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rather that the spoils system should be destroyed and a higher ideal of public service should be required.
Few men would listen to an argument to abolish the police if it should be proven conclusively that half of the money spent on the force was thrown away. Under these circumstances they might consider the question of choosing competent men to manage public affairs. Likewise if the ownership and operation of public utilities logically belongs to the state, and theoretically can be managed best by the state, the problem is not to shirk the responsibility of their management, but to choose servants and officials with the capacity and integrity to do the work.
There is no reason for denying the ability of the state to get any service which it needs. Men have always had a mania to hold public office. For some unaccountable reason there have always been large numbers of citizens ready to sacrifice themselves upon the altar of the state. A lawyer who can make ten thousand a year at his practice is willing to exchange it for a judgeship at five; a business man who can make fifty thousand dollars by managing his own affairs will eagerly take ten to be conspicuous in the public eye. It has always been the rule that the same sort of talent can be commanded by the public at a smaller price than it can be commanded by private enterprise. It is equally true that all sorts of service is for sale in the market. It is as easy to find a fifty thousand dollar man as it is a five hundred dollar man. All positions that there are to be filled will find men ready and willing to perform the service for the reward, and if it is a public position, the fact that this service places them prominently in the public eye will always be a portion of the reward. All our great private corporations are managed by hired men. The shareholders are the owners. They may live in the remotest part of the world. They vote their stock, choose their presidents, general managers, their chairmen of the boards. They may or may not be interested in the business. They are hired to perform certain services
for a certain price. The individual owners of railroad shares know nothing about the management of their business. Many of them may scarcely be able to tell the difference between a locomotive and a hand car. They own the stock; they choose their managers. They choose them for the results that they can show and the managers perform the service. Public service and private service is performed in the same way by agents chosen for that purpose. It is doubtless true that a large majority of those chosen to perform the private service are chosen because of their capacity to do the work, while a large majority chosen to do public service are chosen for their ability to get a certain number of votes into a ballot-box at a particular time and place.
This method of choosing public servants is as bad for the police force as it would be for a street railroad managed by the city, and it is the reform of this method that is needed and not the abandonment of the state and city to leave private enterprise and greed to run riot over collective life.
The private corporation that performs public service must figure to pay interest on its bonds at a higher rate than the public; added to this it must pay a commercial profit for everything it does; it must then issue stocks and bonds for four or five times the value of the plant; all improvement of service or reduction of prices must be done with the sole aim of increasing the revenues as much as possible or reducing the cost to the lowest limit. Its revenue comes from the citizens, and the citizen in his public capacity can borrow money at a lower rate than the owner of the private corporation. In his public capacity he can construct his plant without profit; he can manage and operate it without the issuing of stocks and extravagant bonds, and any extension would be in the direction of lowering prices and improving service.
In only one particular can private enterprise outdo and outbid public enterprise. The private owner of a public corporation may gr out into the labor market and hire unskilled
laborers at the lowest price. With the ebb and flow of labor, with the constant shifting of men, it is often possible to hire unskilled labor at a price below the means of subsistence. By sweating workmen the private owner may be able to get longer hours and hire workmen at smaller pay than it would be possible for a municipal corporation. Of course, the state must pay a fair price for labor: Its constant tendency must be for
: shorter hours, better conditions and higher wages. In this particular, purely as a business proposition, the private enterprise might have an advantage over business conducted by the state, but the result to the state cannot be measured in this narrow way. The state must be maintained by the taxes levied upon the people. Jails and almshouses are one of the greatest burdens of the state. Taking service from the individual for a price below the cost of subsistence in the end means increasing pauperism and increasing crime. It means that a large number of these sweated laborers must shift back and forth between their employment and the almshouse or the jail.
These are a part of the burdens of collective life. The community can make no money by getting its service below the cost of subsistence. What it gains directly to public service must be paid for many times over at the almshouse and the jail.
The private sweater who gets his service below the fair amount that allows labor to live really receives a contribution from the tax-payers, who in the end pay to his victims the difference between a reasonable wage and the sweated wage, together with all the penalties that must be added in the bill of costs. The state or municipality must perform the service without extravagant fixed charges, without watered stock or watered bonds, without extravagant profits and for the good of the public, but it is a part of the general welfare that every individual employed shall receive a reasonable living wage and that he shall not be turned from his employment into the workhouse or the prison.
In every great community, taking one year with another, there is always a large amount of surplus labor. The meanest employers may buy this at the lowest market rate. They can buy it at a wage bordering on starvation. Every employer who buys his labor in this way is a curse to every other employer and to the community in which he lives.
Wages given in public employment go far toward offsetting the evils resulting from the sweated workman, and perhaps more than anything else tend to keep up a fair and reasonable rate of wage and intelligent citizenship. The greater the number of state activities, the more men employed, the easier it is to maintain reasonable wages, reasonable hours and fair conditions of work. It would be difficult to estimate the effect upon wages and indirectly the effect upon civic life if the men now employed in public service should at once be forced to labor for employers whose sole interest was to get the most possible for the smallest wage. Likewise the extension of the activities of the city and the state to perform the public services now done by private corporations would result in the greatest benefit in the way of shorter hours, safer and better methods and increased wages, and therefore a higher standard of life and citizenship.
After all is said and done, the state has one vocation, and that is to promote the general welfare, and whatever tends to this promotion falls within the proper duty of the state. This promotion may be direct or it may be indirect. To better the condition of a large number of its citizens by increased service, by lower prices of commodities, by cutting out the middle man's exorbitant profits, by making employment safer and wages better, comes clearly within the definition of promoting the public welfare. Whatever one may say of figures or of governmental corruption or official incapacity, it is plain that theoretically public ownership will produce these results.
PRESIDENT Page: William R. Hunter will be heard in opposition.
MR. PUNTER: Mr. President, Ladies and Gentlemen of the Bar Association: I was notified some few weeks ago that I would be required to discuss the subject of Municipal Ownership, and I take it for granted that Municipal control and operation, the subject stated, is about as general as a declaration consisting of the common counts. And I believe the first thing to determine, in order to cireumscribe the argument, is what constitutes it public utility. I have never yet been able to find a definition that is satisfactory, and lawyerlike; I have attempted to make one of my own, and whether it is a good definition or not will be for you to determine.
I assume that "Any industry for profit requiring the use of public property, which cannot be pursued by a natural or artificial person without the legal permission of the public authorities," is a public utility. If I am right in this, then it will include steam railroads, elevated railways, underground railways, street railways, interurban railways, telegraphs, telephones, gas plants, electric light plants, water plants, pneumatic tubes and perhaps other minor common carriers.
If the principle of municipal ownership and operation is sound as a governmental principle, it should be, and it will be in time, applied to all of these quasi-public industries. We cannot confine it to Chicago, nor to any other city, for it will be extended to all cities, villages, counties, states and to the nation as well. Whether or not municipal ownership of these utilities will be conducive to the general welfare of the nation is an open question, upon which men widely and honestly differ, and the question is, would municipal ownership and operation of public utilities be more beneficial to the people than private ownership would be, under proper municipal regulation; not to a city or a class, but to the nation. I will not attempt to sustain my position by citing cases. Lawyers know that parallel cases are few in number, and that courts of last resort occasionally change