occasioned by the increase of 
 municipal indebtedness was emphasized 
 in many of the western states by the 
 large sums of public money voted to 
 
 * An address read at the Third Annual Convention of the 
 League of American Municipalities, held at Syracuse, N. Y., 
 Sept. 19-22, 1899. 
 
 fReport on Valuation, Taxation and Public Indebtedness 
 in the United States, and returned at the Tenth Census (June 
 1. 1880), ly Robert P. Porter, Special Agent. 
 
aid innumerable private railway schemes, 
 a majority of which had not come up 
 to the great expectations of the promot- 
 ers and had left the unhappy communities 
 responsible for millions of unpaid bonds. 
 The history of this period of our state and 
 local fiscal history should be familiar to ad- 
 vocates of municipal ownership in the Unit- 
 ed States. If not they will find much official 
 data of value and interest in the vol- 
 ume referred to, which has a prac- 
 tical bearing- on the question at is- 
 sue. In seeking a remedy for the evil 
 of municipal indebtedness which seri- 
 ously threatened our cities and towns with 
 bankruptcy during this period, the constitu- 
 tional limitation of debt was hit upon, and 
 thus the wisdom of the people put a break 
 upon municipal madness. In some of 
 the more flagrant instances, that of Michi- 
 gan, for example, the people even w 7 ent fur- 
 ther and declared that the state must not be 
 "a party to or interested in any work of in- 
 ternal improvement," so bitter had been 
 these experiments in a theory of govern- 
 ment foreign to the sound maxim, that the 
 country is governed the best which is gov- 
 erned the least. This action on the part of 
 the people of that state has saved Detroit 
 from one of the wildest and probably one 
 of the most disastrous experiments in muni- 
 cipal ownership yet recorded. The state 
 constitutional limitation of debt which 
 stopped the debt-creating mania during the 
 seventies and early eighties, will again come 
 in to hold in check these latter-day move- 
 ments towards socialism and paternalism, 
 until practical men in municipal affairs are 
 
enabled to examine fully, not only the many 
 complex questions involved in municipal 
 ownership of all public utilities, but to real- 
 ize the stupendous change which such 
 an absorption of private enterprise would 
 bring about in the fundamental princi- 
 ple of the government of the Republic. 
 An effort is now on foot, in my opin- 
 ion fraught with great danger to Am- 
 erican municipalities, to remove all con- 
 stitutional and legislative restrictions on 
 municipal indebtedness when the muni- 
 cipalities wish to purchase these so-called 
 revenue-producing properties. Communi- 
 ties, like individuals, soon forget past ex- 
 periences, and those who see their wild 
 schemes checked by the sober judgment ex- 
 pressed by the people during times of state 
 and municipal bankruptcy, are apt to urge 
 the removal of such constitutional barriers. 
 Should this be done and full swing given to 
 municipal ownership experiments, the Am- 
 erican taxpayer will simply invite financial 
 catastrophies far more sweeping and de- 
 structive than those referred to in the 
 Michigan Supreme Court decision. Citi- 
 zens who believe in sound government 
 should vigorously oppose all attempts to re- 
 move the constitutional limitation on state 
 and municipal indebtedness.* 
 
 *As the advocates of municipal ownership are so fond 
 of quoting English examples they are referred to the 
 statistics showing the increase in local rates in England 
 and Wales from 1891-2 to 1896-7. In 1891-2 the local rates 
 in England and Wales amounted, roughly, to 28 1-2 mil- 
 lion pounds; in 1896-7 they amounted to 371-2 millions, 
 an increase of about 31 per cent. This was, of course, 
 accompanied by an increase in rateable value, and taking 
 this into consideration, the rate in the pound, calculated 
 on the Poor Rate valuation, rose from 35. 7 i-jd. to 45. 
 6d., an increase of about 23 per cent. The increase in 
 
 5 
 
Before those who are responsible for the 
 administration of these great trusts commit 
 themselves to the expenditure of millions, 
 nay hundreds of millions, of the people's 
 money, in these daring experiments, it be- 
 hooves them to acquaint themselves with all 
 the facts. They must study with the utmost 
 care and impartiality the results of muni- 
 cipal ownership in England. The official 
 reports in relation to the operation of gas 
 works show no special advantage in favor 
 of municipally owned plants. These fig- 
 ures are accessible and in convenient form. 
 They must do precisely the same in relation 
 
 rateable value had taken place entirely in urban dis- 
 tricts. There had, indeed, been a fall in the rateable 
 value of rural districts. The total rates for the Metropoli- 
 tan area had risen within the period under consideration 
 from 53. to 53. pd. in the pound; in Municipal county 
 boroughs from is. 3d. to is. 8d. ; in county boroughs 
 (urban sanitary), from 2s. 6d. to 25. nd. ; and in rural 
 District Councils from is. jd. to 33. Purely urban rates 
 were responsible for 62 per cent of the increase. Those 
 outside London contributed the largest proportion of the 
 increase, but it must be remembered that the number 
 of urban districts had increased. 
 
 In an editorial on this subject a London newspaper 
 says : 
 
 " 'Local indebtedness is mounting up' is a phrase that 
 is often used in connection with proposals in the domain 
 of municipal enterprise. Figures compiled by Mr. Beck- 
 ett, who read a paper on the subject at the Health Con- 
 gress at Blackpool, give us a clear idea of what this 
 growing indebtedness amounts to, both for the individual 
 ratepayer and in the bulk. In 1875 the local debt per 
 head was only 3 173. 2d., in 1894 it had risen to 7 gs. 
 2d. per head, or 93 per cent, over 1875 ; and, of course, 
 it is more now. This indebtedness per head has grown 
 much more rapidly than rateable value. In 1875 this was 
 4 igs. id. per head; in .1895 only 5 73. 2d., which is 
 less than in 1884. The disproportion between the increase 
 of local indebtedness and rateable value may well cause, 
 as Burdett says, an 'uneasy feeling.' The aggregate 
 amount of local indebtedness looks more serious. In 
 1874-75 it was 92,820,100, in 1895-96 243,209,862. More 
 than one-half of the debts, said Mr. Beckett, is due to 
 the aggressiveness of the local administrator as trader. 
 Whether we are paying too much for our 'municipal 
 whistles' or not is a question local ratepayers must de- 
 cide for themselves." 
 
to British tramways. On this side of the 
 problem perhaps I can speak with some de- 
 gree of authority, as I have made a careful 
 study of the facts both at home and abroad.* 
 A brief reference will be made hereafter to 
 the results of these inquiries in relation to 
 the municipalization of street railways in 
 England, where we must go for the sum 
 total of experience up to date. For the 
 moment we may profitably examine some 
 recent statements of those who are in the 
 front rank of this movement toward the 
 municipalization of public utilities. Here, 
 for example, is the venerable and venerated 
 Dr. Lyman Abbott declaring that "the 
 soorfer our cities own the lines of railroads, 
 the better both for the convenience of the 
 people and the purity of our municipal gov- 
 ernments." Similar assertions have been 
 made by advocates of municipal ownership, 
 but assiduous search for the statistics, the 
 facts, if there be any, upon which these as- 
 sertions are supposed to be based, have 
 failed to materialize. As I shall hereafter 
 show, Dr. Abbott, when asked to come and 
 give reasons and facts for his assertions be- 
 fore the New York State Committee on 
 Street Railways, failed to appear. Without 
 facts to sustain these assumptions, the posi- 
 tion of such gentlemen as Dr. Abbott is 
 peculiarly illogical and unbusinesslike. The 
 administrators of our municipalities have 
 been too incompetent and too corrupt to 
 
 *" Municipal Ownership and Operation of Street Rail- 
 ways in England," by Robert P. Porter. Report of the 
 special committee to investigate the relation between 
 cities and towns and street railway companies, Boston, Feb., 
 1898 
 
 "Municipal Ownership at Home and Abroad," by 
 Robert P. Porter, 100 Broadway, New York. 
 
make fair and just bargains with private en- 
 terprise to carry on works of public utility. 
 What is the proposed remedy? That hav- 
 ing sold or leased these rights to do quasi- 
 public business at a public loss, the same in- 
 competent and corrupt officials or their suc- 
 cessors shall now buy them back again at 
 an excessive valuation, as in the case of De- 
 triot and manage such trusts for the con- 
 venience of the public and in the interests 
 of municipal purity. And this in the face 
 of Professor Bemis's declaration that a 
 large portion of the force employed on the 
 Philadelphia municipal gas plant was made 
 up of ward-heelers, faithful only in their al- 
 legiance to a political boss. He frankly tells 
 us : 
 
 "The works under public operation would have 
 shown better results than were obtained had it 
 not been for the spoils system, general ineffi- 
 ciency and unprogressiveness." 
 
 The position of these eloquent phrase- 
 makers must strike practical administrators 
 as grotesque. The practical man knows that 
 cities, like individuals, have made both good 
 and bad bargains with private corporations. 
 That where one of these bargains has been 
 corrupt, a score, nay fifty or a hundred, have 
 been square and honest. They know that 
 oftener than not the cities in the first in- 
 stance have been as glad to secure the im- 
 provement, whether a new water-works, ad- 
 ditional and improved gas plants or electri- 
 cal street railways, as the capitalist has been 
 to invest his money. They know full well 
 that in many cases capital has been coaxed 
 into the enterprises. Indeed, I know per- 
 sonally of the case of a bankrupt street rail- 
 s 
 
way in a western college town in which the 
 present operators the people who fur- 
 nished the equipment attribute the bank- 
 ruptcy wholly to the eloquence of certain 
 college professors, who per- 
 suaded the original pro- 
 moters to lay the line up to 
 the University settlement in 
 advance of public necessity. 
 I have no doubt some of 
 these very gentlemen are 
 lecturing on the iniquities 
 of "capitalistic aggrega- 
 tions " and kindling the fires 
 of "a new application of 
 ethical principles " for effec- 
 tual vengeance for such folly. 
 These theoretical gentlemen, 
 who talk so glibly and 
 eloquently on municipal 
 ownership in the abstract, 
 and conveniently fail to 
 appear when a New York 
 or Massachusetts commission 
 are considering the concrete sides of the 
 question, have little conception of the 
 real obstacles which prevent practical ad- 
 ministrators from rushing headlong into 
 these municipal experiments. The value of 
 the lines of railroads which Dr. Abbott 
 thinks we should at once own will in 1900 
 be in the neighborhood of sixteen hundred 
 millions of dollars ($1,600,000,000); add to 
 this another one thousand million of dollars 
 ($1,000,000,000) for municipal gasworks, 
 and we have a total of two thousand six 
 hundred million of dollars ($2,600,000,000). 
 If state constitutional barriers could be 
 .thrown down to accomplish this, the muni- 
 
cipal indebtedness of the country would be 
 more than quadrupled, or increased from 
 eight hundred million dollars ($800,000,- 
 ooo) to three thousand four hundred mil- 
 lions of dollars ($3,400,000,000), which is 
 simply a preposterous proposition. The 
 fact is, not one of these able general- 
 izers in municipal ownership could 
 present a practically worked out scheme 
 for the acquisition and management of 
 a water-works, a gas plant or an electric 
 street railway. I mean a proposition 
 that would be accepted in the financial 
 world and stand the test of the courts. The 
 Rev. Dr. Washington Gladden, of Colum- 
 bus, Ohio, forcibly expresses a sentiment, 
 which a fair-minded writer in that ably-ed- 
 ited newspaper, the Brooklyn Eagle, says 
 "has run like wildfire through the West and 
 has reached the East." Dr. Gladden 
 says : 
 
 ''There is one class of capitalistic aggregations, 
 based on monopoly, against which popular in- 
 dignation 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 is- 
 sued capital far in excess of their actual invest- 
 ment, have disposed of the stock thus issued and 
 are charging enough for the services rendered 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 investment nobody 
 grudges them, but the privilege 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 reck- 
 or.ing 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. It is 
 probable that some new legal maxims will be 
 framed and enforced and that our jurisprudence 
 will be enlarged and invigorated by a new ap- 
 plication of ethical principles. Whether corpora- 
 tions in any sense private will long be permitted 
 to manage public utilities may be doubted; but 
 if they do they will certainly be required to gov- 
 ern their conduct by a strict regard for the pub- 
 lic welfare." 
 
 Commenting on this, the Brooklyn Eagle 
 writer says : 
 
 "In this statement made by Dr. Gladden is the 
 principal charge in the indictment which the ad- 
 vocates of Municipal Ownership have brought 
 against corporations owning surface railroads, 
 gas, electric light and telephone plants. You 
 will find the same charge made by Professor Be- 
 mis in his book on "Municipal Monopolies"; the 
 same charge is being made from pulpits and the 
 chairs of college professors all over the country. 
 With the truth or falsity of this charge the writer 
 has no concern in the writing of these letters; for 
 he is dealing with facts, as they have been found. 
 Yet one may be permitted to say, without being 
 open to the charge of bias, that this charge has, 
 so far, not been answered." 
 
 This sweeping and general and unsup- 
 ported charge has, in my opinion, not been 
 answered specifically, in the first place 
 because there is no specific charge to 
 answer. Professor Bemis himself seems 
 to be in despair in relation, to gas 
 statistics for comparative purposes, and 
 yet for years he has made a specialty 
 of this branch of the subject. He 
 has given us a bewildering assortment of 
 statistics, and led us into the labyrinthine 
 mains of gas statistics until we supposed 
 the subject exhausted and municipal owner- 
 
 TI 
 
ship in gasworks a mathematically demon- 
 strated success. And now he says : 
 
 "It is indeed difficult to gather statistics of any 
 value upon electric and gas lighting. The bias 
 of the investigator, the secretiveness of the pri- 
 vate companies, the poor bookkeeping of many of 
 the public companies and the fact that the con- 
 duct of a public plant, especially one united with 
 a water plant, does not require the keeping of ac- 
 counts in the way most conclusive to compari- 
 sons with other companies, account for the well- 
 grounded, distrust of most lighting statistics." 
 
 Here we have the unscrupulous secret- 
 iveness of the private companies, that was to 
 be expected from Professor Bemis ; but 
 what are we to think of the "poor book- 
 keeping of the public companies"? I have 
 recently examined some excellent official 
 statistical exhibits relating to the principal 
 gasworks of England, and find them cap- 
 able of comprehension by the ordinary 
 mind. The cost of management and of 
 product to the consumer is clearly set forth 
 municipal gasworks on the one side and 
 private gasworks on the other and the re- 
 sult by no means favors municipal owner- 
 ship. Yet the so-called "spoils system" 
 does not prevail in England. The Gas and 
 Electric Light Commission of Massachu- 
 setts have recently published a very com- 
 prehensive volume of gas and electric light 
 statistics,* in which similar comparisons are 
 made between municipally owned light 
 plants and privately operated plants, to the 
 detriment of the former. The public seem 
 
 * Annual Report of the Board of Gas and Electric Light 
 Commissioners of the Commonwealth of Massachusetts, 
 January, 1899. 
 
 12 
 
to pay higher for the municipal than for the 
 private company gas. 
 
 It is to be hoped that Professor Bemis's 
 announcement, that there is a "well-ground- 
 ed distrust of most lighting- 
 statistics," is not due to the 
 fact that the figures published 
 do not point his way. Certain- 
 ly the English official returns 
 and those trom the last Massa- 
 chusetts report do not support 
 his theories, while many of his 
 other comparisons have been 
 seriously questioned by those 
 who speak with expert author- 
 ity. Take, for example, the 
 Philadelphia case, which has 
 been quite roughly handled by 
 Professor Bemis, and yet it has 
 turned out an admirable ar- 
 rangement for the municipal- 
 ity. An arrangement, by the 
 way, which some of the cities 
 owning their gasworks would 
 be wise to follow. 
 
 In pursuance of its contract, the United 
 Gas Improvement Company has spent in 
 betterments on the Philadelphia gas plant, 
 from December i, 1897, to June I, 1899, 
 $4,049,541.72. It turned into the city treas- 
 ury for old gas bills collected, being bills 
 for gas supplied by the city prior to the date 
 of the lease, $707,340.09. It has paid into 
 the city treasury the amount of the inven- 
 tory of materials on hand at the date of the 
 lease being coal, lime, etc., $187,678.73. 
 It has paid into the city treasury 10 per 
 cent on all collections from the date of the 
 
lease to July i, 1899, $467,628.41. It must 
 be remembered that the company is not 
 paying for a franchise, but is paying rent for 
 the very valuable gas-making property of 
 the city, upon which it is also bound by the 
 terms of the lease to expend these large 
 sums of money in betterments. Cities that 
 are tempted to follow the lead of Governor 
 Pingree and Mayor Jones into municipal 
 ownership of "public utilities" will do well 
 to wait until there are more abundant ma- 
 terials for a comparison of the results in a 
 great city of municipal and of private gas 
 production and distribution. Fortunately 
 for Philadelphia, the company making this 
 contract with the municipality consisted of 
 men of the highest integrity and at the same 
 time represented the highest grade of ex- 
 perience in the manufacture of gas. They 
 can furnish a better commodity for less 
 money than any municipal plant, and hence, 
 while they make a reasonable and fair prof- 
 it themselves, they serve the community far 
 better than it has ever been served before. 
 If Philadelphia would take precisely the 
 same course with its water-works the public 
 would be better served and millions saved 
 to the taxpayers. 
 
 As a rule, these college and pulpit 
 charges are vague and only supported here 
 and there by stray facts, largely culled from 
 inflammatory newspapers. The charges 
 made by Dr. Gladden and by Professor 
 P>emis may be, and probably are, true in 
 some particular instances where private 
 capital and peculiar conditions have enabled 
 private corporations to drive good bargains 
 with the administrators of public corpora- 
 
 14 
 
tions. In a majority of such cases, how- 
 ever, it will be found that the -'vested 
 wrong" has become so by reason of unex- 
 pected growth or prosperity of the com- 
 munity, and not because the contract when 
 made was at that time against public wel- 
 fare. The only remedy in such cases is 
 more care in the future on the part of muni- 
 cipal administrators. Reasonable leases 
 should be made, instead of franchises in per- 
 petuity. Our present municipal adminis- 
 trators are more awake to this. In New 
 York the new state constitution limits such 
 franchises to twenty-five years. This is a 
 practical way to prevent the perpetual fran- 
 chises. And yet if these gentlemen will 
 take the trouble to study the history of 
 some of the worst of these "vested wrongs," 
 they will find that many of the most profit- 
 able of them went begging for years. That 
 the communities looked upon the promot- 
 ers as public utility cranks, instead of pub- 
 lic utility thieves. That the original enthu- 
 siastic owners were buffeted from pillar to 
 post in their endeavor to find capitalists wil- 
 ling to risk their money to operate them, 
 and that the present "deplorable condition 
 of affairs" is as much due to the persistent 
 and stubborn growth and prosperity of 
 these American cities as to the inherent dis- 
 honesty and wickedness of the "capitalistic 
 aggregations" which incite the righteous 
 indignation and wrath of these public spir- 
 ited gentlemen. 
 
 So far as my own personal inquiries in 
 relation to municipalization of street rail- 
 ways indicate anything they clearly point 
 out that the glowing accounts we have had 
 
 15 
 
of such experiments by returned American 
 travelers from the other side are valueless 
 when submitted to practical American tests. 
 Not only are the statements of success and 
 profits greatly exaggerated, but municipal 
 ownership has not made anything like the 
 headway in the United Kingdom which 
 many would have us believe. Indeed, there 
 is much misapprehension in the United 
 States on this subject. Some accounts would 
 seem to indicate that England has munici- 
 palized such undertakings as water, gas, 
 electric lighting, and street railways to a 
 much greater extent than' the facts warrant. 
 In reality, if an absolutely accurate compari- 
 son could be made between the United 
 Kingdom and the United States, it is doubt- 
 ful which of the two countries would lead in 
 this respect. I refer, of course, to public 
 service, with profit-earning possibilities. 
 For example, should we consider the four 
 important branches of service the supply 
 of water, gas, electric light, and street rail- 
 ways together, 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 those without practical experience in 
 handling such vast undertakings, and who 
 therefore cannot possibly realize the ob- 
 stacles in the way of turning over such stu- 
 pendous enterprises as these, requiring, as 
 they do, so much expert knowledge, to of- 
 ficials in no way specially trained, munici- 
 palization is no doubt a fascinating idea. 
 Hence we find many writers at home taking 
 it up with avidity, and as a result the litera- 
 ture on the subject during the last decade 
 16 
 
has increased far more rapidly than the ex- 
 periments themselves. A few instances of 
 municipal ownership have been made to do 
 duty for so many books, essays, lectures, 
 and articles that the practical man of affairs 
 is beginning to inquire for additional partic- 
 ulars. Exaggerated and enthusiastically 
 written accounts of the municipal millen- 
 nium of Glasgow and Birmingham no long- 
 er arrest his attention ; while the sudden 
 change in public sentiment in 1894 in favor 
 of a halt in the startling experiments inau- 
 gurated by the London County Council has 
 greatly increased the doubts of those who 
 are not sure that, even if the success in this 
 direction had been as great as intimated in 
 England, similar experiments might not be 
 fraught with great danger this side the At- 
 lantic. 
 
 The results of my own inquiries into the 
 working of municipalized street railroads in 
 England are supported by almost identical- 
 ly the same investigation and analysis of the 
 same facts by Benjamin Taylor, F. R. G. S., 
 who thus sums up his facts in the August 
 (1899) Cassier's Magazine: 
 
 "This review then, of municipal enterprise in 
 the working of tramways in the United Kingdom, 
 leads to the conclusion that in no single instance 
 has it been perfectly successful. Glasgow fur- 
 nishes the nearest approach to success, but in 
 Glasgow, with a small track for an enormous de- 
 pendent population, it would take very bad man- 
 agement indeed to produce financial failure.* 
 
 * Mr. Taylor is correct in this statement, and he might 
 have added that an American company at the time Glasgow 
 took over the tramways stood ready to lease the enterprise 
 and pay a cash sum annually into the Glasgow city treasury 
 for a permit of twenty -one years far in excess of the profits o'f 
 any year. Not only this, but the fares were not to be 
 increased. 
 
And in Glasgow the system is a very long way 
 short of perfection, while the retention of horse 
 haulage renders the future exceedingly insecure. 
 In no single instance can the municipal working 
 of tramways be demonstrated to be a commercial 
 success; and in no single instance has municipal 
 management fulfilled the socialistic ideal, either 
 in respect of its servants or its passengers." 
 
 It is a very significant fact that Mr. Tay- 
 lor, writing from the British standpoint, and 
 conducting an investigation entirely inde- 
 pendent, should, with the same facts and 
 figures before him the official reports of 
 these several enterprises arrive at almost 
 identically the same conclusions as those 
 which you will find in the paper which I had 
 the honor to submit in response to a re- 
 quest from the chairman of the Massachu- 
 setts State Committee in December, 1897, 
 and which will be found in extenso in the 
 report of that committee. Again Mr. Tay- 
 lor says : 
 
 "The writer does not hesitate to say that any 
 well-managed company, in possession of the ad- 
 vantages which any of these corporations, whose 
 work has been reviewed, possess, would have long 
 ere this produced better results, both for itself 
 and for the public. Nothing is said of the serious 
 dangers and onerous charges that may await the 
 ratepayer as the result of what Lord Wemyss calls 
 'the mad move of municipalities toward the muni- 
 cipalization of everything gas, water, tramways, 
 in the present and all other things in the muni- 
 cipal future.' " 
 
 The fact that these socialistic experi- 
 ments rarely meet the anticipation of the 
 labor side of the problem is receiving em- 
 phasis at this moment in London. Last 
 month, when in London, the newspapers 
 were giving in detail the woes of the County 
 18 
 
Council tramway employees, who were pite- 
 ously calling upon their brother omnibus 
 drivers employed by soulless private cor- 
 porations, but as well paid as any labor in 
 Great Britain to come to their rescue. 
 When in London the general secretary of 
 the union gave me a brief list of the griev- 
 ances of the men thus employed by the Lon- 
 don County Coun- 
 cil the body that 
 started out six 
 years ago to relieve 
 all the burdens of 
 London labor and 
 London poor. 
 From this it ap- 
 pears that the men 
 are being asked to 
 sign an agreement 
 to work under the 
 Council's rules and 
 regulations, many 
 of which are said 
 to be decidedly un- 
 fair towards the 
 workers. In one 
 case, by Rule 33, 
 the men are re- 
 quired to be al- 
 ways within call. 
 During their hours 
 of rest they are 
 
 liable to be called upon at any 
 moment to begin work, so that they dare 
 not leave home, and cannot call a single 
 hour of the week their own. Again, by 
 Rule 31, any disparaging remarks made by 
 employees concerning the conduct - and 
 management of the tramway system are to 
 be treated as a breach of the rules, and Rule 
 
 iq 
 
35 provides that any such breach of rules 
 may be punished by instant dismissal. Fur- 
 ther, although a workman is liable to in- 
 stant dismissal, he may not leave of his own 
 accord without giving a full week's notice. 
 The workmen also object to the exception- 
 ally long hours which they are called upon 
 to work, one instance being an unbroken 
 period of twelve hours and twenty minutes 
 on Sundays. The extra men, moreover, are 
 obliged to loiter about the yards for hours 
 without getting a job, and their work is paid 
 for at the rate of QS. a week less than that 
 of the regular workers. The men complain 
 that they have been left in the lurch by the 
 Council. The London County Council has 
 always prided itself with being a model em- 
 ployer of labor ; yet these men openly 
 claimed to me a few weeks ago that the 
 union could prove that the London County 
 Council was the worst. The tramway en- 
 terprise has been conducted contrary to all 
 the principles of trade unionism. Surely 
 the second condition of these men is worse 
 than the first. A London newspaper in an 
 editorial takes this view of the subject : 
 
 "What seems most likely is that, when the 
 Council came to examine the subject of tramway 
 administration practically, they found that the 
 prospects of extensive improvement in the con- 
 ditions of labor which the advocates of 'Collect- 
 ivist' control had held out could not be realized 
 without throwing upon the rates additional bur- 
 dens, for which even a Progressive majority 
 lacked the courage, when it came to the pinch, to 
 become responsible. . . . What it means is that 
 the pressure now applied to the men will be trans- 
 ferred to the masters; that under pain of losing 
 votes the Progressives will be urged to concede 
 what their servants insist upon. It would be an 
 
interesting struggle for outsiders to watch, if 
 it did not seem so very probable that the settle- 
 ment will be arranged at their own expense." 
 
 This is a phase of the municipal owner- 
 ship question which American taxpayers 
 will do well to study. When the wages of 
 men become political questions, the men 
 will likely get the increased wage, the politi- 
 cal party the votes, and the taxpayer the bill 
 of expenses. If it should appear that, with 
 officials less subject to political influences 
 than the officials of American cities, Eng- 
 land has made no greater headway on the 
 whole in the municipalization of such un- 
 dertakings as water, gas, electric lighting, 
 and street railways, then it may be worth 
 while for us to study more carefully that 
 middle and safer ground which may be 
 found in good working condition on the 
 Continent, and has been able to ob- 
 tain the best expert service of private enter- 
 prises with such municipal control as ab- 
 solutely protects the public interest ; in 
 other words, the highest efficiency of serv- 
 ice, adequate compensation for rights and 
 franchises conferred, reasonable public con- 
 trol, without making the municipality an 
 enormous labor-employing bureau, with its 
 innumerable complications and stupendous 
 dangers. 
 
 It is doubtful, when all the important fac- 
 tors of the problem are taken into consider- 
 ation, if the advocates of municipal opera- 
 tion can point to a single instance in which 
 such service is performed better and cheap- 
 er and on more intelligent principles abroad 
 than in the United States. If American labor 
 would be contented with the foreign scale of 
 
wages, we might be able to give our theo- 
 retical friends even lower car fares than they 
 now enjoy. This statement is made, how- 
 ever, as the lawyers say, without prejudice 
 to the claim which I believe can be sus- 
 tained, namely, that in spite of the great dif- 
 ference in wages, such service is performed 
 in the United States today as well and 
 cheaper than similar service in any Europ- 
 ean city. 
 
 Politics, red tape, ignorance, timidity, op- 
 posing interests, and the deadly fear that 
 private enterprise should make a dollar 
 profit, have all helped in England, and to a 
 lesser extent on the Continent, to retard the 
 extension of street railways to meet the 
 pressing demands of population. In Am- 
 erica, however, private capital has had full 
 swing, and with a courage almost akin to 
 recklessness has not hesitated to discard, 
 regardless of cost, one system of propulsion 
 as fast as a better offered. Whatever the 
 sins of the American street-car man may be 
 and, like all the rest of humanity, he is 
 far from perfection he is up to date. He 
 
 has planned his railway system on broad 
 lines, including the districts that pay and 
 the districts that must be run with a loss. 
 He has gone ahead and taken his chances 
 
 22 
 
with the rest of the community, pinning his 
 faith on the growth of the city and the in- 
 crease of the suburban districts. He has not 
 been contented to pick up the pennies with- 
 in the city walls, but has boldly branched 
 out in all directions, building up suburban 
 districts where none existed, and increasing 
 real estate values along the route. The 
 American street railway man may have 
 driven good bargains for himself, and di- 
 rectly he may not pay as much into the cof- 
 fers of municipalities as toll for the use of 
 the streets, as his co-laborer beyond the At- 
 lantic. Weighed, however, in the balance 
 of good business and common sense, he can 
 point to achievements which far outweigh 
 the results attained in England, where 
 municipal pettifogging has effectually 
 soaked the enterprise out of street railways, 
 and on the Continent, where private enter- 
 prise has only been allowed to go ahead af- 
 ter being enveloped in a sack of govern- 
 mental restrictions. Instead of petty rail- 
 way budgets, showing so much profit to 
 the municipality, the American city can 
 point to largely-increased real estate values, 
 and millions added to the tax rolls, in a 
 large measure the result of distributing the 
 population of our cities beyond the bound- 
 aries far into the country districts. Look at 
 the area of American cities compared with 
 the larger cities of Europe. Without cheap 
 and rapid transit, all the recent extensions 
 of the boundaries of our cities would have 
 been impossible. 
 
 The American street railway man may 
 therefore point with righteous pride to his 
 track mileage, exceeding by 6,000 miles that 
 
 23 
 
of Europe, to the 4,000,000,000 passengers 
 which he annually conveys to and from 
 their homes, and to the fact that he has not 
 waited for the population to come to him, 
 but has gone out, true American fashion, 
 in advance of population, and built up dis- 
 tricts at great expense, which he now works 
 with a profit, not alone to himself, but to the 
 city w r hose revenue from taxes is thereby 
 increased. On the question of charges, the 
 American street railway compares favorably 
 with similar systems abroad. In the first 
 place, we have solved the question of a uni- 
 form fare, while nearly every municipality 
 which I have visited in Europe is strug- 
 gling, apparently hopelessly, with this ques- 
 tion. Why? Because the municipality has 
 not the courage of private enterprise. A 
 uniform fare, it is contended, gives the 
 longer haul an advantage over the shorter ; 
 so, to avoid this, in Glasgow the acme of ab- 
 surditv has been reached bv a one-cent fare 
 
 for a trifle over half a mile. It is far better for 
 a man to walk half a mile than to ride any- 
 how, and quicker, it seems to me, after try- 
 
 24 
 
ing halfpenny fares on the newly inaugur- 
 ated municipal horse tramways of the Scot- 
 tish city, which social reformers claim has 
 solved the true art of municipal government 
 and municipally operated transit. 
 
 With their eyes bent on the puttering 
 short haul, the street railways of the United 
 Kingdom and, to a lesser extent, of conti- 
 nental Europe, have failed to realize that it 
 is the cheap long haul that relieves the con- 
 gested spots of our great cities ; that creates 
 cheap homes; that carries the people into 
 the suburban districts; and, lastly, that 
 builds up new taxable areas, which ulti- 
 mately give back to the city a hundred fold 
 more than it would ever make trying to do 
 for itself that which can be far better done 
 by private ingenuity, economy, and enter- 
 prise. So Liverpool and London and Paris 
 are all at this moment in their new street 
 railway enterprises agitating the uniform 
 fare question, as though it was something 
 new and strange and wonderful. To the 
 canny Scotch mind, however, in Glasgow, 
 it seems a dreadful thing that one passenger 
 should get a fifteen-mile ride for the same 
 price paid by another passenger for the 
 privilege of going one mile. I say fifteen 
 miles, but on this point I may be corrected, 
 because it was only the other day I was told 
 that in New York City you can now ride for 
 five cents along twenty-five miles of road 
 and through territory which ten years ago 
 would have cost you twenty-five cents and 
 three hours' time. The efficacy of the Am- 
 erican nickel, it is true, has helped us out; 
 though with the elaborate systems of trans- 
 fers inaugurated in the larger cities, the 
 
actual American fares can not be measured 
 by five cents. In New York City the enter- 
 prising Metropolitan Street Railway Com- 
 pany have, during the last three years, 
 increased their transfer sys- 
 tem from thirty-two mil- 
 lions in 1896 to sixty-four 
 millions in 1897, to ninety 
 millions in 1898, and to one 
 hundred and thirty- four 
 millions in 1899, thereby 
 reducing the average fare 
 to about three and a quarter 
 cents, which, as I have 
 shown, is less than the av- 
 erage fares on the Paris 
 tramways , less by more 
 than a half a cent than the 
 average fares on the omni- 
 bus of Paris. In London, 
 where the "Penny Bus" 
 is so much in evidence that 
 one would imagine they could get all 
 over London for two cents, the mean 
 rate per mile is nearly two cents 
 that is .92 of an English penny. The 
 tramways of London charge over one 
 and a half cents per mile, and the fares 
 range, as do those of the omnibus, from two 
 cents to twelve, according to distance. 
 
 But these are mere details. We can- 
 not reach a safe plane of comparison be- 
 tween European and American municipali- 
 ties without a proper understanding of the 
 two systems of local government, and es- 
 pecially of the relations of central and local 
 government in the two countries. The first 
 essential, in my opinion, is to determine the 
 26 
 
position of the city correctly and definitely. 
 If after this we shall find that in England 
 and in a greater degree on the Continent 
 the municipality is both an agent of the 
 state and an organization for the satisfac- 
 tion of local needs, may not some of these 
 reformers have to begin their work all over 
 again and become advocates of the great 
 central power, such as that possessed in 
 Germany? In that country state owner- 
 ship of railways has, perhaps, met with a 
 measure of success as a producer of gov- 
 ernmental revenue, though not as a medium 
 of quick, cheap, and efficient transportation, 
 as in England and the United States, where 
 the railways are in private hands. Yet 
 Germany draws the line on street railways, 
 and the future policy of that happy hunting 
 ground of the advocates of state ownership 
 and operation of profit-earning undertak- 
 ings will be in the direction of private oper- 
 ation, and moderate municipal control. In 
 support of this, and also in support of my 
 claim that the English experiments in muni- 
 cipalization of street railways are inade- 
 quate, let me call attention to the following 
 paragraph in the report of the Massachu- 
 setts Special Committee appointed to inves- 
 tigate the relations between cities and towns 
 and street railway companies : 
 
 "As yet no attempt at the municipalization of 
 street railways has been made in any country on 
 a sufficiently large scale and for a long enough 
 time to be of real significance. Glasgow and 
 Leeds, for instance, are the two European in- 
 stances more frequently referred to. From the 
 statements often met with in the press, and the 
 assertions heard in discussion, it might well be 
 assumed that the experiments made in these cit- 
 
 27 
 
ies amounted to an indisputable and established 
 success; whereas, in point of fact, such is in no 
 degree the case. (Those seeking further informa- 
 tion on this subject are referred to a very inter- 
 esting, as well as instructive, paper submitted to 
 the committee by Robert P. Porter, superintend- 
 ent of the United States Census of 1890, printed 
 in the appendix to this report. ) So far from being 
 a demonstrated success, it may, on the contrary, 
 be confidently asserted that nowhere, as yet, has 
 the experiment of municipalization of street rail- 
 ways been worked out to any logical and ultimate 
 results whatever, nor can it be so worked out for 
 at least a score of years to come. Even then, 
 political habits, social traditions, and material 
 and economical conditions vary so greatly, and 
 enter to so large an extent into the problem, that 
 it will not be safe to infer that what may have 
 proved safe and practicable in one community is 
 .either practicable or safe in another. At the pres- 
 ent time, the municipalization of the street rail- 
 ways is not accepted as by any means indisput- 
 ably desirable in Great Britain, while in Ger- 
 many it is regarded unfavorably. This last fact is 
 the more noteworthy, as Germany has been the 
 field in which state ownership and management 
 of steam railroads has been developed to the full- 
 est extent, and with results pronounced to be un- 
 questionable, as well as most satisfactory. The 
 grounds for this apparently illogical action and 
 contradictory policy were, during the last sum- 
 mer, briefly set forth to a member of the com- 
 mittee by the highest German authority. They 
 were purely practical. The state official referred 
 to simply said that Germany had carried official- 
 ism as far as, in his judgment, it was prudent to 
 go. The government employees tended always to 
 increase; and there, as here, if was found that em- 
 ployment by the government signified much 
 which did not at once appear. The line had to be 
 drawn somewhere; and it was not considered ex- 
 pedient to add to the number already existing 
 the numerous officials and employees of all the 
 street railway systems in the empire." 
 
 The member of the committee referred to 
 in the report was the Hon. Charles Francis 
 
 28 
 
Adams, of Boston, one of the clearest- head- 
 ed and fairest-minded men we have in pub- 
 lic life, and an expert in railway matters. I 
 had several conferences last autumn with 
 Mr. Adams on this subject, and found my 
 own conclusions identical with his, after 
 having independently gone over much the 
 same ground. Since then I have spent two 
 months in Berlin and conferred with the 
 same officials and can personally vouch for 
 these opinions being generally held in Ger- 
 many. The fact is, we are not yet prepared 
 for the German system of centralization in 
 the United States, nor do I see in the Eng- 
 lish experiment in municipalization any- 
 thing particularly attractive, either from the 
 standpoint of service rendered, or pecuniary 
 results to the municipalities. 
 
 In its conclusion the Massachusetts Com- 
 mittee says : 
 
 "So far as Massachusetts is concerned, the 
 committee apprehends that great difficulties of a 
 practical as well as theoretical character would 
 present themselves, should a serious attempt be 
 made at the complete municipalization of street 
 railways." 
 
 And this should be the general conclu- 
 sion of all who impartially study the ques- 
 tion. The old aspect of municipal adminis- 
 tration dealt with the paving and lighting 
 of streets ; the supply of water ; the con- 
 struction of sewers ; in maintaining order 
 and occasionally in the establishment of 
 parks. The new phase of municipal admin- 
 istration, in its most ambitious form, aims 
 to deal with every question that directly or 
 indirectly affects the life of the people. Car- 
 ried to the extent which it has been in some 
 
 29 
 
British cities, it is in fact municipal social- 
 ism. The new school of municipal adminis- 
 tration in England enters into the life of the 
 people. It not only takes upon itself the un- 
 profitable side of the local budgets, but ar- 
 gues very plausibly that a well-governed 
 municipality 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 community 
 at large, or should be used to promote the 
 general welfare. Beginning with the muni- 
 cipilization of gas and water, the idea has 
 extended to tramways, markets, baths, li- 
 braries, picture galleries, technical schools, 
 artisans' dwellings, cricket fields, football 
 grounds, tennis courts, gymnasia for girls 
 as well as boys, regulation of refreshment 
 tariffs, free chairs in the parks, free music, 
 and, last though not least, it is proposed to 
 municipalize the ginshops and public- 
 houses. 
 
 The only limit on the non-profit-paying 
 work which a municipality may do is, it 
 might be inferred, the capacity of the as- 
 sessment roll and the amount the ratepayer 
 is willing to pay. On the profit-paying 
 work, however, the real, vital, debatable 
 question, which the growth of the municipal 
 idea or municipal spirit is forcing to the 
 front, is : How far can municipalities go in 
 this direction without undermining the 
 whole fabric of free competition? This is 
 one of the vital points of the whole subject. 
 If the state or city taxes away one after an- 
 other of the opportunities for the profitable 
 employment of private capital and brains 
 the logical result is that other occupations 
 
 30 
 
become over-crowded, the struggle for ex- 
 istence gets harder, and an increasing num- 
 ber of persons must come upon the state 
 or city for support. The state's function is 
 to give every man an opportunity to do 
 business, under a stable government. It 
 ought not to diminish his opportunities for 
 using his capital and his abilities. In thus 
 becoming its own builder, its own engineer, 
 its own manufacturer, does a municipality 
 enter too much into direct competition with 
 private industries? Does it undertake work 
 which individuals are at least equally able 
 to perform?* If this be so, is there not dan- 
 
 *The London Globe, in an editorial on "Municipal Trad- 
 ing." says: 
 
 "There was practical wisdom in the suggestion of one 
 of the speakers at yesterday's meeting of the British 
 Association when the question of Municipal finance and 
 trading was discussed. It was to the effect that Municipal 
 trading should be left to do what it could best do, and 
 that theorists should generalize after the practical people 
 had settled what was best to be done. Adherence to this 
 principle would save a world of trouble, and would lay 
 permanently upon the shelf many a pernicious fad. Of 
 course, there were not wanting yesterday enthusiasts in 
 favor of free everything, with especial reference to tram- 
 ways, while the crank who says profits are not profits 
 when they are made by a municipality, but only a form 
 of indirect taxation, aired his eloquence also. Happily, 
 however, there was a strain of sweet reasonableness in 
 the discussion, and the general contention was the sound 
 one that municipalities should be allowed to undertake 
 only that which they could do better than it could be 
 done by private enterprise. It is well that this saving 
 leaven of commonsense was allowed to counteract the 
 views of some of the speakers, who were clearly inclined 
 to put into the hands of municipal bodies any kind of 
 trading the latter might care to undertake. Whatever ab- 
 stract resolution a body like the British Association 
 might pass, the notion of extending the trading powers 
 of County Councils and other governing bodies is not 
 likely to gain favor. In the matter of direct employment 
 of labor we have already been permitted a glance at the 
 kind of evil likely to ensue on the endowment of local 
 governing bodies with extended powers, and the result 
 is not encouraging to the advocates of such extension. 
 Apart from this consideration, however, the trading as- 
 sociations which we in the metropolis are accustomed to 
 call co-operative have done, and are doing, quite enough 
 to ruin the large class of retail tradesmen a valuable 
 section of the community which we can ill afford to 
 spare without the added influence of municipal bodies." 
 
 31 
 
ger that those of us who applaud the tram- 
 way enterprise of Glasgow, the real estate 
 scheme of Birmingham, the municipal tene- 
 ments of Liverpool, the hydraulic power 
 and ship canal venture of Manchester, the 
 abolition of slums in Bradford, and the 
 municipal achievement of Leeds, will ul- 
 timately find enterprises other than those 
 in the present catalogue taken up by 
 municipalities? The question then arises, 
 to what extent is it safe to trust municipali- 
 ties in this direction? Hon. John Boyd 
 Thatcher, mayor of Albany, has said : 
 
 "If the city may do those things for the indi- 
 vidual which he cannot do for himself, may it do 
 for him those things which he finds it inconven- 
 ient to do for himself? If it may care for his safe- 
 ty and his health, may it also care for his morals 
 and his comforts? If it may build him an academy 
 to educate a sound mind, may it build him a gym- 
 nasium to develop a sound body? If it build a 
 gymnasium to train his muscles, may it erect an 
 arena to test his prowess? If it publish police 
 rules and regulations for his conduct, may it es- 
 tablish an ethical college to teach him the founda- 
 tion of obligation? If it may teach him ethics, 
 may it teach him religion? And may all these 
 things be done at public expense? Here our ves- 
 sel breaks from its moorings and drifts toward 
 the beautiful but dangerous coast of paternal gov- 
 ernment." 
 
 It has undoubtedly been shown that the 
 experience of many cities has proven be- 
 yond a doubt that the municipal ownership 
 and management of transportation lines, 
 water-works, lighting works, markets, 
 docks and other works rendering common 
 public service may be of immediate advan- 
 tage to the public under some conditions. 
 But is this advantage reaped at the expense 
 
 32 
 
of the future? Do not the economic under- 
 takings of government only emphasize the 
 failure of government to govern? These 
 are social questions, and must be answered 
 by the sovereign body in each country of 
 the world. 
 
 In brief, is the state to be supreme? That, 
 after all, is the vital question before the 
 country today. Herbert Spencer, looking 
 out over the civilized world with the clear 
 eye of a trained observer, declared the ten- 
 dency of nineteenth century thought to be 
 in the direction of a Socialized Government, 
 remarking incidentally : 
 
 "Every additional state interference strength- 
 ens the tacit assumption that it is the duty of the 
 state to deal with all evils and secure all bene- 
 fits. Increasing power of a growing administra- 
 tive organization is accompanied by decreasing 
 pcwer of the rest of society to resist its further 
 growth and control. The people at large, led to 
 look on benefits received through public agen- 
 cies as gratis benefits, have their hopes continual- 
 ly excited by the prospects of more. A spreading 
 education, furthering the diffusion of pleasing er- 
 rors rather than of stern truths, renders such 
 hopes both stronger and more general. Worse 
 still, such hopes are ministered to by candidates 
 lor public favor by countenancing them. The 
 current assumption is that there should be no suf- 
 fering and that society is to blame for that which 
 exists." 
 
 When you open up these questions you 
 touch upon broader problems than I am 
 capable of discussing. On the question it- 
 self in hand, of how far we can go with 
 municipal operation, there is a wide diver- 
 gence of opinion in the United States. 
 There are strong advocates of municipali- 
 
 31 
 
zation, favoring almost any sacrifice for the 
 purpose of improving municipal life, en- 
 thusiastic believers in municipal ownership 
 of anything and everything, in Great Brit- 
 ain, who emphatically say that such a 
 policy is mistaken when it is proposed to 
 introduce the ownership and operation of 
 similar undertakings into the cities of the 
 United States. Attention is called to a re- 
 cent report made by a committee of the 
 New York Legislature, after examining 
 many expert witnesses and taking two large 
 volumes of testimony. The committee, in 
 summing up its conclusions in relation to 
 municipal ownership, said : 
 
 "But few have advocated the ownership and op- 
 eration of railroads by the cities. The prepon- 
 derance of testimony taken and the great ma- 
 jority of opinion expressed before this commit- 
 tee is against the system so commonly referred 
 to as "municipal ownership." It is obvious that, 
 with our present system of municipal govern- 
 ment the ownership and operation of railroads by 
 the cities and municipalities would have a tendency 
 to convert these enterprises into powerful politi- 
 cal machines, the result of which would be detri- 
 mental to the public welfare." 
 
 Before that committee was summoned 
 Dr. Albert G. Shaw, whose volume on the 
 municipal administration of certain foreign 
 cities ranks among the classics on this sub- 
 ject. Upon the subject of municipal owner- 
 ship he gave this testimony : 
 
 "I have never dreamed of advocating municipal 
 ownership in the city of New York. I have never 
 thought of it as a remedy. I do believe, if there 
 is nothing in existing charters to prevent legis- 
 
 32 
 
lative remedy, that it might be possible to bring 
 the whole business of transit in the city of New 
 York under a better and more efficient public 
 supervision, to the end of giving us some relief 
 here." 
 
 On cross-examination, the whole case of 
 municipal ownership based on European 
 experience fell to pieces ; for Dr. Shaw, 
 while taking the ground that American cit- 
 ies had perhaps been unwise in not valuing 
 more highly the privileges they had con- 
 ferred upon companies, substantially took 
 the ground that comparisons between 
 European and American cities for elucidat- 
 ing these problems were of little value. Dr. 
 Shaw said : 
 
 "I recognize, on the other hand, the exceptional 
 enterprise of many of the American street rail- 
 way companies, and the immense advantage our 
 communities derive from such facilities as they 
 have; but I do not believe enterprise would have 
 been checked if municipal treasurers had guard- 
 ed financial possibilities a little bit more closely. 
 I think these are questions of fact, to be worked 
 out precisely as I judge your committee has been 
 doing, by getting out precisely the kind of facts 
 they were obtaining from the witness who pre- 
 ceded me. I do not believe the conclusions de- 
 rivable from the experience of foreign cities, al- 
 though I have been interested in them, but I 
 never believed any experience derived from them 
 of any applicability to our cities; but they throw 
 some little side lights that are interesting, but 
 conditions differ, but our heads are as clear as 
 any one's, and we should be able to derive and 
 work out deductions and true conclusions." 
 
 The New York committee did its utmost 
 to secure the attendance of all 'advocates of 
 
 33 
 
municipal ownership, and subpoenaed some 
 of the most prominent, Dr. Rainsford and 
 Dr. Lyman Abbott, for example. Neither 
 of these gentlemen, however, appeared. Yet 
 I have already shown that Dr. Abbott wants 
 our cities to absorb all street railway lines 
 immediately. 
 
 Speaking directly on the ownership and 
 operation of street railways by cities, the 
 committee said : 
 
 "We unhesitatingly disapprove of the idea of 
 municipalities owning and operating street rail- 
 ways. There may be, however, circumstances un- 
 der which it is both feasible, practicable and 
 economical for the city to construct and own the 
 road-bed itself, and permit its operation by a pri- 
 vate enterprise, under the direction and control 
 of the city; but even that time is not yet at hand. 
 The street railway systems of the state are, and 
 for a period of five or six years have been, in a 
 perfect state of transition." 
 
 The closing paragraph of the part of the 
 report relating to this phase of the subject 
 is both unhesitating and conclusive : 
 
 "Under all the conditions and circumstances, it 
 would seem that ownership and operation of 
 street railways by the municipal authorities is 
 quite impracticable at the present time. As an ab- 
 stract proposition, we believe that no govern- 
 ment, either national, state or municipal, should 
 embark in a business that can be as well conduct- 
 ed by private enterprise. The reverse of this 
 proposition carried out to a logical conclusion 
 would put all business enterprises under govern- 
 mental management and control, and leave to no 
 citizen any hope, ambition or aspiration beyond 
 that of seeking an official position that affords a 
 meager existenre." 
 
 34 
 
It would be difficult to frame a more 
 powerful argument against so dangerous a 
 policy than this one put forward by the New 
 York Legislative Committee. There is 
 such a thing as carrying government inter- 
 ference too far, and the danger in all such 
 experiments arises from the fact that one 
 step leads to another. From municipal 
 ownership we may go to municipal social- 
 ism ; and from municipal socialism remem- 
 ber that the distance is not far to state so- 
 * cialism. Are we ready for this? 
 
 35 
 
Economic IVorks of Robert P. Porter. 
 
 LOCAL GOVERNMENT: AT HOME AND ABROAD. Reprinted 
 from ''The Princeton Review," July, 1879. 
 
 REPORT ON VALUATION, TAXATION AND PUBLIC INDEBT- 
 EDNESS IN THE U. S. RETURNED AT THE TENTH CENSUS. 
 
 ( 1882) by Robert P. Porter, Special Agent. 
 
 THE WEST IN 1880. An industrial history of the Western States of the 
 United States. 630 pages, maps and diagrams, $3. Rand, McNally & 
 Co., Chicago, 1882. 
 
 BREAD WINNERS ABROAD. 100 letters from Europe. J. S. Ogilvie 
 & Co., New York, 1884. 
 
 FREE TRADE FOLLY. J. S. Ogilvie & Co., New York, 1886. 
 
 COMMERCE AND INDUSTRIES OF JAPAN. A Report of investiga- 
 tions made for the National Association of Manufacturers of the United 
 States, 1896. 
 
 LIFE OF WILLIAM McKINLEY, Soldier, Lawyer, Statesman. With 
 biographical sketch of Hon. G. A. Hobart, 1896. |i. The N. G. 
 Hamilton Co., Cleveland, O. 
 
 -MUNICIPAL OWNERSHIP AND OPERATION OF STREET 
 RAILWAYS IN ENGLAND. A paper read before the Special Com- 
 mittee appointed by the Governor of Massachusetts to consider and investigate 
 the subject of relations between Street Railways and Municipal Corporations, 
 and reprinted from the report of the Special Committee. House Document 
 No. 475. February, 1898. 
 
 ^MUNICIPAL OWNERSHIP AT HOME AND ABROAD. 1898. 
 
 -"'INDUSTRIAL CUBA. Being a Study of Present Commercial and Indus- 
 trial Conditions, with suggestions as to the opportunities presented in the 
 Island for American capital, enterprise and labor. 62 illustrations, and 4 
 maps 8. 438 pages, $3.50. 1899. G. P. Putnam's Sons, New York. 
 
 --VESTED WRONGS. An address read at the Third Annual Convention 
 of the League of American Municipalities, held at Syracuse, N. Y., Sep- 
 tember 19-22, 1899. 25 cents. 
 
 BOTHER PEOPLE'S MONEY. Being a story of Municipal Speculation 
 and its Consequences. 1900. Revised and reprinted from the New York 
 Times, October 31, 1899. 25 cents. 
 
 *May be obtained from Leonard Darbyshire, 100 Broadway, New York. 
 

 AN INITIAL FINE OF 25 CENTS 
 
 OVERDUE. 
 
1 64287