Public Ownership Will Probably Prevail. It seems probable that public ownership and operation of street railways, gas works, electric lighting plants, and telephones will eventually prevail in America, as it is now fast coming to prevail in Europe. We shall be ready for it when the city's corps of officials and employees has come to consist regularly of honest and efficient men, and when the permanence of this character in them is guaranteed by public spirit and civic pride in a large majority of the voters. There is no lack of capable men, ready to serve successfully in controlling city monopolies under private ownership, or in managing them under ownership by the public. In the latter case the present private managers would be kept in their positions. But the voting public must first reach a plane on which it can be trusted to keep public offices in the hands of the best men; and to obtain their best service it may be necessary to pay them salaries approaching those they get in other professions.1

Public Ownership Not Objectionable in Cities as with Railroads. Public ownership and operation of municipal monopolies, as previously indicated, is not open to the serious objection urged against government ownership of railroads. With railroads there would be centralized management under national officials, so far removed from a voter's power as to control him instead of being controlled; while with street cars and gas works all would be done more closely under the view and power public enterprises in other lines. In Glasgow profits from public enterprises have greatly reduced taxation. Generally such profits are given to the public in lower charges. Great possibilities of municipal betterment are the prize within reach of good government, Birmingham's success in this respect is often referred to,

1 Ely, 262.

of the voter, with whom pride in present success, and in future possibilities, might develop his own civic character to the utmost, and secure for the city the best government attainable. Moreover, in local monopolies there are no questions of terminal handling, classification of freight, or equality of treatment to different communities.

Unquestioned Functions of Government.-The national government may well increase its service in the maintenance of light-houses and life-saving stations, in agricultural experiments, in collection of commercial information from abroad, and in similar lines of clearly useful activity not otherwise to be performed as well. The states also may well maintain agricultural and mining schools, foster general education, and care for the insane and other properly dependent classes. All this is good, so long as the service is needed, would not otherwise be done as well, does not unfavorably affect character and habits, and is not causing neglect of other lines of goverment service more important. On these subjects prevailing opinion is in practical agreement.1

1 Where Public Ownership is Desirable.-Professor Seligman teaches that public ownership is desirable (1) where it promotes a widespread interest of society, (2) where the amount of capital required is not too large, and (3) where management is comparatively simple and certain. By these criteria he thinks the argument for public telegraphs is substantially as strong as that for a public postal service, and that public ownership of telephones also is clearly wise; that street car service is more suitable for public ownership than telegraphs, or even water works, but that because street railways have been revolutionized in the last few years (changed to electricity), and in five or ten years may be revolutionized again, it is better for the present with them to continue public regulation of private ownership. (Indus. Com. IV. 130.)

How Public Ownership Has Grown.-In his testimony before the Industrial Commission (Vol. IX.) Professor Parsons, quoting from Professor Seligman, gave the following outline of historical changes in the control of means of public service:

1. They were held in private hands for extorting tolls, as early European bridges and canals, and sometimes rivers.

2. Next, charges and management, still private, are regulated by law. 3. The government takes the service, but operates it for profit, as at present with European state railroads.

4. The aim is simply to cover expenses, as now with postal service and water supply.

5. Cost is borne by all in taxation, and the use of the service is made free, as at present with roads, bridges, and some canals, and as some American city officials have proposed as to water supply.

Taxation on All, or Fees from Users of the Service ?-But the line seems clear enough between services to be charged for, and services which the public good requires to be free. Roads and bridges must be free, because they are not operated at large expense, and are needed so constantly, by so many of the people, that tolls would hamper civilization. The same is true of police and fire protection. Water is now free as a rule, in street hydrants, and in public baths and closets, except as consumers are properly required to pay according to quantity used. The same is true of light. Schools are free, being equally needed by all, and being especially important to maintain good citizenship. Street cars are not needed or used by all to anything like an equal extent. The same is true of mail, express, and telegraph facilities, and still more true of railroads.

To Make These Free Would Harm the Public, causing waste of labor and capital in useless hauling, as was explained in connection with freight rates. Social welfare requires that they be paid for in proportion to the use made of them. While no more than a fair profit should be collected on anything, none of these things, perhaps, should long be furnished at a loss except mail service, and that only in minor particulars, not in aggregate results where careful management would make it self-supporting. Greater strictness in admitting printed matter at newspaper rates is expected to reduce our postal deficit. Rates too low to newspapers is one cause of the deficit with British telegraphs, causing a waste of labor in sending long speeches of many columns.

High Wages in Public Service.-The fact that labor leaders urge government ownership, because employees would then have higher wages and fewer hours, is a point against it. While the good citizen desires to see wage workers enjoying the best possible living, it is nevertheless true that every dollar paid a public employee above the most his service, talents, and responsibility would bring elsewhere, is a tax on the people for his personal benefit. It falls on privately employed workers too, reducing net income to divide in wages; and so far as public employees kill time, labor force is wasted that otherwise would add to society's supply of goods. Losses in street car service would be a tax likewise. The government can

not be generous if it is to be just. It has nothing but what it takes from its citizens. The advocates of public ownership are doing a good work, however, when they teach, like Professor Parsons, that it should be selfsupporting, and that to get ready for carrying it out extensively, there must first be public ownership of the government itself—a wresting of power from bosses and monopolists. When the people have done this, they may know clearly how far to go in the public ownership movement.

CHAPTER VI.

REMEDIES FOR THE EVILS OF TRUST MONOPOLIES.

Tariff Reform.-As with natural monopolies, so with the strong artificial monopolies, remedies for evils must be found chiefly in law. Where a trust's power to exact excessive profit rests upon a tariff duty that shuts out its commodity from abroad, removal or reduction of the duty would be a simple and effectual remedy—a deserved punishment for the trust's abuse of the favor shown its industry by the public in the tariff. When the words "control in price up to the importing point" have any application to a trust's business, it is the tariff from which it derives its power to exact the upper portion of its price. The words mentioned, in substance, occurred in testimony given in 1899 by President H. O. Havemeyer, of the sugar trust. His saying then that "the tariff is the mother of them all" must of course be restricted to mean all the trusts to which the tariff duty is the basis of a considerable portion of the price charged.

How Important a Source of Profit the Tariff Is to the sugar trust may be known from the powerful influence it successfully exerted upon the Senate in 1894 to change the Wilson schedule on refined sugar into terms favorable to itself.1 The tariff is likewise a source of advan

1The Motive of Mr. Havemeyer's Remark against the tariff, some have thought, was that he would be willing to give up the duty on refined sugar if the duty was also removed on raw sugar, which is his raw material. Beet sugar producers seem to fear that it is also for the sake of checking their industry that the trust now favors free admission of raw sugar from Cuba.