utilities may be mismanaged through the influence of spoils politics. And there are some very discouraging failures on this account. But as the number of utilities in charge of the public increases and the interests involved grow, the necessity of a merit system with appointments and promotions on the basis of efficient service will, it is contended, become the rule in the management of public service companies. Is there any fundamental reason why the public cannot secure the same kind of efficiency in the management of its affairs as the private interests secure? This is a problem which deserves much more thought than it has received thus far.

Public Ownership in European Cities.-The extent to which municipalities may engage with profit in the ownership and regulation of public utilities is best illustrated by some of the leading cities in Europe, where such ownership and regulation have progressed much further than they have in the United States. European cities frequently operate at a small profit water works, electrical and gas plants, and street railways. The water fronts of rivers, canals, lakes, and inland waterways are almost invariably owned by the cities. The profits of these utilities are used toward defraying the expenses of the municipalities and toward lowering the tax rates. It is interesting to compare the lax methods of franchise granting and utility regulation which formerly prevailed in American cities with the method of dealing with utilities in Glasgow, Scotland, where it was decided from 1869 to 1872 that the city would undertake to construct and own its tramway lines. The first lines built by the city were put in operation in 1872. After the lines were completed, the company arranged for a lease of the management of the car service under the following conditions: (1) The leasing corporation was to pay an annual interest charge on the full amount of the city's investment; (2) it was to set aside annually a sinking fund large enough to clear the entire cost of the lines at the expiration of the lease; (3) it was to provide a replacement

fund of 4 per cent per annum on the cost of the lines, out of which they were to be kept in proper condition and re-. stored to the city in perfect order and entirely as good as new in 1894; (4) it was to pay a yearly rental of $750 per street mile. Furthermore, it was provided that in no case should the charges exceed a penny per mile, with special reductions for laboring men in the morning and evening hours. The company that accepted these rather difficult conditions found it impossible to earn much above the expenses of management during the first few years. Within about four years, however, the company prospered and began paying dividends to stockholders. After 1880 the dividends averaged 10 per cent, and a certain proportion was set aside for premiums.1

The following public utilities are owned and administered by the corporation of Glasgow: (1) street railways, (2) gas, (3) electric light, (4) water, (5) parks, (6) slaughter houses and markets for meat and vegetables, (7) bath and wash houses, (8) galleries and museums, (9) hospitals, (10) tenements and lodging houses, (11) police and fire departments, (12) drainage and sanitary sewers and sewage-disposal stations, (13) farms on which city sewage is utilized in growing forage crops for livestock, (14) streets and bridges, (15) public welfare bureau.

Municipal ownership is such a success in Glasgow that it is no longer an issue. All candidates for office are committed to municipal ownership. They differ only as to the degree to which they wish the policy to be adopted. The city of Glasgow is the largest property owner within the city limits. The corporation assets totaled in 1913 approximately $123,000,000. The debt on this property was approximately $83,000,000, with a sinking fund of approximately $40,000,000, making an indebtedness of $43,000,000. It is commonly conceded that the municipal utilities furnish better and cheaper service for

'Albert Shaw, Municipal Government in Great Britain (The Century Company, 1895), chap. iv.

the people than was secured through private operation at the same time they promote general health and take steps to raise the standard of living among workmen. Not only have the street railways, the water, gas, electric light, and market departments of Glasgow been managed efficiently, but they have been handled in such a way as to bring in a considerable revenue to the city. The present condition of the city of Glasgow revenue shows it to be a going and paying concern providing the necessaries of community life to its citizens more efficiently and cheaply than these were formerly supplied by private enterprises. Beyond this, the city corporation through its municipal lodging and tenement houses is using surplus earnings in an attempt to eliminate slums.1

Many of the activities connected with municipal life other than public utilities are publically owned and controlled by the leading cities in Europe. For recreational purposes, cities provide promenades, gardens, and parks. Other enterprises engaged in by certain cities are forests, vineyards, bathing establishments, burial grounds, pawnshops, savings banks (providing particularly for small deposits from the poor), and employment offices for laborers and domestic servants.

In behalf of the public, cities own and operate theaters and opera houses, and contribute to the maintenance of libraries, picture galleries, and zoological gardens. The outlays in support of these activities are regarded as indirect methods of increasing the efficiency of the citizens.

Recently European cities have begun the purchase of land and houses in order to assist in providing satisfactory houses for the poor and to control the development and expansion of the city. This land is usually leased for long terms of years at a low yearly rental. Arrangements are made by which buildings may be erected on the land which the city owns, the city furnishing from 75 to 90 per cent of the money at a low rate of interest. Public slaughter 1 American Municipalities, July, 1913, "Report of Commissioner Putnam."

houses are regarded as a necessity to assure a supply of Food meat. At the municipal market place most of the rovisions of the household may be secured at moderate prices. Savings banks, pawn shops, and mortgage banks are conducted mostly for use of workingmen.1

Public undertakings such as the above in Europe and elsewhere are not always successful, Nor do they, as in some European cities, usually add to the municipal income. Furthermore, the successful management of such enterprises requires a staff of experts specially trained for their work and permanence of tenure as long as efficient service is rendered. The separation of politics and administration which prevails throughout Europe renders it possible to secure and retain experts to manage the public utilities. Where politics and administration are not separated and where offices are filled on a partisan basis for short terms, public ownership is likely to lead to wasteful expenditures and correspondingly poor service. It is a question, then, whether political conditions in the United States are such as to encourage the extension of public ownership. But an analysis of the progress of European cities may aid American citizens in determining the causes for the failure of municipal administration and some remedies which are readily applicable.

Public Ownership of Railroads in Foreign Countries.-The regulation of railroads by the Interstate Commerce Commission, the war-time trial of almost complete public control and regulation, and the Esch-Cummins Act have only tended to accentuate the consideration of the problem of ultimate public ownership of railway systems in the United States. There are in the United States more than 250,000 miles of railways. This mileage is six times greater than that of any other country and comprises almost twofifths of the entire railway mileage of the world. In view of this great mileage and the immensity of the interests

1 See Frederic C. Howe, European Cities at Work (Charles Scribner's Sons, 1913).

involved, the problem of public ownership is of the greatest significance. It is of special interest in the consideration of this problem to note that more than fifty nations own and operate all railway lines or the larger part thereof. The table given below, based on the best available data, indicates the present status of railway ownership.

MILEAGE OF STATE AND PRIVATE RAILWAYS FOR 1913 BY COUNTRIES1

1 Archiv für Eisenbahnwesen, 1913. pp. 520-522; reprinted in Carl D. Thompson, "* Public Ownership of Railways." Bulletin No. 12 of Public Ownership League of America, pp. 42–44. * Including Guatemala, Honduras, Salvador, Nicaragua, Costa Rica, and Panama.