MUNICIPAL GOVERNMENT

Our municipal government, like the rest of our political system, was originally an inheritance from England. The governing power in colonial times was a single body, the common council, such as exists in England to-day, composed of mayor, recorder, aldermen, and councilmen. As a rule the councilmen were elected annually by the qualified voters, while the mayor was appointed by the colonial governor. The council had authority to enact local regulations not in conflict with English or colonial legislation. The mayor had no veto and usually no appointing power.

The Revolution did not modify the general scheme of municipal government in any important respect. The mayor was still, as a rule, appointed by the governor, who now owed his office directly or indirectly to the qualified voters of the state. The power to grant municipal charters, which before the Revolution was exercised by the provincial governor, was now lodged in the state legislature.

The important changes in municipal government were made after, and may be regarded as an effect of the adoption of the Federal Constitution. As the centralization of authority in the hands of the common council could not be reconciled with the new doctrine of checks and balances, municipal government was reorganized on the plan of distributed powers. This effort to readjust the political organization of the city and make it conform to the general scheme of the Federal government is seen in the municipal charters granted after the adoption of the Constitution. The tendency toward a bicameral council, the extension of the term for which members of the council were elected and the veto power of the mayor may be attributed to the influence of the Constitution rather than to any intelligent and carefully planned effort to improve the machinery of municipal government.

As in the case of the state governments, the development of the system was influenced by the growing belief in democracy. Property qualifications for the suffrage disappeared, and the mayor became a directly elected local official. The changes made in municipal government, however, as a concession to the newer democratic thought, did not ensure any very large measure of popular control. Municipal government in its practical working remained essentially undemocratic.

It would be perfectly reasonable to expect that popular government would reach its highest development in the cities. Here modern democracy was born; here we find the physical and social conditions which facilitate interchange of thought and concerted action on the part of the people. Moreover, the government of the city is more directly and immediately related to the citizens than is the government of state or nation. It touches them at more points, makes more demands upon them and is more vitally related to their everyday life and needs than either state or national government. For these reasons the most conspicuous successes of democracy should be the government of present-day cities. Under a truly democratic system this would doubtless be the case. But in this country the most glaring abuses and most conspicuous failures of government occur in the cities. The enemies of popular government have used this fact for the purpose of discrediting the theory of democracy. They would have us believe that this is the natural result of a system which places political authority in the hands of the masses—that it is the fruit of an extreme democracy. This conclusion rests upon the assumption that municipal government in this country is democratic—an assumption which will not bear investigation. American cities are far from being examples of extreme democracy. In some important respects they are less democratic than the government of either state or nation. A careful analysis of the situation shows clearly that the municipal evils so frequently attributed to an excess of democracy are really due to the system of checks by which all effective power to regulate municipal matters is withheld from the majority. In this country popular control is reduced to a minimum in the cities, while in Great Britain and the countries of western Europe we find in municipal government the nearest approach to democracy. This is the true explanation of the fact that municipal government is our greatest failure and their most conspicuous success.

Under any consistent application of the theory of democracy a city would be entitled to the fullest measure of local self-government. It ought to be given an absolutely free hand to initiate and carry out any policies of purely local concern. This right, however, the American city does not possess. Local self-government is recognized neither in theory nor in practice under our political scheme. The true local unit is the city, and this, according to our legal and constitutional theory, is merely the creature of the state legislature. The latter called it into being, determines what powers it may exercise, and may strip it of them at pleasure. According to the prevailing practice of our state legislatures and the almost uniform decisions of our courts the exercise of local self-government by our cities is to be regarded as a mere privilege and not a right.

The municipal charter was originally a grant of certain privileges of local government in return for money payments or other services rendered to the king. It was a mere concession of privileges based upon expediency, and not a recognition on the part of the Crown of local self-government as an admitted right. As an express and formal statement of the measure of local government which the king would bind himself to respect, it tended to limit his power of interference in matters covered by such charter, since privileges solemnly granted could not with safety be lightly and arbitrarily disregarded. Municipal charters thus have the same origin as the constitution of the state itself, in that they are the outcome of an effort to place a check upon an irresponsible central authority.

The legislature of the American commonwealth in succeeding to the power of the king over municipal charters manifested at first an inclination to concede to the city the right to a measure of local self-government. Thus "the city of New York received from the English kings during the colonial period a charter which, on the Declaration of the Independence of the colony of New York, and the establishment of the new state of New York, was confirmed by the first Constitution of the state. For a considerable period after the adoption of this constitution, changes in that charter were made upon the initiation of the people of the city, which initiation took place through the medium of charter conventions whose members were elected by the people of the city, and no statute which was passed by the legislature of the state relative to the affairs of the city of New York took effect within the city until it had been approved by the city."[160]

But as Professor Goodnow observes, American cities "have very largely lost their original powers of local self-government."[161] The original conception of the city charter as a contract which established certain rights of local self-government which the legislature was bound to respect, merely recognized municipal corporations as entitled to the same exemption from unreasonable legislative interference, as the courts have since the Dartmouth College decision enforced in favor of private corporations. If this view had prevailed cities could not have been deprived arbitrarily of rights once recognized by the legislature, but they could have enforced the recognition of no rights not thus granted. The recognition of this doctrine would have prevented many of the abuses that have characterized the relation between state and municipal government in this country, but it would have guaranteed no rights which the legislature had not seen fit to confer. Any liberal interpretation of the theory of democracy must of necessity go farther than this, and make municipal self-government a fundamental right which the central authority of the state can, not only neither abridge nor destroy, but can not even withhold, since it is a right having its source not in a legislative grant, but in the underlying principles of popular government.

The failure to recognize the right of local self-government as fundamental in any scheme of democracy was unfortunate. Some of the worst evils of municipal government would have been avoided, however, if authority once granted to municipalities had been treated by the courts as a limitation of the power of the legislature to interfere in purely local matters. The refusal of the state government to recognize an appropriate sphere of municipal activity which it would have no right to invade, has been the main cause of corruption and inefficiency in municipal government.

The policy of state interference in municipal affairs was the inevitable outgrowth of the doctrine that cities had no powers except such as had been expressly given, or were necessarily implied in their charters. This lack of the power of initiative made it necessary for cities, as they increased in size and complexity, to make constant appeals to the legislature for permission to supply their wants. Every new problem which the city had to deal with, every new function which it had to perform, was a ground for state interference. This necessity of invoking the aid of the state legislature, constantly felt in every rapidly growing city, tended to develop a feeling of dependence upon legislative intervention as an indispensable factor in the solution of local problems. Thus the refusal of the state government to recognize the right of municipal initiative compelled the cities to welcome state interference as the only means of dealing with the new problems with which they were being continually confronted.

Another reason for the extension of state authority at the expense of the municipality is to be found in the twofold character of city government. Besides being a local government the city is also for certain purposes the administrative agent of the state, and as such is properly subject to state supervision. But, in the absence of any clear distinction between state and local interests, it was an easy matter for protection of the former to serve as a pretext for undue interference with the latter.

The city was thus placed at the mercy of the state government, since the legislature could make the needs of the municipality or the protection of the general interests of the state a pretext for any interference calculated to further the private or partisan ends of those who controlled the legislative machine. As cities increased in importance it was found that this unlimited power over them could be made a valuable asset of the party machine in control of the state legislature. The city offered a rich and tempting field for exploitation. It had offices, a large revenue, spent vast sums in public improvements, let valuable contracts of various kinds and had certain needs, as for water, light, rapid transit, etc., which could be made the pretext for granting franchises and other privileges on such terms as would ensure large profits to the grantees at the expense of the general public. That the political machine in control of the state government should have yielded to the temptation to make a selfish use of its powers in this direction, is only what might have been expected.

"The legislature has often claimed also the right to appoint municipal officers and to fix and change the details of municipal organization, has legislated municipal officers out of office, and established new offices. In certain cases it has even provided that certain specific city streets shall be paved, has imposed burdens upon cities for the purpose of constructing sewers or bringing in water; has regulated the methods of transportation to be adopted within the limits of cities; in a word, has attended to a great number of matters which are purely local in character; matters which do not affect the people of the state as a whole, and in regard to which there is little excuse for special legislative action."[162]

The extent to which state regulation of local matters has been carried in New York is indicated by the fact that in the year 1886 "280 of the 681 acts passed by the legislature ... interfered directly with the affairs of some particular county, city, village, or town, specifically and expressly named....

"The Philadelphia City Hall Building affords a good example of how far this lack of local responsibility may sometimes carry the legislature in the exercise of local powers, and in the imposition of financial burdens on cities. 'In 1870 the legislature decided that the city should have new buildings. The act [which was passed to accomplish this result] selected certain citizens by name, whom it appointed commissioners for the erection of the buildings. It made this body perpetual by authorizing it to fill vacancies.... This commission was imposed by the legislature upon the city, and given absolute control to create debts for the purpose named, and to require the levy of taxes for their payment.

"'The public buildings at Broad and Market streets were,' in the words of Judge Paxson, 'projected upon a scale of magnificence better suited for the capitol of an empire than the municipal buildings of a debt-burdened city.' Yet this act was declared constitutional, the city was compelled to supply the necessary funds, and 'for nearly twenty years all the money that could be spared from immediate and pressing needs' was 'compulsorily expended upon an enormous pile which surpasses the town halls and cathedrals of the Middle Ages in extent if not in grandeur.'"[163]

The legislature is strongly tempted to abuse its power when the party machine in control of the state does not have the political support of the local authorities. One of the most notorious examples of such interference in recent years was the so-called "ripper" legislation enacted in Pennsylvania in 1901, by which the mayors of Pittsburg and Allegheny were removed from office and the governor given the power to appoint and remove their successors until the regular municipal election in the year 1903. The motive for this legislation was the desire to crush local opposition to the state machine by putting the control of municipal offices in the hands of a governor friendly to the political boss of the state. In order to provide an opportunity for the mayor appointed by the governor to use his office in building up and perpetuating a local machine that would support the clique in control of the state government, the appointee of the governor was declared eligible for re-election, although his locally elected successors were made ineligible. A more flagrant abuse of legislative authority could hardly be imagined; yet this act was declared constitutional by the supreme court of the state.

Many such instances of partisan interference may be found in the recent legislation of some of the larger and more populous states.

The best example of the misgovernment of cities by the legislature for private or partisan ends is seen in the franchise legislation by which privileges of great value have been secured by street railway and other corporations without any compensation to the cities concerned. The power which the legislature can exercise in the interest of private corporations monopolizing for their own profit the very necessities of life in the modern city—water, light, transportation, communication, etc.—has been one of the most serious evils resulting from state domination of municipal affairs. It exposed the legislature to the temptation which individuals and corporations seeking valuable concessions readily took advantage of for their own gain. It thus brought into active operation those forces which have been the chief factor in corrupting both state and municipal government.

As soon as it came to be generally recognized that state control of local affairs not only did not prevent, but was, in fact, the chief source of the misrule of American cities, an effort was made to provide a remedy by the adoption of constitutional provisions regulating the power of the legislature to interfere in municipal affairs. These limitations relate to those matters wherein the evils of state interference have been most pronounced. Thus in some states the legislature is not allowed to grant the use of streets to railways or other private companies without the consent of the municipal authorities; to create special commissions and bestow upon them municipal functions; or to incorporate cities or regulate them by special laws.

It was not the purpose of these constitutional provisions to grant to municipalities any immunity from state control, but merely to forbid certain modes of exercising legislative supervision which, as experience had shown, were liable to serious abuses. The prohibition of special legislation, generally incorporated in recent state constitutions, has, however, largely failed to accomplish its purpose, owing to the fact that the courts have permitted the legislature to establish so many classes of cities that it has been able to pass special acts under the guise of general laws.

The state of Ohio furnishes a good example of the practical nullification of a constitutional provision by the legislature through the abuse of its power of classification. The constitution of 1851 prohibited the legislature from passing any special act conferring corporate powers and provided for the organization of cities by general laws. The legislature, however, adopted a method of classifying cities which defeated the object of this provision. In 1901 each of the eleven principal cities in the state was in a separate class. Consequently all laws enacted for each of these classes were in reality special acts, and as such were clearly an evasion of the constitutional prohibition of special legislation. Nevertheless, this method of classification had been repeatedly upheld by the courts. Its advantages to the party in control of the state government were obvious, since it gave the legislature a free hand in interfering in local affairs for partisan ends. It permitted the state machine to make concessions to a city which gave it political support and at the same time extend state control over those cities in which it encountered opposition. This was the situation down to 1902, when the supreme court rendered two decisions which overthrew the system of classification in vogue and invalidated the charter of every city in the state. It is unfortunate that this change in the attitude of the court, though much to be desired, occurred at a time when it had the appearance of serving a partisan end. One of these suits was brought by the Republican attorney-general of the state to have the charter of the city of Cleveland declared invalid on the ground that it was a special act. This charter had been in force for over ten years, having granted liberal corporate powers at a time when Cleveland was a Republican city. Later it passed into the Democratic column, and this suit was instituted as part of the plan of the Republican machine of the state to curb the power and influence of the mayor of that city. The new municipal code which was adopted at an extra session of the legislature provided a scheme of government applicable to Cleveland under which the powers of the mayor were much curtailed.

In the New York constitution of 1894 an effort was made to guard against the abuse of special legislation. The cities of the state were by the constitution itself divided into three classes according to population, and any law which did not apply to all the cities of a class was declared to be a special act. Special legislation was not prohibited; but when any act of this kind was passed by the legislature it was required to be submitted to the authorities of the city or cities in question, and if disapproved of by them after a public hearing, it could become law only by being passed again in the regular manner. This merely afforded to the cities affected by the proposed special legislation an opportunity to protest against its enactment, the legislature having full power to pass it in the face of local disapproval. That this is not an adequate remedy for the evils of special legislation is shown by the fact that the two charters of New York City enacted since this constitution went into effect, have both been framed by a state-appointed commission and passed over the veto of the mayor.

The constitutional changes which have been mentioned must not be understood as implying any repudiation of the doctrine that a municipal corporation is a creature of the general government of the state. These provisions merely secured, or rather sought to secure, to cities some benefits of a negative character—immunity from certain recognized abuses of legislative authority. They are the expression of an effort to find a remedy for the evils of municipal government by restricting the authority of the legislature rather than by giving cities the power to act independently in local matters. They have diminished somewhat the evils of state interference, but they failed to remove the cause by giving the cities the constitutional right to control their own affairs.

The failure of all these measures to accomplish what was expected of them finally brought the advocates of municipal reform to a realization of the fact that the American system made no provision for real local self-government, and that our refusal to recognize this principle was the chief cause of the prevalent corruption and misrule of our cities and the insuperable obstacle to all effective and thoroughgoing reform. As soon as attention was directed to this feature of the problem it was seen that no system could be devised that would be better adapted to the purpose of defeating the end of good city government, since those who would be directly benefited by the reforms in municipal government were powerless to bring them about except with the co-operation of the legislature. Moreover the consent of the legislature, though once given, was liable at any time to be withdrawn at the instigation of private or partisan interests, since this body was not directly interested in establishing and maintaining good municipal government nor responsible to those who were.

It was finally seen that some more effective measure than the prohibition of special legislation was required. The next step was the attempt to secure to cities the needed authority in local matters by means of a constitutional provision authorizing them to frame their own charters. In this movement the state of Missouri led the way by incorporating a home-rule provision in its constitution of 1875. California, Washington, Minnesota, and Colorado have since adopted similar provisions. In each of these states the charter is framed by a commission locally elected except in Minnesota, where it is appointed by the district judge.

In Missouri this privilege is accorded only to cities having more than 100,000 inhabitants. The constitution of California adopted in 1879 also restricted the benefits of home rule to cities of more than 100,000 population, but it has since been extended to all cities having more than 3,500 inhabitants. Washington allows all cities having 20,000 or more population to frame their own charters. Minnesota extends the privilege to all cities and villages without respect to size, while Colorado restricts it to cities having more than 2,000 inhabitants.

The right to serve as a member of a charter commission is limited to freeholders in all these states except Colorado, where it is restricted to taxpayers. The object of these home-rule provisions was to give cities some measure of initiative in local affairs without at the same time permitting them to organize on the plan of simple majority rule. In the Missouri constitution of 1875 a four-sevenths vote was required to adopt a charter and a three-fifths vote to ratify an amendment, although the constitution itself was adopted and could be amended by mere majority vote. The constitution of California permits ratification by a majority of the qualified voters, but every charter thus ratified must be submitted to the legislature for its approval or rejection as a whole. No charter amendment can be adopted except by a three-fifths majority of the popular vote and subsequent legislative approval, although, as in the case of Missouri, a majority vote is sufficient to approve an amendment to the state constitution. In Washington the constitution provides for the ratification of charters and charter amendments by a majority of the qualified electors. The constitutional amendment adopted in Minnesota in 1896, with its subsequent modifications, provides for the ratification of charters and charter amendments by a four-sevenths vote except in the case of certain cities where a three-fourths majority is required. A three-fifths vote in favor of a charter amendment is necessary for its ratification. Colorado, by a constitutional amendment adopted in 1902, permits the ratification and amendment of charters by a majority vote. A constitutional amendment adopted in Missouri in 1902 provides for the ratification of charters by majority vote.

With the exception of California, where the constitutional amendment of 1902 allows 15 per cent. of the qualified voters to require the submission of a charter amendment, and Colorado, where 25 per cent. of the voters have that right, the states above mentioned make no provision in their constitutions for the popular initiative. Both Washington and Minnesota, however, have permitted it by statute, the former on the application of 15 per cent., and the latter when 5 per cent. of the qualified voters demand it.

The chief defect of these constitutional provisions relating to home rule is that they do not really grant it. There are too many restrictions imposed upon cities availing themselves of this privilege, and in two of the states in question, notably in Missouri, they are for the benefit of the larger cities only. The restriction of the charter-framing right to freeholders, the withholding from the majority of the power to amend in California and Minnesota, and the failure to provide in the constitution for the popular initiative in Missouri, Washington, and Minnesota indicate a willingness to grant the right of home rule only under such conditions as are calculated to ensure adequate limitation of the power of the majority.

These constitutional provisions certainly point in the direction which we must follow if we would find any satisfactory solution of our municipal problem. They would, if liberally interpreted by the courts, secure to cities immunity from interference in local matters. But the courts are naturally opposed to innovations in our constitutional system, and have consequently been disposed to give provisions of this character such an interpretation as will minimize their effect. The requirement that the charters framed under these provisions must be in harmony with the constitution and laws of the state has been declared by the courts to mean that they must not only conform to the laws in force at the time the charters are adopted, but also that they must conform to all legislation subsequently enacted. Had the courts been thoroughly imbued with the principle of local self-government, they could easily have given these constitutional provisions an interpretation which would have effectually deprived the legislature of the power to interfere in purely local affairs. They could have declared all acts by which the state government sought to invade the sphere of local affairs null and void, just as they have all acts of the municipal government which have encroached upon the powers reserved exclusively to the state. What the courts have done, however, is to hold that these constitutional provisions merely authorize cities to govern themselves in accordance with the constitution and in harmony with such laws as the legislature has or may hereafter enact. The city may adopt a charter which is in harmony with the constitution and the laws of the state, but the charter thus adopted may be freely modified by general laws relating to cities. The unfriendly attitude of the courts has thus largely defeated the object of these home-rule provisions. The state legislature is still free to encroach upon or abridge the sphere of municipal self-government.

The constitutional provisions above mentioned may be regarded as having a twofold purpose. They were designed to limit, if not destroy, the power of the legislature to invade the sphere of municipal affairs, and also to confer upon cities the general power to act for themselves, by virtue of which they could on their own initiative, subject to certain restrictions contained in the constitution, set up their own government, formulate and carry out a municipal policy and manage their own affairs to suit themselves. This would seem to be implied necessarily in the grant of constitutional power to frame a charter for their own government. A liberal interpretation of this feature of the constitutions in question would have held that all cities to which it applied were thereby authorized to exercise all powers not expressly withheld by the constitution or the statutes of the state. This, however, has not been the attitude of the courts. Their reluctance to give home-rule provisions a liberal interpretation may be illustrated by a decision of the supreme court of Washington. In addition to the power granted to cities of the first class to frame their own charters the constitution of this state provides that "any county, city, town, or township, may make and enforce within its limits all such local, police, sanitary and other regulations as are not in conflict with general laws." In view of the attitude that courts have generally taken in this matter it is not surprising that the supreme court of Washington has intimated that the above-mentioned constitutional provisions are not self-executing. Moreover, it does not seem disposed to concede even to cities of the first class any important powers except such as have been expressly conferred by statute. For example, the statutes of Washington authorize cities of the first class "to regulate and control the use" of gas supplied by a private corporation, and the charter of Tacoma expressly gave to the city council the power to fix the price of gas so supplied. Suit was brought to enjoin the city from exercising this power which was claimed under the constitutional and statutory authority given to cities of the first class. The supreme court held that while Tacoma had the power to regulate and control, expressly given it by statute, it did not have the power to fix the price.[164] This decision evinces a singular lack of sympathy on the part of the court with the home-rule provisions of the constitution of Washington.

But although the effort to confer upon cities by constitutional enactment the power to manage their own affairs has thus far largely failed, it indicates a growing appreciation of the nature of the problem and the character of the remedy that must be applied. A more clearly defined and effective public opinion in favor of municipal self-government must in the end overcome judicial opposition.

The most liberal interpretation of which these constitutional provisions are susceptible, however, would not have ensured complete municipal self-government. Unless a city is given adequate financial powers, a constitutional grant of the right of local self-government does not enable it to exercise much choice in relation to the more important matters of municipal policy. By narrowly limiting the powers of cities in this direction, they have been largely deprived of the advantages which they would have enjoyed under a consistent application of the home-rule principle. A certain amount of freedom in the use of the taxing power would seem to be no less essential to the city than to the state itself. Within reasonable limits it ought to be conceded the right to formulate its own scheme of taxation. In every important American city the taxes collected for municipal purposes greatly exceed those imposed for the support of the county and state government. In a matter which so vitally concerns the city it ought to have some right to pursue a policy of its own. This right has not been recognized, however, even in the constitutions which have made most concessions to the principle of municipal home rule. By this means all innovations or reforms in municipal taxation except such as may be authorized by the state itself are effectually prevented. It could not, for instance, exempt personal property from taxation, or make a tax on ground rent the main source of its revenue.

The power to incur debt for municipal purposes is no less essential than the power to tax. The present-day city must spend large sums in making public improvements the cost of which it is necessary to distribute over a period of years. To limit too narrowly the borrowing power of cities for these purposes would prevent them from realizing the full benefits of unhampered self-government. This does not imply that a city should own and operate all industries of a quasi-public character, but it does imply that it should have the unquestioned right and the power to do so. Unless this is the case it is not in a position to secure the most favorable terms from such private corporations as may be allowed to occupy this field. Unreasonable restrictions upon the borrowing power of cities by placing obstacles in the way of municipal ownership of public utilities tend to deprive the people of the most effective safeguard against the extortion of private monopolies.

The limitation placed upon the amount of municipal indebtedness has not had altogether the effect intended. This is mainly due to the fact that the debt limit fixed in the state constitutions was in many cases so low that it did not permit cities to make absolutely necessary public improvements, such as the paving of streets and construction of sewers. To make these improvements without resorting to credit would require the owners of the property affected to advance the full amount of their cost. This would in many instances be extremely inconvenient. Accordingly, an effort was made to find some method of evading these restrictions which would be upheld by the courts. This was accomplished by issuing bonds to be paid out of a special fund which was to be created by taxes assessed against the property of the district charged with the cost of the improvements. The courts held that this was merely a lien upon the property of the district in question, and not a municipal debt within the meaning of the above-mentioned constitutional limitations. These decisions by the courts may not appear to be in harmony with the letter of the constitutional provisions relating to municipal indebtedness, but they are hardly at variance with their spirit. The object of these restrictions was not so much to limit the rights of the property-owning classes as to protect them against the extravagance of the propertyless voters. To make an exception in favor of municipal indebtedness incurred in this way and for these purposes was not calculated to work any hardship upon property owners, but rather to give them the power to authorize the employment of credit for their own advantage. They were protected against the abuse of this particular kind of indebtedness inasmuch as the consent of the owners of a majority of the property affected was quite generally required.

One influence which helped to mold a public sentiment in favor of constitutional provisions limiting the amount of municipal indebtedness was the rapid increase in the debts of American cities during the period that immediately followed the Civil war. For this condition of affairs the state government itself was largely to blame. It had prescribed a form of municipal organization which was scarcely compatible with an efficient and responsible management of financial matters. Moreover, the state government, as we have seen, could empower its own agents to borrow money for a purpose which it had authorized and obligate the city to pay it. The effort to correct these evils, first noticeable about the year 1870, took the form of constitutional provisions limiting the amount of indebtedness which could be incurred by or on behalf of cities. The main object of these provisions was to protect municipal taxpayers against an extravagant use of the borrowing power for local purposes, whether exercised by state or municipal authorities.

Another advantage which these provisions seemed likely to secure to the capital-owning class deserves at least a passing mention. This policy of limiting the amount of municipal indebtedness was adopted at a time when, owing to the rapid growth of urban population, the local monopolies of water, light, transportation, etc., were becoming an important and extremely profitable field for the investment of private capital. The restrictions imposed upon the power of cities to borrow money would retard, if not preclude, the adoption of a policy of municipal ownership and thus enable the private capitalist to retain exclusive possession of this important class of industries.

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 same line of argument which has been accepted by the courts as supporting the constitutionality of the special fund for local improvement purposes is no less applicable to special debts incurred for the purchase of revenue-producing public utilities, such as water works, lighting plants and street railways. Under this arrangement, however, the city must not assume any responsibility for the payment of the capital borrowed, the creditors advancing the purchase price or cost of construction, looking solely to the earnings under municipal operation for the payment of both principal and interest. It may be doubted whether the courts in permitting cities to employ the special fund in relation to local improvements realized its possibilities in the direction of municipal ownership.[165]

These restrictions upon the powers of cities indicate a fear that too much local self-government might jeopardize the interests of the propertied classes. This attitude on the part of those who have framed and interpreted our state constitutions is merely an expression of that distrust of majority rule which is, as we have seen, the distinguishing feature of the American system of government. It is in the cities that the non-possessing classes are numerically strongest and the inequality in the distribution of wealth most pronounced. This largely explains the reluctance of the state to allow cities a free hand in the management of local affairs. A municipal government responsive to public opinion might be too much inclined to make the public interests a pretext for disregarding property rights. State control of cities, then, may be regarded as a means of protecting the local minority against the local majority. Every attempt to reform this system must encounter the opposition of the property-owning class, which is one of the chief reasons why all efforts to establish municipal self-government have thus far largely failed.

We thus see that while property qualifications for the suffrage have disappeared, the influence of property still survives. In many ways and for many purposes property is directly or indirectly recognized in the organization and administration of municipal government. The movement toward democracy has had less influence upon property qualifications for the suffrage and for office-holding in its relation to municipal than in its relation to state and national affairs. When the Federal Constitution was adopted the property qualifications for voting and office-holding in force in the various states were not disturbed. The Constitution did not recognize the principle of universal suffrage. It not only allowed the states to retain the power to prescribe the qualifications of voters in state and municipal elections, but also limited the suffrage for Federal purposes to those who were qualified to vote at state elections.[166] The removal, during the first half of the nineteenth century, of property qualifications for voting at state elections and holding state offices had the effect of placing the Federal suffrage upon a popular basis.

The influence of the democratic movement was less marked, however, in the domain of municipal affairs. Here the old system under which voting and office-holding were regarded as the exclusive right of the property-owning class has not entirely disappeared. In this as in other respects the American state has evinced a fear of municipal democracy. It is true that in the choice of public officials the principle of manhood suffrage prevails. But the suffrage may be exercised either with reference to candidates or measures; and in voting upon questions of municipal policy, which is far more important than the right to select administrative officers, the suffrage is often restricted to taxpayers or the owners of real estate. Thus in Colorado, which has gone as far as any state in the Union in the direction of municipal democracy, no franchise can be granted to a private corporation or debt incurred by a city for the purpose of municipal ownership without the approval of the taxpaying electors. When we consider that 72 per cent. of the families living in Denver in the year 1900 occupied rented houses,[167] and that the household goods of a head of a family to the value of two hundred dollars are exempt from taxation,[168] the effect of this restriction is obvious. In thus limiting the right to vote, the framers of the state constitution evidently proceeded upon the theory that the policy of a city with reference to its public utilities should be controlled by its taxpayers. The justification for this constitutional provision is not apparent, however, inasmuch as the burden of supporting the public service industries of a city is not borne by the taxpayers as such, but by the people generally. Such a system makes it possible for the taxpaying class to control public utilities in their own interest and to the disadvantage of the general public. The part of the community who are taxpayers, if given the exclusive right to control these industries, would be tempted to make them an important source of municipal revenue. They would be likely to favor high rather than low or reasonable charges for these necessary public services, since their taxes would be diminished by the amount thus taken from the non-taxpayers through excessive charges. Where the majority of the citizens are property owners and taxpayers there is but little danger that public ownership will be subject to this abuse. But where there is great inequality in the distribution of wealth and a large propertyless class, democracy is the only guarantee that the benefits of municipal ownership will not be monopolized by the property-owning class.

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 $20,545,409, while the total cost of production, including estimated depreciation, aggregated only $11,469,732. If to this amount be added the estimated taxes, interest on total investment and rental value of the municipally owned quarters occupied for this purpose, the total cost of production would be $22,827,825. Private consumers, however, used only 80.2 per cent. of the water supplied. If the 19.8 per cent. supplied free for public purposes had been paid for at the same rate charged to private users, the total income from these 13 municipally owned plants would have been $25,817,720. This would have been $2,989,895 in excess of a fair return upon the total investment. No one would claim that the price of water has been increased under municipal ownership. As a matter of fact, it has been substantially reduced and the quality of the water at the same time improved. The reduction in price, however, has been less than it would have been, had the interests of the consumers alone been considered. If the object of municipal ownership is to supply pure water at the lowest possible price to the general public, there is no good reason why the city should demand a profit on the capital it has invested in the business. This would certainly be true where the earnings under municipal ownership have been sufficient to pay for the plant. In this case it would be an injustice to consumers to make them contribute, over and above the cost of operating the plant, an additional amount sufficient to pay interest on the investment, inasmuch as they have supplied the capital with which the business is carried on. Any attempt to make municipal ownership a source of revenue would mean the taxation of water consumers for the benefit of property owners. Nor is there any reason why the private consumers of water should be made to pay for the water used for public purposes. The water needed for public buildings, for cleaning streets and for extinguishing fires ought to be paid for by those chiefly benefited—the property-owning class.

If instead of considering these thirteen waterworks together, we take a single example—the third largest plant—the tendency to make public ownership a source of revenue is more clearly seen. The income from private users in the case of this plant was $4,459,404. The city used for public purposes 29.5 per cent. of the total amount supplied, which if paid for at the rate charged private consumers would have made the total income from operation $6,325,395. This would have been $2,929,232 more than was required to pay all expenses, including interest on the total investment.[169]

In the case of electric-light plants private ownership is the rule, only 460 of the 3,032 plants being under municipal ownership. The Report of the United States Commissioner of Labor[170] gives the data for 952 of these plants, 320 of which are municipally owned and operated. Municipal ownership, however, is mainly confined to the smaller cities and towns. This is shown by the fact that although more than one-third of the 952 plants above mentioned are under municipal control, only 30 out of 277, or less than one-ninth of the largest plants, are municipally owned. This is to be accounted for by the more determined opposition to the policy of municipal ownership by the capitalist class in the larger cities, where private management is most remunerative. Municipal plants, too, are often restricted to public lighting, not being allowed to furnish light or power for commercial purposes. This restricted form of municipal ownership is merely a slight concession on the part of the private monopolist to the taxpaying class. The general public, as consumers of light and power, derive no benefit from such a policy.

These and other facts which might be mentioned illustrate the natural tendency of a system under which the power of the masses is limited in the interest of the property-owning class. The chief evils of municipal government in this country have their source not in majority but in minority rule. It is in the city where we find a numerically small but very wealthy class and a large class owning little or no property that the general political movement toward democracy has encountered the most obstinate resistance. Only a small part of our urban population own land or capital. The overwhelming majority of those who live in cities are employees and tenants. In the year 1900 74.3 per cent. of the families in the 160 cities of the United States having 25,000 or more population lived in rented houses and only 14.5 per cent. in unmortgaged homes.[171] In the smaller towns the proportion of property owners was larger, while in the country the majority of the population belonged to the land-holding class, 64.4 per cent. of the "farm" families owning their homes, 44.4 per cent. of such families owning homes that were unencumbered.[172]

"Much has been said concerning the necessity of legislative interference in some cases where bad men were coming into power through universal suffrage in cities, but the recent experience of the country shows that this has oftener been said to pave the way for bad men to obtain office or grants of unusual powers from the legislature than with any purpose to effect local reforms. And the great municipal scandals and frauds that have prevailed, like those which were so notorious in New York City, have been made possible and then nursed and fostered by illegitimate interference at the seat of State government."[173]

The numerical preponderance of the property-owning class in the country and of the propertyless class in the cities must be taken into account in any attempt to find an explanation of the reluctance on the part of the state to recognize the principle of municipal self-government. When we consider that the state government, even under universal suffrage, is largely government by taxpaying property owners, we can understand why the progress toward municipal democracy has been so slow. Under universal suffrage municipal self-government would mean the ascendency of the propertyless class, and this, from the standpoint of those who control the state government, would jeopardize the interests of the property-holding minority.

This is doubtless one of the chief reasons why the state government has not been willing to relinquish its control over municipal affairs. This fact is not recognized, however, by present-day writers on American politics. It is generally assumed that the corruption in state and municipal government is largely due to the ascendency of the masses. This view of the matter may be acceptable to those who from principle or interest are opposed to democracy, but it ignores the facts which a careful analysis of the system discloses. Even in our state governments the changes that have been made as a concession to the newer democratic thought are less important than is generally supposed. The removal of property qualifications for voting and office-holding was a concession in form rather than in substance. It occurred at a time when there was an apparently inexhaustible supply of free land which made it possible for every one to become a landowner. Under such circumstances universal suffrage was not a radical or dangerous innovation. In fact, property qualifications for voting and office-holding were not necessary to the political ascendency of property owners in a community where the great majority of the citizens were or could become members of the property-owning class. It is not likely that property qualifications would have been removed for state purposes without a more serious struggle, if the wide diffusion of property in the state at large had not appeared to be an ample guarantee that the interests of property owners would not be endangered by universal suffrage. It was probably not intended that the abolition of property qualifications should overthrow the influence of property owners, or make any radical change in the policy of the state government.

It is easily seen that the removal of property qualifications for voting and office-holding has had the effect of retarding the movement toward municipal home rule. Before universal suffrage was established the property-owning class was in control of both state and city government. This made state interference in local affairs unnecessary for the protection of property. But with the introduction of universal suffrage the conservative element which dominated the state government naturally favored a policy of state interference as the only means of protecting the property-owning class in the cities. In this they were actively supported by the corrupt politicians and selfish business interests that sought to exploit the cities for private ends. Our municipal conditions are thus the natural result of this alliance between conservatism and corruption.

We can understand now why the state has been unwilling to permit the same measure of democracy in municipal affairs that it has seen fit to employ for its own purposes. This is why our limited majority rule, which may be safe enough in the state government, is often deemed inexpedient for the city. It is also the reason for keeping the more important municipal powers under the control of the state government, as well as the ground for continuing property qualifications in the city after their disappearance from the government of the state.

The checks above mentioned are not the only ones to be found, however, in our municipal government. The city is organized, like the state government, on the plan of distributed powers and diffused responsibility. It contains, as a rule, an elaborate system of checks which affords little opportunity for the prompt and effective expression of local public opinion in the administration of municipal affairs. At the same time, it gives the municipal authorities power to inaugurate and carry out policies to which local public sentiment may be strongly opposed. This is seen in the control which the mayor and council quite generally exercise over the matter of municipal franchises. Probably not a city of any importance could be mentioned in which the council has not granted privileges which have enriched individuals and private corporations at the expense of the public. This power has been the chief source of municipal corruption, since it has made the misgovernment of cities a source of great profit to a wealthy and influential class. Those who imagine that the ignorant and vicious part of our urban population is the main obstacle to reform take but a superficial view of the matter. The real source of misgovernment—the active cause of corruption—is to be found, not in the slums, not in the population ordinarily regarded as ignorant and vicious, but in the selfishness and greed of those who are the recognized leaders in commercial and industrial affairs. It is this class that, as Lincoln Steffens says, may be found "buying boodlers in St. Louis, defending grafters in Minneapolis, originating corruption in Pittsburg, sharing with bosses in Philadelphia, deploring reform in Chicago, and beating good government with corruption funds in New York."[174] This is the natural fruit of our system of municipal government. The powerful corporate interests engaged in the exploitation of municipal franchises are securely entrenched behind a series of constitutional and legal checks on the majority which makes it extremely difficult for public opinion to exercise any effective control over them. The effort to provide a remedy for this condition of affairs took the form of a movement to limit the powers of the council. Boards and commissions have been created in whose hands have been placed much of the business formerly controlled by this body. The policy of subdividing the legislative authority of the city and distributing it among a number of independent boards has been carried so far, notably in New York, that, as Seth Low observes, the council has been largely deprived of all its legislative functions with the single exception of the power to grant public franchises.[175] It must not be inferred, however, that public opinion has favored the retention of this power by the council. The attempt on the part of the people to control the franchise-granting power has thus far largely failed, not because of any lack of popular support, but because our constitutional and political arrangements have made it almost impossible for any reasonable majority to overcome the opposition of organized wealth.

Our efforts to bring about reforms in municipal government have thus far largely failed to accomplish what was expected of them because we have persistently refused to recognize the principle of majority rule. We have clung tenaciously to the system of checks and balances with all its restraints on popular control. The evils of municipal government are not the evils of democracy, but the evils of a system which limits the power of the majority in the interest of the minority.