Those men who ventured early into the street-car business were
pioneers; they assumed large risks, and they rendered a public service.
They had the courage to undertake experiments; they had faith that the
town would grow and become in time a city. And they staked all on the
chance. They had little difficulty, if they had any at all, in securing
franchises from the city to use the streets, for the people of the city
were glad to have the convenience of transportation. Indeed many of
the lines were community enterprises, organized by the men of a given
neighborhood for the sake of the transportation merely, and not with
any notion of personal profit.
Franchise ordinances then were loosely drawn; men had no conception of
what changes the future was to bring about, they lacked the imagination
to prefigure it, the faith to believe it, and so the street-car
promoters who came along a little later were the heirs of advantages
which otherwise they would not have obtained. Under these advantages,
these privileges, they or their immediate grantees were enabled to take
over for their own use and profit the enormous social values that were
being created in cities, not by them, but by all those families who
moved in, and toiled, and wrought and built the modern city.
This was the first phase of the street-car business, its experimental
stage, commensurate with the rapid, disordered growth of the city in
the middle and western states of America. Few indeed of the pioneers
in the business became wealthy; many no doubt lost their money, though
they tried in vain to vary or improve their fortunes through the
changes that were rapidly developing the mighty problem of transporting
the crowded populations of our cities. There were, for instance, the
days when mules were substituted for horses, and sacrificed rapidly and
ruthlessly on the principle that it was cheaper to replace them than
to care for them, a system about as bad in its consuming cruelty as
that adopted by some factories with reference to their human employees.
Then, in a few of the larger cities, there were the cable cars, but the
second phase came with the adoption of electricity as a motive power,
and the coincident development, almost a miracle, of the towns of
middle and western America into real cities.
With electricity as a motive power, and the consequent cheapening of
operation, the street-car business entered upon its second phase, and
it ushered in at once the era of speculation in franchises and social
values, watered stocks and bonds. The era of exploitation came upon us,
and out of these privileges, out of other privileges to conduct other
public utilities, i. e., privileges to absorb social values, enormous
fortunes were made, with all the evils that come with a vulgar,
newly-rich plutocracy. To keep, and extend, and renew these privileges,
they must have their lawyers, and their newspapers to mislead and
debauch the public mind; they must go into politics, organize and
control the machines of both parties, bribe councilmen and legislators
and jurors, and even have judges on the bench subservient to their
will, so that the laws of the state and the grants of the municipality
might be construed in their favor. The sordid, tragic tale of their
domination of municipal politics is now universally known, and in
the tale may be read the causes of most of our municipal misrule. It
happened in Toledo as it happened everywhere, such is the inexorability
of the general law, and the popular reaction was the same.
And so we came upon a new, the third stage, since I have set out to be
scientific in analysis of tractions, and the very name by which these
big enterprises have latterly been called, that is, public service
corporations, suggests the meaning and indicates the significance of
that era. Two facts, or principles, had become perfectly apparent;
first, that transportation, the primal necessity of a modern city, is
a natural monopoly, and must be treated as such. Second, that if these
public utility corporations are to continue to hold these monopolies,
they must become public service corporations indeed, that is, they must
serve the public. No more, then, the old corporation contempt of the
people, at least outwardly expressed, but a softer voice in addressing
them, and a new respect, perhaps grown sincere. Their old lobbyists
disappeared from the council chamber and the city hall--for eight years
they were not seen there. The companies had been primarily profit
making institutions and only incidentally for public service, they were
operated for the private benefit of their owners in contempt of public
right; the service was secondary.
We may say that this third era is the era of regulation, or, as it
is more apt to be, attempted regulation, by the city, in which the
principle of the public interest as paramount to the private interest
is to be the basis on which a private company shall be permitted to
operate. This era will endure long enough to demonstrate itself a
failure, the general mind will continue to learn, to inform itself,
democracy will develop new functions, and we shall enter on the fourth,
and perhaps the final stage, that of municipal ownership.