The Tendency of Municipal Government in the United States

APRIL, 1911

BY GEORGE B. McCLELLAN

I

MUNICIPAL muck-rakers have insisted so constantly that the ever-increasing cost of municipal government in the United States is due to the waste and corruption of city officials, that there has been a general disposition to accept their charge as true. Fortunately the muck-raker seems to have had his day, and is rapidly losing the influence which he wielded a few years ago. While he has succeeded in discrediting our municipalities in the opinion of the foreigner, his excesses have discredited him in the opinion of the people of this country, so that at last and at least they are willing to discuss municipal problems with a certain amount of calmness.

It is as unfair to assume that the rapid increase which has recently taken place in the cost of municipal government has been due to criminal waste and corruption as it would be to make the same assumption in reference to the cost of governing the several states and the nation.

While it is perfectly true that the budgets of our cities have increased with startling rapidity during the last few years, it is no less true that the cost of governing the states has increased with proportionate speed, and that in eighteen years the cost of governing the United States has exactly doubled. But no matter how little civic pride we may have, no matter how readily we may damn city officials who are trying to do their best, we always hesitate to believe that our governors and our presidents are corrupt.

The constantly increasing cost of municipal government is due to causes far more subtle and far more complicated than corrupt officials, dishonest bosses, or rotten political machines.

It is the fashion among those who throw stones at municipal government in this country to compare it, greatly to its disadvantage, with municipal government in England; the ultimate test always being the difference in cost. The statement that municipal government is far cheaper there than here, is predicated upon the total of budgets in English and American cities, which for purposes of comparison is of course valueless. So far as I know, the only effort that has been made toward a fair comparison is that of President Lowell (The Government of England, vol. ii, p. 195, note 1), who has worked out a very satisfactory basis. President Lowell takes Boston as his typical American city, the per capita cost of government in Boston being almost the highest of any city in the Union. He finds the Boston tax rate for 1906 to be equivalent to an English rate of seven shillings in the pound. The rates for 1906 in the ten largest boroughs of England and Wales ranged from 7s. 4d. in Birmingham to 10s. 8d. in West Ham. ‘In the various parishes that make up the County of London the rates vary a great deal. In one case alone they were in 1906 less than 6 shillings. In most of the parishes they were more than 7 shillings, in many cases more than 8 shillings; in several more than 9 shillings, and in the three parishes of Poplar they were 12 shillings.’ In other words, the highest cost of municipal government in the United States was less than that of any of the large cities of England. It would, therefore, seem that there is the same tendency toward high cost of municipal government in England as here, and it is fair to suppose that the same causes of increasing expenditure are at work in the two countries.

One of the curious traits of our national character is that we have always assumed that we are a peculiar people, living under a special Providence, a law and an inspiration to ourselves; while in reality we are, like every other civilized nation on earth, responsive to the spirit and opinion of the time.

Although Jeremy Bentham began to obtain his hold upon the thought of the world early in the last century, it was not until after his death, in 1832, that the direct results of his philosophy were accomplished. Bentham applied practically, through legislation, Priestley’s formula, that the one object of life is ‘ the greatest happiness of the greatest number.’

In the United States under the guidance of Jefferson, constitution-worship had produced a general faith in the power of law. Yet side by side with the doctrine of constitutional infallibility was the belief in the social compact, and the so-called inalienable rights of man. Before he left the presidency, while still preaching the rights of man with all his old fervor, Jefferson had become, perhaps unconsciously, as had his followers, — and they included most of the people of the United States, — to all intents and purposes a practical and an ardent Benthamite. The belief in individualism became as all-pervading and as strong as the belief in the constitution. The direct consequences of Benthamism were the freedom and sanctity of contract, and the freedom of the individual.

The constitution-fetich of Jefferson, the statute-worship of Bentham, necessarily resulted in inculcating a firm belief in the efficacy of legislation. The right of every man to work out his own salvation in his own way, provided that in so doing he does not interfere with any one else, being conceded, it follows that absolute freedom of contract becomes an essential concomitant to such right. But for full contractual liberty, the help of the state is almost always necessary. Unless a contract once made is maintained by law, the right to contract is valueless. Absurd as it may seem, the Benthamite recognized the right of the individual to contract away his contractual freedom, in corporate or laborunion combinations. But to insure such freedom the support of the law is necessary. Both Jefferson and Bentham were inclined to consider the law an end in itself, and to forget that it is only the instrument through which public opinion speaks, that it is only the recognition of existing custom, that it merely prescribes a penalty for a preëxistent offense. From this consideration it was but a step to regard law as an omniscient consciousness, omnipotent to accomplish whatever its authors might decree. When collectivism began to influence public opinion in the United States, this view of legislation made of it a ready vehicle for the expression of the new doctrine. As Professor Dicey has shown, the germ of collectivism, which was latent in the body of Benthamite individualism, was the belief it fostered in the efficacy of legislation, and in the possibility of accomplishing results collectively which it showed in the organization of corporations and labor-unions created under the right of free contract so ardently preached by Bentham.

The collectivistic movement began in the United States almost immediately upon the close of the Civil War. Events which occurred during the four years of hostilities had greatly increased the familiarity of the people with paternalism in government. Government contracts easily acquired and easily filled, government pensions and offices easily earned and obtained, a policy of tariff legislation followed far more in the interest of protection than of revenue, educated our people into the belief that government possesses every good and perfect gift which can be had by any man for the asking. Moreover, under the utilitarian individualism of Hobbes, Bentham, and Austin, public opinion gradually educated itself to the spending of great sums for philanthropic and benevolent objects. Early in the nineteenth century we already had ha bituated ourselves to large expenditures on hospitals, primary education, and poor relief, and to the existence upon our statute books of laws intended for the protection of human life among workmen in factories and in dangerous or semi-dangerous callings. It was not difficult to forget the purpose of philanthropic and restrictive legislation and to exaggerate the potency of the legislation by itself. Individualism, once the creed of almost every American, was generally laid aside, at first quite unconsciously, then consciously and openly.

The utilitarian legislation of the Benthamite period sought to limit as little as possible the freedom of the individual, and only to limit the individual at all for the protection of his fellows. The Benthamite legislates merely for the safety of the state, while the collectivist legislates in any direction which he thinks will conduce to the general welfare, always influenced by a belief in the efficacy of legislation.

II

The practical expression of the collectivistic tendency of the day has been by means of State Socialism rather than through so-called Pure Socialism. I may make my meaning clearer if I explain what I conceive to be the difference between the two, by quoting somewhat freely from Ludwig Bamberger’s very able article, ‘Socialisme d’État’ in Léon Say’s and Joseph Chailley’s Nouveau Dictionnaire d’Economie Politique. Pure Socialism seeks entirely to reconstruct the state upon the basis of a distributive justice founded upon the material equality of the means of existence. Labor alone produces and has the sole right to the thing produced. State Socialism on the other hand denies this hypothesis, and insists that the fundamental law of society is the protection of the weak against the strong. Pure Socialism would abolish the old order of society, State Socialism desires only to correct it. Pure Socialism strives for an absolute equality among individuals, while State Socialism strives for an equalization of their forces, and believes that the equality of the law is more or less an imaginary hypothesis. Under the old order of things, the law only protects the weak against violence and oppression. State Socialism seeks to defend him against the legal superiority of those who enjoy greater intellectual or material advantages. It not only protects the individual against others stronger than he is, but even against himself and his own ignorance and weakness. The individualistic State knows only one condition of minority, due to childhood or mental deficiency, while State Socialism enlarges the idea of minority so as to include all humanity. Pure Socialism would have society consist of the slaves of the state, State Socialism would be satisfied with a society consisting entirely of minors. Under individualism, the adult may dispose of himself as he sees fit, but under Socialism he may not.

Although the origin of State Socialism as well as that of Pure Socialism is lost in antiquity, the theoretical and practical crystallization of the former dates only from the foundation of the German Empire. The real father of practical modern State Socialism was Prince Bismarck, the chief enemy of Pure Socialism, or social democracy. Napoleon III toward the close of his reign had made some tentative collectivistic experiments, but it remained for the Iron Chancellor to make of a somewhat vague theory a very definite political system. In 1878, with the help of an overwhelmingly conservative and obedient Reichstag, Bismarck substituted a high protective tariff for the existing system of near free-trade. The doctrine of protection depends upon the same principle as does State Socialism, for the original purpose of both is to protect the weak against the strong. In the case of protection the weak is the domestic producer, the strong is the foreign competitor; although it maybe urged that ultimately protection is State Socialism in the interest of wealth at the expense of poverty.

Bismarck found it impossible to apply State Socialism for the benefit of the rich, without some application of the same policy for the benefit of the poor. Moreover as a believer in a strong centralized government of which he was the head, he strove to strengthen his own hands in every possible way. The direct result of these two motives was the acquisition by government of the Prussian railroads; the institution of a complicated workmen’s insurance and pension system; the enactment of an employers’ liability law, and a rigorous factory act. The influence of Bismarck’s example was felt almost at once in continental Europe, and somewhat later in England and the United States.

While the doctrine of State Socialism has been put in practice more directly and rapidly by the several states than by the nation, it is in the cities that it has flourished with the greatest vigor. So much so that it is no exaggeration to say that our urban population is composed entirely of State Socialists; that is, every one living in an American city, and the same is true of the cities of Europe, believes more or less strongly, more or less wittingly, in the doctrine of State Socialism. Of course it is very difficult, sometimes almost impossible, to draw the line at which individualism ends and State Socialism begins: so difficult that the individualist and the State Socialist may strive to accomplish exactly the same thing in exactly the same way, but from entirely different motives. The individualist justifies the expenditure of large sums on hospitals on the ground of protection to the entire community, while the State Socialist justifies it on the ground of equalizing the forces of the community by spending the money of the strong (the taxpayer) for the benefit of the weak, and by giving the weak a helping hand toward health. On the other hand, the simonpure individualist scarcely can justify the support by the community of absolutely free schools, while even the most diluted State Socialist is immensely proud of our free-school system. In short, no activity of government that does more than protect the community as a whole can be justified except under the doctrine of State Socialism. While the word socialist has for us an unpleasant meaning suggestive of the torch and of the bomb, the fact remains that the old-fashioned individualist whom our grandfathers knew is as dead as is Jeremy Bentham.

III

In this country we have only felt the full force of State Socialism during the last decade, the large cities having felt it more than the small. According to the statistical abstract for 1909, in 1907 the five city governments in the United States with the highest per capita cost of maintenance were: first, Washington, $35.59; second, Boston, $35.22; third, New York, $24.51; fourth, Pittsburg, $21.80; and fifth, Cincinnati, $19.87. According to the census special report on cities, in 1908 the five cities with the largest per capita of indebtedness were: first, New York, $157.74; second, Cincinnati, $128.61; third, Boston, $119.48; fourth, Galveston, $113.07; and fifth, Portland, Maine, $107.41. For purposes of comparison the statistical abstract and the census report divide the 147 cities of over 30,000 inhabitants into four groups: Group I contains the 15 largest cities, of 300,000 inhabitants and over; Group II contains 25 cities of from 100,000 to 300,000 inhabitants; Group III, 46 cities of from 50,000 to 100,000 inhabitants; and Group IV, 61 cities of from 30,000 to 50,000 inhabitants. From 1902 to 1907 inclusive the per capita cost of maintenance of Group I increased from $18.76 to $21.40; of Group II, from $12.94 to $16.22; of Group III, from $12.88 to $14.59; of Group IV, from $11.55 to $12.80; while the per capita cost of all 147 cities taken together increased during the same period from $16.10 to $18.58.

The per capita of indebtedness increased from 1902 to 1905 inclusive, in Group I, from $75.68 to $91.25; in Group II, from $54.13 to $56.32; in Group III, from $46.78 to $48.34; in Group IV, from $40.10 to $42.41; while in all 147 cities taken together it increased during the same period from $63.62 to $72.89.

The percentage of increase in per capita cost of maintenance from 1902 to 1907 was: Group I, 14 per cent; Group II, 25 per cent; Group III, 13 per cent; Group IV, 10 per cent; for all 147 cities, 15 per cent. The percentage of increase in per capita debts from 1902 to 1905 inclusive was: Group I, 20 per cent; Group II, 4 per cent; Group III, 3.34 per cent; Group IV, 5.7 per cent; for all 147 cities, 14 per cent. In other words, there was a constant increase for all cities both in maintenance and in indebtedness.

The proportionate increase in cost of maintenance was largest in Group II, and fairly uniform in Groups I, III, and IV; the proportionate increase in indebtedness was much larger in Group I than in Groups II, III, and IV. It is fair to assume that while the permanent public improvements have been much more numerous in the fifteen largest cities, the increase in the cost of their government has not been proportionately greater than in that of the smaller municipalities.

During 1905 these 147 cities paid out for all expenses, including loans, the enormous sum of $1,030,797,319, or more than the cost of governing the nation — an increase of $216,100,248, or 26.5 per cent in three years; while in 1908, 158 cities paid out $1,236,782,824.

Every one of these cities maintained a free-school system, the largest per capita expenditure for this purpose in 1908 being that of Salt Lake City, $8.18; the smallest, Montgomery, Alabama, $1.63; the average for all cities being $4.70. The largest gross sum expended for free education in 1910 was in New York, $28,578,432. All of these cities owned and maintained public parks of some sort, and nearly all of them maintained alms-houses and hospitals. Forty-five cities had public playgrounds; seventeen, river or ocean beaches; thirty-one, public baths; and twenty-one, gymnasia. Forty-two cities owned zoölogical gardens; one owned and leased, and five owned and operated, gas plants; twenty-two cities owned and operated electric-light works. During the year 1908 the 158 largest cities expended for new properties or new work $275,003,695, as against $244,117,298 during the previous year.

While in all cities the various transportation facilities are under the more or less rigorous control of either the state or the municipal government, New York is the only large city that has gone into the transportation business, not only as the owner of an underground railway leased to a private corporation, but also as the operator of two lines of municipal ferries. New York heads the list of cities engaged in municipal trading, having received, during 1908, from public-service enterprises, such as water-supply, toll-bridges, and the like, $18,604,056; Chicago comes second with $5,127,401; and Philadelphia third, with $4,368,213.

IV

There is not a city in the Union that has not joined the procession toward collectivism. The typical American city builds, owns, and operates bridges, ferries, docks, and water-supply; has built subways, gives free primary, secondary, and higher education to all boys and girls who apply, for which purpose it even maintains free colleges; supports libraries, museums, and collections of various kinds, nautical schools and observatories, free public baths, gymnasia, playgrounds and athletic fields, with free instruction in swimming, gymnastics, and athletics; all this besides its prisons, reformatories, work-houses, alms-houses, lodging-houses, asylums, laboratories, and hospitals of all sorts and kinds. Besides seeing to it that the citizen is law-abiding and moral, the city most carefully protects his health. It inspects his food and drink, attends to its quality, its measurement, and weight; it watches over his home or his tenement, sees that he has enough light, air, and space, and that his sanitary conditions are as they should be. It assumes toward the citizen at his birth the relation of a kind and generous, if somewhat fussy, grandmother, and continues this relationship until he has passed away.

Their experience of paternalism in municipal government has made the American people anxious for more. There are no people in the world more exacting, more captiously critical of the government of our cities than we are. We demand the extension of municipal activity in every direction, we are never satisfied even with the maximum of efficiency, and we denounce the extravagance of even the minimum of cost. Every extension of the function of government makes us eager for its further development. What was unheard-of a few years ago, we not only accept to-day as a matter of course, but are thoroughly dissatisfied with its insufficiency. Not so many years ago most of our free public schools limited their instruction to the three R’s. To-day they not only carry the pupil through a free college education, but maintain free trade-schools, and there is even a demand in some quarters for free professional education, while in other quarters a demand is being made seriously and vigorously for free meals for school-children, and for free medical attendance and inspection for their parents.

Not so many years ago the streets of our cities, if cleaned at all, usually were cleaned by the abutting property owners; to-day street-cleaning is a constantly expanding civic function. Thus in New York the mileage of streets cleaned increased from 971 in 1903 to 1210 in 1908, or 25 per cent; the amount of refuse collected increased during the same period 27.5 per cent, while the length of streets from which snow and ice were removed was increased from 241 to 471 miles. In the old individualistic days the citizen hesitated to accept the aid of government except as a last resort; in this state-socialistic era we not only accept, but demand as a matter of right, what our forbears would have refused. The majority of the parents whose children attend our free high schools and free colleges can afford to pay a tuition fee, many of those who are cared for at our free hospitals and free clinics are well to do, while the audiences who attend our free popular lectures are in no way different from those who may be seen at any of our theatres.

With our mixed population much of the paternalism in our municipal government is absolutely necessary. Our great cities receive annually vast accretions to their population from every country on earth. Most of these aliens come to us ignorant of our language, our customs, and our institutions; many of them have been subjected in the lands of their origin to unjust governmental restraint; almost all of them have been used to a more or less oppressive governmental interference in every relation of life. If they are to become useful citizens of the United States, if they are to be absorbed into our nationality and made Americans, government must care for them, for they are unable to care for themselves. The city then must teach them, or at least their children, to read and write and think in English; must make them observe habits of health and cleanliness; must protect them from disease, and care for them when they are ill; must give them parks and playgrounds, baths and gymnasia; must, in short, fulfill toward them the parental relationship of State Socialism.

The marvelous results that have been attained by education and by wise governmental regulation and inspection, in transforming our aliens into Americans, have fully justified the enormous cost. Were Jeremy Bentham to return to earth and visit New York, he would doubtless deplore the abandonment of his principles, but he could not fail to approve the accomplishments of the last decade in social regeneration and human improvement. Even Jeremy Bentham would hesitate before returning to the straight and narrow path of individualism, by the abandonment of the almost innumerable public activities to which our cities are committed.

It being conceded that, because of the demand of almost all their citizens, our cities have adopted a policy of state socialism, the question naturally suggests itself, — ‘Where will it all end?’ It is easy enough to dismiss the subject, as the mayor of one of our largest cities is alleged to have done, with the cynical remark, ‘What do I care? The taxpayers only number four per cent of the total vote.’ But the devoted four per cent may be tried past endurance; there is a limit to the burden that the taxpayer can bear.

The public improvements now under way or contemplated in our large cities, such as new water-supply, lines of rapid transit, sewers, bridges, public buildings, and the like, are intended in most cases to meet the needs or rather the demands of populations not much larger than those of to-day. The statesocialistic demand always keeps ahead of the possible government supply. Even when population remains nearly stationary, as in some European cities, the cost of government nevertheless constantly increases. Where population increases, the cost of government grows still more rapidly.

The chief source of municipal income in this country is a direct tax on real estate, a tax whose incidence is perfectly certain, for it is shifted directly to the consumer, that is, to the tenant. No relief can be hoped for in a reduction of the per capita cost of municipal government, and a consequent lightening of the burdens of taxation to the tenant; for while gross municipal expenditure at the present rate of increase (8.08 per cent per annum) will double in eleven years, the per capita cost is increasing at the rate of 3 per cent per annum, which, if maintained, will double in thirty-three years. In most of our cities real estate is assessed for purposes of taxation at almost if not quite its actual market value. The margin between market value and tax valuation is usually so slight that a continuance of ‘hard times’ would cause the former to fall below the latter.1 On the other hand, even under normal conditions, if the present rate of increase in the cost of municipal government continues, the tax on city real estate must ultimately equal its rental value. Of course, the moment that this occurs taxation has become confiscation, and the dearest wish of the pure socialist has been realized.

The only alternative is retrenchment, retrenchment so merciless as to be beyond practical consideration until the pendulum of public opinion, having reached its collectivistic limit, begins to swing in the opposite direction.

Time alone can show whether we are on the eve of an individualistic reaction, or whether the present collectivistic tendency is destined to grow stronger and more widespread, until it commits us to a policy of governmental activity hitherto undreamed of, and only possible of realization through the repudiation of public debt, and the confiscation of private property.

  1. An estate consisting of twenty-three parcels, situated in different parts of the Borough of Manhattan (New York City), was recently sold at auction after great competition for a total of $2,299,450, or six per cent more than the assessed tax valuations. Previous to the sale, the estate had been valued by various private appraisers, the highest valuation being $35,000 less than the tax valuation. Since the sale, assessed valuations have been generally increased; the President of the Department of Taxes has recently stated that assessed valuations now generally equal actual market values.