THE REVENUE OF GARDEN CITY--GENERAL OBSERVATIONS ON ITS EXPENDITURE.
Before entering upon the question which presented itself at the
conclusion of the last chapter--that of endeavouring to ascertain
whether the estimated net available income of Garden City (£50,000 per
annum) would be sufficient for its municipal needs, I will very shortly
state how it is proposed to raise the money required for commencing
operations. The money would be borrowed on “B” debentures,[9] and
would be secured by a charge upon the “rate-rent,” subject, of course,
to the payment of interest and sinking fund in respect of the “A”
debentures on which the purchase money of the estate is raised. It is,
perhaps, superfluous to remark that, though in the case of the land
purchase it might be requisite to raise the whole, or at least some
very considerable part of the purchase money before possession would
be given of the estate, or operations upon it commenced, yet in regard
to public works to be carried out upon the estate, the case is quite
different, and it would be by no means necessary or advisable to defer
the commencement of operations until the whole sum which might be
ultimately required should be raised. Probably no town was ever built
on such onerous conditions as would be involved in the raising at the
outset of such a very considerable sum as would defray the cost of all
its public works; and though the circumstances under which Garden City
is to be built may be unique, there is, as will by and by be seen, not
only no need for making an exception of the town in respect of initial
capital, but quite exceptional reasons will become more and more
apparent which make the overlaying of the enterprise with superabundant
capital altogether unnecessary, and therefore inexpedient; although, of
course, there must be a sufficient sum to enable all real economies to
be readily effected.
Perhaps it may be well in this connection to draw a distinction as to
the amount of capital required between the case of the building of a
town and the building, let us say, of a large iron bridge across an
estuary. In the case of the bridge it is highly expedient to raise
the entire sum required before commencing operations, for the simple
reason that the bridge is not a bridge until the last rivet is driven
home, nor, until its entire completion and its connection with the
railways or roadways at either end, has it any revenue-earning power.
Except, therefore, on the assumption that it is to be fully completed,
it offers very little security for the capital sunk upon it. Hence
it would be very natural for those who are asked to invest to say,
“We will not put any money into this enterprise until you show us
that you can get enough to complete it.” But the money which it is
proposed to raise for the development of Garden City site leads to
speedy results. It is to be expended upon roads, schools, etc. These
works will be carried out with due regard to the number of lots which
have been let to tenants, who undertake to build as from a certain
date; and, therefore, the money expended will very soon begin to
yield a return in the shape of a rate-rent, representing, in reality,
a greatly-improved ground-rent; when those who have advanced money
on the “B” debentures will have a really first-class security, and
further sums should be easily obtainable, and at a reduced rate of
interest. Again, it is an important part of the project that each ward,
or one-sixth part of the city, should be in some sense a complete town
by itself, and thus the school buildings might serve, in the earlier
stages, not only as schools, but as places for religious worship,
for concerts, for libraries, and for meetings of various kinds, so
that all outlay on expensive municipal and other buildings might be
deferred until the later stages of the enterprise. Work, too, would be
practically completed in one ward before commencing on another, and the
operations in the various wards would be taken up in due and proper
sequence, so that those portions of the town site on which building
operations were not in progress would also be a source of revenue,
either as allotments, cow-pastures, or, perhaps, as brickfields.
Let us now deal with the subject immediately before us. Will the
principles on which Garden City is to be built have any bearing on
the effectiveness of its municipal expenditure? In other words, will
a given revenue yield greater results than under ordinary conditions?
These questions will be answered in the affirmative. It will be shown
that, pound for pound, money will be more effectively spent than
elsewhere, and that there will be many great and obvious economies
which cannot be expressed in figures with much accuracy, but which
would certainly represent in the aggregate a very large sum.
The first great economy to be noticed is that the item of “landlord’s
rent,” which, under ordinary conditions, largely enters into municipal
expenditure, will, in Garden City, scarcely enter at all. Thus, all
well-ordered towns require administrative buildings, schools, swimming
baths, libraries, parks; and the sites which these and other corporate
undertakings occupy are usually purchased. In such cases the money
necessary for the purchase of the sites is generally borrowed on the
security of the rates; and thus it is that a very considerable part of
the total rates levied by a municipality are ordinarily applied, not to
productive works, but either to what we have termed “landlord’s rent,”
in the shape of interest on money borrowed to effect the purchase, or
to the provision of a sinking fund in payment of the purchase money of
the land so acquired, which is landlord’s rent in a capitalised form.
Now, in Garden City, all such expenditure, with such exceptions as
road sites on the agricultural estate, has been already provided for.
Thus, the 250 acres for public parks, the sites for schools and other
public buildings, will cost the ratepayers nothing whatever, or, to
put it more correctly, their cost, which was really £40 per acre, has
been covered, as we have seen, by the annual average contribution of
1s. 1d. per head, which each person is supposed to make in discharge
of landlord’s rent; and the revenue of the town, £50,000, is the _net_
revenue after all interest and sinking fund in respect of the whole
site has been deducted. In considering, therefore, the question whether
£50,000 is a sufficient revenue, it must be remembered that in no case
has any cost of municipal sites to be first deducted from that amount.
Another item in which a great economy will be effected will be found
in a comparison between Garden City and any old city like London.
London wishes to breathe a fuller municipal spirit, and so proceeds
to construct schools, to pull down slums, to erect libraries,
swimming baths, etc. In these cases, it has not only to purchase
the freeholds of the sites, but also has usually to pay for the
buildings which had been previously erected thereon, and which are
purchased solely, of course, with a view to their demolition and to a
clearing of the ground, and frequently it has also to meet claims for
business-disturbance, together with heavy legal expenses in settling
claims. In this connection it may be remarked that the inclusive
cost of _sites_ of schools purchased by the London School Board
since its constitution, _i.e._, the cost, including old buildings,
business-disturbance, law charges, etc., has already reached the
enormous sum of £3,516,072,[10] and the exclusive cost of the sites
(370 acres in extent) ready for building by the Board is equal, on the
average, to £9,500 per acre.
At this rate the cost of the 24 acres of school sites for Garden
City would be £228,000, so that another site for a model city could
be purchased out of what would be saved in Garden City in respect of
school sites alone. “Oh, but,” it may be said, “the school sites of
Garden City are extravagantly large, and would be out of the question
in London, and it is altogether unfair to compare a small town like
Garden City with London, the wealthy capital of a mighty Empire.” I
would reply, “It is quite true that the cost of land in London would
make such sites extravagant, not to say prohibitive--they would cost
about £40,000,000 sterling--but does not this of itself suggest a most
serious defect of system, and that at a most vital part? Can children
be better taught where land costs £9,500 an acre than where it costs
£40? Whatever may be the real economic value of the London site, for
other purposes--as to which we may have something to say at a later
stage--for school purposes, wherein lies the advantage that the sites
on which its schools are built are frequently surrounded by dingy
factories or crowded courts and alleys? If Lombard Street is an ideal
place for banks, is not a park like the Central Avenue of Garden City
an ideal place for schools?--and is not the welfare of our children the
primary consideration with any well-ordered community?” “But,” it may
be said, “the children must be educated near their homes, and these
homes must be near the places where their parents work.” Precisely;
but does not the scheme provide for this in the most effective manner,
and in that respect also are not the school sites of Garden City
superior to those of London? The children will have to expend less
than an average amount of energy in going to school, a matter, as all
educationists admit, of immense importance, especially in the winter.
But further, have we not heard from Professor Marshall (see heading
to Chapter III.) that “150,000 people, in London, engaged in the
clothes-making trades, are doing work which it is against all economic
reason to have done where ground-rent is high”--in other words, that
these 150,000 people _should not be in London at all_; and does not
the consideration that the education of the children of such workers
is carried on at once under inferior conditions and at enormous cost
add weight and significance to the Professor’s words? If these workers
ought not to be in London, then their homes, for which, insanitary as
they are, they pay heavy rents, ought not to be in London; a certain
proportion of the shopkeepers who supply their wants should not be in
London; and various other people to whom the wages earned by these
persons in the clothes-making trade give employment should not be in
London. Hence, there is a sense--and a very real one--in which it is
fair to compare the cost of school sites in Garden City with the cost
of school sites in London; because obviously if these people do, as
suggested by Professor Marshall, migrate from London, they can at once
effect (if they make, as I have suggested, proper provision beforehand)
not only a great saving in respect of ground-rent for their workshops,
but also a vast saving in respect of sites for homes, schools, and
other purposes; and this saving is obviously the difference between
what is now paid and what would be paid under the new conditions, minus
the loss incurred (if any), and plus the numerous gains secured as the
result of such removal.
Let us for the sake of clearness make the comparison in another way.
The people of London have paid a capital sum representing, when spread
over the whole population of London (this being taken at 6,000,000),
upwards of 11s. 6d. per head of population for school sites held by the
London School Board, a sum which is, of course, exclusive of the sites
for voluntary schools. The population of Garden City, 30,000 in number,
have entirely saved that 11s. 6d. per head, making a total saving of
£17,250, which at 3 per cent. involves an annual saving of £517 in
perpetuity. And besides thus saving £517 a year as interest on cost
of sites for schools, Garden City has secured sites for its schools
incomparably better than those of London schools--sites which afford
ample accommodation for all the children of the town, and not, as in
the case of the London School Board, accommodation for only half of the
children of the municipality. (The sites of the London School Board are
370 acres in extent, or about 1 acre to every 16,000 of the population,
while the people of Garden City have obtained 24 acres or 1 acre for
every 1,250.) In other words, Garden City secures sites which are
larger, better placed, and in every way more suitable for educational
purposes, at a mere fraction of the cost which in London is incurred
for sites vastly inferior in every respect.
The economies with which we have thus dealt are, it will be seen,
effected by the two simple expedients we have referred to. First, by
buying the land _before_ a new value is given to it by migration,
the migrating people obtain a site at an extremely low figure, and
secure the coming increment for themselves and those who come after
them; and secondly, by coming to a new site, they do not have to pay
large sums for old buildings, for compensation for disturbance, and
for heavy legal charges. The practicability of securing for the poor
workers of London the first of these great advantages appears to have
been for the moment overlooked by Professor Marshall in his article in
the _Contemporary Review_,[11] for the Professor remarks “Ultimately
all would gain by the migration, _but most_” (the italics are my
own) “_the landowners and the railroads connected with the colony_.”
Let us then adopt the expedient here advocated of securing that the
_landowners_, “_who ... will gain most_” by a project specially
designed to benefit a class now low down in the social scale, _shall be
those very people themselves_, as members of a new municipality, and
then a strong additional inducement will be held out to them to make
a change, which nothing but the lack of combined effort has hitherto
prevented. As to the benefit to be derived by the railways, while no
doubt the building up of the town would specially benefit the main line
of railway which passed through the estate, it is also true that the
earnings of the people would not be diminished to the usual extent by
railway freights and charges. (_See_ Chap. ii., also Chap. v., page 60.)
We now come to deal with an element of economy which will be
simply incalculable. This is to be found in the fact that the town
is definitely planned, so that the whole question of municipal
administration may be dealt with by one far-reaching scheme. It is not
by any means necessary, and it is not, humanly speaking, possible,
that the final scheme should be the work of one mind. It will no doubt
be the work of many minds--the minds of engineers, of architects
and surveyors, of landscape gardeners and electricians. But it is
essential, as we have said, that there should be unity of design and
purpose--that the town should be planned as a whole, and not left to
grow up in a chaotic manner as has been the case with all English
towns, and more or less so with the towns of all countries. A town,
like a flower, or a tree, or an animal, should, at each stage of its
growth, possess unity, symmetry, completeness, and the effect of
growth should never be to destroy that unity, but to give it greater
purpose, nor to mar that symmetry, but to make it more symmetrical;
while the completeness of the early structure should be merged in the
yet greater completeness of the later development.
Garden City is not only planned, but it is planned with a view to the
very latest of modern requirements;[12] and it is obviously always
easier, and usually far more economical and completely satisfactory, to
make out of fresh material a new instrument than to patch up and alter
an old one. This element of economy will be perhaps best dealt with
by a concrete illustration, and one of a very striking nature at once
presents itself.
In London the question of building a new street between Holborn and
the Strand has been for many years under consideration, and at length
a scheme is being carried out, imposing an enormous cost on the
people of London. “Every such change in the street geography of London
displaces thousands of the poor”--I quote from the _Daily Chronicle_ of
July 6, 1898--“and for many years all public or quasi-public schemes
have been charged with the liability to re-house as many of them as
possible. This is as it should be; but the difficulty begins when the
public is asked to face the music and pay the bill. In the present
case some three thousand souls of the working population have to be
turned out. After some searching of heart, it is decided that most
of them are so closely tied to the spot by their employment that it
would be a hardship to send them more than a mile away. The result,
in cash, is that London must spend in re-housing them about £100 a
head--or £300,000 in all. As to those who cannot fairly be asked to go
even a mile away--hangers-on to the market, or others tethered to the
spot--the cost will be even higher. They will require to have parcels
of the precious land cleared by the great scheme itself, and the result
of that will be to house them at the handsome figure of £260 a-piece,
or some £1,400 for every family of five or six. Financial statements
convey little to the ordinary mind. Let us make it a little more
intelligible. A sum of £1,400 means, in the house market, a rental of
nearly £100 a year. It would buy an excellent, in fact a sumptuous,
house and garden at Hampstead, such as the better middle-class delight
in. It would purchase anywhere in the nearer suburbs such houses as
men with £1,000 a year inhabit. If one went further afield, to the
new neighbourhoods which the City clerk can easily reach by rail, a
£1,400 house represents actual magnificence.” But on what scale of
comfort will the poor Covent Garden labourer with a wife and four
children live? The £1,400 will by no means represent a fair standard
of comfort, to say nothing of magnificence. “He will live in three
rooms sufficiently small in a block at least three storeys high.”
Contrast this with what might be done on a new area, by carefully
planning a bold scheme at the outset. Streets of greater width than
this new street would be laid out and constructed at a mere fraction
of the cost, while a sum of £1,400, instead of providing 1 family with
“three rooms sufficiently small in blocks at least three storeys high,”
would provide 7 families in Garden City with a comfortable six-roomed
cottage each, and with a nice little garden; and, manufacturers being
concurrently induced to build on the sites set apart for them, each
breadwinner would be placed within easy walking distance of his work.
There is another modern need which all towns and cities should be
designed to meet--a need which has arisen with the evolution of modern
sanitation, and which has of recent years been accentuated by the
rapid growth of invention. Subways for sewerage and surface drainage,
for water, gas, telegraph and telephone wires, electric lighting
wires, wires for conveying motive power, pneumatic tubes for postal
purposes, have come to be regarded as economic if not essential. But
if they would be a source of economy in an old city, how much more
so in new ones; for on a clean sheet it will be easy to use the very
best appliances for their construction, and to avail ourselves to the
fullest extent of the ever-growing advantages which they possess as
the number of services which they accommodate increases. Before the
subways can be constructed, trenches somewhat wide and deep must be
excavated. In making these the most approved excavating machinery could
be employed. In old towns this might be very objectionable, if not,
indeed, quite impossible. But here, in Garden City, the steam navvy
would not make its appearance in the parts where people were living,
but where they were coming to live after its work in preparing the
way had been completed. What a grand thing it would be if the people
of England could, by an actual illustration under their very eyes,
be convinced that machinery can be so used as to confer not only an
ultimate national benefit, but a direct and immediate advantage, and
that not only upon those who actually own it or use it, but on others
who are given work by its magic aid. What a happy day it would be for
the people of this country, and of all countries, if they could learn,
from practical experience, that machinery can be used on an extended
scale to _give_ employment as well as _to take it away_--to _implace_
labour as well as to _displace_ it--to free men as well as to _enslave_
them. There will be plenty of work to be done in Garden City. That is
obvious. It is also obvious that, until a large number of houses and
factories are built, many of these things cannot be done, and that the
faster the trenches are dug, the subways finished, the factories and
the houses built, and the light and the power turned on, the sooner can
this town, the home of an industrious and a happy people, be built,
and the sooner can others start the work of building other towns,
not like it, but gradually becoming as much superior to it as our
present locomotives are to the first crude attempts of the pioneers of
mechanical traction.
We have now shown four cogent reasons why a given revenue should,
in Garden City, yield vastly greater results than under ordinary
conditions.
(1) That no “landlord’s rent” or interest in respect of freeholds would
be payable other than the small amount which has been already provided
for in estimating net revenue.
(2) That the site being practically clear of buildings and other works,
but little expenditure would be incurred in the purchase of such
buildings, or compensation for business-disturbance, or legal and other
expenses in connection therewith.
(3) The economy arising out of a definite plan, and one in accordance
with modern needs and requirements, thus saving those items of
expenditure which are incurred in old cities as it is sought to bring
them into harmony with modern ideas.
(4) The possibility, as the whole site will be clear for operations,
of introducing machinery of the very best and most modern type in
road-making and other engineering operations.
There are other economies which will become apparent to the reader
as he proceeds, but, having cleared the ground by discussing general
principles, we shall be better prepared to discuss the question as to
the sufficiency of our estimates in another chapter.
FOOTNOTES:
[9] _See_ note on page 21.
[10] See Report, London School Board, 6th May, 1897, p. 1480.
[11] No one is, of course, better aware of this possibility than the
Professor himself. (_See_ “Principles of Economics,” (2nd ed.) Book v.,
Chap. x. and xiii.)
[12] “London has grown up in a chaotic manner, without any unity of
design, and at the chance discretion of any persons who were fortunate
enough to own land as it came into demand at successive periods for
building operations. Sometimes a great landlord laid out a quarter in a
manner to tempt the better class of residents by squares, gardens, or
retired streets, often cut off from through traffic by gates and bars;
but even in these cases London as a whole has not been thought of, and
no main arteries have been provided for. In other and more frequent
cases of small landowners, the only design of builders has been to
crowd upon the land as many streets and houses as possible, regardless
of anything around them, and without open spaces or wide approaches. A
careful examination of a map of London shows how absolutely wanting in
any kind of plan has been its growth, and how little the convenience
and wants of the whole population or the considerations of dignity
and beauty have been consulted.”--Right Hon. G. J. Shaw-Lefevre, _New
Review_, 1891, p. 435.