near cost price as possible than any private trader can have for wishing to supply it in that condition and at such a price. It is equally evident that the milk supply of a whole town can be more economically organized if it be centralized than if it be left to the haphazard competition of a dozen or a hundred private dealers, several of whom may be sending their carts every day in competition with one another along the same streets. Similarly it is more to the interest of a community to slaughter only healthy animals for human consumption, and to do this as far as possible under cleanly conditions, than it can be to the interest of private slaughterers. Again, with the supply of coal, it is to the interest of mine owners and coal dealers that the difference between the cost of obtaining the coal and the price paid by the retail consumer should be large; but it is to the interest of the community to have coal supplied as nearly as possible at the price it costs, which could be done by nationalizing the mines and municipalizing the local distribution.

The Limits of Municipalization.

It must, however, on no account be supposed that it is desirable for our town councils to municipalize everything.

If the medical officer of health wants a microscope or the county surveyor a theodolite, it will not pay the municipality to set up a scientific instrument factory to produce that single article, possibly of a kind which can be produced by half a dozen firms in sufficient quantity to supply the whole of Europe. Even the London County Council, with all its bands, has never proposed to manufacture its own trombones. The demand for the commodity must be sufficiently extensive and constant to keep the necessary plant fully employed. The moment this limitation is grasped, the current vague terrors of a Socialism that will destroy all private enterprise laugh themselves into air. The more work the municipality does, the more custom it will bring to private enterprise; for every extension of its activity involves the purchase of innumerable articles which can, in the fullest social sense, be produced much more economically by private enterprise, provided it is genuinely self-supporting, and does not spunge on the poor rates for part of the subsistence of its employees; in short, provided it works under a "fair wages" clause.

A very serious and quite artificial obstacle to municipal trading, as has been already indicated, is presented by the limits within which the activity of each separate borough is confined. In the country, municipal enterprise is reduced to absurdity by the smallness of the areas and their openly nonsensical boundaries. Mr. H. G. Wells's description (in “Mankind in the Making") of his residence on the boundary between Sandgate and Folkestone (two places as continuous as Mayfair and St. James's), a boundary which no municipal tramcar can cross, shows the hopelessness of substituting public for private Collectivism there. A shipping firm whose vessels were forbidden to cross any degree of latitude or longitude might as easily

compete with the Peninsular and Oriental as the Folkestone municipality with a trust which could (and would) operate over a whole province.

In towns the nuisance of antiquated boundaries is equally flagrant and often financially much more serious. But evidently this is a difficulty which can be dealt with as soon as public opinion is educated up to the point of wishing to have it altered, a process which will probably be assisted by the success of various large trusts in crushing small competitors and monopolizing large industries for private profit. In America the Standard Oil Company and other large combines have done more than any Socialist arguments to open people's eyes to the evils resulting from industrial competition, or rather from that stage of economic progress which is rapidly replacing competition by combination, and which, while it does away with the inefficiency and wastefulness of the small, old-fashioned and incompetent trader, introduces its economies and improvements not for the benefit of the public (though incidentally they may get some crumbs of advantage) but for the gain of the capitalist.

The Evils of Private Trading.

It will also be assisted by a growing appreciation of the evils which accompany private trading. The wastefulness of private competition is so obvious that the average town councils would have to be worse than Tammany Hall ever was before a community could reasonably prefer to entrust its public services to the private trader. For though Tammany bosses made fortunes at the public expense by corrupt means they were at least capable and efficient business men; nor did they upset the industrial and economic life of the community as it is upset by speculators of the type of Whitaker Wright or the Directors of the City of Glasgow Bank.

In comparing private with municipal trading one has to bear in mind the indictment of ordinary commercial trades made by Sir Edward Fry, late Lord Justice of Appeal, who said: "If one enquires whether the morality exercised in the conduct of business in this country is satisfactory or not. . . . I fear the answer must be in the negative. Let me enumerate some well known facts :

"I. Over-insurance of vessels . . . . when one considers how nearly this sin approaches to the crime of murder this consideration is startling.

"2. The bad and lazy work too often done by those in receipt of

wages.

"3. The adulteration of articles of consumption.

4. The ingenuity exercised in the infringement of trade-marks, and the perpetual strain exhibited by rival traders by some device or other to get the benefit of the reputation and name of some other maker.

"5. A whole class of frauds exists in the manufacture of goods, by which a thing is made to appear heavier or thicker or better in some way or other than it really is. The deceit is designed to operate on the ignorant ultimate purchaser.

"6. Lastly, but not least, bribery in one form or the other riddles and makes hollow and unsound a great deal of business."

Add to this that a Special Committee of Enquiry of the London Chamber of Commerce reported :

"Your committee conclude from the evidence before them that secret commissions in various forms are prevalent in all trades and professions to a great extent, and that in some trades the practice has increased and is increasing; and they are of opinion that the practice is producing great evil, alike to the morals of the community and to the profits of honest traders."

One has also to bear in mind that the late Lord Chief Justice Russell, addressing the Lord Mayor in 1898, described company fraud as "a class of fraud which is rampant in this communityfraud of a most dangerous kind, widespread in operation, touching all classes, involving great pecuniary loss to the community, a loss largely borne by those least able to bear it; and, even important than this, fraud which is working insidiously to undermine and corrupt that high sense of public morality which it ought to be the common object of all interested in the good of the country to maintain-fraud blunting the sharp edge of honor and besmirching honorable names."

more

It would be easy to continue this indictment of present day methods by reference to the condition of many of the workers and the elaborate deception of consumers by enormously expensive advertisements, on the production of which a not inconsiderable portion of the energy of our population is wasted. Many of these advertisements are mischievous and dangerous as well as wasteful, leading people to depend on drugged or innutritious foods, on tyres falsely alleged to be non-skidding, on quack medicines, etc., etc., etc.

Experience shows that it is difficult to insist on a high standard of morality in war time; but to take the case of the South African scandals as a typical instance, we find that the twelve ounces to the pound jam came from private, and not from government, factories.

The Incidence of Rates.

Something still remains to be said about a matter referred to at the commencement of this Tract, namely, the incidence of the rates. The progressive mayor of one of our large towns felt tempted to declare not long ago that municipal improvements should be stopped until the right to rate ground values had been obtained; for, said he, what is happening here and in other places? We are heavily rating our people in order to make roads and pave streets, and supply gas, water, and trams. The effect is to send up the price of the land we reach. Now a few years hence we shall have to buy parts of that land at a much higher value for schools, parks, open spaces, post offices, etc., etc. Then the very people who have paid the high rates expended on giving the increased value to what was agricultural land, will have to pay higher rates to buy it back at its enhanced price.

In reply to this it will be said that what happens is that the increase of rates really comes instead of an increase of rent, and that in this way ground landlords are already contributing largely to the rates; that, in fact, the present system is a rough way of taxing rent. And it really does so when the tenant is rackrented to the last farthing; but then very few ratepaying tenants are so rackrented. If the tenant would at a pinch pay another two pounds a year, say, sooner than move (a pretty common case, one guesses), he is, from the economist's point of view, enjoying two pounds a year of the rent; and if his rates go up by two pounds he will not be able to shift the increase on to his landlord. All that will happen is that his rent will become a rack-rent instead of falling two pounds short of it. The rate collector takes what the landlord spared.

The remedy is to tax all whose incomes are unearned; not the ground landlords exclusively, though, as a class, they gain most by municipal expenditure, and it is they who should pay the greater part of the local rates. When it comes to a question of national taxation, on the other hand, there is no reason why those who have large incomes from Consols or shares in industrial enterprises, should not also bear a large part of the burden; for they benefit from the maintenance of army and navy, police, etc., quite as much as the owners of the land.

The Last and the Next Generation.

The efforts of our forefathers during the last 150 years have solved one half of the economic problem. Man has obtained such a mastery over matter that it would be easy to-day to organize the labor of the inhabitants of this country so that all might be well fed, clad, housed and trained. It remains for us to accomplish the other half of the problem by arranging the production and distribution of wealth so as to minimize waste, and by making it difficult for the crafty to exploit the simple, to make it easy for all to obtain a fair share of the produce of their own labor and of the fruits of the organized efforts of the community.

In the gradual accomplishment of that task municipal trading can perform a large and useful part when once the question is properly understood and elections so conducted that public spirit and business capacity meet on our municipal councils.

Municipal trading has its limits. Some services, such as the railways, should not be municipalized but nationalized; and, as already indicated, there is no reason why ample scope should not be left for individual enterprise. But the reasonable limits of municipal trading have not yet been approached, even in our most progressive cities.

[Free use has been made of Bernard Shaw's Common Sense of Municipal Trading" and R. B. Suthers' Mind Your Own Business" in preparing this Tract, and many passages have been borrowed from those works.]

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