Municipal ownership

“ 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. ”

“ Important social gains are claimed for municipal ownership. It is said that where the plan has been tried, it has promoted civic interest and has enlisted a higher type of public official. If all utilities were municipally owned, state legislatures and city councils would no longer be subjected to the danger of corruption by private corporations seeking franchises. If utilities were owned by the municipality, it is claimed, service and social welfare rather than profits would become the ideal. ”

“ An investigation of the practical working of municipal ownership in American cities will show that this danger is not purely imaginary. In the year 1899 53.73 per cent. of the waterworks in this country were owned and operated by municipalities, public ownership being the rule in the larger cities. Taking the thirteen largest plants in the United States, all of which were municipally owned, the income from private users was [Pg 281] $20,545,409, while the total cost of production, including estimated depreciation, aggregated only $11,469,732. ”

“ That the constitutional restrictions upon the general indebtedness of cities have retarded the movement toward municipal ownership is beyond question. It is not likely, however, that they will much longer block the way to municipal acquisition of those industries in which private management has proven unsatisfactory, since it may be possible to evade them by resorting to the device of a special fund. ”

“ THE PUBLIC OWNERSHIP OF LAND The ownership of land by the municipality is essential to the execution of many parts of a city plan. Certain acts of private owners which have a tendency to prevent the realization of a plan, either temporarily or for all time, may be enjoined by municipal regulation. ”

“ Nothing in this law has excited greater interest nor greater antagonism than this very question of home rule and the relations in general to municipalities. When the public utility act was first proposed there is no doubt but that the public utilities of the state thought they would gain by placing in the hands of some kind of a weak commission, a power which would protect them from the localities. They were constantly in fear of the encroachments of municipal ownership and the concerns which were granted spurious franchises in so-called competition. ”

“ But a nominated town council is an anomaly even within a Crown colony, since a town council is not concerned with high politics but only with the administration of the area in which its citizens choose to dwell, and any owner of property has a right to a voice in determining the ways in which his property shall be safeguarded. The basis of any municipal franchise is the payment of rates, which imply the ownership of property ”

“ It was the raw material of Municipal Socialism, and from this time forth the Society recognised that the municipalisation of monopolies was a genuine part of the Socialist programme, that the transfer from private exploiters to public management at the start, and ultimately by the amortisation of the loans to public ownership, actually was pro tanto the transfer from private to public ownership of land and capital, as demanded by Socialists. ”

“ Municipal corporations are mere instrumentalities of the State, for the convenient administration of government; and their powers may be qualified, enlarged, or withdrawn, at the pleasure of the legislature. Their tenure of property, derived from the State for specific public purposes, or obtained for such purposes through means which the State alone can authorize,-that is, taxation,-is so far subject to the control of the legislature, that the property may be applied to other public uses of the municipality than those originally designated. ”

“ It is not inconceivable that more radical needs will be recognized by legislatures and courts in the next twenty years. The need for the protection of the community against the selfishness of a few large property owners, for instance, may bring about the creation of a municipal board representing all the people of a community as a factor in the real estate market.
A municipality in the United States may become the owner of land by gift, dedication, or devise, and may use such land for any purpose whatsoever not inconsistent with the conditions of the gift, dedication, or devise. ”

“ If the city became populous, the lots would be sold and built upon, and in the lapse of one or two generations, at most, the title of the original proprietors might well be presumed to be extinguished by sales or otherwise; so that the interest of themselves or their heirs in the streets and reservations would not be distinguishable from that of other citizens. They must also have contemplated that a municipal corporation must soon be created to manage the concerns, and police, and public interests of the city ”

“ The source from which the District obtains the means for maintaining public highways in the city is of no consequence so long as congress has made it, and permits it to remain, a mere municipal corporation, with such functions as pertain to municipal corporations proper. ”

“ But land or rights in land can be acquired by the municipality out of public revenue only for a specific public purpose, whether the acquisition be by purchase or by appropriation under the power of eminent domain. If the city has acquired a complete ownership in land either by purchase or appropriation, it may make any use of the land so long as that use carries out some public purpose ”

“ When any small area becomes thickly and permanently settled, and a certain population is reached (which varies in different States) , the state legislature is appealed to, and a charter of incorporation as a city is granted. This enables the incorporated district to act independently of the county or township, to levy municipal taxes and carry out public improvements. Rapid as has been the growth of cities, the duties required of city governments have increased still faster.
The government of our large cities has become a question of vital importance. ”

“ With a growing intelligence and honesty in municipal enterprise, with greater freedom from the control of the Central Government, it may be found—especially on municipally-owned land—that the field of municipal activity may grow so as to embrace a very large area, and yet the municipality claim no rigid monopoly and the fullest rights of combination exist. ”

“ We think the following principles have been established by them and have become settled doctrines of this court, to be acted upon wherever they are applicable. Municipal corporations are political subdivisions of the state, created as convenient agencies for exercising such of the governmental powers of the state as may be intrusted to them. For the purpose of executing these powers properly and efficiently they usually are given the power to acquire, hold, and manage personal and real property. ”

“ By the 'internal affairs' of a municipal corporation, in the administration of which the legislature could alone authorize it to incur a debt, was undoubtedly intended such business as municipalities of like character are usually required to engage in to fulfill their proper functions, and to effectuate the objects of their charters. ”

“ The property which a municipal corporation holds is for their use, and is held for their benefit. Any of the property held by a city does not belong to the mayor, or to any or all of the members of the common council, nor to the common people as individual property. ”

“ That streets, avenues, pavements, sidewalks, and sewers in Washington are established, repaired, and maintained in part by appropriations made by congress, and in part by taxation upon private property, does not change the fact that, by an express declaration of congress, the District is created a body corporate for municipal purposes. ”

“ Money may be borrowed by a county to aid in the erection of public buildings, and it is well settled law that a municipal corporation, in exercising such an authority, may issue its bonds as the means of accomplishing the object. ”

“ This line of authority conclusively shows that the Court has never acknowledged that the States have power to do as they will with municipal corporations regardless of consequences. Legislative control of municipalities, no less than other state power, lies within the scope of relevant limitations imposed by the United States Constitution. ”

“ Municipal corporations are constituted by the incorporation of the inhabitants of boroughs; but if by statute it were declared that they should consist for the future of the mayor, aldermen, and councillors, the change would not affect the rights, powers, or liabilities of any human being. ”

“ Whether the board of public works is also a part of and an agency of the municipal corporation is the question before us.
1. The authorities state, and our own knowledge is to the effect, that the care and superintendence of streets, alleys, and highways, the regulation of grades, and the opening of new and closing of old streets, are peculiarly municipal duties. No other power can so wisely and judiciously control this subject as the authority of the immediate locality where the work is to be done. ”

“ Counties, cities, and towns are municipal corporations, created by the authority of the legislature; and they derive all their powers from the source of their creation, except where the constitution of the State otherwise provides. Beyond doubt, they are, in general, made bodies politic and corporate; and are usually invested with certain subordinate legislative powers, to facilitate the due administration of their own internal affaris, and to promote the general welfare of the municipality. They have no inherent jurisdiction to make laws, or to adopt governmental regulations ”

“ Municipal corporations were not created for the purposes of private speculation or private gain, but for purely and strictly government purposes. No power is granted (nor can it be implied) to county judges, commissioners, or supervisors, nor to township trustees, or city boards, to take stock in railroad corporations, or to issue bonds of the municipality in payment for such stock, for the reason that such power is not necessary for the administration of these several governments, and does not come within the limit of the powers granted by the people. ”

“ A municipality is a living center of economic activity—a genuine case of essentially local economic interests. To be sure, the greater part of the manufacturing or commercial business transacted in a city belongs undubitably to the national economic system; but there is a minor part which is exclusively local. Public service corporations which control franchises in cities do not enter into inter-state commerce at all—except in those unusual cases (as in New York) where certain parts of the economic municipal body are situated in another state. ”

“ To aid in the building of a railroad is a public purpose, and being for the general welfare of the ordinary municipal corporations, such as counties, cities, and towns, through which the road is to pass, is a corporate purpose, within the meaning of a constitutional provision vesting in the legislature power to authorize municipal corporations to assess and collect taxes 'for corporate purposes.' Livingston Co. ”

“ With the new municipalities, a really autonomous and decentralized municipal government will be established in the towns, since no provincial assembly is created in the capitals of the provinces or districts, and each municipality is the legitimate administrator of the interests of its town, and will keep, preserve, and expend for the public welfare of the municipal funds. ”

“ A bill to incorporate a city and provide for its government may, without conflicting with the constitutional clause, contain provisions relating to the various subjects upon which municipal legislation may be required for the preservation of peach, good order, and health within its limits, the promotion of its growth and prosperity, and the raising of revenue for its government. ”

“ In every case where the financial condition of the municipality obliges it to rely at first upon private corporations for the construction and ownership of its public works, the franchise should expire at the end of a short term of years, and the city should then have the privilege of purchasing the works at their actual cost. ”

“ While the state has the power to absolutely control all public service corporations, it is well to bear in mind that local municipal government, in so far as practicable, is the true policy to pursue and wise state supervision, when dealing with public utilities situated within the corporate limits of cities, will emphasize this principle rather than ignore or override it. The initiative in all local public utility matters should remain with the local authorities. ”

“ If the legislature had placed great restrictions upon its capacity as a railroad corporation, it might plausibly be objected that the purpose of a municipal subscription to its stock would be so far thwarted. Such purpose is to promote the settlement and increase the business and enhance the value of the property of the municipality and of its citizens by furnishing the means of passage to all wishing to come or to go, and providing a means of bringing in the produce of other regions and of furnishing a market for its own. ”