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Author: 
 
 Porter, Robert Percival 
 
 unicipal trading 
 England and the... 
 
 Place: 
 
 London 
 
 Date: 
 
1 
 
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 CUGINCSS 
 
 535.4 
 
 P83 
 
 Porter, Robert PeroiTOl, 1862-1917. 
 
 Munioipitl trading in England and the lilted 
 Statos; an address by the Hon, Robert P. Porter 
 . • • delivered at a complimentary dinner in his 
 honour on the 31st October, 1901, with other 
 speeches on the same occasion. Issued under the 
 authori-ty of the Itoicipal trading coinmittee of 
 the London ohamber of oonniBroe. Iiondon, 1901. 
 
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1^535.4- P83 
 Cobunlna WtaiDmitp 
 
 LIBRARY 
 
 School of Business 
 
MUNICIPAL TRADING IN ENGLAND 
 AND THE UNITED STATES. 
 
 AN ADDRESS 
 
 BY 
 
 THE HON. ROBERT P. PORTER 
 
 ( United States Commissioner}, 
 
 Delivered at a Complimentary Dinner in his honour 
 
 on the 31st October, 1901. 
 
 ^ - ' • A > t « ■ '9 
 
 * • • • * » 4 
 
 WITH 
 
 OTHER SAME OCCASION, 
 
 ■» • -> 
 
 ' ■ * f «■ " 
 
 J • » J e 4 
 
 n ■• ' • ». » At 
 
 Issued under the Authority of the Municipal 
 Trading Committee of the London Chamber 
 
 of CoDimerce. 
 
 LONDON : 10, EASTCHEAP, E C. 
 
 1901. 
 
•ii|iinir 
 
 MUNICIPAL TRADING IN 
 
 EN6UND AND THE UNITED STATES. 
 
 FT COMPLIMENTARY dinner to the Hon. Robert P. 
 
 j \ Porter wm given by the Municipal Trading Com- 
 mittee of the London Chamber of Commerce (Incor- 
 porated) on Thursday, October 31, 1901, at the Trocadero 
 Restaurant, London. Mr. Sydney Morse (Chairman of the 
 Committee) occupied the chair, and there were also present 
 the. Right Hon. Lord Claud Hamilton (chairman of the Great 
 Eastern Bailway Company), Sir C. Rivem Wilson, G.C.M.G., 
 C.B., Sir Israel Hart, General C. G. Sawtell, Col. J. Roper 
 Parkington, Sir Hiram S. Maxim, Mr. Atherley Jones, 
 K.C., M.P., Mr. E. Garcke, Major S. Flood Page, Mr. E. J. 
 Gillespie, Mr. L. R. Wynter, Mr. Charles Charleton, Mr. H. 
 Snowden Ward, Mr. Dixon H. Davies, Mr. C. T. Yerkes, Mr, 
 C. H. W. Biggs, Mr. William Ivey, and about fifty others. 
 
 The Chairman proposed the toasts of " The King " and of 
 "The President of the United States," which were duly 
 honoured. 
 
 The Chaibmah, in proposing the toast of ** Gur 
 Guest,'* said they met under the auspices of the London 
 Chamber of Commerce, which generally looked after the 
 trade of their city to the best of its ability. When a few 
 years ago it was found that the municipalities and local 
 authorities throughout the kingdom were anxious to enter 
 into the arena of trade in competition with theiir ratepayers 
 — with money raised on the security of the rates these traders 
 
paid— it was felt that a time had arrived when a special com- 
 mittee of the Chamber should be appointed to eiideaTonr to 
 deal with the question. The Committee had been doing what it 
 could in annaU and impretentions way ; It even ventured to 
 risk a feneral battle with the representatives of the muni- 
 cipal traders, by getting the Government to appoint a Joint 
 Committee of both Houses, and although that Joint Com- 
 mittee made no report, and came to no deinite decision, it 
 collected a great deal of valuable evidence which had now 
 been published. He had the authority of their guest for 
 saying that that report had been of great value to our friends 
 in America. The question was really of immense import- 
 ance. Few of them realised fully the extent to which 
 municipal iawding, if it was allowed to have its full sway, 
 would interfere, not only with traders, but with the comfort 
 of everyone in the country, if it did not in the end interfere 
 with the Government of the country in a disastrous manner 
 They had it on the authority of representatives of municipal 
 twding that in their opinion there was no finality in it. 
 The latter already owned and worked tramways and light 
 railways, and according to Mr. Burns there was nothing 
 which did not reasonably and properly come within the 
 purview of municipal trading. If that came to pass where 
 would they be if the London County Council were the owner of 
 of all the railways and tramways in the County of London, but 
 not outside, where even the gauges might be different, and 
 the working of the lines constructed on a different jwlnciple. 
 Who were those bodies who desired to have this controlling 
 iniuemce over their trades ? Were they the great traders ? 
 No ! They were the representatives elected for the good 
 government of a particular district, large or small, as the 
 case might be. They were only elected for three years, and 
 yet they considered that they were competent to deal in 
 millions, and to carry on any trade, even if it was a trade 
 requiring the utmost care and greatest knowledge, simply 
 because they were members of a body elected by the rate- 
 
 5 
 
 payers. And what was the cry ? That the traders had made a 
 profit, and why should not that profit be taken away fram the 
 traders and put into their own pockets I It struck at the root 
 of good government when those who governed were not 
 simply filled with the desire to benefit those whom they 
 governed. This was not a new subject, because they found 
 great writers— John Stuart Mill and others--agreeing vnth 
 the same views. The Committee were not trying to put 
 forward a vain and foolish idea, because it was an axiom 
 that no one could carry on a profitable business unless he 
 gave that which the public wanted at a price which they 
 were able to pay for it. What an Of^rtunity the local 
 authorities had lost ! If those authorities had insisted upon 
 every trade being carried out for the benefit of all ; if they 
 had seen that all the sanitary arrangements were perfect and 
 properly kept, and insisted upon the best possible pubUc 
 service being given at the cheapest possible rate ; if, in effect, 
 they had c<mtinued to control the trades, but not absorb them, 
 they would have fulfilled one of the most important func- 
 tions of the State. Mr. Porter had come that evening to give 
 them the benefit of his advice, and he asked those present 
 to welcome him as an expert on this question, and to drink 
 his health in that sense. 
 
 Mr. RoBEKT P. PoRTER said that he feared the reference 
 of the Chairman to the effect that he (the speiier) <* thought 
 in schedules " would have a disquieting effect upon those 
 assembled. A bombardment of " tabulated statements " and 
 "statistical exliibits" after an excellent dinner was hardly a 
 fair return for such generous hospitality as had been accorded 
 him. He wished to thank the Chairman for the kind things 
 he had said about him, and to express his gratitude at the 
 undeserved compliments— (No, no)— which had been given 
 him that night. It was true that he had been largely con- 
 cerned in statistical inquiry in the United States, and in 1890 
 he had taken the census of that country. Previous to that 
 
—in 1880~lie had charge of the railway statistics, and it fell 
 to his lot to make the first Federal report ever made in rela- 
 tion to stl^et and steam railways. By reason of this he had 
 become interested in the subject, and perhaps it gave him a 
 right to speak on the qnestion so capably and interestingly 
 put forward by the Chairman. 
 
 There were a few facts which he thought it was right and 
 proper should be impressed upon them, and after some 
 hnmorous reference to the system of reading papers at pnblic 
 gatherings in England, Mr. Porter proceeded to speak as 
 f oMowB :: — 
 
 li© discnssion of municipal trading in England savours 
 a little of locking the stable door after the ho se is stolen. 
 In America we are trying to put the fastenings in order 
 before misfortune overtakes us. Whatever affliction the 
 American invasion may have brought upon the Mother 
 Country, il must plead not guilty in this case. Municipal 
 trading, as understood here, is not a Yankee notion. We 
 have had some unhappy experiences in lending local and 
 State credit to private enterpris® in the days when the people 
 of a new country were anxious to eJll^^ and 
 CMials. We enjoyed our little whirl, and we had to pay the 
 piper. In the forties and fifties an epidemic for helping 
 private enterprise with public funds passed over the land, 
 and the wildest schemes pushed fey unscrupulous promoters 
 secured the credit of the municipal, county, and State 
 Oovemmeiits. The invariable result followed. Millions 
 and millions of dollars' worth of bonds were issued by public 
 authorities, most of them to become a burden upon the un- 
 fortunate taxpayer. In a large number of instances these 
 ventures brought bankruptcy and even repudiation upon 
 cities, counties, and states, and thousands of your own 
 countrymen who had loaned their money as was thought 
 upon governmental securities, suffered severe hm&B. Again, 
 soon after our civil war, a craie set in for municipal im- 
 provements, and as a result local Indebtedness and taxes in- 
 
 creased SO rapidly that in many instances the burden upon 
 taxpayers became almost unbearable, and in important cities 
 repudiation was openly advocated. It fell to my lot over 
 twenty years ago to write the offlcial report of the history of 
 this period, and the lamentable results of throwing 
 private enterprise upon the rates may Ije studied to 
 advantage in that volume.* These experiences carried with 
 them useful lessons, and, as we shall see, has put a brake on 
 the enthusiastic American municipalist who, fresh from the 
 Mecca oi Spring Gardens or the shrine of Saint Mungo, 
 demands municipal ownership and operation of public utili- 
 ties. In these demands he has been met at almost every turn 
 with the " constitutional debt limit," as we term it. You 
 will easily guess that the Genesis of the '*debt limit *' may 
 be found in the fiscal disasters resulting from our early 
 attempts in using public funds and public credit in enter- 
 prises which should unquestionably be left to individual 
 effort. In seeking a remedy for evils ensuing from the 
 fiscal mildness which ovettiiok us before the civil war, and 
 again in a slightly modified form immediately following 
 the war, the constitutional limitation of debt was hit upon. 
 In some of the more flagrant instances, that of the State 
 of Michigan for example, the people went even further, audi 
 declared that the State must not be a party to, or intei^eted 
 in, any work of internal improvement." So bitter, has been 
 the results of the experiments of this State in a theor^ of 
 government foreign to the sound maxim that " the country 
 is governed the best which is governed the least," that the 
 Municipalists have never been able to secuxe a repeal of 
 this provifidon. I have not introduced thus prominently the 
 "debt limitation " theory because I believe it fits your case, 
 but for the purpose of showing its effect with us in 
 checking the impetuosity of the American municipalist, Go 
 
 TT*-^^?^°''*^^° '^*^*^*'^» Public Indel>tedness in the 
 
 United States, and returned at the Tenth Oensns (Juae h 1880) by 
 Robert P. Porter, Special Agent. 
 
8 
 
 whichever way he is eomrtJHitly nmiiiBg up against 
 
 this prohibitory sign. It has blocked his game in all sorts 
 of ways. In the case of Michigan, for instance, after the 
 city of Detroit had purchased a street railway, the Supreme 
 Court compelled the piiTate owners to take it back again. 
 This, too, after clever inandera had unloaded their system on 
 a coniding and unsuspecting council of mnnicipalista at 
 a splendid profit to themselves. In short, so obnoxious have 
 these limitations become that the first number on the 
 munioipalist prog?amme in the United States is the ropeal of 
 all such constitutional barriers. So far these endeavours 
 have not met with success, and the American taxpayer has 
 remained deaf to the stories of great profits in public 
 utilities, and stupidly impervious to the tempting accounts of 
 how the taxpayer has become, in some of the British cities, 
 as extinct as the dodo, or the pudamonk, while the cities are 
 running themselves on the profits of their gas, electric 
 plants, and tramways. Should these alluring arguments 
 prevail, the debt limit be removed, and full swing given to 
 municipal ownership experiments, the Americfoi taxpayers 
 will, in my opinion, invite financial catastrophes far more 
 sweeping than any they have heretofore experienced. 
 
 The progress of municipal trading in America has not 
 been checked by lack of rhetorical ability or activity on the 
 part of its advocates. Mr. Bryan, who twice contested the 
 Presidency on the Free Silver Issue, is one of its vehement 
 supporters, and the idea has become firmly incorporated in 
 the National Democratic Platform. Mr. Richard Croker, 
 whose studies during his residence in England have perhaps 
 been directed more to the British Turf than to the beneficent 
 results of municipal trading, is an advocate of the expansion 
 of municipal industry, and Tammany is not unwilling 
 to share in its profits. To these powerful political factors 
 we may add a number of exeeUent and well-meaning 
 college professors and quasi-economists, who have con- 
 Wmi what Mr. Garcke so aptly calls the "higher and 
 
 # 
 
 1 
 
 9 
 
 nobler municipal enterprises" with the more sordid 
 desire of profit-making, and are vigorously urging our 
 <sity ooimoils to follow England in these hazardous enter- 
 prises. In support of these ideas we have continuously been 
 told of the success of these undertakings, when managed by 
 capable, upright, and experienced town clerks and aldermen 
 of England. The picture, I do assure you, has been painted 
 with none too fine a brush, and the pigment, in places, laid 
 on pretty iMek. It id not over-flattedng to oweselves. 
 While the city corporations of England were reaping 
 enormous profits in gas, in electric light, in efficient tram- 
 ways, in running omnibus lines, in selling supplies, and 
 the Government rolling in wealth in the telegrsi^ and tele- 
 phone business, your short-sighted kin beyond the sea were 
 being insufficiently supplied with those public utilities at a 
 high price by private companies who were using the streets 
 free of cost and otherwise imposing on the public. So widely 
 have these arguments been disseminated in Amierica that those 
 who have opposed iiie absorption of private industry by public 
 officials have been obliged to enter a demurrer in the English 
 case. I have been obliged to enter a demurrer. I think that 
 means practically what of it ? *' It means an adnoission of 
 ^t. We simply said, ^ We are so bad that we caaaot do 
 what the English do," so on the demun^r we had to rest. 
 That is, we have met this avalanche of oratory and rhetoric 
 with the " what of it " of the lawyer, and taken the ground 
 that, if all that is claimed is true of the success of municipal 
 trading in England, the conditions were so different with 
 JUS — ^Tammany, Crokerism, and so forth — ^that such experi- 
 ments would be both unwise and dangerous. I recall the fact 
 that Professor Albert Shaw, the American Columbus of many 
 of these daring British municipal experiments, and whoeie 
 admirable volumes on the subject are well known, when 
 asked by a commission appointed by the State of New York 
 to investigate the question, if he would be willing to see his 
 
 theory of municipal ownership of tramways and gasworks 
 
 A 2 
 
10 
 
 apliliecl td tlie City of New York, iirOiiiptly replied, " Iliave 
 never dreamed of advocating municipal ownership in New 
 York." Here, then, has been our difaculty. After dilating 
 to the extent of hundreds, nay, 1 would not exaggerate 
 if I said thousands of pamphlets and volnines on the beauti- 
 ful hut dangerous course your municipalists have adopted 
 in England, the more far-seeing and responsible of our own 
 economists— especially if they happen to be ratepayers- 
 hesitate when it is demanded they shall put their theori^ 
 into pitftloe in their own eity. "Try it," they say, *Mn 
 some fvdter city o* ih some other country, but we want no 
 expansion of municipal industry in our own city." It is the 
 old story of the doctor's unwillingness to take his own 
 physic. Up to within a few years ago this was the situation 
 with us. Municipal onimership made an excellent class- 
 room topic, and the men who discussed its advance in 
 England, as an abstract question, had little to say about its 
 practical adoptM|||pn the United States. Here and there a 
 city owned a ^^orks, notably PhOadelphia, but in that 
 particular case the management was so abominable and 
 scandalous that when it was turned over some four years 
 ago to an enterprising and responsible company, all decent 
 citizens rejoiced. Since then Philadelphia has had better 
 gas, and the city is making a handsome income on the 
 franchise it has granted to the private company. A few 
 other examples of municipal electric plants and gasworks 
 might be quoted. Two of the most important municipal 
 gasworks — those of Toledo and Columbus— l^t month 
 were sold to private companies after a sail history of loss to 
 the ratepayer and scandal in respect of the municipal 
 government of the cities. In a report made by the 
 Department of Labour two (2) years ago, I find that 
 in about one hundred and fifty (150) of our principal 
 cities and towns, more than two-thirds (2-3), includ- 
 ing all the large cities, own and operate their own water- 
 works. A glance at the column relating to gasworks and 
 
 11 
 
 electric plants reveals the fact that only two or three 
 cities own their own gasworks, and about a dozen their own 
 electric plants, while no city is reported as owning its 
 tramway. This may be substantially regarded as the 
 condition of affairs at the present time. We seem to have 
 been more successful than you in drawing t^e boundary 
 line, as it were, between legitimate and illegitimate municipal 
 imdertakings. Rightly or wrongly, we have drawn that line 
 on waterworks, on the ground that the water supply of a city 
 is closely allied to its sanitary conditions, and that there is 
 no injustice in levying tribute relative to the ability to pay 
 for a good and sufficient water supply. In the cases where 
 the water supply is in the hands of private companies the 
 cities have either been unenterprising or perhaps the debt 
 limit may have prevented the purchase of the waterworks. 
 The t,endency, I think, is for cities to take over the water- 
 works, and there seems to be no objection from any quarter. 
 The statistics found in the current issue of the "English 
 Municipal Year Book " show you have been more erratic 
 than we in dealing with this problem. You have dashed 
 ahead along some lines that we should regard as extremely 
 hazardous, and in other directions, the control of waterworks 
 for example, you have taken the opposite course. Thus one 
 is surprised to find the London County Council runuing omni- 
 bus lines, erecting small but expensive electric plants to supply 
 limited areas of street-lamps, building tramways, planning 
 extensiTe subways from We^lnster to the Bank, while the 
 water supply of the great Jillbdern city is in the hands of 
 private companies. I am aware of the efforts made to pur- 
 chase the London waterworks, and of the obstacles in the path» 
 but think that the desired result could have better bcfen .^mm 
 obtained had the County Council concentrated its energies 
 instead of going into too many iridescent schemes. The 
 trouble with that body, as it appears to an outsider, is that it 
 scatters too much. The tendency to scatter or spread out 
 into too many things is dangerous to a business man— it m 
 
ruinous to a public body. There is no constitutional limit 
 to the debt-creating power of London County Council, but 
 the price of its seeurltiei suggests that a large increase of 
 those bonds might not he praoticable.* Looking over the 
 entire ield, I find about half the capital inTestod in your 
 tramways owned by municipal authorities ; about one-third 
 of the capital in gasworks : by far the largest portion of 
 the capital in electric light plants, but only half the munici- 
 pal boroughs of England seem to own their own water- 
 works. These general facts indicate the difficulty you will 
 have in defining where municipal enterprise in such matters 
 should rightly end and private enterprise begin. On this 
 point, as has been shown, we have plainer sailing in America 
 than you have here. 
 
 Within the last few years a change seems to have come 
 over this municipal dream of yours. While we, as I have 
 said, have been obliged to argue our case in the United 
 States on a demurrer so far as England's experiences were 
 concerned, there has arisen within the very shadow of Spring 
 Gardens a perverse generation which has set about the 
 •demolition of the idols we have been told to bow down to and 
 worship. The attack on the temple of municipal trading 
 has been sharp and decisive, and the edifice is almost rent in 
 twain. Having accomplished its partial destruction your- 
 selves, aided as you have been by your own Chambers of 
 Commerce, by the Society of Arts debate, by the Royal 
 Statistical Society's investigations of the financial side of the 
 question, by the Parliamentary Committee, by numerous 
 able pamphlets, and more recently by that powerful ally 
 the London Times, you must not ask us foreigners to gaze 
 upon what is left of the edifice and pronounce it complete 
 
 * The avtrage discoiiDt rate at which the mott recent loan worln 
 out at the comparatively high figore of £3 Os. Id. per cent., or rather 
 lew than the qnotation in Lombard-etreet for six months fine paper, 
 which hardened this week to 3* § per cent. Conditions have indeed 
 changed since the Spring Gardens authority oonld market Two and a 
 "Bmipm Gent. Stock above par. 
 
 13 
 
 «ltld satisfactory. We are more likely to enter the sacred 
 preoinots through the aperture you have made in it and 
 endeavour to solve the mystery of ita departed power. We 
 I may even be encouraged to compare the cost of some of 
 
 these boasted achievements with similar undertakings of our 
 I own. We might be tempted to ascertain if under a ilifferent 
 
 I . method we have beeii able, by utilising individual effort and 
 I private capital, to give the public as cheap and as efficient 
 
 I service. You, gentlemen, are too familiar with the short- 
 
 l comings of municipal trading to need even a recapitulation 
 
 1 to-night. You found it did not fit in with the extension 
 
 I of modem enterprise. You wanted to distribute your 
 
 I electrical power and sell it cheaply for all sorts of purposes, 
 
 I and you were blocked by a combination of town clerks. 
 
 I There was a demand for cheap producn-r^, gas for use 
 
 I in the gas engine, the latest and cheapest invention for 
 
 I motor power, and you were held up by municij^ities whoso 
 
 I business interests prompted them to oppose cheap power. 
 
 I So it was with light — electric and gas — and with the exteh- 
 
 I Kion of tramways and light railways. Then it w\is that you 
 
 I discovered that these towns and cities, with their retinue of 
 
 I officials, had bf en merely nibbling at the electrical industry. 
 
 I Private enterprise was being dampened and dwarfed by 
 
 I hold-nps in the shape of provisional orders. Meantime 
 
 I England was behind even Italy in an industry in which she 
 
 I * should, by right of priority of practical application, have led 
 r Europe and been side by side with the United States. When 
 
 th^e facts were fully established, your British ire was 
 thoroughly aroused. Whatever may be the final outcome, 
 and whether you ever come to any understanding with these 
 authorities, as to boundary lines, or not, you have weakened 
 f their power. If they still, as is probable, cling tenaciously 
 
 I to that which they have, they will have to fight harder 
 
 for that which they may in future wish to appropriate. The 
 [ municipal traders may preach "no finality to municipal 
 
 trading," but Parliament, the limitation of the debt creating 
 
14 
 
 piwer, ik© patience of tlie rat^yer, and tlie necessity of 
 encouraging British industry will prevent its being carried 
 out* Still more disastrons will be the trap which Mr. Garcke 
 hai set for the mnnicipalists, and into which Mr. Donald, 
 editor of the Mmmmpai Jmmmif mently precipitated him- 
 self. 
 
 As I have said, until the severe attacks on mnnicipal 
 trading referred to above, we had been given to understand 
 in America that in England wonderful success had attended 
 the efforts of municipalities to monqpoHse individnal 
 endeavour or enterprise. The appeal, however, was chiefly 
 made on the exceedingly fallacious ground that the "profits" 
 thus extracted from the pockets of the capable and enterpris- 
 ing, the energetic and far-sighted, the ingenious and the 
 inventive were enabling the rest of the community to live 
 free of taxation. Herein lay its chief attraction. Mr. 
 Bonald disposes of this point himself, and thus denudes the 
 whole theory of " no finality to municipal enterprise " of its 
 principal charm to American municipalities, by the following 
 declaration a— "It would be preferable in all eases that 
 municipalities ceased to make profits from their undertakings 
 — whether water, gas, electricity, or tramways." Here we 
 have an advocate of municipal trading in England abandon- 
 ing the very essence of the argument of his co-labourers 
 across the Atlantic. The bait of lower taxation* is the 
 luscious morsel which the Bryanite orator and American 
 college professor have been dangling before our taxpayers. 
 Without it the subject will not prove permanently attractive, 
 and hardly command respectful attention. 
 
 The l^rliamentary Committee on Municipal Trading has 
 given the British public full information on the merite and 
 demerits of municipal trading. Much of the work done by 
 your English cities deserves nothing but the highest 
 commendation from the American side of the Atlantic. It 
 is a pleasure forme to be able to inform you that here and 
 ihere we are endeavouring to follow in your footsteps in all 
 
 ■ ^ 
 
 45 
 
 matters that contribute to a higher civic life. At this 
 mommit we are$ as you know, making .a fnited and ncoi- 
 partisan fight to rescue New York from the evil influenoe of 
 ^animany.* Municipal government in the United States 
 is not so bad as it is sometimes painted, and in many of 
 our cities of medium size we enjoy capable and honest 
 government Nevertheless, we are willing to follow your 
 municipalities in the higher and nobler work they are doing, 
 providing it does not take us along the dangerous river of 
 municipal trading into the unknown sea of Socialism. The 
 expansion of the functions of municipal government for 
 the protection of public safety and public health is legitimate, 
 and should be encouraged. The question you gentlemen 
 must solve is ; " Must the economic and idealistic functions 
 of municipal government expand in like manner ? " We 
 have gcme around the circle, and here we are back to the 
 old issue which marks the parting of the ways. You will 
 have more diflBculty in finding the safe road here in 
 England than we shall have in the United States — 
 that is, if we can only hold municipal ^ ambition down to 
 the non-profit producing undertakings. My esteemed Mend 
 John Boyd Thatcher, Mayor of Albany, once said when 
 speaking on this subject : — " If the city may do those things 
 for the individual which he cannot do for himself, may it 
 do for him those things which he finds it inconvenient to dO 
 for himself ? If it may care for his safety and 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 gymnasium to develop a sound body ? If it build him a 
 gymnasium to train his muscles, may it erect an arena to 
 test Ms prowess ? If it publish police rules and regulations 
 for his conduct, may it establish an ethical college to teach 
 him the foundation of obligation ? If it may teach him 
 
 * Since the date of the delivery of this address the Tammany forces 
 have been defeated, and as we may hope, for a more honest govern- 
 rnent of New York, 
 
ethics, may It teacli him religion ? And may ail theie tMng» 
 be done at public expense ? Here our vessel breaks from it& 
 moorings and drifts toward the beautiful but dangerous coast 
 of paternal gOYernment'* Theee words are quoted because 
 they snn^mariae the arguments which yon gentlemen meet 
 willl^ day. 'T|il^^ believe in and want "paternal; 
 government and Socialism, frankly tell you they favour the 
 whole socialistic programme, that a city should conduct all 
 fimctioiiil^^ the worship of the Almighty down to the 
 mannf actnre of tooth brushes. Those who do not believe in 
 j3oeialism,and yet persist in enlarging the sphere of mnnicipal 
 trading, shonM realise that by the destruction of individual 
 effort they are rapidly undermining the very foundation of 
 their country*|M||rength and greatness. 
 
 If the State Inp eity takes away one after another the 
 opportunities for ftfoltable employment of private capital, 
 and brains (ike latest proposal being fire insurance), the 
 logical result is that other occupations become overci owded, 
 the straggle for eauup^hll^ harder, and an increasing^ 
 number of persons must come upon the State or city for 
 BPpporlll^^ State's function Is to give every man an 
 opportunity to do business under a stable government. The 
 question will be asked, Is it safe to trust municipalities to 
 do all these things at public expense ? In spite of the cry,. 
 
 Ko finality to municipal enterprise," there will be a finality 
 when, as Mr. Thatcher suggests, the vessel of municipal 
 trading *' breaks from its moorings, and drifts towards the 
 alluring but dangerous coast of paternal government.'* 
 Germany has lately set her face against municipal ownership 
 and operation of public ntHities, for the simple reason that 
 she had carried officialism as far as It was prudent to go» 
 The Government employees tended alwajrs to increase ; and 
 there, as in England ind America, it was found that 
 twoyplojiiuuvt by the Government signified much irhich did 
 Mtiu^'fisietf appear. The line had to be drawn somelRrliefef. 
 even in Germany ; it was not considered expedient to add to 
 
 17 
 
 the number already existing, the numerous officials and 
 
 employees of all the street railway systems in the empire. 
 
 That State or municipal ownership deadens enterprise 
 there can be no sort of doubt. That the timid policy of your 
 Parliament In tying these great mod^ ent^rises to the 
 apron-strings of local political boards by such leg^lation as 
 the Tramway Act, the various Lighting Acts, and now the 
 Telephone Act of 1899, has had much to do with the back- 
 ward condition of the electrical and other great industries, is 
 proved by the testimony before the Select Oonmiittee. In a 
 like manner the over-zealous corporation, in thwarting 
 company enterprise, because of its own investments in these 
 undertakings, has soaked the activity out of private capital, 
 and kept it back from channels which it would otherwise 
 have sought, to the benefit of the kingdom at large. In 
 short, it has chilled enterprise. In the United States capital 
 in these industries has had a freer headway — not a go- 
 as-you-please, as some seem to imagine — than in England ; 
 and, in jny opinion, the results have been more satisfactory. 
 Private enterprise may need curbing a bit, and this work our 
 various State Legislatures seem fully competent to perform. 
 Better let such undertakings become profitable, and reward 
 individual endeavour and enterprise, than by unjust impedi- 
 ments and State and local " jay-hawking," leave them in a 
 moriband ccmditlon. 
 
 Perhaps, in conclusion, you wiE pardon me for saying a 
 word on what we have accomplished in the United States in 
 certain branches of industry which your municipalities seem 
 
 to watch over so zealously. Take, for example, our twenty 
 
 .1 
 
 thousand (20,000) miles of street railways, not a mile oi 
 which is under the fostering care of a town clerk — ^though 
 some of it may be in the hands of a Receiver — better that," 
 I hear you say, " than on the rates.'' The private capital 
 involved in this industry — ^almost brought into existence 
 since the introditction of electricity as a motor — ^is variously 
 estimated from three hundred million pounds (£300,000,000) 
 
18 
 
 to f onr hmidi-ed million (£400,000,0<H)). pswcMrks and 
 electric liglit plants have gone on increasing side by side. 
 Wlien electric ligM was iral inkoduced, gas stocks went 
 down, lint primt© capital aoon rallied, a<id Individnal 
 conrage invented new methods to make gas cheaper, and new 
 avenntS for its use— power producing, cooking, Ac, so that 
 the consumption of gas has doubled and trebled while electric 
 lights are being strung np all over the conntry. To-day I 
 am told by one of onr greatest experts that the best, 
 steadiest, and isheapest electric light can be made with the 
 aid of gas. Yet some of your municipalities are snapping at 
 private capital and holding np provisional orders for electric 
 plants becanse they own and operate gas plants, and 
 are doing all, sorts of other qneer and anti^qnated things 
 haiid, I believe, on the theory that gas and electricity are 
 rivals. Why, they don't show the enterprise of a little 
 American train boy I once heard of, who asked an irascible 
 old gentleman to bny a box of sweets. ** Can't yon see I 
 have no teeth?" said the old man, crossly. "Gnm drops, 
 ten cents a package " replied the smart American lad. That 
 is good business. If people don't want gas, give them electric 
 light. If they don't want municipal light, give them private 
 company light. There is to© mnch of the spirit of *' Yon 
 mnst have what we have got" abont this mnnioipal trading 
 idea to make it popular in Hi XJnited States. If private 
 capital wants to take the risk ro give a community cheaper 
 transportation, cheaper or better gas, to encourage its use for 
 cooking or for mann^nring pnrposes, by distribution over 
 large areas, by all means let them do it. If individnal effort 
 and private capital want to start electric-light plants, or dis- 
 tributing power houses, the way will be found in an 
 American city. Yon won't find energy of this sort in 
 America hopelessly knocking at the city gates, as yon do in 
 some of the modem walled mnniciimlities of England. 
 
 "That is all very well," I hear my municipal friends say, 
 **bnt we must keep out these tramways and gas, and electric 
 
 19 
 
 » 
 
 and telephone and telegraph companies, for they spoil onr 
 streets and run their rails and mains and poles and elevated 
 structures and tunnels and subways in every direction, and 
 the public gets nothing in retnrn." While I do not propose 
 to be enticed into a d^nee of all the private company 
 iniquity of the United States, and while there has been and 
 is now much that is reprehensible in their actions, we 
 are still obliged to admit that the general result has been 
 satisfactory. Public officials are giving more attention to 
 these matters, and the rights of the public are mnch moie 
 carefully guarded than heretofore. A municipal trading city 
 may make a profit on its transportation, its gas supply, and 
 its electric lighting. It is for you to demand how that 
 profit compares with the amount of money which our private 
 companies annually pay into the city and Stale treasury for 
 the right to use the streets for various purposes. Mr. Garcke 
 has given us, I think, nine sound principles which should 
 be strictly adhered to, in making fiscal comparisons between 
 corporation and company undertakings, imminent among 
 these should be an estimate of the taxes which a muncipalised 
 city loses by owning and operating its own profit-making 
 undertakings. One of my municipalistic friends said to me the 
 other day, that the city was entitled to every penny of the 
 profit from such enterprises. Suppose, for aigum^t sake, 
 we admit tiiis assumption. Having done so, can we not 
 conceive of a condition mrttereih private enterprise, with its 
 greater experience, its scientific experts, and with its bolder 
 operation, might bring better results, in a given field, and 
 while yielding a pfofit for its own capital and a rewatd for 
 its own enterprise and experience — ^which should not be 
 given grudgingly— still pay a greater sum into the city 
 treasury, and at the same time serve the public more cheaply 
 and more efficiently. There, for example, is the Brooldyn 
 Rapid Transit C<nnpany paying over £200,000 annually as 
 taxes. It has worked up a big business in ti-ansportar ion, 
 has consolidated smaller tramways, pays the city nearly 
 
20 
 
 £40,(MX) annually for the privilegre of carrying passengers 
 from New York free across the Brooklyn Bridge, and, if yon 
 wish, will carry yon IMMR^^^ miles at good speed for the 
 modest fare of ive cen^^|d.). Then, again,, we haire the 
 Metropolitan Street Railway of New York, carrying nearly 
 200,000,000 passengers on transfers, free of cost — £2,000,000 
 thrown away, some people contend. Surely here we can match 
 yonr mnmcipalists* halfpenny fares, of which we hear so 
 much. On the contrary, this bold stroke of free transfers 
 brings bnsiness |nst as it would if some great central company 
 secured the underground and tubular railways of London, 
 electrified the roads, unified the fares, and sent the passen- 
 gers night and morning in whichever direction they wished 
 without thought of so much fiire for so many miletp, or 
 of class, for a distance of ten or fifteen or even twenty 
 miles around London. This same New York Metropolitan 
 Railway has just scrap-heaped a good cable plant worth 
 over a million sterling because it stood in the way of 
 electric progreis. The iame company last year paid 
 nearly £200,000 in taxes, without counting the value of 
 paving and street cleaning, and removal of snow which is 
 done for the city, and is charged in with operating expenses 
 of the tramway company. The Union Traction Company of 
 Philadelphia have made me an estimate of their taxes, and 
 including the cost of the maintenance of paving, removal of 
 snow and ice, and the interest on the original £2,800,000, the 
 cost of improved pavements laid by the company at the time 
 the franchise was granted, this aggregates over £400,000 
 annually. These would seeih goodly sums, and certainly 
 dispose of the assertions that the American street railway 
 companies use the streets free. The official report from 
 Massachusetts shows on gross receipts of about £4,t)(i(),U00 
 for all the street railways of the State, taxes of £270,000— a 
 trifie over 6 per cent of gross earnings. These companies 
 also pay an enormous sum for injiiries and damages. Our 
 Courts are seyere on the railways, and the juries liberal to 
 
 21 
 
 the injured passenger. The BroiMyn Rapid Transit piil|^ 
 last year £160,000 ; the Metropolitan Railway of New Yofi* 
 £67,000 ; and the street railways of Massachusetts, £120,000. 
 The Manhattan Elevated Eailway of New York, besides it& 
 very heaty annual taxes, has paid since Ita existence, 
 £2,500,000 in cMltts for damages, and has an equal 
 number of claims still pending. Here and there large 
 fortunes have been made out of these venture?, but the 
 street railway companies of the United States, when the 
 enormous items of expenditmre as above indicated are de> 
 ducted, are not making aa much money as the municipal 
 ^ trader seems to think. The same holds true of the Com- 
 'panies supplying gas, electricity, telephone communication, 
 and telegraph service. The British Government is losing 
 heavily,'! understand, on its telegraph business. We have 
 two competing companies which give us a good and cheap 
 telegraph service, and both seem to make reasonable dividends 
 in spite of the inroads of the telephone. The unhappy story 
 of your telephone industry, divided now under three heads— 
 Goveriimental, Municipal, and Private— is tcjo ^oniliar tf> 
 this gathering to require more than a passing reference. A 
 strong company, if given a fair chance, would have, in my 
 opinion, served both the public and State more satisfactorily. 
 The telephone is of real value in the United States because 
 it works well, the connections are quickly made, and it ia 
 easily reached. In our large cities, public telephcmes may 
 be found on almost every block. Our telephone parlours in 
 some cities are places of luxury where you may read the 
 newspapers and smoke while waiting, and, as your calls are 
 answered, do business all ov^ the United States. Sharp- 
 witted and quick American girls serve you iirHh civility and 
 promptitude. If you do not get the person you want, yon 
 do not pay. The trouble that some of these operators take 
 to connect the proper exchanges, and get the right people to 
 the telephone, would astonish the coolly indifferent operators 
 in British postal or trunk-line exchanges. It is privet© 
 
liiiiilneiB, yon ee!B| mid in many instances edmpeMng IxMfaiess. 
 It pays to push il^ ! Jted it is vigorously pushed. 
 
 Yoti will appreciate tliat these few facts are not sub- 
 mitted in a boasting spirit. We have by no means solved 
 tliese problems, and have much to learn in dealing ^th them. 
 Again differ so widely" that what 'may be suitable 
 
 f <nr us might not be practicable in England. We have begun 
 much of this work with a clean sheet of paper before 
 us, and have worked out our plans without the numerous 
 obstacles which your older civilisation places in the way. If 
 I have been Mm to show that we are not quite so foolish in 
 dealing with tli«iiB Imnohises^ and conducting these extensive 
 business operations, as some of your municipalists seem to 
 imagine, I shall be very happy. If our experience will help 
 you to a greater development in these industries, I shall have 
 accomplished all I could possibly hope to do. The London 
 Chamber of Commerce has done excellent work in exposing 
 the fallacies of municipal trading, and whenever opportunity 
 is afforded you I am sure you will continue tft demonstrate 
 the great fundamental fact that individual entei^'ise can not 
 only conduct these industries better, but yield larger results 
 for the relief of the ratepayer for any rights or privileges 
 which may be granted to individuals by the City. We are 
 at this moment constructing a subway the entire length of 
 Manhattan Island, mucii of the way through solid rock. It 
 is admittedly the greatest work of rapid transit yet executed. 
 The contract has been let to a private contractor, under a 
 heavy bond to construct and operate. It will probably 
 necessitate the outlay of £10,000,000 .sterling before the 
 railway is equipped and running. It will, as I have said, 
 be leased thereafter for a term of years to the contractor 
 under the strictest rules and regulations. The interest of 
 the city and the public have been most carefully looked 
 after in this contract, and ultimately the city will come 
 into possession of the subway. At the same time it affords 
 abundant opportunity to private enterprise. Thinking an 
 
 armngement so satisfactory was in line wllh #10 ipilaw of 
 one of your London municipalists, I submitted to this 
 gentleman the other day a summary of the contract, agree- 
 ment, and lease. He said no, he did not believe in it at 
 all. If .there was any -proM in it, the city should get it all. 
 ThiB spirit is death to all kinds of enterprise, and you ar« 
 justified in fighting it as vigorously as possible. 
 
 In conclusion, Mr. Porter said : I want to thank you very 
 much indeed for suffering tl^^fiiction in such a |4easant 
 mann^, and for the very kind and altogether too generous 
 reception you have given me. (Cheers.) 
 
 The Chaibman said he had to r#porl leltefs of regret 
 from Mr. Alban Gibbs, M.P. for the City of London, and 
 
 Mr. Carnegie, the latter gentleman stating that "he was 
 glad to hear that his friend Porter was to receive deserved 
 recognition." 
 
 Sir Charles Rivers Wilson, G.C.M.G., C.B., said 
 that Mr. Porter in the admirable paper he had just read 
 had covered really the whole of the question. No&iiig 
 surprised him more than the * grasp which he had 
 obtained of all the facts of this complicated and difficult 
 matter, ^vhich, to a certain degree, must have been 
 unfamiliar to him until he came over here. He soemed 
 to have got every point of importance. He could not 
 perceive a single flaw or inaccuracy in any of his 
 statements with one exception. They would agree that 
 Mr. Porter had been insufficiently informed when he said that 
 the temple of municipal trading had almost been com* 
 pletely riven in twain. That was not the case. The battle 
 had not been won, by any manner of means. The Cham- 
 ber of Commerce had done gallant service, and put them- 
 selves in the forefront of the battle ; but it was not to be 
 expected they would conquer, in the fight unless they 
 received more support from the Government, the public 
 generally, and Parliament ; and it is in that direction that 
 
M 
 
 all tlie elf<i||M those interested in this question slioii'Cl be 
 applied. He urged tben to try and form popular opinion 
 on this subject, and it could be done by disseminating 
 information and arguments such as they had listened to 
 that night. He hoped that the interesting and important 
 document contributed by Mr. Portelf would be printed and 
 circulated and gi¥en the widest publlelty. Coming as it did 
 from the representative of a neighbourlDg friendly and pro- 
 gressive country, he trusted it would give a stimulus to their 
 lethargical, indifferent, and perhaps interested legislators. 
 The battle would have to be fought aga^ next year. He 
 thanked Mr. Porter extremely for the service he had 
 rendered them, which was worthy of his great reputation. 
 
 Mr. Ybbkbb said he had noted down in his mind various 
 things that he wished to say, all of which had been touched 
 upon by the chairman and Mr. Porter. The question of 
 municipal ownership— as they called it in America — was a 
 matter that had been very near to his heart. He had had to 
 do with municipalities, with corporations, municipal 
 corporations, and he ha^ Md the fortune, whether good 
 or bad, of always being opposed to them. It had 
 been rather a rocky road sometimes, but they had 
 got through. There seemed to be an idea in the 
 minds of some people that the municipality should 
 own everything ; if not everything, at least a great deal, and 
 if not a great deal, at leiist something. They started with 
 the waterworks — in England they had not been so unfortu- 
 nate. He believed that private corporations should own 
 everything which pertained to the work of a municipality, 
 and that the municipalist, or whatever they might call him, 
 had plenty to do to look after the education, the health, and 
 tie good conduct of the city. For him to enter into business 
 of any kind was to enter a realm that he knew nothing 
 of. What was wanted was experience. They did not 
 want a shipmaker to build a house; neither did they 
 
 25 
 
 want a mason to make a watch ; they wanted every 
 Jack to his trade, and tiie trade of the municipalist was 
 not in runiiiDg riaiways, gasworks, or anything that pertained 
 to the industries of a State. When it came to keeping shops 
 
 or running an omnibus line or anything of that kind, it was 
 simply ridiculous. This meant " hunting around " for some 
 way to get pawer and spend money. If he would let these 
 ifHDdngs alone, attend to the cleanUneeS of th» city, it« good 
 conduct, the education of the people, the welfare of tbepoor, 
 and many things of that kind, he would find he would more 
 than have his hands full. He fully and sincerely believed 
 that the fact that they had private corporations in the United 
 States had been the salvation of the people. If the Govern- 
 ment had owned the railways, the street cars, and the gas- 
 works, they would not have as prosperous a country as the y 
 had to-day. Look at the countries of Europe where the 
 Government owned these things. Let them eay how many 
 miles of railroad they had ; notice the manner in whic h 
 those railroads were run. Why, they were simply nothing 
 as compared with those in the United States, where they had 
 tens of thousands of miles in good condition, controlled 
 by men who had been brought up to it from boyhood. 
 He thought the men who were working in shops, who 
 had been brought up to business firom the time they 
 first knew what business was, were the kind of men to make 
 progress. It was not the Government official who was only 
 giving a little of his time and hiring a lot of clerks to do his 
 work ; those were not the men thit were progressive. Looking 
 a municipal ownerships in the United States— andfortunately 
 they were extremely few — there was an instance that stotjd 
 out beyond all others ; he did not know of another instance 
 in the whole world that was equal to it, and that was the 
 experience of the city of Philadelphia. He was a resident 
 there for a great many years, until he was forty years of 
 age. Everything was arranged in the very early days, before 
 he was born, in fact, in such a manner that the city could 
 
amae liay own th© gaswurks subject to municipal control. 
 Tlie city of PMladelpMa was more like London than any 
 other American city. It was originally composed of a 
 nmnber of townsMpe. First there ima the city itself, 
 which was very anally then there was the district of 
 the Sonthem liberties^ the district of Kensington, the 
 district of Bonthwark, and other districts. They were 
 all combined to make the city of Philadelphia, and 
 they were practically the connty of Philadelphia. When 
 the gasworks were organised they were placed under 
 an Act of Legishitnr© which ^ provided that these different 
 disWcts should bny the gasworks located therein. When he 
 was quite a lad there was a party formed, and they concluded 
 they would consolidate the city of PWladelphia, and an Act 
 of Consolidation was passed which joined together all these 
 different districts with all these various gasworks. This 
 same party obtained a controlling interest, and concluded 
 they would buy the gasworks of the City of Philadelphia as 
 it then was. They bought these gasworks, and they were 
 organised according to law in a Trust, and there wei^e a 
 lot of trustees who were appointed by the council— a sort 
 of common council of the city of Philadelphia. In that 
 way the city council appointed, not elected, but they 
 got together the dominant party, and they appointed so 
 many gas trustees.. He believed there were twelve, who 
 were then empowered to go ahead and bny the gasworks. 
 According to law there were three appraisers appointed- 
 one by the gas company, one by the city, and one chosen 
 toy the two. The gas companies, of oonise, took into 
 their confidetice the politicians; the politicians appointed 
 the gentlemen that they asked them to appoint, ami the city 
 of Philadelphia paij 75 per cent more for the gasworks 
 than they were worth. This operation extended over a 
 period of about a year, and during that year there were no 
 improvements made to the gasworks but, on the contraiy, 
 lots of big billB were run up. The city came into possession 
 
 of the gasworks ; they were run by the trustees, who were 
 
 appointed by the City Council. After they had fairly got 
 under weigh the gas trustees making coal gas employed 
 thousands of men, and when election time came round, 
 thonKRinds of men would be employed by theae gas ^msteeSi 
 and would really control the election, and instead of 
 the City Council appointing the gas trustees, no 
 man could be nominated for a position on the Council 
 nnless he had passed through the ordeal of the gas 
 trustees. They ran the whole dty, and they did it for 
 twenty-five years. He warned them that if the British 
 Parliament sanctioned any such powers as that, they would 
 find that the Municipal Councils would have a broad, strong 
 grip on Parliament. That was the past exemplification o 
 how the thing worked as regards ^municipal control in 
 American cities. If they had the railroads and tramways 
 controlled entirely by the County Council, the County 
 Council would have thousands and thousands of men on the 
 roads, and the people who were in power to-day would be 
 in power next year, the year after, and continually. He 
 did not think the thing would work; and when it came 
 to their keeping shops and going into mercantile business, 
 why, the idea of the County Council running a mercantile 
 establishment was absurd. It would not do at all. It was 
 a spirit of socialism that had got hold of the people, and that 
 was what they were running to. 
 
 Lord Claud Hamilton endorsed the remarks of Sir C. R. 
 Wilson on the admirable paper read by Mr. Fort^. It 
 showed a wide knowledge of our institutions, and of the 
 difificulties to be faced which might in the future, as at 
 present, affect legislative commercial enterprise. He believed 
 he was the only railway chairman present Now, if anyone 
 in the kingdom was affected by municipal trading it was the 
 railway companies, and the shareholders they represented. 
 Between 11 and 12 hundred millions sterling were invested 
 
 I 
 
in British railways. During the past two years they had 
 mperienoed a period of very great difficulty. As a body, and 
 
 a greater body of aharekolders, the railway 
 " ' iMHEpaiiies were opposed tooth and nail to mnnicipal enter- 
 prise, as it was undei-stood and endeavoured to be under- 
 taken by various municipal bodies in this country. Why 
 were they assembled to make this protest ? It happened 
 that he had the advantage of entering Parliament a very 
 long " t^ime ^ago, m txi le year 1865, and lor twenty-three years 
 he remained in Parliament, lIliiiEt he was a very 
 
 simple, retiring member, he still kept his eyes open, and 
 often asked himself why was the Board of Trade — a Govern- 
 ment ingtitiiiUpi, on • which so much depended— always a 
 •second-cntt darvemment department ? He agreed that by the 
 dissemination of information, and especially the circulation 
 of the most admirable paper which had been read by 
 Mr. Porter, some good might be done, but Englishmen 
 and Scotsmen were slow-thinking people ; they did not act 
 BO qtiickly as their American cousins. Mr. Porter asked 
 whether they were afraid of American competition ? Per- 
 sonally he valued their presence amongst them as an 
 incentive to activity, but what was wanted was not only the 
 dissemination of information, but the formation of local 
 liodies who would assist in the dissemination. As a case in 
 point, the company he represented had its works at Strat- 
 ford, in Essex. They paid £30,000 a year in rates, and up 
 to two years ago there was a most Socialistic and Radical 
 corporation at West Ham. He found it nec«88ary to dismiss 
 a servant of the Great Eastern Kailway who was a member 
 of that corporation, and this was resented by those who 
 thought with him. A proposition was actually brought 
 forward that the Great Eastern Railway should be boycotted, 
 that all traders i]|<||pjj||Nirough of West Ham who had goods 
 to sen d, should not wmd them by the Great Eastern Railway. 
 That showed the spirit of thos gentlemen, whose views, if 
 carried into general effect, would in time luin the trade of 
 
 29 
 
 the United Kingdom. What did they do ? They thought it 
 desirable to stem the torrent of Socialism in West Ham, 
 and so they started a Ratepayers' Association on a non- 
 political basis. The result of the establishment of that 
 association was that at the last election the Socialistic 
 majority was swept away, and an ordinarily sensible pro- 
 gressive majority established in its stead. This could only 
 be done by active work within the particular constituencies 
 while this canc^ existed. If such ratepayers' associa- 
 tions were started in those boroughs where this spirit was 
 most rampant, and where it should be checked, they 
 would be doing more to carry out the views they held 
 than in any other way. The railway companies were fully 
 alive to the dangers which were threatening, and would 
 gladly co-operate»with the London Chamber of Commerce and 
 other bodies in opposing the extension of municipal trading. 
 
 Mr. Alderman Wm. Ivey (late Mayor of West Ham) said 
 that Lord Claud Hamilton had not exaggerated the facts. 
 Lord Claud represented the Great Eastern Railway— their 
 largest ratepayer— and they were assessed for the West Ham 
 rates to the tune of about £120,000 gross. They had been 
 badly treated, and had been long suffering. Any man who 
 had gone into municipal life should take a pride in municipal 
 government in its best sense ; but they found that many 
 men only obtained positions on local authorities for the sake 
 of power and of votintr away other people's money, without 
 exercising the same regard for, and judicious business ability 
 they displayed in, their own private affairs. In West Hipi, 
 for instance, a man was elected to a body representing 
 300,000 people, a rateable value of over a million, and 
 46,000 assessments. About 43,000 were assessed at less than 
 £20, or under, and the remainder over. On every cottage 
 at less than this assessment they lost money, on 
 every factory they had to find the deficit caused by 
 the cottages. What was the result ? A man who was 
 
80 
 
 not good enough to be employed by a contractor or a 
 public company at 248. a week, might be elected on the 
 Council, and Ms voting might turn hundreds of thousands 
 of pounds this way or that Was that iiie spirit in which 
 municipal governments should be carried on in this 
 country? Personally he had had twelve years of it, and 
 was going to retire. He had proved how difficult it was 
 im a municipal authority in this country to conduct its 
 buslnees on the same lines as a man would carry it on for 
 either a company or his own personal advancement. He 
 agreed with the whole of Mr. Porter's paper with one 
 exception. He said that he thought the water supply was 
 one question wi^h which the municipal authority 
 should deal. For years past the London County Council 
 had tried to promote a Bill in the House of Commons 
 on the water question, and they had been bitterly 
 opposed by the other local authorities in and around 
 London. Hundreds of thousands of pounds had been 
 thrown away on a useless fight He believed that the 
 Ctovernment were about to bring in a Bill enabling them- 
 selves to become the water authority of Greater London. 
 That was the scheme, and in his opinion the only possible 
 scheme for Greater London. There were eight companies 
 which supplied the whole of Oreater London, and out- 
 side that area every town might have its own water supply, 
 but as it was absolutely impossible to get all the local 
 authorities to agree on the water question, the Government 
 ought to be the water authority for Greater London. As 
 regards municipal enterprise and trading, the Government 
 ought to impose a limitation beyond which it should not be 
 allowed to go. That was the only possible safeguard while 
 local bodies were being filled with men whose one object 
 was the keeping of their positions. 
 
 Mr. Atherley J0NE8, K.C., M.P., said they were glad 
 to observe the lion of Municipalism lying down side by side 
 
 31 
 
 with the lamb of railway capitalism. He was also glad 
 to see that there was no hostility in principle to the develop- 
 ment of healthy municipalism, because they honoured and 
 tf^ured the great municipal institutions of this country. 
 At the same time they felt this, and it was the crux of the 
 situation, that they were going through in England that 
 period of spasmodic and sporadic municipal enterprise which 
 was witnessed in America in the decade between 1S40 and 
 1850. Mr. Porter told them that Americans ran amuck in 
 those years, and, as a consequence, a violent reaction, from 
 which they had not yet recovered, had set in. Since the 
 Reform Act of 1885 political parties catered for the franchise 
 of constituencies on the i^rinciple of which could give the 
 most) and they were taking large steps in advance without 
 having consolidated municipal institutions to enable them to 
 bear the heavier burdens which they were seeking to impose 
 upon them. But in this country also they were interested 
 in the solution of the extraordinarily interesting problems 
 of municipal trams, electric trams, steam trams, electric 
 lighting, and other developments. They found, however, 
 that municipalities endeavoured to retard those who were 
 willing to do those things which municipalities were unable 
 to do. There was no reason why private enterprise should 
 be retarded. They all knew that in their attempts to 
 deal with the extension of electric traction, and in- 
 deed electric lighting, they were met by the multiplied 
 hostility of a variety of independent units. It was 
 against that that they desired to contend, not in any 
 spirit of hostility, but in a spirit of conciliation and with the 
 desire to assist municipalities to realise thai i^vate «iter- 
 prise could effect in that direction far more than municipal 
 effort ; the competition of private enterprise was the most 
 effective safeguard of public security and public utility. He 
 concluded with an acknowledgment of the able speech of 
 Mr. Porter, and shared his general sentiments in deshring to 
 realise all that was best in the municipal institutions of this 
 
Muiifry and in timt great aiicl magnificent Republic across 
 tlie seafti 
 
 Mr. BaSSBTT HoPKlirs said lie felt, witli every other 
 speaker, lliat the paper which commenced the discussion 
 was an extremely instrnctive one, whatever point of view they 
 might adopt. He could not be expected to coincide with 
 everything that had fallen from previous speakers, or to 
 admit that it was impossible for a railway run by a State to 
 be as efficient as one which was run by private owners. He 
 would rather travel, under many conditions, upon a Belgian 
 railway than upon some of the suburban lines which lay 
 between the metropolis and the town of Chatham. He was 
 not aware that the public had been able to see a report from 
 the 'Committee of the Chamber of Commerce on liilHipal 
 trading which they might use as a basis of thought and con- 
 sideration. He ventured to suggest that if they would 
 formulate certain definite propositions they would be more 
 likely to infiuence the ratepayers of the country, and through 
 them the governing bodies whi6i had the control of the 
 municipal affairs of London, than by extreme propositions 
 which would rather repel than attract confidence. 
 
 Mr. DixoM H. Baths welcomed the remark of Mr. 
 Bassett Hopkins, that those who took the view that some 
 restriction should be imposed upon action in the direction 
 of trading by the municipalities were actuated by no hos- 
 tility to those very desirable institutions. He did not think 
 Mr. Porter was quite correct in assuming that this country 
 had no experience of the mischievous interference of the 
 municipal authority in the direction of trade. Prior to 
 1833 the whole of the municipal government of this country 
 was constituted by the trades societies, the places on the 
 municipal body were filled up by co-option and by the elec- 
 tion of the guilds representing the different trades. The result 
 of this was that the whole of the powers of the municipalities 
 
 4 
 
 aa 
 
 were operated for the purpose of serving the selfish intereats 
 of the particular trades represented by iJioee guilda. Tlie 
 first act of the Reformed Parliament in 1833 was to alter the 
 
 constitution of the municipalities so far as it was based 
 upon trade, and consequently to prevent the power of 
 the town being applied as an engine of provincial 
 protection. Those who brought about that reform 
 were actuated in doing so by no spirit of hostility to 
 municipal institutions in this coufitry, for the freeing of the 
 municipal institutions from the grasp of the guilds resulted 
 in an extraordinary development of population, resources 
 and of power in the great towns in this country, besides 
 encouraging principles of free trade. What was happening 
 now might be compared to the dog returning to his own 
 vomit, as they found muncipalities imposing restrictions 
 upon enterprise which were exactly comparable to those 
 of 1830, and the evil which was pointed out then had always 
 been the result of Governmental competition in the domain 
 of trade. He was struck by the figures that were men- 
 tioned of the vast stock which the railway companies of 
 this country had charge of. Even in these bad times 
 under the commercial management of the railway direc- 
 tors that great property produced a profit of forty millions 
 sterling per annum. Compare that with the figure which was 
 mentioned in the Ti^nes that morning regarding only a portion 
 of the railways of France (instituted under Government 
 auspices and dependent for their returns on the aid of the 
 State), on account of Avhich a deficit of forty million francs 
 would be charged in the Budget of France next year. Let them 
 compare the two — in this country forty millions profit, in 
 France forty-eight million francs deficit. That was only 
 one indication of the failure of enterprise when it was sub- 
 jected to Governmental interference. Railway men knew of 
 many expansions of their systems, which w^ould be desirable 
 from every point of view, and which were forbidden by 
 the municipalities. He eould mention towns where 
 
great railway companies had for years been projecting 
 imporlaBt exteMioBS, aiicl which they had been pre- 
 vented from carrying out because those towns have 
 started mnnicipal tramways, and because they believed the 
 railways would take away the trade from those tramways. 
 It was said of Cobden and Bright, when they undertook that 
 great agitation which freed the ports of this country, that 
 they were acting selfishly because they would be, in their 
 private capacity, the first to benefit by that freedom^ but 
 that was not the entire effect of their action. He bad not 
 the least faith, as a practical man, in the remedy suggested 
 by Mr. Bassett Hopkins, His own view was that the 
 remedy was financial restriction. They must limit the 
 taxing power of these bodies. Mr. Porter had told them 
 that all over the United States of America there was a 
 definite limit. It was impossible for the authorities there 
 to levy a greater finimcial burden than was represented by 
 a definite percentage of the values to be taxed. It was 
 of the highest importance they should do so. It was of 
 great importance that all that large amount of capital 
 which necessarily found its investment in Governmental 
 securities should not be absorbed by these municipal 
 authorities, and be frittered away in the advancement of 
 municipal industries which (as Mr. Porter had shown from 
 the experience of the United States) could be better achieved 
 by private association. 
 
 Mr. E. aAECKB proposed the health of Mr. Morse, the 
 chairman. He said Mr. Morse had done excellent service m 
 this cause. He had made very great sacrifices in order to 
 give effect to his convictions upon this question. The 
 manner in which he organised the evidence which was 
 given before the Joint Committee of the two Houses last 
 year was worthy of their utmost* appreciation, and was 
 deserving of the gratitude of all those who took a deep 
 interest in this question. 
 
 35 
 
 Mr^ POBTfiB said the reason he drew the line at water- 
 works was that he thought everyone was entitled to that 
 free, without any profit. Now if these gentlemen were 
 willing to give the gas over and the tramways over, that 
 was all right, but the idea of di-awing the line on water was 
 for that reason and no other. 
 
 Mr. Morse, in returning thanks, said that his share of the 
 work of the Committee had been done from a conviction 
 that they Were right. There was no doubt whatever that the 
 work of the Municipal Trading Committee took up a great 
 deal of time. They had been very highly honoured in having 
 Mr. Porter amongst them, and his paper would be an epic 
 in their records, and would do great good throughout tha 
 country. They were also obliged to Mr. Yerkes for his 
 remarks. The Municipal Trading Committee were not 
 opposed to municipalities doing the work for which they 
 were created, but objected to their taking up matters outside 
 their proper functions. John Stuart Mill had put the 
 matter v^ clearly when he said that:— "The true reason 
 in favour of leaving to voluntary associations all such 
 things as they are competent to perform would exist in equal 
 strength if it were certain that the work would be as well 
 or better done hy public officers." 
 
COLUMBIA UNIVERSITY 
 
 ■ 
 
 SEP 2 91994 
 
 NEH 
 
 AUG 3 1998