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house committees were before the senate, he appeared in person, with a substitute bill of his own writing, at a meeting of the committee of the latter body.
In a special message to the senate, he wrote that “in considering legislation of this character, the difference between private business corporations and those owning public utilities, performing public services, and possessing special and peculiar privileges, conferred upon them by the state or its municipalities, must not be overlooked. There is a distinction between the character and nature of the franchise conferred upon a private corporation, formed to conduct an ordinary business enterprise, and the franchise conferred upon a quasi-public corporation. The difference is not merely in degree, but also in kind. There is no constitutional obstacle to prevent the classification of objects for the purposes of legislation, provided such classification is a natural and not merely an arbitrary one.
“A private business association receives from the state the privilege to be a corporation. This is all that is conferred upon it. ... It is not so, however, with corporations possessing the privilege of using the public streets, acting as common carriers, receiving and collecting tolls, and performing other public services and functions, under the permission of the state and its municipalities. Such special privileges add greatly to the value of the tangible property of the corporation, and constitute intangible property which has a real, substantial value. Whatever adds to the value of property upon the market should enter into the estimate of its value for taxation. It is not in such cases the right or privilege of being a corporation' that should be taxed (which is all that is conferred upon a private corporation, and can be obtained by the proper number of citizens at any time) but the special privilege of exercising public functions, using public property and managing public utilities.”
The exertions of Governor Dockery had their reward when, a very short time before the end of the session, a bill was at last passed" for the taxation of franchises and requiring the state board of equalization to assess the same." By the law as enacted and signed by the governor it is provided that all corporations or quasi-corporations, save those formed for religious, educational or benevolent purposes, owning, operating and managing public utilities, and ... possessing special and peculiar privileges and authorized by law to perform any public service " shall have their franchises assessed and taxed “at the same time and in the same manner as other property of such corporation " is now, or hereafter shall be assessed and taxed. For the purpose of determining the value of the franchise, the board or assessor shall ascertain “ the total value for taxable purposes of the entire property of such corporation, tangible and intangible, in this state, and shall then assess the tangible property and deduct the amount of such assessment from the total valuation and enter the remainder upon the assessment list or in the assessor's books, under the head of 'all other property.''
The letter of the promise has thus been fulfilled, but it remains to be seen whether, in their interpretation of the law, the board of equalization will carry out the spirit of the campaign pledge. Their instruction is extremely indefinite, and, with no prescribed method of determining the real value of the franchise, it is only too probable that the board may almost ignore the law. The discretionary powers are so great as to destroy the compulsory character of the statute.
FREDERIC L. PAXSON. Blees Military Academy, Macon, Missouri.
RELATION OF THE STATE TO MUNICIPALITIES IN RHODE ISLAND.
Rhode Island was founded upon the principle of individualism, and for this principle it has stood throughout the greater part of its history, colonial and national. Naturally the spirit of local independence has always been strong-so strong that it is even contended by many that the relation of the towns to the state is the same as the relation of the states to the nation. The theory of inherent powers residing in the towns, independent of any incorporation by the state, is maintained with considerable plausibility on the basis of actual historical conditions.
All the more striking, then, is the fact that the Rhode Island legislature is no whit behind the legislatures of other states in the extent to which it arbitrarily interferes in the affairs of the cities. The situation is aggravated by the fact that a strong minority of the house and a strong majority of the senate consist of members from what may properly be called rotten boroughs. According to the constitution of 1842, not since changed in this respect, the senate consists of one senator from each town and city (without any regard to population), and in the house, which is limited to seventy-two members, each town has at least one representative, and no town or city more than one-sixth of the whole number. Providence, with two-fifths of the state's population, has one out of thirty-seven senators, and twelve out of seventy-two representatives. With a large number of back towns having populations of 600 to 3,000, decreasing in many instances, the resulting corruption in politics is easily understood.
The boss in the dominant party has for years been building up political control of these rotten boroughs, until to-day he is master of the legislature. “What he says goes.” He acts, not to further his own political fortunes, but as the agent of a small group of men, who, besides completely controlling the state politically, have during the last ten years obtained by his assistance a practical monopoly of electric traction lines, electric lighting, and bay and harbor transportation in the state.
This control of our legislature is solidly buttressed by the provision of the constitution, which requires a two-thirds vote of each house in two successive legislatures in order to propose an amendment to the constitution. No new and equitable apportionment can be arrived at without the consent of the little towns, and when to their natural reluctance to relinqush power long held are added the exigencies of partisanship, the result is a combination which cannot be overcome.
The legislature is a close corporation, then. In the last decade it has made what is supposed to be an irrevocable contract with the street railroad company whose lines radiate from Providence, giving it a monopoly for twenty years and probably much longer, and limiting to five per cent the rate at which its gross receipts may be taxed by the city. It has changed the time of the city election to coincide with the date of the national election. It has saddled a “Board of Canvassers and Registration” upon the city, for which the latter has to pay and pay well. It has proposed an amendment to the constitution dividing the city into legislative districts for the sake of maintaining partisan control of the city. From the mayor of the neighboring city of Pawtucket it has taken most of his power because he was of the opposite party. During the session which has just adjourned until after election, a bill was introduced to saddle a police commission upon Pawtucket, but owing to the unprecedented uprising of a vast majority of the citizens of that city, the bill has been given up for the present. A bill, evidently framed in the interest of the street railway company, was valiantly opposed by a few young members of the house and barely defeated; but within a few days it was brought up in the senate, slightly changed, and passed by both houses in spite of the same valiant opposition. In all but the one instance named, local protests, and they have been strong, have gone for nothing.
Looking at the matter in a general way, it would seem that a distinction must be made between arbitrary interference in local affairs for partisan or monopolistic advantage, and the regulation of matters which, on account of changed conditions, are becoming of general as well as local concern. The former, which is wholly evil, can be remedied by a general awakening of public spirit and increased watchfulness, and more particularly by the improvement of our legislative machinery, through caucus laws, representation which is representative-i.e., proportional, and a referendum of all-important local measures to the localities themselves. As to the latter, in Rhode Island, where over 85 per cent of the people live in cities and towns of over 8,000, and where four-fifths of their number are within a radius of fifteen miles of the state-house in Providence, the state regulation of many things formerly deemed the exclusive province of the town or city, is bound to come. Were the legislature an actual representation of the people instead of a parody on it, there would be little cause for complaint in this compact little “city state," as it has been aptly styled.
SIDNEY A. SHERMAN, Brown University,
MR. CARNEGIE AS ECONOMIST AND SOCIAL REFORMER. Under title of “The Gospel of Wealth," 1 is brought together in convenient form, the thought product of a man who has not only proven himself a master in industrial enterprise, but also in close touch with his fellow men. Foreign-born, coming to America as a poor boy with his parents and younger brother, the whole family wageearners, Mr. Carnegie is a splendid example of the common man, rising from squalor and adversity to the commanding position which honesty, industry and high standards of life make possible under free institutions. It is a commentary on European conditions to read of Czar and Emperor trembling for personal safety, looking upon the common man as a menace to society. Under the freer conditions of America, Australia or Canada this same class, many of them the very ones whose attitude toward society has been considered most dangerous, revolutionists, even criminals, coming to lands where the hold of government is most lax, become strong, useful, patriotic citizensliberty-loving, but strong in their attachment to law and social order. It is quite as significant to find those who have labored in poverty, whose only shelter had been a shed, and whose reasonable hopes, under European conditions, could never rise above the associations of a thatched roof, becoming the sturdy, substantial men of affairs, or, possessed of uncommon ability, with broader opportunity given, coming to the forefront in the management of industry, commerce, in politics and in learning. Too often do we hear our institutions and our society berated. Too often do we have the narrow view of the man who draws his picture from the constrained horizon of a privileged class or the perverted eccentricity of a weakling. It is most hopeful to find a man, rising from humble station, attaining to success which gives him power superior to that of kings, still announcing a doctrine full of patriotic devotion to the institutions that have been favorable to his 1 Published by the Century Publishing Company. New York, 1900. Pp. 305.
rise, keenly sympathetic with his fellows and enthusiastic for the amelioration of conditions against which the less fortunate must struggle.
The circumstances out of which Mr. Carnegie has risen give to his expressions on social and economic questions more than common interest. It is the purpose of this review to point out some of the leading principles set forth in this collection of essays.
The premises of Mr. Carnegie's theory of wealth are those generally admitted by those who think seriously about social and economic problems, viz.;
1. That invention, improved industrial equipment, division of labor, increased capitalization, etc., are the means whereby man is able to provide more abundantly for the satisfaction of his wants.
2. That with better industrial equipment and broader co-operation special ability in the management of enterprise is essential.
Conclusion: “A condition of affairs under which the best interests of the race are promoted . . inevitably gives wealth to the few,” while the masses have only an increased competence as their reward.
It should be noticed that Mr. Carnegie uses wealth to mean a surplus over and above “moderate sums saved by many years of effort, the returns from which are required for the comfortable maintenance and education of families.” This moderate sum is not regarded by him as wealth, “but only competence, which it should be the aim of all to acquire, and which for the best interests of society should be acquired.” His theory, therefore, proceeds from the generally recognized fact, that with modern improvements in production there is a large surplus remaining after satisfying the demands of those contributing to the co-operative process. In other words, that the enormous wealth accumulated in the hands of modern industrial and financial managers is the result of gross income increasing faster than the increase in wages and other charges against gross income.
The point of departure is quite the same as that employed by others in their reasoning; the striking feature of Mr. Carnegie's “gospel is found in his concept of the duties and responsibilities of men of wealth. The second step in his philosophy, if reduced to logical form, would be something as follows:
Wealth is the product of co-operative effort.
The enormous surplus which flows from modern industrial process comes to the few by reason of established principles of social orderprinciples evolved by society as a basis for harmonious effort, such as the protection of rights of property, the right to individual initiative, the right of incorporation, etc.
Since the millionaire is made by the social order in which he lives, he holds his wealth “in trust” for the benefit of that society.