SOCIALISM AND LOCAL GOVERNMENT
Many Socialists, especially the Fabians, hope to introduce Socialistic
principles and Socialistic rule into Great Britain rather through the
local than through the national authorities. They are strenuously
exerting themselves to bring about that result, and so far their
exertions have been by no means unsuccessful.
"Socialists to-day are working in the towns with a twofold object. (1)
To level up their districts. If Glasgow has municipal telephones,
there is a very good precedent for Liverpool, Manchester, Bradford,
Leeds, &c., doing likewise. If Liverpool owns a municipal milk-supply,
London, Manchester, Bradford, Leeds, must be brought into line. Each
town must adopt the good points from every other town. (2) To urge
their districts to launch out into something new."[668] "The property
held and worked and controlled by municipalities already exceeds
_500,000,000l._ sterling in value, and is being added to yearly. This
process has but to continue long enough to ensure that every industry
will pass under public control, and thus State Socialism will become
an accomplished fact by a gradual process of easy transition."[669]
"The proper sphere of municipal activity includes everything a
municipality can do better than a private company."[670] "The
immediate object should be to municipalise all those services which
are necessary to a healthy life. Food, fuel, clothing, shelter--these
are required by all--and no man should have the right to deny them to
any worker. We must not stop at municipal trams. We must not stop at
municipal gas. We must not stop at municipal electricity. These are
only stepping-stones. Not until we can say that poverty and disease
and unemployment are abolished out of the land shall we have the right
to discuss the limits of municipal trading."[671] "The economic forces
which replaced the workshop by the factory will replace the private
shop by the municipal store, and the private factory by the municipal
one."[672]
According to Socialist teaching the destruction of private enterprise
by municipal undertakings will be a blessing to all citizens. "Where a
city supplies its own gas there is no 'middle-man.' The corporation
stands in the place of the 'middle-man,' and as the corporation is
elected by the citizens the people are thus in the position of getting
their own gas made and paying for it in their own way. Some of the
citizens are makers of gas, or workmen; most of the citizens are users
of gas, or consumers; and all of the citizens are owners and managers
of the gasworks and of the gas supply."[673]
The suppression of the "unnecessary middleman" sounds so very
plausible that it is certain to prove an excellent election cry. But
has the middleman really disappeared when a city corporation takes his
place? Does the corporation-middleman supply gas gratis? Are the
private middleman's profits not distributed to a host of corporation
officials in the shape of substantial salaries? The transfer of
gasworks, &c., from private hands to a city corporation is no doubt
very beneficial to those who draw the corporation salaries. It may be
very profitable to the local politicians and their hangers-on. Jobs
may be had as a reward for political support. But the citizens may
find the gas to be no cheaper and the rates to be considerably higher
after the suppression of the "unnecessary middleman." And will it then
console him that he is the "owner and manager of the gasworks and of
the gas supply"?
Under the heading "The Justice of Abolishing the Private Trader" one
of the leading champions of municipal Socialism writes: "Is it unfair
to take away the living of the private trader? Then it is unfair to
take away the living of the unemployed, the twelve millions on the
verge of starvation, and the thousands slain annually by poverty and
preventable disease. I say that the welfare of the nation must be
considered before the profits of the monopolists and the wasteful
freedom of the small trader. Under the present system a large
proportion of the population have so deteriorated in health and
stamina as to endanger the existence of the nation. Private enterprise
and competition are responsible for nine-tenths of the misery and
suffering of our twenty million poor. But we must not attempt to alter
the conditions because the small private trader would be ruined.
Nevertheless the system is going to be altered, whether the small
trader likes it or not."[674]
The foregoing are typical Socialist arguments. In the first place, the
writer grossly exaggerates existing poverty by speaking of "twenty
million poor." Then he boldly asserts that all poverty is due to
private enterprise and that municipal enterprise will abolish it. So
far municipal enterprise has not even succeeded in diminishing
poverty. On the contrary, with the phenomenal growth of municipal
enterprise in Great Britain pauperism, actual and percentual, has also
grown at an alarming rate. It is significant that poverty and
distress have increased most rapidly, and have become most acute, in
those localities in which municipal enterprise has been most active
and in which Socialist councils have held undisputed sway, as, for
instance, in East and West Ham and Poplar. Municipal enterprise, by
increasing the rates--and, with the rates, the rents--has increased
the general cost of living without at the same time increasing
production. On the contrary, it has driven factories away through high
rates. Therefore municipal enterprise has increased the expenditure of
the general body of workers without increasing their earnings, and
consequently has directly increased the existing poverty which it has
promised to abolish. Municipal enterprise has succeeded chiefly in
giving from the rates high wages to municipal employees at the cost of
all other workers.
Municipal Socialists rather rely on force than on justice in dealing
with private business men. "For private traders to fight against
municipalisation is a short-sighted policy. One thing is certain--they
have to go. 'What! Compete with us with the ratepayers' money? Our own
money? What injustice!' says the small trader."[675] This just
objection of the ratepayers is answered with a contemptible quibble.
"The small trader is mistaken. The municipality does not use their
money, and would not use their money, under the supposed
circumstances. If the London County Council decided to open 1,000
bread-shops, how would they raise the capital required? Not by taking
the ratepayers' money, or the private traders' money, but by going
into the money market and borrowing on the credit of all the citizens.
Suppose _100,000l._ were required? Not a penny would come out of the
rates. The credit of all the citizens of London is so good that they
can borrow all the money they want without any difficulty."[676] In
other words, the Social-"Democratic" politician claims for himself the
right of arbitrarily depriving citizens who possess property of that
property and to ruin them by underselling them. They borrow the money
they require for these undertakings on the credit of the very
property-owners whom they wish to ruin, not on the credit of "all the
citizens," as Mr. Suthers pretends, and then they have the impudence
to assert that the corporations do not ruin the citizens with their
own money but only with money borrowed on their credit--as if the one
were not identical with the other.
The objections to municipal enterprise on a Socialist basis are
twofold:
(1) That it increases the rates and the municipal debt, and therefore
the rent of houses and lodgings;
(2) That it is, on the whole, unprofitable, being undertaken without
due regard to sound finance, efficiency, and economy.
Socialists intend to "tax the rich out of existence." Therefore they
endeavour to increase as much as possible not only the Imperial
taxation but also the rates. Owners of house property are used to a
certain income. If the rates are put up, they put up the rent.
Therefore every increase in the rates leads, as a rule, automatically
to an equivalent increase in the rent. The fact that a rise in the
rates leads to a rise in the rent of houses and lodgings, and that the
Socialist policy of waste and squander falls therefore most heavily
not on the capitalist but on the working man, is boldly denied.
"Generally speaking, the reduction of rates is of no benefit whatever
to the working class. Rates are levied upon property.--Q. Do not the
working class pay the rates and taxes? A. No. Rates and taxes are paid
out of the surplus value taken from the workers by their exploiters.
As already explained, the return to the workers, their wages, is
determined by their cost of subsistence, regulated by competition in
the labour market; consequently they have nothing wherewith to pay
taxes, and whether these be high or low, or whoever has to pay them
directly, the position of the worker remains the same. He gets, on the
average, his subsistence, that is all."[677]
Unfortunately, many working men know to their cost that the arguments
given above are absolutely untrue. Whilst their wages have remained
stationary, their expenditure for rent has greatly increased owing to
municipal enterprise carried on by Socialists regardless of expense,
which has greatly increased rates. At West Ham "Local government was
to be carried on in a way regardless of expense, and under the
compounding system the vast majority of the electors were not to
realise that there were such things as rates at all. One member of the
Socialist party publicly declared that it did not matter to the
working men of the borough how high the rates were. But the 'people'
got to see in course of time that there were drawbacks, even for them,
in unrestricted Socialism. They found that, because of the increased
rates, house rents were going up twelve and a half to twenty per
cent., notwithstanding the threats of the Socialists that every
landlord who raised his rents should have his assessments
increased."[678]
Owing to municipal enterprise directed by Socialists, "The sum-total
of the rates, which stood at _6s._ in the pound in 1890 and at _8s._
_1d._ in 1896, rose to _8s. 10-1/2d._ in the pound in 1900 and _9s._
_5-1/2d._ in the pound in 1901. From that figure it advanced to _9s._
_8d._ in the pound,"[679] and to _10s. 8d._ a little later. It is an
impudent misstatement of fact when Socialist leaders tell the workers,
"We are not killed by rates, we are killed by rent."[680] "The whole
of our municipal expenditure is only a paltry 110 millions a year.
What do we pay in rent? Two hundred and seventy-five millions!"[681]
After all, people in other countries, where the blessings of Socialist
local government are unknown, and where poverty is much rarer than in
Great Britain, also pay rent. On an average the rates are 150 per
cent. higher in Great Britain than in Germany.[682]
Whilst the national Government endeavours to diminish the dead weight
and the heavy yearly charge of national indebtedness, Socialist local
authorities vie with each other in piling up local indebtedness as
fast as possible with a reckless disregard of the future. The increase
of the municipal debt, the increase of local taxation, like the
increase of national taxation, has no terrors for Socialists. On the
contrary, "Municipal debt is not a burden. It is a splendid
investment. We 'owe' 370 millions. Do we 'own' nothing? The
municipalities own all the roads, drains, sewers, public buildings,
parks, libraries, a thousand waterworks, two hundred and sixty
gasworks, three hundred and thirty-four electricity undertakings, one
hundred and sixty-two tramways, two or three hundred markets, a
hundred and fifty cemeteries, forty-three harbours, piers, and docks,
numerous baths, washhouses, and working-class dwellings, thousands of
schools, and thousands of acres of land."[683] Since these words were
written local indebtedness has increased. "We owe" now 470 millions.
Unfortunately, many of the splendid assets enumerated possess no
realisable value whatever, and many municipal enterprises are run
without an adequate profit or with a loss.
The Socialist views and aims regarding local indebtedness are well
summed up as follows by Suthers: "The 'municipal debt' argument is a
bogey. The greater the municipal debt, the less private enterprise
there will be. The greater the municipal debt, the cheaper and better
the public services will be. The less private capital, the less
profits going into a few pockets, the richer the general public will
be. Up, then, with municipal debt."[684] These are principles which
threaten to make Great Britain bankrupt. "The annual report of the
work of the Local Government Board for 1907 shows that the local debt
of England and Wales, from being 17 per cent. of the National Debt in
1879-80, has grown to 58.5 per cent. of the National Debt in 1904-5.
The National and Local debts have grown as follows:
1879-80 1904-5 _Increase_
National Debt L770,604,774 L796,736,491 L26,131,717
Local Debt 136,934,070 466,459,269 329,525,199"[685]
Unless the Imperial Government interferes, the local debt will soon be
larger than the National Debt.
We have seen in the beginning of this Chapter that, as regards local
government, the Socialists pursue a twofold aim: (1) To level up their
districts; (2) To urge their districts to launch out into something
new. Therefore we find, as Mr. John A. Fairlie says in his book on
"Municipal Administration," that "the danger of excessive debt is most
serious in the smallest cities. The largest cities, while they have
the largest debts, have also the largest resources, and also the
best-developed financial administration. The cities of modest size,
however, which attempt to equal the works of the metropolis without
its available sources of revenue, are very likely to find themselves
in serious difficulties."
The time may come, and it may come soon, when British local
indebtedness will become greatly reduced by local bankruptcy and
repudiation. That process would have no terrors for Socialists. They
ought rather to look forward to it. As they demand the repudiation of
the National Debt (see Chapter IX.), they should logically also strive
to repudiate the local debt. A general repudiation of local debt would
be the fitting and logical aim and end of municipal enterprise.
Municipal enterprise aims at expropriating private property-owners,
who, rightly considered, are paid not in cash but in debt
certificates. The repudiation of all local debts would convey gratis
to the municipality the municipally managed undertakings which,
rightly considered, belong to the stockholders, and would at the same
time ruin the capitalists who have advanced the money for acquiring
those undertakings. The Socialist policy would triumph. This would be
the fitting end of a rule by irresponsible and penniless demagogues.
To the Socialist there is no limit to municipal enterprise. Not some
branches of private trade and production, but all private trade and
production are to be taken over by the municipalities. Private
enterprise is to be extinguished altogether. The municipalities are to
be universal owners, manufacturers, and providers. Among the first
things which Socialist municipalities wish to control are the supply
of bread, milk, coal; hospitals and public-houses, banks, fire
insurances, and pawnshops.[686]
All workers are to be municipal officials. Stretching out beyond their
borders, the municipalities are ultimately to absorb the country, and
to bring it under Socialist management and government.[687]
Some of the more immediate aims of Socialism as regards London are
expressed by Sydney Webb, the brilliant, but unfortunately somewhat
over-imaginative, leader of British scientific Socialism, as follows:
"We see in imagination the County Council's aqueducts supplying London
with pure soft water from a Welsh lake; the County Council's mains
furnishing, without special charge, a constant supply up to the top of
every house: the County Council's hydrants and standpipes yielding
abundant cleansing fluid from the Thames to every street. When every
parish has its public baths and washhouses open without fees, every
Board school its swimming-bath and teacher of swimming, every railway
station and public building its drinking-fountain and basin for
washing the hands, every park its bathing and skating ponds--then we
shall begin to show the world that we do not, after all, fall behind
Imperial Rome in this one item of its splendid magnificence. By that
time the landlord will be required, as a mere condition of sanitary
fitness, to lay on water to every floor, if not to every tenement, and
the bath will be as common an adjunct of the workman's home as it now
is of the modern villa residence. And just as in some American cities
hot water and superheated steam are supplied in pipes for warming
purposes over large areas, we may even see the County Council laying
on a separate service of hot water to be drawn at will from a tap in
each tenement. Why should London's million families waste their
million fires every time hot water is needed?
"The economy of fuel leads, indeed, to the municipalised gas-supply,
then laid on, as a matter of course, to every tenement, and used, not
only for lighting, but still more largely for cooking in the stoves
supplied at a nominal charge.
"In order to relieve the pressure of population in the centre, and
reduce the rents of the metropolitan "Connaughts," the County Council
tramways will doubtless be made as free as its roads and bridges.
Taxes on locomotion are universally condemned, and the economic
effects of a penny tram-fare are precisely the same as those of a tax
on the trip. The County Council will, however, free its trams on the
empirical grounds of economy and the development of its suburban
estates of artisans' dwellings, built on land bought to retain the
unearned increment for the public benefit. Free trams may well imply
free trains in the metropolitan and suburban area. Does not the
Council already run a free service of steamboats on the Thames at
North Woolwich--eventually, no doubt, to be extended all along the
stream?
"Public libraries and reading-rooms in every ward are nearly here
already, but we may expect that the library and the public hall will
go far to cut out the tavern (at present our only 'public' house) as
the poor man's club. As for bands of music in the parks, municipal
fetes, and fireworks on 'Labour Day,' and other instances of the
communalisation of the means of 'enjoyment,' all this is already
common form in France. The parks, indeed, will be tremendous affairs.
But when London's gas and water and markets are owned and controlled
by its public authorities; when its tramways, and perhaps its local
railways, are managed like its roads and parks, not for private
profit, but for public use; when the metropolis at length possesses
its own river, and its own docks; when its site is secure from
individual tyranny, and its artisans' dwellings from the whims of
philanthropy; when, in short, London collectively really takes its own
life into its own hands, a vast army of London's citizens will be
directly enrolled in London's service."[688]
The foregoing political and economic programme would be more
creditable to an imaginative schoolgirl ten years old than to a man of
science and a politician. How are all these wonderful and almost
miraculous changes to be financed? Quite simply and very easily--by
plunder. Mr. Sidney Webb, like most "scientific" Socialists, is a
loose and shallow thinker. He forgets in his calculations that
stubborn little item--human nature. He forgets that nobody can become
richer by transferring money from the right pocket to the left. If you
plunder all capitalists and all middlemen, the workers will certainly
not be better off. Owing to the absence of direct self-interest, the
management by salaried officials will be inefficient. All experience
of management by public bodies through officials shows that public
enterprise is far more wasteful and far less efficient than private
enterprise; that in official management routine, sloth, waste,
irresponsibility, nepotism, favouritism, and often peculation too,
become supreme. Besides, far more money than is wasted now by
capitalists on themselves will be wasted by politicians hankering
after popularity, and after jobs for themselves and their followers
and dependents. The greatest wasters in the poorest districts are the
irresponsible Socialist authorities. In palatial town halls
sumptuously furnished, in magnificent public libraries, in marble
baths, and other outlets of civic magnificence, money wrung from the
hard-worked wage-earners is wasted in far greater sums than could
possibly be spent by the most reckless capitalist on his private
amusement. The most magnificent town halls, &c., are to be found in
the poorest districts. Besides, "salaries must be liberal enough to
attract the best men to the public service."[689] It is a matter of
course that the rule of irresponsible Socialist agitators, that a
system of local government whereby those who have no money are enabled
to spend lavishly by drawing upon those who have money, will not make
for efficiency and economy, and the end will be the Poplar-ising of
Great Britain. There is a generally accepted principle, "No taxation
without representation." That principle requires as a supplement, "No
representation without taxation." Otherwise Great Britain will be
ruled by a mob headed by imaginative and dishonest demagogues.
No enterprise is too large or too costly for the Socialists. Quite
recently the Fabians recommended in a leaflet that Glasgow should
acquire the whole built-over ground of the city at a cost of
_24,000,000l._, issuing against that sum Corporation Bonds bearing
3-1/4 per cent. interest. Provided that everything should be settled
according to expectations, and supposing that Glasgow should be able
to borrow _24,000,000l._ at 3-1/4 per cent., which seems extremely
unlikely, there would accrue, on the most favourable showing, a net
profit of _200,000l._ per annum to Glasgow, if nothing be allowed for
the cost of management.[690] The possibility that that gigantic
speculation might prove a failure is not even considered. On the
contrary, it is assumed as certain that Glasgow will greatly profit by
the growing value of land. Now if through natural economic
development, or through the rule of a Socialist national or local
administration, Glasgow should decline and land in Glasgow should fall
in value, the town might be ruined. Of course that would not hurt the
penniless Socialist agitators. Besides, there would always be the
sovereign remedy of repudiation.
According to the fundamental Socialist doctrines which condemn
profit,[691] "Municipal trading does not seek profit. To the private
trader the making of profits or losses is a vital matter. He makes the
mistake of thinking the same motives induce a municipality to provide
a public service."[692] To the Socialist administrators it is quite
immaterial whether their enterprises are run at a profit or at a loss,
so long as they can draw freely on the rich and well-to-do to pay for
their extravagance. "The Socialist view of the fair way of dealing
with profits on trading concerns is to have none--if one may be
excused so paradoxical a statement. Fair wages and good conditions
generally for the employees, and selling at cost so that all may use
freely the commodity or service, is the nearest approach to justice in
respect to such municipal concerns as are incapable of being used with
equal freedom by all."[693] "The only sound principle of municipal
management is to run all these things primarily for use, with no idea
of making profit at all, and as far as possible at a price to the user
covering the cost of the production only. Such profits as are made
should be used either to extend municipal enterprise or be utilised
for what in Scotland is known as "the common good," that is, in the
provision of instruction, amusements, parks and open spaces, helpful
and beneficial to all."[694]
"Municipalisation or nationalisation must proceed on the right lines
and for a practical object. What should be the object of
municipalisation and nationalisation? The primary object should be the
most economical provision of the best possible public services. The
general well-being should be the first consideration to be served,
having due regard to the welfare of each and all engaged in these
services. The idea of profit either in the shape of interest on loans,
or of reduced rates and taxes, should be eliminated altogether."[695]
"The private trader always pursues profits. That is why he is such a
dreadful failure. The motive of municipal trading, on the contrary, is
public welfare--the benefit of all the citizens. That is why it is
such a tremendous success. No one ever thinks of criticising a town
council because they make no profits on these services. Now when we
consider the question of municipal trading in gas, tramways, and
electricity, is the principle involved any different? Not at all. The
provision of gas, trams, and electricity is inspired by just the same
motives as inspired the provision of roads, parks, libraries,
sewerages, police, and education. That is to say, the benefit of all
the citizens."[696] "The day may come when municipal trams and
municipal light will be just as free as municipal streets and
municipal libraries. That is to say, a rate will be levied on the
citizens for their upkeep, and everyone will be free to use them as
required."[697]
Such an ideal state of affairs, as pictured by scientific Mr. Webb and
his rapacious followers, would be most desirable from the point of
view of the town loafer. He would no longer monopolise the free
library, the lodging-house, and the public-house corners, as he does
at present. He would vary the monotony of the reading-room and the
street corner by free rides up and down the town and into the country.
In the evening he would take a hot bath in the free public baths
recommended by Sidney Webb, sit for a while in the free clubs
recommended by the same gentleman, and then stroll out to the free
public park to view the free fireworks and listen to the free music.
Free meals and lodgings will no doubt follow in due course. Great
Britain will be ruled for the benefit of the tramp. Why should anybody
work in such a "free" country? Who would not be a loafer or a tramp
under these conditions--especially as the "vice" of work, to use a
Socialistic expression, would speedily be visited by punishment in the
shape of confiscatory taxation, if not of direct confiscation? The
populace of decaying Athens and Rome lived under those conditions
which are the ideals of British Socialists. The citizens lived by
their votes for a time in idleness. They were fed and clothed by
slaves and subject nations. But the end was starvation.
To provide all these free benefits for those unwilling to work, the
owners of property would of course have to be taxed out of existence.
"There is no limit to the present rating powers of the local
authority, nor to the taxing powers of the State. The recognised
limits to local and national taxation are the needs of the respective
authorities. Though not perhaps clearly or generally understood, the
taxing powers of the community are based upon the principle that
private property is only permitted to be held or enjoyed by
individuals so long as that private possession is not opposed to the
general welfare, and so long as the community does not require the
property or the income for public purposes. The Socialist accepts the
principle of taxation--taxation 'according to ability derived from the
profits of stock-in-trade and other property'--but desires
deliberately to incorporate another idea and purpose in taxation,
namely, the taxation of the rich to secure such socially created
wealth as is now taken in rent, interest, and profit, and to use this
revenue for social reform purposes. In other words, we would by that
means compel 'the rendering unto Caesar the things that are
Caesar's.'"[698] Municipal funds would be provided, not only by local
rates, but also by a local income and land taxes.[699] In other words,
Socialism would eat the goose that lays the golden eggs.
According to leading Socialists, municipal enterprise is preferable to
private enterprise, not only for economic but also for moral reasons.
"The system of private enterprise and competition reeks with
corruption. Honesty under it is impossible. Municipal Socialism, on
the contrary, would provide an environment which would encourage and
promote the growth of moral activities. Instead of leading to
corruption it would lead away from it."[700] "Private enterprise must
lead to fraud, deceit, bribery, corruption, and even murder, in the
struggle for existence. Municipal Socialism would entirely remove any
temptation to commit these immoral actions. Why? Because, under
municipal Socialism, every person who worked would be sure of a
living."[701] We have seen some samples of the moral and purifying
influence of municipal Socialism in the investigations recently made
by the Board of Trade. Unfortunately these have revealed the fact
that, in many of the most advanced Socialist corporations, fraud,
bribery, intimidation, favouritism, and common theft are of daily
occurrence. What else can be expected when men of predatory instincts,
who preach the gospel of idleness and confiscation, who live not by
work but by talk, who have been accustomed to handle pence, and who
have to be taught by the town clerk how to sign a cheque, are suddenly
enabled to dispose of thousands of pounds and to negotiate loans?
The general public takes little interest in local elections. Most
citizens abstain from voting. Therefore the numerous corporation
employees often have the decisive vote in local elections, and they
will support only a candidate who promises shorter hours or higher
pay. Municipal employees sitting in the public galleries will even
dominate the council chamber, intimidate councillors, and shout down
those of whom they disapprove. Besides, they may strike and
disorganise the public services, and make the Socialistic authorities
look ridiculous. Therefore it is better to humour and to obey them
than to oppose them. The Fabian Society demands for municipal servants
"full liberty of combination," because "the servants of the public
may often need protection against the public, as in the Post
Office."[702] The results of Socialist teachings are to be seen in
many municipalities. "The servants of the public" are already, and
will in an increasing degree become, the masters of the public.
Under municipal Socialism the wages of tramway-men have increased as
follows: "In Sheffield, where the private company paid _100l._ for
labour, the Corporation pay _165l._ for the same amount of work. In
Bolton, where the private company paid _100l._, the Corporation pay
_137l._ In Wallasey, where the private company paid _100l._, the
District Council pay _185l._ In Northampton, where the private company
paid _100l._, the Corporation pay _120l._ In Birkenhead, where the
private company paid _100l._, the Corporation pay _315l._ In
Portsmouth, where the private company paid _100l._, the Corporation
pay _130l._ In Sunderland, where the private company paid _100l._, the
Corporation pay _145l._ When the Manchester Corporation took over the
trams they paid increased wages amounting to _60,000l._ a year."[703]
The foregoing information is given by a Socialist. Some of the
advances may be justified, but others, and probably the majority, have
been made with that fine disregard of economy which is commonly found
among men who can afford to be generous at other people's expense.
Municipal Socialism is an ever-growing cancer which is rapidly
exhausting the country.
"Half the municipal debt is of a nature which can never yield a
profit."[704] The other half is invested in enterprises many of which
are run regardless of economy and of expense, regardless of profit and
loss, in accordance with the Socialistic principles stated in this
Chapter. The policy of deliberate waste and of constant increase of
debt, the principles of "launching out into something new" and
"levelling up their districts," perhaps also the fear of eventual
bankruptcy and repudiation, have at last frightened the investor.
Corporation stocks can no longer be considered as safe first-class
securities. Besides, the banks have begun to refuse to accommodate
Socialistic municipalities with the necessary funds by overdrafts,
short loans, &c. Socialists have therefore begun to complain when they
saw that the unlimited supply of other peoples' money was diminishing.
They consider it a grievance that they can no longer arbitrarily
squander on fantastic undertakings what is not their own. "The
hostility of the banking interest to municipal borrowing, and the
threat to 'cut off supplies' has at length taken practical form.
Disappointed in their attempt to secure sufficiently favourable
treatment from their bankers (Parr's), the Chester Corporation applied
to four other banks in the city, viz. Lloyds, North and South Wales,
National Provincial, and Liverpool Banks. All refused to tender for
the account. The banks are not run for the public, the public are run
for the bankers."[705] Also, the banks, instead of lending their funds
gratis to Socialist corporations, are heartless enough to demand
interest "usury" on their loans. "Unfortunately at present public
bodies must pay heavy tribute as interest on borrowed money."[706]
"Our embryo Socialistic enterprises are even now suffering from the
toll of interest which a restricted credit and currency permit the
money lords to exact."[707]
Has the attitude of the investing public and the banks caused the
Socialist municipalities to restrain their insane expenditure, and to
keep it within legitimate bounds? No, they have tried to obtain money
by borrowing it in small sums directly from the public. "The
Corporation of Bolton, the Boroughs of Heywood, Middleton, and others,
invite the investment of small sums of money in municipal enterprise,
offering a higher rate of interest on deposits than the banks can
supply."[708]
Many Socialists advocate that the municipalities should raise money by
issuing paper-money in unlimited quantities or that they should become
bankers, pay interest on deposits, and invest the savings of the poor
in highly speculative enterprises carried on without regard to economy
and expense, or to profit and loss. "Why pay in usury at all? Abolish
the gold monopoly by demonetising metals, and the sole remaining
argument against municipal trading disappears along with the most
crippling restriction under which public enterprise labours."[709]
"Credit notes would be of little use were the city's credit gone,
because the people would be afraid to take them. However valuable the
assets of a municipal authority might be--and municipal concerns are
usually far more substantial and sound than banking companies are--it
is public confidence that constitutes the first requisite, and this it
is the duty of all reformers to establish and maintain against the
assaults of those whose interest it is to break it down. The
institution of municipal savings banks under the protection of, and
subject to inspection by, the State would assist public authorities
and render them less dependent on the bankers; then when people had
become accustomed to thinking their city's credit at least equal to
that of the leading banks, a limited issue of notes might be
allowed."[710] Further proposals for "demonetising" gold and issuing
unlimited amounts of unconvertible notes, on the model of the
assignats of the French Revolution, will be found in Chapter XX.
"Some Socialist Views on Money, Banks, and Banking."[711]
These and many other dangerous experiments could easily be undertaken
by needy demagogues with fantastic ideas, if the supervision of
municipalities by the national Government were abolished. Therefore
the Independent Labour Party passed at the last Annual Conference the
following resolution: "That this Conference urges the Labour party in
Parliament to secure the extension of power to municipalities,
enabling them to undertake trading and the development of existing
municipal concerns, without the sanction of the Local Government
Board, and to use any profits accruing from same in such manner as may
be decided by the municipality, without the necessity of promoting
Parliamentary Bills."[712]
No administration can continue for long a financial and general policy
of waste and pillage, such as that followed by the Socialist
municipalities of Great Britain, without diminishing not merely
private wealth but also the national wealth. The British Socialists
seem determined to do all they can to destroy as fast as possible the
accumulated wealth of the country and its productive power.
FOOTNOTES:
[668] _The Advance of Socialism_, p. 2.
[669] Keir Hardie, _From Serfdom to Socialism_, pp. 27, 28.
[670] Snowden, _Straight Talk to Ratepayers_, p. 8.
[671] Suthers, _Mind your own Business_, p. 148.
[672] _Fabian Essays in Socialism_, p. 157.
[673] Blatchford, _Competition_, p. 4.
[674] Suthers, _Mind your own Business_, pp. 93, 94.
[675] Suthers, _Mind your own Business_, pp. 87, 88.
[676] Suthers, _Mind your own Business_, p. 88.
[677] Bax and Quelch, _A New Catechism of Socialism_, p. 42.
[678] _The Times, Municipal Socialism_, p. 43.
[679] _Ibid._
[680] Suthers, _Killed by High Rates_, p. 12.
[681] _Ibid._ p. 11.
[682] Ellis Barker, _Modern Germany_, p. 552.
[683] Suthers, _Killed by High Rates_, p. 9.
[684] Suthers, _Municipal Debt_, p. 4.
[685] _Daily Mail_, November 26, 1907.
[686] See _A Municipal Bread Supply_; _Municipal Bakeries_; _Municipal
Drink Traffic_; _Municipal Fire Insurance_; Washington, _Milk and
Postage Stamps, &c._
[687] _Municipalisation by Provinces._
[688] Sidney Webb, _The London Programme_, 1892, pp. 208-213.
[689] Jowett, _Socialism and the City_, p. 17.
[690] _Forward_, October 12, 1907.
[691] See Chapter IV.
[692] Suthers, _Mind your own Business_, p. 14.
[693] Jowett, _The Socialist and the City_, p. 40.
[694] Irving, _The Municipality_, p. 6.
[695] Bax and Quelch, _A New Catechism of Socialism_, p. 42.
[696] Suthers, _Mind your own Business_, p. 9.
[697] _Ibid._ p. 8.
[698] Snowden, _The Socialist's Budget_, pp. 3, 4, 6.
[699] Jowett, _The Socialist and the City_, p. 38; Snowden, _The
Socialist's Budget_, p. 83.
[700] Suthers, _Mind your own Business_, p. 119.
[701] _Ibid._ p. 122.
[702] _A Labour Policy for Public Authorities_, p. 19.
[703] Suthers, _Mind your own Business_, p. 103.
[704] Snowden, _A Straight Talk to Ratepayers_, p. 8.
[705] McLachlan, _The Tyranny of Usury_, p. 15.
[706] Jowett, _The Socialist and the City_, p. 42.
[707] McLachlan, _The Tyranny of Usury_, p. 11.
[708] McLachlan, _The Tyranny of Usury_, p. 13.
[709] _Ibid._ pp. 13, 14.
[710] Jowett, _The Socialist and the City_, pp. 45, 46.
[711] See p. 281 ff.
[712] _Independent Labour Party Report, Annual Conference_, 1907, p.
50.