But the partisans of government and municipal ownership are incorrigible. "What if there are losses," they say; "the citizens have been gainers." Not as taxpayers, that is certain. As for the United States the disorder and waste of its municipal administrations are notorious, and development of public operation has certainly not lessened them. In Milwaukee, a city inhabited almost exclusively by Germans, municipal Socialism has been a very costly proposition. Before the city had experimented with a single municipal undertaking the annual normal increase of the budget was $250,000. Beginning with 1909 it has increased $1,000,000 in two years. At the April elections, 1912, the Socialist ticket was defeated by a majority of 13,000 and Mayor Seidel prosecuted. A new Bureau of Efficiency and Economy, costing $20,000 a year, has been organized, but it has thus far failed to make any report.1 'Journal of Commerce, New York, December 22, 1911. CHAPTER XVII CHARGES, DEBTS AND CREDIT The Profits of British Financial Enterprises for the Period 1893-1898.1898-1902.Report for 1907; 1902-1906An Annual Profit of 6s 3d ($1.50) per 100 Pounds.Financial Situation on March 31, 1911, of 2,500 Local Governments.-Substituting Monopolies for Taxation. -Relation Between Local Taxation and Appropriations, 10s 7d ($2.54) per 100 Pounds.-Increase of Local Taxes.-Increase of Loans.-Decline of Credit.Complaint of a Citizen of Birmingham.-Profit on Undertakings and the Cost of Loans.-Conclusions of Major Darwin.-Credit of German Local Governments. Let us now take up the question of charges, debts, and credit, in relation to British local enterprises. The first parliamentary report on municipal undertakings, which appears under the title of Municipal Corporations' Reproductive Undertakings, dates from 1899. It includes accounts of 265 towns of England and Wales for a period of five years, ending March, 1898. The financial results indicated are shown in the following table: Capital invested.... Annual net profit; depreciation deducted... Pounds Sterling 88,152,000 370,000 The second document dates from 1903. It is more comprehensive. The Municipal Year Book of 1912 reproduces it in its entirety. It gives the results of the undertakings of 299 municipalities out of 317— not including London-for a period of four years, or from 1898 to 1902. Capital invested Net annual profit; depreciation deducted.... Pounds Sterling 121,172,000 An apparent profit of .312 per cent. is thus indicated. In 1907 the Local Government Board published a supplementary statement, showing the results obtained by 192 municipalities out of 324 in England and Wales during the year 1904-1905. Profits in aid of taxes. Pounds Sterling 898,742 242,472 Municipal Trading Returns (No. 171, 1909) gives statistics only regarding the work of the London County Council, the City Corporation, the London boroughs, and 43 municipalities in England and Scotland for the four years from 1902-1906. Mr. J. H. Schooling, the celebrated statistician, has demonstrated that all the municipal enterprises taken together show, for the period 1898-1902, an annual profit of 6s 3d ($1.50) per 100 pounds sterling of capital invested. He adds, however, that, if the depreciation of roadbeds, equipment, etc., of the various undertakings was taken care of as it would be in private business normally managed, the annual loss would be 5,500,000 pounds sterling ($26,785,000), or, in other words, £4 10s 7d ($22) on every 100 pounds. Among the sources of profits are reckoned the sums collected from private businesses. These sums are very large in the case of some municipalities, but they cannot legitimately be called profits from municipal enterprises.1 The Local Government Board has published a statement of the receipts, expenses, and local loans in England and Wales for the year 1910-1911. The number of local authorities included in this work is 2,500, representing about one-tenth of the local governments mentioned in the local taxation returns for the same districts. The financial situation, on March 31, 1911, of these 2,500 local governments was: The debt of these 2,500 local governments reached, then, the enormous figure of £410,695,000 ($2,000,094,000). The expenses are more than £137,382,000 ($668,850,000). Of the £122,953,000 ($598,780,000) of receipts, local taxation accounts for £64,004,000 ($311,699,500) and grants from the exchequer (including the local share of license fees) for £21,073,000 'Fortnightly Review, August, 1906: Lord Avebury, On Municipal and National Trading, page 68. ($102,625,510), giving a total of £85,077,000 ($414,325,000). The apologists for municipal enterprises give the impression that such undertakings may be substituted for taxes, with no apparent perception of the fact that, if municipal enterprises were to replace taxation, by reason of their innately fiscal character they would come to weigh heavily on the consumers. The conception of substituting municipal enterprises for a treasury is, therefore, only a delusion. Local government undertakings have, in some instances, yielded profits which have relieved local taxation. But in others they have created deficits which are met only with the help of taxes. In 1910-1911 the total amount contributed in aid of taxes on gas, electricity, ports, docks, jetties, canals, quays, tramways, light railways, and waterworks undertakings was £1,320,000 ($6,428,400), of which £1,203,000 ($5,858,600) came from town councils. The total amount of tax funds paid out to provide for deficits on the same undertakings was £971,000 ($4,728,800), of which £631,000 ($3,073,000) was provided by town councils. Thus, the reduction of local taxation effected by profits from local enterprises amounted to £349,000 ($1,700,000), or, as against the £64,000,000 ($311,680,000) of local taxes and the £23,000,000 ($112, |