FURTHER DETAILS OF EXPENDITURE ON GARDEN CITY.
To make this chapter interesting to the general reader would be
difficult, perhaps impossible; but if carefully studied, it will, I
think, be found to abundantly establish one of the main propositions
of this book--that the rate-rent of a well-planned town, built on
an agricultural estate, will amply suffice for the creation and
maintenance of such municipal undertakings as are usually provided for
out of rates compulsorily levied.
The net available revenue of Garden City, after payment of interest
on debentures and providing a sinking fund for the landed estate, has
been already estimated at £50,000 per annum (see Chap. iii., page
42). Having, in the fourth chapter, given special reasons why a given
expenditure in Garden City would be unusually productive, I will now
enter into fuller details, so that any criticism which this book
may elicit, having something tangible to deal with, may be the more
valuable in preparing the ground for an experiment such as is here
advocated.
---------------------------------------+-------------------------------
| EXPENDITURE.
---------------------------------------+---------------+---------------
| | On Maintenance
| | and
| On Capital | Working
| Account. | Expenses.
---------------------------------------+---------------+---------------
| |
(See Note A) 25 Miles road (city) at | |
£4,000 a mile | £100,000 | £2,500
( „ B) 6 miles additional roads, | |
country estate at £1,200 | 7,200 | 350
( „ C) Circular railway and | |
bridges, 5-1/2 miles at | |
£3,000 | 16,500 | 1,500
( „ D) Schools for 6,400 | | (maintenance
children, or 1/5 of the | | only)
total population, at £12 | |
per school place for | |
capital account, and £3 | |
maintenance, etc. | 76,800 | 19,200
( „ E) Town Hall | 10,000 | 2,000
( „ F) Library | 10,000 | 600
( „ G) Museum | 10,000 | 600
( „ H) Parks, 250 acres at £50 | 12,500 | 1,250
( „ I) Sewage disposal | 20,000 | 1,000
+---------------+---------------
| £263,000 | £29,000
+---------------+---------------
( „ K) Interest on £263,000 at |
4-1/2 per cent. | 11,835
( „ L) Sinking Fund to provide for |
extinction of debt in 30 years | 4,480
( „ M) Balance available for rates |
levied by local bodies within the |
area of which the estate is situated | 4,685
+---------------
£50,000
-----------------------------------------------------------------------
Besides the above expenditure, a considerable outlay would be incurred
in respect of markets, water supply, lighting, tramways, and other
revenue-yielding undertakings. But these items of expenditure are
almost invariably attended with considerable profits, which go in aid
of rates. No calculation, therefore, need be made in respect of these.
I will now deal separately with most of the items in the above estimate.
_A. Roads and Streets._
The first point to be observed under this head is that the cost of
making new streets to meet the growth of population is generally not
borne by the ground landlord nor defrayed out of the rates. It is
usually paid by the building-owner before the local authorities will
consent to take the road over as a free gift. It is obvious, therefore,
that the greater part of the £100,000 _might_ be struck out. Experts
will also not forget that the cost of the road sites is elsewhere
provided for. In considering the question of the actual sufficiency of
the estimate, they will also remember that of the boulevards one-half
and of the streets and avenues one-third may be regarded as in the
nature of park, and the cost of laying out and maintenance of these
portions of the roads is dealt with under the head “Parks.” They will
also note that road-making materials would probably be found near at
hand, and that, the railway relieving the streets of most of the heavy
traffic, the more expensive methods of paving need not be resorted to.
The cost, £4,000 per mile, would, however, be doubtless inadequate if
subways are constructed, as probably they ought to be. The following
consideration, however, has led me not to estimate for these. Subways
are, where useful, a source of economy. The cost of maintaining roads
is lessened, as the continual breaking-up for laying and repairing
of water, gas, and electric mains is avoided, while any waste from
leaky pipes is quickly detected, and thus the subways _pay_. Their
cost should, therefore, be debited rather to cost of water, gas, and
electric supplies, and these services are almost invariably a source of
revenue to the Company or Corporation which constructs them.
_B. Country Roads._
These roads are only 40 feet wide, and £1,200 a mile is ample. The cost
of sites has in this case to be defrayed out of estimate.
_C. Circular Railway and Bridges._
The cost of site is elsewhere provided for (_see_ p. 40). The cost of
maintenance does not, of course, include working expenses, locomotives,
etc. To cover these a charge based on cost might be made to traders
using the line. It should also be noticed that, as in the case of
roads, by showing that the expense of this undertaking could be
defrayed out of the rate-rent, I am proving more than I undertook to
prove. I am proving that the rate-rent is sufficient to provide for
landlords’ rent, for such purposes as are usually defrayed out of rent,
_and also for greatly extending the area of municipal activity_.
It may here be well to point out that this circle railway not only
will save the trader the expense of carting to and from his warehouse
or factory, but will enable him to claim a rebate from the railway
company. Section 4 of the Railway and Canal Tariff Act, 1894, enacts:
“Whenever merchandise is received or delivered by a railway company
at any siding or branch railway not belonging to the company, and
a dispute arises between the railway company and the consignor
or consignee of such merchandise, as to any allowance or rebate
from the rates charged to such consignor or consignee, in respect
that the railway company does not provide station accommodation or
perform terminal services, the Railway and Canal Commissioners shall
have jurisdiction to hear and determine what, if any, is a just and
reasonable allowance or rebate.”
_D. Schools._
This estimate of £12 per school place represents what was only a few
years ago (1892) the average cost per child of the London School Board
for building, architect, and clerk of the works, and for furniture and
fittings; and no one can doubt that buildings greatly superior to those
in London could be obtained for this sum. The saving in sites has been
already dealt with, but it may be remarked that in London the cost per
child for sites has been £6 11s 10d.
As showing how ample this estimate is, it may be observed that the cost
of schools which have been proposed to be built by a private company at
Eastbourne, “with a view of keeping out the School Board,” is estimated
at £2,500 for 400 places, or but little more than half the sum per
school place provided in the estimate for Garden City.
The cost of maintenance, £3 per head, is probably sufficient, in
view of the fact that the “expenditure per scholar in actual average
attendance” in England and Wales, as given in the Report of the
Committee of Council on Education, 1896-97, c. 8545, is £2 11s.
11-1/2d. It must be especially noticed, too, that the whole cost of
education is, in these estimates, assumed to be borne by Garden City,
though a considerable part would be, in the ordinary course, borne by
the National Exchequer. The amount of income per scholar in actual
average attendance in England and Wales, as given in the same report,
is £1 1s. 2d. as against a rate in Garden City of £3. So that I am
again, in the case of the schools, as in the case of roads and circle
railway, proving more than I set out to prove.
_E. Town Hall and Expenses of Management._
It is to be noticed that the estimates of the various undertakings are
intended to cover professional direction and supervision of architects,
engineers, teachers, etc. The £2,000 for maintenance and working
expenses under this head is, therefore, intended to include only the
salaries of town clerk and of officials other than those comprised
under special heads, together with incidental expenses.
_F. Library, and G. Museum._
The latter is usually and the former not infrequently elsewhere
provided for out of funds other than rates. So, here again, I am more
than proving my case.
_H. Parks and Road Ornamentation._
This item of cost would not be incurred until the undertaking was
in a thoroughly sound financial condition, and the park space for a
considerable period might be a source of revenue as agricultural land.
Further, much of the park space would probably be left in a state of
nature. Forty acres of this park space is road ornamentation, but the
planting of trees and shrubs would not entail great expense. Again, a
considerable part of the area would be reserved for cricket-fields,
lawn-tennis courts, and other playgrounds, and the clubs using public
grounds might perhaps be called upon to contribute to the expense of
keeping these in order, as is customary elsewhere.
_I. Sewage._
All that need be said on this subject has been said in Chap. i., page
25, and Chap. ii., page 32.
_K. Interest._
The money to construct the public works with which we have been dealing
is supposed to be borrowed at 4-1/2 per cent. The question here
arises--a question partly dealt with in Chap. iv.--what is the security
for those who lend money on the “B” debentures?
My answer is three-fold.
(1) Those who advance money to effect any improvements on land have a
security the safety of which is in reality largely determined by the
effectiveness with which the money so advanced is spent; and, applying
this truism, I venture to say that, for effectiveness of expenditure,
no money which the investing public has been for many years asked to
subscribe for improvements of a like nature has an equal security,
whether it be measured by miles of road, acres of park, or numbers of
school children well provided for.
(2) Those who advance money to effect improvements on land have
a security the safety of which is largely determined by the
consideration, aye or no, are other and yet more valuable works to
be simultaneously carried out by others at their own expense, which
other works are to become a security in respect of the first-mentioned
advance; and, applying this second truism, I say that, as the money for
effecting the public improvements here described would only be asked
for as and when other improvements--factories, houses, shops, etc.
(costing far more money than the public works necessary at any given
period)--were about to be built or were in process of building, the
quality of the security would be a very high one.
(3) It is difficult to name a better security than that offered when
money is to be expended in converting an agricultural estate into an
urban, and this of the very best known type.
That the scheme is in reality a 3 per cent. security, and would in its
later stages become so, I entertain little doubt; but I do not forget
that, though its points of novelty are the very elements which really
_make_ it secure, they may not make it _seem_ so, and that those who
are merely looking out for an investment may eye it with some distrust
because of its novelty. We shall have in the first instance to look
to those who will advance money with somewhat mixed motives--public
spirit, love of enterprise, and possibly, as to some persons, with a
lurking belief that they will be able to dispose of their debentures
at a premium, as they probably will. Therefore, I put down 4-1/2 per
cent., but if anyone’s conscience prick him he may tender at 2 or
2-1/2, or may even advance money without interest.
_L. Sinking Fund._
This sinking fund, which provides for the extinction of the debt in
thirty years, compares most favourably with that usually provided
by local bodies for works of so permanent a character. The Local
Government Board frequently allows loans to be created with a sinking
fund extending over much longer periods. It is to be remembered also
that an additional sinking fund for the landed estate has been already
provided (_see_ Chapter iv., p. 42).
_M. Balance available for Rates levied by Local Bodies within whose
jurisdiction the estate is situated._
It will be seen that the whole scheme of Garden City will make
extremely few demands upon the resources of outside local authorities.
Roads, sewers, schools, parks, libraries, etc., will be provided out
of the funds of the new “municipality,” and in this way the whole
scheme will come to the agriculturists at present on the estate very
much like “a rate in aid”; for, as rates are only raised for the
purpose of public expenditure, it follows that, there being little or
no fresh call upon the rates while the number of ratepayers is greatly
increased, the rate per head must fall. I do not, however, forget that
there are some functions which such a voluntary organisation as Garden
City could not take over, such as the police and the administration of
the poor-law. As to the latter, it is believed that the whole scheme
will in the long run make such rates unnecessary, as Garden City will
provide, at all events from the time when the estate has been fully
paid for, pensions for all its needy old citizens. Meantime and from
the very outset it is doing its full share of charitable work. It
has allotted sites of 30 acres for various institutions, and at a
later stage will doubtless be prepared to assume the whole cost of
maintaining them.
With regard to police rates, it is not believed that these can be
largely increased by the coming into the town of 30,000 citizens, who,
for the most part, will be of the law-abiding class; for, there being
but one landlord, and this the community, it will not be difficult to
prevent the creation of those surroundings which make the intervention
of the police so frequently necessary. (_See_ Chapter vii.)
* * * * *
I have, I think, now fully established my contention that the rate-rent
which would be willingly offered by the tenants of Garden City, in
respect of the advantages afforded them, would be amply sufficient,
(1) to pay landlord’s rent in the form of interest on debentures; (2)
to provide a sinking fund for the entire abolition of landlord’s rent;
and (3) to provide for the municipal needs of the town without recourse
to any Act of Parliament for the enforcement of rates--the community
depending solely on the very large powers it possesses as a landlord.
_N. Revenue-bearing Expenditure._
If the conclusion already arrived at--that the experiment advocated
affords an outlet for an extremely effective expenditure of labour and
capital--is sound in regard to objects the cost of which is usually
defrayed out of rates, that conclusion must, I think, be equally sound
in regard to tramways, lighting, water-supply, and the like, which,
when carried on by municipalities, are usually made a source of
revenue, thus relieving the rate-payer by making his rates lighter.[13]
And as I have added nothing to the proposed revenue for any prospective
profits on such undertakings, I do not propose to make any estimate of
expenditure.
FOOTNOTE:
[13] “Birmingham rates are relieved to the extent of £50,000 a year out
of profits on gas. The Electrical Committee of Manchester has promised
to pay £10,000 this year to the city fund, in relief of rates out of a
net profit of over £16,000.”--_Daily Chronicle_, 9th June, 1897.