SEMI-MUNICIPAL ENTERPRISE--LOCAL OPTION--TEMPERANCE REFORM.
In the last chapter we saw that no line could be sharply drawn between
municipal and individual enterprise, so that one could definitely say
of one or the other, “Hitherto shalt thou come, but no further”; and
this ever-changing character of the problem can be usefully illustrated
in our examination of the industrial life of Garden City by reference
to a form of enterprise there carried on which is neither distinctly
municipal nor distinctly individualistic, but partaking, as it does, of
the character of both, may be termed “semi-municipal.”
Among the most reliable sources of revenue possessed by many of our
existing municipalities are their so-called “public markets.” But
it is important to notice that these markets are by no means public
in the same full sense as are our public parks, libraries, water
undertakings, or those numerous other branches of municipal work which
are carried on upon public property, by public officials, at the
public expense, and solely with a view to the public advantage. On
the contrary, our so-called “public markets” are, for the most part,
carried on by private individuals, who pay tolls for the parts of the
buildings which they occupy, but who are not, except on a few points,
controlled by the municipality, and whose profits are personally
enjoyed by the various dealers. Markets may, therefore, be fitly termed
_semi-municipal_ enterprises.
It would, however, have been scarcely necessary to touch on this
question, but that it naturally leads up to the consideration of a
form of semi-municipal enterprise which is one of the characteristic
features of Garden City. This is to be found in the Crystal Palace,
which, it will be remembered, is a wide arcade, skirting the
Central Park, in which the most attractive wares on sale in Garden
City are exhibited, and, this being a winter garden as well as the
great shopping centre, is one of the most favourite resorts of the
townspeople. The business at the shops is carried on, not by the
municipality, but by various individuals and societies, the number of
traders being, however, limited by the principle of local option.
The considerations which have led to this system arise out of the
distinction between the cases on the one hand of the manufacturers,
and on the other of the distributive societies and shopkeepers who
are invited to the town. Thus, for example:--In the case of the
manufacturer, say, of boots, though he may be glad of the custom of the
people of the town, he is by no means dependent on it; his products go
all over the world; and he would scarcely wish that the number of boot
manufacturers within the area should be specially limited. He would,
in fact, lose more than he would gain by restrictions of this kind. A
manufacturer frequently prefers to have others carrying on the same
trade in his vicinity; for this gives him a larger choice of skilled
workmen or workwomen, who themselves desire it also, because it gives
them a larger range of employers.
But in the case of shops and stores the case is entirely different. An
individual or a society proposing to open in Garden City, say a drapery
store, would be most anxious to know what, if any, arrangements were to
be made for limiting the number of his competitors, for he would depend
almost entirely on the trade of the town or neighbourhood. Indeed it
frequently happens that a private landlord, when laying out a building
estate, makes arrangements with his shopkeeping tenants designed to
prevent them from being swamped by others in the same trade starting on
his estate.
The problem, therefore, seems to be how to make such suitable
arrangements as will at once--
(1) Induce tenants of the shopkeeping class to come and start in
business, offering to the community adequate rate-rents.
(2) Prevent the absurd and wasteful multiplication of shops referred
to in the note at the foot of page 81.
(3) Secure the advantages usually gained (or supposed to be) by
competition--such as low prices, wide range of choice, fair dealing,
civility, etc.
(4) Avoid the evils attending monopoly.
All these results may be secured by a simple expedient, which will have
the effect of converting competition from an active into a latent force
to be brought into play or held in reserve. It is, as we have said,
an application of the principle of local option. To explain:--Garden
City is the sole landlord, and it can grant to a proposed tenant--we
will suppose a co-operative society or an individual trader in drapery
or fancy goods--a long lease of a certain amount of space in the Grand
Arcade (Crystal Palace), at a certain annual rate-rent; and it can
say, in effect, to its tenant, “That site is the only space in that
ward which we for the present intend to let to any tenant engaged in
your trade. The Arcade is, however, designed to be not only the great
shopping centre of the town and district, and the permanent exhibition
in which the manufacturers of the town display their wares, but a
summer and winter garden. The space this Arcade covers will, therefore,
be considerably greater than is actually required for the purposes
of shops or stores, if these are kept within reasonable limits. Now,
so long as you give satisfaction to the people of the town, none of
the space devoted to these recreative purposes will be let to anyone
engaged in your calling. It is necessary, however, to guard against
monopoly. If, therefore, the people become dissatisfied with your
methods of trading, and desire that the force of competition shall be
actively brought into play against you, then, on the requisition of a
certain number, the necessary space in the Arcade will be allotted by
the municipality to some one desirous of starting an opposition store.”
Under this arrangement it will be seen the trader will depend upon
the good-will of his customers. If he charges prices which are too
high; if he misrepresents the quality of his goods; if he does not
treat his employees with proper consideration in regard to hours of
labour, wages, or other matters, he will run a great risk of losing
the good-will of his customers, and the people of the town will have
a method of expressing their sentiments regarding him which will
be extremely powerful; they will simply invite a new competitor to
enter the field. But, on the other hand, as long as he perform his
functions wisely and well, his good-will resting on the solid basis of
the good-will of his customers, he will be protected. His advantages
are, therefore, enormous. In other towns a competitor might enter the
field against him at any moment without warning, perhaps at the very
time when he had purchased some expensive goods, which, unless sold
during the season, could only be realised at an enormous sacrifice. In
Garden City, on the other hand, he has full notice of his danger--time
to prepare for it and even to avert it. Besides, the members of the
community, except for the purpose of bringing a trader to reason, will
not only have no interest in bringing a competitor into the field,
but their interests will be best served by keeping competition in the
background as long as possible. If the fire of competition is brought
to bear upon a trader, they must suffer with him. They will lose space
they would far rather see devoted to some other purpose--they will
be bound to pay higher prices than those at which the first trader
could supply them if he would, and they will have to render municipal
services to two traders instead of to one, while the two competitors
could not afford to pay so large a sum in rate-rent as could the
original trader. For in many cases the effect of competition is to
make a rise in price absolutely necessary. Thus, A. has a trade of 100
gallons of milk a day, and can, we will suppose, pay his expenses, earn
a bare living, and supply his customers with milk, say, at 4d. a quart.
But if a competitor enters the field, then A. can only sell _milk
and water_ at 4d. a quart if he is to continue to pay his way. Thus
the competition of shopkeepers absolutely tends not only to ruin the
competitors, but to maintain and even to raise prices, and so to lower
real wages.[15]
Under this system of local option it will be seen that the tradesmen
of the town--be they co-operative societies or individuals--would
become, if not strictly or technically so, yet in a very real sense,
municipal servants. But they would not be bound up in the red-tape
of officialism, and would have the fullest rights and powers of
initiation. It would not be by any literal conformity to cast-iron and
inflexible rules, but by their skill and judgment in forecasting the
wishes and in anticipating the tastes of their constituents, as well
as by their integrity and courtesy as business men and women, that
they would win and maintain their good-will. They would run certain
risks, as all tradesmen must, and in return they would be paid, not of
course in the form of salary, but in profits. But the risks they would
run would be far less than they must be where competition is unchecked
and uncontrolled, while their annual profits in proportion to capital
invested might also be greater. They might even sell considerably below
the ordinary rate prevailing elsewhere, but yet, having an assured
trade and being able very accurately to gauge demand, they might turn
their money over with remarkable frequency. Their working expenses,
too, would be absurdly small. They would not have to advertise for
customers, though they would doubtless make announcements to them of
any novelties; but all that waste of effort and of money which is so
frequently expended by tradesmen in order to secure customers or to
prevent their going elsewhere, would be quite unnecessary.
And not only would each trader be in a sense a municipal servant, but
those in his employ would be also. It is true such a trader would have
the fullest right to engage and dismiss his servants; but if he acted
arbitrarily or harshly, if he paid insufficient wages, or treated his
employees inconsiderately, he would certainly run the risk of losing
the good-will of the majority of his customers, even although in other
respects he might prove himself an admirable public servant. On the
other hand, if the example were set of profit-sharing, this might grow
into a custom, and the distinction between master and servant would be
gradually lost in the simple process of all becoming co-operators.[16]
This system of local option as applied to shopkeeping is not only
business-like, but it affords an opportunity for the expression of
that public conscience against the sweater which is now being stirred,
but which scarcely knows how to effectually respond to the new impulse.
Thus there was established in London some years ago the Consumers’
League, the object of which was not, as its name might lead one to
suspect, to protect the consuming public against the unscrupulous
producer, but it was to protect the sweated, over-driven producer
against a consuming public over-clamorous for cheapness. Its aim was
to assist such of the public as hate and detest the sweating system
to avail themselves of the League’s carefully compiled information,
so that they might be able to studiously avoid the products which had
passed through sweaters’ hands. But such a movement as the Consumers’
League advocated could make but little headway without the support of
the shopkeeper. That consumer must be an uncommonly earnest opponent of
sweating who insists upon knowing the source whence every article he
purchases has come, and a shopkeeper under ordinary circumstances would
scarcely be disposed either to give such information or to guarantee
that the goods he sold were produced under “fair” conditions; while
to establish shops in large cities, which are already overcrowded
with distributive agencies, and to do this with the special object
of putting down sweating, is to court failure. Here in Garden City,
however, there will be a splendid opportunity for the public conscience
to express itself in this regard, and no shopkeeper will, I hope,
venture to sell “sweated goods.”
There is another question with which the term “local option” is most
closely associated which may be dealt with here. I refer to the
temperance question. Now it will be noticed that the municipality,
in its position of sole landlord, has the _power_ of dealing in the
most drastic manner possible with the liquor traffic. There are, as is
well known, many landlords who will not permit a public-house to be
opened on their estate, and the landlord of Garden City--the people
themselves--_could_ adopt this course. But would this be wise? I think
not. First, such a restriction would keep away the very large and
increasing class of moderate drinkers, and would also keep away many
of those who are scarcely moderate in their use of alcohol, but as to
whom reformers would be most anxious that they should be brought under
the healthful influences which would surround them in Garden City.
The public-house, or its equivalent, would, in such a community, have
many competitors for the favour of the people; while, in large cities,
with few opportunities of cheap and rational enjoyment, it has its own
way. The experiment, as one in the direction of temperance reform,
would, therefore, be more valuable if the traffic were permitted under
reasonable regulations than if it were stopped; because, while, in
the former case, the effects in the direction of temperance would be
clearly traceable to the more natural and healthy form of life, if the
latter course were adopted it could only prove, what no one now denies,
that it may be possible, by restrictive measures, to entirely keep away
the traffic from one small area while intensifying the evils elsewhere.
But the community would certainly take care to prevent the undue
multiplication of licensed houses, and it would be free to adopt any
one of the various methods which the more moderate of temperance
reformers suggest. The municipal authorities might conduct the liquor
traffic themselves, and employ the profits in relief of rates. There
is, however, much force in the objection that it is not desirable that
the revenue of a community should be so derived, and, therefore, it
might be better that the profits should be entirely applied to purposes
which would compete with the traffic, or in minimising its evil effects
by establishing asylums for those affected with alcoholism.[17] On this
subject, as on all points involved, I earnestly invite correspondence
from those who have practical suggestions to offer; and, although the
town is but a small one, it would perhaps not be impracticable to test
various promising suggestions in the different wards.
FOOTNOTES:
[15] “It has been calculated by Mr. Neale” (“Economics of
Co-operation”) “that there are 41,735 separate establishments for 22
of the principal retail trades in London. If for each of these trades
there were 648 shops--that is 9 to the square mile, no one would have
to go more than a quarter of a mile to the nearest shop. There would
be 14,256 shops in all. Assuming that this supply would be sufficient,
there are in London 251 shops for every hundred that are really wanted.
The general prosperity of the country will be much increased when the
capital and labour that are now wastefully employed in the retail trade
are set free for other work.”--“Economics of Industry,” A. and M. P.
Marshall, Chap. ix., sec. 10.
[16] This principle of local option, which is chiefly applicable to
distributive callings, is perhaps applicable to production in some of
its branches. Thus bakeries and laundries, which would largely depend
upon the trade of the locality, seem to present instances where it
might with some caution be applied. Few businesses seem to require
more thorough supervision and control than these, and few have a more
direct relation to health. Indeed, a very strong case might be made out
for municipal bakeries and municipal laundries, and it is evident that
the control of an industry by the community is a half-way house to its
assumption of it, should this prove desirable and practicable.
[17] Since “To-Morrow” was published, various Companies have been
formed by the Public House Trust Association, 116 Victoria Street,
Westminster, S.W., with the object of carrying on the trade on
principles advocated by the Bishop of Chester. A limited dividend of 5
per cent. is fixed; all profits beyond are expended in useful public
enterprises, and the Managers have no interest whatever in pushing the
trade in intoxicating liquors. It may be interesting also to observe
that Mr. George Cadbury, in the Deed of Foundation of the Bourneville
Trust, provides for the complete restriction of the traffic at the
outset. But as a practical man, he sees that as the Trust grows (and
its power of growth is among its most admirable features) it may be
necessary to remove such complete restrictions. And he provides that in
that event “all the net profits arising from the sale and co-operative
distribution of intoxicating liquors shall be devoted to securing
recreation and counter attractions to the liquor trade as ordinarily
conducted.”