tained any control over such
franchises, it is converting the public service corporations merely into
temporary tenants of what are essentially exclusive economic privileges.
During the period of its tenancy the management of a corporation has
full opportunity to display any ability and energy whereof it may be
possessed; and such peculiarly efficient management should be capable of
earning sufficient if not excessive rewards. In the meantime, any
increase in value which would result inevitably from the possession of a
monopoly in a growing community would accrue, as it should, to the
community itself.
The only alternative to such a general scheme of municipal policy in
relation to public service corporations would be one of municipal
operation as well as municipal ownership; and municipal operation
unquestionably has certain theoretical advantages. When a corporation
enjoys a tenancy for a stated term only, there is always a danger that
it will seek temporarily larger profits by economizing on the quality of
its service. It has not the same interest in building up a permanently
profitable business that it would in case it were owner as well as
operator. This divergence of interest may lead to a good deal of
friction; but for the present at least the mixed system of public
ownership and private operation offers the better chance of satisfactory
results. As long as the municipal civil service remains in its existing
disorganized and inefficient condition, the public administration should
not be granted any direct responsibility which can be withheld without
endangering an essential public interest. A system of public operation
would be preferable to one of divided personal responsibility between
public and private officials; but when a mixed system can be created
which sharply distinguishes the two responsibilities one from another
without in any way confusing them, it combines for the time being a
maximum of merit with a minimum of friction.
Such a system carries with it, however, two results, not always
appreciated. A municipality which embarks upon a policy of guaranteeing
monopolies and leasing the enjoyment thereof should make all permanent
improvements to the system at its own expense, and its financial
organization and methods must be adapted to the necessity of raising a
liberal supply of funds for such essential purposes. Its borrowing
capacity must not be arbitrarily restricted as in the case of so many
Ame
|