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As regards existing Companies, it is extremely difficult to state in any general terms what can be justly done ; still more difficult in the present state of public feeling and of legislation to do anything effectual. Theoretically, it is quite just to make the conditions on which Parliament has made concessions to them, effectual in their operation ; e.g. to compel Railway Companies to adopt a proper system of through-booking and convenient arrangements; to compel Gas Companies to supply good gas, and to use economy in its manufacture; and to compel Water Companies to give an ample supply of pure water. But there is really enormous practical difficulty in the intricate system of supervision and joint management, which such restrictions imply. Take the case referred to above, of the want of harmonious arrangements between different Railway Companies, one of the greatest grievances of which the public have to complain. Suppose that a Government Department were intrusted with the duty of seeing that these arrangements were so made, as to give the greatest possible facility for through-communication to goods and passengers, and consider what powers and what an amount of interference this duty would involve. The Government officers would have to see that at each point where one railway intersects or meets another, the trains are so timed that a passenger travelling by one line shall be able, without unnecessary delay, to proceed by the other. He must, therefore, determine the time tables of both Companies. Again, he must settle how long the train of the one line is to wait for the train of the other, if late; and he must also determine whether through-carriages must be used. He would also have to settle whether through-booking is to be adopted, and if there is any dispute between the Companies, what proportion of fares and of expenses is to fall to each Company. In short, he would be obliged, unless the Companies were to second him with a good will we have no right to expect, to take a large share of the management of their traffic arrangements into his own hands; and a system of divided power and responsibility would be introduced, which could lead to nothing but confusion.
A further practical objection to supervision of this kind, is the difficulty of procuring the requisite powers. To
effectual measure there would be an amount of opposition which no Government can or will face. A recent case in which an attempt was made to regulate, not existing Companies but future Companies, which will resemble existing Companies, is a good illustration of this difficulty. There was a Bill introduced last Session to amend the General Act relating to Gas Companies. It applied to future undertakings, and did not affect existing undertakings at
all, unless they should come to Parliament for new powers, and then only to such an extent as might be determined by Parliament. It provided for an effective test of gas; for periodical revision of prices; for keeping proper accounts; for a compulsory supply of gas on certain terms to consumers living within the district; and, finally, for the purchase of the undertaking by the municipality, on terms to be fixed by arbitration, after a certain period of years. These are certainly no unfair conditions to impose upon persons about to set up a new monopoly of a necessary of life. And yet the opposition to this Bill on the part of the existing Companies was so powerful, that even the present Government-strong as it is—would probably, even if it had time at its disposal, have been unable to carry it. In this, and similar cases, petitions are printed by a central organization in London, and sent to every shareholder in every company in the country to send up to their members, with statements, from which it might be thought that the Government was organising a conspiracy, to rob all the widows and orphans whose fortunes are invested in shares. Gas shareholders have made, must make, will make, and shall make, an easy 10 per cent.! and they will stir heaven and earth to prevent, even as regards new undertakings, enactments which would show that gas can be made under conditions more favourable to the public than those which have been imposed on themselves.* Against an organization of this kind, concentrated, wide-spreading, and agitating, with all the irresponsibility of a public body, and with all the skill and audacity of the most practised agents, the power of the Government, and the interests of the population are really helpless. These influences pervade in the House of Commons, and are felt in the serener regions of the House of Lords. And even the Public Press, whilst ready enough to blame Government and Parliament for the misdoings of the Companies, will constantly be found, when the pinch comes, in speaking of company management, or mis-management, to treat the question of profit to the invester, as of more importance than that of good service to the public.
* Another illustration of the same difficulty is to be found in the history of another Bill of this Session. The Courts have decided that a Municipality cannot spend its rates in opposing or promoting a Gas or Water Company's Bill in Parliament. A Bill was introduced to remedy this defect, and to enable the natural protectors of the local public to act on its behalf. Immediately ppeared the usual array of deputations, amendments, and opposition, by which the Companies 50 successfully defeat any measure which is calculated to protect the public against their monopoly. The Companies are not content with a fair field, with their power of the purse, and with the indulgence Parliamentary Committees always show to vested interests. Their opponents, the consuming public, must fight them with its hands tied, without funds and without organization !
As regards existing Companies, therefore, it is difficult to believe that any restrictions or regulations can be framed or brought into operation so as effectually to protect the public. And if this is impracticable, the only mode of dealing with them is to buy them up whenever the evil of the monopoly is sufficiently felt to make such a course practicable and desirable. As regards Gas and Water Companies in every large town, this should be done with as little delay as possible ; and if greater facilities for doing so than exist at present could be given by any General Act, so much the better. As regards Railways in England, the time for such a measure is probably distant; but in Ireland the question presses for early solution. What the terms of any such purchase should be is a question far too difficult and practical to deal with here. It is only to be hoped on the part of the public taxpayer that they may be less onerous to him than those which the shareholders in Telegraph Companies have lately obtained from Parliament.
As regards future undertakings, the above considerations shew that whilst, on the one hand, it is in many cases desirable that public authorities should undertake these works, it would be madness to forego the advantages of private capital and enterprise. When the financial success or the absolute necessity of an undertaking is well established--as in the case of gas or water in populous towns-or where private capital is less abundant than it is in this country, there we may possibly expect and even compel public bodies to rouse themselves. But where an enterprise is in any way speculative, either from inexperience in construction or manufacture, or from doubts as to the extent of the demand, or from the amount of capital needed, or from any other reason, we must in this country, at any rate, trust to private energy and self-interest. Better local organization may do something towards enabling Municipal and Local bodies to act with greater vigour; but the experience of the last fifty years, and last, but not least, the present experience of Tramways, shows that joint-stock capital will cover the country with public works before Government, Local or Central, will stir. Private enterprise must not, therefore, be forbidden or effectually discouraged by too stringent conditions; whilst on the other hand, provision should be made for securing to the public good service at once, and in the end the benefit of the profits of the undertaking. Fortunately, capital seeks immediate returns, whilst the life of a nation, a town, or a county is comparatively unlimited. It is possible, therefore, to make a concession temporary, and yet to give to private enterprise liberal and sufficient encouragement. And even if conditions more stringent than have been
yet imposed should have some effect in checking the growth of these Companies, it is possible that an equivalent advantage might arise from the consequent stimulus which would be given to Governing Bodies. What may, therefore, be suggested as principles to govern future legislation are the following. They are already embodied in the Tramways Act of last Session, and, though it is too early to say how that Act will work, there is no reason yet to believe that it will be unsuccessful :
1. Give to all Local Authorities the utmost possible facilities for undertaking these works. Let every village or district have the means of establishing Gas and Water works, and paying for them, if necessary, out of the rates. 2. Let Counties, or Highway, or other Districts have the
power of making Tramways and Railways.
3. Where any of these works are to be made by a Company, give them a liberal scale of immediate charges; but take power to revise their charges at certain intervals; take power also to test the article they supply; and compel them, where they monopolize a district, to supply all consumers within the district on certain terms.
4. Give to the Government, or to the Municipal or other Local Authority, power after a given period—which will vary according to the capital expended and other circumstances—to purchase the undertaking, at the then value of the works themselves and the plant, without payment for profits or goodwill. The effect of such a provision would probably be to make promoters ask for high prices and large profits in the meantime, so as to allow of their forming a reserve or sinking fund; but at the end of the period the Town or District would get the full benefit of the works, without the ruinous struggle as to terms which now goes on whenever a Municipality wishes to purchase an undertaking of this kind.
A further suggestion has been made in the extract from Mr. Mill, quoted above, which seems to deserve consideration. It is to the effect that these monopolies might be leased out by Government for a term by competition to a company or other contractor. Such a lease might assume various aspects. The governing body might construct the work themselves, and then lease the working of the undertaking for a given number of years to a private company; or they might merely lease the power to construct the works and the monopoly upon certain terms, leaving it to the lessee to execute the work and hand it over in good condition to the governing body on the conclusion of the lease. Again, the competition might either take the form of a competition in rent, the conditions and the price to be
charged charged to the public being fixed ; and in this case the price must be such as to admit of both profit to the contractor and rent. Or the rent to the governing body being fixed or being nil, the object of the competition might be to determine the lowest price at which any solvent and responsible contractor would supply the article or convenience in question to the public.
In all these cases there would be considerable difficulty in framing the conditions; and in the relations both during the lease and at the end of it between the governing body and the contractor. But a scheme of this description would give to the public, either in the shape of rent or of reduction of charge, the ultimate profit to be made out of the monopoly. It is to be regretted that no experiment of this kind has yet been tried in
The above considerations are economical. There is one other consideration of great importance, but of importance in a political rather than in an economical point of view, viz., the effect which would be produced on the political morals of the country, of a town, or of a district, if the patronage and other opportunities for jobbing involved in the management of large public works were placed in the hands of its governing body. That some evils might thus arise we cannot deny; for no one who has watched local administrative bodies is likely to believe that they are universally proof against temptations of this kind. But most, if not all, of the services in question will be rendered to the public, and in public, and every defect in the service will be promptly noticed and complained of. There is nothing like plenty of work and full publicity for preventing jobbery and keeping administration sound and pure. On the other hand, also, there is a serious political evil to be apprehended from the growing influence of the great Joint-Stock Company interest in Parliament and in local governing Boards. This evil is, if report speaks truth, a very serious one in America. In this country it is as yet not much felt, except in the combined resistance which the Companies make to any alteration of the law which affects themselves. But the success and ability with which they can do this is, considering the ever-widening sphere of their operations, a great evil in itself
, and if they should ever turn their powerful organization to a political purpose, it would become a national calamity.
There is one other point to be considered. If Municipal bodies become to any large extent owners of profitable undertakings, the question will arise, whether, when a given undertaking produces profits, they should be bound to apply all the surplus for the benefit of those who use the particular article or