Page:American Journal of Sociology Volume 10.djvu/864

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natural units for industrial undertakings. The boundaries are too artificial to be used as the limits of the area of service, particularly in such enterprises as water-supply and tramways. One finds suburban districts outside the jurisdiction of the municipal authority which are precisely the places which should be supplied with water and electric light by the same body and from the same source as the city ; and tramways should certainly connect them with the center. But if the services are performed by the municipality, there is an overlapping of function in the suburban areas which may at any time become a source of discord.

The expression " natural municipal monopolies " turns out, then, to be a rather inexact phrase, inasmuch as the natural area for the monopolies seldom entirely coincides with that of the municipality. Under present conditions, therefore, it is quite absurd to expect a municipal industry to be circumscribed by the adminis- trative area. Thus we find that whether by direct grant of powers by Parliament, or by purchase of private undertakings which were not restricted to the single area, the extension of municipal activity beyond the municipal boundaries is at present proceeding very rapidly.

This extension, however, is attended by many vexing financial questions of relationship between the municipality and the outlying communities which are served by its industrial enterprises. The whole discussion of this series of rela- tionships centers about the three elements of risk, of representation, and of profit. It is possible to do little more than state some of the problems which demand solu- tion in connection with these matters.

It is to be noted that the risk involved in undertaking a service for a much larger area than the administrative one falls entirely upon the administrative area, that is, upon the municipality. This fact accounts in certain cases for the appar- ently excessive per capita indebtedness of some cities an indebtedness which is explained by municipal trading extended over an area and population much greater than those of the municipality itself.

With respect to representation of the outlying districts upon administrative boards charged with the management of municipal enterprises, a few experiments have been made. Where many such suburban districts are served, the committee is apt to become unwieldy ; for the city itself would always demand a majority of the members. Such a scheme of representation, however, raises a crop of questions of its own, and leaves untouched the matter of risk, for it may be doubted whether the suburban authorities would accept risk as involved in their share of management. On the whole, there seems to be no feasible plan of giving effective participation in the work to outside areas.

It has sometimes been urged that the best solution of the whole question is to forbid a municipality making a profit from any of its enterprises. In that way it is thought that there can occur no possible exploitation of external areas. But in the first place there is not, necessarily, any injustice to these suburban districts in the reaping of profits by the cities which assume all the financial risk of the undertaking. And, furthermore, " profits " from such enterprises are so largely a matter of bookkeeping in the matter of depreciation and sinking-fund, and of tariffs and charges, that no present data on the subject are sufficiently uniform to serve as a basis from which conclusions may be drawn. This is merely pointed out to show how futile it would be under present conditions to disallow profits, even if it were desirable from other points of view.

In order both to safeguard the outlying areas, and at the same time to com- pensate the municipality for the financial risk assumed, it might be possible for governmental regulations to be devised which would admit the principle of differ- ential charges in some industries, but within strict limitations. If the charges were hound to go down on a sliding scale pan passu with the charges within the city area, so that the difference could never be very great, no injury could be alleged. But. of course, in such industries as tramways, such a principle could hardly be applied. STANLEY H. TURNER, in Economic Journal, March. IQOJ.

E. B. W.

The Employees of the State and Professional Organizations. The Commission of Labor has framed a law which renders the provisions of the law of 1884 regarding organizations of employees applicable " to the employees of the